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A bright financial future Worries lift for couple after receiving loan repayment assistance No catch. No gimmicks. Just loan assistance. It’s just that easy, as Huntington University graduates Brandon and Brenda (Bair) Borders have learned. Brandon and Brenda both graduated from Huntington in 2011, Brandon with a journalism and public relations degree, and Brenda with a youth ministries degree. Shortly after, they married and began to settle into their new lives — complete with new challenges and new worries. But one concern no longer weighing on their minds was their loans. They knew those were in good hands with the Loan Repayment Program. While at Huntington, both Brandon and Brenda applied to receive the Loan Repayment Program. Through the program, they, like many other Huntington students, are given assistance on their loan repayments after graduation. Based on income amounts, students can qualify for full or partial repayments of their loans. After graduation, students are reimbursed quarterly. Brandon and Brenda were the first Huntington students to enjoy this benefit. “We opened the envelope right after we left the HUB (and then) we went right to the bank,” Brandon said about the check presentation from the LRAP Association on Feb. 7. “We jokingly said that we were going to frame the (bank) receipt or at least put it on the fridge.” For the Borders, that day was many years in the making. During their sophomore year, Brenda had changed her major to youth ministries and the couple had begun to talk about marriage. They weren’t sure about their financial future because their loans had already begun to accumulate. “We started to pray about it. It started hitting us pretty hard,” Brenda said. But a wise friend passed along advice that sent Brenda to Scott Raymond, executive director of student success, who told her about the Loan Repayment Program. “Ok, I’m going to be able to pay this back and do what I love,” Brenda remembers. “It was unbelievable. … I was just full of joy.” Today, Brenda works as the director of youth ministry at Life Community Church (formerly Aboite Missionary) in Fort Wayne, Ind. To fill the full-time hours commitment for the Loan Repayment Program, she also works part time at a daycare. Brandon works as a sales and marketing associate at Only Internet in Bluffton, Ind. Together, they know the future is bright with a chance to be debt free sooner. “It has allowed us, in some sense even, to think farther into the future,” Brandon said. “Instead of thinking a month or three months ahead, we can think three or five years ahead.” ###

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Tonight on Nightly Business Report, Google and Microsoft report earnings. Which one is a better buy for your portfolio? NBR will ask a money manager what he's doing with his money. And, JP Morgan may be facing a big fine for reportedly manipulating the energy markets. D Amy Grant (musician). D "The Animal House" From termites' towering metropolises to prairie dogs' underground cities complete with heating, cooling and intersecting highways, NATURE goes above ground and underground on this tour of the homelife of wildlife. Guided by instinct, animal architects have developed some of the most innovative and practical dwellings in the world.G 4:00 am Newsline James Cromwell (actor). D "Lesley Hazleton, "The First Muslim: The Story of Muhammad"" NULL "Does Hell Reveal God?" What kind of God would create hell? Does the truth of Christianity, Judaism and Islam depend on the reality of Hell? Does the nature of Hell offer Insight into what God would be like?. D "Behind The Rainbow" Can the deal between South Africa's old apartheid regime and its new government withstand the test of time?. D "Dear Mandela" Destroyed homes, threats at gunpoint and high-court action, this battle by three young people to stand up for their rights is a testimony to people power. When the South African government promises to "eradicate the slums" and begins to evict shack dwellers far outside the city, three friends who live in Durban's vast shantytowns refuse to be moved. Dear Mandela follows their journey from their shacks to the highest court in the land as they invoke Nelson Mandela's example and become leaders in a growing social movement. D "Idaho Fairways" OUTDOOR IDAHO cameras visit some of the state's golf courses that cater primarily to locals and are gathering places for the community. Some are on naturally challenging terrains, others are designed and created; some are built by farmers, others by a more formal process. From hillsides to canyons, from sharing space with an airport to links behind protective woods, Idaho's small courses offer unique experiences.G 10:30 am Dialogue "Filmmaker Dawn Porter" Host Marcia Franklin talks with Porter, whose documentary Gideon's Army aired last year on HBO and whose newest film, "Spies of Mississippi" aired in February on INDEPENDENT LENS.G 11:00 am Well Read 12:00 pm Serving America: Memories of Peace Corps 5:00 pm Lewis & Clark: The Journey of the Corps of Discovery As Meriwether Lewis, William Clark and the Corps of Discovery passed the Missouri River and approached the Bitterroot Mountain Range, they grew desperate for horses and provisions to get through the seemingly endless, snow-covered peaks. Sacagawea's presence provided solace for the Corps--her knowledge of the West, her tireless enthusiasm, great courage and ability to care for a child along the expedition were inspiring to the frontiersmen. She once again became a living "white flag" for Lewis and Clark, this time to the Shoshone Indians--her native culture--who provided them with horses for their journey. D 7:00 pm The Spirit of Sacajawea One of the most revered women in American history, Sacajawea has been romanticized and often misinterpreted by non-natives. Revolving around interviews with her tribal peoples as well as recognized historians, this documentary examines the many controversies regarding her life, how her role in the Lewis & Clark journey impacted her tribe, and how they are surviving today. D Tonight on Nightly Business Report, the day after Detroit files the largest municipal bankruptcy in U.S. history, what happens to its city workers, bond holders and mutual fund owners? And, as the temperature rises, power companies are put to the test. But what if a utility could store electricity before a heat wave hits? NBR will introduce you to one company that wants to make that a reality. D 11:00 pm Secrets of Chatsworth In its 500-year history, Chatsworth, home to the dukes of Devonshire, has seen scandal, titled visitors and changing times. King Edward VII enjoyed shooting parties there. The heir of the 10th Duke of Devonshire married a sister of future U.S. President John F. Kennedy.G <<Previous Month

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Italy (EN) Diane Kruger has a Rendez-Vous with time Women have a date with time. With their own time. On their wrist is the new Jaeger- LeCoultre: Rendez-Vous. More than a watch, it embodies a free-spirited and spontaneous personality that is constantly reinvented and perpetually surprising. Behind the regular beat of its Manufacture movement lies a concentrated blend of the creativity that has pervaded the history of the Grande Maison. More than a watch, an encounter. A state of mind. Echoing the 2009 encounter between Diane Kruger and the Manufacture, the Rendez-Vous collection pays eloquent tribute to the personality of this stellar actress. Her innate grace, her cosmopolitan spirit and her choices inspired the feminine world of Jaeger-LeCoultre. A world with no compromises, in which beauty and refinement are expressed through each beat of the mechanisms driving its creations. Ballerina, fashion model, actress, and quite simply a woman, Diane Kruger has always managed to conduct every moment of her life with self-assured determination, perpetually reinventing herself while losing nothing of her natural finesse and elegance. The same can be said for the feminine creations that continue to forge the legend of Jaeger-LeCoultre and testify to the brand’s amazing creative liberty. Born at the heart of the Vallée de Joux – the cradle of Swiss Fine Watchmaking, far removed from the frantic pace of the city where time is no longer counted but instead rushes relentlessly by – the Rendez-Vous collection proudly proclaims its roots. It embodies the full range of expertise developed by Jaeger-LeCoultre for over 180 years. Within it blossoms the beauty of authentic horology: that which transcends time, the better to tame it. It epitomises the charm of the most beautiful creations, those that set a date with techniques and aesthetics, uniting them in a disarmingly natural manner. Its femininity is conveyed through every detail of its graceful silhouette. The perfectly matched case and dial provide the perfect backdrop for the mechanical movement. The automatic calibre entirely developed, crafted and assembled in the Jaeger-LeCoultre workshops stages a day/night indicator amid a hand-guilloché décor reflecting the finest Haute Horlogerie traditions. Time serenely takes its place, bathed in the glow of the diamond-set bezel that illuminates each passing moment. The time of the Rendez-Vous is set. Is the eye drawn to the soft relief of the guilloché pattern, dazzled by the sparkle of the diamonds, or captivated by the slow dance of day and night? Each woman has her own answer… But rather than a single feature, it is the entire set of details of the Rendez-Vous watch that invite women to assume full ownership of an object that matches their character. Clearly influenced by the Art Deco movement from which the House has drawn the stylistic essence in order to exalt the beauty of the passing hours, the collectionappears in two diameters – 29 and 34 mm – clothed in pink gold or steel and embellished by the finest manually crafted finishes. The 1930s-inspired hour numerals create a subtle link between the brand’s longstanding expertise and its perpetually renewed creativity. Backstage beats the unfailingly regular mechanical automatic movement, of which the oscillating weight and the exceptional finishes may be admired through the sapphire crystal case-back. Like women themselves, the Rendez-Vous watch makes light of conventions. An actress with its finger firmly on the beat of time, it grasps each moment with authentic fervour. A loyal daily companion, it sets the scene for everyday life in a fascinatingly masterful and confident style. Jaeger-LeCoultre has always devoted special attention to feminine timepieces, in terms of both their aesthetics and their mechanism. This tradition particularly dates back to the first round movements featuring an extremely small diameter, such as the LeCoultre Calibre 7HP created in the 1880s and which equipped enamelled, diamond-set and pearl-beaded watches, often worn around the neck. The 19th century witnessed the emergence of the wristwatch. Contrary to common belief, the first wristwatches were worn by women, before being adopted by men who had long clung to their preference for the supposedly masculine elegance of pocket-watches. At that time, the sleeveless dresses of the Directory and Empire periods revealed women’s arms and wrists, thereby encouraging jewellers to adorn them with a wealth of sparkling creations. Some even had the idea of incorporating a watch mechanism inside these exquisite models. And so the first wristwatches were born: individually commissioned, crafted, and exclusively destined to play a resolutely jewellery-oriented role. Today, the Rendez-Vous collection is paying a new, glowingly self-assured and refined tribute to feminine time. Conditions of sale Italy (EN)

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February 1, 2011 – Thoughts on EgyptBy Mad Hedge Fund Trader on February 1, 2011 in Diary (SPECIAL MIDDLE EAST ISSUE) Featured Trades: (THOUGHTS ON EGYPT) 1) Thoughts on Egypt. When I first visited Egypt in 1977, they tried to kill me. I was accompanying US Secretary of State Henry Kissinger on an Air Force jet as part of his shuttle diplomacy between Tel Aviv and Cairo. Every Arab terrorist organization had vowed to shoot our plane down. When we hit the runway I looked out the window and saw a dozen armored cars and personnel carriers chasing us just down the runway; all on board suddenly got that gut churning feeling. When the plane stopped, they surrounded us, then turned around, pointing their guns outward. They were there to protect us. The sighs of relief were audible. In a lifetime of heart rending landings, this was certainly one of the most interesting ones. Those State Department people are such wimps! Henry was nonplussed, as usual. When I traveled to Tel Aviv, El Al security made sure my luggage got lost. So the Israeli airline gave me $50 to buy clothes. On that budget, all I could afford were the surplus Israeli army fatigues at the Jerusalem flea market. A week later, my clothes still had not caught up with me when I boarded the plane with Henry. That meant walking the streets of Cairo in my Israeli army clothes. It would be an understatement to say that I attracted attention. I was besieged with offers to buy my clothes. Egypt had lost four wars against Israel in the previous 30 years, and military souvenirs were definitely in short supply. By the time I left the country, I was stripped bare of all Israeli artifacts, down to my towels from the Tel Aviv Hilton, and boarded the British Airways flight to London wearing a cheap pair of Russian blue jeans. Levi Strauss never had a thing to worry about. Virtually every research and intelligence organization seemed surprised at the sudden riots in Egypt that dinged the market on Friday. Every one, except this one, that is (click here for ‘It’s just a matter of time before the food riots resume’). For some time now, I have been warning that high food prices would lead to political instability in emerging markets. If you had to pick one place where this would happen first, it would be Egypt. The bewitching North African country is a prisoner of a medieval religion that has left its people stranded in the Middle Ages. While its GDP has doubled in the last 60 years, so has its population, to 83 million, meaning there has been no improvement per capital income. Islamic fundamentalism can be traced back to the mid-19th century as an extreme reaction to British colonialism. Egypt responded by inventing the concept of the sovereign debt default, which is how Britain ended up with the Suez Canal. Later, a young Winston Churchill cut his teeth as a journalist covering a major battle, the first where machine guns were successfully employed, and 10,000 of the faithful were mowed down. During the sixties, Gamel Abdel Nasser’s efforts to form an Arab United States failed. As a journalist, I covered Kissinger’s negotiations for peace with Nasser’s successor, Anwar Sadat, who was assassinated by his own bodyguard for his efforts shortly afterwards. Hosni Mubarek inherited the throne in 1981, and has been ruling the country with somewhat of an iron fist ever since. I know that whenever the CIA kidnapped a suspected terrorist, but didn’t want to deal with the legal consequences of bringing them home, they happily handed them over to Egypt, where the shadow of Amnesty International is unseen. Today, the advent of cell phones, cable TV, the Internet, Twitter, and even Facebook, enable revolutions to unfold at lightning speed. Cut these off, and everyone pours into the streets. The tourism industry, the big earner for this impoverished country, has been shattered and will take years to recover. The Egyptian stock market gave up $12 billion in stock market capitalization in two days, but who cares. Events like this tend to have implications far beyond our initial understanding. In 1979, when the Shah of Iran fell to a movement led by an unknown radical mullah named Ayatollah Khomeini, we thought no big deal, it’s a local problem. The Shah was no Boy Scout, and corruption in Iran was then endemic. Yet the fall out eventually led to our wars in Afghanistan and Iraq that has cost us trillions of dollars. Of course, the final question has to be how all of this affects you and I and the financial markets. The positive impact on food prices has to be obvious. But as long as the world is in ‘RISK OFF’ mode, we aren’t going to see dramatic moves in my favorite ETF in the area, the (JJG). The selloff in stocks was going to happen anyway, so don’t pin the correction on the Middle East. Egypt was just the match to a market pyre that had been drenched with gasoline. Today, Egypt is far and away the world’s largest importer of wheat. It is also a major supplier of food to the rest of Africa, as it always has been. At first sight of the troubles, surrounding countries rushed to increase stockpiles to head off shortages, and are a major force driving prices higher. Egypt is also a leading supplier of cotton to the world market, and there is no other commodity less able to handle a supply cut off right now. Its price has already doubled in the past four months. There has been much talk about the oil situation. While Egypt produces 600,000 barrels a day, that is a drop in the bucket in today’s 84 million barrel/day global production. That is barely enough to meet domestic needs. A cut off of the Suez Canal would be problematic, but only for the short term. This explains why there has been a huge run up in Brent crude, to a record $9 a barrel premium over West Texas intermediate. But that is Europe’s problem, not ours. All of America’s crude from the Middle East comes around Cape Horn because the tankers are so large. If anything, this places a greater premium on Canadian tar sands producers like Suncor (SU), which are already rapidly replacing imports from other unstable sources. The net net of all of this is a lot of short term angst, but little long term impact. This is great for volatility owners (VIX), (VXX), but of little consequence to the rest of us. ← February 1, 2011 – Quote of the Day February 2, 2011 – Quote of the Day →

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You are HereHome » Local Assistance » District Office List » Nebraska District Office » Press Releases Nebraska District Office Region VII Administrator talks up Nebraska's SBA success on KMTV's The Morning Blend Advisory Date: Friday, March 16, 2012 Release Date: Friday, March 16, 2012 Related State: Nebraska Contact: Michael Foutch (402) 221-7211 Internet Address: http://www.sba.gov/ne Region VII Administrator Pat Brown-Dixon (left) shares a lighthearted moment with Mary Nelson and Mike DiGiacomo during KMTV-TV 3's The Morning Blend March 16, 2012. Brown-Dixon was in Omaha to host the Youth Entrepreneur Summit at the University of Nebraska at Omaha's Mammel Hall Auditorium, and used her appearance on the CBS affiliate to promote the event. Also serving as hosts for the Summit: the University of Nebraska at Omaha and the Nebraska Business Development Center. The Young Entrepreneur Summit looks to connect SBA resources and programs with a cohort of enthusiastic would-be business owners, allowing the latter the chance to voice their concerns about the current business climate in Omaha, the state and the country, and bring their ideas to the table. Omaha was proud to be one of the locations across the country to be selected for this event, with its strong core of entrepreneurial energy and success in start-up financing. According to the Young Entrepreneurs Council, more than half of 16-39 year olds do not feel they have sufficient resources to start a business; 24 percent reported not having enough government or financial support. With youth unemployment twice the national average in many communities, particularly underserved neighborhoods and among veterans, SBA recognizes a need to promote and better support the efforts of young people looking to create jobs for themselves and others. The goal for this summit is to provide a comprehensive overview of resources to start a successful small business and encourage a new generation of people to create a foundation of long-term economic growth by hearing from existing successful entrepreneurs. Since Oct. 1, 2010, more than 740 SBA-backed loans for upwards of $228 million have been approved for small businesses in Nebraska, creating more than 3,000 new jobs and helping keep more than 7,600 jobs on company payrolls in our state. In Omaha alone, during that same time small businesses were approved for more than 260 SBA guaranteed loans for a total of $89 million, directly resulting in the creation of more than 1,200 jobs in the city, and helping companies keep more than 3,200 jobs on their payrolls. Of those loan approvals, 47 percent went to new businesses in the city, a promising sign for the local economy; usually, 33-40 percent of SBA loan approvals are made to new firms.

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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. Pension Funds Underinvesting in Stocks BlackRock CEO says the only way for most pension plans to meet their obligations is to invest more in equities. By Alexis Leondis, Bloomberg December 4, 2013 • Reprints BlackRock Inc. Chief Executive Officer Laurence D. Fink, who last year said he would invest 100 percent of his personal wealth in equities, said pension funds won’t meet their liabilities unless they put more money in stocks. “I do believe most plans that I know have underinvested in equities,” Fink said today at the National Association of State Treasurers Issues Conference in New York. In a low-interest-rate environment, increasing stock holdings is the only way for pension funds to meet their obligations, he said. The Standard & Poor’s 500 Index has surged 26 percent this year, challenging 2003 for the biggest annual gain in the last 15 years, as the Federal Reserve refrained from reducing its monthly bond purchases. Central-bank policy makers have been scrutinizing data to determine whether the economy is robust enough to withstand a reduction in their support. Pension funds have to focus on the longer-term view and can’t look at quarterly or yearly returns when allocating money to assets, Fink said. Since March 9, 2009, when the stock market closed at its lowest after the financial crisis, the S&P 500 has advanced 165 percent. “I truly believe the experience we’ve just witnessed over the last several years explains more than ever why you have to have an outcome-oriented investment process,” Fink said, referring to the stock market rally. Fink co-founded BlackRock in 1988 and built it into the world’s largest money manager, with about $4.1 trillion in assets. The equity market may decline as much as 12 percent after rallying this year, which would be a “buying opportunity,” Fink said. Emerging-market stocks also represent good value, since they haven’t increased like U.S. stocks, according to Fink. Fink has said in the past he’s bullish on the U.S. over the longer term, citing a strong banking system, an improving housing market, and the nation’s large supply of natural gas.

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Founded in 1958 by Bill Callaghan, WRL is based on the promise to protect its customers against life's uncertainties and has built a reputation on solid management, sound decisions and consumer confidence. Measured growth became rapid expansion as WRL acquired other small insurance companies and their blocks of business. By the end of 1962, the company was able to conduct business in five states. By the mid-70s, barely 16 years after its birth, the company achieved $1 billion of life insurance in force. The second billion came only two years thereafter. This phenomenal growth was a direct result of the success of the company's innovative products. Sales soared when WRL introduced its first variable universal life insurance product in 1986. This revolutionary product gave consumers all the features of life insurance, including the flexibility to choose among investment options and accumulating cash value on a tax-deferred basis. In 1991, WRL was acquired by AEGON N.V. AEGON is an international life insurance, pensions and asset management company headquartered in The Hague. As a strong global presence, AEGON has businesses in over 20 markets in the Americas, Europe and Asia and its ambition is to be a leader in all its chosen markets by 2015. For information about AEGON's financial results and strategies, please visit AEGON. WRL continues its tradition of protecting its customers against life's uncertainties by offering a full portfolio of life insurance products to help customers achieve their dreams of financial security.

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Dubai Version Potential for Islamic finance in Canada is huge Conference highlights opportunities and challenges in serving Muslim market Tuesday, March 30, 2010 By Megan Harman As the Muslim community in Canada continues to grow, there are vast opportunities for financial institutions to offer Islamic financial products, services and advice, speakers at a Toronto conference said on Tuesday.UFANA, the Usury-Free Association of North America -- a new non-profit organization committed to helping people sustain themselves on a usury-free lifestyle -- launched its first annual conference on Tuesday.Speakers at the conference emphasized the potential for growth in Islamic finance in North America. The Muslim population in Canada is roughly 1 million in size, representing 3% of the country’s population; and doubles every 10 years, noted Omar Kalair, president and CEO of UM Financial -- an Islamic financial institution offering financing, investment planning and advice and Shariah-compliant products, among other services.Islamic financial products are unique in the sense that they must be designed to be compliant with Shariah law, which requires that all products are traded interest-free, among other limitations.“Demand from the community has kept increasing,” said Kalair. “Our business model has always been that we’ve partnered with financial institutions to try to meet the demands of the Muslim community.”Few firms in Canada offer Shariah-compliant products and services to retail clients. The Big Banks have so far avoided the market, which is niche and limited in size, and lacks a regulatory framework, the speakers said.As a result, the market remains underserved, according to Saad Rehman, a wealth advisor at Scotia McLeod in Saskatchewan.“The reality is there is still a huge portion of investors in Canada that nobody seems to really focus on,” he said.Access to Shariah-compliant products and financing is critical for Muslims, noted Sheikh Nizam Yaqoobi, a Shariah scholar based in Bahrain. He said many Muslims would otherwise be unable to take out mortgages and loans, which in many cases would prevent them from owning homes and cars, from starting businesses, and from affording post-secondary education.“A big proportion of them are not willing to compromise their beliefs,” he explained, adding that a lack of access to appropriate financing for these individuals would lead to a “big burden on the community.”Aznan Hassan, a Shariah scholar from Malaysia, agreed that the potential for Islamic finance in Canada is huge.“I believe it’s very timely for the Canadian society, Canadian government, and also the financial institutions in Canada to try to explore this opportunity to offer this to their clients,” said Hassan. He added that in countries such as Malaysia, Shariah-compliant investment products have proven to appeal to non-Muslims, as well.“These products are not only for Muslims,” he said. “Islamic financial products are for everybody to use.”But serving the Muslim community involves challenges, the speakers admitted. Representatives from U.S.-based companies that offer Islamic financial products said it took up to 10 years to become profitable in the market, since the Muslim community is limited and the domain is relatively new.Successfully developing Islamic financial products and services for the North American Muslim community demands “tremendous patient capital, patience, perseverance,” said Stephen Ranzini, president and chairman of University Bank, who launched its Islamic financial subsidiary.Another challenge is the lack of education around Shariah-compliant financial products and services, Rehman said.He noted that even Muslim clients are often unfamiliar with how the products work, and how they’re different from conventional products. In fact, he said many Muslim clients have millions of dollars of assets that they do not invest, since they’re unfamiliar with the Shariah-compliant options available to them. Educating these clients could create an opportunity for Canada’s financial services community to serve them.“There’s not enough knowledge out there,” he said. Abu Dhabi's oil reserves to last another 150 years Emirate is blessed with 95 per cent of the UAE’s oil reserves and 92 per cent of gas. By Shuchita Kapur Capital contributes 60 per cent to the UAE's GDP. (REUTERS) Oil-rich Abu Dhabi is on a strong growth trajectory and the emirate will remain in a strong economic position in the future, too, after having weathered the economic downturn considerably well. The figures quoted in a new report by Isthmus Partners 'Abu Dhabi Investment Environment', shows that with 33 per cent of the country's population, the emirate contributes around 60 per cent to the UAE's GDP and has a GDP per capita of 1.8 times the national average. "Abu Dhabi has one of the highest GDP per capita in the world. Even on a standalone basis, Abu Dhabi would be the second-largest economy in the GCC after Saudi Arabia," said the authors of the report stressing the economic clout of the capital city. The emirate is blessed with 95 per cent of the UAE's proven oil reserves and 92 per cent of UAE's gas reserves. Based on current utilisation rates and no additional discoveries, Abu Dhabi's oil reserves will last for 150 years, said the report. According to the IMF estimates, the UAE produced 2.62 million barrels of crude oil per day on average in H1 2008, 97 per cent of which was produced in Abu Dhabi. As a result, oil exports generate significant income for the emirate. In 2008, export revenue from oil and gas was Dh376.9 billion, but in 2009 this figure was reduced to Dh208.5bn due to the drop in the price of oil and the global economic recession. With good revenues coming from the hydrocarbons, Abu Dhabi is also trying to diversify its economy. "The government has intensified the diversification efforts in recent years capitalising on the 2000s oil boom and the increased inflows of foreign investment," said the report, adding that the "emirate's strategy is to capitalise on the strong hydrocarbon sector and grow into other industrial sectors as well as tourism and aviation". The emirate is also home to one of the world's leading sovereign wealth funds, Abu Dhabi Investment Authority, which is a strategic international investor. The report said: "Although official figures on assets under management are not forthcoming, it is considered that the Abu Dhabi Investment Authority (Adia) and Abu Dhabi Investment Council (Adic) hold hundreds of billions of dollars of investments. According to the IMF, the UAE held an international investment position (IIP) with net assets of $305 billion (Dh1.1 trillion) of international assets in 2009 and the great majority of them are owned by Abu Dhabi entities. The ratio of IIP net assets over UAE's GDP is 132 per cent, compared to 105 per cent for Singapore and 52 per cent for Norway." Abu Dhabi has traditionally invested a considerable amount of its oil revenues abroad and such international investments provide a significant source of income to the Abu Dhabi Government and reduce the volatility of the emirate's GDP and dependence on oil prices, said the authors of the report. Exports of oil and gas brought $102.7bn to the UAE in 2008 and a projected $56.8bn and $71.8bn in 2009 and 2010 respectively, according to the IMF, as quoted in the report. The year 2008, which was probably one of the best in terms of economic growth, saw the UAE's consolidated fiscal surplus reach a record high of Dh127bn due to strong oil and non-oil revenue, even though consolidated government expenditure increased to a record of Dh198bn, as per the data in the report. "The UAE reported fiscal surpluses for four consecutive years from 2005-2008 (while previously it had several years of fiscal deficits due to low oil prices and a steady growth in public spending and infrastructure). "A small fiscal deficit of 0.3 per cent of GDP is predicted for 2009 due to lower oil prices and an expansionary fiscal policy by Abu Dhabi to counteract the economic slowdown. The IMF forecasts that the UAE will report a surplus in 2010." Given the economic growth, Abu Dhabi's population has increased rapidly in recent years, primarily through immigration of expatriates. "Resident population grew by a compounded average of 4.6 per cent annually between 2001 and 2006. Between 2005 and 2008, the emirate grew at a faster annual rate of six to seven per cent. Anecdotal evidence suggests that the population increased mildly in 2009 and 2010, as Abu Dhabi remains a net employer." In recent developments, Abu Dhabi was also hit by the global credit crunch. "The oil growth engine (centred in Abu Dhabi) and the non-oil growth engine (centred in Dubai) were hit at the same time driving the country into mild negative real GDP growth in 2009, forecast at –0.7 per cent by the IMF." However, it was a softer landing. "Though at the beginning of the financial crisis many participants expected that Abu Dhabi could be immune to shocks, the reality is that the crisis has affected Abu Dhabi though to a smaller degree. "In the real estate sector, Abu Dhabi has expanded more conservatively and has a better match of demand with supply. In many segments of the property market, Abu Dhabi is still undersupplied. Yet the UAE's capital experienced a reduction in real estate prices in 2009. Prices in prime residential properties have fallen 40 per cent between Q3 2008 and Q3 2009," said Colliers. Rental levels have fallen by an average 18 per cent in the first three months of 2009, but had previously increased by 14 per cent in Q4 2008. "Occupancy rates in Abu Dhabi are almost 100 per cent and supply of completed property (rather than off-plan) cannot satisfy demand. Yet rental prices have been dropping since Southern Dubai has emerged as a substitute to Abu Dhabi." As far as the banking sector is concerned, the central government has moved proactively in easing the liquidity problem and restoring confidence in the system. Other sectors of Abu Dhabi's economy are performing well. The return of oil prices to the $70-$80 a barrel level has boosted oil revenues. "Industrial demand and revenues have fallen due to the slowdown in global activity and local construction, but investments in this sector continue. "Abu Dhabi will capitalise by increased industrial export revenues once the global economy resumes expansion. In the meanwhile, the emirate benefits from carrying out its infrastructure investments at reduced cost due to the drop in the price of construction materials and labour costs." Abu Dhabi has also indicated that the government and the emirate will continue supporting troubled government-related entities given that they are sustainable businesses, the report points out. With a GDP of Dh520bn in 2008, the emirate is a strong economy. Yet, Abu Dhabi is one of the most concentrated economies in the GCC, as the oil sector dominates economic output and any major fluctuations in oil price can impact it. Thus, diversification is in a major way and the emirate has invested large amounts of capital in broadening the economic base. "Abu Dhabi has intensified efforts embracing the two pillars of diversification and privatisation, introducing strategic measures and undertaking substantial new investments in industry, real estate, tourism, aviation and other sectors. "Abu Dhabi targets an annual growth of 7.5 per cent. The emirate published in 2009 the 'Abu Dhabi Economic Vision 2030' outlining its economic priorities for the coming years and its policies over the next two decades to achieve its goals. "The plan envisages a population of 3.1 million by 2030, an 80 per cent increase from an estimated 1.7 million people in 2009," it said. "Abu Dhabi's aim is to stimulate non-oil sectors rather than to reduce activity in the oil sector. It is increasing its industrial base [petrochemicals, plastics, metals] capitalising on the availability of resources. In addition, it is looking to boost tourism and aviation sectors amongst others. Abu Dhabi aims to become industrial and manufacturing hub On sector analysis of the Abu Dhabi economy, the Abu Dhabi Investment Environment report highlights that Abu Dhabi aims to become the Middle East hub for industrial and manufacturing companies seeking to capitalise on the numerous opportunities that the emerging economies of the region offer. "The government envisages exploiting the emirate's competitive advantage in the energy sector and command a larger share of the hydrocarbons value chain. "According to the Abu Dhabi Chamber of Commerce, investments in industrial projects reached Dh39.8 billion in 2008." The construction sector is another important one to watch out for. It contributed Dh21bn to Abu Dhabi's GDP in 2008. Construction activity is still strong as there are massive infrastructure projects under development. Growth in real estate construction has slowed down but fundamentals are good, said the report. "There are massive government or government-related investments in shipyard, seaport, airport expansions, healthcare, education, major road upgrades and transportation. "Infrastructure investment makes up a significant and growing proportion of construction activity for Abu Dhabi and the GCC," it said. Developments in transport are also commendable. Abu Dhabi's new port is under construction and will include one of the world's largest industrial zones. The emirate has also undertaken a massive expansion project for its main airport. Aerospace and defence are also important pillars for Abu Dhabi's diversification plans. "In the third quarter of 2009, Mubadala announced that it had signed a long-term strategic aerospace agreement with Boeing to develop mutually beneficial initiatives in various areas including composite manufacturing, engineering, R&D, commercial maintenance, repair and overhaul, military maintenance and sustainment, and pilot training. "In the first quarter of 2009, Mubadala had announced that it is in the initial stages of forming a joint venture with the United States company Sikorsky Aerospace Services in order to develop a military-aviation maintenance centre," the report said. Abu Dhabi is also investing considerably in the tourism sector as a means of diversification. The city has been developing specialised economic zones in strategic locations to attract investments. The emirate has launched huge projects to diversify its economy. Kumpulan Cerpen Terbaru Ekspatriat - Terbitan DBP Mohd Fudzail Mohd NorCreate your badge Pelancaran Prizma, Trilogi 'Aotearoa', Tabung Gempabumi Christchurch Pelancaran Trilogi Trilogi a0teAr0a - Wainuiomata Terbitan Oasisbuku, sekarang di pasaran Trilogi a0teAr0a - r0eWy0 Terbitan Oasisbuku - sekarang dipasaran Trilogi a0teAr0a Kumpulan Cerpen 'Dotkomania' (DBP) Dapatkan di gedung MPH, DBP atau secara online di DAWAMA Kumpulan Puisi Kembara Ilmu 'Waikato' Me, personally In transition ..... Gift By Print Restore, Repair, Retouch - Gifts with your own personal touch, contact Artchetak hit counter script Faidhi's Abu Dhabi's oil reserves to last another 150 years... Dari Mana

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Risk Versus Reward: 3 Diversified Financials By Bill Edson - AXP, GS, IVZ Bill is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. In addition to the thousands of traditional banks scattered across the fifty states, there are other types of financial institutions with limited or no banking functions, but with sources of income and expenses not typically found at commercial banks. I am going to look at some of those companies today, focusing on well known, high capitalization stocks. Steady as she goes American Express (NYSE: AXP) traces its roots to New York City and the year 1850 and has developed into a premier travel services and payment network company. In fact, as more and more travel, especially leisure travel, becomes Internet based, that payment system and the ubiquitous American Express charge card in all its forms and permutations will be increasingly important to the company's future. American Express had a mixed first quarter, as revenues of $7.88 billion, while four percent higher than a year ago, failed to meet expectations of $8.03 billion. Profits of $1.28 billion, or $1.15 per share beat last year's first quarter of $1.07 per share and analysts' expectations of $1.12 per share. It has been a common theme thus far in 2013: disappointing revenues but quality earnings. This of course cannot go on forever. Statistically, as a federally chartered bank American Express has no peers. Its return on assets is in the 3.35% range, double that of even the best commercial banks. Its return on shareholders’ equity is in the mid 20% range. Management recently increased its dividend by 15% to a yield of 1.3%, and share buybacks seem a continuing part of the company's climate. So, is there any downside at all? Well only that the stock has risen 30% since the first of the year. I see earnings advancing annually in the low double digit range for the next several years, and in addition to American Express' strong balance sheet, the company still carries the endorsement of its largest shareholder, Warren Buffett. If there is such a thing as a buy and hold stock among financials, American Express is it; I just wish it could be purchased at a cheaper, say, mid-$60 price point. A more stable earnings base The top of the investment banking food chain is where one finds Goldman Sachs (NYSE: GS). This behemoth no longer has the same sort of high risk, high reward profile it was known for before and even during the recent recession. At the end of the first quarter it carried $263 billion in cash on its balance sheet, and even restructured with Warren Buffett the terms of the deals between the two entities to allow Buffett and Berkshire Hathaway to fully benefit from stock price appreciation while not accumulating an unnecessarily large stake in Goldman Sachs. On the earnings side, the slowness of economies outside of Asia does make Goldman Sach's core investment banking unit difficult. Revenues for the first quarter were $10.1 billion, which while one percent ahead of the first quarter of 2012, was less than half the average quarter of a year like 2007. Profits came to $2.26 billion, or $4.29 per share, up from $3.92 per share a year ago and 11% above analysts' expectations. If the European economy would actually recover, Goldman Sachs might again be able to earn the sorts of numbers it used to. But things are what they are, and most see earnings of about $14.50 for this year, about three percent above 2012. This tortoise-like profit growth is likely to continue for several years, barring a changing European landscape. Goldman Sachs seems fairly valued today, and this is little reason I see for recommending it. A fast-growing offshore fund manager Sliding down the size and prestige scale, we come upon more compelling investment options. Invesco LTD (NYSE: IVZ) is a Bermuda-based investment manager and mutual fund operator. It has an 80 year history, but its most recent incarnation dates just to 2007, and of late each quarter has been setting a record. Invesco's European business, at least in England, is growing rapidly, as are the company's Asian and Canadian units. In its first quarter the company earned an adjusted $314 million, or $0.52 per share, a jump of 16% over 2012's first quarter, and 11% above analysts' expectations. The profit surge arrived not just from cost control, but from revenue growth of 5% on strong investment inflows. That helped support operating margin growth of 290 basis points over the year earlier quarter. Its net profit margin is hovering around 20%, versus the mid-teens where it had been for the past few years. Adding to the appeal of this company is that it recently raised its dividend by 30% to a yield of 2.7%, and the company is actively buying back stock. Analysts see profit growth averaging in the mid to upper teens the next several years, driving the five year PEG down to an even 1.0. I do not have the space to discuss this equity more fully, but from what I can see, it should have wide appeal as both a short and a long-term investment. Diversified financial companies offer relative safety, but often at the cost of unappealing profit growth. American Express has an excellent risk reward profile, as does Invesco. But Goldman Sachs is entrenched in a period of limited growth opportunities. During the financial crisis, Goldman Sachs did so well avoiding the worst of the fallout that it had to downplay its success to duck public ire and conspiracy theories. Today, Goldman is still arguably the powerhouse global financial name, and yet its stock trades at a valuation of less than half what it fetched prior to the crisis. Does this make Goldman one of the best opportunities in the market today? To answer that question, I invite you to check out The Motley Fool’s special report on the bank. In it, Fool banking expert Matt Koppenheffer uncovers the key issues facing Goldman, including three specific areas Goldman investors must watch. To get access to this report, just click here. Bill Edson has no position in any stocks mentioned. The Motley Fool recommends American Express and Goldman Sachs. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own! Email Bill Edson BillEdson11 Bill Edson is a member of The Motley Fool Blog Network Latest Editor's Choice Mounting Economic Pressure Weighs Heavily on Solar Companies Value Investors: 3 Turnaround Stocks To Consider Now The Best Way to Invest in JPMorgan July 26, 2012 IVZ Also On This Topic Profiting from the Swipe Swipe Profits With This Industry Giant Visa Selloff Has Eager Investors Eyeing Fresh Entry Points Credit Stocks to Raise More than Your Score The "Small Four"

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Most Economists Say Recession Has Arrived as Outlook Darkens By Phil Izzo The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month. "The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession. The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices. More from The Wall Street Journal Online: • See the Complete WSJ Economists Survey and Download the Data • Housing Market Has Further to Fall • Brainstorming About 'Bailouts' The survey, conducted March 7 through March 11, marked a precipitous shift to the negative from the previous survey conducted five weeks earlier. For example, the economists now expect nonfarm payrolls to grow by an average of only 9,000 jobs a month for the next 12 months -- down from an expected 48,500 in the previous survey. Twenty economists now expect payrolls to shrink outright. And the average forecast for the unemployment rate was raised to 5.5% by December from 4.8% in the previous survey. Much of the gloom stemmed from last Friday's employment report, which showed a loss of 63,000 jobs in February, the second consecutive monthly decline. "My recession call comes from the employment data," said Stephen Stanley of RBS Greenwich Capital. "It struck me as a recessionary number." Twenty-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth -- just 0.1% at an annual rate in the current quarter and 0.4% in the second. Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product, Mr. Stanley pointed out that the National Bureau of Economic Research, the nonpartisan organization that is the official arbiter of when recessions begin and end, doesn't necessarily follow that definition. "If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said. The economists also expressed growing concerns that a 2008 recession could be worse than both the 2001 and 1990-91 downturns. They put the odds of a deeper downturn at an average 48%, up from 39% in the previous survey. Mark Nielson of MacroEcon Global Advisors said that "we recognize the previous two recessions were mild and, if a recession does occur, it is likely to be slightly worse than the previous two." Amid the concerns about the economy, respondents expect more action from the government and the Federal Reserve. Some 63% said the use of public money to deal with the housing crisis is now likely or certain, while on average they expect the Fed to lower its benchmark federal-funds rate to 2% by June from the current 3%. Futures markets Thursday priced in certainty of at least a 0.5 percentage point cut in the Fed's rate target and up to 90% probability of a 0.75 point cut. Officials had, prior to this week, appeared unconvinced a 0.75 point cut was needed, given signs that inflation psychology is worsening. But those views may have been affected by continued upheaval in credit markets and the weak retail sales and employment data. Market participants say this would be a risky time to cut less than investors expect. The Fed will have to weigh the urgency of addressing the continued credit crunch against the risk of appearing unconcerned about inflation. However, the Fed's job may be complicated by inflation concerns. The economists raised their average forecast for consumer-price increases to 3.5% by June, up from 2.7% in the prior survey. The change reflects persistently high oil prices and a 4.3% jump in prices last month from the year before. February's CPI data will be released Friday, and economists surveyed by Dow Jones Newswires expect a 4.5% increase from a year ago. Even as the Fed has made clear that it is most focused at the moment on threats to economic growth, some central bank policy makers have continued to voice concerns about the possibility of resurgent inflation. The central bank has used unconventional methods to boost liquidity in the market; its goal is to limit the use of its bluntest weapon, interest-rate reductions, which can fuel price pressures. Meanwhile, most forecasters expect a recovery to begin in the second half of this year, as the government's stimulus package and the Fed's interest-rate cuts begin to spur the economy. By the end of the year, the economists expect inflation still to be hovering at an uncomfortably high 2.7%, raising the question of when the Fed will start raising rates. Some 84% of economists in the survey said the Fed was too slow to raise interest rates in 2003, and policy makers don't want to repeat that mistake. But "it's going to take some time even under the best of circumstances before the Fed can be comfortable that the economic situation has stabilized," said Bruce Kasman of J.P. Morgan Chase. One thing is clear: The darkening economic outlook has made Ben Bernanke's job less secure, especially with a new president about to enter the White House. The economists gave the Fed chairman just a 59% chance of being reappointed in 2010. "If a Democrat is elected he won't be reappointed, and [presumptive Republican presidential nominee John] McCain may opt for another, too," said David Resler of Nomura Securities. "The problems occurred on his watch," added Ram Bhagavatula of Combinatorics Capital. Write to Phil Izzo at philip.izzo@wsj.com Market News Play Europe opens mixed after Yellen 01:40 Play Chocolate could become like Champagne: Pro 02:54 Play Shorting euro/dollar: Why it's a good idea 02:05 Copyrighted

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At The IMF, $430 Billion In Pledges Buys Leverage For Emerging Markets Share Tweet E-mail Comments Print By John Ydstie Originally published on Mon April 23, 2012 5:09 am The UK gave some support to the emerging market nations' quest for a greater role today at the IMF during the spring meetings of the World Bank and International Monetary Fund in Washington, D.C. Chancellor of the Exchequer George Osborne said the UK's $15-billion contribution to the IMF's enhanced crisis fund could not be accessed until further progress is made on giving the emerging market a greater voice in how the is Fund is run. Osborne said the action will play an "important role in maintaining the credibility and legitimacy of the IMF." The promised reforms are supposed be put in place this year and fully implemented by 2014. Osborne's statement comes a day after IMF Managing Director Christine Lagarde announced a near doubling of the Fund's lending capacity from pledges totaling more than $430 billion from member states. The aim was to have more firepower available to deal with any new problems that might develop out of Europe's prolonged debt crisis. This was the Fund's main goal at these meeting. But the goal was met only with the help of nonspecific pledges to contribute by several emerging market nations, including China and Brazil. They're pushing the IMF's advanced economies — read the U.S. and Europe — to follow through on their promise to give emerging market nations more voting power in the Fund to match their growing economic power. Not specifying how much they might contribute gives the emerging nations some needed leverage. It's a bit of a diplomatic dance that continues today during the official meetings and on the sidelines of these meetings. The emerging markets are not likely to officially specify the size of their contributions until at least the summit of G-20 leaders June. By then they hope to have made more progress in achieving what they believe is their rightful role at the IMF.Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread.

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S&P lowers American Club rating Standard & Poor's Ratings Services said yesterday that it lowered its counterparty credit and financial strength ratings on American Steamship Owners Mutual P&I Assn. Inc. (American Club) to 'BB+' from 'BBB-' and then removed the ratings from CreditWatch. The outlook is stable, says Standard & Poors. "The downgrade reflects the company's recent operating performance, which was below Standard & Poor's expectations," said Standard & Poor's credit analyst Jason Jones. "Results on policy years 2001 and 2002 deteriorated in 2003, resulting in substantial underwriting losses before the beneficial effects of unscheduled supplementary calls that were made in June 2004," he noted. The ability of American Club to make unscheduled calls lends some strength to its capitalization and enabled it to prevent erosion of capital in 2003; however, American Club has recently been over-reliant on this mechanism, says Standard & Poor's. The company's growth strategy in recent years has the potential to improve American Club's competitive position in time, says Standard & Poor's, but also increases risk in the interim due to high operating leverage and the difficulties of developing infrastructure suitable for a company of larger scale. The recent delay in providing year-end 2003 financials that due to technical problems when new IT systems were implemented illustrates this. Standard & Poor's says it expects American Club to demonstrate improved operating performance based on maintenance of the modest profit so far on policy year 2003 and reasonable prospects for improvement in policy year 2004. Standard & Poor's says the rating on American Club was placed on CreditWatch with negative implications on May 4, 2004, due to the delay of 2003 financial statements caused by implementation difficulties from the Club's new IT system. The Club has made substantial progress toward correcting the situation. American Club has now filed year-end 2003 statutory financials and has provided Standard & Poor's with draft GAAP financials. Although statutory financials show the Club's risk-based capitalization to be slightly below authorized control levels, Standard & Poor's believes year-end 2003 GAAP capitalization will be substantially higher than statutory surplus because GAAP accounting allows the full amount of assessments announced in June 2004 to be booked in 2003--unlike statutory accounting. The Club is expected to substantially improve its statutory capitalization by year-end 2004, as revenue from the June 2004 supplemental call becomes recognized in statutory revenue and as improved operating performance helps to build retained earnings. MORE JULY NEWS STORIES Tell a friend: REGULATORY OVERLOAD? Know what maritime regulations are in the works and what you need to do to stay ahead of the curve Two day conference, Washington, DC September 23 & 24, 2004

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comments Best year ever for stock funds By Ben Rooney @CNNMoneyInvest December 26, 2013: 12:45 PM ET It's been a banner year for Wall Street as money flows into stocks at a record pace in 2013. NEW YORK (CNNMoney) As memories of the financial crisis fade, the amount of money flowing into stock funds in 2013 has reached an all-time high. Investors put $346 billion into mutual funds and exchange-traded funds that own stocks this year as of Dec. 23, according to data TrimTabs Investment Research. That's more than the $324 billion investors put into these funds in all of 2000, when the bubble in technology stocks burst, and is the largest annual inflow on record, said TrimTabs chief executive David Santschi. The flood of money into stock mutual funds and ETFs, which are popular with individual investors, comes as stock prices rally to record highs. The Dow Jones industrial average and S&P 500 are both up more than 20%, while the Nasdaq has soared over 30%. The Dow is on track for its best year since 2003 and the S&P 500 is on pace for its best year since 1997. This year marks a significant departure from the trend over the past few years. Investors yanked more than $150 billion from stock mutual funds and ETFs in each of the past three years, according to data from EPFR Global. Related: Riding momentum isn't a sin 2013 was great for stocks. Now what? Many small investors have been wary of stocks after being burned in the 2008 financial crisis. But the stock market has been on a bull run since 2009 and individuals now seem more afraid of missing out on the rally. This year's gains have been driven by ongoing economic stimulus from the Federal Reserve, increased confidence in the economy, solid corporate earnings growth and more individual investors entering the stock market. The Fed announced earlier this month that it will modestly reduce its bond buying program in January. But many experts believe the bull market, which began in early 2009, will continue for a sixth year in 2014, albeit at a more modest pace. Related: The 2013 Nasdaq is nothing like 2000 Meanwhile, the bond market is on track for its worst year in history. Investors withdrew $77 billion from bond mutual funds and ETFs this year, making 2013 the worst year ever for bond funds, according to TrimTabs. This is the first time in nearly a decade that investors have taken more money out bond funds than they've put in -- and it tops the previous record from 1994 when investors withdrew almost $63 billion. Bond yields rise when prices fall, and prices have fallen a lot this year. The yield on the 10-year Treasury briefly traded at 3% on Thursday. That matches the highest level of the year and is up from a low of 1.63% back in May. First Published: December 26, 2013: 12:45 PM ET Join the Conversation Most Popular Sponsored by US Indexes

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The PCAOB’s Role in Investor Protection DATE Sept. 28, 2012 SPEAKER(S): Jay D. Hanson, Board Member EVENT: University of Nebraska Omaha Accounting Speaker Series LOCATION: Omaha, NE Good Morning, I am very honored to be here to present at this inaugural speaker series event. I am particularly excited about the mix of participants here this morning — ranging from students who are yet to begin their careers, faculty that are helping to prepare future accountants and auditors, accountants working hard every day to get the numbers and disclosures right, and audit professionals providing important assurance to investors. Thank you all for choosing careers that are so challenging and critical to the capital markets. Before I go further I must tell you that the views I express today are my personal views and do not necessarily reflect the views of the Board, any other Board member, or the staff of the PCAOB. I started my career over thirty years ago when I graduated from college in Minnesota and joined McGladrey and Pullen. A great deal has happened since then, particularly in the last decade. As all of you know — although the students among you probably were not reading the Wall Street Journal at the time — the collapse of Enron, the bankruptcy of WorldCom, and a number of other corporate scandals led Congress to pass the Sarbanes-Oxley Act of 2002, which established the PCAOB and imposed some important new requirements on corporate America and the auditing profession. Before "SOX," as so many affectionately call this landmark legislation, the auditing profession in the United States was subject to self-regulation, and, in response to major corporate bankruptcies and concerns about the quality of public company audits in 1970's, the American Institute of Certified Public Accountants ("AICPA") established a variety of measures to enhance oversight over the practice of auditing, including the Auditing Standards Board, the SEC Practice Section, and the Quality Control Inquiry Committee. In spite of these measures, scandals and business failures continued, often prompting the question: "Where were the auditors?" Even after the Sarbanes-Oxley Act, we had a major financial crisis and scandals like those involving Madoff, Petters, Peregrine Financial Group and others. Again, questions were raised about the role of auditors. In 2010, Congress again acted, passing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which included a variety of provisions, including expanding the PCAOB's oversight authority to include the auditors of brokers and dealers. So, with all of this attention on auditors and their role in the capital markets, what has been the role of the PCAOB in investor protection during the last ten years, and where are we headed in the future? The PCAOB commenced operations in 2003, building programs to meets its four statutory obligations: registration, inspections, enforcement and standard setting. Initially conducting only limited inspections of the four largest firms, the Board's registration records currently show over 2300 firms, including foreign firms from 85 jurisdictions. To date, the Board has conducted over 1950 inspections, including inspections in 38 jurisdictions outside the United States. Last year, we commenced a pilot program of inspections of the audits of brokers and dealers, and, in August, we issued our first public report on the inspection results of that program thus far. Since its inception, the Board also has issued 16 auditing standards — including, for example, audit documentation, internal controls, audit planning, engagement quality review, and risk assessment — and has substantially amended a number of interim standards — including, for example, AU 325, AU 411, AU 508, AU 350 and AU 329. Last year, the Board issued concept releases or proposals to trigger wide-ranging discussions about potential changes to certain fundamental aspects of auditing, including the content of the auditor's report, audit transparency, and auditor independence, objectivity, and skepticism. More recently, the Board issued a proposed standard on related parties and a final standard on communications with audit committees. The PCAOB also has regularly issued staff audit practice alerts, intended to highlight new, emerging or otherwise noteworthy issues or circumstances that affect how auditors do their jobs. Examples of topics include auditing during and after the financial crisis, difficult valuation issues, litigation and other contingencies, using the work of other auditors, and several others. Combined, our work conducting inspections and enforcement proceedings and drafting standards and practice alerts give us a pretty good sense of the areas with which auditors are struggling. Recent inspection findings tell us that auditors have struggled with auditing fair value measurements, impairment of goodwill, indefinite-lived intangible assets, and other long-lived assets, allowance for loan losses, off-balance-sheet structures, revenue recognition, inventory and income taxes. Our inspection results in 2010 and 2011 showed an increase in inspection findings, particularly in the area of fair value, but also in the auditors' testing of internal controls. We know that the accounting profession as a whole is facing difficult questions as a result of the increasing complexity of business transactions and complex financial instruments which are appearing more frequently not only in the financial statements of financial institutions but many other types of companies as well. Management and their accountants must tackle an ever growing list of fair value measurements and estimates, which often involve measurement uncertainty or predictions of the future. At the same time, in the wake of the financial crisis, the work of accountants is subject to increased scrutiny by regulators and investors, particularly in the areas of complex accounting applications, disclosures and internal controls over financial reporting. Auditors also must master these technical challenges while simultaneously overcoming the difficulties associated with tight deadlines, fee pressures, demands for client service, and business development expectations, all of which may undermine incentives to conduct comprehensive, high quality audits. At the same time, auditors face criticism from those who believe that they did not do enough, in the years or months leading up to the recent financial crisis, to sound an alarm about the risks and uncertainties associated with certain companies. Although the challenges for the audit profession remain numerous, I firmly believe that PCAOB inspections, standard setting and enforcement activities have had a substantial, positive impact on audit quality since the PCAOB's establishment. While I cannot speak for my fellow Board members, several have made public statements indicating that they agree. However, when pressed for details, we find that it is difficult to provide specific measures to support our belief that audit quality has improved. There have been many discussions about audit quality at the PCAOB and among leaders in the audit profession. Everyone agrees that audit quality is difficult to measure, and that unintended consequences may result from attempts to do so. There are many possible ways to look at whether audits are effective, including the trends in restatements of financial statements, revisions to opinions on internal control over financial reporting, litigation against the auditor, investor and audit committee satisfaction, peer review results and our inspection findings, to name just a few. Although this is a difficult area with many uncharted waters, I am hopeful that, with almost ten years of experience under our belt, we can make progress in figuring out how to measure the quality of audit work and our success as a regulator in driving important improvements. Another important aspect of trying to determine what drives audit quality is understanding what auditor actions or behaviors result in poor audits, and what auditors do that has positive results. Consistent with the requirement in the Sarbanes-Oxley Act that PCAOB inspections "assess the degree of compliance of each . . . firm . . . with th[e] Act, the rules of the Board, the rules of the Commission, or professional standards."[1] our inspectors specifically look for and communicate audit deficiencies. PCAOB inspection reports are not intended to convey a balanced view of the strengths and weaknesses of each inspected firm. We do not provide grades to firms, and what we report should not be the only fact informing anyone's view about audit quality. Nevertheless, we are frequently asked whether and how we can communicate what we observed in inspections of audits where we found no deficiencies. Said another way, where did things go right and why? In any given firm, PCAOB inspectors may find very different results in different audits of similar companies. Currently, our answer is that — other than anecdotally — we have not been collecting and reporting data about what firms are doing right. I believe we should be, as we consider how best to continue our work to improve audit quality. Clearly, we at the PCAOB have our work cut out for us, and I look forward to continuing to contribute to the work of the Board as we enter our second decade of operations. However, we cannot do it alone, and we need your help. I have already discussed some of the complexity in business models and transactions that pose unprecedented challenges to accountants and auditors today. Fair value accounting and the auditing of fair value measurements and management estimates play an increasingly important role in today's economy, yet even experienced auditors struggle with these issues every single day. Many universities and colleges have begun to include fair value accounting modules in their curriculum, but I urge the academics in the room to consider whether more can be done. Provide real world examples to your students, and address both the accounting requirements and appropriate audit approaches. Cost accounting is an indispensable building block in any accounting education, but fair value accounting is an indispensable skill in today's business world. Other developments that auditors increasingly encounter include complex intellectual property arrangements, rapid business cycles where companies move quickly from start-up to IPO to merger and acquisition or sell-out, and, of course, the expansion in the use of International Financial Reporting Standards. I know many accounting programs incorporate these and other emerging themes into your teaching and research activities, and I applaud you for your efforts. Those among you who are students with the goal of joining the audit profession, my best advice is never to lose sight of the fact that your true clients are the investors in the companies you are auditing, not the company's CFO, or the accounts receivable accountant, or even the internal auditor with whom you may be interacting day after day. When you are working long hours and dealing with difficult issues, it may be easy to forget about the public-interest mission auditors fulfill, but that mission is the only thing that distinguishes the auditor from the legions of others whose work affects the company's financial statements. Finally, we at the PCAOB need to work closely with audit committees, who have a substantial effect on audit quality, as they work every day to fulfill their investor protection obligations, hiring and firing auditors, directing and supervising their work, and holding them to high independence and performance standards. We try to do our part to make the jobs of audit committees easier and their efforts more effective. Recently, the Board issued Audit Standard No. 16 to expand the matters about which auditors are required to communicate with the audit committee. These matters include, for example, significant risks, critical accounting estimates, difficult or contentious matters, significant unusual transactions, and going concern. Last month, we also issued a document, Information for Audit Committees about the PCAOB Inspection Process,[2] intended to help inform the dialog between audit committees and their auditors about our inspection findings. We hear from audit committee members frequently, including at our investor advisory group meetings, standing advisory group meetings and roundtables like those held throughout this year to seek input about auditor independence, objectivity and skepticism. We are eager to better understand how audit committees fulfill their role today and what has changed under "SOX." Our interactions with audit committee members have impressed upon us that many audit committee members take their role very seriously and put forth substantial time and effort to ensure that investors receive fair and accurate financial statements. But we also hear from auditors, financial statement preparers and investors that the quality of audit committee performance varies, and there is always room for improvement. We do not regulate audit committees, and, due to confidentiality provisions in the Act, we cannot provide them with non-public information about our inspections or enforcement work relating to the audit firms they oversee. Nevertheless, given the key role of audit committees in the capital markets, it is important that we work together to achieve our common mission of investor protection. Starting a dialog was a great first step. I am hopeful that we can continue these efforts and do even more to help audit committees understand what we do and what we observe about the audit profession. Likewise, we have a lot to learn from them, and I welcome any and all input from audit committees of companies of all sizes. Thank you again for inviting me here today. I look forward to your questions. [1] Section 104(a) of the Sarbanes-Oxley Act of 2002. [2] PCAOB Release No. 2012-003 (Aug. 1, 2012).

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hide This U.S. official is heading to Jeopardy! Who is Richard Cordray? Consumer Financial Protection Bureau Director Richard Cordray testifies before the House Financial Services Committee in Washington Septembe WASHINGTON (Reuters) - He'll take 'Consumer Protection' for $200, Alex. Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, will appear on Jeopardy! on February 5, about 27 years after he won $45,303 as a contestant on the game show. He will be part of a Battle of the Decades between former champions as the show celebrates its 30th anniversary. Jeopardy!, with its long-time host Alex Trebek, quizzes contestants about a range of categories from pop culture to science. Participants must answer in the form of a question. Cordray was an undefeated, five-team champion in 1987. In a video posted online by the game show, he said he used his winnings to buy a car and repay his father for money he had borrowed to go to law school. "It was exciting, it was intimidating ... you recognize suddenly as you get there that two out of three contestants lose their game," said Cordray, an Ohio native who was that state's attorney general before joining the consumer bureau. In the video, Cordray said he was surprised by how many people watched the show, and he recalled receiving "a couple of marriage proposals," but he noted he is now happily married. Jennifer Howard, a spokeswoman for the consumer bureau, said Cordray would not take any money if he won. The show has already been taped. The two contestants facing him, both season 10 alumni, won more than twice as much money as Cordray won on the show. As for studying, Cordray said in the Jeopardy! video, "Back then I used books. Nowadays I think people use the computer." (Reporting by Emily Stephenson; Editing by Karey Van Hall, Toni Reinhold)

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Back to October 2012 home page How top private companies are growing Business North Carolina examines the Grant Thornton 100 to see what it takes for closely held companies to expand. By Erin Dunn Acquisitions/expansions Peak 10 Inc. This Charlotte company has kept adding data centers, which it operates for small- and medium-size companies in midmarket cities. Peak will soon open its 24th and is in talks to build a 25th at an undisclosed location, CEO Dave Jones says. Companies outsourcing information technology have fueled its double-digit annual growth in revenue and net income.VPS Convenience Store Group LLC In January, the Wilmington-based owner of the Scotchman and Village Pantry chains bought seven convenience stores in central Illinois, its third acquisition in about a year, which helped it move from sixth to fourth in the ranking. It now operates more than 420 stores in the South, Midwest and Mid-Atlantic. Reinvesting/rebranding Belk Inc. The Charlotte-based retailer and largest company on the list, with revenue of $3.7 billion its last fiscal year, is in the midst of a $600 million effort to rebrand and remodel its department stores. Concord Hospitality Enterprises Co. The Raleigh-based operator of more than 80 hotels invested $18.5 million renovating more than a quarter of them last year and more than $6 million converting a 32,000-square-foot building into its new headquarters. Concord, which made its debut on the list this year at No. 19, spent $7 million in the first quarter of 2012 on renovations. New products Bandwidth.com Inc. The fast-growing Cary communications-technology company is moving this fall to N.C. State University�s Centennial Campus to take over Raleigh-based software maker Red Hat Inc.�s former headquarters. One of its most-anticipated products is a phone that lets users make calls over a Wi-Fi network. It�s in the testing phase. S&D Coffee Inc. The Concord coffee roaster and distributor is adding more lines of tea to its product mix and is searching for a site for a new production and distribution operation. New partners AmWINS Group Inc. The Charlotte-based wholesale insurance distributor teamed up this year with New York-based private-equity group New Mountain Capital for a $1.3 billion recapitalization so AmWINS can grow organically and through acquisitions. In September, the company announced it would purchase Stevens Point, Wis.-based Special Markets Insurance Consultants Inc., which underwrites insurance for schools, youth groups and sports associations. Download a full ranking of North Carolina's top 100 private companies here. See how Epic Games Inc. became the NC100 largest's gainer in 2012.

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A commitment to the community is still working for you today. Capital City Bank was established in 1892 as Neese Brothers Bank in Richland, Kansas. In the early 1900s, the name was changed to the Richland State Bank. In 1930, Georgia Neese Gray began helping her father, Albert Neese, run the family business. In 1935, she began working at the bank as an assistant cashier and following her father�s death in 1937, she became president of the bank. President Harry Truman named Georgia the first woman treasurer of the United States in 1949. In 1964, the Richland State Bank relocated to Topeka in a new building at the Southeast corner of 37th and Topeka Boulevard and was renamed Capital City State Bank and Trust Company.The bank remained in the Neese/Gray family until 1974, when Georgia and her husband, Andy Gray, sold the bank to Gaylen Lawrence and Jim Hentzen. They managed the bank until 1979, at which time they sold it to the Sabatini family. In 1993, Southwest Bank at 17th and Gage was acquired and merged into Capital City Bank. Southwest State Bank was organized in 1958 by Lou Falley and a group of local businessmen. The bank has played an important role in the restoration and preservation of historic Topeka locations, including the downtown bus depot that Sabatini purchased and renovated, and in 1988 opened as the third Capital City Bank location. Participation in other restoration projects includes the Union Pacific Depot, Cedar Crest Mansion, Row House, and Historic Richey House. Capital City Bank, the Sabatini family, and bank associates have been integral parts of Topeka. For his contributions, The Topeka Capital-Journal, in 2000, named Sabatini the fifth most influential individual in Topeka. Giving back to the community, on both corporate and individual levels, is what Capital City Bank does best. Not only through loans and other banking services, but also in donations to charitable, educational, and a variety of non-profit organizations. Besides monetary donations, associates donate time on behalf of Capital City Bank. They chair gala events, work at auctions, serve on boards of directors, and provide volunteer support to numerous community and educational organizations. The bank has 10 full-service locations, including nine drive-thru facilities and 11 automated teller machines throughout Topeka, Lawrence, and Overland Park, Kansas. Capital City Bank has focused on serving individuals and small to mid-sized businesses, placing emphasis on customer service and keeping pace with advances in technology to improve the customer�s banking Capital City Bank is owned by a one-bank holding company, Capital City Bancshares, Inc. Capital City Bank owns one subsidiary, Capital City Investments, Inc., a real estate

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LICU Expansion, Distance From Cap Seen Blunting Need for MBL Cap Fight February 25, 2013 • Reprints Surrounding the chocolates, roses and love-filled greeting cards that made the rounds in Washington on Valentine’s Day, was an announcement from Rep. Ed Royce (R-Calif.) re-introducing a bill that would increase the member business lending cap from 12.25% of assets to 27.5%. And the fight to expand lending authority heads back to the battlefield as bank trade groups stock their quivers with more arrows in hopes of emerging victorious in a battle that has waged on for at least a decade. But how much of a fight is it? Especially in light of the fact that most credit unions are nowhere near their MBL caps and an edict from the NCUA last August allows more than 1,000 credit unions to become a low-income designated credit union, which would exempt them from the cap. “When we talk about those credit unions that are up against the cap, we’re only talking about a few, less than 5%,” said Harvey Johnson, CPA and senior manager with PBMares LLP, a regional accounting and consulting firm based in Newport News, Va. “I think there’s two things going on. For smaller institutions, the NCUA issued the low-income designation, which gave them unlimited authority and others that have started using participations to manage the cap.” As long as the expertise is there, Johnson said he is a big fan of participation loans. It’s the credit unions that lack the experience that tend to get themselves in trouble, he added. Those type of cooperatives tend to the run the gamut but for the larger credit unions, the MBL cap may not be as big of a concern because their cap limits are so far off in the horizon, said William McCluskey, CEO of Willow Capital Group, a firm in Centerbrook, Conn., that provides commercial loan origination, underwriting and closing for more than 30 credit unions, managing a servicing portfolio of nearly $330 million. “The bigger issue is to attract quality loans, and there’s pressure to put balances on the books, coupled with the fact of building a program,” McCluskey said. He pointed to one large credit union client that is 47% loaned out and has between $500 million to $1 billion in capacity. However, in order to fill that space, McCluskey said the fuel has to come from wanting to invest in the loan program and other factors, including justifying to the board that the credit union has income coming in. Still, McCluskey can see both sides for raising and keeping the MBL cap where it is. “There needs to be some outlet to letting a credit union not having to abide by the 12.25% arbitrary cap,” he offered. “On the flip side, I’m concerned that if the cap is raised, there are many credit unions that are looking to enter the market. They might go out and grab any loans and lose sight of building quality programs.” McCluskey pointed to another instance of a credit union that has been a longtime proponent of raising the MBL cap. After building a successful program over the past 15 years, the cooperative had built a reputation in its market, he said. “They’re under a lot of pressure because they can’t serve their community, and they can’t help grow the community this way,” McCluskey pointed out. As the cap fight in Washington begins another round, market conditions will often determine whether credit unions will hum along as usual, scale back or delay getting into commercial or business lending programs this year, McCluskey said. For instance, in states like New York, where bank saturation is heavy, credit unions are facing stiff competition, he said. In other parts of the country, banks might not be as big of a concern. And for those that are already flush in auto, mortgages and home equity loans, there might not be a need to turn to business loans to add to the bottom line. “We focus on commercial real estate. It’s a slow moving animal. We counsel credit unions that if they get into this type of lending, they need to mirror their communities,” McCluskey said. “One of the pressures of those who are trying to build balances is knowing local lenders.” By targeting loans under $1 million, which are considered small balances to many credit union competitors, and partnering with agencies such as the SBA, McCluskey said some can get a feel for how they can best serve small businesses. Knowing the markets and who they’re competing with is just as important if not more important than where the MBL cap lift will go. “One thing that’s different about 2013 is credit unions face not only the limitation cap but also more money coming back into the market,” said David Polevoy, executive vice president of commercial lending for Credit Union Business Services LLC, a Norcross, Ga.-based commercial mortgage lending firm owned by six Georgia credit unions. “A lot of credit unions would like a level playing field, particularly as more lenders come out in the marketplace,” Polevoy said. “It’s somewhat of an indication of a healthier economy. But credit unions have been out there throughout the cycle, have been generally conservative and have relatively good quality loans and didn’t have to pull back like other lenders did.” Since 2003, CUBS has originated in excess of $250 million in commercial property and commercial mortgage loans in the Atlanta area and throughout Georgia as well as properties in Alabama and Tennessee, according to the CUSO’s website. This year, it plans to coordinate the funding of over $50 million in business and commercial property loans. Polevoy believes the NCUA’s low-income designation and to a smaller degree, signing on with the SBA’s 7(a) loan program, are a few ways credit unions will manager under their caps. “Credit unions are experiencing asset growth. As assets expand, business lending expands,” Polevoy said. “Certainly, there’s no interest in pulling back. I think more and more credit unions have looked at the commercial market and said, ‘Here’s an opportunity to have good credit and diversified assets.’” Well-capitalized credit unions that can show they have established a strong MBL program should be allowed to press beyond the 12.25% cap, McCluskey said. They should be given flexibility to originate loans with limited or nonpersonal recourse, provided the structures of these loans are within accepted industry norms, he added. Nonrecourse loans for instance, are generally collared at much more conservative leverage points or loan-to-value and are reserved for the highest quality real estate assets, which should effectively mitigate the risk of the loan investment, he explained. For those credit unions that do not have an established program or that demonstrate inconsistent results, such as higher than normal loan losses or delinquencies, regulations should serve as an effective guideline for prudent program creation and growth, McCluskey said. “Increased capacity above 12.25% may provide a credit union inappropriate justification to build a program deemed feasible due to its potential size, but it cannot replace measured and disciplined growth, which focuses on quality performance,” McCluskey said. “In other words, credit unions that exhibit risky behavior or nonuniform execution of their programs, may not even be justified in a 12.25% let alone a higher cap.” For Business Lending Group LLC in Appleton, Wis., three of its four credit union clients are exempt from the MBL cap, said Linda Kennedy, president/CEO of the CUSO. The fourth credit union still has plenty of room to grow towards its cap, she noted. “I haven’t seen a lot of new credit unions in Wisconsin getting into business lending,” Kennedy said. “Still, I hope Congress looks at increasing the cap. There are a lot of small businesses that need a credit union environment. Big banks don’t want to do deal with small credit. There are a lot of people that fall into that underserved market.” In the current lending environment when loans are hard to generate, there’s an uptick in interest in member loans and nonmember participation loans, especially from credit unions in the $100 million to $250 million asset range, said Bill Beardsley, president of Michigan Business Connection LC, a CUSO in Ann Arbor that manages over $200 million in business loans for more than two dozen credit unions. “I don’t think there’s any doubt that the cap discourages smaller credit unions from launching MBL programs because it limits the loans they can make,” Beardsley said. Page 1 of 2 Next »

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<!-—Include OAS Analytics Setup Script --> Customer Service 1 (888) 261-2693 Stansberry Research Not a subscriber? Click here to learn Please enter Search keyword. Advanced Search Market Window Steve's note: This week, I've showed you why I believe stocks could double over the next three years. As I explained, the market is cheap... and low interest rates will fuel a tremendous move higher. But there's one more force working to drive the market higher. I'm calling it the "Great Migration." And it could push stocks to unimaginable highs... The "Great Migration" Could Lead to a Dot-Com-Style Boom in Stocks By Dr. Steve Sjuggerud Wednesday, March 6, 2013 Mom and Pop America are about to buy stocks... big time. And that will kick the market into a major boom phase... As I've showed you over the last two days, the stock market is incredibly cheap right now. Plus, there's plenty of "rocket fuel" to drive it higher. And right now, the "Great Migration" of Mom and Pop investors is just getting underway. If you understand this and position yourself correctly, you could make a ridiculous amount of money. The principle is simple. It is the idea that Mom and Pop America are about to buy stocks... big time. They are about to migrate from ultra-low-interest investments (like cash and bonds) and into stocks. Mom and Pop don't want to do this, yet. (Heck, they don't want to do it at all.) But over the course of the next three years, they will make the migration. They have no choice. One by one, Mom and Pop will soon realize that near-zero-percent interest on money in the bank and in bond funds isn't good enough. You can't live on that in retirement... and you need to do something else. They'll look around to see what they can do with their money... and they will rediscover stocks. They will eventually figure out they've been left with no other options. At first, this migration will be slow... But it will gain some real momentum once Mom and Pop understand the effect the first two incredible forces I described (low interest rates and low inflation) are having on stocks. By the end of next year, the Great Migration could get silly. Ultimately, we could see a dot-com-style boom in stocks all over again through 2015. I don't know how high things will go. But if the stock market rises to 30 times earnings in three years, that's a 168% gain from here. The market went higher during the dot-com boom... and we could see a similar boom here. To maximize your gains, you need to get there first. And you're still plenty early. The Great Migration has just begun... It really just started this year. According to Lipper, a global leader in mutual fund research, $25 billion flowed into stock mutual funds in the first five weeks of 2013. That's the biggest inflow in any five-week period since April 2000 – right at the peak of the dot-com boom. This is a major change... You see, in the last five years, $1 billion-plus has flowed INTO bond mutual funds (according to the Investment Company Institute, a trade organization). Meanwhile, $500 million has flowed OUT of stock funds. I can't fault Mom and Pop for investing in bonds... It was actually a great move. As I pointed out in a recent essay, you'd have made a 100% return in high-yield bonds starting from the March 2009 bottom. But as I explained, the move in bonds is over now. The easy money is gone. So what should you buy? Let's talk through this... The first stocks I expect Mom and Pop to buy when they migrate out of cash are the big names... the dividend-paying blue chips. Their next stop will be Big Tech, like Apple and Google. You can hardly blame them... shares of Apple and Microsoft trade at a single-digit forward price-to-earnings (P/E) ratio. IBM trades at a forward P/E ratio of 11. These names are cheap! After seeing their success in big, dividend-paying stocks and Big Tech, Mom and Pop will become emboldened... They'll be ready to take on some real risk. And that's when riskier assets like emerging-market stocks will take off. Again, I am fully aware that any number of things could happen to prove me wrong. I know the entire globe is struggling right now. According to the most recent data, the U.S., Europe, and Japan are all experiencing NEGATIVE economic growth. And that's today... Looking down the road, a crisis in the U.S. is inevitable... You can't borrow money and print money at the rate we are without consequences. I know these things. But the facts speak for themselves... Conditions are perfectly lined up for a dramatically higher stock market. • Stocks are the greatest value in my career and could double, to trade at a P/E of 22 by 2015. • Interest rates will stay at zero for a long time. • The Great Migration out of cash and into stocks is starting, and could propel stocks to dot-com-boom-like highs. I am excited about this. Make sure you position yourself to take advantage of it. The ride might be bumpy, but it will be worth it. Be confident in the low rates and the Great Migration, and stay onboard as long as you can stand it. Good investing, Steve This week, Steve has shared the key catalysts for a three-year rally that could send stocks higher than anyone believes. "We've been handed the playbook," he writes. "We know the plays. We know what the other team is going to do. And we know how they're going to do it – almost exactly." Read Parts I and II of his series here and here. Market Notes CAN YOU NAME THE WORLD'S TOP-PERFORMING COMMODITY? Quiz time: Which commodity has performed the best over the past 12 months? Some might guess natural gas. The clean fuel has enjoyed a heck of a rally off its early 2012 lows. Others might guess corn or soybeans. These agricultural commodities have been all over the news. The correct answer, according to financial research website Finviz, is lumber. Wood has registered a 47% gain in the past 12 months... beating stocks, grains, energy, and everything else. You might not have guessed lumber would be the winner. But you can probably guess the driver of its rally... It's the huge rebound in the housing market. Like most commodities, lumber was hammered during the credit/housing bust of 2008. But as you can see from the chart below, it's been a heck of a recovery. Prices have surged in the past 18 months... and are sitting near eight-year highs. It's a bull market in wood! – Brian Hunt How True Wealth Systems is buying the stock market right now... My True Wealth Systems computers showed us the value in stocks last May... Click here to get immediate access. In The Daily Crux The Obama administration has now admitted the unthinkable "Fears are very quickly being realized not as possibilities, but actualities..." Porter Stansberry: This could be the most shocking thing I've ever written "A message I doubt you will ever forget..." Ron Paul: Here are the facts on the sequester "crisis" "We are speeding toward collapse..." Doc Eifrig: A super-simple way to protect yourself from a deadly stroke This common food could reduce your risk by up to 55%... Why this could be the most dangerous rally in history "Is this the final blowout top?" Use This Simple Idea Today for Safe, Steady Income Dr. David Eifrig Like most great investment ideas, the story behind "Digital Utilities" is simple... and it doesn't change much... The Sector Due for a Crash Dr. Steve Sjuggerud Nobody knows more about this sector than Mr. Fridson. So I listened... Selling Biotech: How We're Locking in Big Gains My friend, it is time for me – and for my subscribers – to move on from biotech. Let me explain... On-Air Surprises from Billionaire T. Boone Pickens "You were right, and I was wrong," billionaire T. Boone Pickens told Porter Stansberry on Stansberry Radio last week. And in this interview, Pickens was full of candid insights like these... The Simple Concept That Made Me $6 Million Last Year Mark Ford It's the primary way I developed my wealth... I am talking about the strategy of developing multiple streams of income... DailyWealth Premium DailyWealth Trader Legal Notices: Stansberry & Associates Investment Research LLC (S&A) is a publishing company and the indicators, strategies, reports, articles and all other features of our products are provided for informational and educational purposes only and should not be construed as personalized investment advice. Our recommendations and analysis are based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. Readers should be aware that trading stocks and all other financial instruments involves risk. Past performance is no guarantee of future results, and we make no representation that any customer will or is likely to achieve similar results. Our testimonials are the words of real subscribers received in real letters, emails, and other feedback who have not been paid for their testimonials. Testimonials are printed under aliases to protect privacy, and edited for length. Their claims have not been independently verified or audited for accuracy. We do not know how much money was risked, what portion of their total portfolio was allocated, or how long they owned the security. We do not claim that the results experienced by such subscribers are typical and you will likely have different results. Any performance results of our recommendations prepared by S&A are not based on actual trading of securities but are instead based on a hypothetical trading account. Hypothetical performance results have many inherent limitations. Your actual results may vary. Stansberry & Associates Investment Research expressly forbids its writers from having a financial interest in any security they recommend to our subscribers. And all Stansberry & Associates Investment Research (and affiliated companies), employees, and agents must wait 24 hours after an initial trade recommendation is published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation. © 2014 Stansberry & Associates Investment Research, LLC. | Privacy Policy| Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This website may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202.

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Banta Rejects Cenveo Offer, Considers Sale of Company Printer and supply chain specialist Banta Corp.'s board of directors has unanimously rejected Cenveo Inc.'s unsolicited proposal to acquire Banta for $47 per share. The board of directors determined that the proposal is not in the best interest of Banta shareholders. The decision led to a renewed, higher Cenveo offer of $50 per Banta share.Banta also said that it will explore all potential strategies for further maximizing shareholder value, including the possible sale of the company. On Sept. 14, Banta, Menasha, WI, announced a series of strategic initiatives as a follow-up to its reorganization plan of several months ago. These actions, which included laying off about 6 percent of its workforce, were designed to bring the company significant cost savings and make it a more competitive player in the print and supply-chain management industries. These initiatives, which included a special $16 per share cash dividend for shareholders, came shortly after a couple of bids from Cenveo to acquire Banta. At the beginning of September, Cenveo, Stamford, CT, offered $47 per share, a 38 percent premium on Banta's closing price prior to its first offer in early August.

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Business & economics / International In category Imagining India: The Idea of a Renewed Nation A visionary look at the evolution and future of India In this momentous book, Nandan Nilekani traces the central ideas that shaped India's past and present and asks the key question of the future: How will... Business & econo... Tower of Basel: The Shadowy History of the Secret Bank that Runs the World Adam LeBor Tower of Basel is the first investigative history of the world’s most secretive global financial institution. Based on extensive archival research in Switzerland, Britain, and the United States, and in-depth... Patrick Healey First published in 1998 Why Nations Fail: The Origins of Power, Prosperity, and Poverty Daron Acemoglu & James Robinson Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness,... The 22 Immutable Laws of Marketing: Exposed and Explained by the World's Two Al Ries & Jack Trout Two world-renowned marketing consultants and bestselling authors present the definitive rules of marketing. The 30 Day MBA in International Business Colin Barrow The 30 Day MBA in International Business provides examples, case studies and a thorough understanding of international business to help boost your knowledge of export trading for the benefit of you and your... Start-up Nation: The Story of Israel's Economic Miracle Dan Senor & Saul Singer START-UP NATION addresses the trillion dollar question: How is it that Israel-- a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural... India Unbound India today is a vibrant free-market democracy, a nation well on its way to overcoming decades of widespread poverty. The nation’s rise is one of the great international stories of the late twentieth century,... IFRS Made Easy Steven M. Bragg The definitive guide to all things IFRSIFRS Made Easy provides complete, easy-to-navigate coverage of all International Financial Reporting Standards (IFRSs) with concise explanations and hundreds of supporting... An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China Rongxing Guo This comprehensive overview of the modern Chinese economy by a noted expert from China offers a quality and breadth of coverage. In this book, the author provides an introduction to China's economy since 1949... China Inside Out: 10 Irreversible Trends Reshaping China and Its Relationship with the World Bill Dodson An in-depth look at the forces and trends changing China and its place in the worldChina has dominated the news for nearly a decade and will continue to grab headlines as it moves inexorably toward becoming... Doing Business in India For Dummies Ranjini Manian India is booming! This practical, easy-to-understand guide covers all the basics of setting up and growing your business in India, from choosing a location and selecting your Indian team to understanding the... A Year Without "Made in China": One Family's True Life Adventure in the Global Economy Sara Bongiorni A Year Without "Made in China" provides you with a thought-provoking and thoroughly entertaining account of how the most populous nation on Earth influences almost every aspect of our daily lives. Drawing on... The Chinese Yuan: Internationalization and Financial Products in China Peter G. Zhang & Thomas Chan Few topics have attracted as much attention worldwide in recent years as the RMB. These debates have gained added urgency in light of the financial crisis and the topic of RMB revaluation is now being actively... Global Revival of Left and Socialism Versus Capitalism and Globalization and China's Share Pu Guoliang & Xiong Guangqing This book is the result of a research sub-topic, titled as "The Relations of the Two Systems and China's Foreign Strategies in the Process of Globalization in the Post-Cold War Era". The main research project... Couples Group Psychotherapy Judith A Coché Couples Group Psychotherapy gives therapists everything they need to develop a cost-effective, time-efficient method for addressing the needs of diverse communities and uncommon settings. Clinicians will come... Favorite Counseling And Therapy Techniques Howard G Rosenthal In the new edition of this highly popular book, Howard Rosenthal once again brings together a group of prominent therapists who share their insightful, pioneering, and favorite therapeutic techniques. Information-Processing Channels in the Tactile Sensory System George A Gescheider & John H Wright Information-Processing Channels in the Tactile Sensory System addresses the fundamental question of whether sensory channels, similar to those known to operate in vision and audition, also operate in the sense... An Introduction to Art Therapy Research Lynn Kapitan This book fulfills the need for a pragmatic text that is grounded in art therapy research literature and surrounding contexts, providing guidance to students and practitioners in research design via a broad... Insidious Workplace Behavior Jerald Greenberg Insidious Workplace Behavior (IWB) refers to low-level, pervasive acts of deviance directed at individual or organizational targets. Because of its inherently stealthy nature, scientists have paid little attention... ‹‹ 1 2 3 4 5 6 7 … 35 36 ››

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U.S. warns foreign exchange houses are helping Iran skirt sanctions Kuzma/Shutterstock.com By Rachel Oswald The US Government Doesn’t Want Online Courses to Be Open to Iran, Sudan, and Cuba The Evolution of the Twitter Revolution Smart Sanctions 2.0 Obama Scooped by Iranian President's Tweet The U.S. Treasury Department on Thursday warned financial institutions to be on the lookout for money transfers sent by foreign exchange houses and trading companies that are actually an attempt to mask transactions on behalf of sanctioned Iranian entities. The United States and allies have targeted Iran’s banking system and energy sector under a sanctions regime aimed at curbing the Persian Gulf power’s alleged pursuit of a nuclear-weapon capability. Tehran is widely understood to have responded by developing methods to avoid the full brunt of the punitive measures. A 2010 U.S. law goes after foreign companies that do business with designated Iranian financial institutions. As the U.S. dollar is the favored currency for many international transactions, limiting Iran’s ability to utilize it has a powerful impact on opportunities for foreign trade. The advisory notice by the Treasury Department’s Foreign Assets Control Office warns that increasingly restrictive U.S. measures targeting Iran’s banking system have led the nation to rely “more heavily on third-country exchange houses and trading companies to move funds.” Foreign currency exchange companies and trading firms are increasingly being used by Iranian entities to act “as money transmitters to process funds transfers through the United States in support of business with Iran that is not exempt or otherwise authorized by OFAC,” the notice states. The department called on U.S. financial firms to keep closer watch on money transfers submitted from foreign trading companies and exchange firms. Treasury did not single out any specific countries as being the sources of these dubious transactions. Cities and nations with large foreign trade sectors such as Dubai, Hong Kong, Singapore, and Malaysia are good guesses to be the sources of the transactions, according to a Washington-based expert on sanctions targeting Iran. “My assumption is that the [United Arab Emirates] is probably a major locus for this activity because of the strong commercial relationships between Dubai and Iran and the presence of very sophisticated trading companies and foreign exchange houses,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies. The foreign exchange houses involved are not small ‘mom-and-pop’ operations but highly profitable currency firms that handle commercial transactions worth hundreds of millions of dollars, he said in an interview. “They are interested in the business of major Iranian energy companies or telecommunication companies or construction engineering companies.” As Dubowitz explained the Iranian scheme to avoid financial sanctions imposed by Washington: a U.S. bank receives a wire transfer from an exchange house that seems on the surface to be a normal transaction between ‘Company A,’ whose address has been removed, and a nonsanctioned entity. “The U.S. bank thinks it’s a normal payment sent from [for example] Dubai on behalf of a UAE company” when the real originator is an Iranian firm, he said. Tactics used by exchange houses in this scheme to route payments to or through U.S. financial firms include not noting Iranian business addresses where they would otherwise apply and not naming Iranian individuals or businesses as the originator or beneficiary of the money, Treasury said. “They [Treasury] are trying to warn U.S. financial institutions that these transactions may be a pretense by the Iranian regime to hide the origins of these transactions in order to circumvent U.S. financial sanctions,” Dubowitz said. In addition to the explicit cautionary message to U.S. firms, Treasury is also giving an implicit warning to the third-party countries that are the sources of these transactions, according to Dubowitz. Treasury officials have been traveling around the world to inform foreign governments on the risk to their own formal financial institutions under recently passed U.S. laws if they do not crack down on transactions with sanctioned Iranian enterprises. With Thursday’s advisory, Treasury is probably signaling to these governments that their exchange houses and trading companies could also be subject to U.S. sanctions if they do not watch out for these practices, Dubowitz said. (Image via Kuzma/Shutterstock.com)

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Joint Release Office of the Comptroller of the Currency Office of Thrift Supervision NR 2008-150FOR IMMEDIATE RELEASE Agencies Release Joint Mortgage Metrics Report For the Third Quarter of 2008 WASHINGTON — The Office of the Comptroller of the Currency and the Office of Thrift Supervision issued their second report on mortgage performance today showing continued increases in delinquencies and foreclosures in process.While delinquencies, foreclosures in process, and other actions leading to home forfeiture continued to rise, newly initiated foreclosures dropped by 2.6 percent from the second to the third quarter of 2008.Loan modifications continued to grow more quickly than other loss mitigation strategies, as banks and thrifts worked with borrowers to keep them in their homes while minimizing losses. The number of new loan modifications increased 16 percent in the third quarter to more than 133,000.New in this report are re-default rates on modified loans. The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months."One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months and even eight months," said Comptroller of the Currency John C. Dugan. "This trend of increasing delinquencies underscores the need to understand why these modifications have not been more sustainable."OTS Director John Reich credited financial institutions for their continued cooperation and the depth of the data they provided."This report once again provides valuable insights into foreclosure prevention efforts in this country," Reich said. "We hope future reports will continue to yield information on how best to modify troubled mortgages to preserve homeownership over the long term."Other key findings include:The number of delinquent loans increased during the third quarter across all loan categories—prime, Alt-A, and subprime. More than nine out of 10 mortgages remained current, but the percentage of current and performing mortgages fell from 93.33 percent at the end of the first quarter to 91.47 percent at the end of the third quarter.Banks and thrifts continued to work with borrowers to mitigate losses and help borrowers retain their homes. The number of newly initiated home retention actions—loan modifications and payment plans—increased by 13 percent from the second quarter to the third quarter.Loans held on the books of servicing banks and thrifts had the lowest re-default rates at 35.06 percent after three months, and 50.86 percent after six months, compared with loans serviced on behalf of third parties. The lower re-default rate for loans held by servicers may suggest that there is greater flexibility to modify loans in more sustainable ways when loans are held on a servicer's own books than when loans have been sold to third parties.The report provides loan-by-loan data in a standardized format for 35 million first-lien mortgages—worth more than $6.1 trillion—held or serviced by national banks and thrifts. Despite its broad industry coverage, the data in the report should not be used to draw conclusions about overall conditions in mortgage lending.Media ContactsOCCBryan Hubbard(202) 874-5770OTSWilliam Ruberry(202) 906-6677Related LinksAttachment

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How the rich get richer Dan Richards Sunday, Aug. 29 2010, 8:00 PM EDT The events of the past couple of years have changed the investing landscape in fundamental ways. That's true of average investors, of large pension funds and equally true of wealthy families. This year, I've had conversations with two participants in a global study of over 150 families with investments over $100-million - it's a study that holds important lessons for all investors. The Wharton Global Family Alliance was established in 2004 in response to the desire by wealthy families to compare their performance with similar families around the world. At a May meeting in Boston, I met with Laird Pendleton, who chairs the alliance's advisory committee. And, at a Montreal conference in August, I spoke with Raphael Amit, academic director at the Wharton School of Business. In 2007 and again in early 2009, the alliance conducted interviews with wealthy families; 40 per cent had assets of more than $1-billion (U.S.). Half these families were in Europe with 44 per cent in the United States, Canada and South America. These families have very long time frames, investing with future generations in mind; their returns are often compared to large endowments such as Harvard or Yale. With that as a comparison, the performance of these families through the 2008 and 2009 downturn was exceptionally good. In the twelve months to June, 2009, Harvard's and Yale's endowments each lost more than 25 per cent. By contrast, only 45 per cent of family offices (a professional management organization owned and controlled by the wealthy family) in the study suffered losses over 6 per cent, and 15 per cent actually had positive returns. A shift in thinking Despite having fared relatively well, many families changed their approach as a result of the downturn. Professor Amit talked about a significant shift toward less volatile assets, particularly among American families. From 2007 to 2009, U.S. families cut their allocation to stocks in half, from 62 per cent to 32 per cent. Offsetting this, they increased their allocation to bonds by 11 percentage points and to hedge funds by eight percentage points. They also added 11 percentage points to "other stores of value" such as gold and collectibles. The changes among European families were less dramatic. They started off in 2007 with a stock allocation of 31 per cent, half that in the U.S. They reduced this to 21 per cent in 2009, offsetting this with a slight increase in bonds and a 14-percentage-point increase to "other stores of value." Learning amid the downturn In addition to his role with t

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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. IPOs Slump to Lowest Level Since Financial Crisis Economic slowdown and Facebook's disappointing debut curbed 2012 offerings. By Lee Spears, Ruth David and Fox Hu, Bloomberg December 28, 2012 • Reprints Initial public offerings in 2012 slumped to the lowest level since the financial crisis as signs of an economic slowdown and Facebook Inc.’s disappointing debut curbed demand and prompted companies to push back sales. IPOs have raised $112 billion worldwide this year, the least since 2008, according to data compiled by Bloomberg. Initial sales in western Europe dropped to one-third of last year’s level, while concern about China’s economy helped cut proceeds in Asia by almost half. U.S. offerings raised $41 billion, little changed from last year, as Facebook’s IPO spurred a monthlong drought in U.S. deals. With the possibility of $600 billion in U.S. spending cuts and tax increases that could cause another recession also weighing on the IPO market this year, the global backlog of potential offerings has now swelled to the largest year-end size since 2007, data compiled by Bloomberg and Ipreo show. That could set the stage for a rebound if lawmakers avert the so-called fiscal cliff, according to Credit Suisse Group AG and Barclays Plc, with companies from China Petrochemical Corp. to ING Groep NV poised to potentially move ahead with offerings. “A lot of people have been very selective,” Joe Castle, head of equities syndicate at Barclays, said at a briefing this month in New York. “If we see some deals go out early in the year that go well and trade well, then it feeds on itself for more volume to come out in the U.S. and on a global basis.” In the fourth quarter, IPOs in western Europe surged more than fivefold from a year earlier to $5.71 billion, and U.S. initial offerings increased 15 percent to $8.8 billion, data compiled by Bloomberg show. First-time share sales in Asia fell by 46 percent to $10.9 billion, the data show. Globally, IPOs this quarter edged up to about $32.4 billion from $29.5 billion in the year-earlier period. The annual global IPO tally declined for a second straight year as Europe slipped back into a recession, cutting the amount raised in the region by about two-thirds to $9.91 billion. In Asia, the biggest region for IPOs, proceeds fell by 43 percent to $46.7 billion. The U.S. total barely eclipsed last year’s mark, even including the $16 billion debut of Facebook, the biggest technology IPO on record. After Facebook fell as much as 32 percent in the first three weeks after its IPO, companies such as Party City Holdings Inc. and American International Group Inc.’s airplane-leasing unit pulled planned offerings in favor of private sales. The global IPO backlog swelled to about $115 billion at the end of this year, including a sale by Japan Post Holdings Co. that’s planned for 2015, according to Ipreo, a New York-based provider of market data. Excluding that offering, the backlog would be about $65 billion, larger than the $52 billion a year ago, the data show. “Many companies may have felt that the broader economic environment and their resultant earnings didn’t represent the true worth of their businesses,” Darrell Uden, co-head of equity capital markets for Europe, the Middle East and Africa at Zurich-based UBS AG, said in a phone interview. “Many chose to wait for a few more earnings cycles to ensure a better valuation.” U.S. lawmakers last week scrapped a proposed plan for higher taxes, stalling budget talks and fueling concern that the officials will fail to prevent tax increases and spending cuts from taking effect in January. President Barack Obama and the Republican-led U.S. Congress returned to Washington yesterday with five days left to reach a deal. Unease on the part of companies and investors may give way to an increase in new-share sales as a possible rise in mergers and acquisitions prompts more fundraising for strategic takeovers, according to Alasdair Warren, co-head of investment banking in Europe at New York-based Goldman Sachs Group Inc. Global M&A in the fourth quarter rose to the highest since 2008 as companies started to draw on cash piles totaling more than $3.5 trillion to make acquisitions. “In the period post summer, there’s been a pickup in issuance, but overall there’s still a degree of nervousness and uncertainty in the market,” Warren said in a phone interview. “In the first half of next year you are going to see more meaningful primary capital raisings in the corporate space, in many cases to improve strategic flexibility.” Direct Line In Europe, the fourth quarter was this year’s busiest for IPOs, picking up even after the region’s economy shrank for the second quarter in a row during the July-September period. IPOs in Europe since 2007 haven’t managed to recover to even half of their pre-crisis level, data compiled by Bloomberg show, as concerns over sovereign debt across the region have persisted. Telefonica SA’s German unit Telefonica Deutschland Holding AG raised 1.45 billion euros ($1.9 billion) in October in Europe’s largest IPO in 2012, listing in Frankfurt. Britain’s Direct Line Insurance Group Plc raised $1.5 billion in October, and Russia’s OAO MegaFon raised $1.8 billion in November. All three offerings were increased after underwriters exercised over-allotment options to buy more shares. There may be additional large telecom IPOs from Europe next year, as Telef

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100 banks end reporting to SEC under new law View Photo Gallery — Several small banks have stopped reporting financial details about their operations to the Securities and Exchange Commission. Here’s a look at the regulators of the nation's financial institutions. By Dina ElBoghdady, E-mail the writer About 100 small banks have stopped reporting financial details about their operations to the Securities and Exchange Commission since April, when a law was enacted that aimed to lower the regulatory burdens for small companies. For nearly five decades, securities law allowed banks with fewer than 300 shareholders to “deregister” — meaning they could stop reporting to the SEC their revenue, expenses, executive compensation and trends affecting their businesses, among other things. Bank deregistration jumps in 2012. How would you like these paychecks? J.D. Harrison Is gulf cleanup over or not? BP and Coast Guard differ. Steven Mufson Nearly four years after the spill, the groups put out dueling press releases about the progress of the response. Yellen makes careful forecast on economy Ylan Q. Mui Fed chairman stresses that flexibility is crucial to adjust to possibly changing conditions. Now, banks with fewer than 1,200 shareholders can deregister under a provision of the Jumpstart Our Business Startups, or JOBS, Act. Since the threshold rose in April, 101 banks have rushed to take advantage of it — more than the total number of deregistrations for the previous 21 quarters combined, according to an analysis by SNL Financial. Eighteen of the banks are based in Virginia, the highest number of any state. Most of the firms are small community banks with less than $500 million in assets. The banks say that reporting to the SEC is a time-consuming and expensive process that eats into thin profit margins without any meaningful benefit to the public. The industry remains heavily regulated even without SEC oversight, bankers say.“I’m the happiest person in the bank because we’ve deregistered,” said Alan Dickerson, chief financial officer of the Bank of Floyd, a state-chartered bank southwest of Roanoke that is the sole subsidiary of Cardinal Bankshares Corp. But “I still have a lot of people looking over my shoulder.”Critics of the higher thresholds say it’s true that some banks may be regulated by several institutions, including the Federal Deposit Insurance Corp., the Federal Reserve and state entities. But those regulators serve different constituencies whose interests do not always overlap, they said. The SEC is tasked with looking out for investors.Making it easier for firms to avoid issuing key disclosures to the investing public will only lead to more fraud, investor advocates and lawmakers said. “Shareholders should always be concerned when companies they invest in are allowed to operate behind a veil,” said Amy Borrus, deputy director of the Council of Institutional Investors. The industry has been lobbying for years to get rid of the thresholds, which were put in place in 1964. The premise of that law is that companies with stock that’s widely held should disclose basic information about themselves, even if they’re private. Over time, the older banks kept bumping up against that 300-shareholder limit. As longtime customers died, their stock was parceled out to heirs and other people. The shareholder count ballooned, forcing some banks to make public disclosures. The issue was of such great concern to so many banks that they would often go to smaller shareholders and buy back the stock to keep from going over the limit, said Chris Cole, a senior vice president at the Independent Community Bankers of America.Recognizing that banks already report to several regulators, the JOBS Act carved out an exception allowing them to deregister if the shareholder count fell below 1,200. All other companies must still abide by the old 300-shareholder limit. Chris Brockett, chief financial officer of Virginia Heritage Bank, said his Vienna-based firm spent about $200,000 annually to comply with SEC rules before it deregistered. It will not reap all that in savings because it continues to pay for independent audits and other steps, he said.“But all in all, we saw it as a cost save,” Brockett said. “That’s the biggest reason we did it. We are so regulated and so transparent that we didn’t see a big risk in it.” Bill Ridenour, president of Reston-based John Marshall Bank, said his institution considered whether its 900 shareholders might balk at the bank’s decision to deregister. But the investors are fine with it, he said. “We’ve gone out and raised capital from people that we do business with, that we’ve known for many years,” said Ridenour, who expects his bank to save $100,000 annually. “If we were a much larger company and they didn’t know us, that might be a different story.”As an investor in banks, Joshua Siegel said he is not concerned. The chief executive of StoneCastle Partners in Manhattan said he’d rather see a bank’s money invested in new technologies or products rather than regulatory paperwork, especially since banks must disclose detailed financial data about themselves in “call reports.” Those reports do not include some of the details the SEC requires, such as executive compensation or the management’s analysis of business risks. “But you’re not facing a drought as an investor for financial information on any bank, public or private,” Siegel said.Still, critics of the new thresholds say the more information, the better. They’re worried because banks have a history of issuing partial or distorted data to their shareholders. The SEC is uniquely positioned to demand internal auditing controls.As for the shareholders themselves, there are more of them than the public might think.In the old days, the shareholders of record were individuals who held stock. But now they can be companies, such as ETrade or Merrill Lynch, that count as one shareholder even though they may represent tens of thousands of individual investors.Sen. Jack Reed (D-R.I.) offered an amendment to the JOBS Act that would have forced the shareholder count to reflect each individual. But that amendment failed, along with a similar one offered by Sen. Carl Levin (D-Mich.). Heartbleed bug fixes threaten to cause major Internet disruptions in coming weeks The insanely fast Wi-Fi router you'll probably never need Steven Mufson Google spells out how (and why) it scans your e-mail Teenager arrested in Heartbleed hacking; Bank of America reports losses over legal fees ::unspecified:: Price transparency stinks in health care. Here's how the industry wants to change that.

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Environment in Africa Showing 20 of 657 results Accounting and Auditing Assessment (ROSC) (1) Agreement (1) Auditing Document (1) Credit Agreement (1) Departmental Working Paper (3) Economic Updates and Modeling (1) Energy-Environment Review (1) Environmental Assessment (77) ESMAP Paper (3) Foreign Trade, FDI, and Capital Flows Study (2) GEF Project Document (1) Global Environment Facility Working Paper (1) Grant or Trust Fund Agreement (40) Guarantee Agreement (4) Implementation Completion and Results Report (16) Implementation Status and Results Report (19) Integrated Safeguards Data Sheet (18) Loan Agreement (14) Memorandum & Recommendation of the President (1) Other Environmental Study (10) Other Financial Sector Study (1) Poverty Reduction Strategy Paper (PRSP) (1) Procurement Plan (9) Program Document (3) Project Agreement (7) Project Information Document (23) Project Paper (27) Project Performance Assessment Report (1) Resettlement Plan (2) Staff Working Paper (1) Tranche Release Document (1) Speeches and Transcripts (11) Europe and Central Asia Language Romania - Mine Closure, Environment & Socio-Economic Regeneration Project : P087807 - Implementation Status Results Report : Sequence 17 Language: English World Bank Helps Moldova Restore Degraded Lands and Earn Carbon Credits Chisinau, October 25, 2012 – Today, the United Nations Framework Convention on Climate Change (UNFCCC) announced the issuance of the first carbon credits generated by the Moldova Soil Conservation Project,... Show More + purchased by the World Bank’s BioCarbon Fund. The issuance is for 851,911 temporary Certified Emission Reductions (tCERs), which is the largest issuance of carbon credits from a reforestation project in the Emerging Europe and Central Asia countries. This was only the second land use and land-use change project to be registered with the UNFCCC, and the first to issue carbon credits in Moldova. It is an excellent example of how cooperation between a number of forestry actors in a large-scale project can make a difference – involving actors such as the Moldova Forestry Agency Modsilva, the Forestry Research and Management Institute, private forestry partners, local communities, and the World Bank.“We are strongly committed to supporting Moldova’s efforts to increase forest cover, address soil degradation and reduce greenhouse gas emissions”, said Qimiao Fan, Country Director for Ukraine, Belarus and Moldova. “The project is having an impact at the local level by improving land management practices and generating income from carbon sequestration which has already been reinvested in a second reforestation project, setting an excellent example for replication”.For decades, Moldova experienced creeping desertification due to the lack of investment in and restoration of degraded lands. Over 900,000 hectares of land are unfit for agricultural use, ravaged by soil erosion and landslides, at a significant cost in lost agriculture production. Since 2003, a World Bank-supported project has achieved restoration of over 20,300 hectares of these severely degraded lands by planting trees and improving the quality of the earth. The soil is increasing its storage of carbon dioxide as the project minimizes water and wind erosion, leading to improved soil fertility. Farmers like Tudor Corlateanu are seeing a higher milk production of his cows as a result of better feed.”The best thing about the program is that I don’t have to search for fodder for my cows all over the fields anymore. The alfalfa crop has doubled my cows’ milk”, said Mr. Corlateanu.In addition to increasing the country’s forest cover, replenishing the carbon stock of degraded lands and reducing greenhouse gas emissions, for which the project is earning carbon credits, the project is also a source of employment as well as of forest products and services. These include fuel wood as a result of pruning trees, medicinal plants, honey from beekeeping and the restoration of habitats for endangered species. With carbon finance, Moldsilva has access to a revenue stream that helps finance the reforestation of degraded lands, putting in motion a positive cycle that generates income for local communities.”The Soil Conservation Project has been first and foremost an example for local communities on how to extract the added value from adequately managing their lands, whilst protecting the environment”, said Dumitru Galupa, Head of the Project Implementation Unit and Director of the Forestry Research and Management Institute. “Some communities are already replicating land-management practices established by the project with their own resources, and are generating tangible benefits for local farmers and members of the community”.What is perhaps most unique about this project is its nation-wide extent. “At less than 10%, Moldova’s forest cover has historically been extremely low, leading to severe soil degradation and erosion. Intervening at a national scale, with the reforestation effort spanning the entire country, has visibly altered Moldova’s landscape”, said Franka Braun, Carbon Finance Specialist at the World Bank. Afforestation/Reforestation (A/R) CDM projects can only issue credits once per commitment period, and many are therefore waiting toward the end of the Kyoto Protocol’s first commitment period to maximize the number of credits issued. While this is the first forestry project in Moldova, many others elsewhere in the world are currently undergoing verification. Show Less - Date: October 25, 2012 Language: English Cooperation between Russia and the World Bank in Sustainable Forest Management I am very pleased to have the opportunity today to present the Bank’s collaboration with Russia in sustainable forestry management. The Russian Federation and the Bank have had successful cooperation in... Show More + the forest sector for over 15 years, where efforts have centered on forest policy and governance, as well as sustainable forest management. This engagement has includedanalytical studies,a forestry management pilot project, andthe 2005 St Petersburg European and North Asian Forest Law Enforcement and Governance (ENA FLEG) ministerial conference, which led to a regional FLEG program.This collaboration has taken place both at the national level (via technical assistance, policy analysis, and an investment loan) and more broadly at the global level (through FLEG). The Russian Federation, as the custodian of over 20 percent of the world’s forests, is a major contributor to international efforts to improve forest governance.This partnership first developed during the mid 1990s, as the Bank conducted a forest policy review and Russia also carried out analytical work that identified several key constraints in the forest sector, includingfinancial and economic viability,the regulatory framework,forest management plans,forest protection,forest industry, andsocial issues.In particular, allocations from the central government for forest management at the time did not cover costs, which resulted in the over use of sanitary felling. Also, while the forest code provided guidelines for forest management, these needed to be also adapted to the regions. Forest fire and pest incidence had also increased since transition – partly due to decreased funding but also due to an emphasis on fire fighting rather than monitoring, prevention and management. Lastly, the economic downturn had severely affected forest industry. The sector was undercapitalized and needed new equipment and new skills to compete. The Russian Federation requested Bank support to help create a favorable environment for sustainable management and subsequent investment by the private sector. The Sustainable Forestry Pilot Project (US$60 million), which closed in May 2010, supported forest management in 7 diverse regions in European Russia, Central Siberia, and the Far East, by enhancing forest management, information and land-use planning systems and strengthening regional forest inventory and pest protection organizations.With the project's support, forest area covered by improved information management and planning systems increased from 10 million ha in 2006 to 95 million in 2009. The project supported the development of national voluntary forest certification standards, with a subsequent significant increase in areas of certified forest. In addition, forest pest monitoring (by remote sensing) now covers 85 million ha. And the forest area protected against forest fires and proliferation of forest pests and disease increased during the project period to 410 million ha. In 2005, the World Bank assisted the Russian Federation in organizing and holding the FLEG Ministerial Process for Europe and Northern Asia (ENA-FLEG) in St. Petersburg. This led to EU support for the FLEG process in the countries of Russia, Armenia, Azerbaijan, Belarus Georgia, Moldova and Ukraine, which the Bank is implementing with WWF and IUCN.The results of the four year (2009-2012) FLEG regional program (Euros 6.3 m) have been impressive.National ownership and capacity has increased; gaps in legislation and policy have been identified; awareness has been raised significantly both within the sector and with outside stakeholders; there has been improved collaboration with neighboring countries; an increased area of forest has been certified; among others.It is also important to highlight that Russia's contribution among the participating FLEG countries has been significant, with Russia taking the lead in many regional collaboration events and knowledge sharing.So what then is the context of the forest sector in Russia now? Well, forest fires continue to cause impact – not just in terms of economic losses, but also associated with carbon emissions and climate change, losses of biodiversity; the forest code of 2007 has been amended, but at the same time more needs to be done to address the perverse incentives; we’re very pleased to see that a new participatory process has commenced to develop a new federal forest policy; the process of decentralization and institutional change continue to pose challenges to the sector; the ongoing financial crisis impacts the forest sector and rural poor; and there are external factors such as the pending introduction of the EU Timber Trade regulation, which requires all timber traders in the EU to undertake ‘due diligence’ to ensure timber traded within the EU comes from legal sources.In terms of our current cooperation in the forest sector, the Bank together with our implementing partners (WWF and IUCN) has prepared a follow on program to the recently completed FLEG activities. This second phase of the FLEG Program (US$11.21 million) will continue to support participating countries in (i) strengthening forest governance, (ii) enhancing their forest policy, legislation and institutional arrangements, and (iii) developing, testing and evaluating sustainable forest management models at the local level on a pilot basis for future replication.In addition, the recently approved Forest Fire Response Project builds on the successes of the forestry pilot project, particularly in the areas of forest fire prevention, suppression and management and related forest protection. It also responds to the 2010 summer wildfires (which demonstrated areas in Russia's forestry legislation and forest fire management that could be improved). The project supports both forest fire management and sustainable forest management given their close linkages. In conclusion, much has been achieved as a result of the Bank and Russian partnership in the forest sector. And we look forward to continuing this cooperation and building achievements in truly sustainable forest management. Show Less - Date: October 24, 2012 Language: English FLEG Role in the Forest Sector Development: Country and Regional Dimensions MOSCOW, RUSSIA, October 24, 2012 - The 6th International Forest Forum – Forest and Man -- to be held on October 22–26, 2012, in Moscow, will include a roundtable to highlight country and regional dimensions... Show More + of the FLEG role in the development of the forest sector. The event is jointly organized by the FFA and the World Bank and supported by the European Commission.The FLEG process is a major on-going intergovernmental process called to promote sustainable forest management and improved forest law enforcement. Countries with different development levels, timber exporters and importers are equally concerned about forest crime, and, in particular, about illegal logging, trade of illegally harvested timber and corruption. The 2000-ies saw the development and strengthening of the FLEG processes (in Africa, East Asia, Europe and North Asia) which had a strong catalytic effect on countries’ efforts to develop national programs and plans of action in response to these illegalities.The Eurasia Ministerial Process, the EU FLEGT Program and other international initiatives permitted to look at forest development issues differently in the context of discussions of ways towards sustainable forest management in the East Region of the European Neighborhood and Partnership Instrument.The Program titled Improving Forest Law Enforcement and Governance in the European Neighborhood Policy East Countries and Russia (the ENPI FLEG Program) was successfully implemented in 2008­-2012 in Russia and other 6 countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova, and the Ukraine) by its Implementing Organizations. This international program is implemented in support of the intergovernmental ENA FLEG Process and contributes to country efforts initiated by governments, business and non-governmental organizations in response to threats posed to forests by their illegal uses. Currently, the second phase of this regional program is under preparation and is expected to benefit Russia through the following activities: Improving the FLEG planning and monitoring at the national, regional (local), and interagency levels;Building human resource capacity to address FLEG issues;Causing specific FLEG actions to be implemented by top Russian forest companies and their international trading partners;Safeguarding the rights of local communities and small businesses to forest resource use;Increasing transparency of action and raising stakeholder awareness.The Roundtable will serve as a channel to communicate information about the priorities and implementation of the EU’s policy of using its ENP Instrument, preparation status of the EU Timber Regulation and its potential impact on the EU’s partner-countries. The event will include a panel discussion among representatives from the ENPI FLEG Program countries to cover such issues as the need and ways to mainstream ENPI FLEG activities into National Forest Policies; practical use of program outputs; roles and effectiveness of regional activities of Phase 1 of the ENPI FLEG Program; and the dialogue at the country, regional and interregional levels.Stakeholders invited to participate in the event include representatives from (federal and regional) executive and legislative authorities, the European Union/EC, participating countries of the ENPI FLEG Program and the Program Management/ Coordination Team, timber industry and trade companies and associations, non-governmental organizations, research and education institutions and other stakeholders. Show Less - Date: October 24, 2012 Language: English Cleaning Ash and Chemical Waste in Kosovo Lundrim Aliu, Communications Officer in the Pristina Office, offers this story.Kosovo's oldest power plant has been burning coal for over 40 years as it produces electricity. And for over forty years,... Show More + Kosovo A, as it's known, has been throwing vast quantities of ash out in the open, creating a hill of ash visible from the capital ten kilometers away.When the wind blew, ash mixed with existing air pollution, cloaking the area in choking dust.Over the last three years, Kosovo's public energy utility, Kosovo Energy Corporation (KEK), has been working to clean up its environmental legacy through the Clean Up and Land Reclamation Project. It is funded by a $10.5 million World Bank grant, a Euro 3-million Dutch Government donation and a $3.5 million KEK contribution. Eliminating these pollutants will make the environment cleaner for those living near the power plants. At the same time it will allow the corporation to operate in a way that's better for the environmentCleaning up and stabilizing the ash dump is one part of the project. The second is installing a system to discharge ash in the mine pit through water pipes, sharply reducing its exposure to the open air. The third is removal of chemicals from a disused gasification plant that was once part of the power plant complex.Most of the ash hill has now been rehabilitated with excavators and trucks purchased with project funds. Almost 30,000 hectares of ash have been covered. The manmade mountain is 14 meters lower; its slide towards the neighboring has been stopped.A new hydraulic system to transport wet ash is expected to start working in the Fall of 2012. An open cast mine has been prepared to receive the wet ash. The wet ash transport plant, new ash bunkers and transport pipelines are being built and transport pipelines installed.Not only ash, but also the overburden from mining—soil and rock—was dumped carelessly. The project cleaned that up, too, leveled and reshaped overburden dumps and planted almost 100,000 trees on 30 hectares.What is more, around 20,000 cubic meters of liquid hazardous waste from the gasification plant were abandoned when the facility was closed in 1988. They contained liquid and concentrated phenol, tar, and different chemical solvents."Treatment was necessary because the waste represented a permanent hazard for human health and the environment, since the tanks where the waste was stored began to leak with time," says Behxhet Shala, a cleanup expert working on the project.About15,000 cubic meters of phenol waste have been treated and neutralized. The remaining 5,000 cubic meters of waste with higher phenol concentrations have been stored in new containers awaiting disposal outside the country. Kosovo is working on agreements to transport the waste to Belgium or Sweden, which are better equipped to neutralize it. Export and final disposal of over 5,000 tons of hazardous chemical liquids, tar sludge, solvents and pasty tar is expected by September 2012. Transporting the waste internationally will fully comply with the Basel Convention."The potential danger for massive pollution is now avoided," Shala explains.Continuation of cleanupThe government will need to do some more ash dump remediation and land reclamation work after the project closes in June 2012. Given the importance of the clean up for surrounding communities and feedback from World Bank consultations with civil society representatives, the World Bank is proposing finance an additional $3.2 million for the cleanup as part of its country partnership strategy for 2012-2015.This additional financing would extend clean up and land reclamation efforts at the site of the Kosovo A and B power plants. It would finance monitoring of air, soil and water associated with power generation, strengthen the capacity of Kosovo's environmental and energy regulatory authorities, environmental and social assessments for energy projects, and preparation of a low carbon growth strategy and a greenhouse gas inventory.The additional financing will be complemented by a Dutch government grant of about $1,165,000. Show Less - Date: October 6, 2012 Language: English High-Tech Cars Alone Can’t Fix Problem of Transport Emissions Turning the Right Corner - New World Bank report says broader reforms, changes in mobility patterns neededBERLIN, September 27, 2012 --- Developing countries need to transition to a low-carbon transport... Show More + sector now to avoid locking themselves into an unsustainable and costly future, says a new report released today by the World Bank. Technical progress will take too long to fix the problem of transport emissions, with fuel cell cars, for instance, only expected to become a mass technology by the end of the 21st century. Countries need to start shifting now to more sustainable mobility patterns and, to make this affordable, broad sector reforms will be needed that cover all external costs of transport, not just greenhouse gas (GHG) emissions. According to Turning the Right Corner: Ensuring Development Through a Low-carbon Transport Sector, if countries do not contain fossil fuel use, transport will become the biggest emitter of GHGs by the middle of the 21st century, and rising oil prices and agreements on carbon pricing will lead to higher transport prices. European countries, which are well endowed with public transport, are better placed to respond to future changes in energy and emission prices than countries such as the United States which have emphasized road infrastructure. “Transport is a driver of social and economic development, enabling citizens to access health care, education, and jobs, and unlocking growth potential for cities and countries,” said World Bank Vice President for Sustainable Development Rachel Kyte. “Developing countries can make choices now to reduce transport GHG emissions, so as to lower fossil fuel use and transport costs in the long run, while safeguarding transport’s contribution to inclusive green growth.” This new report analyzes what countries need to do to transition to a low-carbon transport sector and how they can pay for it. The transition will involve shifting transport systems toward low-emission modes, such as higher shares of mass transit in urban transport, and changing settlement and mobility patterns, away from energy-intensive patterns such as suburbanization in North America. “Transport infrastructure is very costly to build and decisions taken are often irreversible,” said Marc Juhel, World Bank Sector Manager for Transport. “Directing infrastructure investment toward low-emission modes now will help avoid lock-in of transport systems to a fossil fuel-intense and high-cost future. Developing countries have an opportunity to build a more sustainable future.”The most cost-effective way to finance the transition to a low-emission sector, according to the study, is the adoption of broad sector reforms that combine policies to reduce GHG emissions with policies to reduce local air pollution, road safety risks, and congestion. This is because, at the local level, the costs of GHG emissions are lower than the other external costs of transport. Thus, to impact fuel prices sufficiently to change citizens’ mobility patterns, carbon prices need to be combined with broader fiscal incentives. “For rapidly growing cities in developing countries, finding alternatives to road transport will be a challenge. Governments need to ensure high-quality services in low-emission modes, or people will continue to prefer individual cars,” said Andreas Kopp, Lead Transport Economist at the World Bank and lead author of the report. Asia provides several examples of fast-growing countries that have successfully developed low-carbon transport sectors, such as Hong Kong SAR (China), Japan, Korea, and Singapore. Thirty years ago in Hong Kong, for instance, car ownership doubled in a decade and time lost to congestion exploded. The integration of road building, a massive expansion of mass transit, and demand management halved vehicle ownership by 1985—by then 10 percent of the passenger cars were taxis—drastically reducing travel times without making the city less attractive for business. Hong Kong now ranks second on the infrastructure index of both the 2012 Logistics Performance Index and the World Bank-IFC Doing Business Report. Show Less - Date: September 27, 2012 Language: English Serbia - Transitional Agriculture Reform Global Environment Facility Project : restructuring (Vol. 1 of 2) : Main report The development objective of the Transitional Agriculture Reform Global Environment Facility Project for Serbia is to enhance the competitiveness of Serbian agriculture.... Show More + The closing date for the project will be extended by eight months from September 30, 2012 until May 31, 2013. The extension is necessary to allow road and bridge rehabilitation works in four pilot villages in the old mountain (Stara Planina) area to be completed under component three. In addition, the extension will also allow the newly-reorganized Ministry of agriculture; forestry and water management to procure short-term consulting services to support the national paying agency undergo the European Union (EU) accreditation process and access EU pre-accession agriculture funds. This will be the third extension of the project. Show Less - Date: September 25, 2012 (Vol. 2 of 2) : Data sheet Language: English Forest Fire Response Project: World Bank Continues its Support to Sustainable Forestry Management and Effective Protection of the Environment in Russia WASHINGTON, September 20, 2012 - The World Bank’s Board of Directors today approved a US$ 40 million loan to co-finance with the Russian Federation a US$ 121.26 million Forest Fire Response Project in... Show More + Russia.The Project will assist the Federal Forestry Service and the Ministry of Natural Resources and Environment to improve forest fire prevention and suppression in select forest ecosystems, including targeted protected areas. It also will help enhance forest management in pilot regions, which include Voronezhskaya and Moskovskaya oblasts, Krasnoyarsk and Khabarovsk Krais, and the Republic of Komi.Russia, one of the largest countries in the world, also has the largest area of true closed forests, which represent 20 percent of the world's forests and account for 15 percent of the world's growing stock. Russian forests play an important role in the carbon cycle, providing significant carbon sequestration services, including to other countries.Official data on forest fires shows that on average there are 24,000 forest fires annually covering 1.4 million ha of forest. Preliminary analysis of data collected during project preparation indicates that up to 93 percent of the country's forest fires are of human origin. In addition, total carbon emissions from fire-disturbed Russian forests are estimated at 50 to 231 million tons of carbon per year.Most human-origin fires are quite naturally near settlements, which for that very reason are the more urgent to prevent, monitor, suppress, and extinguish, given the high potential for loss of life and property. In more remote locations, many fires may be worsened by clear-cutting by leaseholders. Any successful program of fire prevention will thus have to invest in public awareness campaigns, and devote attention to forest practices which may increase fire incidence.“By supporting the Government in its forest fire prevention and management efforts, the Bank continues its long-standing and comprehensive engagement with the Russian Federation on forest management, where efforts have centered on policy development, institutional strengthening, information and land-use planning systems and strengthening regional forest inventory and pest protection organizations,” said Michal Rutkowski, World Bank Country Director for Russia.Further, the Bank's engagement also provides direct support to the country's Forest Sector Development Strategy through 2020, a national policy document approved by Executive Order of the Ministry of Industry and Trade and Ministry of Agriculture in October 2008. According to the Strategy, the systemic problems facing forest sector development include significant loss of forest resources from fires, pests and diseases; as well as low quality forest regeneration; and a high level of illegal timber logging. The primary objective of the Strategy is to support sustainable forest management and to maintain and strengthen forest resources, as well as the environmental capacity of forests.“This engagement includes analytical and advisory activities as well as the current EU-supported Forest Law and Governance (FLEG) program, which the Bank is implementing with the World Wildlife Fund (WWF) and International Union for Conservation of Nature (IUCN). Through this support, the Government has come to rely on the Bank as a source of global best practice on forest fire management and sustainable forest management,” added Angela Armstrong, World Bank Project Team Leader.The Project will support two of the four strategic themes of the World Bank Country Partnership Strategy with Russia for 2012-2016, which was discussed by the Bank Board of Directors in December 2011. In particular, forest fire management improvements envisaged by the Project will support sustainable development and effective protection of the environment under the first strategic theme, Increasing Growth and Diversification. In addition, the Project will strengthen Russia's contribution to global public goods, thereby supporting another strategic theme, Deepening Russia's Global and Regional Role.The loan has a final maturity of 18 years including a grace period of 5 years.Russia joined the World Bank (IBRD-member and IDA-donor country) in 1992. Today, IBRD is financing 9 investment projects in Russia for the total amount of US$ 756 million.Background The Soviet Union had a large and advanced forest-fire suppression capability, using 600 aircrafts, 8,000 smokejumpers, and 70,000 full time forest guards. This capability was decimated by budget cuts after the dissolution of the Soviet Union. Indicators of the consequences of this were the 70 percent decline in aircraft flight hours for fire control between 1991 and 2002, and the decline over the same period in the percentage of fires detected by aviation, from 89 percent in 1991 to 44 percent in 2002. In addition, the average size of fires at detection - the smaller the fire at detection, the more likely/easier it is to be brought under control - and initial response time consistently increased from 1991 to 2002 as a result of shrinking fire management resources.These negative trends were exacerbated as an unintended consequence of a major reform embodied in a new Forestry Code, which took effect January 1, 2007. This code decentralized responsibility for fighting forest fires to the 89 subjects (oblasts, krai, republics) of the Russian Federation, many of whom were not prepared for this responsibility. Furthermore, the elimination of any central authority with the ability to shift resources in real time from regions free of severe fire stress to those suffering overwhelming attack, removed the main source of flexibility from Russia's fire response system.The consequences of these accumulated deficiencies came dramatically into focus in the summer of 2010. Human activities, which increase burning and carbon release from living and dead vegetation includes the large-scale historical drainage of peat swamps in Russia. In drought years, combustion of drying peat accelerates to the stage of open fire, with large smoke releases to the atmosphere.Some 33,500 fires were recorded (50 percent more than in 2009) covering 2.3 million ha, with a large proportion of high-intensity crown fires. Unusually, most of the damage occurred in the western part of Russia, particularly the Central, Southern, Volga, and Urals federal districts (Okrugs), with the hardest hit oblasts being Nizhny-Novgorod, Moscow, Ryazan, and the Republic of Mari El. Comparing 2010 with 2009, the Central Okrug experienced 32 times greater burned area, the Volga Okrug 27 times, and the Urals 6 times. In addition, carbon emissions from vegetation fire, estimated at 150 million tons, were 50 percent higher than 2009 estimates. Several plumes of smoke rose to the stratosphere over western Russia, and by August coalesced into one massive cloud 3,000 km long. In Moscow City on August 7, air samples showed 6.6 times the normal levels of carbon monoxide, and illness and mortality due to extreme air pollution reached high levels.IIASA estimates economic losses from the 2010 summer fires at $10 billion. Show Less - Date: September 20, 2012 Language: English Mitigating the Risk of Natural Disasters in Romania The facade of Bucharest's Sector One City Hall is pure neo-Romanian baroque, festooned with pillars and arches and flanked by an imposing tower. The inside is a feat of earthquake proof design and engineering.The... Show More + foundation of this massive building where thousands of couples have tied the knot has been reinforced. Hundreds of arches in this beloved landmark built between the two world wars have been fortified with concrete. These are among the techniques deployed to insure that city hall will fare well in a big earthquake. It's not an idle threat. In 1977, a quake measuring 7.2 on the Richter scale killed 1,578 Romanians and destroyed 35,000 buildings, damaging many more. Large red circles painted on many of the capital's buildings after that earthquake notify people that they're unstable and remind them that this urban area of almost two million lies near a fault line.The building is reinforced to withstand a quake measuring 8 on the Richter scale"The building is reinforced to withstand a quake measuring 8 on the Richter scale," says Liviu Cismasu, who oversees the works to reinforce city hall, replace its roof and retrofit its interior. This structure and many others in Bucharest and around Romania, 40 in all, have been protected thanks to the Hazard Risk Management and Emergency Preparedness project supported by the World Bank.Protecting people is at the heart of the project. The surgical and intensive care wing of the 125 year-old Children's Hospital also has a new foundation and reinforced walls thanks to the project. And it has new interiors, too. "Having a strong foundation reassures doctors and nurses," says intensive care chief surgeon Dr. Florin Rusu. "Having a nice atmosphere reassures patients and helps recovery," he adds.Having a strong foundation reassures doctors and nurses. Having a nice atmosphere reassures patients and helps recovery.Earthquakes are not the only natural hazards in this part of Europe. Floods are an all-too-frequent reality, too. That is why the project has repaired and improved the safety of six dams to insure they don't leak, crack, or worse, fail. It has protected riverbanks to ensure full rivers don't over flow.The project rehabilitated mine facilities that contain pollutants left over after the valuable portion of what's being mined has been extracted. That reduced the risk of accidental spills that could contaminate the soil, air and water, harming human and aquatic life. A computer-based monitoring system tailored to mining operations was developed.Strengthening institutional and technical capacity to manage disasters is part of the project, too. A management information system was developed to allow emergency responders to react quickly and efficiently to emergencies like earthquakes and floods. Emergency responders at Bucharest's crisis control center have been trained to use the software which will be rolled out in 48 locations around Romania in the near future.The project supported the creation of a mandatory catastrophic insurance scheme that transfers the financial risk of a natural catastrophe away from citizens. It gave technical assistance for the development of a high resolution flood and earthquake risk model and for a dynamic financial analysis model for the establishment of a Pool for Insurance against Disasters. And it supported the development of norms and regulations for the implementation of a law mandating insurance of dwellings. Show Less - Date: September 18, 2012 Language: English Uzbekistan - Second Rural Enterprise Support Project [Additional Financing] IDA Credit: US$40 million equivalent Terms: Maturity = 25 years: Grace = 5 yearsProject ID: P126962Project Description: The objective of the project is to increase the productivity and financial and environmental... Show More + sustainability of agriculture and the profitability of agribusiness in the project area. Show Less - Date: September 11, 2012 Language: English Infographic: What's Happening to Biodiversity? Click the image for&nbsp;FULL RESOLUTION. Language: English Calling All Allies in the Fight Against Pollution In 1995, Indonesia put in place a voluntary, public disclosure scheme that encouraged firms to self-report their contributions to local water pollution. The government checked and assigned a color-coded... Show More + rating (black for those factories that made no effort and gold for adhering to international standards). These ratings were made public, bestowing shame or honor on the companies. This information sharing led to behavior change on the part of the companies, and eventually resulted in lower levels of pollution.When the Indian capital city, Delhi, was choking with high levels of smog, a civil society group, the Centre for Science and Environment, asked the Supreme Court to enforce the Clean Air Act that had been passed 15 years ago. A public campaign followed that involved releasing quantitative data on the health impacts of pollution. In 1998, the Supreme Court compelled the Government to enforce its own regulations pertaining to air quality, reducing the ambient levels of respirable suspended particulate matter.These examples point to a different approach toward pollution management: one that does not rely solely on the government as the regulator but involves the community, civil society, private sector, and even the courts in pollution management. In Indonesia, although the Government had mandated lower pollution levels, it was the public "show and tell" that helped the community get involved and forced firms to clean up. In India, the judiciary, prodded by civil society, played an important role.A new World Bank Group publication, Getting to Green – A Sourcebook of Pollution Management Policy Tools for Growth and Competiveness reflects this shift in pollution management from the traditional approach that relies solely on public regulatory instruments to acknowledging that every stakeholder has important tools and levers at its disposal. A strategy that engages additional actors in the pollution management effort, each in parallel using their own policy tools, can get to clean air, water and land, while ensuring growth and competiveness.The sourcebook builds upon and broadens the scope of the policy advice in The Pollution Prevention and Abatement Handbook: Towards Cleaner Production, a World Bank publication from 1998 which has served as an important reference source for policy and technical guidance ever since.“The sourcebook highlights the advantages of approaching pollution management through multiple stakeholders,” said Mary Barton-Dock, the World Bank’s environment director. “This can bring about positive outcomes more quickly. It ensures a balance between growth and competitiveness objectives and pollution management objectives that help to maximize public welfare and ultimately, greener and more sustainable growth.”To make this approach a reality, the sourcebook presents 23 short guidance notes on key policy tools that each of the actors have at their disposal. The toolkit is organized by the primary user of a particular policy tool, making it easier for users to access tools that are specific to them.For example, land use planning, environmental impact assessments, environmental licensing, are all essential government tools for pollution prevention and control. The private sector can use sustainable supply chain policies and environmental management systems. Financial institutions, from banks to investors, can enforce environmental and social policies in their investments and lending. Active citizens, through civil society organizations, can promote access to information, citizen participation in decision-making, and public access to the courts.An important factor that increases the effectiveness of all tools and empowers different players is information sharing. Publicly available data on pollution works in two ways: it provides information to the community and consumers who may exert pressure on polluting firms to clean up, and plant managers have better information to design strategies to manage pollution. This could be data on the water quality in local rivers, or hourly air pollution levels or even the resources used in manufacturing a product.Consider the licensing system. By itself, it does not strengthen the capacity of non-government stakeholders. However, by ensuring that all licensing information is available freely, civil society and the private sector can seek redress and hence ensure accountability.The private sector, traditionally seen as a player on the receiving end of government regulation, is an important actor in pollution management. By December 2007, almost 130,000 companies in 140 countries were certified as compliant with ISO 14001, an internationally accredited tool for managing corporate environment and social responsibility.Through supply chain management, private sector companies can extend their influence in pollution control and abatement beyond their own operations and into their supply chains – which can include suppliers, intermediaries, third-party service providers and customers.There are also examples where the private sector has indirectly encouraged the government to take a more prominent role. In Chile for example, mining companies, in line with corporate requirements, prepared Environmental Impact Assessments (EIAs) and submitted them to the government. This has led to the formation of CONAMA, a national environment commission set up to review EIAs, institutionalizing the process for all mining companies.The sourcebook is a collaborative effort of the World Bank, International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA) and reflects the practical experience and changes in the external environment in the last decade. It is a living document and will be updated to reflect the lessons learned from its application. Show Less - Date: August 15, 2012 Language: English Romania - Mine Closure, Environment Language: English Protection in good and bad times ? the Turkish green card health program This paper evaluates the equity and financial protection implications of the expansion of the Green Card (Yesil Kart) non-contributory health insurance program in Turkey... Show More + during the growth years from 2003 to 2008. It also considers the program's protective impact during the economic crisis in 2009. The authors find that the rapid expansion of the program between 2003 and 2008 was highly progressive. It led to significant gains in coverage of the poor but offered limited financial protection as out-of-pocket expenditures even before the introduction of the program had been limited. Using a specialized welfare monitoring survey, fielded in 2009, the authors estimate the impact of the program on household level health care utilization during the first phase of the economic slowdown in Turkey. Using three different estimation techniques, they find that the Green Card program had a significantly positive impact on protecting health care utilization during the crisis. Show Less - Date: August 1, 2012 Language: English Uzbekistan - Alat and Karakul Water Supply Project : environmental assessment (Vol. 1 of 3) : Environmental impact study and environment management plan The objective of Alat and Karakul Water Supply Project for Uzbekistan is to improve the coverage, quality, and efficiency of public water supply services in the two... Show More + districts (rayon's) of Alat and Karakul in the Bukhara region. Negative measures include: loss of soil; loss of animals; loss of trees and plants; and air, water, and noise pollution. Mitigation measures include: 1) development regime sewage and drainage of the wastewater treatment plant during the period of work, 2) carrying out rehabilitation works on damaged sections, 3) organize the timely collection of construction waste, the shipment and storage in designated locations, 4) monitoring during the rehabilitation or construction and operation, and 5) prohibit the commissioning of the rehabilitated facilities that fail to meet environmental requirements. Show Less - Date: July 14, 2012 Language: English Croatia - Additional Financing for the Export Finance Intermediation Loan Project : environmental management framework Financing for the Export Finance Intermediation Loan Project is to enhance the access to finance to support the preservation and growth... Show More + of exports by providing medium and long term finance to exporters and foreign exchange earning companies. Importantly, the additional financing will enable banks to continue extending credit to exporters and foreign exchange earning enterprises in an environment of constrained funding. The negative impacts include: a) dust and noise due to excavation, demolition and construction; b) management of demolition construction wastes and accidental spillage of machine oil, lubricants, etc., c) encroachment to a private property; d) damage to historical or cultural property or unknown archaeological sites; e) traffic disturbance; f) surface or ground water; and g) soil pollution or erosion. Mitigation measures include: 1) the local construction and environment inspectorates and communities have been notified of upcoming activities; 2) all work will be carried out in a safe and disciplined manner designed to minimize impacts on neighboring residents and environment; 3) there will be no open burning of construction/waste material at the site; 4) suppress dust during pneumatic drilling/wall destruction by ongoing water spraying and/or installing dust screen enclosures at site; 5) construction noise will be limited to restricted times agreed to in the permit; 6) the site will establish appropriate erosion and sediment control measures such; 7) waste collection and disposal pathways and sites will be identified for all major waste types expected from demolition and construction activities; 8) temporarily storage on site of all hazardous or toxic substances will be in safe containers labeled with details of composition, properties and handling information; 9) the wastes are transported by specially licensed carriers and disposed in a licensed facility; and 10) signposting, warning signs, barriers and traffic diversions: site will be clearly visible and the public warned of all potential hazards. Show Less - Date: July 11, 2012 Language: English World Bank Sees Warning Sign in Gas Flaring Increase WASHINGTON DC, July 3, 2012 — New data showing a two-billion cubic meter increase in flared gas in 2011 over the previous year is a warning that efforts to reduce flaring need to be sustained and even... Show More + scaled up, said officials with the World Bank-led Global Gas Flaring Reduction partnership (GGFR).The slight increase in flaring from 138 billion cubic meters in 2010 to 140 bcm in 2011, revealed in latest satellite data, is due largely to increased hydrocarbon production in Russia and shale oil and gas operations in the US state of North Dakota. While not significant when viewed against the longer-term 20% drop in flaring since 2005 — from 172 to 140 bcm — the new increase is a warning sign, World Bank officials said. Gas flaring reductions since 2005 have cut greenhouse gas emissions by a volume equivalent to that emitted by some 16 million cars.“The small increase underlines the importance for countries and companies to sustain and even accelerate efforts to reduce flaring of gas associated with oil production,” said Bent Svensson, manager of the GGFR partnership. “It is a warning sign that major gains over the past few years could be lost if oil-producing countries and companies don’t step up their efforts.”Some of the highlights from the 2011 satellite data on flaring include:Overall, global flaring has increased by 2 bcm, from 138 bcm in 2010 to 140 bcm in 2011.The USA, Russia, Kazakhstan, and Venezuela are the main contributors to this increase. These countries need to step up their efforts in associated gas utilization. The same applies to Iraq.Most of the increased flaring in the USA comes from North Dakota, where there has been an important increase in activity related to shale oil and gas production.Russia still tops the world's flaring countries, followed by Nigeria, Iran and Iraq. The USA is now the fifth flaring country in the world, with some 7.1 bcm of gas flared in 2011.Latest satellite estimates also show some continuous progress in flaring reduction in Nigeria, Algeria, Mexico and Qatar. These countries need to sustain their flaring reduction and gas utilization efforts.“By reducing gas flaring, oil-producing countries and companies are improving energy efficiency and mitigating climate change,” said S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department. “Instead of wasting this valuable resource, we now need to develop gas markets and infrastructure so the associated gas can be utilized to generate electricity and cleaner cooking fuels.”Inconsistent data and often under-reporting of gas flaring by governments and companies has complicated the global effort to track progress on flaring reduction. GGFR’s cooperation with the US National Oceanic and Atmospheric Administration (NOAA) to use satellite data aims to improve the reliability and consistency of global gas flaring data. This has now resulted in more consistent national and global estimates of gas flaring volumes from 1995 through to 2011.The GGFR, a public-private initiative of some 30 major oil-producing countries and companies, aims to overcome the challenges for the utilization of associated gas, including lack of regulations and markets for associated gas utilization. GGFR partners’ main objective is to reduce the environmental impact of gas flaring, as well as the waste of a valuable energy source.Global gas flaring, estimated in 2011 at 140 billion cubic meters (bcm), also accounts for some 360 million tons of greenhouse gas emissions. Eliminating these annual emissions is equivalent to taking some 70 million cars off the road.Note to Editors:The GGFR partners include: Algeria (Sonatrach), Angola (Sonangol), Azerbaijan (SOCAR), Cameroon (SNH), France, Gabon, Indonesia, Iraq, Kazakhstan, Khanty-Mansiysk (Russia), Kuwait Oil Corporation, Mexico (SENER), Nigeria, Norway, Republic of Congo, Qatar, the United States (DOE), Uzbekistan; BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Marathon Oil, Maersk Oil & Gas, Pemex, Qatar Petroleum, Shell, Statoil, TOTAL; the European Union, the European Bank for Reconstruction and Development (EBRD), the World Bank Group; Associated partner: Wärtsilä. Show Less - Date: July 3, 2012 Language: English Modern companies, healthy environment : improving industrial competitiveness through potential of cleaner and greener production The objective of this report is two-fold. First, it is to raise awareness of the health and economic damages of industrial air pollution in key oblasts and to develop... Show More + long-term options of improving industrial competitiveness. The second objective is to synthesize the results of a pilot benchmarking exercise of selected industries on natural resource and energy efficiency improvements, cleaner production and identify options for cleaner and greener industrial production in Kazakhstan. The report is structured as follows. Section two motivates the cleaner production topic by providing some estimates of the health impacts and economic costs of air pollution in Kazakhstan. Air pollution is selected because of data availability, but also because it is one of Kazakhstan's major environmental priorities. Section three provides a discussion of the current regulatory framework that industry faces as well as its limitations. Section four reviews the results from the pilot benchmarking exercise among selected industrial firms that were subject to 'quick-scans' for efficiency and pollution reduction improvements. Section five gives some examples how businesses have responded to environmental norms and section six reviews the major constraints faced by industry in environmental compliance and clean technology adoption. Finally, section seven provides some concrete recommendations in areas that both government and industry can pursue in achieving greater environmental compliance and clean technology adoption. Show Less - Date: July 1, 2012 Language: English Keynote Address on Connecting to Climate Event at the Newseum, by Caroline Anstey, Managing Director, World Bank IntroductionWelcome everyone. I am delighted to be at this wonderful venue.As we prepare to “swing into action” here tonight, I want first to acknowledge the symbolic importance of this event here at the... Show More + Newseum, a very special place that celebrates the value of communication, transparency, openness and freedom of information. These values are also at the core of the World Bank’s mission and our drive for Results, Openness and Accountability.I’d also like to recognize the timing of this event, immediately after Rio +20, which brought together thousands of people around issues ranging from cities to sustainable energy, oceans, food, water and landscapes.Rio showed the vital need for partnerships. Take the more than 100 countries, private companies, civil society groups and international organizations that declared their support for the Bank backed new Global Partnership for Oceans.Or the support for Green Accounting - factoring the value of natural assets like clean air, clean water, forests and other ecosystems into countries systems of national accounting and business decision-making.Swing into ActionBut Rio also demonstrated something else. Climate change and the environment are too important be left to negotiators. We don’t need - and can’t afford - to wait for others to get things done. We can all be powerful catalysts for change. What we just saw on the screen says it all – “All it takes is you”. Climate change is one of the biggest development challenges of our time. It is here, now, impacting every aspect of our lives – be it food, water, or the air we breathe. It threatens to reverse the hard-won development gains made over the last decades.And climate change will hit developing countries the hardest. It's poor countries that will suffer the earliest and the most. Its poor countries where higher temperatures, changes in precipitation patterns, rising sea levels, and more frequent weather-related disasters will threaten agriculture, food, and water supplies. The hard truth is that we have almost run out of time. The window of opportunity to curb emissions, limit rises in global temperatures and help countries deal with its impacts is closing. We need solutions, and we need them now.So what's the gamechanger? I want to suggest to you tonight that it here before our eyes: a powerful and transformative combination of technology and people power. Its a combination that can help us leapfrog old paradigms, old development models, and old North-South divides. One of the reasons we are all here this evening is to celebrate our Apps4Climate finalists, whose ingenuity and entrepreneurial spirit can only inspire us. We’re also launching “Voices4Climate,” a new Connect4Climate/MTV global competition in search of the world’s most powerful climate stories told through photos, videos, and music.Opening up Development / Climate ChangeBut to capitalize on that heady cocktail of technology and people power, we need information. Action is nothing without information. Freely available climate-related data is essential to catalyze the changes in policies, investments and technologies that will be needed if we are to move towards a climate-smart future. So let me relate that to the World Bank.The Bank made a giant leap forward when in 2010 we opened up our data so we can help countries adapt to change, as well as mitigate what is to come. These data cover climate systems, exposure to climate impacts, resilience, greenhouse gas emissions, and energy use.We have been using crowd-sourcing, and combining data with geo-mapping. 9rowd-sourced hackathons hosted by the Bank have enabled the tech community and disaster experts to jointly develop applications in response to disasters in Haiti and Pakistan and have “virtually” brought together people from around the globe to devise solutions to water and other development issues. Last December, we launched an Open Climate Data Initiative, and a Climate Change Knowledge Portal including visualization tools depicting temperature and rainfall scenarios to the year 2100, linking users to more than 250 socio-economic indicators, and risk profiles for 40 countries that integrate climate and disaster risk.If you want to use water indicators to assess the impact of climate change across 8,000 water basins worldwide, the information is there. But to capitalize on that heady cocktail of technology and people power, we need information. Action is nothing without information. Freely available climate-related data is essential to catalyze the changes in policies, investments and technologies that will be needed if we are to move towards a climate-smart future. Working with others we've launched an Open Data for Resilience Initiative, a global effort working in 25 countries. An example is haitidata.org, which makes risk assessment data produced following the 2010 Haiti earthquake available for anyone to download and use.Similarly, Open Data for the Horn of Africa now facilitates open access to geospatial information, data and knowledge sources about the ongoing response to the drought in the Horn of Africa.My point is simple: Farmers, fisher folk, and others around the world are using data and technology everyday to deal with increasing uncertainty brought on by climate change. In Nepal they are using PDAs – computers that fit into the palm of your hand - to collect data regarding changes in food security situations. In Chile, farmers can use low-cost mobiles to receive SMS messages about weather forecasts, market prices and even the latest cultivation practices.In India, fisher folk can use mobile phones to receive messages about weather forecasts, optimal fishing zones, and market prices. And in Laos, Cambodia and Vietnam, mobile phones are used to collect data for flood forecasting and forwarded to a central early warning system, with the information then sent out via traditional media.The Search for Solutions – Engaging and Empowering YouthSo that's the technology part of the transformational combo. Where do youth come in?You are the ones who can think out of the box. You are the ones who can take convoluted conference communiques and begin to make them real, not in conference rooms where agreements stumble or disappoint, but on the ground, and in local and virtual communities around the world.And your numbers are growing. In Africa alone, 70 percent of the population is under 30. And there are already more than 400 million cell phone users. That transformative combo of technology and youth is not tomorrow's world. It’s today.Connect4Climate initiativeThe Connect4Climate initiative – also one of the sponsors of tonight’s event – is using the power of partnerships, participation and social media to include the voices of local youth in the global climate change conversation.With a coalition of more than 140 partners and a Facebook community of over a quarter million, Connect4Climate is reaching out to young people – to listen, acknowledge, and respond to their ideas, to help amplify their voice. Across multiple social media channels, Connect4Climate reaches up to 6 million users each week.In the run-up to the UN Conference on Climate Change in Durban last December, Connect4Climate used a combination of social media and a photo and video competition to getAfrican youth aged 13 to 35 to tell their personal climate change stories through photos and videos.340 rural young people in Somalia were trained on climate change and its effects on agriculture, energy, forests, gender, health and water. They were given cameras to document how climate change has affected their lives and these photo stories depicting deforestation, drought, and health issues were entered in the C4C Photo/Video Competition.Youth from all 54 countries on the African continent participated – they want their voices – and their stories – heard. And we need to listen.ConclusionLadies and gentlemen, As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that can sustain or destroy our future.We know that economic development during the next two decades cannot mirror the past two: poverty reduction remains urgent, but growth and equity can be pursued without relying on policies and practices that foul the air, the water, and the land. The powerful combination of technology and people power can help us avoid the pitfalls of the past.Over the course of this evening you will hear from others on what they are doing to “swing into action”! It’s an impressive catalogue. Enjoy! Show Less - Date: June 28, 2012 Language: English « PREVIOUS / Environment Environment in Africa RESOURCES Civil SocietyConsultationsGovernmentClient ConnectionParliamentariansAccess to InformationFinancing & Risk ManagementBusinessesCorporate ProcurementOperational ProcurementInvestorsWorld Bank BondsJob SeekersJournalistsStudents

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Newsline (30min) jurgen fitschen GRID SCAN Journal a number of british banks. there are several investigations in the u.s. by the securities and exchange commission concerning whether deutsche bank under reported risk in connection with mortgage securities and derivatives. that is particularly ironic. during the financial crisis, deutsche bank was very pleased that it did not call for -- ask for government help, did not ask for a bailout, and it came to the crisis allegedly unscathed. all of this casting doubt about whether deutsche bank's reputation is as golden as it was thought to be. >> thank you very much for joining us, melinda. >> we turn to the markets. the tax-evasion probe was the governing topic there, too. have this report from the frankfurt stock exchange. in the investigation against deutsche bank have been the big issue on the frankfurt -- >> the investigation against which a bank have been the big issue. the co-ceo is under investigation. experts fear there might be heavy image problems for deutsche bank, not because of these investigations, but also because of the fact that there might have been market manipulations ma Newsline 30min they learned of the launch from u.s. missile warning systems around 9:51 japan time. it was confirmed around 10:01 by self defense forces radar which then tracked the rocket. the ministry says it decided not to fire its patriot defense missiles because the rocket was confirmed to pass over okinawa toward the pacific ocean. the officials say there was no possibility of debris falling on japanese territory. south korea's defense ministry says the rocket that north korea launched on wednesday could have reached as far as the u.s. west coast. >> translator: the rocket launched today must be a long-range missile with an estimated range of about 10,000 kilometers. >> kim said the launch was aimed at furthering the development of intercontinental ballistics missiles. the launch had officials scrambling to catch up. north korean authorities announced monday they were extending the launch window by a week because of problems. south korean officials said their intelligence suggested a delay. they said north korean crews removing the missile from a launch pad possibly to repair it. they told nhk the techn Search Results 0 to 1 of about 2

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Mad(man) Moneyby digbyWhy isn't this illegal?When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively "shorts" long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor's office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.Now, it's my opinion that Cantor is playing the designated "madman" role in the negotiations and that he will "come around" at the last minute after they've squeezed every cut they can. But what he is doing could very well roil the markets, even if they don't recklessly default in the end. No way should he be allowed to benefit from that.I just can't believe these people aren't forced to put their holding in blind trusts. Why should any lawmaker be in this position? .

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hide Treasury's Lew presses Congress on IMF funding Wednesday, April 24, 2013 12:25 p.m. CDT U.S. Treasury Secretary Jack Lew testifies before a House Appropriations Subcommittee on State, Foreign Operations, and Related Programs hea By Anna Yukhananov WASHINGTON (Reuters) - Treasury Secretary Jack Lew on Wednesday urged Congress to permanently boost U.S. funding for the International Monetary Fund, saying it was essential for Washington to maintain its influence at the global lender. The Obama administration wants Congress to shift $63 billion from an IMF crisis fund to the IMF's general accounts in order to maintain U.S. power at the international lender and make good on an international commitment made in 2010. The request, however, has been met with skepticism from some Republicans, who see it as tantamount to approving fresh funding in a tight budget year. "I spent much of my professional life making tough budget choices, and I can say without reservation that we must continue to invest in the IMF," Lew told a House of Representatives subcommittee. "The IMF's balance sheet is rock solid," the former White House budget chief added, trying to allay concerns that the money could somehow be lost. He noted the IMF's assets outstrip its credits to countries in the euro zone that are deep in debt, including Greece and Cyprus. But at a separate hearing, Republican lawmakers raised concerns about how well the IMF was helping struggling economies in Europe and the risks attached to IMF loans, suggesting Congress was in no hurry to approve any changes to U.S. contributions. "Although this (U.S. contribution to the IMF) is often characterized as an exchange of assets ... it cannot be considered as a zero-cost or a benign contribution," said Representative John Campbell, chairman of a House subcommittee on monetary policy and trade. Testifying before the panel, Lael Brainard, Treasury's undersecretary for international affairs, defended the safety of U.S. contributions to the Washington-based lender. "If all the credit outstanding today were to go into default ... the reserves and the gold holdings of the IMF would be more than sufficient to completely cover all of those claims," she said. "So for that reason it is extremely hard to envisage circumstances where the U.S. taxpayer would be in any way at risk." WAIT ON VOTES Congressional approval of the IMF funding changes is necessary to complete reforms at the lender that the international community has already agreed upon to boost the voting power of emerging economies. The reforms would make China the IMF's third-largest member. The reform of the voting shares, known as quotas, cannot proceed without the United States, which holds the only controlling share of IMF votes. Under the reform, U.S. voting power would decrease slightly but it would still maintain its veto. "There are other countries that would be happy to increase their quotas and eliminate the U.S. veto," Lew said. "So, I think it's a matter of urgency that we have these reforms ratified." He said IMF funding helps preserve U.S. business interests, by pushing for a level playing field for U.S. companies and protects U.S. national security by promoting economic stability in fragile states that could descend into political upheaval. Washington's foot-dragging on IMF funding came under criticism at last week's meetings of the IMF and financial officials of the Group of 20 nations. "Frankly speaking, some of us are losing patience already. The decision of this nation is very important for all," Russia's deputy finance minister, Sergei Storchak, said last week, referring to the United States. But U.S. lawmakers on Wednesday made no firm commitments. Representative Kay Granger, the chairwoman of a House appropriations subcommittee that deals with U.S. foreign programs, said it was unclear that U.S. support for multilateral development institutions was effective. "Funds are more difficult to track when they go through multilateral institutions rather than through bilateral assistance programs," she said. (Reporting by Anna Yukhananov; Editing by Tim Ahmann, Andrea Ricci and Kenneth Barry)

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hide Opponents of Dell buyout say don't delay vote Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference at the New York Stock Exchange in this June 27, 2007 fi By Greg Roumeliotis and Ross Kerber (Reuters) - Opposition to Michael Dell's bid to take his computer company private grew on Wednesday, and billionaire Carl Icahn argued Dell Inc had no right to delay a shareholder vote, even if the deal looked more likely to fail. Holders of nearly 30 percent of Dell stock oppose the $24.4 billion offer by founder Dell and private equity firm Silver Lake, which is now scheduled for a vote in Austin, Texas on Thursday morning. That includes shareholders who say they will vote against the buyout or have been reported to oppose it. Dell may decide to delay the July 18 vote to gain time to win support for the deal, a person familiar with the matter said on Tuesday, asking not to be identified because the deliberations are confidential. In an open letter to shareholders on Wednesday, billionaire activist investor Carl Icahn, who has amassed an 8.7 percent stake in Dell, said Dell's special board committee must allow a final vote to be completed on July 18 as scheduled. He once again urged shareholders to oppose the buyout. "Can you imagine a political election contest where one side could push off the election to wait for a better day to hold the election - a date when it is hoped they might do better in the vote than they would have done on the originally scheduled election date?" he wrote. The stock ended down 1.1 percent on Wednesday at $12.88, its lowest level since July 5. Michael Dell and Silver Lake have so far resisted calls, including from Dell's special committee, to raise their $13.65 per share offer. Two people familiar with the matter said on Tuesday the bidders would stick to their offer even if the vote was postponed. The sources asked not to be identified because they were not authorized to speak to the media. The Wall Street Journal reported on Wednesday that Vanguard Group Inc, the largest U.S. mutual fund manager and holder of a 3.7 percent stake in Dell, and State Street Corp, which has a 3.5 percent stake, were set to vote against the buyout. Vanguard and State Street declined to comment. Vanguard and State Street run index funds that typically follow the lead of shareholder advisory firms. Their decision to defy all the three major advisory firms that have recommended the Dell buyout would add to the uncertainty over the vote outcome. Other key minority shareholders, including BlackRock Inc, T. Rowe Price Group Inc, Highfields Capital Management, Pzena Investment Management and Yacktman Asset Management, have already come out against the buyout or have declined to comment on reports that they are against it. Under so-called majority-of-the-minority voting provisions, a majority of Dell shareholders, excluding Michael Dell's roughly 16 percent stake in the company, have to vote for the buyout in order for it go through. This means shareholders, other than Michael Dell, who collectively own almost 43 percent of the Round Rock, Texas-based company need to vote for the buyout for it to go through. Accounting for the stakes of Icahn and his partner Southeastern Asset Management Inc, the total against the buyout approaches 30 percent of Dell's shareholder base. To be sure, some shareholders supportive of the deal are holding their ground, including Invesco Ltd's PowerShares line of exchange traded funds, which held a roughly 1 percent stake of Dell according to recent filings. Asked how they would vote, Invesco spokeswoman Kristin Sadlon said in an e-mail that the funds will vote in accordance with recommendations by Glass Lewis & Co. Like other proxy advisors, Glass Lewis has recommended shareholders vote in favor of the acquisition. Dell's special board committee will likely decide by Thursday morning whether or not to delay the vote, based on the number of votes that have been cast to block the buyout. Dell's board has set up the special committee to independently assess the best option for shareholders, without influence from Michael Dell, who is the company's chairman and chief executive officer. Icahn has argued since March that Dell's founder is trying to steal the company away from shareholders almost 30 years after he founded it with just $1,000. Icahn and Southeastern announced their latest alternative offer for Dell last week. It calls for a buyback of up to 1.1 billion shares at $14 apiece and a Dell warrant offered for every four shares held. Each warrant would entitle the holder to buy one Dell share for $20 each within the next seven years. Icahn estimates the value of his latest offer at $15.50 to $18 per share although Dell's special committee dispute this. In order for his proposal to be put forward for consideration by Dell shareholders, he must first succeed in having Michael Dell's offer voted down and then win enough shareholder support to replace the members of Dell's board with his own nominees. (Reporting by Nicola Leske, Jessica Toonkel and Greg Roumeliotis in New York and Ross Kerber in Boston; Editing by Gerald E. McCormick and Richard Chang)

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Fair Winds Ahead Superior performance has helped Neuberger Berman survive and thrive since the Lehman Brothers bankruptcy. Michael Santoli Neuberger Berman was knocked around more than most asset managers in the treacherous seas of the 2008 financial crisis. The 73-year-old firm had only recently been lashed to Lehman Brothers when the investment bank foundered and ultimately failed. Buyout firms proposed a lifeline, but they fell short as the financial crisis deepened, leaving Neuberger's leaders to improvise an employee buyout during the most punishing financing environment in memory. Yet, four years later, Neuberger is freshly invigorated and focused on the essentials in the way disaster survivors tend to be. Its business is in sturdy condition, its fund performance is outpacing most peers and its strong investment culture has been affirmed. If the new Neuberger is in some ways "a $200 billion start-up," as one executive characterizes it, it is also one of the country's premier and most deeply rooted asset managers. Roy Neuberger, a founding partner and guiding force of the firm, died just two years ago, at the age of 107. Until he was nearly 100, he came into the office every day. Thomas Reis for Barron's For all the drama Neuberger has undergone in the past 15 years -- going public in 1999 after 60 years as a partnership, being absorbed by Lehman in 2003 and then set adrift five years later -- Neuberger is in some ways now much closer to the firm that Roy Neuberger ran than it has been in years, with its focus squarely on its client base, and not on the demands of a parent company or public shareholders. "Our mission is totally different as part of an employee-controlled partnership," than it was as a subsidiary of a bulge-bracket investment bank, says Neuberger Chief Executive George Walker. The 43-year-old Walker, a former Goldman Sachs partner, was hired by Lehman in 2006 and soon found himself steering Neuberger through Lehman's chaotic demise. His thoughtfulness -- as he listens to a question, he often closes his eyes tightly before coming up with a careful and articulate answer -- has served the firm and its customers well. "Now, unlike most competitors, we measure success by how clients, partners and employees feel about the place," he says. "It changes the pressures if you're in my seat." Rather than gunning for growth for its own sake, he can focus the firm on "being a good steward of client capital and the franchise." The stability that has long characterized the firm is still in place. More than 95% of its 400 investment professionals from before the 2008 disruption are still with the firm; 80% have been with the firm for more than 10 years. That continuity is present in the firm's post-Lehman headquarters: Located in an unfashionable part of Manhattan, just south of Grand Central Terminal, the offices are nondescript save for pictures and sculptures from Roy Neuberger's world-class art collection around nearly every turn. MOST IMPORTANTLY, THAT commitment shows in Neuberger's performance. More than 90% of its equity and fixed-income assets have outperformed their benchmarks over the past 10 years (as of June 30). Its mutual funds are a relatively small, though notable, part of its business; Neuberger has just $29 billion in 31 funds, though that's up about 50% since 2000. Its addition of a global asset allocation fund in 2010 made this the first year Neuberger qualified for the Barron's Lipper ranking of the best fund families: The firm finished third overall out of 58 families ("Worth the Risk," Feb. 6). NEUBERGER'S STORIED PAST has finally found some resolution this year. In a bid to shore up capital, Lehman had negotiated a deal for more than $2 billion to sell the firm to Bain Capital and Hellman & Friedman in the summer of 2008. But the deal, which was in part contingent on the level of the S&P 500 index, fell apart when the market collapsed. Neuberger's management quickly scrambled to put together an employee buyout, financed by a preferred stock issue with a dividend set to rise over time. The deal valued the company at $920 million. Employees garnered 51% of the firm; the Lehman estate, controlled by creditors, owns the rest. CEO George Walker: Building on Neuberger's strength and stability. Courtesy of Neuberger Berman Earlier this year, Neuberger completed a debt offering to redeem the preferred and help employees acquire increasing portions of the firm in agreed-upon phases, reaching 64% by the end of this year on the way to 100% by early 2016. A system has been created to share firm equity in a way meant to retain senior professionals and create incentives for younger generations of employees. Neuberger is now one of the largest employee-owned asset managers, and likes to compare itself to Wellington Management, the venerable Boston firm that has nurtured an impressive investment culture while passing ownership seamlessly from one generation to the next. Based on the firm's assets and asset mix, it's probably worth at least $3 billion today. Neuberger's time with Lehman was culturally challenging but provided it with the engines for growth it's using today. Following its founding in 1939, Neuberger was mainly a manager of private family wealth and later keeper of a smallish equity mutual fund array. In terms of cohesion, though, it was little more than an amalgam of small, semiautonomous teams of wealth advisors and portfolio managers. The firm is now more balanced and more global, in large part thanks to the (once-) deep-pocketed and internationally oriented Lehman. Lehman acquired Lincoln Capital, a long-tenured Chicago-based institutional bond manager, and merged the firms, later adding to private-equity shop Crossroads, all the while distributing products through Lehman's far-flung global sales network. As a result, Neuberger's $200 billion in assets breaks down as 45% equities, 45% fixed income and about 10% alternative categories such as hedge funds and private equity. By distribution channel, 55% is institutional, 25% is mutual funds sold through third-party investment advisors, and 20% is in direct private-client accounts. NO MATTER HOW THE CAPITAL is conveyed to Neuberger, the money is managed the same, by distinct investment teams known by name rather than style-box category. A hallmark of the firm's early years, there are 40 teams, each with its own process and penchant for lively debate. Now, though, they're watched over by a central risk committee and by President and Chief Investment Officer Joe Amato, a longtime sell-side research veteran who took on his role during the Lehman interregnum. The teams are known internally by such neighborly shorthand monikers as "The Straus Group," rather than "large-cap value" (longtime investor Marvin Schwartz's area), or even more simply, "Ann and Tom," for high-yield bond, run by Ann Benjamin and Tom O'Reilly, who have been plying speculative-grade debt management together for nearly two decades. Neuberger's Biggest Funds Neuberger Berman has $29 billion in 31 funds, but the lion's share—nearly 40%—of those assets are in Genesis, its biggest fund. Its roster may be small, but its funds consistently outperform. Return Fund name Ticker Category Assets ( bil) 1-Yr 3-Yr Neuberger Genesis NBGNX Small-Cap Growth $11.6 21.2% 13.4% Neuberger Hi Inc Bd NHINX High Yield 3.1 18.1 11.8 Neuberger Eqty Inc NBHAX Equity-Income 2.6 19.4 14.5 Neuberger Soc Resp NBSRX Multi-Cap Core 1.8 20.7 11.0 Neuberger LC Value NPRTX Large-Cap Core 1.5 25.0 6.7 *Performance figures as of 9/30/12. Source: Lipper Though the teams have often come from elsewhere or were taken on via acquisition under Lehman, they tend to share certain unifying tendencies: a true, bottom-up security-selection process, a priority on protecting principal first, and a healthy disdain for hewing strictly to benchmarks or rigid, marketing-driven style silos. Amato points out that Neuberger's heritage as a private manager for wealthy families has bequeathed an absolute-return mind-set. The firm's most notable fund is the $11.7 billion Neuberger Berman Genesis fund (ticker: NBGNX). Run by Robert D'Alelio and Judy Vale (or "Bob and Judy") for the past 16 years, Genesis comprises nearly 40% of the firm's $29 billion in mutual fund assets. With an average annual return of 11.5%, Genesis has beaten the Russell 2000 Value index by about three percentage points a year over the past decade. D'Alelio and Vale, who also run $2.8 billion in institutional money and separate accounts, hunt for smaller, cheaply valued stocks with a safety-first approach, privileging self-financing companies with strong free cash flow that can weather all sorts of economic environments. Once they find them, they rarely sell, which means these small-cap buyers end up holding some large companies, and their fund is currently classified by Morningstar as a mid-cap growth vehicle. They simply don't care. Nor are they shy about closing the fund to new investors when they see a scarcity of names that meet their criteria. VALE DESCRIBES COMING TO meet Neuberger folks in 1992, while considering taking a job there. To her surprise, the group ended up "fighting and arguing" over investment ideas, relishing principled disagreement. "Everyone here is a stock junkie, and there's pride of authorship of ideas." Neuberger hosted 1,400 meetings with public-company management teams last year, gatherings that tend to be well attended and spawn vigorous debates among Neuberger analysts and portfolio managers about the investment merits. While there is a centralized research effort, there is no "house view" on a stock that must be adopted by the individual portfolio managers. Benjamin and O'Reilly, co-managers of $23 billion in high-yield bond assets -- including the Neuberger Berman High-Income Bond fund (NHINX) -- arrived via the Lincoln Capital acquisition, but similarly try to insulate clients from risky market environments and tack away from their benchmark when necessary. "We're a disciplined credit shop," says Benjamin. "We protect on the downside when default rates are rising and participate on the upside" as the market fundamentals improve. Like Vale and D'Alelio, the high-yield team likes to tell clients that if their funds are outperforming in a risk-on, momentum-type market phase, then they're doing something wrong and should be fired. The fund has outperformed its benchmark over the past five years by dialing down risk ahead of the '07-'08 crisis. "A diversity of opinion makes us better investors, helps us attract talent, and makes us a more stable firm," contends Benjamin Segal, who runs Neuberger's global equity group. Such a legacy is hardly foolproof in averting over concentrated, ill-timed bets on certain sectors, even if the various teams making those bets came to them by separate processes. Its heavy tilt toward large-cap value teams left the firm freighted with too many energy and financial stocks ahead of the 2008-'09 bear market, after which asset levels and flows suffered. Still, Walker says that while the firm was part of Lehman, "it used to be the hot committee to be on was new products. Now it's the risk committee, which is populated by senior, skeptical people, who thinks if it's saleable it's probably not a good idea." The firm, for example, has resisted requests to launch a thematic sector product, such as a green energy fund. Neuberger also exited the money-fund business in 2010. Of course, the firm as a whole doesn't mind selling something new, especially when the product draws on its internal strengths and serves an evident client need. Witness Neuberger's determined push into the burgeoning "liquid alternatives" segment, where institutional-caliber hedge-fund-style strategies are wrapped in a mutual-fund package offering low minimum investments and daily liquidity. David Kupperman, a longtime overseer of funds of hedge funds and private-equity vehicles, runs a newly launched Neuberger Berman Absolute Return Multi-Manager fund (NABCX). And Charles Kantor, a go-anywhere manager of a team, now runs Neuberger Berman Long Short fund (NLSAX), a hedged mutual fund. Year-to-date, the fund is up 11%, while taking less than half of the market risk of the S&P 500. IT'S TEMPTING TO ASK WHETHER the evident vogue for volatility-damping absolute-return funds built to hold up in down markets but lag strongly rising ones is a matter of fighting the last war by exploiting investors' risk aversion. Yet Neuberger executives make the case that with "safe" bond investments yielding near zero, an aging investor population and squeezed pension funds, predictable return streams without major principal declines will serve an enduring purpose in portfolios. It's also true that Neuberger leaders are not above expressing concern that some of their products might be too popular, or popular for the wrong reasons. Brad Tank, the firm's fixed-income chief, says, "The thing that's most troubling about the fixed-income environment, aside from the diminished yields and prospective returns, is the way retail [investors have] chased the market to the exclusion of everything else." Neuberger's balance across asset classes, sales channels and regions allows it to be agnostic about where client needs and preferences drive growth, and what markets present the best growth opportunities in years to come. Neuberger's independence and employee-ownership structure presents is a sort of test of industry's conventional wisdom, which holds that the mature, increasingly global business will come to be dominated by a handful of gargantuan firms plumbing $1 trillion or more in assets on one side, and tightly focused boutiques on the other. And with a reported $1.1 billion in revenue last year and $261 million in profit, it has the wherewithal to continue to expand. Walker is adamant that he's not looking to go public or sell the firm. In any case, it will no doubt remain independent until at least 2016, when employee ownership is scheduled to reach 100%. Among the rare opportunities that being revived following a brush with extinction affords is the chance to assess a company's heritage and capabilities to formulate a fitting creed and credo. With the close guidance of Gerald Kaminsky of Neuberger's Kaminsky group, an investment advisor for nearly 50 years, management took as its mission statement, "To partner with our clients to achieve their unique investment objectives." Not all that catchy, and bordering on bland fiduciary piety, perhaps. But Neuberger is the rare firm structured and positioned to profit only to the extent their clients thrive, free of growth-obsessed corporate masters or temporary public shareholders with other priorities. E-mail: editors@barrons.com Email

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U.K. Floods May Cost Insurers 1 Billion Pounds, Deloitte SaysAmbereen Choudhury and Alex MoralesFeb 11, 2014 4:34 am ETFeb. 11 (Bloomberg) -- Floods and storms pounding the U.K. may cost the insurance industry at least 500 million pounds ($822 million), a figure that may double if the weather conditions persist, according to a partner at Deloitte LLP. The storms may also drive up insurance premiums this year, James Rakow, an insurance partner at the firm, said in an interview with Bloomberg Television today. “If we get continued rains and storms throughout February and March, we could easily see a figure of 1 billion pounds for the industry,” he said. Rakow predicted insurance premiums may increase by 10 pounds to 15 pounds per household. Waterlogged towns on the River Thames west of London are bracing for more flooding as the U.K. struggles to deal with the wettest weather since 1766. The British weather service says two months of record-breaking rain are related to an unusually strong North Atlantic jetstream that’s more southerly than its usual flow north of Scotland. There’s little respite likely for southern England, with meteorologists forecasting rain every day through Feb. 14. Storms and tidal surges have buffeted Britain since December, flooding more than 8,000 homes and damaging coastal infrastructure, including the main railway connecting the southwestern city of Plymouth with the rest of England.--Editors: Keith Campbell, Steve Bailey

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Dutch Finance Minister Says His 'Patience Has Run Up' With Greece Share Tweet E-mail Comments Print By Eyder Peralta Dutch Finance Minister Jan Kees De Jager addresses the media prior to the start of the Eurogroup ministerial meeting at the European Council building in Brussels on Feb. 9. Yves Logghe NPR's Eric Westervelt scored an interview with Dutch Finance Minister Jan Kees de Jager. And Eric reports that he did not mince words. The Netherlands and Germany, which have AAA credit ratings, hold great sway in whether Greece will receive a $170 million bailout from the European Union and the IMF. Without it, Greece would default on its debt and would almost certainly exit the monetary union. Eric asked Jager if Greece needed to do more beyond the tough set of austerity measures Parliament passed on Sunday and this is what Jager told him: "We do want to see more guarantees in place by implementing in law some of the measures that are absolutely needed in the next two weeks before we can give a final 'yes' to the package. "It is fair to say that my patience also has run up, so that's why I say we have to see the evidence of implementing the measures into law and just promises are not enough, not anymore." Today the Greek conservative opposition leader, Antonis Samaras, who is widely expected to become the country's next prime minister, met one of the demands when he pledged in writing that he would remain committed to the austerity measures if his party takes power in the next election cycle. Eric will have much more of his interview with the Dutch finance minister on tonight's All Things Considered. Tune in to your local NPR member station to listen.Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/. View the discussion thread.

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Stereotypes Can Deter Consumer Purchases The perception of negative stereotyping, particularly in the areas of financial services and automobile sales and service, can cause consumers to fear being duped and forgo their purchases, according to new research by University of Minnesota Associate Professor Kathleen D. Vohs. Vohs, the Land O'Lakes Professor for Excellence in Marketing at the University's Carlson School of Management, and co-authors Hakkyun Kim (Concordia University, Canada) and Kyoungmi Lee (Yonsei University, Korea) found that a potential buyer, aware of negative associations held about a group to which he or she belongs, may experience apprehension when transacting with someone from outside this group. This nervousness detrimentally impacts purchasing decisions. "People naturally withdraw from situations where they anticipate being stereotyped," says Vohs. "They fear being duped or inadvertently reinforcing the negative association." In "Stereotype Threat in the Marketplace: Consumer Anxiety and Purchase Intentions," which will appear in a forthcoming issue of the Journal of Consumer Research, the researchers conducted three experiments. The first focused on women's feelings when interacting with potential financial advisors. When predisposed to conditions meant to remind participants of the stereotype that women are less competent at math than men, women reported feeling more anxious about interacting with a male financial advisor and less inclined to procure financial services. The second experiment tested these findings in an automobile repair context. When asked to report their gender before seeking a car repair, women were more likely to feel anxiety when contemplating a transaction with a male technician. "Consumers don't have to believe the stereotype; they just have to be aware that the stereotype exists to experience the threat" Vohs adds. "The actual behavior of the salesperson may have little effect." This research provides some of the first evidence that the presence of negative stereotypes plays an important role in consumer judgments. These findings have practical implications for marketers, who may take care to avoid using advertising content that might trigger thoughts or associations of a negative stereotype in potential costumers. While marketers cannot completely control for which perceived stereotypes may cause anxiety in potential buyers in all cases at all times, Vohs and colleagues found they may be able to mitigate the stereotype threat by introducing a sense of calmness into the transaction environment. In the study's third experiment, the researchers found that introducing the scent of vanilla into the decision-making process helped participants feel calmer and more assured of their transaction. "Vanilla scent has been used for centuries to calm and pacify people who have anxiety," says Vohs. "While we used scent, any tactics firms can employ that would calm consumers could help the transaction take place as the marketer would intend."

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DinarSpeculator.com > Iraq Dinar Speculation Forums > Iraq and CBI > Central: exchange rates fixed, and cash reserves is subject View Full Version : Central: exchange rates fixed, and cash reserves is subject kelsguy111304-05-2010, 01:08 AMCentral: exchange rates fixed, and cash reserves is subject by cosiangel � Fri Apr 02, 2010 1:17 pm Central: exchange rates fixed, and cash reserves is subject to licensing rounds http://translate.googleusercontent.com/ ... 7WkvB_hZ8g 1/4/2010 - 10:04 BAGHDAD / Aswat al-Iraq: Central Bank of Iraq adviser, on Thursday, the Iraqi dinar exchange rate against the U.S. dollar is steady and stable, indicating that conditions are subject to cash reserve, including the outcome of the oil licensing rounds, which will hopefully raise Iraq's imports of Finance. The appearance of Mohammed Saleh told (Voices of Iraq) that "the policy of the central bank depends on maintaining the stability of the currency exchange rate, which currently stands at 1170 dinars per dollar," noting that monetary policy "is usually not fixed in absolute terms, the interference of the Central which comes for the needs of customers the dollar for legitimate purposes. " The rumors were fired in the domestic market during the past two days, suggesting that the central bank will cut the exchange rate from 1170 dinars to the dollar to 1000 dinars per U.S. dollars. He pointed out that "what is said about the low exchange rate or stop the currency auction just rumors aimed at selfish gains only, especially since the transfer abroad is permissible, and the freedom of foreign exchange, not intersect with the law on combating money laundering and money, crime and terrorism," noting that " All funds that do not intersect with the law is money free, owners are free to remittances, so we build a stable economy we do not need to resort to crisis or to surprise the public, and these policies, if any, it will be visible and clear without relying on underground. " On the cash reserve legal Saleh pointed out that the central "has the reserves are adequate and sufficient, and conditions are subject to including results of the rounds of licensing oil, and if they succeed in the export of large quantities of oil Vstkhaddm the national economy and development efforts, and thus will enter flow into Iraq, and not vice versa." Iraq had signed a dozen oil contracts with major international oil companies through two rounds of licensing the first oil and the second, which was held in Baghdad in mid and late last year, which is expected to raise Iraq's production of 2,5 million barrels per day to about 12 million during the next six years. On the future of the Iraqi dinar Saleh said that the "exchange rate governed by the reserves, and price trends, which are stable at the moment," expected to be "the future of the Iraqi dinar a prosperous and stable, and every case, we believe that the future of the Iraqi economy in general will be promising, according to an optimistic outlook must be paint in the mind and the changes will be positive, provided that other factors not subject to constant surprises. " H u h (m) - MD All Rights Reserved for � 2008 Aswat Al Iraq

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E-Commerce Times > Business > Wall Street | Next Article in Wall Street Growing Pains Lead Yelp to Loss By Rachelle DraganiE-Commerce Times Online review site Yelp lost nearly $10 million in its first quarter as a publicly traded company, due in part to aggressive expansion pursuits. "They raised a lot of cash and are using it to rapidly expand and protect against competitive erosion," said analyst Rob Enderle. "This is a case of use it or lose it." Yelp reported a net loss in its first quarter as a publicly traded company after aggressive expansion abroad led to a sharp increase in costs. The site, which provides online reviews of local businesses, released its earnings on Wednesday for its first ever fiscal quarter after filing its IPO. Yelp reported a net loss of US$9.8 million, or 31 cents per share, more than triple its net loss of $2.7 million from the same time last year. Revenue was up from the same quarter a year ago, though, driven by growth in visitors to the site and its number of reviews. It averaged 71.4 million monthly unique visitors, a 53 percent increase. Active local business accounts grew as well. The site now hosts 27.6 million reviews, a 59 percent increase from a year ago. Local businesses are also adding more accounts, growing 117 percent to 27,300. Yelp said it is working to bring even more business accounts to the site by improving mobile metrics that would allow owners to see how many people accessed the site to get more information on their business. Yelp brought in $27.4 million for the first quarter, up 66 percent from the same quarter last year. The company expects to bring in $128 million to $132 million overall for 2012, topping the Street prediction of $124.4 million. Yelp didn't respond to our requests for comment on the story. Since going public in early March, Yelp's stock has been consistently trading above its $15 IPO price. The company still faces challenges, though, in a market where barriers to entry are small but operating costs are high. "The Yelp earnings today were fairly good," Sam Hamedeh, CEO of PrivCo, told the E-Commerce Times. "But [they] do show the company's revenue growth already decelerating from earlier, faster rates, despite still being quite small." Since the company projected an increase in sales for 2012 as a whole, investors are likely to stick it out with Yelp for the time being, Rob Enderle, principal analyst at Enderle Group, told the E-Commerce Times. "Their revenue growth was strong and beat expectations," said Enderle. "So they have a profit engine and investors will ride with them if they can articulate a plausible positive future, and they did that." If competitors or other challenges get in the way and keep Yelp from turning a profit, though, Yelp might make a better acquisition than an independent company, Hamedeh said. "It's hyper-local advertising business is quite a difficult one to make profitable or scale well," said Hamedeh. "Local salespeople must call on small restaurants, bars and so on. It is highly labor-intensive, and Yelp really is not so much a technology company at all but a local advertising company. Very tough to make it work at a large scale." Rapid Growth Yelp is attempting to add more local spots for its site. Though revenue and accounts are growing, the company's rapid expansion contributed to its overall net loss. With the extra $114 million cash boost it added after going public, the company said it is pursuing a rapid growth phase. It brought the service to 11 markets over the past quarter, including Antwerp, Brussels, Oklahoma City, Perth and Hampton Beach. With the added locations, Yelp now has 82 active markets around the globe. That rapid expansion can act as a safeguard against competitors, said Enderle. "They raised a lot of cash and are using it to rapidly expand and protect against competitive erosion," said Enderle. "This is a case of use it or lose it -- they need to move into regions and get established before a local, similar, smaller company locks them out." While the net loss due to growth might not look attractive on an earnings report, said Enderle, the company faces a bigger risk if it doesn't spend on overseas growth. "In the Web game, if you want to go global you need to move quickly or overseas firms will clone you," said Enderle. "You saw that happen to Google in China." E-Commerce Times Headlines

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Felicis Ventures Felicis Pronounciation: fell-e-sis Latin, meaning: lucky, fortunate, happy. Aydin Senkut Renata Streit Quintini Sundeep Peechu Guergana Tomova Dasha Barannik Jack Abraham Nick Baum Featured Investments Aydin Senkut is the Founder and Managing Director of Felicis Ventures. He has been named one of the top 25 tech angels by Businessweek recently and was featured as one of the top 8 up and coming VCs by Forbes’ Midas List. Felicis Ventures portfolio encompasses over 90 companies currently including Clearslide, Dropcam, Inkling, Practice Fusion, Rovio, and Shopify. Since 2006, over 47 Felicis backed start-ups have been acquired by firms such as Google, Facebook, Twitter, Groupon, Microsoft, AT&T, Disney, Ebay, Chegg and Intuit. Prior to starting Felicis Ventures, Aydin was a Senior Manager at Google, responsible for strategic partner development and account management in Asia Pacific (including Japan). Aydin joined Google in 1999 as its first Product Manager to launch Google’s first 10 international sites, its first online search licensing products and its first Safe Search. He then became the first International Sales Manager at Google, responsible for world-wide licensing deals. Before joining Google, Aydin was the Product Manager for Data Visualization and Data Mining software MineSet, and led the business development efforts for the financial services industry at SGI. Aydin received a BS in Business Administration with Honors from Boston University. He also earned an MBA in Marketing from the Wharton School and an MA in International Studies from the School of Arts at the University of Pennsylvania. He speaks five languages: English, German, French, Portuguese and Turkish. Aydin and his wife are Associate Founders of Singularity University, have backed bio-tech research at UCSF and sponsored a scholarship at the University of Pennsylvania. Aydin is on the boards of Clearslide and the Wharton Entrepreneurial Program. Aydin has been featured on Businessweek, New York Times, Wall Street Journal, Fortune, Financial Times Germany, and San Francisco Chronicle Copyright © 2006-2014. Felicis Ventures. All rights reserved. Google Plus Twitter

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Grading Bernanke's Fed By Morgan Housel | Washington Post columnist Neil Irwin stopped by to discuss his book, The Alchemists: Three Central Bankers and a World on Fire. It's a great read on the history of central banks, including how they responded to the financial crisis and the challenges they face in the future. Popular opinion generally has plenty to say about the current chairman of the Federal Reserve, but hindsight is keen and often vindicates -- or vilifies -- key players after the fact. In this video segment, Irwin is hesitant to qualify Ben Bernanke's legacy just yet. A full transcript follows the video. Morgan Housel: You write in the book about how hated Paul Volcker was back in the '70s, when he was raising interest rates to slay inflation, which almost purposely sent the economy back into recession. You had all these homebuilders were sending him two-by-fours in the mail. You had auto dealers sending him keys to unsold cars in the mail. He was really hated at the time. In hindsight now ,we look back at him, I think broadly, as saving the economy -- one of the better Fed chairmen. Then on the opposite spectrum you have [Alan] Greenspan, who, back in the '90s and early 2000s, people loved him more than anyone. He was responsible for the boom, and they loved him. They stopped him on the streets to thank him, and now we look back at him as one of the people responsible for the crash. My question is, how do you think history will judge Bernanke's actions in 2008? Neil Irwin: The things you just described have made me modest in my ability to predict and know what the ultimate historical legacy of Ben Bernanke will be. Look, I think fundamentally Ben Bernanke has done a marvelous job the last five years. Yes, they missed a lot of stuff heading into the crisis. They didn't see beyond the horizon of how bad it could be. Yes, they shouldn't have let Lehman Brothers fail. That set the stage for all that followed. But in their speed, their creativity, and his willingness to analyze the world as it is and find ways to use his limited tools to try and keep the economy afloat, I think he has a lot to be proud of. But, again, for exactly the reasons you're describing, I think his ultimate legacy is something that can't be written for quite a few years to come. If his successor can get through these next few years and do an exit that's as skillful as the entry into all this easy money and bailouts and all the stuff they did, then I think we can say Ben Bernanke is a great historical figure. Until then, he's a guy who made some hard decisions in a hard time and looks so far, so good, but I think we have to reserve judgment until we know more, and that'll be a few years. Housel: On that same point, Ben Bernanke is probably the most criticized person in America for the past five years. That may be a stretch, but pretty close. On a personal level, how does he take that? Does he ever doubt himself? Is he pretty stubborn in his views that he knows he's right, or does he take criticism pretty seriously? Irwin: I think he takes certain criticism pretty seriously. He had to learn this whole thing of becoming a public figure, and having to develop the thick skin you need if you're going to be a public figure who people are criticizing all the time. In a way, he was the accidental Fed chairman. He only came to Washington in 2002. He got a call from Glenn Hubbard, who was George W. Bush's economics advisor, saying, "Hey, would you like to come to Washington and be a Fed governor?" It was right after 9/11; it was kind of a time of patriotism. Ben Bernanke said: "OK, yeah. It seems like a good way to do a couple of years of public service, see what it's like." Four years later, through a kind of random series of events, he ends up chairman of the Federal Reserve, one of the most powerful people on Earth. Two years after that, this tremendous crisis happens that turns him from this kind of "man in the gray flannel suit" -- he did not want to be a flashy Fed chairman. He doesn't like going to fancy parties in Georgetown. He prefers to lay low and go to a Washington Nationals game with his wife. But the crisis thrust him into this prominent, celebrity kind of role, going on 60 Minutes, and all this stuff he's done. But I think it's not a natural fit for his personality. I think through that process, he's had to evolve the thicker skin to get used to people complaining about what he does, and criticizing every move he makes. I think he's much more savvy now than he was when I started covering him in 2007. In 2007 I think he was not as politically savvy; I think he was not as market savvy. I think he was not as accustomed to this experience of being a public figure who people are going to complain about all day long. More from The Motley FoolThe Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-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.

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Enda Kenny on the front cover of TIME magazine The Time of Enda Kenny’s life - Superman act does hide the fact that Ireland’s a long way from a “comeback” John Spain Taoiseach Enda Kenny on the cover of Time MagazineIt was hard to know whether to laugh or cry here last week when we saw Taoiseach (Prime Minister) Enda Kennyadorning the cover of Time magazine, doing his steely-eyed pose into the camera. “The Celtic Comeback,” the cover headline said. You will not have seen it on the newsstands over there since it was the cover of the European edition only. Be thankful for small mercies. And spare a thought for Time readers all over Europe who were confronted with the disturbing sight of Endadoing his Superman act. I'm prepared to bet that most of them hadn't a clue who was he was, which must have been a bit perplexing since Time covers personalities who are usually familiar faces. Even so, people across Europe must have been intrigued by this strange man's power stare. This is what Enda does, of course. He may not use as much make-up as Bertie Ahern did, but he's just as concerned about image. A bit like George W. Bush, he talks in short sentences and simple language and he's slightly aggressive in his delivery, using a lot of hand chops for emphasis. Under that improbably blond head of hair, he's very stern (to show he's serious), but with the occasional twinkle in the eye (to show he's human). And he is relentlessly positive. Ireland will never default on its debts, Ireland will do whatever is necessary to get back on track, he repeats. Lately he's started saying that Ireland is turning the corner.He says these things with so much conviction he's probably starting to believe them himself. The trouble is very few people here go along with him. They have seen through the empty positivity because they live in the real world, not in Kenny’s parallel universe. But whoever wrote the “The Celtic Comeback” headline appears to have bought Kenny’s line. To be fair to the European editor of Time, Catherine Mayer, who wrote the cover story, her account was a lot more nuanced and qualified that the headline suggests. (Even though Enda did not make the cover in the U.S., Mayer's story was carried inside the US edition so you can read it yourself).So as someone who wrote front page headlines for newspapers for years, let me offer an alternative. A more accurate headline would have been “The Celtic Con Job.” Because that is what we are faced with here, a financial con job that has been imposed on Ireland by Europe at enormous cost to the ordinary citizens here.It's called a bailout, but in reality it's a way of paying back all the (mainly foreign) bondholders who gambled on the Irish property boom and making the Irish taxpayer pick up the tab. And who is the chief enforcer of this con job on Ireland? It's the Comeback Kid himself, Enda Kenny. The Time magazine article does quote Kenny saying that he wants a better deal from Europe on our debt. We may get one eventually. But in the meantime he continues to work this deeply unfair bailout agreement which is depressing the Irish economy, causing record emigration and making life tough for ordinary people here. The heroic image of Enda on the cover of Time and the headline suggests that we are on the road to recovery and that the Irish economic crisis will be over before too long. Nothing could be further from the truth. The truth is that we are not even halfway through this crisis and it's a toss up which way it goes from here. Yes, it is true that because of the perception that we are coping with austerity, the yield on Irish bonds has come down and we may be able to get back into the money markets at some point. But the scale of the debt problem facing us is so great that we don't have a hope of keeping up with repayments. And where will our bond yields go then? Read more news on Irish politics and government here.There are two elements to the problem we face. The first is the €68 billion EU/IMF bailout we got, which is a millstone around the neck of the country. As you know, the Irish state guaranteed all Irish bank debt when the crisis erupted at the end of 2008, and so far the amount of money the Irish government has pumped into the banks to make good on this promise is around €64 billion. So almost all of the money we got under the bailout has been used to enable the Irish banks to pay off their bondholders. These bondholders took a risk lending money to the Irish banks because they wanted a slice of the high returns that were available during the boom here. They took a chance and it did not pay off. But even so, they are getting all their money back.The joke is that many of the original bondholders sold on at prices discounted up to 50 percent, so the new holders of the bonds are doubling their money when the bonds mature and the Irish banks pay up the face value in full. So in effect what has happened is that the bailout money was given to the Irish government, who gave it to the Irish banks, who gave it to the bondholders.At the end of this merry-go-round, the Irish taxpayer/state owes €68 billion in bailout repayments to the EU/IMF.And these repayments are now part of the annual budget here, eating up a huge chunk of our tax revenues and making it much harder to balance the budget, even with big cuts in state spending. The Irish taxpayer is being forced to pay the gambling debts in Ireland of the international money markets.Kenny was not taoiseach when the disastrous state guarantee was given to our banks or when the bailout was imposed on us after the state went bust as a consequence. But instead of refusing to be part of this unjust system, he has gone along with it since he came into power. It is unjust because the bondholders, including senior bondholders, should have been forced to take a hit. This was ruled out at the time by Europe because they feared it would seriously undermine confidence in European banks. So the EU turned a European banking problem into a gigantic problem for the ordinary Irish taxpayer who had nothing to do with the boom here. It's an impossible burden for Ireland to carry. Even hiking taxes sky high and cutting state spending to the bone is not going to be nearly enough to allow us to pay back all we "owe." The figures don't add up. We either get a large amount of debt forgiveness (and it's not really our debt anyway) or Ireland will collapse again. So to suggest that we are now experiencing The Celtic Comeback is ridiculous. The humiliating part of all this is that our plea to have our banking debt separated from our sovereign debt and to have Europe deal with our banking debt, was turned down flat. It was impossible, we were told. Yet now that a major country like Spain is asking for the same thing, it is suddenly possible after all. We are now being told by Europe that the new arrangements don't apply to our "legacy" problem. But that is so ridiculous it is unlikely to be sustained. What is clear is that, despite the impression given by the Time cover, Ireland is not showing the rest of Europe how to stage a comeback. Instead we are trailing on Spanish coattails.Apart from bank debt, the other part of our problem is the massive budget deficit that we now have following the collapse of tax revenue when the boom became a bust. The Irish state is spending far more than we can afford. Instead of implementing a bold adjustment plan, Kenny has been fiddling while Dublin burns, afraid to take on the vested interests and the unions. He has failed to cut waste out of the system, to cut the pay and pensions of state workers in line with what has happened in the private sector, to reduce the hugely expensive government and NGO morass that eats up state revenue. Most of the cutbacks so far have been aimed at the poor and powerless because they can't fight back. Despite the image of the strongman on the Time cover, Kenny's performance has been extremely weak. The magazine piece includes a few quotes from Mario Rosenstock, a brilliant satirist and mimic who makes his living sending-up our top politicians. He got it exactly right when he told Time that Enda was a bit like Chauncey Gardiner, the Peter Sellers character in the movie Being There. The movie is about a simple gardener in Washington who is mistaken for a great seer and whose simple pronouncements on the seasons and growing plants are interpreted by the president as allegorical insights into the state of the economy. With his Chauncey-like observations, Enda appears to have beguiled a lot of people outside Ireland that all will be well in the Irish garden. But the reality is very different. The truth is we're a long way from any kind of Celtic Comeback.

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Welcome President's Message IYF History What We DoAll Programs Where We WorkEast Asia & The Pacific Our Global Network Join UsMake a Donation CSR Solutions Jobs @ IYF John Studzinski Translations available in: << Donate now! >> Home > Welcome > Board of Directors > John Studzinski John Studzinski Mr. Studzinski runs the Blackstone Advisory Partners, serves as a Senior Managing Director of the Blackstone Group, and is a member of the Executive Committee of the firm, which he joined in 2006. He began his banking career in 1980 at Morgan Stanley in New York and later moved to London. Mr. Studzinski serves on numerous boards, including Human Rights Watch, Bowdoin College, FAPE, and the American Patrons of Tate. He is President of the American Friends of the Foundation of Prince William and Prince Harry and serves as Chairman of The Benjamin Franklin House Museum. He is also a member of the Council on Foreign Relations and the Peterson Institute. In 2001, Mr. Studzinski founded the Genesis Foundation -- his personal foundation that supports young and emerging artists. His many awards include the Prince of Wales Ambassador Award. Contact Us © 2014 International Youth Foundation, 32 South Street, Baltimore, MD 21202, USA

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Jaeger-LeCoultre proudly celebrates the spirit of invention of Dubai Expo 2020 by presenting a specially commissioned painting to the Higher Committee Jaeger-LeCoultre Middle East Brand Director Renaud Pretet and members of the Touchline board were recently received by His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Higher Committee for Dubai Expo 2020 to present the special painting 'Tawasul Al-Himam' (The Continuum of Resolve) by Ali Omar Ermes. The great work of art was commissioned by Jeager-LeCoultre and Touchline FZ-LLC in celebration of Dubai's expo theme.The luxury Swiss watch Manufacture congratulated the Dubai Expo 2020 Higher Committee for its success in winning the World Expo, and expressed how honoured Jaeger-LeCoultre Middle East had been to support the bid.Renaud Pretet, Middle East Brand Director said, “The theme of Dubai “Connecting minds, Creating the future” corresponds perfectly with the values of Jaeger-LeCoultre. As Dubai does, Jaeger-LeCoultre connects all talents in a single place: back in 1866, Antoine LeCoultre created the first full-fledged manufacturer. As Dubai does, Jaeger-LeCoultre reinvents the future: since 1833, Jaeger-LeCoultre has not only registered more patents and created more calibers than any other watchmaking company but it has paved the road for precision watchmaking, winning three major awards at three different World Expos over the course of the late 19th Century. We are proud today to re-assert our support to the future of Dubai, symbolised by the great painting of Ali Omar Ermes, 'Tawasul Al-Himam' (The Continuum of Resolve)”The painting presented to His Highness Sheikh Ahmed bin Saeed Al Maktoum, translates the spirit of Dubai Expo 2020 through the Arabic letter ت (or taa), which refers to “Tawasul” (or "continuity") and gives voice to the unshakable resolve of special people and nations, who contribute to a better future for human civilisation, who pursue their vision and make the right decisions at the right time at the right place by connecting people. Part of the inspiration of Ali Omar Ermes came from his visit to Manufacture Jaeger-LeCoultre as he expressed: "Another important element is the reference to a precise 'moment in time' when everything comes together, and this was mainly inspired by a visit to the Jaeger-LeCoultre manufacturing headquarter in Le Sentier in Switzerland."Ali Omar Ermes is widely regarded as the greatest living Arabic Artist. His work is part of some of the most influential collections in the art world, in museums such as the British Museum, Ashmolean in Oxford, Smithsonian Museum, Wereld Museum in Rotterdam and the national galleries of Jordan and Malaysia to name but a few.

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Politics Government Spending TWEET Bush Policies Played Little Part in Economic Collapse By Gary W. Patterson, Jr. September 16, 2011 Polls continue to show that Americans believe that President George W. Bush is to blame for our flagging economy. Many commentators, most recently Thomas Friedman, make the blanket charge that Bush’s tax cuts, war spending, deficits, and deregulation caused the downturn. However, these claims don’t stand up to scrutiny. Perhaps the most patently ridiculous claim is that tax cuts caused the meltdown. Even the most progressive economist would have to concede that tax cuts help stimulate the economy. President Barack Obama’s former chair of the Council of Economic Advisors, Christina Romer, did a study in 2007 which found that for every $1 in tax cuts, there is a corresponding rise in GDP of $3. People may quibble over the multiplier effect, but virtually all economists agree that tax cuts have some positive effect on growth. While many disagree over the wisdom of the wars in Afghanistan and Iraq, most economists would acknowledge that war spending stimulates the economy. World War II is the most obvious example. Progressive economist Paul Krugman recently called for a fake alien invasion of the United States to spur a World War II-style defense buildup. According to Krugman, such a defense buildup would cure our economic ills in a matter of 18 months. It’s hard to believe that a fake war would be more stimulative than an actual war. The tax cuts and wars, together with the economic downturn following 9/11, all contributed in varying degrees to deficit spending during the Bush administration. That being said, the deficit spending was relatively modest and certainly manageable. According to the Congressional Budget Office, the annual deficits as a percentage of GDP ranged between 1.2% and 3.5% before the collapse in 2007. Interest rates remained at historically low levels. Proponents of the deregulation argument often point to the weakening of the Glass-Steagall Act of 1933, which prohibited any one institution from acting as any combination of an investment bank, a commercial office listings bank, and an insurance company. The Gramm–Leach–Bliley Act was passed in 1999 and allowed commercial banks, investment banks, securities firms, and insurance companies to consolidate. The act was signed into law by President Bill Clinton, not George W. Bush. Notwithstanding, there is little evidence that Gramm-Leach-Bliley significantly contributed to the financial collapse of 2007. The collapse was largely set in motion by the insolvency of Lehman Brothers and Bear Stearns. Neither of these investment banks had insured deposits. Perhaps if they did, they would have been better able to withstand the downturn. Clearly, the housing crash was largely to blame for the financial collapse. Fannie Mae and Freddie Mac played a large role in creating the housing bubble. In 2003, the Bush administration did in fact propose a new agency to oversee Fannie Mae and Freddie Mac. The proposal never became law. It was opposed by House Democrats who feared that tighter regulation of Fannie and Freddie could sharply reduce financing of low-income housing. "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,' 'said Representative Barney Frank (D-Mass.), the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' In 2005, the Senate Banking Committee, then under Republican control, proposed a bill to regulate Fannie and Freddie. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. This was the kind of regulation that might have helped stem the collapse of the housing market, but it wasn’t George W. Bush who was opposing it. In the end, the failure to properly regulate Freddie and Fannie may end up costing tax payers as much as $1 trillion. Bush understandably gets blamed for the economic downturn because he was the president at the time, but upon closer inspection, his policies played little part. Photo Credit: Wikimedia Commons TWEET Gary W. Patterson, Jr. Attorney practicing in New York metropolitan area. YOU MIGHT BE INTERESTED IN This Government Practice Wasted $15.9 Billion in a Single Year — We Have a Chance to Stop It By Alexandra Booze FEATURED PARTNER 7 worst international aid ideas Matador 11 The $60 Million Capitol Building Restoration is a Slap in the Face to Many Americans By Brenton Smith FEATURED PARTNER The Fiscal Times 15 6 Immigration Reform Ideas We Should Steal From Australia By Michelangelo Landgrave 55 Wait — Healthcare.Gov Cost HOW Much?!?! By Brenton Smith 28 4 Times Republicans Could Have Made a Deal, and Said "Screw You" By Sean McElwee 6 So, Why Do We have a Debt Ceiling Anyway? By Bethany Bowra JOIN THE DISCUSSION

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Maine Angels succeed when startups get their wings The group is adding investors and expecting a return soon on the millions in aid to businesses. By Jessica Hall jhall@pressherald.comStaff Writer Maine Angels' $9.7 million in investments over 10 years has yet to produce a return, but that patience may be close to paying off. click image to enlarge Ben Polito, president of Pika Energy in Westbrook, holds one of three blades on a personal-size wind turbine. Polito said he appreciates the mentoring he gets from investors. John Patriquin/2013 file photo Gelato Fiasco co-founder Josh Davis, shown at the company’s flagship shop on Maine Street in Brunswick, has received assistance from Maine Angels investors. John Ewing/2013 file photo The group of 63 Mainers invests in and mentors startup -- or early stage -- companies with the goal of turning a profit after three years. Maine Angels has had to wait a little longer, but a few investments are "on the cusp of hitting it," said Maine Angels chairwoman Sandra Stone. "Activity breeds activity. As we do more deals and get more investors, more entrepreneurs apply and then you get more interesting deal flow, and that helps the whole process," Stone said. "This isn't philanthropy. But people are eager to learn. People want to stay invested and give back. But there's an expectation of a return someday." Last year, Maine Angels invested a record $3.4 million in 21 companies throughout New England, including $1.5 million in eight Maine-based companies. For its 10th anniversary this year, the group isn't focused on topping the record. Instead, it is expanding its membership ranks, diversifying the investor pool by attracting more women to the group, and perhaps starting satellite locations in the Bangor and midcoast areas. So far this year, Maine Angels has invested $497,000 in 10 deals -- including six follow-on investments in existing enterprises and four investments in new companies. The group expects to close two to three additional investments in September. "It's cool to be around people who think outside the box. I find it exciting. It's a little infectious. I'm loving it," said Stone, who expects to be nominated for a second two-year term as chairwoman this fall. This year's investment total will likely fall short of last year's record because investors have more attractive options, such as a more buoyant stock market, and fewer extra incentives in Maine because the Maine Seed Capital Tax Credit Program has expired. "I don't have a crystal ball on the year. The stock market has done well, so there are more attractive options for investing right now," Stone said. "It takes a lot of work to be an angel investor. You have to do some due diligence versus the stock market, which is less work." ENGAGED INVESTORS DESIRED Some investments are as small as $50,000, but more likely they are in the range of $150,000 to $200,000, Stone said. The group has expanded to 63 members, about doubling in size during Stone's two-year tenure. The average investor's annual investment is $25,000 spread among various projects. The individual investors must meet certain income or net worth requirements set by the U.S. Securities and Exchange Commission to become "qualified investors." There are several requirements, but generally a qualified or accredited investor must either have a net worth of $1 million or have an annual income of more than $200,000. For most of the Maine Angels, the investments through the group represent just 10 percent of their portfolio, Stone said. "You have to have money and know you might not get it back," Stone said. "We don't need watchers. We want investors who are engaged and involved." Maine's network of angel investors is relatively small compared with states such as Massachusetts, New York and California. "In Maine, there's money to do this kind of thing, but Maine is not seen as a place for investors to get their money out in a fairly timely manner," said Charles Colgan, professor of public policy and management at the University of Southern Maine's Muskie School of Public Service. "An investor wants to put their money in and see the company grow to the point it can be sold or the startup can buy out the early investors. In Silicon Valley or Massachusetts, there's an expectation to sell or go public. In Maine, the entrepreneurs don't want to sell it -- they are much more likely to grow it just to the point to maintain their lifestyle than selling it or flipping it," Colgan said. 'NOT JUST A CHECKBOOK' Rick Sales of Abierto Networks in Eliot, which received $200,000 from Maine Angels last year, said he benefited from the experience of pitching his ideas and fielding questions from the prospective investors, plus ongoing consultations. Abierto Networks provides digital marketing and high-speed payment technologies for convenience stores. "It's not just a checkbook. It's a relationship. It's an opportunity to present your plan and strategy -- and to just have that pulpit to talk to them, you get better. They give you solid criticism and feedback," Sales said. "Maine is not a huge state as far as business people are concerned, so it's also a great conduit to meet a lot of contacts," he said. In addition to providing funding, Maine Angels also can serve as mentors or advisers for the companies. Regardless of whether they have a mentor on-site a few days a month or not, Maine Angels expects regular reports and updates on business progress. "There's mentoring and involvement, sometimes on a week-to-week basis, that is critical for new-stage companies," said Ben Polito, president and co-founder of Pika Energy of Westbrook. The company makes and sells home renewable-energy systems that use wind turbines and solar panels. Polito said Maine Angels is crucial to the development of startups in Maine because it can be difficult for companies in the state to attract investment funds from Boston, New York or Silicon Valley. "It's important for a local investor group to take a chance on a new entrepreneur. Getting money from Maine Angels helped us get additional outside money, which all helped us make progress towards commercialization," Polito said. Among the entrepreneurs, there's a varying level of sophistication, Stone said. Maine Angels gets between eight and 15 applications a month. Three to four are selected to come in to give a 10-minute pitch to the investors. "They get 10 minutes to try to hook us. If entrepreneurs can't figure out what to tell us in that time, then they haven't focused their plan enough," Stone said. The biggest mistake entrepreneurs can make is to bluff and act like they know an answer during their 10-minute follow-up Q&A with investors, Stone said. "That means credibility is already damaged and we haven't even started working together yet," Stone said. "I would rather have someone say, 'That's a good question -- let me get back to you on that,' than have someone act like they know something they don't." Maine Angels looks for growth businesses in a range of industries. The group is "sector agnostic," though it has not fared well with food product investments, Stone said. "We're not looking for a retail store, coffee shop or restaurant -- that's not us. We need businesses that are scalable but that might be too green to get a bank loan," Stone said. Three to four Maine Angels investors have to be interested in the startup company, or the group passes. One change this year that has made investing in Maine companies less compelling than in the past is the expiration of the Maine Seed Capital Tax Credit Program. As of January, the statutory limit of $30 million had been reached. Since the creation of the program, 128 Maine companies have received funding through various investment groups or individuals. The Finance Authority of Maine administers the program, which allows qualified investors who invest no more than $500,000 in certain Maine-based business to get tax credits equal to 60 percent of the investment. A tax credit directly reduces a person's tax liability. State Sen. Linda Valentino, D-Saco, this year introduced a bill, L.R. 1377, to extend the program. The Maine Seed Capital Tax Credit Program "made Maine investments very attractive," Stone said, noting that seven of the eight Maine investments made by Maine Angels last year were part of the seed capital program. CHALLENGE ATTRACTING WOMEN Stone's biggest surprise in chairing Maine Angels has been the difficulty in attracting female investors. Adding more women will not just bring in more potential money, but also a different perspective in business styles, Stone said. "It's a male-dominated space -- even among entrepreneurs," she said. Stone also has instituted a spousal membership to increase female participation. The spouse gets to join for the same $1,000 application fee and $300 annual dues, but is expected to make an additional $25,000 investment in addition to their partner's investment. "It makes sense -- so many couples do their financial planning together and this is just another type of investing," Stone said. Stone's leadership and efforts to expand Maine Angels' membership and activity has been noticed. The group was recognized by the Angel Resource Institute, Silicon Valley Bank and CB Insights last year in a ranking of national angel group investing activity. Maine Angels ranked No. 10 in the nation. "Maine Angels reputation has really grown. Boston funds will now follow and back a deal they are involved with," said Susan MacKay, founder and chief executive of Cerahelix in Orono. Cerahelix, which received $55,000 from Maine Angels last year, uses DNA to make ceramic-coated membranes for water filtration systems. The money from Maine Angels, and other investors, helped the company build a pilot test system that allowed it to get a prototype ready. "Spreading money around and helping the startups, getting more members involved, helped us build a broader network and helped build momentum in terms of investing in Maine," MacKay said. Jessica Hall can be contacted at 791-6316 or at: jhall@pressherald.com Were you interviewed for this story? If so, please fill out our accuracy form

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China exchanges bad for economy - Taipei Times ‧Editorials Home / Editorials Wed, Jul 02, 2003 - Page 8　News List China exchanges bad for economy By Huang Tien-lin 黃天麟 Economists who embrace the idea of moving westward to China view the arguments that "bad cross-strait relations will boost Taiwan's economy" and "good cross-strait relations will hurt the economy" as nonsense. However, Taiwan's more than 400 years of history has proven the continuity and truthfulness of these arguments.During the period of Dutch occupation of Taiwan, China adopted an isolationist policy, thereby turning the island into a regional hub of commerce for Dutch and Portuguese traders to make connections with Korea, Japan, China and South Asia (which proved that the economy would also do well in the absence of cross-strait relations). But once China adopted an open-door policy and retook Taiwan, Taiwan's position as a regional hub vanished (which proved that Taiwan would change for the worse if cross-strait relations improved).Taiwan was ceded to Japan after the first Sino-Japanese War. As Taiwan departed from China's orbit, the island's economy was changed inside out. But after Taiwan was returned to China following World War II, it encountered a major economic calamity that lasted four years, undergoing unprecedented inflation with 40,000 old Taiwan dollars worth NT$1. Cash assets disappeared (another example of good cross-strait relations leading to a poor economy for the island).Later Taiwan adopted the KMT government's "three no's policy" and severed relations with China for 50 years. During this period of separation, Taiwan created its own economic miracle that was admired by the world (which proved for the second time that bad cross-strait relations would improve the economy).Taiwan resumed relations with China in 1987 when people were allowed to visit their relatives there. Next, a series of "opening-up" policies -- such as tourism -- compelled the government to open up indirect investment in China in late the 1990s. China fever then started to burn off Taiwan's economic power. Around the time of the so-called 1992 consensus ("one China, with each side having its own interpretation"), our traditional industries started to move to China in great numbers. It was also a period in which the stock market had its darkest phase, with index falling to 3,098 in January 1993. People suffered great losses (which proved for the third time that good cross-strait relations would ruin the economy).In 1995, when the Constitution was amended to allow for direct presidential elections, cross-strait tensions escalated. Then president Lee Teng-hui's (李登輝) "no haste, be patient" approach in 1996 worsened cross-strait relations, but Taiwan's economy took a favorable turn. In August 1997, the stock market soared to 10,256 points, its highest in 10 years (which proved for the third time that bad cross-strait relations would make Taiwan well). As the "no haste, be patient" policy began to ease in 1998, the Investment Commission of the Ministry of Economic Affairs rarely rejected any applications for investment in China. The nation's high-tech industries then moved quickly to China and Taiwan's stock market plunged (which proved for the fourth time that good relations would hurt Taiwan).Tension resurfaced when Lee came up with his "state-to-state" model of cross-strait relations in July 1999, but Taiwan's stock market soared to 10,393 points seven months later (which proved for the fourth time that bad cross-strait relations would improve the economy).

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Where Will the Next Economic Boom Come From? By Derek Thompson This is part of a series on the next engine of growth for the U.S. economy. To read more, see the selection of articles at the bottom of the page.If you want to know what industry will power the next U.S. economy, follow the money. Where are investors really looking? And where is research and experimentation really happening?Abraxas Discala, is CEO of the Broadsmoore Group, a financial advisory and investment firm founded in 2009. He sees the future the same way many urbanists and mayors see it: It's all about alternative energy. "The Internet bubble was the last real boom. The next boom is alternative energy, getting away from our need on OPEC oil," he said. "I think it could be five or six times what the tech boom was."China's overwhelming investment in solar energy in the last five years has been formidable, Discala said. But solar is a long term bet that isn't guaranteed to take off. "I'm more interested in coal and natural gas, where T. Boone Pickens has a phenomenal plan," he said. "The fact is, if we just turned our 18-wheelers to natural gas right now, we would reduce our dependency on oil by 50 percent."Natural gas! Manufactured human tissue! Memory pills! Searching for the next boom...The other space Discala sees a productivity revolution is in regenerative medicine -- where scientists create living tissue to heal illnesses or replace organs. With enough government investment at its back, technologies like stem cells and soft tissue manufacturers should have breakthroughs in the next decade that will pay off dramatically, not only in the United States, but throughout the world where foreign governments will want to buy and license our innovation.FOLLOW THE R&DInnovation is the key to spotting the next boom, says economist Michael Mandel. That's why he focuses on research and development investments. If you follow the R&D money, it's a clear picture. "The truth of the matter is the US in the last 10 years has put its R&D money into information technology and biosciences," he said. "That's really it. We have not really put it into energy."Source: Mandel.What would an infotech and bioscience economy look like? First, it could resemble a communications revolution, with telecom providers like Verizon, Internet giants like Google and Facebook, and Web services like Groupon and Mint soaking up legions of software engineers, computer support specialists, web developers and programmers. These highly skilled, highly educated, and highly paid jobs where the United States still has a competitive advantage over the rest of the world. This would, as a National Journal reporter told me, resemble Tech Boom: Part Two, "but this time, we get it right."THE FUTURE IS SCIENCE...Like information technology, bioscience is a term that evokes vague visions (beakers? lab coats? titration? ... titration!). But Mandel sees it more concretely. He sees the ramp up in bioscience investment from the 1990s starting to pay off in real products with vast implications for every industry. Microcellular organism-based technology to produce energy. Bioprocessing to juice productivity on our farms. And new machines, pills and treatments to make our health care industry more efficient."We need a biosciences revolution because it's a direct attack on our biggest problem, which is tremendous amount of resources sucked up by health care," he said. "Imagine if we had a pill to deal with Alzheimer's patients. Now those bodies are freed up to do other things. And those costs are freed up. That drives growth across the entire economy.""I'm betting that we'll see this bioscience drought as a pause rather than a stop."It's a compelling vision, but it raises the question: If biosciences are the future, why aren't they the present? We've been investing in the next big pharmaceutical breakthrough (cancer? AIDS? heart disease?) for two decades with frustratingly little to show for our efforts. "For a variety of reasons it turned out that bioscience has lots of good science but not a lot of good products," Mandel acknowledged. "If we're looking for what the future looks like, there are two separate futures. One is this record of weakness could continue in which case, in which case, that's all she wrote. The other thing that could happen is it could have turned out to be a pause," he said."I'm betting that we'll see this bioscience drought as a pause rather than a stop." ... NOT ENERGYThe most surprising thing about Mandel's vision is his pessimism about alternative energy. At a time when almost every mayor, urbanist and government leader talking about the need to develop clean energy sources, Mandel's says the money just isn't there to build a competitive advantage for the United States."We have no investment in green energy R& D," he said. "We have no dynamism there. When your local university invests 70 percent in life sciences and 2 percent in energy, why put your bet on energy?"________________THE NEXT ECONOMYA series of articles about education and job creation trends that will impact the next decade.Is College No Longer Worth It (or More Worth It Than Ever?)America 2020: Health Care NationThe Health Care Employment BubbleFour Horsemen of the Job-pocalypseWhat If Education Fails to Fix the Jobs Crisis?The Hollowing Out of America's Middle ClassIs the Next Economic Boom Another Tech Revolution?How to Navigate the Part-Time Economy http://www.theatlantic.com/business/archive/2010/12/where-will-the-next-economic-boom-come-from/68423/

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Why Apple Should Not Give-in to Special Dividend Demands By Richard Saintvilus - AAPL, BBRY, GOOG, MSFT, ORCL Richard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. I asked recently if Apple (NASDAQ: AAPL) is the most manipulated stock on the market. On Wednesday, that Apple shares experienced their largest single day drop, losing over 6% of their value while shedding $35 billion in market cap, it was a legitimate question to ask - especially since it occurred on essentially no news. What was the cause? Depending on who you ask, investors will be given a host of reasons, one of which being the easy scapegoat of “manipulation.” But I don’t buy it. On the other hand, I am willing to consider the more obvious reason and those that suggest investors are running from the tax man. If true, they might also be running from future gains. Is a Special Dividend Good or Bad? It depends on who you ask. In other words, with the fiscal cliff overhang causing such anxiety on the market, I’m willing to buy the explanation that the recent sell-off in shares has been more the result of investors getting angry that the company has opted not to pay a special dividend. Although it is worth noting here that Apple has not come out and explicitly stated that it won’t. The question is does it make sense for Apple to do it? Logic says yes. After all, what other reasons would there be for publicly-traded companies to exist, if not to look out for the benefit of shareholders? The fiscal cliff has increased the urgency with which many companies are working to minimize the tax damage. This is assuming that congress does not come up with a resolution. To date, over 120 companies have accelerated their dividend payments to help shareholders keep more of their money ahead of anticipated rate hikes, which might jump from 15% to as high as 40% (in some instances). There have also been cases such as Oracle (NYSE: ORCL) where the database giant accelerated its next three quarterly dividend payments into December. It seems extreme. But I can’t fault Oracle or any other company for taking such measures. And it’s not as if shareholders wouldn’t have gotten the payments anyways. It just arrived earlier than usual. In my opinion, any time a company has excess capital, shareholders have as much right to it as any other means of use. After all, many of these companies would cease to exist had it not been for the capital infusion supplied by loyal investors. So if some companies have opted to consider the interest of investors, that’s a good thing. Isn’t it? Should It Be Paid at the Risk of Sacrificing Growth? In the case of avoiding the fiscal cliff, if any company can find (legal) ways to maximize the value of the capital returned to shareholders, then they are exercising their fiduciary duties. I don’t see how any company, or in this case Oracle can be faulted. But at what cost? Not many companies are able to grow like Apple. In other words, Apple has much better use for its cash than Oracle. This is meant as no slight to the database giant, but Oracle’s growth rate does not even begin to compare to Apple’s business. Besides, what would investors really gain other than some quick cash? Sure, the cash upfront will be nice. However, both Apple and its investors might lose out on the back end. Worse yet, the idea that investors are selling the stock now ahead of the anticipated rate hike seems ill-timed. I don’t think anyone truly believes that congress won’t get a deal done. Having said that, I can also appreciate that investors want to take their gains from Apple, which (at times) have been in excess of 50% on the year, but in my opinion, it is foolish to sell a winner like Apple solely on the basis of capital gains taxes. Likewise, I think investors of any company should question why a special dividend is considered the “best use” of capital. Although I don’t suspect that many investors will rush to bang on CEO doors demanding to stop payments, but anyone who is objective and understands the real reason for investing should want their companies to use any excess capital to grow the business, not demand special payouts. Apple has many rivals such as Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) clawing at its heels and doing everything possible to put the company out of business. Apple understands what is at stake. And it is not as if Apple is not monitoring the balance sheets of these rivals. There’s More Security by Preserving Capital For instance, Google has $44 billion in cash and pays no dividends. Although Microsoft has $66 billion on its books, the software giant does pay a decent yield. Apple’s cash balance stands at $30 billion – 30% and 55% less than Google and Microsoft, respectively. What this means is that at any moment, either rival has enough liquidity to make any move that can disrupt Apple’s momentum. Case in point, Google is rumored to be interested in a Pandora acquisition. With Pandora’s current market cap of $1.35 billion, Google can do this deal 32 times over. This can be in immediate response to Apple’s desire to enter the music streaming business. Likewise, it is also rumored that Microsoft is in the midst of developing its own music service platform. But for “Mr. Softy” it’s more than just that. It’s about what its cash position allows it to do. Because, aside from Microsoft’s current partnership with Nokia, which is now in a patent battle with Research in Motion (NASDAQ: BBRY), what is to stop Microsoft from making a bid for RIM, whose market cap stands at a paltry $6.2 billion. Essentially, with Microsoft’s current cash position, the company can make this deal for RIM 10 times. For Microsoft, the end result would be that it now has three phone platforms to use to launch an assault at both Apple and Google. Although it is unlikely that Microsoft would make this deal, it’s about security and mobility, both of which are provided by excess capital. If Apple were to give in and pay these dividends, or give in to demands each time investors have their hands out, the company would no longer be able to operate its business. Investors that want to sacrifice long term benefits for short term gratification should really think this over. This practice never works. While I’m willing to applaud companies such as Disney and Walmart that have come out and paid these special dividends, I also think that there are several that might get themselves into trouble for having done so. At the same time, I blame the government for having created this mess. But I don’t believe that a special dividend payment is the only answer for excess capital – especially not for Apple. rsaintvilus is long AAPL and has no positions in the other stocks mentioned above. The Motley Fool owns shares of Apple, Google, Microsoft, and Oracle. Motley Fool newsletter services recommend Apple, Google, and Microsoft. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own! Email Richard Saintvilus rsaintvilus Richard Saintvilus is a member of The Motley Fool Blog Network Latest Editor's Choice A New Mature Apple Emerges; Is It Too Late? Plenty of Drama with This Stock, and Earnings Might Be a Thriller Microsoft’s Q2: Time to Kick Ballmer and PCs to the Curb Also On This Topic Exchanges Will Never Be Flawless GOOGLE; Taking lead in the Technology stocks August 28, 2013 Bet Against Apple? That Depends Nokia: Like Catching A Falling Knife? China is Not the Holy Grail

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How Much Income Taxes Could Rise: A Breakdown Of The Options Share Tweet E-mail Print By John Ydstie Originally published on Fri November 30, 2012 9:46 am Listen House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill Thursday after private talks with Treasury Secretary Timothy Geithner. "No substantive progress has been made." That's what House Speaker John Boehner had to say Thursday about efforts to avoid automatic spending cuts and tax increases at year's end. The administration's lead negotiator, Treasury Secretary Tim Geithner, met with congressional leaders from both sides of the aisle Thursday, looking for an agreement on the hazard Congress and the White House created last year to focus their minds on deficit reduction. Perhaps the most important sticking point is over income tax rates. The outcome of the negotiations will determine how many Americans will face higher tax rates — and how much of a hike it will be. Obama's Proposal President Obama has proposed that top tax rates for well-off Americans rise to their levels from before the Bush-era tax cuts. But he wants to keep the Bush tax cuts for the middle class. So income tax rates for couples making less than $250,000 and individuals making less than $200,000 would remain where they are. What would that mean for you? Well, if you're among the well-off and earn more than those amounts, the money you make above those levels would be taxed at 36 percent and 39.6 percent — up a few points from where they are taxed now, and exactly where they were during the Clinton administration. For the top 1 percent of taxpayers, this change would boost their tax bill a lot. "That tax increase would amount to something in the neighborhood of $120,000," says Donald Marron, co-director of the Tax Policy Center. The center has crunched a lot of numbers related to the tax effects of the fiscal cliff and the various proposals to avoid it. Len Burman, who used to run the center but now is a professor at Syracuse University, says allowing the Bush tax cuts to expire for the well-off would put a dent in the deficit. "Raising the tax rates to basically the pre-Bush levels for the high-income people would raise about $850 billion over 10 years," he says. But would that be a bulldozer-size dent or a baseball-size dent in the deficit? "It's significant ... but we're looking at $10 trillion-plus in deficits over the next 10 years, so this is less than 10 percent of the total," Burman says. The president would reduce the deficit an additional 5 percentage points through his proposal to reduce the value of tax deductions for the wealthy. The Fiscal Plunge Scenario But what if policymakers can't reach an agreement and we go over this fiscal cliff? Tax rates would go up across the board. The Tax Policy Center says about 90 percent of Americans would see their tax bill increase. "For a middle-income household, this increase would be around $2,000; for a low-income household, it would be around $400," says center co-director Marron. While that's not a pleasant thought, allowing the Bush-era tax cuts to expire for everyone would cut deficits significantly, Burman says. "We'd raise $2.2 trillion in income tax revenues over the next 10 years and $430 billion in estate tax revenues," he says. That would cut projected deficits by about 25 percent over the next 10 years — a much more sizable chunk, but still not enough to solve the deficit problem. Of course, the shock to the economy of the abrupt tax hikes and spending cuts would likely cause the economy to plunge back into recession. That's really why they call it the "fiscal cliff." GOP Pushes Tax Reform Republicans say hiking rates for anyone is the wrong approach. They want to extend the Bush tax cuts for everyone for one more year. That would mean a $400 billion boost to next year's projected deficit. But during the year, Republicans say, Washington could work on changes to tax policy and entitlements and try to close the budget gap for the long term. Glenn Hubbard, dean of Columbia University's School of Business and an adviser to Mitt Romney, agrees. He says raising rates is a bad idea. "I'd rather see us talk about tax reform," Hubbard says. "That is, have the Congress say, 'OK, here's the dollars that we need to raise in revenue, now let's talk about a better tax system.' "Copyright 2013 NPR. To see more, visit http://www.npr.org/. Public Radio Tulsa

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The Rise of China comments China's manufacturing sector stumbles By Charles Riley @CRrileyCNN February 24, 2013: 11:31 PM ET The pace of manufacturing expansion has slowed in China, according to HSBC. HONG KONG (CNNMoney) A key gauge of momentum in China's manufacturing sector fell unexpectedly in February, raising concerns about the strength of recovery in the world's second largest economy. Global bank HSBC said its "flash" index of purchasing managers' sentiment fell to 50.4 in February from January's final reading of 52.3. Any reading above 50 signals expansion in the manufacturing sector. The index, which had been on a winning streak, is now at a 4-month low. Still, economists are not ringing the alarm bells. "The underlying strength of Chinese growth recovery remains intact, as indicated by the still expanding employment and the recent pick-up of credit growth," said Hongbin Qu, an economist at HSBC. The timing of the Lunar New Year further complicates reading of the data. Many Chinese factories shut down during the holiday as workers return to the countryside, a migration that can skew PMI readings. Related: Scenes from China's annual migration Not all of February's decline can be attributed to the holiday, according to economists at Nomura. Still, the government will likely wait for more data before making policy changes. "We believe China's leaders will wait for the batch of macro data ... before making an assessment of economic conditions and deciding an appropriate policy stance," the economists wrote Monday. Chinese workers: America's loss is our gain The fate of manufacturing in China is considered a barometer of the global economy due to the nation's role as a powerhouse exporter. China's economy has grown at an average of around 10% a year for the past three decades, allowing the nation to rocket past competition to become the world's second-largest economy. While the growth slowed in 2012 to 7.8%, that figure topped government targets and analyst expectations, signaling an exit to the slowdown that had worried economists. HSBC's final reading of February purchasing managers' sentiment is due on March 1, as is the Chinese government's reading. First Published: February 24, 2013: 11:21 PM ET Join the Conversation Most Popular

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2014-15/0557/en_head.json.gz/7639

Top Stories in WSJ. Money​ WSJ.Money Spring 2014 He's Got Your Back: How a Protection Sp... The Hidden Game Behind Professional Pok... A Bull Market of a Different Kind Robert Shiller's Nobel Knowledge The Seven-Figure Financial Portfolio Fee Luxury-Backed Loans How Rick & Kathy Hilton Built Their... Painted Dollars Finances and the Aging Brain Behind Two Symbols on a Phone Keypad The Great Property (and Tax) Rebound Giving: The Elkhart County Miracle A reclusive entrepreneur wills his entire $150 million fortune to his hometown. Now the town wonders what to do with it Sept. 19, 2013 11:57 a.m. ET With a population of about 50,000, Elkhart sits in far north Indiana, not far from the Michigan border and only 20 miles from the University of Notre Dame in nearby South Bend. Photograph by José Mandojana WHEN DAVID GUNDLACH RETURNED HOME several years ago, it was inconceivable to those who knew him as a boy that he would soon be a local legend, almost a myth. In fact, he'd largely been forgotten. It was spring of 2007 when Gundlach bought a house in Elkhart, Ind., where he went to high school and his mother still lived. Shortly after, he called longtime area resident Robert Kloska to say he wanted to reconnect. "I had to call my dad and say, 'Refresh my memory: Who is David Gundlach?'" recalls Kloska, now 46. The answer, recalled his father, was a boy who sometimes joined them during rounds of golf at the local country club. Gundlach was a good player—he was known to hit balls on the practice range until his hands bled—but a loner and somewhat socially awkward. The Kloskas agreed to go for a ride on Gundlach's pontoon boat and see what sort of man he had become. In his early 50s at the time, Gundlach spoke with a slight English accent and his hair was more salt than pepper but he was in many ways the same guy Kloska remembered from childhood: gregarious, with a hearty laugh, but also prone to pontificating and needling people to the point it became uncomfortable. "He was just sort of an eccentric guy." Gundlach explained that he'd been living and working overseas for more than a decade, and though he never married and had no children, he talked of his houses in Beverly Hills, Malibu and Las Vegas. He mentioned poker games in Hollywood with A-list celebrities, and hopes of getting into the movie business. Kloska's initial reaction: "I thought he had to be making some of this stuff up." Enlarge Image THE HEARTBREAK KID | David Gundlach Courtesy of the Estate of David Gundlach Enlarge Image Shown holding a dog next to an unidentified boy. Sledding with an unidentified girl. His mother holds two photos of him. Photograph by José Mandojana He wasn't. A semi-regular visitor to Elkhart for the next few years, Gundlach eventually caught the town's attention when he co-produced a film called "Get Low," starring Bill Murray, Sissy Spacek and Robert Duvall. In the movie, which had a modest $7 million budget, Duvall plays a hermit who is the subject of rumors and mystery in the Tennessee town near where he lives and throws himself an elaborate funeral so he can "get low" and die in peace. The film got mostly positive reviews, but to Gundlach the real prize came at home. He told Kloska that a front-page story in the local newspaper, the Elkhart Truth, about his role in the project was one of the highlights of his life. Residents were still getting to know their quirky neighbor when a year later, in 2011, Gundlach died of a heart attack at age 56. In Elkhart, the funeral drew an intimate crowd of about 50 people, including only a handful of people from out of town and overseas. "There weren't a lot of people anywhere who knew David," says Liz Naquin Borger, who grew up with Gundlach and was named executor of his estate. In the weeks after his death, word trickled out around town that Gundlach had met with officials at the Elkhart County Community Foundation shortly before he died. There were rumors of a sizable gift, but few people knew how much money was at stake. His mother, Marge Swift, told friends that she didn't have any idea how much money her son had. The irony was inescapable: As in Gundlach's movie, a town was transfixed by a man who few knew anything about. And this story, too, had a happy ending. When the estate was mostly settled, in mid-2012, Pete McCown, president of the foundation, went to visit Marge, who was 93 at the time. McCown told her that her son's gift was going to have a "transformative" effect on life in the community. "How much was it?" she asked. "Well," McCown recalls saying, "there is a Swiss bank account with $113 million sitting in it." THE UNITED STATES IS IN the midst of what's being called the largest transfer of wealth in history, with trillions of dollars being passed down to future generations, says the Center on Wealth and Philanthropy at Boston College. While most of that money will go to heirs, a big chunk—about 12 percent—will be allocated to charities like hospitals and universities, which then have to make sure they make the best use of it. It's often a tricky business, and the Gundlach bequest generated more than its share of hand-wringing and debate. “ While the size of the gift is significant, there's an extraordinary element:the foundation can use it however it likes. With a population of about 50,000, Elkhart sits in far north Indiana, not far from the Michigan border and only 20 miles from the University of Notre Dame in nearby South Bend. A manufacturing hub for recreational vehicles, Elkhart has produced a steady stream of blue-collar millionaires over the years. But until Gundlach died, McCown didn't have an original Salvador Dalí sculpture on his desk, and there was no Marc Chagall painting above the filing cabinet in the office next door. Those works are among the noncash components of the estate, along with 11 homes and 15 cars, including a Rolls Royce, two Bentleys and a Ferrari. All in, the estate's value is estimated at $150 million, almost quadrupling the assets for the Elkhart County Community Foundation. Despite the pockets of wealth, Elkhart was hit hard by the recession. When President Obama visited in 2009, the city's unemployment rate was the highest in the country, at more than 15 percent. McCown says it's hard to overstate the impact the gift could have, calling it "one of the historic moments in time for this county." Enlarge Image A NEW HOME IN HOLLYWOOD | Gundlach funded 'Get Low,' starring Bill Murray, Sissy Spacek and Robert Duvall. Stephen Lovekin/Getty Images Enlarge Image His local newspaper featured him on the front page. Sony Pictures Classics/Photofest While the size of the gift is significant, there's another element that potentially makes it extraordinary: The foundation can use it however it likes. Typically, big donors prefer to specify how their donations are used. But Gundlach declined to put conditions on his money. McCown, a 44-year-old former college professor, had just taken the job at the foundation when he met with Gundlach, who explained that he was putting the foundation in his will. After chatting for about an hour, McCown recalls, Gundlach tapped him on the knee and said, "Kiddo, it seems to me you are better qualified to handle this money than I am." Like all foundations, Elkhart's must spend at least 5 percent of its endowment each year—now at least $7.5 million annually, 10 times more than its previous commitment. After the gift was announced, McCown says he received around 500 emails daily from residents with ideas on where the money should go, including pleas to fix schools, transform the animal shelter and even improve outreach to the local Amish community. At local charities and community groups, long-shelved proposals got dusted off as civic leaders angled to get a piece of the pie. McCown started a "listening tour" of the community to hear what residents think should be done. The first gifts will be made next year. More From WSJ.Money Fall 2013 Franky Sze/Getty Images, Digital Retouching by Ron Meckler Bermuda's Search for New Wealth China Goes Postal for Stamp Collecting Our Chat With Jeremy Grantham There is another, equally vexing decision to be made: how to honor the man behind the town's newfound largesse? The foundation's board recently voted to endow a scholarship fund in Gundlach's name, and there have been discussions about creating a library or gallery to display some of his art and furniture and perhaps tell the story of the town's benefactor. That story, however, is incomplete in places. Even those who were closest to him say that because Gundlach traveled so much, no one had a complete picture of his life. "We had to piece together what was out there," says Borger. They describe a brilliant but complicated figure who was still trying to sort through how he wanted to use his vast fortune, and create a positive final chapter in a life marked by sadness and disappointments. With his gift to Elkhart, they say, he did just that. He was, McCown says, "a somewhat lost soul who did something incredibly noble at the end of his life." Enlarge Image AMASSING MANSIONS | Later in life, Gundlach bought several lavish homes in (clockwise from top left) Malibu, Oak Grove, Nev., Elkhart and Reynolds Plantatation, Ga. Photograph by José Mandojana (Elkhart) THE HEARTBREAK STARTED early for Gundlach. He was born in Downey, Calif., and his father, an insurance man, died when he was 8 years old. His mother later moved the family back to Elkhart to live with her parents. David's older brother, a California highway patrolman, was killed several years later in a motorcycle accident. His mother says she and David were always "great buddies," and friends say he doted on her when he got older. But Gundlach never collected friends or thrived socially, which in combination with his tendency to fixate on topics or interests led some to believe he had a mild form of Asperger's syndrome—though Gundlach recoiled at the notion when it was suggested to him as an adult. He returned west for college to the University of Southern California but dropped out before getting a bachelor's degree at Chapman University. I Leave My Fortune To... A Chinese restaurant? Some large and unusual bequests: 1. Roman Blum, U.S. Worth about $40 million | Died: 2012 When the real-estate developer died childless and without a will, he left behind the largest unclaimed estate in New York state's history. Experts say that in most of these cases, the money ends up in the state coffers. 2. Wellington Burt, U.S. Worth about $100 million | Died: 1919 The lumber baron and former Michigan state senator took his own sweet time with his bequest. He wanted his fortune handed out 21 years after the death of the last grandchild, who was born while he was still alive. The money was finally distributed to 12 heirs in 2011. 3. Golda Bechal, U.K. Worth more than $15 million | Died: 2004 The property magnate left her fortune to a couple running her favorite Chinese restaurant. The unusual friendship, which began over a dish of Chinese pickled leeks and bean sprouts, extended to shared Christmases and other holidays. 4. Nina Wang, Hong Kong Worth about $10.7 billion | Died: 2007 A long-drawn battle over Wang's will unfolded when it revealed she had left her money to her personal feng shui guru. The Hong Kong court later ruled the bequest to be a forgery by the geomancer, who recently appealed a prison sentence for fraud. The money has gone to charity. He worked at several large companies but ultimately followed his father into the insurance business and in 1995 started his own car-insurance firm in the U.K. that used demographic data to assess driver risk. It was an idea ahead of its time, says Andrew Bowen, a computer programmer who was the first person Gundlach hired. "He was very intelligent and very direct," recalls Bowen. Gundlach also made some brilliant marketing decisions, naming his company Hastings Direct in large part so he could use the digits 1066—the year of the Battle of Hastings—in the company's telephone number. The firm's jingle also became ubiquitous on British television. Gundlach was also a workaholic and "a difficult person to know on a social level," Bowen says. With the habits of a committed bachelor, Gundlach began each week buying a half-dozen new dress shirts—then throwing them away after wearing them so he wouldn't have to do laundry. The two men, who were neighbors, ate dinner together almost every night for 10 years. As the company grew rapidly, Gundlach made clear that he saw success—and the money that came with it—as a means to an end. One was charity. Gundlach always said he wanted to give his money away, Bowen says, and talked frequently of getting involved with groups that helped children. The other was "access"—meaning a wider spectrum of business and social activities he felt would be open to him through wealth. In 2006, Gundlach got his payday. He sold Hastings Direct to Insurance Australia Group for 140 million pounds, or about $260 million at the time. With his new fortune, Gundlach returned to the U.S. and bought a $20 million glass-and-stainless-steel Malibu mansion, originally built by fashion designer Perry Ellis, and a Beverly Hills home neighboring Microsoft co-founder Paul Allen. He even plunked down millions on a 20,000- square-foot home at Reynolds Plantation in Georgia, telling friends that it was less than an hour's drive from Augusta National, home of the Masters, and that he dreamed of meeting someone who might invite him to join the exclusive club. “ Word quickly spread in hollywood that Gundlach was sitting on a pile of money and willing to spend it. ” Gundlach, whose favorite movie was "Gladiator," which starred Russell Crowe, also tried to break into Hollywood. Dean Zanuck, scion of the storied producing family, was introduced to Gundlach in 2008, after trying to make "Get Low" for years. At first, he was skeptical that this newcomer could help. "He told me, 'Get me a signed contract from Robert Duvall and a signed contract from Bill Murray and I'll write you a check for $5.5 million.'" Once the stars signed on, Gundlach stayed true to his word: Zanuck woke one morning to find $5.5 million in his production account. Enlarge Image THE INNER CIRCLE | Gundlach's childhood friend, Robert Kloska Photographs by José Mandojana Enlarge Image His mother, at the Elcona Country Club The executor of his estate, Liz Naquin Borger Photographs by José Mandojana Word quickly spread in Hollywood that Gundlach was sitting on a pile of money and willing to spend it. "Guys like David come around once in a lifetime," says Joey Rappa, a producer who met Gundlach soon after he arrived in L.A. "People come at you in droves." Stars like James Franco and Keanu Reeves came to barbecues at Gundlach's Malibu mansion. Gundlach told friends that he played poker with Leonardo DiCaprio and Tobey Maguire. Gundlach was also prized because he didn't demand to participate in the creative process: His only nonfinancial contribution to "Get Low" was insisting a swear word get cut out, Zanuck says. There were signs, though, that Gundlach was slightly adrift through this time. Because of a persistent bad back, he was taking painkillers, and there were many days when he didn't leave the house. His friends say he battled depression. On one occasion, Kloska says, Gundlach became convinced while watching the financial news that he could be a successful day trader. It was a poor impulse: He lost $6 million in less than 24 hours, he told Kloska. Gundlach also made fitful attempts at philanthropy. He bought an apartment building in Las Vegas with plans to convert it to a sort of halfway house for teens leaving foster care, but the project never got off the ground. His lawyer in Elkhart, Mike Pianowski, says Gundlach felt taken advantage of by the charities that he tried to work with and "had some bad experiences trusting people." Around this time, Gundlach started spending more time in Elkhart, and the Kloskas, who have five children, became a sort of second family. On several occasions Gundlach told Kloska that he wished he had a family of his own and complained that many people only used him for his money. Yet Gundlach insisted on picking up the check at fancy dinners and implored friends to vacation at his houses around the country. When the Kloskas agreed to visit the Georgia house, Gundlach bought two extra jet skis so the kids could be out on the lake together. Gundlach also flew Robert and his wife, Margy, out to Hollywood for the "Get Low" premiere. Kloska knew his friend was struggling, but saw glimmers that Gundlach was recognizing the good his money could do. Just before he died, Gundlach agreed to host an event for Holy Cross College, where Kloska works. Gundlach was subdued on the day of the event, and it took some convincing to get him to come upstairs and mingle. As it happened, the brother of a former Holy Cross student had been killed in combat in Afghanistan days before, and the event started with a prayer for the soldier and his family. Out of the blue, Gundlach announced that he was endowing a permanent scholarship in the fallen soldier's name. Gundlach "just came alive," Kloska says. "At the end of the day, he really wanted to help people." Enlarge Image Like all foundations, Elkhart's must spend at least 5 percent of its endowment each year—now at least $7.5 million annually, 10 times more than its previous commitment. The first gifts will be made next year. Photographs by José Mandojana There are conflicting views about Gundlach's plans for his estate. Some say he complained of heart problems and knew he needed to settle his affairs sooner rather than later. Others contend the gift to the foundation was more of a placeholder until he opted for a detailed philanthropic plan that he would be involved in personally. But all of those who knew Gundlach say he would be thrilled at the excitement his gift has generated around Elkhart, and the expectation that its impact will be felt for generations to come. The effects are already showing up in surprising ways. In June, a local businessman announced plans to bring a professional baseball team to Elkhart. In deciding on a name for the team, one of the factors he considered was Gundlach's sizable gift to the community. The name he chose: the Elkhart County Miracle. Write to Brad Reagan at brad.reagan@wsj.com Explore More Small-Fry Family Giving Maynard Webb on His Investment Mistake How Rick & Kathy Hilton Built Their Empire

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Marathon Oil's CEO Discusses Q2 2011 Results - Earnings Call Transcript Aug. 2, 2011 6:30 PM ET | About: MRO by: SA Transcripts Executives Clarence Cazalot - Chairman, Chief Executive Officer, President and Member of Proxy Committee Howard Thill - Vice President of Investor Relations & Public Affairs David Roberts - Executive Vice President of Upstream Janet Clark - Chief Financial Officer, Executive Vice President and Member of Proxy Committee Edward Westlake - Crédit Suisse AG Evan Calio - Morgan Stanley John Herrlin - Societe Generale Cross Asset Research Paul Cheng Arjun Murti - Goldman Sachs Group Inc. Douglas Leggate - BofA Merrill Lynch Pavel Molchanov - Raymond James & Associates, Inc. Faisel Khan - Citigroup Inc Ann Kohler - CRT Capital Group LLC Unknown Analyst - Blake Fernandez - Howard Weil Incorporated Marathon Oil (MRO) Q2 2011 Earnings Call August 2, 2011 2:30 PM ETHoward Thill Welcome to Marathon Oil Corporation's Second Quarter 2011 Earnings Webcast and Conference Call. The synchronized slides that accompany this call can be found on our website, marathonoil.com. On the call today are Clarence Cazalot, Chairman President and CEO; Janet Clark, Executive Vice President and CFO; and Dave Roberts, Executive Vice President and COO. Slide 2 contains the discussion of forward-looking statements and other information included in this presentation. Our remarks and answers to questions today will contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In accordance with Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Marathon Oil Corporation has included on its annual report on Form 10-K for the year ended December 31, 2010, and subsequent Forms 10-Q and 8-K, cautionary language identifying important factors, but not necessarily all factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. Please note that in the appendix to this presentation is a reconciliation of quarterly net income to adjusted income from continuing operations for 2010 and the first 2 quarters of 2011, preliminary balance sheet information, third quarter and full year 2011 and 2012 operating estimates and other data that you may find useful. Slide 3 provides net income and adjusted income from continued operations on an absolute and per share basis. Our second quarter 2011 adjusted income from continued operations of $0.96 per share reflects a 9% increase from the first quarter and a 55% increase from the second quarter. The waterfall chart on Slide 4 shows the first to second quarter change in pretax adjusted income from continued operations by segment and the change in income taxes. The increase in income was driven by improved results in Oil Sands Mining and lower income taxes, reflecting no production from our Libya operations in the quarter. These were partially offset by a decrease in E&P pretax earnings. The effective income tax rate for the second quarter, including special items and the effect of foreign currency remeasurement of our deferred tax balances, was 67%. Excluding special items and the effect of foreign currency remeasurement of our deferred tax balance, the rate was 54%. We expect the effective tax rate for the full year 2011, excluding special items and the effect of foreign currency remeasurement of our deferred tax balances to be between 50% and 55%. As shown on Slide 5, E&P segment income compared to the first quarter was down about 10% largely due to lower sales volumes, partially offset by higher realizations and lower cost. The lower sales volumes were a result of the Libyan conflict and downtime in Norway and Equatorial Guinea. Our historical realizations are shown on Slide 6. Our liquid hydrocarbon average realization increased $9.14 per barrel compared to the first quarter, which is largely in line with the $7.74 per barrel increase in WTI and the $11.61 per barrel increase in Dated Brent. Moving to Slide 7. As a result of lower international liftings, our second quarter sales volumes decreased 15%, while production available for sale decreased 13%, both primarily a result of the previously discussed downtime and conflict in Libya. The difference in sales volumes and production available for sale was the result of an underlift for the quarter of approximately 674,000 boe in the U.K. and Alaska, offset by an overlift of 341,000 boe in EG and Norway. At the end of the second quarter, our cumulative international operations were underlifted by approximately 1.6 million barrels. Domestically, we remained 2 million boe cumulatively underlifted due to gas storage in Alaska. Slide 8 shows the 7.5% growth in E&P production available for sale since the beginning of 2010, excluding Libya, by quarter. Turning to Slide 9. Exploration expense fell in the second quarter with lower dry well expense, while field level controllable cost per boe increased as a result of additional domestic work over expense, the lack of lower-cost Libyan production and turnaround cost of Brae. Also influencing per barrel costs were lower volumes in the second quarter. Turning to Slide 10. The second quarter E&P segment income increased 6%, primarily due to higher per boe realizations, partially offset by lower sales volumes. Total E&P expenses per boe were relatively unchanged. Turning to Slide 11. The Oil Sands Mining segment's improved results were largely driven by higher prices and increased volumes, partially offset by higher operating and blend stock costs. DD&A and foreign income taxes were also higher because of the increased volumes. On a boe basis, operating cost per synthetic barrel actually declined, moving from $54 per barrel in the first quarter to $46 per barrel in the second quarter. We expect the per barrel cost to continue to trend downward as reliability and production increase. Moving to Slide 12, in the Integrated Gas segment. Second quarter segment income decreased $17 million, primarily as a result of lower sales volumes. Slide 13, while rather busy, provides an analysis of preliminary cash flows for the first half of 2011. Operating cash flow from continuing operations before changes in our working capital was slightly over $2.4 billion. Our cash balance was increased by working capital changes of $872 million as a result of increased commodity prices and the ensuing higher payables related to Norwegian taxes. Capital expenditures were $1.7 billion. Asset disposals generated proceeds of $371 million. And dividends paid totaled $356 million, reflecting a $0.25 dividend of which we will retain 60% on a go-forward basis. As a result of the spin-off of the Downstream businesses, debt was reduced by $2.8 billion and a distribution was made to MPC of just over $1.6 billion, while discontinued operations contributed $3.6 billion. Our cash balance at the end of the second quarter was $4.7 billion. As shown on Slide 14, at the end of the second quarter, our cash adjusted debt-to-total capital ratio was 2%. But I would remind you, we have the pending all-cash Eagle Ford acquisition of $3.5 billion, subject to closing adjustments, expected to close November 1. Taking this into consideration, had the Eagle Ford acquisition closed in the second quarter of 2011, cash adjusted debt-to-capital would have been approximately 18%. As a reminder, the net debt-to-total capital ratio includes about $221 million of debt service by U.S. Steel. With that, I will turn over the call to Clarence Cazalot for a few remarks. Clarence Cazalot Thank you, Howard, and good afternoon, everyone. As you're well aware, this was our last quarter as an integrated company, having spun off MPC June 30. And I'm proud of the team that worked so diligently to make this happen. I wish everyone at MPC all the best. From the standpoint of our continuing operations, I'm personally not satisfied with our overall second quarter performance, and I know our team feels the same way. The short-term liability issues in some of our international assets, which as you know have historically demonstrated outstanding reliability, and the disappointing results at Droshky impacted both our second quarter production and financial results. Our international operations are now back at full speed, and we have properly addressed the reliability issues. Going forward, we are pursuing a more balanced lower risk and, I believe, more sustainable program of investment and growth in unconventional resource plays. This move is best demonstrated by the outstanding position we have built in the Eagle Ford, particularly with our pending 141,000 net acre acquisition, largely in the heart of the play. Building the position we have across the premier liquids-rich resource plays in North America is only the start, and every member of our team understands that execution and results are how we will be judged. We'll be focused on growing both production and reserves on an absolute and per-share basis and generating sufficient free cash flow to fund this growth. Our emergence as an E&P company is more than just a name only. It's about delivering profitable growth, and our increased guidance of 5% to 7% compound average growth between 2010 and 2016 is a good start in this regard. It's about a significantly higher level of drilling activity to deliver this growth, going from a 15 U.S.-operated land rigs currently to over 40 rigs operating 18 months from now. It's about continuing to increase our overall resource position with a focus on liquids-rich plays, and we are doing this. Bottom line, it's about consistent execution and demonstrating profitable growth year-after-year and funding this growth from internally generated cash flow. And that's precisely what we intend to do. And now we will move to the Q&As. Question-and-Answer Session [Operator Instructions] Our first question comes from Ed Westlake of Crédit Suisse. Yes, it's Ed Westlake. I guess, the first question on the Bakken. Obviously you've flagged that you're going to be raising sort of production and increasing recounts there. Can you talk about any of the latest drilling results that you've had up there in terms of maybe EURs or IPs or particularly capital cost per well in light of service cost inflation? Yes, Ed, this is Dave Roberts. I think we're still very happy with the estimates that we have across the play for the various EURs that we have. And I think we've been fairly consistent that in what we would consider the poorer areas there on the border of 450,000 barrels, and we're seeing 500,000 to 600,000 in our more promising areas, Myrmidon and EMEA. And we consistently see 30-day IPs across the play of between 500 and 700 barrels per day. In terms of completed well costs, we generally are on the order of $7 million to $7.5 million for our wells today. But I'd like, at this point, really to talk about what's going to happen in the future because, as you know, we have been probably a little bit slow in the minds of a lot of people in terms of how aggressively we completed our wells. And we got a significant stock of wells that have been drilled and are waiting on completion. The 28 that we have waiting are -- 26 of them will be 20 stage frac jobs, but they'll be pumped at 300 pounds per foot, which will put us in the range of what most people are seeing in terms of the larger states frac jobs. And we will be moving beginning in the next month or so towards outfitting our wells to be able to pump 30 stage fracs on a perspective basis for the remainder of life in the play. We expect that, that will add on the order of $500,000 to $1 million to the costs of our well. So we'll be seeing those kind of increases on a go-forward basis, but we do expect that, that will at least increase the initial rates consistent with other operators have seen. And we'll to continue to monitor the play to see if we should continue to move forward by increasing those stages to accelerate the recovery in the play. That's very clear. And maybe just switching topic, on the corporate tax outlook of 50% to 55%. Obviously, E&P in the second quarter was, I guess, at the low end about that 50%. Can you just walk us through a little bit what the increase in taxes is likely to come from? Is it an assumption of about U.K. taxes or something else in the mix? Janet Clark Certainly, the U.K. tax rate did increase during the year on the special corporation tax there, but it's also -- it's about mix. As we look forward with higher oil prices, Norway contributes a higher percentage of pretax income with lower gas prices. Our EG -- LNG generates lower proportion of pretax income. As you know, Norway has 78% tax rate, EG has a 25% tax rate. So while we'd like to help you and give you guidance on what to expect in terms of tax rate, because of the broad range of effective tax rate in the various jurisdictions in which we operate, the volatility of commodity prices, it can be a little bit difficult to predict. Okay, but those are the main moving cost? Those are the 2 biggest ones, yes. Our next question comes from Arjun Murti of Goldman Sachs. Clarence, over the years, you've shown a willingness to adjust your Upstream portfolio. You've not necessarily been wed to any specific asset. I think you bought into Russia, sold that at a profit, and there are numerous examples of that. I'm just curious, now as an independent, how do you see the areas you're in, and the Gulf of Mexico is one of the areas I'm thinking about. Droshky is obviously a recent disappointment, as the Neptune before it. It's a shorter reserve life area. You're starting to gain some critical mass in the shale plays, which tended to receive better valuations amongst the E&P analysts. How are you thinking about your portfolio now as independent and, I guess, specifically the Gulf of Mexico and should that remain a part of your portfolio? Arjun, we certainly saw the write-up that you published several weeks ago that suggested perhaps the disposition of the Gulf of Mexico in light of the stronger onshore unconventional asset base we have, that, that might indeed make sense. I would simply say that you characterize my position of the past correctly. There are no sacred cows. I've said many times before that we constantly review our portfolio in terms of those assets and opportunities that have the kind of growth and value creation that we want to invest in the future. And as you've seen in the past, we haven't hesitated to divest of those assets that don't fit that. But we are indeed looking at our portfolio, particularly as we seek to generate additional funds to invest in profitable growth. We continue to see good opportunities coming our way in the attractive poor resource plays that we want to grow in. And as we view our investment, it's not all incremental. It's really about redeploying proceeds out of, again, less-promising, lower-growth, more mature declining assets and into growth. With respect to the Gulf of Mexico, Arjun, I don't want to speculate about any one asset at this time. We certainly, from an exploration standpoint, see the Gulf of Mexico as one of our better high-potential exploration focus areas around the world. And as soon as we can get some permits to get back to drilling, that's what we intend to do out there. So that's where we are. That's a very candid and helpful answer, Clarence. Maybe just as a follow-up, you've clearly made progress in the shale plays, and you'll close on this Bakken acquisition -- or excuse me, the Eagle Ford acquisition in November. Do you believe that shale program is at a critical mass where you have confidence in its running room and is today a core part of the portfolio? I realize it's a subjective question but, how do you perceive where you are in that? Or are there still a number of steps you still need to take in the shale areas? Well, I think we certainly are approaching, if not at a critical mass. I think, if you look at what we said in the press release, Arjun, that in terms of these unconventional plays in North America, that we expect to have production of about 175,000 boe per day by 2016, again the vast majority of that in the U.S. resource plays. That's indeed critical mass. But at the same time, I think, as we've indicated, we continue to seek bolt-on acquisitions in those core areas to grow our position. Again, this is a program that we operate, that we drive the value creation in and to the extent we can have a broader opportunity set or indeed even have a higher interest in the wells that we're already going to be drilling. That's of great interest to us. So that's where you're going to see us putting our incremental dollars in terms of building our positions there. You know what I like about the Eagle Ford is not simply our total position but our position in the core area. As we've indicated, we believe we have a top-5 leasehold position in that core area, and we see a great deal of upside certainly in terms of productivity but also the ability to down space in those areas. So again, that's where we'll focus our investment. Our next question comes from Evan Calio of Morgan Stanley. You guys talked about U.S. unconventional growth, but maybe I could shift to Poland where I know Marathon's acreage across the 3 major basins in the country and in fact you have the largest, by factor, relative exposure versus your peers. And so I know it's early days. I mean, could you talk to me about the differences you see in the 3, the geology amongst the 3 basins and where you expect to drill. I think it's 2 wells in the second half of the year. And I have 2 follow-ups. Evan, this is Dave. And I guess what we tried to do is similar to what we think we ascertained about things in unconventional plays in the United States. We believe that there's a potential for there to be liquids as well as gas windows across this very large area. And so that's the reason you see our portfolio spread out the way it is because we're hoping to catch on to that. And the first well that we'll drill will be to test that particular concept, and then we'll go ahead and drill out. I guess I would say one of the reasons that we did the farm-downs that we did was to make sure that we had a very large acreage exposure, but making sure that the financial exposure to the play is relevant to the size of the company we are. So we think we've got a good spread of opportunity clearly as a portfolio because of the number of blocks that we have, and we're very excited about getting a couple of drills towards the latter part of this year. So it's interesting. So you're looking for a potential liquids window as well. And is that in the Baltic basin? Is that -- you'd mentioned kind of what basin your drilling your wells in? Let me check that real quick. My Polish is kind of bad. I think what we'll be looking at doing is -- the level in trough [ph] is what we think will be the most likely area for there to be a liquids potential. And that's would be where we drill our first well. Okay. And then let me just move on to a different production guidance question. I know you narrow the full range year end, and on the first quarter conference call, I thought you'd guided to your 15 to 17 on Droshky. Clearly, your comments here producing to abandonment in 1H '12. What is the embedded Droshky volume going to in that guidance in the second half and first half 2012? Well, I think that the -- right now, Droshky is producing between 11,000 and 12,000 barrels a day of oil, and what we're looking at is essentially -- there's a physical limitation of the ability of the reservoir to lift barrels when the total fluid gets to about 12,000 barrels a day. We're producing 22,000 gross. If you can think about this in terms of we're seeing about a 25% to 30% annual decline rate, an issue is right now we're seeing slugging issues, as you'd expect, towards the latter stages of this. And so it's difficult to use just a decline curve analysis. But our view suggests that where the 40% water cut now, assuming that's consistent, my guess is that Droshky would probably end its life on the order of 3,000 to 4,000 barrels a day sometime next year, oil. Okay, that's good. And then just to confirm, your new guidance includes you acquire Eagle Ford acreage. And I guess with the offset of Droshky and plate Ozona, it appears you're making up some of the balance also on the portfolio. Can you discuss maybe some positive contributions Q-on-Q? Yes, we're obviously counting the Eagle Ford acquisition post the 1st of November, but it's a fairly small volume, even though we're very excited about the exit rate being 13,000 barrels-a-day-plus, so the mass is just small volume. I think, consistent with Clarence's earlier comments and what we saw in the first quarter, we looked at the reliability issues that we had in the Norwegian North Sea and, to a lesser degree, in West Africa, and EG is kind of an aberration. Continue to expect those assets to over-deliver on what the expectations might be, which we think is going to carry us in good stead to hitting our guidance in the latter part of the year. Our next question comes from Blake Fernandez of Howard Weil. Blake Fernandez - Howard Weil Incorporated I had a couple of quick modeling questions and then one broader strategic question. On the modeling, just wanted to confirm on 2012 production guidance, for one, does that include Libya? And then secondly on the natural gas realization, it looked like they actually declined sequentially, which is a little bit confusing to me because most of the benchmarks that we looked at actually increased. Yes, I -- this is Dave. And I can answer the first one categorically. Our guidance for '12 does not include Libya. And the sequential gas price realizations are actually up quarter-to-quarter. Okay. I'm sorry, I'll have to double-check that. Clarence, I had a strategic question for you. As you move to more of a independent E&P peer group, obviously the integrated tend to focus more on margins and return on capital employed, whereas the E&P space tends to focus more on volumetric growth. Right out of the gate, you've got a nice Eagle Ford acquisition here, which is going to increase your production growth. I'm just curious, is there any change to your strategic focus on running the company? Yes, I think, Blake, there's no question that the yardsticks, the metrics doing the change as you move from an integrated space to an E&P. I think the measures that you'll see us focusing on with respect to our new business are really two-fold. One is production growth per share, and we'll view that on a debt-adjusted basis. And again, that's an area that we recognized that, at 5% to 7% compound average growth on a pure volumetric basis, we may not be as high as some of our E&P brethren. But the reality is, again from our standpoint, we believe we generate sufficient cash flows internally to fund our growth. And so we won't be issuing equity or necessarily having to go to the debt markets to fund our CapEx and indeed with sufficient free cash flow, having the ability to either pay down debt or potentially, in certain instances, buy back stocks. So that's a measure we think we can perform quite well on. And the other metric of course is the generation and growth in free cash flow. And again we believe, with the strong base, with a solid set of liquids-focused growth assets that we'll be executing on, we believe, will perform well against that metric as well. So it is clearly a shift from what has been an earnings focus, a competitive group, to now what is a cash-focused group for all the reasons you know well in terms of different accounting methods between the 2 and again moving away from ROCE to really growth in volumes, both reserves and production. Blake, on your gas question, the reason -- the difference a large portion of our Alaska gas volumes are through long-term contracts, which tend to lag in price and have alternative commodity indexes rather than Henry Hub. Okay, that makes sense. Your next question comes from Paul Cheng of Barclays Capital. A number of quick questions. Maybe this is for Howard. Alaska LNG operation, when that is going to cease to operate? Paul, this is Dave. We expect to approve an additional cargo or two in August or September, and then at that point, our view is that the plant will reach the end of its useful life. So Dave, so you have -- what is the won-in that we're talking about in the third quarter, then? I'm sorry, Paul? What's the total won there, average won for Alaska in the third quarter? I'll give you that offline. Okay, that's fine. And Dave, what's the actual downtime impact in the second quarter? It's on the order of 11,000 barrels a day for the quarter. And you say it's already back up. So did they back up at the -- before the end of the quarter or just after the quarter? No, it was a shutdown in May, Paul, so... Okay, so that by July, just everything back up? And U.K., you dropped sequentially. Is it a lifting situation or the actual production just dropped? I think, in the notes, we do have a lifting situation, but obviously we are experiencing a continuous decline in our Brae assets. And I think, when Howard was going through, he was saying that maybe I guided wrong. We have a total underlift at the end of June of 1.6 million barrels and underlift of 2 million barrels in Alaska. So with that, should we assume that international you overlift by 400,000? And if it is the case, do you have a breakdown by countries? Howard Thill Yes, Paul, for Europe, at the and of period we were about 540,000 for the quarter. To-date balance is about 450,000 for all of Europe. For EG, it's about an underlift of about 280,000. Libya's underlifted about 850,000. And Alaska's underlifted by about 2 million. The total underlift is about, on a to-date basis, is about 3.6 million. But the number you were looking out was excluding -- or the number we talked about was excluding the Libya underlift. Okay, all right. And in Ozona, Dave, what's the total recoverable resource that we expect for Ozona? Any change? We have not changed, Paul, and that figure is on the order of 7.2 million barrel. 7.2 million barrels. And you're assuming that the 9,000 barrel per day net to use, so that was just about 15,000 barrel per day gross. So you're expecting, out of the 7.2 million, about 5.5 million barrels to be produced in the first year? That would not be beyond expectation, Paul... Okay. So that then, in 2013, we should assume you probably drop 70% or so in the production run rate? That would be a normal Gulf of Mexico decline, Paul, yes. Okay. On Droshky, Dave, what's the second quarter production and unit DD&A? And will the unit DD&A change dramatically after the write-off in the third quarter? 17,500 was the Q2 production for Droshky, and we'll get you the DD&A number. Okay. And the final 1, Howard, in the oil sand sales number, 41,000 barrel per day, can you remind me, is that net of the royalty? Or that this is not net of the royalty? The sales number is net of royalty. Our next question comes from Faisel Khan of Citi group. Can you talk a little bit about the discovery at Kurdistan? It seems like a fairly large oil column. What were the plans that kind of delineate this? And kind of figure out what you guys have here? Yes, Faisal, we're shooting seismic across all 4 of our licenses because it's pretty important to be able to tie that down. This particular area, there's multiple other targets, so we'll be drilling likely later this year an appraisal well to offset this discovery, to see what we actually have. And then there will be some follow-on exploration where I think the most important thing that we'll be doing here is we'll be setting up to install early production facilities that will be ready probably by the middle of next year. These are fairly elementary-type systems, so it's not that big of a deal, but 2 things that gives you. Number one, and most importantly, it tests the fiscal regime that you have because there's reports that the people are getting paid for the cost barrels in Kurdistan. We think that's very important, from an overall risk standpoint. And then secondly, these are fractured carbonate reservoirs, notoriously tricky, and so getting some extended production data out of this will tell us what it is that we ultimately have. So you'll feel very good about the fact that we've only been in the country since October, have a couple of discoveries and are setting up to at least have a look-see on the production side pretty quickly as well. Okay, got you. So first production test some time second half of next year, that fair? Okay. And then just on the rig count kind of ramp-up in North America, from 15 rigs to 40 rigs by the end of next year. It seems like a very large ramp-up. Logistically, how do you guys get there? Maybe secure these rigs under long-term contracts, give out completion clues like -- how do you get comfortable ramping up to that level of rig count? We have a very deep relationship with our primary drilling rig contractor in the United States, and we've scheduled -- we've worked out with them to basically take delivery of rigs as they're manufactured. We do have contractual line of sight to be able to get to those numbers and in each of the various basins. They're outfitted obviously a little bit differently for cold weather service than they might be for the ones that we're going to have in South Texas. Part and parcel of that is they have a very diligent training program to make sure that we that qualified crews at the same time we get the rigs, so that's important. The same time, one of the things that we mentioned is previously having a greater depth of rig inventory has given us a little bit more impact and clout in terms of being able to contract for pressure pumping services. And we're on the cusp of getting contractual line of sight on the pumping services requirements and ancillary services that we need in order to get all the stuff done. So we're in very good shape to go from the 15 that we're running today across the U.S. to probably on the order of 10 more by the end of the year, so that jump up to 40-plus is not that big of a leap. Okay, got you. Last question for me. I guess there was a USGS report that was done one the Cook Inlet of Alaska. I know you guys have some producing field in that area. Is there sort of an opportunity for you? Or is that kind of outside your set? No. We're the oldest and longest-serving producer in Cook Inlet. Marathon was one of the first companies that discovered oil and gas up there, and it's produced on the order of 3 tcf from that basin. We obviously have taken a hard look at the USGS, and it's been pointed to us by the regulators in Alaska. I think one of the things that we would say is there's tremendous number of wells that have been drilled in that particular basin. While we're always looking for new opportunities, much of the resource that was outlined in the report is going to be in an off-limits wilderness area that we operate right next to. But the other thing we're very focused in a lot is they had the highest impact, the least sale they've had since 1983 up there a couple months ago, the couple of new operators, and so we we'll be paying close attention to the activity in the area. Let's see if it warrants another look on Marathon's behalf. Our next question comes from Pavel Molchanov of Raymond James. First, just a quick housekeeping item. As an independent company, should we assume that your deferred tax component is going to generally get higher over time? On the tax deferral, Pavel? Yes, I'm sorry Pavel, I was distracted for a moment. Can you repeat the question please? Sure. I mean, typically, independents have a higher deferred tax component in their overall tax expenditure than integrated companies, and I was wondering whether you would expect that to be true of Marathon? I don't really have a good answer for that because I haven't looked yet at the deferred tax rates for other companies. Okay, fair enough, let me have ask a slightly broader one. The long-term growth target of 5% to 7%, how much exploration credit is embedded within that? None. There's -- again, none of the ranked exploration, the impact exploration activities that we're undertaking today factor into that. The existing discoveries we have, for example, in the Gulf of Mexico, like Shenandoah, our interest in that, or in the Gunflint discovery, those are in our production growth but those are existing discoveries. So no future exploration success -- impact exploration success is factored into our production growth. And, Pavel, just thinking about it to the extent that a company's entirely domestic, the IDC generates a lot of deferred taxes, yes. So I guess, if a company was completely domestic, then they probably would have a higher component of deferred to credit cash taxes than we would overall. Our next question comes from Ann Kohler of CRT Capital Group. A question -- most of my questions have been answered, but do you have any update on Birchwood? And the status, if you're looking after submitting an application to the Canadian government at the end of this year, the beginning of next year? Yes, Ann this is Dave. We're continuing with the reservoir analysis, and as we've kind of indicated, we're pushing that towards turning that project to an FID for the first stage toward the middle of next year. And our permitting people are working diligently on what's going to be required to push that application forward consistent with that timing. Our next question comes from John Herrlin of Societe Generale. Got a bunch of quick ones. Kurdistan, matrix or fractured porosity? Or don't you know yet? It's too early. I think that's the reason we're going to do a pressure test. Obviously, we hope we have both, but that's the reason we need an extended production time. Okay. Same question for the Niobrara. Matrix or fracture or both? Well, again, I think it's -- I think one of the things that we would characterize in Niobrara is very early days, and it's one of the things that we'll be looking at that. But my guess is, from what we have seen at this point, you're looking at more of a matrix situation than fraction. Okay, good. Could you give us some postmortem on Romeo? And will you be drilling more in Indonesia? Well, we've said that we're going to move to a non-operated status. We've got 2 more blocks over there that we continue to evaluate, and obviously 1 of them, the Kumawa Block, we're paying very close attention to a very high profile dryhole-ing area and a well that's currently drilling, so we'll continue to look at that. I think, Romeo, the Pasangkayu block in general could be characterized as pure frontier-type drilling. Great reservoirs, good concept, no hydrocarbons, and so it just didn't work. Okay, that's all right. I got in the call late. With the Gulf of Mexico, do you think, given Droshky and Ozona, that maybe you need to reduce your network in interest exposure or diversify a little more? Or have you given that any thought? Well, Clarence answered that a little bit earlier. I think we've consistently said on Droshky that, in retrospect, having 100% interest there is a challenge at this particular point. But given our optimism going in, it would've a difficult decision to take. I think we continue to look at that as we evaluate the risk of the aggregate Gulf of Mexico portfolio both on an exploration and a future production basis. It's certainly something that we'll take into consideration. Okay, great. With Hilcorp, are we going to capitalize all of it? Capitalize the acquisition costs, you mean? And last one for me. North Sea taxes, any sort of adjustment? Maybe you mentioned that, it's just that I got in the call late. On the U.K.? It was... U.K. side, yes. Yes, special corporation tax went up by 12 percentage points. Our next question comes from Michael Carsh of Carsh Capital [ph]. Unknown Analyst - I guess I'm trying to understand. You'd articulated a strategy that you're not very interested in buying back stock. We shouldn't expect that, and I understand you've played it out early on. But is that a permanent goal -- permanent objective? Or are your stocks trading below 8x earnings? Is that something you would consider if the stock got to a more depressed level? Or do you always feel like you could put -- you're better off with your money back in the ground? I think our priority for cash has really never changed, it's to reinvest in the business in a value-accretive way. We think that's the best way to drive shareholder value. We're going to keep a strong balance sheet. Obviously, for independent, the dividend yield is probably less important than it was for the integrated, and as it is, we're that near the top end of our competitor group in terms of yield. So to the extent that we've got excess cash being generated, stock buyback is absolutely one of the tools that we would use to optimize our balance sheet. Yes, I didn't say we were opposed to it, anyway. We simply said it's an option. As Janet said, as we have a strong balance sheet, that's one of the options we have. [Operator Instructions] Our next question comes from Doug Leggate of Bank of America Merrill Lynch. I had a couple of quick ones, and forgive me if some of these have already been addressed. The first one is, going, looking into 2012, you've got a fairly large footprint still in the Gulf of Mexico, but we haven't really heard anything about rig allocation or rig commitments as you head towards potentially ramping up that drilling program. Can you just give us a feel as to where your field head is there? And I've got a couple of quick follow-ups, please. Yes, Doug, as Clarence indicated, we have 2 permits submitted: One Dane submitted, which is important, it's the Innsbruck reentry, if you want to call it that; and then one of our exploration projects. I think what we're looking at is we do still believe we have a deep portfolio on the order of 20 prospects in the Gulf. We've said previously that we thought about 3 to 4 co-op wells drilling at any one time on an annual basis in the Gulf. I think that number's going to be smaller. We believe there'll be rigs of opportunity in order to get after our program on that particular basis. And so once we start getting the permits, we're obviously going to wait well after hurricane season. We'll probably get back after our drilling program in the Gulf of Mexico. Great. Two quick follow-ups, if I may, and they are quick. Forgive give if this has already been addressed, but can you quantify the opportunity cost of the change in mix? Meaning that, obviously you were underlifted in the U.K., that's some of your highest margin bowels, I guess. Can you help put a number around how that might have impacted the quarter? And the second the one, very quickly, is we're hearing from Noble and others that there's moves at first to maybe try to monetize gas in West Africa. Any update as to how you see a potential second train in Equatorial Guinea? And I'll leave it there. Yes, I think we estimate the underlift on an earnings basis, on the order of $15 million to $20 million decrement. So not insignificant, but not a large number. I guess the question with respect to future LNG volumes out of EG, one of the things I would say is we still believe that the Atlantic basin is grossly oversupplied in terms of LNG, and we think that, that's going to continue for some period of time, and I think you saw something in our release that indicated our belief in that. We continue to have discussions with the government of EG about what's the most practical way to continue to expand our position there, but we continue to believe, and we think the government supports the fact that the most economic and viable way is to utilize the equipment that we already have in EG LNG. And we think most of the gas will come on in a period of time such that it can just be used to keep train one full. And then as we get volumes beyond that, then we would consider expanding our franchise. Our next question is a follow-up question from Ed Westlake of Crédit Suisse. Just on the Athabasca oil sands. Obviously, you're mid-startup. Your costs sort of have come down, but when do you think you'll be fully up and running in AOSP? And maybe what sort of OpEx do you think you can get down until its reliability improves? I think, Ed, the historic number has always been sub-30. I think the partnership right now is saying that they would like to see the numbers that we're marking now, at about $46 coming into the $35 range. Clearly, all the equipment is up and running. This is a matter of keeping the equipment running reliably and obviously we're looking forward to some solid quarter-on-quarter performance to demonstrate that we can actually use the nameplate capacity that we have out there, and so we'll keep a watch on that. But we have some very good days, we have some not-so-good days. Certainly, as the cooler weather approaches, we'd expect reliability to improve out there. I am showing no further questions at this time. Thank you, Maika. And we appreciate everyone's attention and interest in Marathon Oil, and we'll be speaking with you hopefully very soon in the future. Have a great day. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may all disconnect. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. Source: Marathon Oil's CEO Discusses Q2 2011 Results - Earnings Call Transcript All MRO Transcripts Marathon Oil Corporation released its FQ4 2013 Results in their Earnings Call on August 02, 2011. Do you feel more positive or less positive about Marathon Oil Corporation after ready these results?

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BPZ Resources, Inc. via GlobeNewswire News Releases December 31, 2012 at 09:01 AM EST BPZ Energy Announces Receipt of Peruvian Supreme Decree to Amend Block Z-1 License Agreement HOUSTON, Dec. 31, 2012 (GLOBE NEWSWIRE) -- BPZ Energy (NYSE:BPZ) (BVL:BPZ), an independent oil and gas exploration and production company, today announced that the Peruvian Government has signed the Supreme Decree authorizing Perupetro to execute the amendment to the Block Z-1 License to add Pacific Rubiales Corp. (TSX:PRE) (BVC:PREC) (BOVESPA:PREB) to the Z-1 License Contract.President and CEO Manolo Zúñiga commented, "We appreciate the hard work of the BPZ and Pacific Rubiales teams dedicated to this process that helped us obtain the necessary approvals before year-end. With the contractual agreements closed and the Supreme Decree now received, our partnership with Pacific Rubiales enters the new year intently focused on production growth at Block Z-1." ABOUT BPZ ENERGY Houston-based BPZ Energy, which trades as BPZ Resources, Inc. under ticker symbol BPZ on the New York Stock Exchange and the Bolsa de Valores in Lima, is an independent oil and gas exploration and production company which has license contracts for oil and gas exploration and production covering approximately 2.2 million gross acres in four properties in northwest Peru. In partnership with Pacific Rubiales Energy Corp., the Company is currently executing the development in offshore Block Z-1 of the Corvina oil discovery, as well as the redevelopment of the Albacora oil field. In addition, the Company is pursuing the exploration of onshore Blocks XIX, XXII and XXIII, in parallel with the execution of an integrated gas-to-power strategy, which includes generation and sale of electric power in Peru and the development of a regional gas marketing strategy. The Company also owns a non-operating net profits interest in a producing property in southwest Ecuador. Please visit the Company's website at www.bpzenergy.com for more information.ABOUT PACIFIC RUBIALES Pacific Rubiales, a Canadian-based company and producer of natural gas and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a Colombian oil operator which operates the Rubiales, Piriri and Quifa oil fields in the Llanos Basin in association with Ecopetrol, S.A., the Colombian national oil company, and 100 percent of Pacific Stratus Energy Corp. which operates the La Creciente natural gas field, and light oil assets from the recent acquisition of PetroMagdalena Energy Corp. The Company's common shares trade on the Toronto Stock Exchange and La Bolsa de Valores de Colombia and as Brazilian Depositary Receipts on Brazil's Bolsa de Valores Mercadorias e Futuros under the ticker symbols PRE, PREC, and PREB, respectively.FORWARD LOOKING STATEMENTThis Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are based on our current expectations about our company, our properties, our estimates of required capital expenditures and our industry. You can identify these forward-looking statements when you see us using words such as "will," "expected," "estimated," and "prospective," and other similar expressions. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements. Such uncertainties include successful installation of our new platform in Corvina, the success of our project financing efforts, accuracy of well test results, results of seismic testing, well refurbishment efforts, successful production of indicated reserves, satisfaction of well test period requirements, successful installation of required permanent processing facilities, receipt of all required permits, receipt of final, formal approval for our joint venture partner in Block Z-1, and the successful management of our capital expenditures, and other normal business risks. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.CAUTIONARY STATEMENT REGARDING CERTAIN INFORMATION RELEASESThe Company is aware that certain information concerning its operations and production is available from time to time from Perupetro, an instrumentality of the Peruvian government, and the Ministry of Energy and Mines ("MEM"), a ministry of the government of Peru. This information is available from the websites of Perupetro and MEM and may be available from other official sources of which the Company is unaware. This information is published by Perupetro and MEM outside the control of the Company and may be published in a format different from the format used by the Company to disclose such information, in compliance with SEC and other U.S. regulatory requirements. Additionally, the Company's joint venture partner in Block Z-1, Pacific Rubiales Energy Corp. ("PRE"), is a Canadian public company that is not listed on a U.S. stock exchange, but is listed on the Toronto (TSX), Bolsa de Valores de Colombia (BVC) and BOVESPA stock exchanges. As such PRE may be subject to different information disclosure requirements than the Company. Information concerning the Company, such as information concerning energy reserves, may be published by PRE outside of our control and may be published in a format different from the format the Company uses to disclose such information, incompliance with SEC and other U.S. regulatory requirements.The Company provides such information in the format required, and at the times required, by the SEC and as determined to be both material and relevant by management of the Company. The Company urges interested investors and third parties to consider closely the disclosure in our SEC filings, available from us at 580 Westlake Park Blvd., Suite 525, Houston, Texas 77079; Telephone: (281) 556-6200. These filings can also be obtained from the SEC via the internet at www.sec.gov.CONTACT: INVESTOR AND MEDIA CONTACT: A. Pierre Dubois Investor Relations &amp; Corporate Communications BPZ Energy pierre_dubois@bpzenergy.com Related Stocks: BPZ RESOURCES, Inc. PACIFIC RUBIALES

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HomeBizNews Julia Louis-Dreyfus sues Holzer Actress claims financial guru misled her Janet Shprintz Actress Julia Louis-Dreyfus and husband, writer-producer, Brad Hall have sued financial guru Bambi Holzer, claiming that misleading they were given misleading investment advice that cost them millions of dollars. The complaint, filed Aug. 31 in Los Angeles Superior Court, alleges that the couple hired Holzer as an investment adviser in the mid 1990s when she was employed by Paine Webber, now know as UBS. She advised them to invest in a life insurance annuity contract and represented that they could withdraw the money at any time and would get a guaranteed annual 7% rate of return. They invested $2 million into the account in 1997. Subsequently, they invested almost $3 million in similar accounts. In 2003, Louis-Dreyfus and Hall learned that several other clients had asserted claims against UBS and Holzer based on her investment advice. They learned that there was no guaranteed investment return under the contracts; any return was only payable as a death benefit and they could not withdraw the money during their lifetimes without paying penalties. In 2004, the couple entered into a tolling agreement with UBS and Holzer, which preserved their claims from being barred by the statute of limitations. The tolling agreements were extended twice and are due to expire on September 27. Holzer, who has her own financial group, is the author of four bestselling books on personal finance and a frequent speaker and television guest. She did not return a call seeking comment. ExaroExaro NewsJulia Louis-Dreyfus Follow @Variety on Twitter for breaking news, reviews and more

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Channels Wells Fargo's Vision of the Branch of the Future Bryan YurcanSee more from BryanConnect directly with Bryan Bio| Contact The bank is opening the first of what it calls the "neighborhood format" of store in Washington D.C. Tags: Wells Fargo, Bank Branch of the Future, Mobile Banking Wells Fargo today announced the opening of the first of what it says will be a new bank branch format. The "neighborhood bank format," as Wells Fargo describes it, is approximately 1,000 square feet -- about a third of the size of a typical Wells Fargo branch -- that will offer personalized service in settings not suitable for its larger stores. The first store using the new design will open in Washington, D.C. on April 15th. According to Wells Fargo, the new store was designed to create areas within the store where sales associates can conduct business with customers and have financial conversations, including in private. It also will have wireless tablets and phones that team members will use to serve customers, while a free wireless hotspot will also be available for customers to use. After hours, the store transitions into a smaller lobby format, providing customer’s access to several ATMs that dispense $1, $5 and $100 bills in addition to the $20 bills a typical ATM offers, the bank said. Additionally, Wells Fargo claimed the new stores will feature technology that allows for the elimination of paper-driven back-office processes. "With this new store concept, we’ll be able to offer person to person sales and service along with leading banking technology in settings that previously would have discouraged us from building a store," said Jonathan Velline, head of Wells Fargo ATM Banking and Store Strategy, in a written statement. "Stores are central to our strategy of providing excellent service and meeting our customers’ financial needs. This new neighborhood bank concept complements our traditional stores to help us bring the Wells Fargo store experience to more customers." [See Also: What Will the Branch of the Future Look Like?] ABOUT THE AUTHORBryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as ...See more from Bryan

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Dan Gilbert talks about entrepreneurship and urban revival Blog entry: December 3, 2012, 1:27 pm | Author: SCOTT SUTTELL There's a lot to chew on in this TechCrunch.com interview with Cavaliers owner/Quicken Loans founder Dan Gilbert about entrepreneurship and urban revival.It's a long interview, focused primarily on Mr. Gilbert's business efforts in Detroit. But it has significant resonance for Cleveland, where one of Mr. Gilbert's ventures, startup accelerator Bizdom, is trying to replicate some of the success it has had in the Motor City. Quicken Loans also has become a major job generator in downtown Detroit.Here are some of the highlights of Mr. Gilbert's comments: “I think it's pretty clear to everybody (that people in the 20s and 30s) want to be in urban core, so they just ditch Michigan. When you sit around tables and you listen to people talk about their relatives or their kids or their grand kids or their friends or their friends' kids, they say 'This one is moving to Chicago, this one is moving to New York, this one is moving to San Francisco.' If we're going to keep growing and keep doing the kinds of things we do, we're Quicken Loans, we're a really technology company that happens to do loans.” “(Startups in Detroit) can get some great people, some hardworking, Midwest people who first of all tend to be loyal here; they just do. … (There) is just less competition for the talent, and so you have a better chance and maybe keeping the same group of people with you for a long period of time. And it's exciting and there are startups happening.” “Through Detroit Venture Partners and Rockbridge (a private equity firm) we try to tap into the operational expertise of our business. … We really try to look at it as one company, one business, one family where people can tap in and either recruit other people maybe to come over and help in or even for short periods of time. For instance, we're even going to put what we call our mousetrap. People who just process excellence, we're going to put them in the Casino in Cleveland for a period of time to help them. There's going to be two or three people go over there for 90 days just to help them set-up their process excellence.” “One of the figures I give to people here is that you pay less per square foot for the building than the average rental rate is in New York for a year. So you think about that difference. I'm not bragging, I'm just saying, 'Hey, there's a significant advantage' even in Cleveland where we're active, the real estate prices didn't decline like in Detroit. Get it done Comments from two economic experts from KeyCorp in Cleveland underscore what's at stake in the fiscal cliff negotiations.This MarketWatch.com story notes that the Nasdaq Composite index just scored its first positive November since 2009, even as the political rhetoric over the budget continued with little obvious progress toward a deal.“I don't think there is a politician out there that wants on their watch an adverse economic outcome. But they could wait for the 11th hour,” said Nick Raich, director of Key Private Bank in Cleveland, of the possible repercussions of not reaching an agreement to block billions in automatic spending cuts and tax increases early next year.“Our base case is there will be some sort of solution, but it may not occur by or on Dec. 31, so the market is not pricing completely going off the cliff, but more of a roll down the hill,” Mr. Raich added. This Bloomberg story says the world economy “has recovered to its strongest level in 18 months as China's stimulus measures bolster growth and the U.S. seeks to avoid the so-called fiscal cliff, a Bloomberg Global Poll of investors showed.”One of those polled was Bruce McCain, chief investment strategist at Kay Private Bank.“With so much monetary stimulus around the world, we've taken the brakes off the global economy,” he told Bloomberg. “It should mean improved growth into next year. Officials in Europe and in the U.S. seem to realize that we're on the precipice of some pretty negative outcomes if they don't do something to find better solutions.” This and that Taking it slow: Foreclosures in Ohio take an average of 571 days to complete, making it the ninth-slowest state in the country, according to this story from MarketWatch.com, based on data from RealtyTrac.The slowest state, at 1,072 days, is New York. Also slower than Ohio are Connecticut (661 days), Florida (858) Hawaii (662), Illinois (673), Indiana (603), New Jersey (931) and Pennsylvania (580).Business-friendly Texas will get you through the foreclosure process faster than any other state. It takes only 97 days, on average, to complete a foreclosure there.Move along: The New York Times profiles Dr. Michael Roizen, the chief wellness officer at the Cleveland Clinic, and declares he's “at the forefront of the upright workers movement.”That “movement,” The Times says, “is not a union uprising, but a reference to the growing numbers of office workers who are rising from their chairs to stand, even walk, for health reasons.” (Check out this story about Dr. Roizen, by Crain's Dan Shingler, from January 2011.)Dr. Roizen walks the walk, so to speak. He “typically works at a treadmill desk for hours a day” and follows a 10,000 steps-a-day regimen for better health, The Times says.“For me, this setup is a way around inactivity,” he says. Dr. Roizen has “found he can effectively handle conference calls while walking at 3.3 miles per hour, typing to reply to e-mails at 1.8 mph, and more serious writing at 1.7 mph.”Game on: Worried when you see your kid playing video games more than, say, reading books? Maybe you shouldn't be.“Over the last few years, there's been a lot of research done on the social, emotional, mental and physical benefits of gaming, and the results may surprise you: video games actually have considerable real-world benefits,” USA Today reports.The newspaper cites data from the Entertainment Software Association that finds 62% of gamers play games with others, either in-person or online. These social games “teach kids leadership skills, including delegating responsibility, and working effectively as a team,” according to the story.And research from Ohio State University “finds that players who engage in cooperative play in games show increased cooperative behavior,” the newspaper reports.You also can follow me on Twitter for more news about business and Northeast Ohio. Reader Comments

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Journal Register Files For Bankruptcy Protection PHILADELPHIA (AP) - Another U.S. newspaper company is in serious financial trouble. The Journal Register Co. filed Saturday for bankruptcy protection from its creditors and said slumping advertising revenue and circulation are to blame. In the filing in U.S. Bankruptcy Court in Manhattan, Journal Register proposed a restructuring plan in which it would cancel its stock and become a closely held company controlled by its lenders. The Yardley, Pennsylvaniabased newspaper publisher reported $596 million in assets as of Nov. 30 and $692 million in debt, including unpaid interest. Revenue has fallen more than 20 percent since 2006, the company said in the court filing. In the documents, company Chairman and Chief Executive James W. Hall said the recession had placed an even greater burden on an already distressed industry. On Thursday, JP Morgan Chase & Co. and 26 of the company's 37 lenders agreed to the reorganization, according to a statement posted Saturday on the Journal Register's corporate Web site. A phone message left for company spokesman Edward Yoakam at Journal Register's corporate offices was not immediately returned. The Journal Register owns 20 daily and 159 non-daily newspapers and has about 3,500 employees. In its filing, Journal Register said it serves greater Philadelphia, Michigan, Connecticut, the greater Cleveland area and parts of New York state. Its newspapers include the New Haven Register in Connecticut, a number of suburban Philadelphia newspapers and the Trentonian near Philadelphia. Journal Register stock, which traded as high as $23.87 a decade ago, was removed from the listings of the New York Stock Exchange in April. It traded for less than one cent on Friday Return to top

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BEFORE “OCCUPY WALL STREET” Introduction | 1792 | 1837 | 1857 | 1874 NOTES ON PRIOR NEW YORK CITY PROTESTS AGAINST ECONOMIC CRISES 2011 A DEMAND One of the signs in the remarkable October 5 2011 demonstration (depicted in the images on the Gotham Center's home page) read "You Wanted Demands??" – a reference to the complaint that the Occupy Wall Street movement had been insufficiently precise as to what it wanted, and to the plethora of quite precise demands emblazoned on the great crowd's placards. I don't share the concern for spelling out plans at this point. There are lots of blueprints floating around. But the essential precondition of real change is the tangible demonstration of massive disgust with the status quo so well evidenced by the demonstration itself. But in the interest of honing one obviously popular slogan – Tax the Rich! – to give it a sharper cutting edge, I re-present here a proposal I advanced ten years ago, for what's now being called a Financial Transaction Tax, as was historically known as a Stock Transfer Tax or, as it was refashioned by a Nobel Prize winning economist, the Tobin Tax. It's a proposal targeted precisely at Wall Street, and one that, in addition to raising a good deal of money, might have the admirable side effect of reining in over-exuberant speculation. The proposal would need to be updated and shaped to deal with existing circumstances, which are in constant flux. And it would need to be constructed carefullly, by economic experts, which I am not, to withstand the variety of hysterical objections that would certainly be launched against it. But it still seems worth considering, especially as it's now being advanced by the European Commission – see here and here and here and here – and a version of it has long been in effect in London (the Stamp Duty Reserve Tax), with no ill effect. A Financial Transations Tax [excerpted from Mike Wallace, A New Deal for New York (2002).] Finally we should revisit the stock transfer tax. A time honored American revenue source, it was applied by the federal government during the Civil War, the Spanish American War, and WWI – and we are, are we not, in a quasi-wartime condition? New York State adopted its own stock transfer tax in 1905 – despite threats from the New York Stock Exchange that if passed it would instantly decamp for New Jersey (yes, even then) – and it generated substantial income, all of which, beginning in 1965, was given to New York City. In the so-called Fiscal Crisis of the 1970s, however, the Exchange gained sufficient leverage to win repeal of the tax. The state stepped in to provide an annual consolation prize, which amounted to $114 million in 2001, the year in which even this payment was gratuitously eliminated by Governor Pataki. What almost no one realizes is that tax is still in place, still collected to serve as technical backing for bonds issued back in the Fiscal Crisis, only to be immediately returned. As the tax was and is keyed to volume, and the market binged wildly upward during the 1980s and 90s, its earning power has shot up exponentially. During the 2000-2001 state fiscal year, the state collected (and instantly rebated) 7.6 billion dollars, and in FY 2002-03 it’s expected to reap (and return) over $8 billion – enough, obviously, to entirely wipe out our $5 billion deficit, leaving lots left over for schools and housing. Why not reinstitute even a small portion of that tax, on a short term, sunseted, emergency, patriotic, wartime basis, with the goal of making New York a more competitive place to do business, and a more enjoyable place to live life. Rebating 90% rather than 100% would still leave a $800 million revenue stream, sufficient to back the sale (by a newly created New York City Investment Trust Fund) of $10 billion worth of municipal bonds (at 5%). This Fund would be strictly dedicated to: a) building schools; b) building affordable housing (the two might fruitfully be combined by giving bonuses to developers who include turnkey schools in their apartment towers); and c) paying for a spanking new New York Stock Exchange, relieving us of the $1.1 billion burden [which Mayor Giuliani was then proposing to hand the assembled brokers to keep them from fleeing westward]. I’ll bet Jim Lebenthal [a municipal bond specialist] would be interested. Such a tax-and-fund policy could galvanize the construction trades (who in return for receiving a prevailing wage, and in recognition of their dwindling ranks, might be willing to open up their apprenticeship and pre-apprenticeship training programs). The tax would also reduce market volatility by discouraging speculative short-term gambling, and predispose large investment funds to pay more attention to long term investments. Finally, as the tax is paid by the seller of stock – not the brokers on the NYSE – it would allow investors from around the country (and the planet) to make a modest contribution toward rebuilding Lower Manhattan (The Whole World is Helping). It’s possible the NYSE would once again threaten to skip town, arguing such a tax would cause it irreparable damage. If so we might remind it that in 1999, when several European exchanges joined forces and abolished transfer taxes in an effort to capture business from NYSE and the London Stock Exchange, an excitable group of the latter’s members insisted that England immediately eliminate its hefty tax, lest the fiscal roof fall in. The British Government refused, being made of sterner stuff than the one in Albany. The London Exchange, despite the tax (applicable since 1986 to electronic trades), continues to flourish mightily. Any serious examination of the viability of a local equivalent, however, would have to determine how readily it might be circumvented, especially in an era when shuttling income to tax-free offshore havens has become a fine art. Ideally the stock tax should be made national again. [For more on this, and other proposals, see A New Deal for New York (2002), available, free, at http://www.gothamcenter.org/newdeal] Donate Now! Help support the Gotham Center. Mailing List Sign up for the Gotham Center's mailing list so we can keep you informed about upcoming events. Site produced by: Suzanne Wasserman Micki Kaufman Tinyboxer Web Development

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Facebook to make $1bn in 2011, worth $50bn Goldman Sachs values social network at $50 billion By Sharon Gaudin, Computerworld.com | Computerworld US | 11 January 11 Facebook reportedly generated $1.2 billion in revenue in the first nine months of 2010, according to a document being distributed by Goldman Sachs. What are reportedly Facebook's financials began leaking out Friday thanks to a not-very-secretive 101-page document that Goldman Sachs is sending out to potential Facebook investors, according to Reuters. Leaky investorsGoldman Sachs, which earlier this week invested $450 million in Facebook and valued the social networking company at $50 billion, is providing its wealthiest customers with the most detailed information about Facebook's financials to hit the street yet. Citing an unnamed source who received the document, Reuters is reporting that Facebook earned $355 million in net income in the first nine months of 2010. It also noted that the financial statements being handed out have not been audited and do not specify how Facebook is pulling in its revenue. Businessweek is reporting that if Facebook can maintain its growth and margins, the company could realistically pull in $1 billion in profit in 2011. Facebook declined to comment for this story. "We're finally seeing some numbers on Facebook's revenue and profitability and the news is mostly good," said Dan Olds, an analyst with The Gabriel Consulting Group. "The company has solid revenues north of a billion and profit margins of anywhere from 25% to 35%. These are great numbers, but not necessarily high enough to support a $50 billion valuation." Revenue growthTo financially get where Goldman Sachs thinks Facebook can go, the company won't be able to just stay the course. "The only way Facebook at $50 billion looks like a good investment is if you believe that the company is going to continue to grow revenue and profits at a huge clip well into the future," added Olds. News of Facebook's financials surfaced just one day after reports hit that the social networking company is on the cusp of gaining 500 shareholders, an invisible line enforced by the US Securities and Exchange Commission (SEC) that will force Facebook to disclose its financials even though it's not a publicly traded company. The Wall Street Journal reported yesterday that Mark Zuckerberg, CEO and co-founder of Facebook, is preparing to launch an initial public offering in 2012. That echoes statements made last September by Facebook board member, venture capitalist and PayPal co-founder Peter Thiel that Facebook was eyeing an IPO in late 2012. News about Facebook's IPO prospects follow widespread speculation in recent days that another social networking company, LinkedIn, is working on an IPO of its own and could beat social networking heavyweights like Facebook and Twitter to the IPO gate.

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Smithfield shareholders approve Shuanghui deal RICHMOND, Virginia (AP) — Shareholders of Smithfield Foods Inc. on Tuesday approved a plan to sell the world's largest pork producer and processor to a Chinese company. The Smithfield, Virginia-based company said more than 96 percent of the votes cast during a special meeting in Richmond were in favor of Shuanghui International Holdings Ltd.'s $34 per share offer, or $4.72 billion in cash. The deal, which is expected to close Thursday, will be the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion including debt. Its sale to Hong Kong-based Shuanghui comes at a time of serious food safety problems in China, some of which have involved Shuanghui, which owns food and logistics enterprises and is the largest shareholder of China's biggest meat processor. "We will cease to be the company you saw in the past," Smithfield's CEO Larry Pope told shareholders. "This does not mean the company goes away, the company just enters into a new phase and a new era of its life." Smithfield's shares rose to a penny to $33.99 in morning trading Tuesday, just short of the buyout offer. Smithfield Foods, whose brands include Armour, Farmland and its namesake, was founded in 1936 and has grown to annual sales of $13 billion and has about 46,000 employees. Pork producers such as Smithfield have been caught in a tug of war with consumers. The company needs to raise prices to offset rising commodity costs, namely the corn it uses for feed. But shoppers are still extremely sensitive to price changes in the current economy. By raising prices, Smithfield risks cutting into its sales should consumers cut back or buy cheaper meats, such as chicken. In 2009, Smithfield Foods posted its first annual loss since 1975, and lost money again in 2010, but has since rebounded. Pope noted that the industry has been stagnant and the ability to grow has been tough. The deal, he said, gives the whole industry an opportunity to grow. "The times for this company and the future, I think are very bright," Pope said. "It's the same old Smithfield, but better." Smithfield has said that the buyout and China's growing demand for pork will be a boon for American agriculture and an opportunity to export to new markets. Smithfield's existing management team will remain in place and Shuanghui also will honor labor agreements with Smithfield workers. Shareholders also on Tuesday approved retention bonuses for the company's executives. The acquisition highlights what could be growing interest in American food by Chinese consumers. Foreign food, such as milk powder from New Zealand and vegetables from neighboring Asian countries, is prized by Chinese consumers because of the frequent domestic food safety scandals. In one of the most notorious incidents, six babies died and 300,000 were sickened in 2008 from drinking infant formula and other dairy tainted with the industrial chemical melamine. And Shuanghui's reputation was battered in 2011 when state broadcaster CCTV revealed its pork contained clenbuterol — a banned chemical that makes pork leaner but can be harmful to humans. Earlier this month, a U.S. committee that reviews mergers between American and overseas companies for national-security implications cleared the deal. Some U.S. lawmakers have questioned the sale, even convening a Senate Agriculture Committee hearing in July to discuss the deal. At the time, Committee Chairwoman Debbie Stabenow, D-Michigan, said the sale raised many questions, including the impact on food safety and security. She also said the precedent-setting transaction prompts reservations about the government review process of foreign acquisitions of U.S. companies. "Smithfield might be the first acquisition of a major food and agricultural company, but I doubt it will be the last," said Stabenow. Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum . Reddit Next article Northrop looks to split ship unit, close shipyard Smartphone apps remind patients to take their meds NC sides with Duke in appeal of coal ash ruling Coast Guard working to reopen shipping channel TechBits package More>>

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Enterprise Zone – Nonprofits May be Allowed Net Interest Deduction California provides for special tax incentives to encourage investment in specific geographic areas targeted for economic revitalizing called Enterprise Zones within the state. One of these incentives is the net interest deduction. It is available to banks and other lenders. The requirements are simple. If a bank or lender makes a qualified loan to a qualified debtor, it is allowed to deduct the net interest received from such loan against its California taxable income. To be a qualified transaction, the loan must be made to a debtor that is engaged in a “trade or business” in an Enterprise Zone. The term “trade or business” is generally defined for tax purposes as “an activity engaged in for profit.” When a bank or lender makes an otherwise qualified loan to a nonprofit organization, the question arises as to whether a nonprofit is engaged in a trade or business, and thus considered to be a qualified debtor for the purposes of the net interest deduction. In the past, we disallowed debts made to nonprofit organizations based on the general presumption that nonprofit organizations are not engaged in a trade or business as defined under various tax provisions in the Internal Revenue Code and the California Revenue and Taxation Code. However, we recently revised this policy based on statutory authority in the California Corporation Code that suggests a nonprofit could be recognized as being engaged in a trade or business. The California Corporation Code which governs nonprofit entities affirms the nonprofit’s right to “carry on a business at a profit,” and use that profit for any lawful activity.” Many nonprofit organizations accept donations, conduct fundraising activities, or charge fees. This revenue is used to sustain the organization, pay salaries, interest, fund capital improvements, expansions, etc. These activities are similar to a trade or business engaged to earn a profit. Therefore, qualified loans made to nonprofit organizations can qualify for the Enterprise Zone net interest deduction if the debtor meets all the other required qualifications. Back to July 2009 Tax News Close Survey Facebook

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Qwest gets $1B line of credit Connected Planet December 22nd, 2009 Qwest Communications International Inc. Announces New $1.035 Billion Revolving Credit Facility DENVER, Dec. 21, 2009 � Qwest Communications International Inc. (NYSE:Q) today announced that it has entered into a new revolving credit facility. The new $1.035 billion agreement expires on Sept. 30, 2013, and replaces the company’s pre-existing revolving credit agreement that was scheduled to expire on Oct. 21, 2010. Wachovia Bank, National Association � an affiliate of Wells Fargo Securities, LLC � acts as administrative agent under the new agreement. The new credit agreement is currently un-drawn. If drawn, proceeds would be used to provide liquidity for general corporate purposes, including working capital, capital expenditures and debt refinancing. Any amounts drawn on the new agreement are guaranteed by the Qwest Services Corporation (QSC) subsidiary and are secured by a senior lien on the stock of the Qwest Corporation (QC) subsidiary. The bank syndication supporting the new agreement is comprised of a diverse group of 13 banks. �Every one of our 13 existing revolving credit facility banks reaffirmed or increased its existing commitment to the new revolving credit facility,� said Joseph J. Euteneuer, executive vice president and chief financial officer for Qwest. �This support enabled Qwest to increase the size of its revolving credit facility by 22 percent from the previous facility’s initial $850 million. Given the challenging economy and credit environment, we greatly appreciate the continued support of our banking partners.� ### Forward-Looking Statement Note This release may contain projections and other forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by us with the Securities and Exchange Commission, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including but not limited to: access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives, among others; our substantial indebtedness, and our inability to complete any efforts to further de-lever our balance sheet; adverse results of increased review and scrutiny by media and others (including any internal analyses) of financial reporting issues and practices or otherwise; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings; potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete including the effects of consolidation in our industry; changes in demand for our products and services; acceleration of the deployment of advanced new services, such as broadband data, wireless and video services, which could require substantial expenditure of financial and other resources in excess of contemplated levels; higher than anticipated employee levels, capital expenditures and operating expenses; adverse changes in the regulatory or legislative environment affecting our business; changes in the outcome of future events from the assumed outcome included in our significant accounting policies; our ability to utilize net operating losses in projected amounts; and continued unfavorable general economic conditions, including the current financial crisis. The information contained in this release is a statement of Qwest’s present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest’s assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest’s assumptions or otherwise. The cautionary statements contained or referred to in this release should be considered in connection with any subsequent written or oral forward-looking statements that Qwest or persons acting on its behalf may issue. This release may include analysts’ estimates and other information prepared by third parties for which Qwest assumes no responsibility. Qwest undertakes no obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements and other statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. By including any information in this release, Qwest does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material. The marks that comprise the Qwest logo are registered trademarks of Qwest Communications International Inc. in the U.S. and certain other countries. Contact Information: Media Contact Diane Reberger 303-992-1662 diane.reberger@qwest.com Investor Contact Rahn Porter 303-896-0263 rahn.porter@qwest.com Related Topics: Business Services, IP/NGN, Independent, Other

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A bold and responsible budget TK Arun 28 February 2013, 08:27 PM IST It is a bold and responsible budget. The responsible bit is evident enough: the fiscal deficit has been reined in, both for the current year and for the next year, at 5.2% and 4.8% of GDP respectively. The boldness is perhaps not so obvious, as it lies in deciding that good economics has to be the basis for good politics. In the last full budget before the next general elections, P Chidambaram has resisted all temptation to hand out largess. And that is a very major act of courage. There is no special new tax rate for the super-rich, only a 10% surcharge on individuals with an income in excess of Rs 1 crore, and on companies with an income in excess of Rs 10 crore. This restraint is welcome, although whether the FM needed to introduce the sentiment-dampening surcharge is open to question. The introduction of a transaction tax on commodities is a negative. This is so, even if the tax treatment of profits in commodity exchanges has been brought on par with that prevalent in stock exchanges. This is so, because all financial transaction taxes interfere with the redistribution of risk across the economy through financial transactions that allocate both funds and redistribute risk. The result would be to raise the cost of capital, particularly for small and medium enterprises. The investment allowance of 15% for investments in excess of Rs 100 crore made in the next 24 months should act to incentivise quite a lot of investment. The biggest contribution of any Budget is to macroeconomic stability. New schemes and tax breaks and the rest of it are just bells and whistles. From that point of view, the budget is sound, as it seeks to increase macroeconomic stability. By reining in the fiscal deficit, the finance minister has fulfilled his essential macroeconomic duty. The fiscal deficit is financed by borrowings, that is, drawing on the private sector’s savings. If what the government wants to borrow is in excess of what the private sector is willing to spare after meeting its own investment plans, the fiscal deficit will create excess demand, that is, aggregate demand in the economy would be in excess of the supply of goods and services, resulting in a combination of price rise and a wider current account deficit (CAD). By reining in the fiscal deficit, the pressure eases on both inflation and the CAD. But how realistic is the fiscal deficit projection by the finance minister, and why does even this major fiscal consolidation still leave the GDP deflator, a measure of economy-wide price rise, close to 7% (assuming real growth accounts for some 6.5% of the nominal GDP growth of 13.4% assumed in the Budget)? Tax revenues are slated to grow by 19%, including additional resources mobilised by an amnesty scheme for service tax payers and a surcharge of 10% on high incomes. This seems realistic. In 2008-09, when the economy grew 6.7%, tax revenues were 10.8% of GDP, falling from 11.9% of GDP in the previous years. The Budget assumes that in 2013-14, when growth will recover to something like that in 2008-09, tax revenue/GDP ratio will go up to 10.9% from 10.4% in the current year of 5% growth. This does not seem unreasonable. But telecom revenues and disinvestment receipts have been assumed to go up very significantly, in a manner that has not been achieved in the past. But this is not to say that, with determination, these targets cannot be met. As we noted, the Budget is nothingm, if not bold. A pro-growth feature of the fiscal correction process undertaken by the finance minister is that it has not sought to compress overall government spending too much. Total expenditure goes up 16.4%, up to 14.6% of GDP, up from 14.3% of GDP in the current fiscal. After such fiscal consolidation, the question remains why inflation should still be 7% economywide. A plausible scenario is that a series of administered prices in energy and fertilisers would be allowed to go up, over the year. The finance minister and his economic advisor need to clarify this. There has been no major change in indirect tax rates, except for some duty changes on high-end automobiles and a few other products. Yet, indirect tax revenues are slated to grow 20.4%. How does this work out? Only customs revenues are expected to grow in line with the nominal GDP growth rate of 13.4%. Both excise duty collections and service tax collections are expected to grow faster: 15% and nearly 36%. Service tax collections will cross Rs 180,000 crore, just 4% short of excise collections. Sure, part of this rise will come from an a

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TARP: A success none dare mention By: Ben Smith The Obama administration this week will mark the second anniversary of the collapse of Lehman Brothers and the ensuing Wall Street meltdown with an ironic bit of bipartisanship: letters of thanks to some of the congressional Republicans who helped fashion the government’s response in fall 2008. No one in the Treasury Department is expecting any appreciation from House Minority Leader John Boehner, Senate Minority Leader Mitch McConnell or former House Minority Whip Roy Blunt for the gesture. In a reversal of the old adage quoted by President John F. Kennedy, that victory has a thousand fathers, there’s hardly a Republican who wants to be associated with perhaps the most successful and least popular American economic policy in the past decade: TARP, or as it is generally known, the bank bailout. The Troubled Asset Relief Program is widely viewed as the original sin of the Obama administration — though it was put together under President George W. Bush and succeeded far beyond expectations. It’s widely seen as the tipping point for disgust with elites and insiders of all kinds — though it could also be seen as those insiders’ finest moment, a successful attempt to at least partially fix their own mistakes. Rammed through Congress in the final months of the Bush administration by a political and financial establishment that felt it had looked into the abyss, TARP had the support of not just President Barack Obama but also his likely foes in 2012, such as former Govs. Mitt Romney and Sarah Palin. But it has been only sporadically defended, or even explained, by leaders of both parties who have shown decidedly little courage of their convictions. “It’s become demonized on the left and the right by screamers — Glenn Beck and Rachel Maddow — who have no interest in the facts; they’re just interested in hyperbolizing and generating attention,” lamented New Hampshire Sen. Judd Gregg, a key player in guiding the measure through the upper chamber and one of the few Republicans willing to talk about TARP in positive terms. Perhaps it’s not a coincidence that Gregg is retiring from the Senate at the end of the year — or that hardly anyone from either party is joining him in praising TARP. While Obama last week made reference to having narrowly avoided another Depression, he and other leaders have generally avoided trying to explain that mechanism, in favor of trying to change the subject. All that, despite a broad consensus of economists who think things would have been worse without the bank rescue — and perhaps far worse: In one simple example, American workers’ paychecks might well not have arrived. Think bread lines and cat food. “The TARP is probably the most effective large-scale government program that the public has vehemently decided was a bad idea, and, therefore, has only the most tepid political defenders,” said the Brookings Institution’s Douglas Elliott. “Unfortunately, the right thing to do for the public just sounds so wrong to Main Street in this case.” The policymakers who emerged shaken from a Sept. 16, 2008, briefing by Treasury Secretary Henry Paulson never managed to win credit for the apocalypse avoided from an American public furious at them for allowing the mess to develop in the first place.And the rank and file in both parties have channeled that anger into an assault on members of Congress who voted for the measure. Politicians have spent about $80 million on ads this cycle mentioning bailouts — every penny of it negative — with Democrats spending the bulk of that sum, $53 million, according to an analysis by the Campaign Media Analysis Group’s Evan Tracey. The attacks on the bailout are emblematic of an age that finds politicians generally scared of an angry electorate and “elitist” to be the ultimate dirty word. “Both President Bush and President Obama deserve tremendous credit for having pursued that policy in the face of a withering, irresponsible attack from the left and the right, full of misstatements and representations about what actually happened,” Gregg said. Polls suggest the public has only the haziest view of what TARP was. It’s often conflated — not least by politicians who voted for it and now seek to muddy the waters — with the stimulus, a piece of policy whose supporters and foes have fallen into a much more familiar debate about the role of government and public spending. Even Nevada GOP Senate nominee Sharron Angle at one point referred to TARP as “the stimulus.” And few Americans seem to know that the banks at the center of TARP have paid the money back — with interest. Pollster Ann Selzer asked voters this summer, “Do you think the Troubled Asset Relief Program, known as TARP, was necessary to prevent the financial industry from failing and drastically hurting the U.S. economy, or was it an unneeded bailout?” Fifty-eight percent of Americans said TARP was unneeded. Only 28 percent called it “necessary.” The consensus of economists and policymakers at the time of the original TARP was that the U.S. government couldn’t afford to experiment with an economic collapse. That view in mainstream economic circles has, if anything, only hardened with the program’s success in recouping the federal spending. A study this summer by former Fed Vice Chairman Alan Blinder and Moody’s chief economist Mark Zandi was representative of that consensus. They projected that without federal action — TARP and the stimulus — America’s gross domestic product would have fallen more than 7 percent in 2009 and almost 4 percent in 2010, compared with the actual combined decline of about 4 percent. “It would not be surprising if the underemployment rate approached one-fourth of the labor force,” they wrote of their scenario. “With outright deflation in prices and wages in 2009-11, this dark scenario constitutes a 1930s-like depression. Back in 2008, that view was persuasive. Republicans like McConnell and Blunt swallowed their distaste for government action and persuaded their colleagues to vote with them for TARP. Liberals like House Speaker Nancy Pelosi and Massachusetts Rep. Barney Frank swallowed their dislike of Bush and distrust of the bankers.“They did the right thing at very great personal cost — and in a very intense political environment,” said Tony Fratto, a former spokesman for the Bush Treasury and White House, who said he finds TARP’s persistent unpopularity “very, very frustrating.” “To me, that was one of the most critical pieces of legislation ever passed,” he said. The leaders he praises aren’t exactly campaigning on that record. The Democratic leaders, on the whole, would rather not talk about it. “It’s a good premise, but he won’t want to comment,” an aide to one senior Democrat wrote when asked about a story on the gap between TARP’s success and its unpopularity. One Republican sought to defend the bailout. In a direct-to-camera ad that came after he was booed for the bailout during his campaign for governor, South Carolina Rep. Gresham Barrett made the case for the tough vote. “I honestly believe with all my heart that we were at a point where men and women were going to reach in their back pocket and pull out a credit card or an ATM card, stick it in a machine and nothing was going to come out,” he said. “You can always be a Monday morning quarterback. But leaders make decisions based on the best information that they have, and they go with it. That’s what I did.” It appeared to do little good for Barrett, who lost badly to an anti-bailout outsider, state Rep. Nikki Haley, in the GOP primary runoff for governor. Most other Republicans have infuriated their old allies on TARP by appearing to attack it. Boehner, in a speech demanding Treasury Secretary Timothy Geithner’s firing, twice spoke derisively of the “bailout” — though he didn’t attack the original TARP. Blunt, who was key in 2008 to rallying support for the legislation in the House, finds himself under bitter assault from his Democratic Senate rival, Robin Carnahan, who has labeled him “Bailout Blunt.” Blunt has responded by trying to accommodate voter anger with attacks on elements of TARP — he brags of having voted against dispensing its second $350 billion tranche, for instance, which allows him to say he opposed the full $700 billion bailout, and of having “voted against every bailout since that time.”But Blunt, though he’s not advertising it, also stands by the program on its merits. “Roy Blunt was concerned that the global economy was in a crisis in 2008 that could have been worse than the Great Depression and that doing nothing was not an option,” said his spokesman, Rich Chrismer. The legislation’s outright foes seem to fall into two categories. Some are conservative Republicans and tea party candidates who believe banks should have been allowed to fail and that a dynamic private sector would have quickly righted the economy. Some, like Sen. Jim DeMint (R-S.C.), were in position to vote that way at the time; others who weren’t in office then have embraced the position. But many others — particularly Democrats — tout their opposition to the bailout on shakier ground. Carnahan, for instance, has been fiercely attacking Blunt for his role in passing TARP. Her spokesman didn’t respond in detail to a question about what she would have done to avert economic collapse. Instead, he e-mailed a statement attacking Blunt and suggesting that legislation should have looked to “private-sector alternatives” and “property accountability measures.” And the website FactCheck.org recently noticed that five freshman Democrats were touting their votes against the “bailout” when they weren’t even in office for the original legislation and had voted on the second tranche or other measures. Spokesmen for two of them defended the characterizations but conceded that they did support the massive government action at the heart of the bailout — just with “more teeth” in the form of bank regulation, as Andrew Stoddard, a spokesman for Nevada Rep. Dina Titus, put it. Brad Bauman, a spokesman for Ohio Rep. Mary Jo Kilroy, put it more bluntly. “She supported buying toxic assets,” Bauman said. “She did not support the Great Depression.”

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2014-15/0557/en_head.json.gz/9745

Glenn Beck comments Doomsday preppers after the gold rush August 19, 2013: 10:58 AM ET In the wake of gold's continuing decline, financial survivalists stick to their guns. By David Z. Morris FORTUNE -- What happens when gold may no longer glitter enough to stave off the financial apocalypse? The precious metal, a big beneficiary at quantitative easing's outset as investors sought a hedge against possible inflation, has been steadily declining. During the first round of QE in December 2008, the price of gold was $837.50 an ounce. The precious metal's longer term run-up kicked into overdrive, with the price peaking in September 2011 at $1,922. Of course, this ultimately represented a dependency trap -- in April the price dropped 30%, in part on fears that QE would be coming to an end. Today, gold sits at around $1,371, a 20% drop in six months. QE was only one contributing factor to gold's run-up. Broadly perceived as a safe store of value in uncertain times, gold benefited from the sense of instability and looming disaster that has persisted since the financial crisis. Inversely, gold's downward trend has corresponded with a tentative but broad-based sense that things are inching back to normalcy. MORE: Mohamed El-Erian: Don't give up on an Egyptian democracy For one small group of investors, this return to normal places them in a new, confounding position. While a worried mainstream saw gold as a hedge against short-term instability, the past five years have seen huge exposure, particularly in America, for a set of ideas that sees gold as a protection against the total collapse of the financial system as we know it. Probably the most well-known proponent of this viewpoint is former Fox News personality Glenn Beck, who has persistently warned of the inevitability of hyperinflation, lawlessness, and bread riots in the wake of QE and other Fed initiatives to inject liquidity and expand the money supply. Starting in 2008 and with little respite since, Beck has kept up a drumbeat of parallels between American monetary policy and disaster scenarios such as Weimar Germany. Whether by correlation or causation, Beck also happens to be heavily sponsored (both in his Fox News days and now in his internet enterprise) by Goldline, a company selling gold coins. Alex Jones, a goldbug and conspiracy theorist only slightly less influential than Beck, is sponsored by Midas Resources Inc., which ... well, guess. Though Glenn Beck and Alex Jones are in many ways fringe figures, they have significant followings, and their goldbug ideas are part of an even larger pattern of thought that encompasses genuinely influential groups including Ron Paul's Libertarian wing of the U.S. Republican Party, and the even more powerful Tea Party faction. "Anyone who is not looking at a financial collapse of the United States right now is not looking at our debt and the inability of our government to rein in costs. It's no longer a case of if, but a case of when," says Norman Cillo, a member of the Tampa Bay Tea Party. With that scenario in mind, gold looks like a pretty good bet, no matter what the market is doing. Gold's longtime nickname, "God's Money," captures some of the faith these goldbugs put in the yellow stuff as a life raft for the most extreme, yet imaginable, scenarios. For most of the last five years, this has been an easy enough proposition -- doomsayers could have their apocalypse and profit from it too, watching gold prices rise in dollar terms while also being confident in the commodity's value in the lawless, feral world they think Ben Bernanke's monetary policy is laying the groundwork for. For the last six months, though, things have been more complicated -- while goldbugs of all sorts have taken a haircut, the most extreme true believers now have to watch the value of their gold in dollar terms collapse, while sticking with the idea that the real collapse will be that of the entire U.S. economy in the near future, after which they'll have the last laugh. It's a reminder that gold, whatever its transcendent value, remains entwined in a very human economic system in the here and now, and that holding on to rocks has an opportunity cost. MORE: A sobering gut check for the market But it seems the decline of gold has had little or no impact on the beliefs of the most prominent extreme goldbugs. "None. Zero, zip, zilch," says Alan Madison, executive producer of National Geographic's Doomsday Preppers reality show. "Gold for them has an inherent value that is independent of market fluctuations. They do watch [the market price of gold], but mostly just for chances to purchase." Which ultimately is what separates the goldbugs from more run-of-the-mill gold bulls. This indifference to the market is being fed by goldbug-friendly media and analysis, which has insisted that the decline is irrelevant, a buying opportunity, the product of a government conspiracy, or some mix of the three. Relying heavily on the broader conspiracist mindset that defines him, Beck declared after the gold crash that "something doesn't smell right," further saying that "This is collusion. It is keeping the price of gold down for the sovereign central banks so they can store the gold." Some have totally dismissed the losses by insisting on the difference between "paper" gold and "real" gold, an important distinction for goldbugs of the prepper variety. "They all take physical delivery, they don't invest in [gold] derivatives or funds," says Madison. Finally and most paradoxically, some goldbugs have said that the gold crash is a harbinger of deflation, a defeat for Fed policies and therefore -- presto change-o -- a validation of their underlying thesis that centralized policy can't control the economy, and we should all prepare for Thunderdome. This is all particularly amazing since, not only has the daily price of gold plummeted, but the hyperinflation it is supposed to hedge against hasn't shown its face, even after five years of QE. In fact, we haven't even seen slightly above-average inflation. According to some analysts, this is simply because it has had minimal effect on consumer spending. MORE: The gray art of not quite insider trading Going forward, signs for gold in the mainstream market remain mixed. QE is likely headed for a taper, even if we're not yet sure whether that's in the near or middle term. This means gold's function as an inflation hedge for the broader market is likely to become less relevant. But apocalyptic goldbugs seem genuinely unconcerned with mere dollars if it makes it possible for them to hang onto more gold. According to Madison, "This recovery is temporal, elusive to them. It's based on us borrowing money, as far as they're concerned." Inflation is still the bugaboo: "The folks here recognize that the Fed's digital printing of money is reducing the value of any non-hard asset. We realize that property, precious metals, and commodities will only increase in value while currency will drop," says Tea Party member Cillo. It's difficult to quantify the relationship between these ideas and the real market. Glenn Beck, Alex Jones, and Ron Paul have huge combined audiences, but these are individual rather than institutional investors. And obviously, if they were market drivers in themselves, their unsubtle insistence on gold as the only decent store of value would have kept the dollar price trending upwards indefinitely as the economy itself shut down in the ultimate self-fulfilling prophecy. By contrast, as mainstream economists have pointed out, the current scenario reflects increasing faith in the overall economy and a hopeful shift of capital "from rocks to stocks" -- toward support for constructive human endeavors. Even if they're not all that directly influential, investors can gain insight from these outsider ideologies -- the rigidity and doomsaying of the most extreme goldbugs is an opportunity for reflection on gold itself. The market price of gold on any given day is made up of a very small slice of industrial value combined with a huge helping of psychological premium -- the self-fulfilling prophecy that gold is the ultimate secure storehouse of value in uncertain times. According to Cullen Roche of the Orcam Financial Group, "There's an explicit premium built into the price of gold because it's always seen as an alternative to the fiat money system." But, as Preppers' Alan Madison is quick to point out, even that's not nearly as timeless as the likes of Glenn Beck and his attentive followers would like to think. "Gold, in their mind, is eternally useful as a trade item ," he says. "Five hundred years ago it was salt, and suddenly it became gold. Or Whale blubber -- once that was used as a power source." Madison's not sure that gold's value would hold in the case of a real economic catastrophe. "It's more mythological than anything else." Posted in: Alex Jones, Ben Bernanke, conspiracy, Federal Reserve, Glenn Beck, gold, gold bugs, inflation, Ron Paul Exclusive: Glenn Beck's company makes how much? Glenn Beck doesn't just hawk gold, he mints it. FORTUNE -- Glenn Beck's right-wing media network TheBlaze is generating between $35 million and $45 million in revenue per year, according to information obtained by Fortune. Beck's broader business empire, which also include his eponymous radio program and speaking tours, brings in more than $80 million annually. Beck launched TheBlaze as a news and opinion website back in 2010, and later expanded into MORE Dan Primack - May 6, 2013 4:55 PM ET Posted in: Glenn Beck, TheBlaze, Venture Capital Most Popular

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Majestic Gold Reports Fourth Quarter 2012 Gold Production VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/14/12 -- Majestic Gold Corp. (TSX VENTURE:MJS)(FRANKFURT:A0BK1D) ("Majestic" or the "Company") is pleased to announce that it has received a preliminary report of gold production from the Song Jiagou gold mine for its financial quarter ended September 30, 2012 ("Q4 2012"). Song Jiagou gold production by quarter for FY 2012 is detailed in the following table: Quarter Gold Production (ounces) Q1 2012 4,738 FY 2012 Total 18,969 Further details regarding results of operations for the Company and its Chinese subsidiary, Yantai Zhongjia Mining Company Limited ("Zhongjia"), including revenue from gold sales and profitability, will be set out in the Company's annual management discussion and analysis and annual audited consolidated financial statements. The Company expects gold production to increase during the next nine months toward the Company's goal of 100,000 ounces per year as Zhongjia commences to process the higher grade ore from the main ore body. Over the past four quarters, Zhongjia has processed all mined materials, including material considered waste in the Mine Plan, resulting in a mill head grade lower than the grade projected for the main ore body. This practice will be continued until the planned upgrades to the onsite assay lab have been completed. The lab improvements will include the addition of fire assay equipment and the expansion of lab facilities to allow more samples to be processed on a daily basis, resulting in more detailed and timelier information for the mine operator. These upgrades will allow the Company to implement improved grade control, resulting in higher head grades for ore delivered to the mill. "We are very pleased with the results to date," stated Mr. Rod Husband, CEO of Majestic Gold Corp. "Annualized gold production of almost 19,000 ounces is consistent with our expectations based on our Mine Plan and indicates steady progress toward our production goal of 100,000 ounces per year when we reach the higher grade portion of the ore body." The geological and technical information contained in this news release has been reviewed and approved by Rod Husband, P.Geo., who is a qualified person under the definitions established by National Instrument 43-101. About Majestic Gold Currently focused solely in China, Majestic Gold Corp. is a Vancouver, BC based company engaged in commercial gold production at the Song Jiagou gold mine in Yantai, China. Majestic Gold has forecast an average production for the life of mine at a rate in excess of 100,000 ounces of gold per year. (Wardrop Engineering Inc. NI 43-101 Technical Report dated February 2011). Pursuant to the terms of the Zhongjia joint venture, Majestic is entitled to 70.5% of net profits from gold sales. Additional information on the Company and its projects is available on SEDAR at www.sedar.com and on the Company's website at www.majesticgold.net. On Behalf of the Board of Directors MAJESTIC GOLD CORP. Rod Husband, P.Geo, President Certain statements contained herein may constitute forward-looking statements and are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Forward-looking statements are statements which relate to future events. Such statements include estimates, forecasts and statements as to management's expectations with respect to, among other things, business and financial prospects, financial multiples and accretion estimates, future trends, plans, strategies, objectives and expectations, including with respect to production, exploration drilling, reserves and resources, exploitation activities and events or future operations. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when, and if, a project is actually developed. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans, "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggestions herein. Except as required by applicable law, Majestic Gold does not intend to update any forward-looking statements to conform these statements to actual results. Production Disclaimer The Company's production decision was not based on a feasibility study of mineral reserves demonstrating economic and technical viability. The Company's production decision was made based on the open pit optimization resource model set out in the Preliminary Economic Assessment ("PEA") which takes into account the relatively low mining costs negotiated by the Company. The pit optimization that was conducted in the preliminary assessment generated a production schedule summary at grade cut-off of 0.30 grams per tonne Au. The PEA includes the inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will ever be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is available for review on SEDAR. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. (604) 681-4653 or 1-866-282-8398info@majesticgold.net www.majesticgold.net

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Ex-gov, hedge fund target Mont. mining company Comments | Print Source: United States News Originally published: Feb 25, 2013 - 5:54 pm BILLINGS, Mont. (AP) - A former Montana governor considered a dark horse candidate for the 2016 Democratic presidential nomination has joined a hedge fund's attempt to take control of the state's largest publicly-owned mining company. Less than two months out of office, Democrat Brian Schweitzer said he's intervening to save Stillwater Mining Co. from questionable foreign expansion plans he says could leave its 1,500 Montana jobs at risk. A New York-based hedge fund, the Clinton Group, submitted formal notice to Stillwater on Monday of its bid to oust the precious metals company's board of directors. If Schweitzer and the Clinton Group can persuade enough investors to support them, the current board would be replaced with a new slate that includes Schweitzer. The hostile takeover bid answers, at least in part, what's next for the effusive ex-governor. That question has been on the lips of many political pundits, with Schweitzer demurring and never completely stamping out speculation of anything from a primary challenge to Democratic Sen. Max Baucus in 2014 to a long-shot bid for his party's 2016 presidential nomination. The 57-year-old former governor brushed aside questions about his political future in an interview. For now, he said he's committed to reviving the fortunes of one of Montana's most high-profile companies. "I've got some time on my hands and I'd like to help turn this company around. It's an important company to Montana and it's an important company to me," Schweitzer said. "You've got a company that's draining its equity, and you can't run a mine if you don't have any money and don't have equity." In a statement issued Monday, Stillwater said the Clinton Group had "minimal experience in the mining industry" and failed to recognize the company's "positive momentum." Stillwater also said it had taken steps to ensure the company benefits from market trends, but did not offer specifics. The Billings-based company operates the only platinum and palladium mines in the U.S., deep beneath southern Montana's rugged Beartooth Mountains. Buoyed by high precious metals prices, Stillwater made two major purchases in recent years that executives said were designed to diversify its holdings. Those purchases were a palladium, copper and gold reserve in Canada, worth $118 million when it was announced, and a copper and gold reserve in the Andes of Argentina initially valued at $450 million. The company has since revealed that the palladium content of the Canadian reserve was overestimated. And the copper deposit in Argentina could cost up to $2.5 billion to develop, a questionable prospect in a country with unsettled politics that have prompted other companies to stay out, Schweitzer said. Stillwater last year sold a 25 percent stake in its Marathon project in Ontario to Mitsubishi Corp. for $81 million. Mining is expected to begin in 2017. Without a change in course, the governor said, Stillwater potentially faces the same fate that befell Montana's legendary Anaconda Mining Co. That copper industry giant cratered after the Chilean government took over much of its foreign assets in the 1970s, leading to large-scale layoffs among Montana miners. The former Montana governor owns 25,000 shares of Stillwater, worth roughly $325,000 at current prices, according to documents provided by the Clinton Group. He bought the stock after leaving office, between Jan. 23 and Feb. 20. The Clinton Group holds almost 1.3 million shares, giving it a 1 percent stake in the company. On Monday, Stillwater shares dropped 14 cents on the New York Stock Exchange to $12.85, a loss of about 1 percent. The overwhelming majority of the platinum and palladium mined by the company is used by automotive companies in catalytic converters, which help control pollution. Schweitzer said he wants the company to consider putting the foreign assets up for sale, particularly its property in Argentina. That comes after the Clinton Group in a December letter called for the retirement of Stillwater Chairman and Chief Executive Officer Frank McAllister. McAllister received $5.6 million in salary, stock and other compensation in 2011. Schweitzer said his interest in Stillwater was first sparked by news of that letter, which prompted him to contact the hedge fund soon after leaving office. The company's stock price has dropped by about two-thirds since it peaked at $40 in March 2000. The stock generally tracks with precious metals prices, but fell sharply after the 2011 purchase of Peregrine Metals and its assets in the Andes of Argentina. For the takeover bid to succeed, Schweitzer and the Clinton group will have to convince other company investors to get on board. But the reaction to the Peregrine purchase could be a signal of what's to come, said Rick de los Reyes, who manages an investment fund at T. Rowe Price Group that holds Stillwater shares. "The type of asset they went after makes no sense," de los Reyes said of the Peregrine purchase. "It's a completely undeveloped area in the far reaches of Argentina, with no power, no water. The nature of that is just ridiculous for a company that's been focused on a palladium mine in Montana." Directors at Stillwater currently make about $200,000 a year, a compensation level that Clinton Group Managing Director Gregory Taxin said was reasonable given the company's size. Taxin said Schweitzer was not being paid to be a nominee nor as a consultant, although he would be paid as a director if the takeover is successful. Stillwater's net income fell by 72 percent, to $33 million, through the third quarter of 2012. The company chalked up the decline to lower precious metals prices.

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hide Fed's Lacker says exit from bond-buying program must be quick Saturday, July 27, 2013 2:07 a.m. CDT Federal Reserve Bank of Richmond President Jeffrey Lacker testifies before the House Financial Services Committee hearing on "Examining How BERLIN (Reuters) - The U.S. central bank must end its bond-buying program quickly and an end to the program was "in sight", a senior Federal Reserve official said in a German magazine on Saturday. Fed Chairman Ben Bernanke jolted markets in late May with plans to ease back on stimulus efforts once the economy improves. The Fed is likely to reduce its monthly bond purchases later this year and stop them altogether by mid-2014, as long as the economic recovery unfolds as expected, Bernanke has said. "We must make our exit from the bond-buying program quick," Richmond Fed President Jeffrey Lacker, one of the Fed's most fiscally conservative officials and a persistent critic of the latest round of bond buying, said in WirtschaftsWoche. "An end to these bond purchases came into sight at the latest Fed meeting," said Lacker, who is not among the Fed policymakers who will vote on monetary policy this year. Lacker pointed to relatively low inflation and said a faster-than-expected fall in the U.S. jobless rate was sufficient to start winding down the program. "First of all we should end the monthly purchases of mortgage bonds as quickly as possible," Lacker said in the interview. It was not the central bank's role to give any sector preferential support, he said. Lacker said the United States had made hardly any progress in cutting its debt and had instead only come up with temporary solutions for several months at a time. He said he hoped the Fed's planned scaling back of bond purchases this year and rising interest rates would force the U.S. Congress to agree more quickly on reducing debt. "We need a sustainable solution and the sooner the better," he said. Whoever takes the helm at the Fed when Bernanke's term as chairman ends in January 2014 must find a way to exit the bond-buying program without shocking the markets, Lacker said. He said the quantitative easing program had done little to boost the economy, and the U.S. economy would grow by 2 percent this year and by no more than 2.25 percent next year - lower than the 2.8 percent in 2013 and 3 percent in 2014 forecast by other Fed policymakers - as consumers remain cautious. Lacker said more needed to be done on drawing up rules to avoid future government bank rescues and said stress tests done in the United States were a step in the right direction. (Reporting by Michelle Martin; Editing by Louise Ireland)

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Next Binary Economics: Paradigm Shift Or Cluster of Errors? by Timothy D. Terrell Also by Timothy D. Terrell The Independence of Capital Productivity "Capital Workers" Independent Productivity in Nature Labor's Income Share Binary Economics on Savings and Consumption "Sterile" Savings Binary Economics and Say's Law The "General Theory" Diagram Binary Economics, Property Rights, and Freedom Binary economics is a theory of economic growth that places emphasis upon the distribution of capital, rather than the quantity of capital or the productivity of labor. Its roots are found in the late 1950s, in the work of Louis Kelso, originator of the Employee Stock Option Plan. Regarded as a paradigm shift by its proponents, binary economics maintains that capital is productive independent of the labor input, and that most economic growth occurs as a result of capital accumulation, exclusive of increases in the knowledge or skills of humans. As binary economists Robert Ashford and Rodney Shakespeare explain, [Binary analysis] says that while humans undoubtedly make contribution to the growth, the capital assets such as machines and technological processes are making an even bigger, ever-increasing, contribution…. So, from a binary perspective, growth is primarily a function of increasing capital productiveness rather than increasing labor productivity. (Ashford and Shakespeare 1999, p. 7) Those who rely exclusively on their labor input as a means to earn income are therefore consigned to increasing poverty, since labor productivity is shrinking in importance relative to capital productivity. Interestingly, binary economists assert that growth is best promoted by spending on consumer goods, and that investment in capital by existing capital owners "sterilizes" the production of that additional capital. If the typically wealthy capital owners have a lower marginal propensity to consume (as the binary economists argue) than the laboring poor, then distributing capital more evenly would produce greater spending and therefore growth. Binary growth is a distribution-based growth that is presently impeded by the prevailing pattern of concentrated capital acquisition. Thus the binary paradigm reveals a potent distributive relationship between capital ownership and economic growth, a growth which is not comprehended by conventional economics and which is suppressed by conventional economic practices and institutions. (Ashford and Shakespeare 1999, p. xi) Binary economists may be few but they are prolific writers (Kelso and Adler 1958, 1961; Kelso and Hetter 1967; Kelso and Kelso 1986; Ashford 1990, 1996; Gauche 1998; Ashford and Shakespeare 1999; Kurland 2001), and have at least two active "think-tanks" devoted to promoting their work.[1] Though binary economists are not highly influential among orthodox economists, they do have a following (particularly among legal scholars, and other non-economists interested in economics). Recently binary economists have attempted to establish links between binary economics and the social justice, environmentalist, and corporate social responsibility movements. It is in these areas that binary economists have enjoyed most of their recent success. Some economists have taken an interest,[2] but few criticisms of binary economics have appeared (there is a significant "sympathetic" criticism in Roth [1996], discussed below). However, given the persistence of the theory, and its resurgence under the umbrella of "socio-economics," it deserves enough attention to expose its shortcomings. This paper examines the basic assertions of binary economics, and suggests that the proposed paradigm shift is plagued with theoretical difficulties. In the second section, the binary concept of independent capital productivity is discussed. The third section covers the binary view of savings and consumption, and the implications of Say's Law for binary economics. The fourth section evaluates the binary economists' plan for capital distribution. The fifth section contends that binary economics is fundamentally incompatible with a free market economic system, despite binary economists' declarations to the contrary. The sixth section concludes the paper with an assessment of the claims of binary economists as to the potency of their new paradigm. Binary economics relies heavily on the idea that capital is "independently productive." The productivity of labor is viewed as being independent of the availability of capital. Additional capital, therefore, is entirely responsible for the increase in output that results from it. Thus, binary economists argue that additional capital does not increase the productivity of labor but "displaces" it. Ashford writes, assume that in a pre-tool age, a person could dig a hole in four hours by hand. After the invention of a shovel, she can dig the same hole in one hour…. In binary terms, the productiveness has changed from 100% labor … to 25% labor and 75% capital … the worker contributes only one-fourth as much input, so her labor productiveness … has been reduced to only one-fourth of its former value. (Ashford 1996, p. 10) Because binary economists fail to recognize that labor productivity has increased with additional capital, and insist that gains in productivity have accrued solely to capital owners, they argue that the only way for laborers to reliably and consistently increase their income is to acquire capital as owners. If wages are related to the value of the marginal product of labor, merely to use another's capital as an employee would not increase income. As the production of goods and services changes from labor intensive to capital intensive, it is clear that the way in which every household participates in production and earns income must similarly change from labor to capital intensive. The workability of the economy — the continued democratization of its economic power and the continuous economic autonomy of its consumers — requires that capital ownership of undercapitalized consumers be progressively enlarged. This is the only alternative to income redistribution for providing consumer demand. (Kelso and Kelso 1986, p. 17) Roth has effectively pointed out some of the salient problems with this view of productivity (Roth 1996, pp. 58–59). Referring to Ashford's hole digger example, Roth argues that someone with human capital had to invent the shovel before it could be used, so the presence of the shovel is not independent of human capital. Also, Roth notes the presumption that the hole digger has no role in the "productiveness" of the shovel. Yet, absent the acquisition of the requisite knowledge — human capital — the hole digger could not use the shovel. Moreover, if the hole digger did not use the shovel, its "productiveness" would be zero. The labor and the capital together produce far more than the two factors could produce separately. Thus, it is not at all clear that "capital productiveness" replaces "labor productiveness." It seems clear that the stocks of human and nonhuman capital are — even in this simplified example — mutually interdependent; that the use of the shovel increases the value of the hole digger's human capital; and that use of the shovel by the hole digger enhances the shovel's value (Roth 1996, p. 60). The binary economists have failed to recognize the importance of labor and innovation in the development of capital. What will happen to most workers as ever more work is done by robots, computers and other forms of capital? … Unfree market theorists allege that it does not matter if capital assets substitute for labor in the productive process because, in some unspecified way, service and other jobs will increase and everyone will benefit. However, most of those service jobs are hardly likely to pay good wages (assuming there will be sufficient jobs). (Ashford and Shakespeare 1999, p. 60) This entirely ignores those jobs that are necessary to make capital, not consumer goods. While some labor might be replaced by a machine, new opportunities for labor will appear in the creation of that capital equipment. It is often said that the skills required to enable workers to use modern technology are higher skills that command higher competitive prices simply because a longer formal education is required to qualify such persons for these skills. These alleged "higher" skills are really only different skills and generally involve less overall knowledge, less effort, less risk, and less learning time than the skills they displaced. For example, the modern jet pilot requires less skill than the original bush pilot, even though he navigates with far more sophisticated and expensive capital instruments. A modern production line worker requires vastly less skill than the craftsman who preceded him in the marketplace; he may be needed only to check the behavior of robots. The function of human intellect in the economic world is to push the burden of production off labor and onto capital workers with their machines, that is, to "save work." (Kelso and Kelso 1986, p. 17) What of the value of the innovative labor that produced the jet engine, the satellite navigation system, or the robots? The operators may not need more skill, but the inventors are exhibiting quite a bit of skill. Binary economists have developed the term "capital worker" to describe someone who manages, or allocates, capital to its most valuable uses. Kelso and Kelso define a capital worker as "One who engages in economic production and earns income through his or her privately owned capital. A capital worker is not generally required to be personally present at the scene of production, although astute management of the ownership interest in capital is constantly required" (Kelso and Kelso 1986, p. 165). How is this different from someone described as a labor worker: "An individual who engages in economic production and earns income by employing his or her physical and mental abilities" (p. 168)? Of course, "astute management of the ownership interest in capital" would be impossible without employing "physical and mental abilities." As Ludwig von Mises wrote, [C]apital or capital goods [do not have] in themselves the power to raise the productivity of natural resources and of human labor. Only if the fruits of saving are wisely employed or invested, do they increase the output per unit of the input of natural resources and of labor. If this is not the case, they are dissipated or wasted. (Mises 1956, pp. 84–85) Thus, the distinction between the labor worker and the capital worker, which is critical to binary economics, is not at all clear. Binary economists roll the "astute management" of capital into their concept of "ownership" and do not consider it to be labor at all. Ashford and Shakespeare state that people "can … be productive merely by owning capital" (Ashford and Shakespeare 1999, p. 28). And, "from the binary perspective, the whole point of private property in capital is to enable people to earn without personally laboring" (p. 30; emphasis in original). Perhaps the absence of physical labor might be considered a distinguishing characteristic of a "labor worker." Yet even a person who sits in a chair trading stocks is laboring physically, if only to think and communicate by voice or keystrokes. To base the definition on the degree of physical exertion required would miss the point of the distinction. As we have seen, to be a successful capital worker requires labor in the form of insight and skill. Like physical abilities, insight and skill are not uniformly distributed across the population, and that is why capital is not uniformly distributed across the population. Not everyone is well-qualified to be a "capital worker." Yet binary economists perceive a great injustice in the failure of market economies to distribute capital evenly. Binary economists frequently allege that there are many examples of independently productive nonhuman factors. In an example similar to the hole-digging example above, Ashford and Shakespeare write, A man carries a heavy sack on his back for a mile and is exhausted. But with the help of a donkey, five sacks can be carried twice as far in half the time, leaving the man with enough energy to go dancing. From the conventional viewpoint, human productivity has increased by a massive 2000%. However, from the binary viewpoint, the great increase in per-capita output is not caused by an increase in human productivity. Rather it is caused by the fact that the nonhuman factor (the donkey) is doing most, if not all, of the extra work. Indeed, the man is doing less work by employing the donkey rather than doing the carrying himself. The productiveness of the donkey has both replaced and vastly supplemented the former labor productiveness of the man so that the donkey is doing approximately nineteen times as much work. (Ashford and Shakespeare 1999, p. 23. See also Ashford 2002b, p. 1540) A donkey is part of nature, and in its state of nature should be considered a natural resource rather than nonhuman capital. Humans together with only natural resources will have a very low standard of living indeed. Capital is necessary to have economic growth, and for a donkey to be considered capital instead of a natural resource, it must be "modified" in some way. Certainly, a donkey will move around independently of any action taken by humans. Yet it is still necessary for a human to alter the donkey from its natural state to make it useful for doing work. It must be domesticated, fenced in, and guided about for any cargo transportation to be accomplished. Humans thus convert, through their labor, a natural resource to capital and contribute to the productivity of that capital. Binary economists confront serious problems in attempting to determine the shares of income that can be attributed to the different inputs to production. In discussing similar attempts by the Marxists, Mises criticized "the illusion that it is possible to determine the shares that each of the various complementary factors of production has physically contributed to the turning out of the product" (Mises 1956, p. 86). If one cuts a sheet of paper with scissors, it is impossible to ascertain quotas of the outcome to the scissors (or to each of the two blades) and to the man who handled them. To manufacture a car one needs various machines and tools, various raw materials, the labor of various manual workers and, first of all, the plan of a designer. But nobody can decide what quota of the finished car is to be physically ascribed to each of the various factors the cooperation of which was required for the production of the car. (Mises 1956, pp. 86–87) Binary economists must also deal with the obvious fact of the increase in real wages over the last several centuries, that has coincided with the increase in capital. Roth presents data indicating that human income's share of aggregate personal income has been fairly stable over several decades. Furthermore, contrary to the binary economists' claims that only existing capital owners have been able to acquire new capital, Roth shows that capital asset ownership has increased consistently with the aging of the workforce, indicating that the workforce has not had any trouble adding new capital owners (Roth 1996, pp. 61–62). Roth concludes that there is "no unambiguous, 'scientifically correct' way to determine the effect of changes in the stock of nonhuman capital on human capital's income share (or vice versa)" (1996, p. 59). Even the binary economists recognize this difficulty: "there is great dispute … as to how to measure and understand the separate inputs of capital and labor" (Ashford 1996, p. 8). If the increase in real wages is not linked to the increased productivity of labor (made possible with additional capital and improved technology), then it must be artificial. Kelso and Kelso write, [Technological] advance does not generally make labor, as such, more productive. In fact, the opposite is true. As capital work supersedes labor work, the demand for labor work diminishes, and the value of labor tends to fall. Free-market forces no longer establish the "value" of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income. (Kelso and Kelso 1986, p. 17) In addition, binary economists cite labor's decreasing productiveness as the primary reason for poverty and state redistribution programs (Roth 1996, p. 61). "The myth of the 'rising productivity' of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable" (Kelso and Kelso 1986, p. 8). It would seem, then, that binary economists are begging the question. With no real evidence that capital productivity is increasing relative to labor productivity, binary economists assume that this shift is in fact occurring. We are then asked to believe that government intervention is masking the labor-to-capital shift they claim, and that market valuations showing an increase in real labor incomes are misleading. Binary economists tend to see savings in the Keynesian sense as detrimental to economic growth. In a remarkable disconnect in their system, binary economists fail to see the link between savings and the availability of funds to finance capital acquisition. Thus, the borrowing that they see as key to dispersed capital acquisition must occur without anyone having to postpone consumption and make those funds available. Kelso and Kelso write, "The business genius tightens his belt only in the first stage of his quest for real capital riches. Not thrift but his ability to finance capital acquisition out of the wages of his capital is the secret of almost all of his impressive fortune" (Kelso and Kelso 1986, p. 114). Ashford and Shakespeare say that "the patience and abstinence of the owner who may invest or consume" is not needed for "efficient capital acquisition" (Ashford and Shakespeare 1999, p. 128). This contrasts sharply with Mises's explanation of capital accumulation and of the source of the "impressive fortune" of the "business genius": The accumulation of new capital, the maintenance of previously accumulated capital and the utilization of capital for raising the productivity of human effort are the fruits of purposive human action. They are the outcome of the conduct of thrifty people who save and abstain from dissaving, viz., the capitalists who earn interest; and of people who succeed in utilizing the capital available for the best possible satisfaction of the needs of the consumers, viz., the entrepreneurs who earn profit. (Mises 1956, p. 85) The Kelsos see savings as a leakage out of the economy and therefore "sterile." A market economy is essentially a double-entry bookkeeping system based on the fact that each household in market economies has a double role of consumer and producer. Costs paid for production on one side of the ledger become personal incomes earned for consumption on the other. The economy itself is a vital organism engaged primarily in the current production of consumer goods and services for current consumption. Any sustained accumulation of capital-produced income in excess of that actually used to pay for things consumed will inevitably be channeled into the ownership of progressively greater capital-earning power. At the time when such capital-earning power exceeds the demands of a household's consumer lifestyle, it becomes sterilized and unusable, so far as the economy is concerned; it also actively violates the common law of individual property rights. (Kelso and Kelso 1986, p. 20) Because investing in more capital does not contribute to growth (in the binary view), any use of income for nonconsumptive purposes slows the economy. To some binary economists, apparently, capital is useless ("morbid," in their terms) if the owner decides to reinvest any income from it. Kelso and Kelso (1986) make this plain: "The earnings of morbid capital — capital in excess of that which can or will be used to support the consumer lifestyles of the owners — are altogether diverted out of the market economy for useful goods and services" (p. 128). Binary economists perceive a great injustice in the failure of market economies to distribute capital evenly. Thus, anyone who owns such capital — who fails to spend every dollar earned through capital ownership and management, is being irresponsible and selfish: "A participant in production who, through his or her superproductive power (normally excess capital accumulation), earns more income than he chooses to devote to consumption, necessarily beggars his neighbors" (pp. 35–36). And, "[morbid capital] beggars others by depriving them of the economic opportunity to increase their earnings as capital workers" (pp. 36–37). To some binary economists, there is a ceiling on consumer "needs," above which a person will choose only to invest in "morbid capital." Ashford and Shakespeare go so far as to say that existing capital owners "generally have little or no unsatisfied consumer needs and wants" (Ashford and Shakespeare 1999, p. 39). Of a household earning $10 million a year on "capital-earned income," Kelso and Kelso write, The family may live luxuriously indeed on a modest part of these earnings, spending $1 million or possibly as much as $5 million. But the rest will most certainly be invested in the most productive capital assets (and tax shelters) that skilled advisers can find. This will further increase the owner's excess capital income rather than channel it back into the system as payment for consumer goods and services. Such excess income has thus been sterilized with regard to the production-consumption market. It can only be used to acquire more producer goods. (Kelso and Kelso 1986, pp. 34–35) For binary economists, then, the key to economic growth is the increasing of demand for consumer goods, à la Keynes, rather than the increasing of the capital stock to allow greater production of consumer goods at lower cost. Yet capital goods must be produced if the capacity to produce consumer goods is to increase, and increases in the capital stock are actually integral to Kelso's "general theory" plan for capital dispersion and growth. Somehow, binary economists have even managed to conquer the capital/consumption tradeoff that has been with us from time immemorial. In a mature capitalist democracy, labor-earned income ordinarily would not be needed or used for capital asset acquisition. Commercially insured capital credit would be used instead. The costs of a capital asset would be defrayed in the financing process before its income yield would become available for personal use. Thus the economy would no longer have to choose between current consumption and capital investment — an artificial necessity that has long depressed market demand in Western industrial societies. (p. 37) Again, it seems that binary economics is missing a critical link between "capital credit" and the postponing of consumption. For someone to borrow for the purpose of acquiring capital, someone else must ultimately reduce current consumption. Through money creation by a central bank, that link can be temporarily stretched, but only at the cost of a subsequent recession. As Section IV indicates, this money creation is in fact the means by which binary economists hope to put their plans into effect. Ashford and Shakespeare go on to confuse the reason for the gains that occur from choosing capital accumulation over current consumption. "[I]n the conventional analysis, the rich are being productive by waiting. But, in the binary analysis, the rich are being productive by owning, not waiting" (Ashford and Shakespeare 1999, p. 126n). Capital owners do not prosper because they own, or because they wait. In addition to postponing consumption, they must do something requiring considerable skill — evaluate alternative uses for the unconsumed resources they own and choose the most productive. This task of evaluation may be contracted out to professionals, but the risk belongs to the capital owner alone. Also, capital owners still must evaluate the professionals they put in charge of allocating their capital. Of course, binary economists take issue with Say's Law (Roth 1996, p. 61). In their view, all income earned (through any means) must be respent on consumption if the economy is to grow. "Sustained economic prosperity in a market economy requires that earners and their dependents devote currently earned income to current consumption" (Kelso and Kelso 1986, p. 36). The output of the economy will be purchased in full only through consumption (p. 34). Production goods, one must suppose, do not count. Strangely, the presence of government redistribution is put forward as evidence of the impossibility of Say's Law: In assuming that employment-generated purchasing power will be adequate, both from the consumer's standpoint and the economy's, conventional finance makes a disastrous error and compounds it by ignoring the massive contradictory evidence. If consumers could afford to buy the economy's output from their employment earnings, income redistribution through government-levied taxes would be unnecessary. People would not need welfare, open or concealed. (p. 40) Supposedly, even consumer borrowing proves that the economy's output cannot be entirely purchased by "labor workers," so that economic growth is stunted unless their purchasing power can be increased (by distributing capital ownership to those who will spend it on consumer goods). In the absence of this purchasing power, consumers must borrow. In a world in which everyone is earning "adequate" income through labor and capital earnings, welfare and consumer credit both would disappear. In a binary economy, Kelso and Kelso argue, "[c]onsumer credit would not be desired, or even tolerated. No one derives consumer satisfaction by paying interest to others" (p. 40). This displays a fundamental misunderstanding of interest. Interest itself may not produce consumer satisfaction, but borrowers pay interest to persuade others to postpone consumption — so that the borrowers may enjoy the goods now. As long as people prefer goods and services now to goods and services in the future, there will be interest. Yet binary economists contend that consumption is unrelated to the interest rate: the conventional theory says that people will defer more (or less) from current personal consumption depending on the anticipated rewards for deferring consumption (or "waiting") (Ashford and Shakespeare 1999, p. 125). this prospect of deferred income (which determines the value of the capital) is itself seen as a function of consumer demand for the output of the capital which is in turn based on the individual worker's decision to work for consumer goods at the prevailing wage or remain idle. Thus, in the conventional analysis, the value of all goods and services (both consumer and capital) is basically a function of the work decision, which is in turn a function of human productivity. (Ashford and Shakespeare 1999, p. 126) It is apparent from this that the binary economists' misunderstanding of the interest rate is related in some way to a misapprehension of value theory. The Austrian understanding of value, at least, does not fit the description provided here. It is true that the demand for capital is derived from the value placed on the consumer goods that the capital produces. The demand for labor, as well, comes from the value placed on the consumer goods that the labor produces. But, to Austrian economists, the value of consumer goods is related to the subjective assessment by individual consumers of the ability of each good to satisfy personal goals. It is true that wages, and thus some part of the work decision, are based on productivity. But the productivity of labor is based partly on the availability of capital, and is not independent of capital (as pointed out above). The work decision is based on the opportunity cost of one's time — which may include the value attached to leisure time. To argue that the value of consumer goods depends on the work decision would be to reason in a circle. People choose to earn wages (versus remaining idle) to pay prices for consumer goods — prices which are dependent on the amount of wage-earning (versus remaining idle)? This is not the Austrian perspective, nor can it be reasonably called "conventional." Binary economists have devoted a great deal of effort to developing a plan for dispersing capital ownership. This plan is intended to allow the poor to obtain capital quickly by setting up "constituency trusts," which would hold capital for constituents in the manner of an employee stock ownership plan. Part of the plan would necessarily include restrictions on "cashing out" funds held in trust, so that the laboring constituents would not convert the invested funds to current income. Louis Kelso explained that these trusts would be funded by loans from commercial lenders, which would in turn obtain the funds from the central bank through discount lending. The loans would be insured by a commercial capital credit insurer, which would obtain reinsurance from a tax-supported public corporation. Kelso planned for the repayments on the loans to be made from the trust's initial earnings on the capital purchased (see Figure 1). The binary economists' plan would create a massive credit bubble. When the central bank lends money to the commercial lenders via the discount window, it would temporarily increase the money supply. The bank loans to the trusts would be used to purchase new stock from corporations, whereupon the corporations would purchase capital assets to expand. What binary economics overlooks is that in order to acquire these capital assets, the firm must entice people to give up current consumption of goods and services in order that resources may be devoted to production of capital goods. However, money creation by the central bank does not alter time preferences. People have the same internal interest rate, dictated by the intensity with which they prefer present goods to future goods. When capital goods are bid up in price through bidding from the constituency trusts, production shifts to capital goods instead of goods for immediate consumption. From this point on the inflation caused by the central bank begins to work its way through the rest of the economy. Workers employed in the production of capital goods have not become more willing to put off consumption, so as their higher wages are used to purchase consumer goods, the prices of consumer goods begin to increase. As consumer goods prices rise, workers in the capital goods industries require higher nominal wages to compensate for the decline in the purchasing power of their wages. The wage increases reduce the profits to capital asset production relative to production of lower-order goods. Firms engaged in production of higher-order goods must reduce production, or face bankruptcy. The capital production bubble bursts.[3] Now the constituency trusts begin to suffer, as the value of the stock they hold falls. Dividend payments fall, and constituents face lower incomes. Some of the loans from banks may not be repaid by the trusts, and the capital credit insurer must step in to cover the losses. If the losses are large enough, then the capital credit reinsurance corporation (CCRC) may have to cover the losses of the capital credit insurer. Since the CCRC is ultimately a taxpayer-backed corporation (like the FDIC or Freddie Mac), the taxpayers bail out the CCRC. The capital distribution to the "labor workers" has been funded with tax dollars, and the gross earnings on capital are no greater than when the plan was initiated. In sum, the entire scheme is nothing more than the sort of government-backed wealth redistribution that binary economists claim is inevitable with "conventional" economics. The scale of their envisioned plan would make this a far larger redistribution than is currently occurring. "The binary economists' plan would create a massive credit bubble." The level of inflation under such a plan would be severe. Ironically, the binary economists insist that their capital distribution plan would eliminate inflation. Kelso and Kelso write, "The entire design is calculated to negate inflation because it eliminates the chief cause of inflation, namely redistribution" (Kelso and Kelso 1986, p. 111; Kurland 2001). The logic here is inscrutable. Roth contends that the Fed's independence would be jeopardized as "need" is introduced to the criteria for these central bank loans (Roth 1996, pp. 65–66). The amount of discount lending that would occur under the binary economists' plan is not clear, but it would necessarily be large. Yet, if more discount lending would promote more rapid growth, why not make the initial discount window loan truly enormous, perhaps ten times the current US GDP? Certainly this would allow even more rapid capital accumulation, if the binary economists are correct. The limits to such lending are not made clear. As we have seen, the binary economists' plan for capital dispersion would produce a massive business cycle. It is also important to show that the plan is in no way compatible with a free market economy — as the binary economists claim. At its core is the government, reinsuring credit acquisition loans and setting up need-based criteria for such loans. As Roth wrote, "Good intentions notwithstanding, the binary property system would simply substitute a new political redistribution process for the extant process" (1996, p. 64). Besides, as Roth points out, the federal government already is the largest underwriter of financial risk in the United States (with student loans and home mortgage loans figuring prominently in the mix). The redistributive nature of these underwriting programs produces enormous losses (p. 64). more likely than not, the government's decisions would reflect the concentrated benefit-dispersed cost calculus: credit would generally be allocated to well-defined constituencies, while the (largely hidden) costs would be broadly dispersed across all taxpayers. This would be the inevitable consequence of binary financing; an outcome which would hardly be congruent with the goals of binary economists. (Roth 1996, pp. 64–65) Where the binary economists' antagonism toward the free market is most plainly seen is, perhaps, their proposed limitation on capital ownership. Kelso and Kelso want to set a limit on the amount of capital that a family can own. "[The state] must prohibit the sterilization and morbidization of capital ownership by those who seek too much capital-productive power" (Kelso and Kelso 1986, p. 33). Saving, apparently, would be a crime: "Economic health also requires vigilance in preventing families from accumulating more capital-earning power than they can or wish to spend on their own consumption" (p. 20). Kelso and Kelso also want to restrict or even eliminate bequests, as an extension of their proposed "principle of limitation." The state would step in to regulate intergenerational transfers and distribute assets after death. Property ceases at death…. The right to make gifts of one's capital and assets ceases at death. Transfers of property at death, either through institutions or by will, including their taxation, belong to the domain of positive law and public policy. This is also true of limitations on transfers, such as those to charitable foundations, intended to circumvent laws regulating testamentary gifts. Thus the principle of limitations extends to, and countermands, all stratagems to subvert it. The legal implementation of the principle of limitation — its application to every situation — is, of course, a task for federal and state legislatures. No specific legislation regulating a capitalist economy is more critical than this. (Kelso and Kelso 1986, p. 27) At least binary economists want to privatize public property in order to sweep more capital into the constituency trusts they have concocted (Kelso and Kelso 1986, pp. 121–22; Gauche 1998). The Kelsos argue from the de facto existence of government involvement in the economy, and prevalent opinion that it should be so involved, that this constitutes an obligation to be involved. "Is the federal government responsible for the health and prosperity of the American economy? … Today, both voters and officeholders take it for granted that the answer is yes" (Kelso and Kelso 1986, p. 109). Vox populi, vox dei. "At issue, then, is not whether government will assume responsibility for economic prosperity, but how it will choose to discharge its obligation to do so" (p. 110). The Kelsos are emphatic, and will brook no dissent: there can hardly be any basis for questioning the establishment of the Capital Diffusion Reinsurance Corporation (CDRC [CCRC in Figure 1]) as a U.S. government-backed capital credit reinsurance underwriter, supported by the full faith and credit of the U.S. government. This entity would fulfill a function that is already the government's but that the government is not carrying out in the most rational and purposeful way. (Kelso and Kelso 1986, p. 111) Federal and state governments have the duty to adopt a sound economic policy. It is also government's duty to take primary responsibility for interpreting, administering, and enforcing the policy of redemocratizing economic power…. If we want to redemocratize economic power, we must do it through a new binary national economic policy. (p. 122) To remove all doubt as to the legality of the binary economists' proposal, Kelso and Kelso suggest a modification of the 1946 Employment Act (15 U.S.C. 1021) to include reference to "capital workers" (p. 123). Ashford and Shakespeare argue that a true free market obviously has failed, because there are so many government interventions — bailing out big firms, subsidizing farming, research, etc., redistribution of income, etc. "[T]he redistributions continue and on a very large scale precisely because the market distribution of income has proved economically and politically unacceptable to almost everybody" (Ashford and Shakespeare 1999, p. 65). This is begging the question. A true free market does not work, they argue, because the government is in fact intervening to correct failings. Ashford and Shakespeare condemn hypocritical defenders of the "free market" for favoring all these interventions. Then they want to say that their hypocrisy implies that the free market must not work. This is clearly an ad hominem attack. "Saving, apparently, would be a crime..." Incredibly, Ashford and Shakespeare claim that binary economics is "more faithful to free market principles than the theories, critiques and proposals of even the most ardent 'free market' advocates" (p. 17). They refer to free market capitalism as "unfree, unfair, and inefficient market capitalism" (p. 10). It is called unfree because "although everyone is theoretically free to acquire productive capital, effective freedom to acquire it is unnecessarily denied to the many and enjoyed by only a few" (p. 11). Moreover, the binary economy is structured to operate in a way more faithful to free market principles than any existing economy. It is a true free market effectively open to everybody instead of a few. In accordance with true free market logic, it eliminates unnecessary market barriers so as to allow the law of supply and demand to work more efficiently for all people individually. It therefore offers a level of efficiency well beyond that which can be achieved in the existing unfree market economies. (p. 17) Later, Ashford and Shakespeare write, "In binary terms, true free market principles are those of open participation, voluntary exchange, and respect for private property" (p. 19n). This is a semantic game with the term "free market." These binary economists want to redefine a free market as an economy in which there is freedom from all constraints that might prevent a person from attaining command over capital assets. This definition inserts equality of individual capability as a precondition of a free market. A free market, properly understood, is one in which two individuals are free to voluntarily exchange their property without the coercive intervention of a third party. The binary economists' concept of freedom is egalitarianism. One might well ask, what if that person who owns so little capital in the "unfree" economy is less capable of sending those capital assets to their highest and best uses? What if that person has a time preference that is inconsistent with the postponing of consumption that is necessary to invest in capital? Is that person therefore less free? Yet the binary economists are arguing in their ideal world of dispersed capital ownership, everyone would be able to handle capital asset management with an equal degree of skill. The so-called "binary property right" actually strikes at the core of property rights. It is not mere hubris, then, when Ashford and Shakespeare call the binary property right a "paradigm-altering concept." It is "at the heart of the binary private property system and is the right of all people to acquire, on market principles, private and individual ownership of wealth-creating capital assets" (p. 7). And, "the basic binary property right is the right to acquire capital on non-recourse corporate credit and to repay the loan with the earnings of the capital acquired" (p. 47). The binary property right is … a right to participate in production and in market transactions with willing buyers and sellers of goods and services with respect for everyone's private property. It is not the right to compel a transaction or to barge in on, or prevent, the voluntary transactions of others…. Nevertheless, although the binary property right is a market right which respects the rights of others and requires voluntary transactions for its implementation, it is intended to be an effective right and not a merely theoretical one. In other words, it is intended to enable people without capital to compete in practice with existing owners for new capital acquisition. This is done by modifying the present legal and administrative structure to make the right effective in practice. (p. 48) Again, the binary economists want to have the voluntary nature of a free market but none of the constraints that might prevent a person from attaining command over capital assets. According to the binary economists, each individual has the right to engage in voluntary transactions to acquire capital (and a substantial amount of it). If an individual lacks sufficient wealth, creditworthiness, or income to purchase this capital, it must mean that he doesn't have an effective right. To grant the effective right to that individual means that someone is going to have to increase his wealth, creditworthiness, or income. Transferring wealth to that person, or requiring others to ignore certain factors relevant to his creditworthiness, is inconsistent with "respect for everyone's private property." Yet this is exactly what is required by the binary proposal for capital dispersal. In the view of binary economists, no one should be denied credit for the purpose of buying capital for any reason. Inadequate collateral, a poor repayment history, or any other justification a lender might provide for denying a loan are all swept aside as violations of the binary property right. Even the U.S. Constitution is supposedly consistent with the binary proposal: The essence of economic democracy lies in the elimination of differences in earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of economic opportunities are natural, proper, and desirable. But all differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy. (Kelso and Kelso 1986, p. 115) The alleged "right … to be adequately capitalized" (p. 25) is violated whenever someone accumulates "more capital than is required to meet the owner's consumption needs and wants and to free him or her from subsistence toil" (pp. 24–25). Any returns to productive work that are not immediately consumed are apparently illegitimate, to binary economists. The Kelsos go on: This is the essence of social injustice. It denies the capitalless majority of citizens their right to be productive — a right dependent in our industrial age upon effective opportunity to acquire, own, [p. 26] and protect capital. It denies them equal protection of the laws, which would give them equal access to the freedom and independence that capital ownership provides and enhances. It follows that if every household must own enough capital, no household can or should own too much because the aggregate of what is produced equals the aggregate power to consume generated by production. If the few produce what must be consumed by the many, the many are deprived of their power to produce for themselves and either become wards of charity or die of privation. The condition of too much is reached when a household or consumer unit's capital holdings produce more income than its members wish to spend and in fact do spend on consumption patterns, freely chosen by the individuals concerned, and to the prevailing state of technology. (Kelso and Kelso 1986, pp 25–26) Similar "rights" are mentioned elsewhere: a "right to good livelihood" is implied (p. 12), and Franklin Delano Roosevelt's claim that "every man has … the right to make a comfortable living" is approvingly quoted (p. 23). Binary economists also refer to a "right to produce goods and services" (p. 11). A right to produce requires the right to command resources necessary for production — and this implies an obligation on the part of others to provide those resources. If they are not voluntarily tendered to the person with the "right to produce," they may presumably be taken. A position more consistent with private property rights acknowledges that before trade no one has a "right" to the property of another. The "economic democracy" of the Kelsos strikes at the foundation of property rights. Ironically, even in the same page they celebrate the free market. How large, exactly, is the capital portfolio that each person should have? Binary economists link the size of the portfolio to the indeterminate "physical capacity of the economy," a nonsensical concept.[4] Ashford and Shakespeare say that the goal should be a "capital estate large enough to supply sufficient current consumer income to support at least one half of an affluent life style (measured in the context of what society as a whole can efficiently produce)" (Ashford and Shakespeare 1999, p. 49). "Reasonable" people, it seems, will stop increasing their consumption after a certain standard of living has been attained. "When one has acquired sufficient capital-sourced earning power to satisfy one's consumer needs and wants, sufficient to reasonably provide the living one wishes to enjoy, one has enough capital-oriented earning power." (Kelso and Kelso 1986, p. 29). Once one has "enough" capital, any excess would be violating the rights of the capital-deprived, so that government intervention is necessary. The state will also need to decide what a "reasonable" standard of living is: What constitutes a viable capital estate? How large should it be? In a free society that is a question for each household to decide for itself, subject to the power of government to enforce the limitation set forth in the common law of property. But the logic to which Congress must resort, both under the concept of economic justice and under the philosophy behind the Declaration of Independence and the Constitution, is the equal right of each consumer unit to the opportunity to produce under competitive conditions the income necessary to enjoy the standard of living it reasonably chooses for itself. "Reasonably" refers to the physical capacity of the economy. If its physical capacity is smaller than the aggregate of chosen living standards — a condition that modern technology makes highly unlikely — then Congress must, with equal protection to each, define a lower limit of viability that will prevent any capital-owning family from injuring anyone else's person or property or the public welfare. Social policy concerning family size will here become an essential political consideration. (Kelso and Kelso 1986, p. 27–28) Clearly, the binary proposal amounts to a severe attenuation of basic individual property rights. Savings would be illegal, caps would evidently be set on standards of living, and even family size would be regulated. "It is not clear from reading binary economists that they understand the 'conventional' economics that they are criticizing." The claims of binary economists can be quite extravagant, and they lack no confidence in the ultimate success of their new paradigm. Ashford and Shakespeare write that "the binary view of production … has momentous implications which will reshape the way people look at everything economic and much else besides. Those implications will eventually fill articles and books" (Ashford and Shakespeare 1999, p. 32). Kelso and Kelso make other bold claims: We can, in time, inoculate people against poverty…. [W]e can raise the earning power of the underproductive and prevent the sterilization of excess capital productive power accumulated by those who will not and cannot use it for their own consumption. We can tame, if not wholly eliminate, the business cycle in the American economy. We can plan and deliberately effect economic health, both for the national economy and for each consumer unit within it. We can indeed demonstrate for the world how to produce goods and services in such a way as eventually to make all consumers economically autonomous, as they were under nature's original economic plan for preindustrial humanity. (Kelso and Kelso 1986, p. 21)[5] In this society of evenly dispersed capital, there will be no need for welfare or charity. "Welfare, private charity, boondoggle employment, and other modes of redistribution might well be necessary as temporary political or emergency expedients. But once the democratic capitalist goals have been attained, charity and other forms of redistribution should no longer be needed" (Kelso and Kelso 1986, p. 37). The benefits of binary economics are said to extend even to a change of human nature, so that people will become happier with less: as all people acquire an increasingly secure capital base, it is conceivable that there will be a diminution in perceived human needs (which, in the case of some people today, amount to almost limitless dreams of conspicuous consumption) to a more balanced understanding of what is really required for human happiness. Fear of, and the reality of, material insecurity are probably the main reasons why some humans come to have almost limitless wants and greedy, highly possessive attitudes…. The binary economy, however, holds a potential for greatly improving attitudes because it provides a profound material security for all. (Ashford and Shakespeare 1999, p. 54) What it's all about: $6 Elsewhere the Kelsos claim that their "economic democracy" will eliminate inflation as well (Kelso and Kelso 1986, p. 26). Other binary economists believe that binary economics is also going to produce environmental purity and habitat preservation, because incomes will be so high that we can afford to produce using more expensive methods that are less damaging to the environment (Ashford and Shakespeare 1999, pp. 54–55). Binary economists stress the uniqueness of their "new paradigm." Yet the theory is riddled with severe problems. Milton Friedman, who once debated Kelso, called Kelso's "two-factor economics" a "crackpot theory," and with considerable justification, it seems. It is not clear from reading binary economists that they understand the "conventional" economics that they are criticizing. Many binary economists are not formally trained in economics.[6] Binary economics is, in sum, a cluster of significant theoretical errors masquerading as a market-friendly solution to our worst economic problems. Kelso's employee stock option plan is a legitimate method of simultaneously compensating employees and solving a pervasive principal-agent problem. Binary economics takes the ESOP and turns it into a fantastic Wolkenkuckucksheim, heedless of the massive inflation that would necessarily accompany its policy proposals. Timothy D. Terrell is assistant professor of economics at Wofford College and an adjunct scholar of the Ludwig von Mises Institute. Send him mail. See his archive. Comment on the blog. This essay was originally delivered as a speech at the 9th Annual Austrian Scholars Conference on March 14, 2003. It also appeared in The Quarterly Journal of Austrian Economics, Vol. 8, No. 1 (Spring 2005): 31–50. (PDF) Ashford, Robert. 2002a. "What Is the 'New' Corporate Social Responsibility?: The Socio-Economic Foundation of Corporate Law and Corporate Social Responsibility." Tulane Law Review 76: 1187–205. ———. 2002b. "What Are the Ways of Achieving Corporate Social Responsibility?: Binary Economics, Fiduciary Duties, and Corporate Social Responsibility: Comprehending Corporate Wealth Maximization and Distribution for Stockholders, Stakeholders, and Society." Tulane Law Review 76: 1531–578. ———. 1996. "Louis Kelso's Binary Economy." Journal of Socio-Economics 25 (1): 1–53. ———. 1990. "The Binary Economics of Louis Kelso: The Promise of Universal Capitalism." Rutgers Law Journal 22: 3–120. Ashford, Robert, and Rodney Shakespeare. 1999. Binary Economics: The New Paradigm Lanham, Md.: University Press of America. Gauche, Jerry N. 1998. "Binary Economic Modes for the Privatization of Public Assets." Journal of Socio-Economics 27 (3): 445–59. Kelso, Louis O., and Mortimer J. Adler. 1961. The New Capitalists. New York: Random House. ———. 1958. The Capitalist Manifesto. New York: Random House. Kelso, Louis O., and Patricia Hetter. 1967. Two-Factor Theory: The Economics of Reality. New York: Vintage. Kelso, Louis O., and Patricia H. Kelso. 1986. Democracy and Economic Power. Cambridge, Mass.: Ballinger. Kurland, Norman G. 2001. "A New Look At Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation." Journal of Socio-Economics 30 (6): 495–15. Mises, Ludwig von. 1981. The Theory of Money and Credit. Indianapolis: Liberty Fund. ———. 1956. The Anti-Capitalistic Mentality. Princeton: Van Nostrand. Mises, Ludwig von, Gottfried Haberler, Murray N. Rothbard, and Friedrich A. Hayek. 1996. The Austrian Theory of the Trade Cycle and Other Essays. Auburn, Ala.: Ludwig von Mises Institute. Roth, Timothy P. 1996. "A Supply-Sider's (Sympathetic) View of Binary Economics." Journal of Socio-Economics 25 (1): 55–68. Rothbard, Murray N. 1993. Man, Economy, and State. Auburn, Ala.: Ludwig von Mises Institute. [1] These are the Kelso Institute and the Center for Economic and Social Justice. [2] Binary economics has indeed found a home, of sorts, within "socio-economics," an interdisciplinary approach to the study of human behavior. Socio-economics seems almost agnostic about economic theory: Although seeing questions of value inextricably connected with individual and group economic choice, … socio-economics does not entail a commitment to any one paradigm or ideological position, but rather is open to a range of thinking that treats economic behavior as involving the whole person and all facets of society (within a continually evolving natural context). (Ashford 2002a, p. 1194) Socio-economics aspires to a rigorous, "holistic understanding of economic behavior" that is both paradigm conscious and value conscious, and yet largely paradigm-neutral and value-neutral. Being largely paradigm-neutral, socio-economics does not require the adoption of any particular school of economic thought. (Ibid., p. 1195) [3] For a more complete treatment of the Austrian theory of the business cycle described so briefly here, see Mises (1981), Mises et al. (1996), or Rothbard (1993, pp. 850–79). [4] Binary economists apparently regard the existence of temporarily idle capital (factory downtime at night, etc.) as evidence of unused physical capital. [5] Kelso and Kelso (1986), p. 21. Note here the goal of "economic autonomy" or self-sufficiency. If this means that people have greater ability to fulfill their own economic goals, this is fine. But if this means less reliance on others through specialization and trade, then this autonomy will lead to poverty. [6] This is not necessarily a problem, as many of the greatest insights in economic thought came from people who had no such training. Yet, for an organized effort to reform the discipline of economics, binary economics reveals surprisingly little participation from those schooled in the discipline. Louis Kelso himself had degrees in law and finance, Robert Ashford is trained in law, and Rodney Shakespeare has a degree in history. Shakespeare, co-author (with Ashford) of a major work defending binary economics, states that he "tried to study conventional economics but found that every book on economics gave him a headache" (Ashford and Shakespeare 1999, p. 464). From which he concluded that economics was fundamentally flawed. View Author Archive Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, SC, and an adjunct scholar with the Ludwig von Mises Institute.

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Upstarts ready to rule world's economyA research firm predicts the West's share of the global economy will be eclipsed by emerging markets this year. No wonder Tim Geithner's in China. EMAIL | PRINT | SHARE | RSS By Paul R. La Monica, CNNMoney.com editor at largeJune 3, 2009: 1:12 PM ET About the author ROAD TO RESCUE Home prices up for 1st time in 3 years New home sales: 'Really good news' Wall Street: Here comes the hard part 7 regional banks fail Banker: "TARP helped avert a global calamity" Are you open to the idea of buying a GM vehicle in the future? Yes, if the quality improves Yes, it's an American company No, I'm happy with what I drive No, they've lost me forever The S&P 500 has soared on U.S. recovery hopes during the past three months. But an index tracking emerging markets Brazil, India, Russia and China (BKF) has done even better. NEW YORK (CNNMoney.com) -- It's only fitting that General Motors, once the embodiment of U.S. economic might, decided to sell its Hummer brand to a Chinese manufacturer after GM (GMGMQ) filed for bankruptcy.We may not like to admit it, but it's time to get used to this fact: emerging markets such as China and India are quickly becoming the world's new economic powerhouses. In fact, according to a report from a leading economic research group released earlier this week, emerging market economies may overtake the U.S. and the rest of the Western world this year.The Centre for Economics and Business Research (CEBR), a London-based economic consulting firm, predicted that the United States, Canada and Europe will contribute 49.4% to the world's total gross domestic product in 2009. According to the CEBR, this will be the first time since the beginning of the Industrial Revolution in the mid-19th century that non-Western economies produced more than half of the world's GDP. The CEBR said it had originally predicted emerging markets would make up a bigger portion of the world's economy than the West -- but not until 2015. The firm said the resurgence of China's economy is the main reason why it expects the West's share of global GDP to dip below 50% this year. "We had expected this to happen, but not quite so soon. The West will have to start to get to grips with the fact that we are no longer dominant and cannot expect to have things our own way," said Douglas McWilliams, chief executive of CEBR, in a statement.Now the United States is still the world's economic leader. If the global economy were a basketball team, the U.S. is Kobe Bryant. But China is LeBron James (sorry, Cavs fans). In other words, China isn't the champ yet, but it's catching up fast. Along those lines, CEBR forecast that China will surpass Japan this year as the world's second largest economy. China is already the largest holder of U.S. Treasury notes and the country's second biggest trading partner. Those are key reasons why Treasury Secretary Tim Geithner is in China this week: he's trying to make nice with our largest creditor and a key market for exports. It's smart to do so.Talkback: Are you concerned by the increased economic clout of China, India and other emerging markets? Leave your comments at the bottom of this story. After Chinese leaders expressed concerns earlier this year about how much debt the U.S. government is incurring to bail out financial firms and stimulate the economy, it's important to convince China that the dollar is not going to be devalued into oblivion and that Treasurys will remain safe investments."China is now the largest of the U.S. creditors and its willingness to absorb U.S. Treasurys could be key to the success of the U.S. fiscal stimulus and banking sector rescues," wrote analysts for RGE Monitor, the economic research firm run by NYU Stern economics professor Nouriel Roubini, this week. "No wonder Treasury Secretary Geithner faced questions about the U.S. fiscal deficit reduction plan in Beijing."0:00 /03:04Falling dollar shockwavesThis doesn't necessarily mean that the United States is doomed to a massive economic fall from grace. In fact, it does not appear to be a coincidence that hopes of a U.S. economic recovery have helped lead a surge in stocks in China, India, Latin America and other emerging markets.According to mutual fund research firm Morningstar, emerging markets funds have actually outperformed the broader U.S. market since the rally began in March. Latin American stock funds, for example, are up a staggering 78% in the past three months, while Pacific/Asia funds (excluding Japan) are up 66%. The S&P 500, by way of comparison, is up about 35% during the same period. If nothing else, both the reaction to a potential U.S. recovery and the fallout from the problems in the U.S. housing and credit markets should prove beyond any shadow of a doubt that the notion of economic decoupling was a myth. America led the rest of the West into recession, as many European banks had massive exposure to bad mortgage loans in the United States. The credit crisis wound up contributing to a slowdown for China and other emerging markets. China's economy grew at its lowest level in nearly two decades during the first quarter.And now that the United States is showing some signs of economic stabilization, emerging markets have snapped back.So rather than bemoaning the West's inevitable slip in economic importance, investors need to embrace emerging markets and realize that interdependence is key to the global economy. "China and other emerging markets have tied themselves intricately to the U.S. economic system," said James Swanson, chief investment strategist with MFS Investment Management in Boston. "As the U.S. recovers, that means that there will be a lot of earnings growth coming out of China and other emerging markets like India and Brazil." With that in mind, Swanson said investors need to be thinking more about buying shares of multinational U.S. construction firms that will benefit from increased demand in emerging markets, as well as mining, energy and manufacturing companies in China, India and Brazil.So if companies such as Alcoa (AA, Fortune 500), Ford Motor (F, Fortune 500) and ExxonMobil (XOM, Fortune 500) are in your portfolio, you might also want to take a look at Aluminum Corp. of China (ACH), India's Tata Motors (TTM) and Brazil's Petrobras (PBR) as well. "U.S. investors can't have 80% to 90% of their portfolio in the U.S. anymore," Swanson said. "The old notion of having 5% to 10% in international stocks is outdated. Americans should increase their weight in emerging markets." Talkback: Are you concerned by the increased economic clout of China, India and other emerging markets? Watch video editions of The Buzz American CFOs more optimistic than Europeans China gives Geithner a warm welcome - to a point GM unloads Hummer to Chinese buyer Is the emerging markets rally about to run out? Features

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[The Age | Text-only index] Macmahon to post loss before new future Mining services company MacMahon Holdings will post a loss of up to $20 million this financial year because of its troubled construction business.But the sale of the construction operations, approved by shareholders on Tuesday, will enable the company to focus on its better performing mining operations, it said on Wednesday.MacMahon made a net loss of $60.7 million in the six months to December 31, due to almost $61 million in writedowns on its construction projects.Leighton Holdings has bought all of the construction business' projects, and costs associated with the sale, plus ongoing losses, are expected to lead to a loss of between $10 million and $20 million for Macmahon in the full 2012/13 financial year, Macmahon chief executive Ross Carroll said.Macmahon shares were down two cents, or 5.9 per cent, at 32 cents at 1129 AEDT.Macmahon's mining business made a profit before tax of $38.4 million in the six months to December, up 20 per cent on the previous corresponding period.The business provides drilling, blasting and other services for clients including BHP Billiton and Fortescue Metals Group.Macmahon expects it to make a pre-tax profit of more than $85 million in the year to June 30."The recent growth of our mining business in a time of challenging market conditions highlights its sustainability and holds the company in good stead for its mining focused future," Mr Carroll said.Leighton chief executive Hamish Tyrwhitt said Macmahon's construction contracts would now begin transferring to the John Ho

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http://reason.org/news/show/america-is-still-hurtling-towards-t City AM & Reason.comAmerica Is Still Hurtling Towards the Fiscal CliffIt�s time to bring meaningful reforms to America�s unaffordable and outdated entitlement programs. Tom Clougherty It is telling that, according to a recent survey by Macro Risk Advisors, the biggest threat facing U.S. investors isn’t a meltdown in the eurozone, or a crash in China, or even a misstep by the Federal Reserve. In fact, their biggest fear is the uncertainty engendered by election season, and the “fiscal cliff” over which the United States is set to hurtle come January 2, 2013. The cliff in question is a $607 billion combination of tax increases and spending cuts, and is the result of failure by Congress in 2011 to reach agreement on how to reduce the federal deficit. Without political intervention, it will come into force just as our New Year’s Eve hangovers start to wear off. But how bad could it be? According to the Tax Policy Center, taxes would rise by more than $500 billion in 2013, as almost every tax cut enacted since 2001 would expire. Average marginal tax rates would rise by 5 percent on labor income, by 7 percent on capital gains, and by more than 20 percent on dividends. Almost every American will be hit. Most will feel the impact of a rise in payroll taxes and higher income tax rates, with middle-income Americans facing an average tax increase of almost $2,000. Those on low incomes will suffer the withdrawal of tax credits, while high earners will face punitive taxes on high-end health care plans and a squeeze on their investments. You don’t have to agree with President Obama’s former advisor Christina Romer—who estimates that increasing taxes by 1 percent of GDP leads to a 3 percent reduction in GDP overall—to see that tax rises of this magnitude are likely to be very damaging, especially in the context of an anaemic and largely jobless economic recovery. But even avoiding these tax rises wouldn’t leave the U.S. with a rational, pro-growth tax system. Policy makers desperately need to comprehensively reform the code, eliminating a maze of exemptions, deductions, and special favors, while cutting rates across the board. Unfortunately, that’s not how Washington works. When it comes to the spending cuts, the story is rather different. Here, at least, the threat to U.S. economic health is vastly overstated. The lion’s share of the scheduled cuts come courtesy of the Budget Control Act of 2011, which mandates automatic cuts of around $109 billion a year, starting on January 2 and continuing until 2021. That sounds drastic, but should be put in context. The federal government has run a trillion-dollar deficit four years in row, and currently borrows 30 cents of every dollar it spends. It barely raises enough revenue to cover “non-discretionary spending” on things like pensions, debt interest payments, and health care for the poor and elderly—let alone to fund national defense (where America spends five times as much as its nearest competitor, China) and other government programs. Such profligacy may be manageable now, with treasury yields at record lows, but bond markets can be capricious. The U.S. is storing up enormous trouble for its future, even before you consider the impact of inexorably rising health care costs and an aging population. Moreover, these automatic cuts are calculated against a baseline of projected spending increases. As Mercatus Center economist Veronique de Rugy has pointed out, “After the initial cuts, spending will grow by $1.65 trillion, as opposed to $1.8 trillion, between 2012 and 2021.” Defense spending—the target of half the automatic cuts—will initially fall to 2007 levels (in inflation-adjusted terms) and then return to 2012 levels by 2018. So while these cuts will undoubtedly pose an administrative challenge, they are hardly the public sector apocalypse—or the open door to America’s enemies—that their critics would have you believe. Indeed, the problem with the fiscal cliff spending cuts is not that they go too far, but that they don’t go nearly far enough. They entail no meaningful reforms to unaffordable and outdated entitlement programs at home, and they impose no serious restraint on America’s trigger-happy interventionism overseas. They’re a start, but that’s all. In the long run, the U.S. needs to do the same thing as every other Western state: Radically re-think government from the ground-up and question absolutely everything. Fiscal cliff or no fiscal cliff, the 112th Congress has shown itself spectacularly ill-suited to that task. One can only hope its successor will do better. Tom Clougherty is managing editor at Reason Foundation. This article was originally published at reason.com. An earlier version appeared in City AM, a London-based business newspaper. Tom Clougherty is Managing Editor, Research

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Sustainable Log Mark Brandon is the Managing Partner of First Sustainable (http://www.firstsustainable.com), a registered investment advisory catering to socially responsible investors. In addition to Socially Responsible Investing (SRI), he may opine on social venturing, microfinance, community investing, clean technology commercialization, sustainability public policy, green products, and, on occasion, University of Texas Longhorn sports. Are Green Consumers Gullible?As an advocate for all things green and sustainable, I am often peeved by the firms that feel it is their God given right to charge a massive premium for sustainable products. All of us in the business have read the LOHAS and Cultural Creative Market Research. Sure, it shows that the green consumer is often willing to pay a 20 percent premium for a product to know that its creation conforms with certain social values. However, charging a Whole Foods-like premium for everyday commodities will always keep the movement relegated to the elite types who can afford it. The typical Wal-Mart shopper, who, by the way, outnumbers the LOHAS crowd by a significant margin, will rarely buy "fair trade" coffee at $9/lb when you can get Folger's for $2. And, until the everyday shopper embraces sustainable values, our impact will be minimal.The window for making an impact with a new sustainable product or business model is getting smaller and smaller. Although this is probably so in any industry, once a market is demonstrated, the marketers among us stink it up with off-base, fraudulent, or misleading claims. Fair Trade coffee is one of those. What started out as a noble idea -- committing to give rural farmers better than market prices so that they can afford subsistence -- has now been taken over by brands that expect to charge 200% more by slapping the words "fair trade" on the label along with some bucolic scenes of Latin American peasants. Coffee is already a global commodity, and even moderately priced bags of beans carry a magnificent margin. The same can be said for organic milk now. Paying a 100 percent premium for a gallon of milk is now more than likely to by you a fancy label with pictures of dancing cows and nothing more (see a post a few weeks ago concerning Dean Foods and Horizon Organic). When there is no official definition, loose regulation, no oversight of the use of terms such as "organic", "fair trade", "all natural", "herbal", "sustainably harvested", etc., we invite abuse.In the investment field, I have to look in the direction of the Domini family of funds, though it pains me to do so. This week, they approved a move of their KLD Social Index fund to active management. Index funds are a commodity, and the primary measure of their worth is the expense ratio. Where Vanguard charges 20 basis points for their socially screened fund, Domini tried to get away with 80 basis points. Management will tell you that this was because of their size, relative to behemoths at Vanguard, but I see that as a bunch of bunk. An index fund is on auto-pilot. Trading costs would be minimal, even at a firm of Domini's size. There are no research costs. The only thing they have to pay is for annual prospecti, statements, confirms, regulatory registrations, and presumably a license fee to KLD. So, after several years of sub-par performance , they have decided to now call their fund "actively managed", which means they will trade the markets in an attempt to beat it. By definition, an index will underperform its benchmark by the sum of its expenses, so either Domini set themselves up for failure, or they must have believed in gouging green consumers.This move is unconscionable for shareholders. First, re-balancing a portfolio will create immense capital gains taxes, which have to be distributed to shareholders. Management says they will be "strategic" about this, which to me, means they will pretty much stay with their index and only move to active management slowly. Only now, their expense ratio is in line with other actively managed funds. Second, actively managed funds are usually a bad bet for investors for the same reason expensive index funds are bad: their expenses are too high. Frightfully few actively managed funds exceed their benchmarks over a three year period. On average, actively managed funds underperform their benchmarks by the average expense ratio, which is 1.57 percent (almost 8x the aforementioned Vanguard index fund).If you believe in indexing, it is time to reduce or get rid of your holdings in the Domini index fund. The Vanguard-Calvert index fund is a much better choice. posted by Mark Brandon at 4:22 PM Plug-In Hybrid Electric Vehicles -- Get Your Municipality on BoardMy local utility, Austin Energy, which happens to be one of the most forward thinking utilities in the country, along with municipal governments, non-profits, and even individuals have launched Plug-In Partners. The organization seeks to spur the manufacture of PHEV's by generating advanced demand for the vehicle. They do this by gathering advance purchase orders from fleet buyers. The video attached will show you the benefits of this program.With due respect to the pro-hydrogen crowd, PHEV's offer a much more sensible solution to curbing automobile emissions. Our H2 friends should focus on stationary applications of energy production. The technology and infrastructure exists now for PHEV's, plus the problems of transportation and storage of hydrogen are non-existent.The electric cars of the 1990's, recently eulogized in "Who Killed the Electric Car" had an enormous flaw. They could not be counted on for long trips. PHEV's solve this problem. While the 35-40 mile range on one charge of the PHEV's will take care of the average commute, long commuters and weekenders do not want to wait 8 hours for the battery to re-charge if they are travelling beyond range. PHEV's solve that by including a regular internal combustion engine for those times that it is required. The pundits are predicting that a PHEV could get 100 mpg, while at least one designer, AFS Trinity, have signed a Memo of Understanding with Austin Energy to supply their so-called "Extreme Hybrid Drive Train" which they claim will get 250 mpg. An equivalent "gallon" of electrical charge (the juice it would take to travel the same miles as the nationwide fuel efficiency standard) averages about 75 cents. This dollar savings is real money to the average car owner. Add in the environmental and national security benefits and this solution becomes the most compelling case for alternative fuels. This even beats ethanol, which as I've explained in previous posts, creates competition between fuel and food.Sign the petition, and if possible, call your city council members and urge them to become a Plug-In Partner. Most mid-sized to large municipalities have sizable fleets, and their demand could help make the technology affordable for us all. posted by Mark Brandon at 10:42 AM Is That $6 Gallon Of Organic Milk Really Organic?The Cornucopia Institute, an aggressive watchdog of the organic industry has sued Dean Foods (NYSE: DF), the makers of Horizon Organic Milk, claiming that the world's largest dairy concern does not conform to the USDA's National Organic Standards. The Institute alleges that Dean's grazing and pasturing amount to a "dog and pony" show, which if true, means that all of those $6 gallons of milk were not truly organic. Considering that, in my town of Austin, TX, the non-organic brands go for less than $4, the 50 percent premium also amounts to outright theft. In my household, we have been buying organic milk for years, so this story hits close to home. However, if Cornucopia Institute is being too aggressive, it could scare off other large corporate players from entering organic agriculture.According to the USDA's guidelines, organic milk must come from cows that are grazed in pasture. Additionally, there are guidelines about where, and how long cattle can be kept in confinement. Graze Magazine uncovered numerous ex-employees who say that proper grazing and pasturing techniques were used when VIP visitors, such as Whole Foods' (NASDAQ: WFMI) John Mackey, were touring the facilities. If true as alleged, then the milk should not have carried the organic label. The Cornucopia lawsuit is not the only black eye for Dean Foods. The Organic Consumers Association issued a boycott of Horizon products last year.Such conflict in organic agriculture makes one apprehensive. Of course, we would hope that corporations would live by the honor system and not cross the line. On the other hand, one of the primary drivers for going organic is the ability to charge a premium and get a little positive PR value out of being Green (aside from the intrinsic, non-economic reward of doing the right thing). If going organic also carries the prospect of unrelenting scrutiny by activists, then large corporate concerns might decide that the venture would not be worth it. Up until now, Horizon has been THE most successful organic brand, with margins that the rest of the dairy business can only dream about. Clearly, the best hope to ensure organic quality is for the large organic grocers (think Whole Foods) to make it clear that crossing the line means losing shelf space. This, too, would be a difficult move for those companies, since they, too share in the fantastic margins. After all, John Mackey is the CEO of a publicly traded corporation. Clever marketing by his company has sort of made him the standard bearer, like it or not.In any event, let's hope the allegations are not true. If they are true, I hope class action lawyers are paying attention. posted by Mark Brandon at 12:49 PM Headlines from Austin BloggersAs you can tell from the right-hand column, I strongly believe that the best way to reach a blogosphere is to contribute to it. Our latest feed tool is for Austin Bloggers. The meta-feed is created from the wonderful resource at Austin Bloggers. If you're a blogger, you should follow the link below, and copy the code snippet. Place the code snippet into your blog's template. Doing so helps traffic cross-pollinate amongst Austin Bloggers. The Progressive and Green Blogosphere tools on the right column cumulatively receive about 150,000 page views per week with thousands of clicks being referred between like minded bloggers. It may take some time to get to that point, but we can do it. I hope you're on board. Just follow the link below.Click Here To Copy The Code Snippet Pensions Strengthened by CongressCongress took the unusual step of accomplishing something meaningful in the field of pension reform, and the effects could be felt broadly, whether or not you yourself are covered by a defined benefit plan. To simplify the action, the law enacted last week accomplished three important things:1) It required a timeline for underfunded pensions to become fully funded. Nationwide, it is estimated that US Corporate pensions are only 85 percent funded, with the most profligate underachievers in the 55-60 percent funding range. The worst performers are clustered in the troubled auto and airlines businesses. United Airlines (NYSE: UAL) and US Air (NYSE:LCC) have already foisted their pension liabilities onto taxpayers because management could not find the discipline to either make reasonable promises to their employees or shore up their plans during good times.2) It mitigated liability on the part of the employer when recommending or providing investment advisory services, especially for defined contribution (401k and 403b) plans. On the surface, you might think this means a whole lot more to people in my profession, but consider that a frightfully low percentage of potential participants participate in their plan, and even smaller percentage are actively managing those funds in a way that will be sufficient to meet their long term retirement needs.3) The plan also enables employers to make compulsory deductions from employees' paychecks into the company-sponsored retirement plan. Although this may sound frightening from a personal property-rights standpoint, just consider that the default is being changed to participation, whereas before, the default was non-participation. This action may be the kind of "kick in the tail" that the public needs to start planning their financial futures.Although making these much-needed changes provides a glimmer of hope, it is somewhat disheartening that Congress lacks the will to address three even more important aspects of the nation's retirement plans:1) The Pension Benefit Guaranty Corporation (PBGC) which insures private pension obligations (think FDIC for pension benefits) operates in a way that only a government bureaucrat could love. Unlike traditional insurance, premiums for coverage bear absolutely no resemblance to the amount of risk that taxpayers assume. Clearly, firms such as General Motors (NYSE: GM), whose pension obligations promised to current and future retirees exceed shareholder equity by ten times, should be required to pay a higher premium per employee than other, more frugal companies. The PBGC's premium structure encourages employers to over-promise and under-deliver.2) As awful as the current private pension underfunding seems, it is a mere shadow of the sickly pension plans for public employees nationwide. As is typical of institutions with no profit motive, public employees are being promised ever more generous retirement benefits. The politicians who accede to these unreasonable demands are clearly lacking leadership, instead opting to trade political favors now for IOU's to be paid long after they leave office.3) All of this pales in comparison to the morass we face if Social Security funding is not put on a sustainable path. The Bush Administration learned a hard lesson about the so-called "third rail" of politics in 2005, paying a steep political price for floating some trial balloons. The fualt for this lies with both parties, and the consequences are that social security reform will most likely be left for future administrations. This is a shame, since the pain will be greater every year that action is deferred. Of course, this is a subject worthy of many posts. Slick GOP PR-Firm outed as Inconvenient Truth SpooferABC News has uncovered the identity of one of the most popular You-Tube spoofs, which mocks Al Gore's arguments in An Inconvenient Truth. It turns out that the supposedly amateur video originated with a PR firm that has Exxon Mobil (NYSE: XOM) as a client. I'll let you watch it for yourself. Ad-Sense and Overture Criminal EmpireThis is a little off of my typical fare, but I have to get this off my chest. I am firmly convinced that Google and Yahoo are knowingly perpetuating criminal activity in their content networks.As some of you know, I have a business promoting feed tools such as the ones in the right column. These tools aggregate the content of a blog community and containerize them. Other bloggers are displaying these tools, because they get to cross-promote their content throughout the community. The sponsors of the tool benefit by gaining pretty massive link popularity, which in turn, helps them gain on the search rankings. Info on this business is at http://www.viralinks.com.Anyway, I've been running PPC campaigns on Google, Yahoo, and MSN. None of them deliver anything of value. Here's how I know.I had a one-pixel image load with my home page, so I could know how long visitors were staying on the site. After noticing that scant few of the PPC visitors were staying, I had this pixel load 1 second after the home page loaded. This way, if the visitor did not load the pixel, then it would be clear to me that the visitor was not a real, human eyeball.As it turned out, a full 86 percent of the visitors from both Yahoo and Google failed to load that pixel. It is apparent to me that the vast majority of the ad spending, accounting for several hundred dollars was fraudulent. There is no possible way that 86 percent of thsoe visitors don't stay longer than 1 second.Noticing again that much of the traffic was originating in India, Moldova, and Hungary, I changed my settings for U.S. visitors only, and only natural search results. My click-throughs then plummeted to basically nothing.pnI did not have the same results for MSN, but it's not because they do things honestly. I put up a campaign with the new MSN Search in its first week. Despite projecting 3,000 clicks per month, they have only been able to deliver 2-3 per week. I complained to MSN. They told me that those projections are only "meant to be a guide". However, they had no response when I pointed out that even their projection for the number of searches was off by 97 percent. I mean, I understand that click-throughs are imprecise. Search queries are a known factor. Three months later, even though I know for a fact they have hard data on the number of searches for the almost 500 terms I picked, they still advertise the much larger amount. Obviously, this is a ploy to get users to sign up for the first time.The Search Engines have been scrambling to have the courts frame click fraud as "clicks originating from the same IP", but in fact, the clever fraudsters move past this technique a long time ago. Who can blame them for perpetuating this criminal enterprise? They have built billions of market valuation out of this model, even though it defrauds their customers. Just a hint that over half of their traffic was bogus would send their stock prices into freefall.I, for one, will never engage in another PPC campaign. Natural search is the way to go. And, by the way, since I am in a position to shamelessly plug, the Viralinks system goes a long way to achieving this. Movie Review: Who Killed the Electric Car?A strange thing has occurred in my movie-going habits lately. Usually a consumer of the usual summer fare (minus the inanities of super-hero sequels), the last 3 films I have paid full price to see are documentaries, including Al Gore's An Inconvenient Truth and United 93. Ok, so I realize that the latter is not necessarily a documentary, but it was so true to the story that it felt like one. On Friday, I saw Who Killed The Electric Car, which chronicles the birth and demise of the Zero Emissions Vehicle.In 1990, the state of California mandated a certain percentage of cars sold in the state to have zero emissions by a certain date. The auto manufacturers scrambled to come up with a ZEV. The most ambitious, most popular, and best seller was the General Motors EV1. These cars were plugged in and had a range of approximately 125 miles, more than enough for the average commuter to make it through the day on one charge. Enthusiasts loved it because of its pick-up, quiet operation, and (since this is Hollywood, after all) its cool factor. After a few years, despite robust waiting lists, the auto companies claimed there was little demand, and over the next several years, the car died a slow death. Because all EV1's were leased and not sold, GM repossessed every single EV1 and had them crushed.Without their beloved cars, conspiracy theories were developed assigning blame on the car companies, the oil companies, federal politicians, state politicians at the California Air Resources Board, consumers, and even backers of hydrogen technologies. Who gets the MOST blame is, of course, the point of the movie.Narrated by Martin Sheen, the movie is riveting in the way a Matlock episode is riveting. That is, you already know all the reasons and motivations for the crime at the beginning, but you still have to watch it. However, at the end, you have to hand it to the filmmaker for making the topic interesting.I have one criticism. The film devotes the first quarter of the film to people singing the praises of the EV1, but since I lived in California at the time this is all taking place, they never mentioned the one serious technological drawback of the cars. It is true that, as actor Ed Begley Jr. says in the film, that the Ev1 will "meet the needs of 90 percent of the people", his statement should be amended to "it meets the needs of the 90 percent of the people 90 percent of the time". On most days, the average driver can make it on 1 charge. It is those few days where they can't make it on one charge that is the problem. If you need to drive from LA to San Diego one day, you would need to stop for eight hours somewhere in Orange County to re-charge. Of course, finding a suitable re-charging station was a challenge in and of itself.Many of the rental car companies used EV1's. As it turned out, at LAX on the high demand days, the EV1's would be the last to go. Out of town travelers, with no idea how to plan for re-charging, would find themselves stranded in the middle of nowhere with no power outlet in site. Towing was the only option. As is the case with Priuses today, the charges would also not last 125 miles as stated in the marketing brochures. It was the old "up to" rule, where in the optimal conditions, it can make it that far, but in reality, it's never that far.The more virtuous among us (namely, my wife) would say that these are the times when you should plan for mass transportation or renting a car. However, I see the everyday driver looking at the possibility and just deciding to chuck the idea of the electric car.Gladly, new technologies are on the horizon to address these issues. A plug-in hybrid should have all the benefits of the EV1, while being able to fall back on gasoline in those rare cases where longer range is required. While leaving the cinema, we were greeted with people handing out fliers for plug-in organizations. The literature stated that recharging a plug-in hybrid would be equivalent to gasoline at 77 cents per gallon. We'll see.I give the film 3 stars out of 4. Name: Mark Brandon Location: Austin, Texas, United States Mark Brandon has 13 years of experience in the financial services business, helping customers assess and reach their financial goals. Brandon spent the early part of his career at nationally respected investment firms Fidelity Investments and Piper Jaffray. In 1997, he took on the role of Managing Partner at Daylight Online Brokerage, where he held the General Securities Principal and Financial Operations Principal designations, guiding the firm until its eventual sale to Yourtrade.com. In 2005, he opened First Sustainable, a Registered Investment Advisory catering to socially responsible investors. Customer funds are held by FolioFN investments and insured by the Securities Investor Protection Corp. Brandon obtained both undergraduate and graduate degrees from the University of Texas at Austin. He holds a B.A. in History (1992) and an M.S. in Science and Technology Commercialization (2005). He resides in Austin, TX with his wife and daughter. Socially Responsible Investing by First Sustainable Link Popularity Building by Viralinks Collaborative Law for Austin Divorce Best Digital Cameras Motorcycle Leathers Kichler Lighting Continuing Education for Lawyers Austin Contractors Previous Posts On HiatusI am announcing today that Sustainable Lo... Branson, Gore, and the $25 Million Virgin Earth Pr... Great New Site: Green Options Green junkies will... Are Americans Saving Too Much? Some leading econo... Business Week Covers Social Responsibility If you... 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Tax Justice Network Why tax havens cause poverty In trusts we trust The Swiss tend to be outraged when they are criticised for their fabled bank secrecy. They correctly argue in response that Anglo Saxon common law countries, which are so often the origin of the finger-pointing, routinely achieve even stronger and more devious forms of secrecy through trusts. TJN has always been extremely concerned about trusts, especially offshore trusts. Trillions of dollars’ worth of assets are likely to be held through trusts worldwide – three to four hundred billion through Jersey-admnistered trusts alone – so this is an issue of global importance.This long blog offers a simplified primer on trusts, to help foster better understanding of how trusts are used to create secrecy, to evade or avoid tax, and to get around rules, laws and regulations. It is illustrated mostly with reference to the United Kingdom, the original home of the trust concept, and to Jersey, a secrecy jurisdiction that has made it onto the OECD’s “white list”. It is simply descriptive: it is neither intended to be comprehensive and exhaustive, nor does it offer solutions for tackling abuse (something we intend to tackle in due course.)1.1 IntroductionMost people take it for granted that when they own an asset – a bank deposit, say, or a painting – it is a simple matter: they own it, and that is that. In fact, however, ownership is a more complex concept involving a bundle of different rights: these include the legal title to the asset; the right to an income stream from an asset; the right to control the asset and direct how it is used; and other things. Usually these rights are bundled together into one, and you don’t notice the difference. Yet these rights can and frequently are unbundled. For example, if you buy a house on a mortgage, you are the legal owner, but the bank or building society has rights to foreclose and take over the property if you default on the payments.Trusts are ways to unbundle different the aspects of ownership into separate parts. This can be done for valid and legitimate reasons, or for abusive ones.A trust typically involves three main parties. One party (“the settlor” or grantor or donor) -- typically a wealthy person, hands over control of an asset to a trusted second party (“the trustee”), perhaps a lawyer, who in turn controls the property on behalf of a third party (“the beneficiary”) who might be the settlor’s child, for example. The trustees are the legal owners of the asset (“the trust property”) but they are not the beneficial owners, and apart from fees the trustees should receive no benefits from the assets. Trustees are bound by a “deed of settlement” (or trust deed) in which the settlor lays out instructions about how the assets of a trust can be used; the trustee is bound by law to follow these instructions. Trusts are generally meant to incorporate this split of roles, responsibilities and entitlements (although as described below there are trusts, sometimes known as purpose trusts, for which there is no intended beneficiary.)(Contrasting the trust with the limited liability company may help illustrate this further. The owners of a limited liability company control it as beneficial owners: they have full control of the company through the company’s bodies – on behalf of themselves.)Many varieties of trusts exist. The U.S. Internal Revenue Service (IRS) provides a glossary here and the UK Revenue and Customs provides a clear outline of some of the main forms of trusts here.The historical origins of the trust mechanism help illustrate what is happening. They were first used, the legend goes, in the early Medieval period in Europe when knights (in effect, the settlors) headed off to the Crusades and left their property and land in the hands of trusted stewards (trustees), who would look after them on behalf of third parties – typically their wives and families (the beneficiaries) – under a set of clear instructions (the deed of settlement.)In more recent times trusts became used typically for inheritance tax purposes: people with assets (settlors) created trusts to pass assets to their children (beneficiaries) and these assets were managed on the beneficiaries’ behalf by trustees. For example: a settlor might say to a trustee: “here is a million dollars. You take it off my hands, and you are instructed to invest it; then when my oldest child is twenty-one you pay him a half of the current value; pay the remainder to my youngest when she is twenty-one.” The trustee should in theory be fully independent of the settlor. Again, although the trustee has legal title to an asset (so, for example, he or she can sell them – though the proceeds must go to the beneficiaries), the trustee is not the beneficial owner - so, for example, if a trustee becomes insolvent, creditors have no claim on it.A body of law grew up around these arrangements so that they have become enforceable, and an industry has grown up around these laws, often to provide services to facilitate them, and trust facilities have become replicated in many jurisdictions around the world.1.2 Q: Why does the settlor have to give away assets as part of a tax avoidance or evasion strategy? Doesn’t that drastic step more than defeat the original objective?It can be hard to understand why a settlor would want to give away their assets. To lose the whole asset seems like an oversize price to pay if the aim is, say, to cut the tax bill on the income from that asset.A first answer to this question is that the British upper classes, quite comfortable with sending their children away to be cared for by trusted strangers in boarding schools, also seem to be perfectly happy separating themselves from their money, to be managed by trusted strangers. This apparently light-hearted answer conveys an important point, however, that there is a significant cultural element here: people in Anglo-Saxon traditions have tended have grown to be more comfortable with trusts than are people from other jurisdictions.A second, more serious answer is that while the settlor has, in theory, given the assets away to a trustee, who has legal title to them, the settlor can still exert a measure of control over the assets. Offshore jurisdictions in particular allow very wide powers to settlors – which mean they can still pretend to have been separated from the assets, while in reality they exert a large measure of ongoing control and can, to all intents or purposes, be considered to be the real beneficiary. This can become a game of smoke and mirrors. Several examples of how this is done are given below.1.3 Q: How is secrecy obtained through trusts?This happens in several layers. The first two described below are specific to trusts; the others are techniques commonly used with trusts but which are common with other structures, such as companies, too.In a first layer, trusts create a legal barrier between the trustee, on the one hand, and the settlors or beneficiaries, on the other – and in the process this creates the potential for an information barrier in the same place as the legal barrier. Even if you can find out who a trustee is, the trustee may be bound by a confidentiality arrangement not to reveal who the settlors or beneficiaries are. Often, and especially in a secrecy jurisdiction, the trustee will be an anonymous trust company that specialises in being a trustee for many thousands of trusts, and there will be no obvious clue to suggest who the settlors or beneficiaries might be.A second layer of secrecy is typically provided for in onshore and offshore legislation, which may stipulate – as in the case of the Cayman Islands or Jersey – that trusts do not need to be registered. (A trust is just a legal instrument; it does not have its own legal identity which might require registration.) If there is no register of trusts, you may not know what you are looking for. For example, a Jersey trust provider, Appleby, said this:A trust is not a public document and does not need to be registered with the Jersey authorities. Furthermore, neither the settlor nor the beneficiaries will be the registered owner of any trust assets. As a result, a trust arrangement can be regarded as highly confidential.A third layer of secrecy may involve several layers. This might split the trustee, the settlor and the beneficiary between three different jurisdictions, with the assets themselves parked in a fourth jurisdiction (or many jurisdictions.) Not only that, but a trust might be layered upon another trust or another structure, itself split between two or three further jurisdictions. For example a trust’s assets may be shares in a company controlled by nominee directors in a jurisdiction where it is impossible to find out who the company directors are or what the company does. That company’s assets may also turn out to be deposits held in a bank account in a country with strong bank secrecy laws. This layering process can, and frequently does, go on for several more steps, making it fiendishly hard for the forces of law and order to work out what the trust is really about – if they can identify it in the first place.A fourth layer of secrecy, which does not only apply to trusts, involves the international protocols by which information is exchanged. Some countries simply refuse to exchange meaningful information with others, although this is becoming less common as a result of international pressure. Nevertheless, many generally agreed protocols such as the OECD’s standards of “exchange of information only on request” (as opposed to automatic, multilateral exchange of information) are pitifully weak, making it exceedingly hard to find out information even if you know what you are looking for (and frequently it is hard to know where to start looking in any case.) See more in our briefing paper on information exchange, here. One such protocol is the Tax Information Exchange Agreements (TIEAs). An official Jersey website says, for example:A high threshold therefore exists before the Jersey authorities will accede to a request under a TIEA. For example in the past year, there have been just four requests from the US under the terms of the TIEA. There is no automatic exchange of information under any circumstances and no ‘fishing expeditions’ for information. Strict confidentiality provisions in the agreement preclude any information being passed to third parties without the express written consent of the requested country.Not only that, but trusts constitute major loopholes in international treaties and arrangements. A good example is the European Savings Tax Directive which applies to income on bank deposits, but not to income from trusts. This may be amended.A fifth layer of secrecy involves the many other offshore tricks that assist secrecy, though these are generally not exclusive to trusts and will not be discussed in detail here. These might include, for example, “flight clauses” that require trustees and company administrators to transfer assets to a different jurisdiction at the first hint of investigation.In a slightly different context, when somebody dies trusts are often used in place of wills, as a way of keeping financial affairs secret; wills must be filed in a probate court to be executed, meaning that they become public documents. Trusts can stay secret.1.4 Q: where are trust assets actually located?This is important. If a trust is administered in one jurisduction, the underlying assets may be located anywhere. If a newspaper somehow finds out about this trust, it may say “a trust in Jersey” – but in fact although the trustees are in Jersey, the underlying asset will typically be held in London. In fact, Jersey serves as a conduit and a satellite of the City of London, sweeping up assets from around the world and parking them in London – even if the trust is supposedly located in Jersey.1.5 Q: How are trusts taxed?Trust tax law is a complex area, and the principles vary according to the jurisdiction, so this blog only gives some basic notions.In the UK, for example, trust tax is paid by the trustees (the legal owners of the trust property) out of trust funds. However, a trust beneficiary may also have to pay tax separately on the income they receive from a trust. (Sometimes inheritance or other taxes may also be paid upon the transfer of some property into trusts.) Yet trustees in Jersey, by contrast, do not pay Jersey income tax on certain common types of income, at least if the settlor and beneficiaries are resident elsewhere.Adding to the complexity, trusts may or may not produce income. For example, an antique painting held in trust constitutes capital, but it will not produce any direct income, whereas $100,000 sitting in a bank will produce bank interest. The income, and the capital, may go to different beneficiaries, and different taxes may apply on the different elements: income tax, capital gains tax and so on – each of which may be taxed at different rates. The UK, for example, currently has an income tax rate and an inheritance tax rate of up to 40%, and 18% on capital gains. Jersey, by contrast, does not have capital gains tax or inheritance tax, and it has zero tax on certain common types of income. UK Revenue and Customs give some basic principles here.1.6 Q: How are trusts used to avoid and evade tax, in theory?In summary, two main themes are involved.First, because a trust creates a distinction between the legal owner, the trustee, and the beneficiary, this complicates the issue of how to tax the trust. This creates many avenues for both avoidance and evasion.Second, because trusts create the potential for great secrecy, tax authorities cannot easily find the assets to tax them. This typically creates possibilities for tax evasion. Often the two themes: the legal distinction, and the secrecy, apply simultaneously.In theory, once a settlor passes the assets into a trust, he or she no longer owns it, so cannot be taxed on its income. So a settlor should not be a beneficiary too. If a settlor could say in the deed of settlement: “make all the assets available to me whenever I want them” then the tax authorities could judge them still to be the real owner of the asset – and tax them on the income. If the ownership were not really split, what would the point of a trust be? The property would be owned absolutely by one person, for own benefit.However, as explained above, if the settlor is able to pretend to let go of the assets in order to escape a tax bill, while not having let go of them in reality, then he or she may be able to enjoy the income or other benefits of the asset without paying tax. The question of whether or not the settlor has really become separated from the assets can be a legal grey area, raising difficult questions over whether this is avoidance or evasion.The U.S. IRS notes this, in a primer on trusts:Abusive trust arrangements often use trusts to hide the true ownership of assets and income or to disguise the substance of transactions. Although these schemes give the appearance of separating responsibility and control from the benefits of ownership, as would be the case with legitimate trusts, the taxpayer in fact controls them.Games of smoke and mirrors can also be played between the trustee and the beneficiary. The discretionary trust is an example, below.1.7 Q: How are trusts used for tax avoidance and evasion, in practice?A wide variety of other mechanisms are used to cut tax bills. Just a few examples are given below; new ones are being invented or modified all the time.One of the central mechanisms, as explained above, is for the settlor to enjoy benefits from an assets while pretending to have become entirely separated from them. (One might call this the “settlor’s pretence.”) Secrecy is often a counterpart of such schemes.Some of the world’s finest legal minds spend their time dreaming up schemes using these kinds of principles – generally, the more complex (“sophisticated”) they are, the harder it is for tax authorities or crime-fighters to penetrate.1.7.1 Permissive or "flexible" laws giving special powers to the settlorLaws in secrecy jurisdictions in particular are set up with the intention of helping create the “settlor’s pretence.” As one Jersey commercial website puts it:Jersey trusts are created and governed pursuant to the Trusts (Jersey) Law 1984, as amended. The 1984 Law is essentially a permissive law which provides, in effect, that the terms of the particular trust determine the duties and obligations of the trustee thereof.Note the word “permissive” and the suggestion of how the flexibility of offshore arrangements can create trust products tailor-made for tax evasion. The U.S. Congressional Research Service describes another way of achieving the settlor's pretence:"Trusts may involve a trust protector who is an intermediary between the grantor (settlor) and the trustees, but whose purpose may actually be to carry out the desires of the grantor."The Cayman Islands’ Star trusts are even more stark versions of the settlor's pretence. While Star trusts are used for many purposes, another commercial operator describes this possibility:The settlor has the power to make the trust's investment decisions and the trustee is under no obligation to ensure the investments are in the interests of the beneficiaries.Other examples include:1.7.2 Replacing the trusteesA trustee might, for example, appear to be independent from the settlor when the trust is set up, but then be replaced later by a more pliable trustee, or even by the settlor himself, in disguise, perhaps through another complex offshore secrecy arrangement involving trusts elsewhere.1.7.3 Sham trustsJersey’s sham trust is another example of the “settlor’s pretence.” Jersey Finance says this of its new laws introduced in 2006Among the amendments is the introduction of settlor-reserved powers. . . the powers that may be reserved by the settlor will include the power to appoint and remove trustees, to amend or revoke the terms of the trust and to appoint or remove an investment manager or investment adviserRichard Murphy analyses what this means:Jersey will now allow the creation of what can only be called ‘sham trusts’, although they’re calling them trusts with ‘reserved powers for the settlor’. What are those reserved powers? Well, the settlor can tell the trustee what to do, which means the trustee only has a nominee role. And the settlor can claim the property back (see “revocable trusts,” above.) . . . In other words, the settlor continues to have complete beneficial ownership of the asset and there is in fact no trust in existence at all, just a sham that suggests that there is. . . . This is a completely bogus transaction. I have no doubt that Jersey knew the new laws would facilitate tax evasion. Indeed, it is hard to see what other purpose they could have.”Belize, a 2008 US Senate report notes, offers something even more blatant:"In Belize you can be the grantor, the trustee, and the beneficiary, and have the trust considered valid."1.7.4 Revocable trustsA more specific way to achieve the settlor’s pretence is through a revocable trust (that is, the settlor could decide to revoke the trust and get their property back whenever they wanted.) In such a case, it is hard to see how the settlor has really let go of the asset if they can always get it back: trusts should in theory be irrevocable for the settlor to get the tax benefit. However, it can be hard for tax authorities to find this out or fight legal battles in support of a tax claim. Laws passed by Jersey in April 2006, for example, said that every single Jersey trust can now be revoked.Read more here. 1.7.5 Private Trust CompaniesAnother way to give the settlor more control is to appoint a Private Trust Company (PTC) as the trustee, then have the settlor (or perhaps a family member) be a director of the PTC, giving the settlor a significant degree of control. As one offshore promoter puts it:If you’re familiar with the concept of an offshore trust but always had issue with handing over control of your assets to a third party you are not alone. Many people fear that the establishment of a trust really leaves them in too tenuous a position regarding the protection and management of their own assets…which is why private offshore trust companies came into being. They give the settlor far greater asset control.In the Cayman Islands, for example, it is extremely hard to find out who a company’s directors are, so it can be hard to work out that the settlor has this measure of control.Similarly, Jersey Finance says this:A PTC (Private Trust Company) can be established in Jersey on a fast track basis within 24 hours and other than providing the name of the PTC to the JFSC, there are no other regulatory hurdles to surmount. For the reasons set out above, PTCs have become increasingly popular with high net worth individuals . . . . PTCs are also typically used to act as the trustee of family charitable or philanthropic trusts or where the assets to be held in trust are regarded as being of the sort which carry greater risk for a trustee than usual.In other words, you only need to provide the name of the PTC to the authorities, but not the underlying information. Note the section in bold text, and ask what this “risk” means. This is most likely to mean the risk of getting caught engaging in malfeasance?1.7.6 Discretionary TrustsA discretionary trust is one where the trustees can pay out income or capital to one or more of a group of beneficiaries, entirely at the trustees’ discretion. This is not about the settlor’s pretence. The beneficiaries have no right to demand income from a discretionary trust. Discretionary trusts can, for example, protect trust assets against the bankruptcy of a beneficiary: since a beneficiary has no claim to any specific part of the trust fund, none of it can be claimed by creditors in the event of the beneficiary’s bankruptcy.Yet from tax authorities’ points of view these kinds of trusts have another crucial feature: because no single beneficiary can be said to have title to any trust assets prior to a distribution, there is no obvious taxable asset for tax authorities to be able to get a handle on. This makes it a powerful weapon in the tax-dodgers’ arsenal.Illustrating how difficult it is for tax authorities to tackle these trusts, the Society of Trust and Estate Planners (STEP) has said of efforts by the European Union to update its EU Savings Tax Directive to include discretionary trusts:It would appear difficult to draft practicable trust-related amendments to the Savings Directive of the kind referred to in the Working Document which would be "litigation-Proof"The EU is likely to take a contrary view.1.7.7 Other mechanisms for promoting tax evasion1.7.7.1 SecrecyThe simplest is tax evasion through subterfuge: assets generating income and capital gains are parked in secrecy jurisdiction where the owner’s tax authorities are simply unaware of what is going on. This may be the commonest form of tax loss, though it is impossible to measure with any precision, and it is of course not only a problem for trusts.1.7.7.2 Bogus expensesBogus expenses might be charged against income at one layer. After these expenses are deducted, the remaining income is distributed to another trust, and the process is repeated until, in many cases, the income falls to zero. Tax is eliminated from the trust income by distributing all that income to the beneficiary; and tax on the beneficiary is eliminated through the claiming of bogus expenses to set off against tax. This scenario is a criminal matter.1.7.7.3 Complexity and jurisdiction shoppingIf the trustee, the beneficiary, and the trust assets are located in the right combination of jurisdictions, tax can often be avoided altogether without technically breaking the law. This is not always a simple matter: a German resident, for example, should generally expect to pay tax on their income and capital gains, wherever in the world they are realised. But some countries create categories such as the non-domiciled residents: usually wealthy individuals who are absolved of the need to pay tax on their worldwide income. This creates opportunities to cut the tax bills through jurisdiction shopping, again without technically breaking the law, though this end need not be achieved through trusts.A tax bill on a trustee can be made to fall upon a beneficiary, if so intended, perhaps because of where the trustee and beneficiary are located. So a trustee may distribute all the trust income to beneficiaries, then legally deduct these distributions from its taxable income, reducing its taxable income, and its taxes, to zero. If the trust is offshore, the tax rate on trust income may well be zero in any case. For example, the trustees of a Jersey trust are not liable to income tax on the income from trust assets where none of the beneficiaries is Jersey resident.Complexity is a classic support for secrecy. For example, you might have a trust whose trustees are a Jersey law firm (but which is not registered), whose trust assets consist of shares in a company in Luxembourg which has nominee directors. The company might have a bank account in Liechtenstein, but the bank account might be managed by a Geneva private banker, which invests the funds in Hong Kong. Many structures are more complex than this – and a secrecy wall must be penetrated at every step.As one former trustee put it:“You will not get any disclosure of who's behind them. There will be no register anywhere of who is the real owner, or who is the beneficiary. You will never find them for tax purposes – these are far more secretive than bank accounts under bank secrecy.”The IRS of the United States provides another example here. Other abusive schemes can be seen here.In the promotional literature, the euphemisms for ‘complex’ or ‘complexity’ being used to create secrecy are words like ‘sophisticated’ and ‘sophistication.’ These words should generally be taken as a red flag.Q. What else can trusts be used for, apart from tax evasion?Trusts can be used in a number of legitimate ways. For example, they can be used for the genuine charitable transfer of assets; or to hold assets for minors and those unable to handle their financial affairs.However, take a look at this list of other possible uses of a trust, from the Jersey Association of Trust Companies (JATCO)• Preservation of family property and protection against political risk• Tax planning• Avoidance of inheritance laws or probate formalities• Employee benefit trusts and employee share option schemes• Charitable trusts• Purpose trusts• Trading trusts• Unit trusts• Avoidance of exchange controls• Ownership of special purpose vehiclesIt is useful to unpack this list to understand its meaning. Note how many of these bullet point items refer to undermining the laws of other jurisdictions – that is, helping the wealthy (who can afford the fees) escape their responsibilities to the societies upon which they and their wealth depend.Note: “Avoidance of inheritance laws.”Is it right that a tax haven should get to decide whether wealthy individuals should be provided with facilities that enable them to escape the laws that normally affect the rest of us?Exactly the same could be said of “avoidance of exchange controls.” Whatever one thinks of exchange controls, if, say, a democratic developing country’s government decides it wants to impose certain types of controls to try and counteract massive capital flight by the wealthiest sections of society– is it right that tax havens should provide trust facilities to undermine that?“Preservation of family property and protection against political risk.” This is a complex area. “Preservation of family property” may well mean, in practice, “protection from the tax authorities” or “protection from creditors.” The latter often protects the proceeds of ‘take the money and run’ illegal activity that is a common feature of the international criminal underworld. “Protection against political risk” is typically a euphemistic term for “protection” against one’s own government and particularly its tax authorities and/or other law enforcement bodies.A trust provider in Jersey is more explicit:a trust can provide for the transmission of wealth in a manner which may not be allowed, and to persons who may not be entitled, in some countries.”In a similar light, another company boasts of “enhanced protection of Jersey trusts from adverse foreign court judgments.”Jersey Finance adds this:The validity of a trust governed by Jersey law will not be affected by any rights conferred on anyone under a foreign law.”In other words, ‘we will help you get around the laws of the place where you live.’____________________________________________BOXTrusts and Special Purpose VehiclesAs the JATCO list above notes: one purpose of trusts can be “Ownership of special purpose vehicles (SPV)” These kinds of bodies have been a central feature of the latest global economic crisis. Why are trusts often used for these arrangements?What trusts do, as we’ve noted, is to split ownership. If a company puts its assets into a trust, for example, it can be treated as if it is so that it is no longer the beneficial owner of the assets, then it can be arranged so that the assets are no longer bound by the regulatory or tax requirements of the jurisdiction where it is incorporated. A trust arrangement might help a bank, say, shift assets off its balance sheet. As one analysis put it, “the company (then) belongs to no-one.”SPVs are not only set up for tax reasons but for other specific purposes (which is why they are called “special purpose” vehicles – they may be used to ring-fence one part of a business, perhaps to prevent it from “contaminating” (through, say, uncontrolled losses) another part of the business, or vice versa. A company may want to, say, invite investors into a particular project, but protect them from risks inherent in the parent company itself. The trusts involved are often known as “purpose trusts” – which are neither charitable nor for obvious beneficiaries, but for a special purpose.Quite often, charitable trusts are involved. A famous example was in the case of the failed British bank Northern Rock, which was discovered to have a charity for children with Down’s Syndrome – with the charity unlikely ever to receive a penny from the arrangement, and even unaware that it was the beneficiary. The charity said:“We are investigating why our charity appears to have been named as a beneficiary of a Trust without our consent.”Why did Northern Rock do this? Because trusts need beneficiaries – although because of the way it was set up there was no real need to pay any money to beneficiaries: all the important business was between settlors and trustees. As one commercial analysis put it“A trust must have an identifiable beneficiary to exist and, for that reason, nearly all trusts include a long stop charity as a beneficiary in case all of the named beneficiaries should die. To use a trust for commercial purposes it is therefore necessary to employ a charitable trust whose real purpose is commercial.”While trusts have sometimes been used as special purpose vehicles themselves, often the SPV is an “orphan” company whose equity share capital is held by the trustees of a general charitable or purpose trust. _________________________________________________Q: What other mechanisms are used, apart from trusts?Other common mechanisms are anstalts (establishments, used in Liechtenstein) and stiftungs (foundations) and various other types of corporate entity. These are outside the scope of this primer.Q: What countermeasures are taken?Tax authorities in foreign countries routinely seek out, and take countermeasures against, abusive trust arrangements. Tax authorities try to determine the economic substance of a transaction, rather than take a purely legalistic view, and they can and do overrule what a taxpayer thought was a bullet-proof asset “protection” mechanism.The U.S. IRS, for example, would take a very dim view of a US taxpayer using a Jersey sham trust, and would not let the settlor get away with it, if discovered. Yet to do this the IRS must first find out that this is going on – the secrecy involved makes this hard, and Jersey will not volunteer this information.If the well-resourced IRS has enough trouble keeping track of these criminal or questionable arrangements, how much hope is there for countries with less well resourced or skilled tax authorities?Cautionary note: Confusingly, there are companies out there that call themselves "trust companies" or "trust services companies" which in reality are not directly related to the concept of the trust. One of these companies describes its services here.*Endnote Please add any comments, clarifications and queries underneath this blog (or contact TJN staff directly).Update: this was complemented in November 2010 by this article by François Valérian of Transparency International, about how trusts and other structures are used to move dirty money into the licit financial system. posted by TJN at 2:47 am Hi, excellent introduction to trusts. I have one point to add; one of the main purposes of trusts (in New Zealand) is to avoid paying creditors, and hence, undermining the ability of courts to enforce civil liability (and resonsibility). Currently in New Zealand domestic trusts are used for this purpose.Yours sincerely,Tobias Barkley Name: TJN The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens. www.taxjustice.net Links - July 21 Tax Justice seminar in Dutch senate Tax Justice in History: Thomas Paine, Citizen of t... TJN's 2008 accounts Friends Provident rejects tax dodging Does society need monsters? More on innovation Scratch his back Britain's industrial policy European Investment Bank - in tax havens

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Newsletter SignupTCF ArchivesDonate About TCF Century Reads Graph: State Finances Projected to Recover in 2013, but Second Fiscal Cliff Looms Post by: Benjamin Landy , on January 8, 2013 States, unlike the federal government, cannot run deficits. So when tax revenues dropped during the Great Recession, state and local governments were required to downsize rapidly—cutting spending, reducing salaries, and laying off more than half a million public sector workers between late 2008 and 2012. The American Recovery and Reinvestment Act (ARRA) of 2009 helped soften the blow, providing federal aid to states that helped close 30 percent to 40 percent of their budget gaps in 2010. According to the Department of Education, ARRA funding for state fiscal relief preserved or created more than 240,000 education jobs and about 44,000 other jobs during the fourth quarter of 2009. But because the Obama administration was ultimately unable to secure as large a stimulus as was needed, less than 30 percent of Recovery Act aid to states remained by the end of 2010. Public sector layoffs continued unabated through 2011 as stimulus funding dried up, creating a massive drag on the nascent economic recovery before leveling off in late 2012. That trend is set to reverse in 2013, according to the Pew Center on the States. "Through a combination of downsizing, changes in tax policy and sometime[s] the luck of having energy and commodities, some states have weathered the recession better than others. Iowa is looking at an $800 million surplus. Florida's is more than $400 million." Even California, infamous for its budget shortfalls, is projecting a $1 billion surplus by 2014-2015. The National Associating of State Budget Officers (NASBO) is also projecting a turnaround in the coming year, with state general fund revenues expected to grow 3.9 percent from fiscal 2012, surpassing pre-recession levels for the first time since 2008. According to their 2012 survey, nearly every state government expects they will need fewer budget-reduction strategies, like benefit cuts or layoffs, to fix budget gaps in 2013. The shift from budget shortfalls to budget surpluses means the improving state and local fiscal outlook should be a net positive for overall economic growth in 2013, after years in which state-level austerity policies lowered both GDP and employment. Mark Zandi, chief economist at Moody's Analytics, predicts state and local payrolls will expand by 220,000 in 2013, helping to offset the effect of federal tax increases and spending cuts, and keeping the current economic expansion on course. Still, "states aren't talking about new extravagant array[s] of new programs," according to a senior fiscal analyst at the Council of State Governments quoted by the Pew Center on the States. "'State Medicaid bills are continuing to surge, so whatever little surplus states might have generated will likely go back into that,' as well as programs that were put on the backburner during the recession, such as their unemployment insurance trust funds, pensions and infrastructure." More worrisome is the prospect of a second "fiscal cliff." Although state and local governments were granted a temporary reprieve when Congress delayed some $7.5 billion in planned spending cuts for education, health care, and other programs, they are unlikely to avoid both these and further cuts when budget negotiations resume next month. Browse by Category Economics & Inequality Sign up for our mailing list and stay up to date on the latest happenings at The Century Foundation Sign up for our mailing list and stay up-to-date on the latest happenings at The Century Foundation Send us an email or get directions to The Century Foundation’s offices. TCF Bookstore The TCF Bookstore is a curated collection of books and magazines that backup the mission of our organization. Visit Our Bookstore What We Work On New York City Office: One Whitehall St., Fifteenth Floor NY, NY 10004 DC Office: 1333 H Street, NW, 10th Floor All Content Copyright © 2014 The Century Foundation

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Two Sides of How Businesses are Dealing With Minimum Wage Increasesby Mike Dang April 9th, 2014The Wall Street Journal has a pretty even-handed examination of how increases in the minimum wage has affected businesses in various cities across the U.S., focusing on San Jose, Calif. where locals voted to increase the minimum wage to $10.15 hour in 2012. The State With the Highest Minimum Wage Is Outpacing U.S. Job Growthby Mike Dang March 5th, 2014From Bloomberg, a look at the minimum wage debate via the state of Washington, which has the highest state minimum wage in the country. Eating for a Livingby Mike Dang January 29th, 2014Instead, I'd like to point to this report by Reuters via Digg about a trend in South Korea called "gastronomic voyeurism." The young woman in the video earns $9,000 a month eating in front of a webcam for three hours a day and chatting with strangers. My stars. a mcliving wage Striking For Better Wages at McDonald’sby Meaghan O'Connell December 5th, 2013Fast food workers around the country are striking today, calling for the federal minimum wage to be increased to $15. labor Happy Equal Pay Day!by Meaghan O'Connell April 8th, 2014Today is not a day to celebrate equal pay between the genders, as that does not exist. By "equal pay day" we (we?) mean, Happy This is How Many Extra Days Women Would Have To Work To Make As Much As Men Did In 2013 Day. Ladies, we are done working for 2013 now, hypothetically! And boy am I tired. As you may have heard, women earn on average 77 cents out of every dollar paid to their male counterparts. Here are some more SAD FACTS, courtesy of the National Women's Law Center, who is covering the pay gap all week. labor Gap Stores Raising Its Hourly Wage to $10 Next Yearby Mike Dang February 20th, 2014 In a surprising move, Gap Inc. informed its employees on Wednesday that it would set $9 as the minimum hourly rate for its United States work force this year and then establish a minimum of $10 next year. Gap said this move would ultimately raise pay for 65,000 of its 90,000 American employees, including those at Banana Republic, Old Navy and other stores. Gap is making this move as many states consider raising their minimum wage, and as Republicans and Democrats debate a bill that includes a proposed increase in the federal minimum wage to $10.10 an hour by 2016. This is particularly interesting to me because I worked at Gap’s baby store in high school at the minimum wage of $6.25 an hour, which adjusted for inflation would be between $8 and $8.50 today. It’s notable that Gap is also based in San Francisco, which has a city-wide minimum wage of $10.74. California is set to raise its state minimum wage to $10 by Jan. 1 2016, and as the Times points out, by raising it’s hourly wage higher now, “Gap will help avoid a checkerboard of different wages in different states in which workers with several years’ experience might be earning $8.50 or $9 an hour and wondering why they earn less than new hires in California who will be earning a minimum of $10 an hour.” Gap CEO Glenn Murphy said this move would also go to support the company’s founders promise “to ‘do more than sell clothes.’” Photo: Wonderlane Corporate Profits Up, Wages Down, and a Call From 600 Economists to Raise the Minimum Wageby Mike Dang January 27th, 2014For the fourth year in a row, real median weekly earnings for full-time workers have fallen. Corporate profits, on the underhand have, have been on the rise. At Economix, Jared Bernstein unpacks the data and concludes that one of the few ways we can fix wage stagnation is through collective bargaining power. A Fair Day’s Pay for a Fair Day’s Workby Mike Dang December 2nd, 2013Arindrajit Dube, an associate professor of economics at the University of Massachusetts, Amherst whose focus includes labor economics, has an editorial about the rise and fall of the minimum wage. He writes that at the heart of the debate about wage standards is the idea of fairness—the Fair Labor Standards Act which established the minimum wage in 1938 was sent to Congress by President Franklin D. Roosevelt, who declared that our country should be able to provide working men and women "a fair day’s pay for a fair day’s work" and that "no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." Credit.com 17 Million Reasons to Raise the Minimum Wageby Elizabeth Warren, Credit.com March 25th, 2014I have 17 million reasons for wanting to increase the minimum wage. Yes, 17 million—the number of children whose lives would be a little more secure if their moms and dads earned at least $10.10 an hour. Minimum Wage Numbers, Here and Elsewhereby Mike Dang February 13th, 2014Bloomberg Businessweek has a fun graphic looking at the minimum wage by the numbers in the U.S. and a few other countries. When New Jersey Boosted Its Minimum Wage 20 Years Agoby Mike Dang December 17th, 2013Annie Lowery tackles the fast food/minimum wage debate this morning in the Times magazine, and unsurprisingly, the conclusions are what they have been: economists cannot agree on what will or will not work (some have argued that the New Jersey study above, for example, may not be a microcosm of what could happen nation-wide), raising the minimum wage alone will not eradicate poverty, and since the minimum wage has eroded over time and Washington has been lead-footed when it has come to increasing it, raising it in individual states and cities has been popular among voters. An Effort to Raise the Minimum Wage in a Mostly Blue Collar Communityby Mike Dang November 12th, 2013The state of Washington has the highest minimum wage in the country at $9.19 an hour, and voters in a small city south of Seattle named SeaTac may soon push it up to $15 an hour if voters pass a referendum known as Proposition 1. Many of the people who live in SeaTac work at Seattle-Tacoma International Airport and its nearby hotels earning an estimated $11 an hour for airline related jobs (in comparison, the minimum wage at San Francisco International Airport is $12.93 an hour), and if the proposition passes, it would double the federal minimum wage of $7.25. The editorial board at the New York Times writes: All of which makes $15 an hour sound too high. Hardly. Over the last half-century, American workers have achieved productivity gains that can easily support a $15-an-hour minimum wage. In fact, if the minimum wage had kept pace over time with the average growth in productivity, it would be about $17 an hour. The problem is that the benefits of that growth have flowed increasingly to profits, shareholders and executives, not workers. The result has been bigger returns to capital, higher executive pay — and widening income inequality. Efforts by the states and the federal government to raise the minimum wage are an important way to counter that dynamic. It’ll be interesting to see if the referendum passes at SeaTac, and if so, what kind of difference raising the minimum wage in a mostly blue-collar community makes. Photo: Spencer Thomas Older »

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hide FTC asks Visa for information on debit card service (Reuters) - The Federal Trade Commission (FTC) has asked Visa Inc to provide information on a debit card service that may have violated regulations related to the Dodd-Frank Act, the company said. The FTC's Bureau of Competition requested the company to provide information regarding violations of the Durbin amendment, Visa said in its annual 10-K filing with the U.S. Securities and Exchange Commission on Friday, The Durbin amendment, a part of the Dodd-Frank Act of 2010, lowered swipe fees that are charged by merchants every time a consumer makes a purchase using a debit card. The voluntary access letter was issued by the FTC on September 21 and the request focuses on information "related to the purposes, implementation, and impact of the optional PIN Debit Gateway Service", Visa said in the filing. However, the revenue generated by the service is not material to the company's financial statements, Visa said. The company disclosed in a May regulatory filing that the U.S. Department of Justice had asked for documents and information about its response to a new law and rules limiting debit card fees. Visa introduced a new fee structure in April called Fixed Acquirer Network Fee to push more transactions to its network that is likely to hurt other card processors. Shares of Visa were up more than 1 percent to $142.20 in afternoon trade on the New York Stock Exchange. (Reporting by Aman Shah and Sharanya Hrishikesh in Bangalore; Editing by Anil D'Silva)

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hide Texas power company Energy Future proposes prepackaged bankruptcy Monday, April 15, 2013 6:20 p.m. CDT By Nick Brown and Michael Erman (Reuters) - Texas power company Energy Future Holdings, formerly known as TXU Corp, has proposed a prepackaged bankruptcy that would restructure $32 billion of debt, but no deal has been reached, the company said on Monday. Energy Future , taken private in 2007 in the largest-ever leveraged buyout, said in a U.S. Securities & Exchange Commission filing that it has proposed a restructuring deal to creditors that would exchange secured creditors' claims for a combination of equity and new debt. "The principals of the companies and the creditors are currently not engaged in ongoing negotiations," Energy Future said. It noted, however, that creditors have conveyed they would consider the restructuring if it increased distributions and better compensated them for the risk of taking on equity. Energy Future is trying to restructure more than $30 billion in debt it was saddled with after the buyout by a consortium including KKR & Co , TPG Capital Management and Goldman Sachs Group Inc's private equity arm. The $45 billion TXU buyout, which loaded the company with debt, is viewed as one of the most spectacular failures of the last decade's buyout boom. The company has a large and complex capital structure, and industry experts have speculated about which entities may be headed for bankruptcy and which could be spared. Most of Energy Future's debt sits on the unregulated side, at Texas Competitive Electric Holdings (TCEH), the holding company for its unregulated retail business, TXU Energy, and its unregulated merchant power unit, Luminant. The company has ringfenced Oncor , its regulated power delivery business, in hopes of keeping it solvent, and the restructuring proposal revealed on Monday would not have included that unit or the holding company that owns its equity. The proposed restructuring would have allowed TCEH creditors to trade in their senior claims for a combination of equity at the Energy Future parent and a share of $5 billion in cash or new TCEH debt. Under the company's proposed restructuring, TCEH would pick up $3 billion of new loans and another $5 billion of long-term debt. The company's private equity backers proposed a restructuring in which the buyout firms and other equity holders would retain 15 percent of the equity in the reorganized company and creditors would end up with the remaining 85 percent, according to the filing. The private equity firms also suggested that they could provide additional capital to Energy Future in exchange for a larger share of the company, the filing said. But according to Monday's SEC filing, creditors told Energy Future that they believe the company needs to address debt structure issues at its parent as well as at the holding company for ringfenced Oncor. They said they would not accept the proposed prepackaged bankruptcy unless, among other things, it achieved "a sustainable debt capital structure" for the parent company and Oncor's holding company "without reliance on TCEH's cash flows." Some of Energy Future's largest creditors include Apollo Global Management, Oaktree Capital Management, Centerbridge Partners, Fidelity Investments and Franklin Resources, according to a source close to the matter. Energy Future is not necessarily up against the clock. Although it has about $270 million in interest payments due on May 1, it can easily afford to make them. It has around $2.7 billion in liquidity - plenty for it to survive on, at least until a $3.85 billion bank loan matures in October 2014, a U.S. regulatory filing from January shows. The TXU takeover was built on hopes that natural gas prices would stay high. Instead, they dropped sharply and are still down 45 percent from February 2007 levels. Energy Future Holdings is the largest power generator in Texas. Its merchant power unit, Luminant, owns more than 15,000 megawatts of nuclear, coal and gas-fired power plants. KKR and TPG declined to comment on the matter. Goldman Sachs could not be immediately reached for comment. (Reporting by Nick Brown and Michael Erman in New York; Editing by Lisa Shumaker and Phil Berlowitz)

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Human Capital & Careers June 1, 2006June 1, 2006 CFO Magazine Portland General Electric’s Jim Piro An Enron survivor, Piro had to reassure banks, creditors, ratings agencies, and customers that the utility wasn't tainted by the energy trader's sins. Joseph McCafferty Jim Piro is an Enron survivor. As CFO of Portland General Electric, he helped steer the 116-year-old utility — purchased by Enron in 1997 for $3 billion — through the massive scandal at its parent company. To do that, Piro, 53, had to reassure banks, creditors, ratings agencies, and customers that the utility wasn’t tainted by the energy traders’ sins. More important, he had to focus employees, who had lost much of their retirement savings in Enron stock, on the task at hand — keeping their customers’ lights on. The effort paid off. On the April day when Jeffrey Skilling first took the stand to defend himself in the Enron criminal trial, PGE listed on the New York Stock Exchange, establishing itself once again as an independent entity. It is the only surviving business of Enron. What were your thoughts when news of the scandal broke? Early on, there was so much [information] swirling about, you couldn’t tell fact from fiction. As I learned more about it, I was shocked. I’m generally a trusting person and this doesn’t change my view about people; it’s just that some people are crooks. When Enron had bad periods, they had the chance to come clean and they didn’t; they kept going down the path and, ultimately, it led to their demise. Was it hard to stay focused amid all the negative publicity? By far the biggest impact was that we all had Enron stock in our 401(k)s and people saw significant financial losses. That obviously created a lot of talk around the water cooler, especially since some people made big bets on Enron and lost. So from that perspective, it had a really bad effect, and some people carried that pain longer than others. But we knew our customers were depending on us, so we rolled up our sleeves and went to work. What is PGE doing to try to compensate employees for those losses? We are supporting legislation that would allow them to put more money aside in their 401(k)s, so that they can catch up a bit. There have been a number of lawsuits and a few other settlements to try to restore some of what was lost, though it can never really be replaced. We also have a very good, well-funded defined-compensation plan. How did PGE avoid being liquidated, or dragged into bankruptcy along with Enron? First, everyone rallied around the issue and said, “OK, we’ve had some losses, but we need to do our job — get the lights on, put up the wires, meet our customers’ needs.” Second, we had very strong relationships with the ratings agencies and commercial banks, and they stood by us. Typically, ratings agencies practice the two-notch rule, meaning you can’t be more than two notches away from your parent. At the time of Enron’s bankruptcy, it became junk status, but we were able to retain our investment-grade rating thanks to some structural [strengths], including a ring-fencing provision — meaning we could never have our equity balance go below 48 percent of total capitalization. And that gave the ratings agencies comfort that Enron couldn’t raid the bank. 1 2View AllNext page → Discuss Cancel reply Enron Sets Portland General Free CFOs on the Move: Week Ending April 11 Operations Nirvana: Profits Soar Far Beyond Sales Growth

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Monday 11/18/13 Print MF Global to Pay Restitution, But That Doesn't Change Much A federal court ordered MF Global to pay $1.2 billion of restitution to its customers, but that doesn't mean they'll get more money. Earlier this month, a judge approved a final round of payments that will make customers whole. "It's not in addition to sums already paid, it is simply an order to return the amount the Trustee noted as missing to customers," said John Roe, a co-founder of the Commodity Customer Coalition, which has advocated for customer rights in the wake of the MF Global and Peregrine Financial scandals. "Additional recoveries may be made possible through the class-action lawsuit now underway, but that remains to be seen." Aspects of that lawsuit have been able to move forward, like a $100 million settlement with JP Morgan that occurred last March, Roe said. The primary class-action lawsuit can't get underway until the MF Global's parent firm, MF Global Holdings, completes its liquidation. CFTC announced the restitution order Monday morning along with notice that MF Global's been charged a $100 million civil penalty, and "MF Global admits to the allegations pertaining to its liability based on the acts and omissions of its employees as set forth in the consent Order and the Complaint. The CFTC’s litigation continues against the remaining defendants: MF Global Holdings Ltd., Jon S. Corzine, and Edith O’Brien." Last summer, CFTC filed a complaint that argued MF Global unlawfully used customer segregated funds -- the collateral customers put up to secure their trades -- for its proprietary trading. CFTC also outlined how MF Global failed to notify regulators of deficiencies in customer accounts, filed false statements on those accounts, put customer money in inappropriate investment tools and failed to "diligently supervise the handling of commodity interest accounts carried by MF Global and the activities of its partners, officers, employees, and agents." So, if you're a farmer or an elevator manager that used MF Global, this development doesn't affect your bottom line, but it does advance the case in a few ways. MF Global admitting to the allegations about its liability could potentially play into the continuing cases against Corzine and O'Brien. Today's announcement is also one step closer to bring the class-action case to the courtroom.© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.

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Citizens Bank of Edmond promotes employees to assistant vice president Mon Jun 24, 2013, 07:49 PM CDT EDMOND — Citizens Bank of Edmond recently announced that Caleb Coldwater, Jason Jameson and Miguel Gonzalez have all been appointed assistant vice presidents. Caleb Coldwater is currently working towards a degree in pastoral studies with an emphasis in youth studies. He started at Citizens Bank of Edmond in 2007 and was promoted to manager of the First and Broadway location in 2013. Jason Jameson graduated from the University of Central Oklahoma with a Bachelor’s of Science degree in kinesiology. He started at Citizens Bank of Edmond in 2008 and was promoted to manager of the 164th and Pennsylvania location in 2013. Miguel graduated from the University of Central Oklahoma with a Bachelor’s of Business Administration degree and started working with Citizens Bank of Edmond in 2007. He was promoted to manager of the Hurd and Broadway location in 2013. Founded in downtown Edmond in 1901, Citizens Bank of Edmond is a locally owned and operated community bank and is celebrating 112 years of serving Edmond. Food Network show visits Guthrie for ’89er Days Guthrie’s annual ’89er Days Celebration provides a variety of activities for people to enjoy including a carnival, rodeo, parade and lots of food vendors. This year, visitors at the 84th annual event, which runs Tuesday through Saturday, will notice an added bonus when a film crew from the new television series “Carnival Eats” will be in town filming for its inaugural episode. OSBI grounds voted locale for new sculpture City staff is working toward an agreement with the Oklahoma State Bureau of Investigation Lab to place the “Touch the Clouds” bronze sculpture on the OSBI grounds on Second Street. The City of Edmond would retain ownership of the artwork. The Edmond City Council voted 4-1 this week to allow city staff to negotiate the agreement as soon as possible. Mayor Charles Lamb voted against pursuing the agreement. City Councilwoman Victoria Caldwell said she was initially interested in placing the sculpture near the Smith House because of it’s proximity to state Highway 66. 11 file for county offices Eleven candidates filed for Oklahoma County races last week with County Assessor Leonard E. Sullivan, 79 of Oklahoma City, re-elected to office without opposition, said Doug Sanderson, secretary of the Oklahoma County Election Board. Voters will nominate their party’s candidates on June 24 for the statewide primary election, Sanderson said. A run-off primary election is set for Aug. 26. The statewide general election is scheduled for Nov. 4. OIPA hosts Rally for the Rigs The Oklahoma Independent Petroleum Association this week hosted a “Rally for the Rigs” at the Oklahoma state Capitol. Watch China for the next economic trigger For my male readers out there, remember back to your teens and 20s when one of the primary goals was getting a date and finding a girlfriend? Oh come on! You can admit it. Well imagine how it would have complicated matters if no woman would give you a second thought if you didn’t own property. No, not that old beat up car you drove and sometimes slept in. I mean real property, as in a house.

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login | careers | contacts | sitemap About Us Responsible Lending Policy First Time Borrower's Guide Member Loan Connection Housing Associate Certification Bulletins & Memos Business Lines Credit Products MPF® Program Housing & Community Lending Programs First Home Clubsm Community Lending Programs Disaster Relief Funding Small Business Lending Rural Development Advance Urban Development Advance Gallery/Success Stories › News & Events › Publications › CI News › Prior Issues › 2012 › Fall 2012 FHLBNY Advantage MPF Connection CI News Prior Issues Community Investment News Fall 2012› View Print Version Housing Advocacy is Vital Alfred A. DelliBovi, president and CEO of the FHLBNY, was named to the Bipartisan Policy Center’s Housing Commission in December 2011. By Alfred A. DelliBovi In December of last year, I was named to the Bipartisan Policy Center’s Housing Commission, which has gathered leaders from across the housing spectrum to look at the challenges facing the industry and develop solutions that will preserve a sound national housing policy. Earlier this year, in these very pages, we referred to the Housing Commission as “a new voice for housing.” It is also an important one. In Washington, the focus remains fixed on the November elections. But in the next Presidential term, our elected officials will begin to take a serious look at housing finance reform, an issue that has long been stalled in the hallowed halls of Congress. And when those discussions begin in earnest, you can be sure that there will be many voices competing to be heard. We need to make sure that the voice that rings the loudest is the one that supports affordable, responsible homeownership, backed by the local lender. Decorated for the holiday, Branch Village, located in Camden, New Jersey, consists of sixty-seven newly affordable housing units. The FHLBNY and its member, Liberty Bell Bank, provided the project with a $1.1 million Affordable Housing Grant in 2010. I have spoken with my fellow commissioners at length on the virtues of the local lender. Recently, Ed DeMarco, acting director of the Federal Housing Finance Agency, referred to Home Loan Bank members as “front-line, local lenders.” Our Home Loan Bank of New York cooperative is made up of 341 such lenders, active and committed members of the communities they serve. Housing is not only the cornerstone of our nation’s economy, it is also the foundation on which our communities are built. The community bank model of knowing their customers and supporting them with responsible, prudent lending has worked to the benefit of this country for decades. We must continue to protect that foundation. I believe in the principle that great things can grow from the base of a stable home. Sensible and responsible policies will revitalize our country’s housing sector and, in turn, the greater economy. This is what the Housing Commission was created to do: develop the housing policies that will serve as solutions to the challenges that continue to batter our economy. And now, we must all make sure that we lend our voices to these sensible policies, those which stress the importance of responsible, affordable homeownership. Now is the time to speak up. If we are silent on this issue, you can be sure that there will be others who will fill the void. Empowering Women, Providing Hope and Homes in White Plains Ninety-eight years after its original construction, YWCA’s Resident for Women in White Plains, New York, hosts a new total of 191 units for its female residents. For more than 80 years, the YWCA of White Plains and Central Westchester has been an advocate for women and their families, implementing programs and offering services in an effort to provide for a better quality of life. On June 11, 2012, the perseverance of this organization’s commitment to service was clearly evident at the official grand re-opening of its Residence for Women in White Plains. This building is indeed in a class by itself, as it is the only affordable, permanent housing facility for single women in Westchester that also includes the provision of supportive services. The Residence is the result of a partnership between a variety of public and private funding sources. The project boasts an impressive development design, as roughly $26.9 million in financing provided for the necessary renovations to the existing 183 units, and new construction of eight new units, all while the historic components of the original building, built in 1914, were preserved. New roofs, terraces, external masonry, and elevators now compliant with the Americans with Disabilities Act, are amongst the newly completed renovations to the YWCA, as well as upgrades to the life safety systems with the addition of fire detection and suppression systems, and alarm systems. Furthermore, the building now incorporates a green design, featuring energy efficient heating systems with sustainable materials. The most significant amenities, however, have remained the same, as the YWCA Residence provides case management, supportive services, and social services for many of its female residents that have been affected by domestic violence, medical illness, substance abuse, and psychiatric disabilities. Case management provisions provide connections to doctors, families and social services; and education resources such as employment counseling, job training and interview preparation, are available to the residents, either on site, or through referrals. Through these services, the YWCA residence is a manifestation of the YWCA mission: eliminating racism, empowering women, and promoting peace, justice, freedom, and dignity for all. The Federal Home Loan Bank of New York was an integral financier to the YWCA Residence, providing approximately $2.4 million through the award of two AHP grants administered through M&T Bank, including a $2 million grant in 2007. Other key financing partners included DHCR HOME funds, Federal low income housing tax credits, the New York State Office of Temporary and Disability Assistance Homeless Housing Program, the City of White Plains, Westchester County, NYSERDA, Enterprise Green Communities, and grants from Home Depot and Con Edison. The grand re-opening was a proud moment for all who have supported the YWCA’s mission. Joseph Gallo, Community Investment Officer at the FHLBNY, was among many speakers who gathered to mark the grand re-opening of the YWCA Residence in White Plains, New York on June 11. “The FHLBNY knows just how important the YWCA is to the Central Westchester community, and how vital its mission,” said Joseph Gallo, director of Community Investment for the FHLBNY at the event. “We are proud to support such a tremendous organization.” Congresswoman Nita Lowey (NY-18), who attended the reopening ceremony, said in a press release on the event: “I am proud to see the re-opening of the beautifully renovated YWCA. For years the YWCA has come to the aid of women in need and worked to change their lives and help them take meaningful steps toward independence. I applaud the YWCA for their exceptional work in the community and look forward to their many accomplishments in the years to come.” Home Loan Banks Support National Housing Efforts Locally The first group of FHLBNY employees applied stucco in order to protect the foundation of the home. Habitat for Humanity hopes to have the family settled in by December, before the holidays. Responsible and affordable housing is a cornerstone of our nation’s economy. This is why the Federal Home Loan Banks have strongly supported Habitat for Humanity, which strives to build and repair reasonably priced homes across the country. These efforts have helped families find stable footing and have strengthened communities nationwide. Since 1990, the Federal Home Loan Bank System has contributed more than $195 million in Affordable Housing Program grants to Habitat for Humanity. These activities have made the Home Loan Banks the largest single funding source for Habitat, and, more importantly, have helped create 23,882 affordable homes. The Federal Home Loan Bank of New York has contributed $7 million to local Habitat chapters, funding 94 projects and creating 663 homes across the region. But the FHLBNY has found other ways to support the group, as well. Over the span of two days this June, thirty enthusiastic volunteers from the FHLBNY joined with Habitat for Humanity of Raritan Valley to aid in the construction of a home in Somerset, New Jersey. The first group of volunteers helped finish the house’s groundwork by applying mesh and stucco to the foundation. The subflooring was then completed by the second group when the volunteers placed and glued the interlocking floor panels. The volunteers on both days toiled under temperatures that soared into the 90s; however, they remained eager to build the home for the young family of five who will soon become its occupants. “Despite the heat, I would do it all over again,” assured Regina Cooper, Sales and Marketing Administrative Assistant. “I was honored to be a part of such a great opportunity in helping build a family a home.” The committed Federal Home Loan Bank employees show pride in their day’s work, helping build an energy efficient home for a family of five. This summer, the 12 Home Loan Banks were presented with another opportunity to support affordable housing, joined together to provide $60,000 in grants to Bike & Build. Through service-oriented cross-country cycling trips, Bike & Build strives to inspire individuals and communities to create fair, decent housing for all Americans. As these brave volunteers cycle across the country, they make various stops at affordable housing construction sites and contribute hours of labor at each individual location, helping to build homes. Through local seminars, the group spreads awareness of affordable housing initiatives and needs nationwide. And the group raises funds to support projects — over nine seasons, Bike & Build has contributed $3,387,200 to housing groups to fund projects planned and executed by young adults. Bike & Build had 128 cyclists pedaling through the FHLBNY’s district, spreading awareness of the national need for affordable housing in communities across New York. The Federal Home Loan Bank of New York believes the goals and achievements of Habitat for Humanity and Bike & Build strongly contribute to our mission to create housing opportunities and drive local community development. These organizations have proven to be instrumental in creating affordable housing for many families and neighborhoods across the country, and the FHLBNY is proud to support them. Program Spotlight: First Home Clubsm With matching funds up to $7,500, the Federal Home Loan Bank of New York has contributed more than $38 million in grants to help 6,000 households become first-time homeowners. Initially designed and launched in 1995 by President Al DelliBovi, the Federal Home Loan Bank of New York’s First Home Clubsm (FHC) has been helping low-income families find homes for over 17 years. The program was developed in order to make the American dream of becoming a first time homebuyer an achievable goal to all families, especially those with low incomes who may not customarily be considered candidates for homeownership. As a non-competitive, special set-aside of the FHLBNY’s Affordable Housing Program (AHP), the program is administered through approved members of the FHLBNY. Through the FHC program, a maximum grant of $7,500 is provided to qualified households to be used toward down payment and closing cost assistance in the purchase of a new home. In order to be deemed an eligible for an FHC grant, the total household income may not exceed 80% of the area median income, as determined by the Mortgage Revenue Bond Limits for the prospective occupant’s current residence. The household must also satisfy the criteria to meet the definition of a first time homebuyer, establish a savings account, and complete a counseling seminar to educate them on foreclosure and predatory lending. One of the most significant aspects of the FHC Program is the requirement that all households enroll and open a savings account through an active FHC participating member. Each household establishes an agreement with an FHLBNY member, whereby they consent to deposit a specific amount in this savings account each month, for a minimum of 10 months and a maximum of 24 months, in order to reach an equity goal. As the household continues to make consistent deposits in this savings account, the simulation of making a mortgage payment is paralleled. Finally, upon reaching their equity goal, the FHLBNY will provide a matching grant of $4 for every $1 saved, up to a total grant of $7,500. Counseling is arguable the fundamental element to which the First Home Club Program can attribute its success. Each participating household must complete a counseling seminar though an approved agency, that teaches our future homeowners the essential lessons with regard to what it takes to purchase a home and how to establish a monthly budget to suit the household income. The FHLBNY requires that each household attends a minimum six-hour course, with at least one hour of one-on-one counseling. And this counseling works: the FHC program has a foreclosure rate of less than one percent. The FHC Program continues to gain momentum since it was established in 1995 – more than $38 million has assisted nearly 6,000 households achieve the dream of owning a home. The partnership between the FHLBNY members, counseling agencies, and their unique relationship with each individual household is one that clearly works. And with the low rate of default for households who have received FHC grants, the future for these homeowners looks bright. A Vision Realized Supporters gather in Brooklyn as Concern for Independent Living, Inc. cuts the ribbon to officially open the borough’s newest community asset. When the Federal Home Loan Bank of New York first toured the plot of land at MacDougal Street in 2009, it was just an empty lot on a street corner in Brooklyn. But Concern for Independent Living, Inc. saw great promise in the location. As Ralph Fasano, executive director of Concern for Independent Living, walked the group through its plans for the site, it became clear to all that something great was in store for MacDougal Street. When Concern first purchased the site, it promised to improve the neighborhood by developing an attractive building that would serve as an asset to the community; increase employment opportunities; encourage the stability, self-sufficiency and productivity of adults living with mental illness; and increase affordable housing opportunities for disabled men and women. When the MacDougal Street Apartments officially opened on June 1, it was clear to all in attendance that Concern had fulfilled its promises. The MacDougal Street Apartments is the first of its kind in New York State to be built by using modular construction techniques. Eighty-four modules were constructed off-site at Capsys Corp.’s manufacturing plant at the Brooklyn Navy Yard, and transported to the project site for “stacking” on the building’s foundation. The result: a brand new, six-story building that provides 65 supportive and affordable housing opportunities for low-income individuals recovering from mental illness. The FHLBNY partnered with its member, Astoria Federal Savings Bank, to award a $967,087 Affordable Housing Program grant to help fund the construction costs for the Apartments. Since 1999, Astoria Federal Savings and the FHLBNY have provided Concern with 10 AHP grants totaling more than $6.3 million to help the group fund the construction of more than 400 affordable homes as it works to better the lives of so many New York residents. AHP Performance Statistics (Program totals as of 9/30/12) • Projects approved: 1,352 • Units created: 57,864 • Subsidies approved: $444,020,445 Paul Héroux, the FHLBNY’s head of Member Services, spoke at the grand opening event: “The vision that was laid out in a vacant lot three years ago is now a reality, to the benefit of both the residents of these apartments and the greater Brooklyn community.” AHP funds are awarded to members who submit applications on behalf of project sponsors who are planning to purchase, rehabilitate, or construct affordable homes or apartments. Funds are awarded through a competitive process, which typically takes place either once or twice a year, at the FHLBNY’s discretion. Have You Seen “The Power of an Advance” Advertisements? The FHLBNY’s “The Power of an Advance” advertising campaign is still circulating in select trade publications, emphasizing the unique FHLBNY/member partnership that works together to strengthen local communities. The advertisements feature Community Lending Program projects within our district that the FHLBNY has helped our member community lenders fund. As the campaign progresses, different members and projects are featured based on the region the publication represents. However, one clear message remains the same, as stated in the opening paragraph of every ad: One advance can help fund hundreds of neighborhood needs. FHLBNY advances are a reliable liquidity source for our member lenders to finance home mortgage, small business, and economic development activities. Hopefully you will agree that these advertisements portray the FHLBNY’s mission and differentiate us from our competitors as a unique members only, co-operative structure, while reinforcing the concept that we are an “advances” bank and premier provider of sound and reliable liquidity. Examples from the campaign are shown below. Become a part of the campaign! To be considered, contact the Community Lending department at (212) 441-6850 with the community development project the FHLBNY helped your institution fund, or e-mail us. Javascript must be enabled for search to work properly Spring 2013Community Investment News Fall 2012Community Investment News General Terms and Conditions of Use | Privacy Policy | Forward-Looking Statements Our friendly lawyers have asked us to tell you that visitors remaining in session with this site IMPLICITLY CONSENT to our General Terms and Conditions of Use and our Privacy Policy, and ACKNOWLEDGE our Cautionary Language Regarding Forward-Looking Statements. Please exit this session if you do not agree with the foregoing. © 2014 Federal Home Loan Bank of New York. All rights reserved.

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Views of Regulatory Consolidation Top of the Ninth Gary H. Stern - President, 1985-2009 March 1, 1994 | March 1994 issue Late last year the Administration unveiled its proposal to revise the structure of bank supervision by consolidating the responsibilities currently performed by the Federal Reserve, the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision into a single new federal banking agency. This proposal is the most recent in a long series of such proposals. Given the remarkable complexity of the present structure, bank supervision is an obvious target of current efforts to streamline government. While I believe that the current regulatory structure can be streamlined, there are other, equally important, objectives to consider. Ideally, restructuring bank supervision should make it more effective. I doubt, however, that more effective supervision can be achieved simply through bureaucratic reorganization. Despite the complexity of the existing structure, the agencies have been able to make it work reasonably well. At least in the short run, consolidation of the agencies would be likely to decrease the effectiveness of supervision as significant attention was diverted to the process of consolidation. If revising the structure of banking supervision is unlikely to improve the effectiveness of bank supervision, what considerations should guide the process? From my perspective, any restructuring proposal should satisfy the following criteria. First, the reforms should enhance the efficiency of the supervisory process. Second, the new structure should ensure a sufficient role in regulation and supervision for the Federal Reserve to fulfill its central bank responsibilities. Third, the new structure should also ensure that the supervisory authorities have adequate independence. Fourth, the resulting structure should ensure equitable treatment of comparable institutions. Fifth, the revised regulatory structure should not impede competition among banks. And finally, the supervisory structure must allow adequate oversight of any consolidated organization in which a bank is affiliated. To some, my second principle—that the Federal Reserve must have a sufficient role in regulation and supervision to fulfill its central bank responsibilities—may seem unduly self-serving. But it is my conviction that for the Federal Reserve to effectively fulfill its responsibilities as the nation's central bank, it must have a significant, direct role in the supervision of the nation's banks. In general terms, the Federal Reserve has three basic responsibilities: conducting monetary policy, ensuring the smooth functioning of the payment system and ensuring the stability of the nation's financial markets. For each of these responsibilities our involvement in supervision and regulation has, over the years, proven to be of considerable value. History has shown that in times of crisis in the financial markets, it is the Federal Reserve that is called on to manage the situation. This responsibility for ensuring financial stability is cited by the Federal Reserve Act as one of the principal reasons for the creation of the System. Experience has shown that the Reserve banks, with their broad knowledge of regional economic and business conditions, bank supervisory resources and bank operations expertise are uniquely qualified to respond to the unpredictable demands of a crisis situation. Without its supervisory responsibilities, the System would be seriously handicapped as a crisis manager. Currently, we have both the opportunity to shape policies that will reduce risks that can lead to instability and the resources to respond effectively to crises when they arise. Under the Treasury's proposal, we would lose these capabilities. In particular, we would no longer have staff with the breadth and depth of hands-on, practical expertise and experience essential to managing serious financial disruptions effectively, nor would we have the clout as an institution to intervene positively. My concern over this situation is magnified by the fact that I do not see any other institution or entity ready and able to step in and play the role of crisis manager that the Federal Reserve currently performs. Our bank regulatory structure can be streamlined, but in doing so we should ensure that the changes are consistent with other fundamental objectives, including the preservation of the System's ability to continue to act as effective crisis manager. Top Tweet Till College Do Us Part The Region - February 2014 Fed Marks 100 Years The Region - December 2013 Interview with Neil Wallace Is There a Stable Phillips Curve After All? Quid pro quo: Technology capital transfers for market access in China

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SEC, FINRA Enforcement Roundup: Allianz, TheStreet Charged Fine of $12M for Allianz; accounting fraud charges for TheStreet.com; censures and fines imposed by FINRA Among recent enforcement actions taken by the SEC were charges against Allianz for violations of the Foreign Corrupt Practices Act that resulted in penalties of more than $12.3 million; against a Connecticut-based advisor for telling clients it was investing in the same collateralized debt obligations it recommended for them; against TheStreet Inc. and three executives for accounting fraud; against a Toronto-based brokerage firm and two executives for allowing layering; and against two investment advisory firms and two portfolio managers in the collapse of a mutual fund. FINRA, meanwhile, imposed censures and fines for a Toronto firm that inappropriately shared transaction-based commissions with non-FINRA entities, and censures and fines for a Chicago-based firm after it was found to be an introducing broker-dealer established to facilitate U.S. market access for a single large entity and it had failed to design or implement an anti-money-laundering program to track possible violations. Allianz SE Agrees to Pay Penalty of $12.3 million-plus on FCPA Violations The SEC charged German-based insurance and asset management company Allianz SE with violating the books and records and internal controls provisions of the FCPA for improper payments to government officials in Indonesia during a seven-year period. In its investigation, the SEC found 295 insurance contracts on large government projects that were obtained or retained by improper payments of $650,626 by Allianz’s subsidiary in Indonesia to employees of state-owned entities. Allianz made more than $5.3 million in profits as a result of the improper payments. According to the SEC’s order instituting settled administrative proceedings against Allianz, the misconduct occurred from 2001 to 2008 while the company’s shares and bonds were registered with the SEC and traded on the New York Stock Exchange. Two complaints brought the misconduct to Allianz’s attention. The first complaint, submitted in 2005, reported unsupported payments to agents, and a subsequent audit of accounting records at Allianz’s subsidiary in Indonesia uncovered that managers were using “special purpose accounts” to make illegal payments to government officials in order to secure business in Indonesia. Despite the audit, the payments continued. According to the SEC’s order, the second complaint was made to Allianz’s external auditor in 2009. Allianz failed to properly account for certain payments in its books and records. The improper payments were disguised in invoices as an “overriding commission” for an agent that was not associated with the government insurance contract. In other instances, the improper payments were structured as an overpayment by the government insurance contract holder, who was later “reimbursed” for the overpayment. Excess funds were then paid to foreign officials who were responsible for procuring the government insurance contracts. Allianz lacked sufficient internal controls to detect and prevent the wrongful payments and improper accounting. Without admitting or denying the findings, Allianz agreed to cease and desist from further violations and pay disgorgement of $5,315,649, prejudgment interest of $1,765,125, and a penalty of $5,315,649 for a total of $12,396,423. Connecticut Advisor Charged for ‘Skin in the Game’ Lies to Clients Connecticut-based Aladdin Capital Management was charged by the SEC with falsely telling clients to whom it recommended two different CDOs that it had “skin in the game” and was investing in the CDOs along with them. The SEC’s investigation found that Aladdin Capital Management’s co-investment representation was a key feature and selling point for its Multiple Asset Securitized Tranche advisory program involving CDOs and collateralized loan obligations. For example, Aladdin Capital Management asked in one marketing piece, “Why is an investor better off just investing in Aladdin sponsored CLOs and CDOs?” It then emphasized that the “most powerful response I can give to your question is that Aladdin co-invests alongside MAST investors in every program. Putting meaningful ‘skin in the game’ as we do means our financial interests are aligned with those of our MAST investors.” Aladdin Capital Management in fact made no such investments in either CDO, and its affiliated broker-dealer Aladdin Capital collected placement fees from the CDO underwriters. According to the SEC’s order against one of the firms’ former executives, Joseph Schlim, he was significantly involved in the MAST program on a day-to-day basis. He made sales calls to potential clients and negotiated with CDO and CLO underwriters about the amount of equit

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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. February 14, 2013 Goldman’s Blankfein for Treasury Secretary? CEO hints he might want the job Lloyd Blankfein, right, in front of the NYSE. (Photo: AP) Will Goldman Sachs unleash another exec on weary public in the form of a senior administration advisor or even cabinet official? CEO Lloyd Blankfein isn’t ruling it out, hinting he might like the job, just not any time soon. In an interview with Bloomberg TV on Tuesday, Blankfein said he had no plans to leave Goldman: "The combination of this being who I am and what I do and having absolutely no other interests makes me think this is what I'll be doing for a while." But he also noted that while he "would love to be wanted" for the role of Treasury Secretary, he diplomatically added that it “seems like such a distant hypothetical." Blankfein on what his next move will be: "Could you imagine giving up all this? Of course not. The combination of this being who I am and what I do and having absolutely no other interests makes me think I want to be doing this for a while." On whether he might be Treasury Secretary one day: "I would love to be wanted. And that seems like such a distant hypothetical at this point, I'll sort of end it there." On whether he ever wonders why CEOs like Tim Cook don't get the same scrutiny that bank CEOs do: "I'll tell you, here's another slogan that's trite. It is what it is. We are a very key part, again, of our own industry and help drive other people's industry. When things go well, we've gotten a lot of credit. People of our industry also have made a lot of money in the past when things went well. You could debate who caused what and how many people contributed, but we were certainly near the scene of an accident, and you can debate who contributed and what other things, who could have told what, but you know something? The trauma was very recent. There's going to be a lot of focus on us for a while, and you know something? That also goes with the territory. So pointing finger and acting defensive and saying, gosh, I wish it wasn't here, the way I'm trying to live is I want to spend most of my time learning forward, trying to help finance businesses that will improve the economy and those companies, that will improve the health and welfare of people in this country and world. An

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New Hire Roundup: FPA Welcomes David Brand Back to the Fold Former ICFP executive director who was there at FPA's birth returns to the planner association This week in personnel announcements and new hires, the FPA announced that David Brand has joined the association as director of strategic operations; Securities America announced that it has promoted Roger Verboon and hired John Carruth; WilmerHale announced that Matthew Martens will be joining the firm; the SEC announced that Daniel Murdock was named deputy chief accountant; and the The Small Business Investor Alliance announced its new board and officers. Also, Fred Alger Management welcomed a new head of marketing; New York Life announced two staff changes and one addition; the American College named Brian Clontz the Leon L. Levy Fellow in Philanthropy; and RiverNorth added two new professionals. David Brand Joins FPA as Director of Strategic Operations Just days before its annual conference, FPA Experience--which will be held in Orlando beginning Saturday, Oct. 19--the Financial Planning Association (FPA) announced that David Brand has joined the association of financial planners as director of strategic operations. In this role, he will focus his efforts on assisting FPA in achieving its strategic directive of becoming the “recognized and unquestioned professional membership organization for Certified Financial Planner professionals,” according to the FPA statement announcing his hiring. To this end, he will be instrumental in guiding the organization on several major internal and external issues and programs and will be involved in "major policy and landscape issues affecting the organization." Brand has been with the FPA before, in its earliest days following the merger of the IAFP and the ICFP. At the time of the 2000 merger that created the FPA, Brand was executive director of the ICFP, and became co-executive director of the FPA with Janet McCallen, former executive director of the IAFP. He held that position for six months before leaving FPA in favor of McCallen in August 2000. Brand became a leadership and organizational consultant in 2004. Securities America Promotes Verboon, Adds Carruth Securities America, a wholly owned subsidiary of Ladenburg Thalmann Financial Services, announced recently that it has promoted Roger Verboon to director of practice succession and acquisition and hired John Carruth on its branch office development recruiting team. Verboon, who joined in 1996, previously held the position of senior practice management consultant, which included coaching advisors in the company’s next level, associate advisor and jump start marketing coaching programs. He also led the creation of the company’s practice transition center. Prior to joining the company’s practice management group in 2003, he managed the company&rsq

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Resource Center Current & Past Issues eNewsletters This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the top of any article. The Fed to Address Credit Pinch for Small Business As U.S. community banks continue to struggle, 41 percent of businesses under six years old cannot obtain a business loan. By Steve Matthews, Bloomberg May 10, 2013 • Reprints Jim Brown, owner of JWB Properties LLC, says community banks called him almost every day in 2006 trying to lend him money. Now, his homebuilding business in Atlanta can’t get a loan. “The small banks became really, really cautious, and real estate became a dirty word,” said Brown, 65, whose one-man company takes on workers on a project-by-project basis. Tighter lending standards among U.S. community banks help explain why small businesses are adding jobs at only half the pace of large employers. The Federal Deposit Insurance Corp. says the 6,900 institutions it classifies as community banks supply almost half of small business loans. Their health has become a focus for Federal Reserve Chairman Ben S. Bernanke and his colleagues. “If community banks are on shaky ground and unable to extend credit, the small businesses won’t be able to expand their operations and payrolls,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. Companies with fewer than 20 workers increased employment by 3.8 percent from February 2010 to April 2013, while the largest companies—with more than 1,000 on their payrolls—expanded their workforces by 8.6 percent, according to data compiled by Moody’s and ADP Research Institute. In the U.S., recent startup companies—which lead small businesses in creating jobs—have had a particularly tough time getting loans, according to an Atlanta Fed survey released in December of 495 small businesses in the southeastern U.S. Among companies less than six years old, 41 percent couldn’t get a loan at all, and 36 percent got less than the sum they requested. Among more mature employers, 23 percent were rejected, and 38 percent got just part of the amount they applied for. Profitability Gap That disparity reflects, in part, the gap in profitability between large and small banks. In the fourth quarter of 2012, 21 percent of banks and savings institutions with less than $100 million in assets were losing money, according to FDIC data. Eleven percent of lenders with assets of $100 million to $1 billion were unprofitable, while among institutions with greater than $10 billion in assets, just 1.9 percent were losing money. “Small banks are still trying to get up off the mat from the beating” from the past recession, said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. Some have been restricting lending to conserve capital, while others face tougher regulatory examinations and more rules that hurt lending, he said. “With interest rates currently so low, it is an exceptionally difficult task for these banks to generate a profit and thus rebuild their equity,” he said. That leads to caution in lending that is having “its greatest impact on the small businesses” that rely on community banks. The availability of small loans, and community banks’ ability to earn money amid increasing financial rules, have become concerns for Fed officials. The Fed and the Conference of State Bank Supervisors last month announced plans for their first research conference on community banking in October in St. Louis. Four central-bank policy makers, led by Bernanke, will speak on what the chairman calls the “vital role” of small banks in the economy. Fed Governor Elizabeth Duke, a former Virginia banker, said she often hears from small lenders who tell her they worry that community banking might not survive. Concerns include weak regional economies, near-zero interest rates squeezing lending margins, and an increased burden of regulations following the 2008 financial crisis, she said in a speech in February in Duluth, Georgia. Regulators’ Focus Regulators have increased their focus on real estate-backed loans and commercial borrowers that started operations recently, said Jack Hartings, chief executive officer of The Peoples Bank Co. of Coldwater, Ohio. “The regulatory scrutiny is a little more severe” for lending to startups and new companies, he said. “I may be questioned at the next examination” and a loan to such a borrower could be classified as a problem by regulators “even though I may not consider it” weak. Julie Stackhouse, senior vice president for supervision at the St. Louis Fed, said regulators are “very concerned about the credit needs of small communities and the ability of the financial sector to meet them.” If small banks

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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. Dodd-Frank and the Future of Derivatives Hedging Corporate treasurers have long used derivatives hedging to bring stability and predictability to their financial position. Now the safety net is riddled with holes, thanks to uncertainty about global regulation of cross-border transactions. By Luke Zubrod July 1, 2013 • Reprints When the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in July 2010, many corporate treasurers were satisfied that they had obtained an exemption from its derivatives provisions. Now, three years later, they have begun to reconcile with a different reality. They are engaging legal resources in evaluating their regulatory status, re-documenting their transactions, and working in new ways with their boards of directors. As they take these steps, treasurers are becoming increasingly aware that they are just beginning a journey that could extend for years. Cross-border, margin, and Basel III regulations are not yet complete, which is creating uncertainty about their true regulatory impact. Additionally, it is becoming clear that navigating new regulations is not merely a compliance exercise. Corporate treasurers need to re-evaluate how regulations will impact their risk management strategies, operational processes, and systems. Rather than being outside of Dodd-Frank’s reach, corporate treasurers are finding themselves in the splash zone of the act’s enormous market changes. Looming large among these uncertainties is cross-border regulation of swaps trading. Because of the global nature of the swaps market, end users in the United States regularly transact with European, Canadian, Asian, and Australian entities, just to name a few, and U.S. banks serve customers domiciled in every business center around the world. So far, neither Europe nor the United States has adopted final regulations governing the application of its rules to cross-border transactions. Early indications are creating concern about the potential for confusing, conflicting, and duplicative regulation.* Rules proposed by the U.S. Commodity Futures Trading Commission (CFTC) hold that Dodd-Frank should apply whenever a “U.S. person” is party to a derivatives transaction. As of July 12, 2013, the CFTC’s definition of a “U.S. person” may become expansive unless the agency extends an exemptive order from December 2012. The legal implications of the expiration of the exemptive order, without a final rule to replace it, are complex. But in the absence of the clarity and relief that the exemptive order provided, many more entities—particularly those that are majority owned, directly or indirectly, by U.S. entities—may need to comply as U.S. persons. Companies’ first order of business is to sort out which regulatory regimes apply to each of their various entities. Then they need to consider which regulations apply to each particular transaction, which involves determining the regulatory status of their counterparty in the transaction. There are a total of six different end-user statuses and eight different bank-entity status configurations that can alter which regulatory requirements apply to a transaction. It’s likely that many transactions could be subject to oversight by multiple rule-making bodies. If the European Union adopts an approach similar to that proposed by the CFTC, any transaction between a U.S. entity and a European bank, or between a European entity and a U.S. bank, will be subject simultaneously to two different regulatory regimes. And a transaction might be subject to different rules depending on which bank wins a competitive auction. For example, the documentation, reporting, and other requirements that a European subsidiary of a U.S. parent company must comply with will vary depending on whether it’s working with a U.S. swaps dealer, a non-U.S. branch of a U.S. swaps dealer, or a non-U.S. affiliate of a U.S. swaps dealer. This Rubik’s Cube of complexity is the source of international discomfort with the CFTC’s proposal, and it’s the basis for ongoing international dialogue about a system of mutual recognition that could simplify regulatory analyses. In a mutual-recognition system, one country could recognize another country’s regulatory regime as comparable to its own and so could deem any transaction that fully satisfies the regulatory requirements of the transaction’s host country as satisfying all requirements of both regulatory regimes. The CFTC contemplated such a system, but its proposed cross-border guidance only compounded concerns about complexity because it applies the regulatory regime at a requirement-by-requirement level, rather than at a jurisdiction-by-jurisdiction level. If such an approach were finalized, a single transaction might be subject to the margin, reporting, and documentation rules of one country, while being subject to the clearing, recordkeeping, and portfolio reconciliation requirements of another country. In a letter to U.S. Treasury Secretary Jack Lew on April 18, nine foreign finance ministers—including those from Germany, France, the U.K., and Japan—indicated that such an approach would challenge the efficient functioning of global derivatives markets. They noted: “An approach in which jurisdictions require that their own domestic regulatory rules be applied to their firms’ derivatives transactions taking place in broadly equivalent regulatory regimes abroad is not sustainable. Marketplaces where firms from all our respective jurisdictions can come together and do business will not be able to function under such burdensome regulatory conditions." While taking umbrage to the letter before a Senate panel, Treasury Secretary Lew noted that U.S. regulators were “making real progress” on the issue. And indeed, a recent proposal by the U.S. Securities and Exchange Commission (SEC) offers hints about the dimensions of that progress. While SEC rules will not apply to an end user’s interest rate, currency, and commodity swaps, its approach could influence the CFTC’s final rules. The Worst of all Worlds On May 1, the SEC offered a proposal on cross-border regulation that re-envisions how a mutual-recognition regime might work. Rather than evaluating whether each rule is equivalent between the U.S. and another regulatory regime, the new proposal focuses on the outcomes that the rules achieve. For example, if rules in one regime mandate that a given transaction be reported within one day, while comparable rules in another regime allow for three days, one could reasonably conclude that these rules achieve similar outcomes, even if they differ in the specifics. And rather than comparing regimes on a rule-by-rule basis, the SEC proposal groups regulations into four broad categories and evaluates whether those categories are broadly comparable between jurisdictions. In essence, it takes a half-step toward the jurisdiction-by-jurisdiction approach that foreign regulators have called for. *Note that the CFTC and the EU have reached a tentative accord on the issue of cross-border swaps although, as the president of the Securities Industry and Financial Markets Association put it, "the devil's in the details." As regulators labor toward harmonizing their approaches domestically and internationally, corporate treasurers must begin working through the practical implications of the current proposals. In the absence of clear and final guidance, many are assuming that their transactions will be subject to both U.S. and European laws, as well as rules in some other jurisdictions such as Singapore, Japan, Hong Kong, and Australia, which are largely lagging behind the U.S. and Europe. Such an approach dictates understanding the requirements imposed by each regime and, for every derivatives transaction, comparing the requirements in each rule category for the jurisdictions the transaction falls under. When treasurers identify which regime’s requirements have the highest standards and nearest-term compliance deadlines for each rule or rule category, they can prepare to comply with the most stringent

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October 26, 2011Economist Cheng Siwei on China’s Growth, Europe’s Crisis, Occupy Wall Street, and Steve Jobs December 14, 2011Private Firms Say Infrastructure Main Impediment to Indonesia’s Growth May 4, 2011The Arab Awakening: Governance Lessons for Asia and Beyond May 18, 2011Chief Economist Offers Insight on New Asian Development Report and Afghanistan’s Economic Prospects November 16, 2011As Host, Indonesia Anticipates Obama’s First East Asia Summit Cheng Siwei to Address China’s Growth at Commonwealth Club, Harvard, and Brookings The Asia Foundation awarded its prestigious Chang-Lin Tien Distinguished Visiting Fellow Award to leading Chinese economist Cheng Siwei, and has arranged a series of high-level exchanges across the United States on China’s economic growth and challenges ahead. As former vice chair of the Standing Committee of the National People’s Congress, Cheng has played a key role in his country’s economic transformation over the last 20 years. As the concurrent chair of the International Finance Forum, Beijing, and president of the Association of Management Modernization, China, Cheng is intimately acquainted with a range of domestic and global economic issues confronting China today. On October 20, Cheng will speak at San Francisco’s Commonwealth Club on challenges to rebalancing China’s economy. He continues to Silicon Valley to meet with William Perry, former secretary of defense, and Stanford University faculty and students. Cheng will also present at the Fletcher School of Law and Diplomacy at Tufts University, the World Affairs Council in Boston, Harvard University, and the Brookings Institution in Washington, D.C., among others. On October 25, he will join Arianna Huffington, Twitter co-founder Biz Stone, economist Niall Ferguson, George W. Bush, former U.S. senate majority leader Tom Daschle, journalist Katie Couric, and others as a featured speaker at the 2011 Global Financial Leadership Conference in Naples, Florida. The Chang-Lin Tien Distinguished Visiting Fellow Award is named for the late Dr. Chang-Lin Tien, renowned thermal scientist, chancellor of the University of California, Berkeley, and chairman of The Asia Foundation Board of Trustees. Stay tuned for an exclusive interview in next week’s In Asia with Mr. Cheng. Topics: Economic Development | Exchanges | Washington DC Countries: China Write a comment:

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Will Hong Kong overtake London, New York in financial jobs stakes? Many of the world's leading banks are shedding jobs in Hong Kong amid global restructuring. Reports suggest Hong Kong could become the world's financial capital in terms of jobs Many jobs expected to be on "buy side" of industry, in asset and wealth fund management Analysts expect more job volatility on "sale side," which includes investment banking Local knowledge, language skills increasingly important in Asian market Hong Kong (CNN) -- If that corner office at a financial firm on New York's Wall Street or at London's Canary Wharf has been illusory, then a Victoria Harbor view from Hong Kong's skyscraper skyline may be the place to find yourself in a few years. That's because the Asian city looks set to become the center of the Earth when it comes to jobs in the financial sector. CEBR, the London-based economics consultancy, recently forecast Hong Kong will have more financial services jobs than New York or London by 2016, with some 262,000 positions. The Institute of Chartered Accountants in England and Wales (ICAEW) also gives its endorsement, saying Hong Kong will be the world's premier financial job center by 2017, with 275,000 positions. Believable or bizarre? "It's three years from now, but it's believable," says Brian Lim, director of Value Search Asia, a Hong Kong-based boutique headhunting firm focused on the banking and financial sectors. "Asian opportunities are going to be a lot more stable. (The employment market) has been slow because of the European and U.S. economic crises -- not because of major issues from our side." Lim says he does expect continued job volatility on the so-called "sale side" of the financial industry, which includes investment banking, because of sensitivity to market gyrations. But he already sees more hiring on the less-market sensitive "buy side," which includes asset and wealth fund management. But other search firms find recent job market forecasts far-fetched. "I think it's bizarre," says Jonathon Hollands, Managing Director of Carraway Group, a financial and corporate headhunting firm headquartered in Hong Kong. As the global economy has slowed over the past few years "Hong Kong is shedding jobs." This past September, HSBC finished its planned Hong Kong layoffs by eliminating 3,000 staff from its workforce in the city -- part of a global restructuring to cut an astounding 30,000 jobs around the world. (Financial services firms) are getting people who understand the local markets. They will hire a Korean to cover Korean markets, Chinese to cover the PRC.Brian Lim, Value Search Asia Earlier this month, Barclays announced it will cut up to 2,000 jobs with many of those losses coming out of Asia and Europe. Hollands expects even more job losses in Hong Kong are "still to come." As proof, Hollands cites a steep drop-off in recruitment requests from global banks based in Hong Kong. He declines to name them but says they are easy to guess. "The amount they spend on recruiters is 80-100% down. They haven't spent anything on headhunters in the past year." Still, CEBR's Chief Executive Douglas McWilliams is preaching the message that Hong Kong will boast the most financial jobs by 2016. He says it is "inevitable as a result of the world's changing economic geography. "And Hong Kong will be boosted by the internationalization of the renminbi (China's currency). But we have accelerated the (West-to-East job) shift through short-sighted overregulation, penal taxation and banker bashing." Despite those reasons, financial executives from the West will not necessarily secure a new job in the East. Three Ls Language ability, links across Asia and localization are prime deciding factors for the success of a financial services job seeker. "'How good is your Mandarin?' is one of the first questions you will be asked," says Carraway Group's Hollands. "Mainland China's market has been badly serviced by private banks" and opportunities exist if you can speak the language. The second question will be about the strength of your regional relationships across Asia. "People have to have relationships -- not just from doing well in the front office but to asset management and private wealth management in particular," says Hollands. "The longer one has lived in China, the better. The best is if you've grown up here." "(Financial services firms) are getting people who understand the local markets," adds Lim of Value Search Asia. "They will hire a Korean to cover Korean markets, Chinese to cover the PRC. We do see a large inflow of European and U.S. bankers (seeking jobs), but (they are) finding it very difficult to get a job here because they don't understand the local markets. It's a safer bet to pick someone local." A third question correlates with culture -- literally how far are you willing to go to give "face." "I recently had a qualified candidate lose out," says Hollands. "He is a Korean national who had lived in Hong Kong but is currently based in Los Angeles. The guy who got the job is a local Hong Konger, and he's here. He had a face-to-face-interview. A phone call or a video call just isn't the same." "Being here gets you 70% of the way." Looking ahead two years, the decision to relocate from West to East hinges on whether you believe financial jobs will be easier to find in Hong Kong -- as opposed to London or New York -- and whether you believe you are that much better than the competition.

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Home / News / Economy / HIRE Act falls short with hiring HIRE Act falls short with hiring By: Bernadette Starzee June 16, 2010 Comments Off The federal Hiring Incentives to Restore Employment Act went into effect in March. But while the act saves businesses a decent chunk of change when they hire certain qualified employees, it won’t measurably improve the unemployment rate. The HIRE Act provides a tax exemption for the employer’s portion of social security payroll tax, or 6.2 percent of the employee’s salary, on salaries paid from March 19 through the end of the year, for qualified employees hired after Feb. 3. To qualify, new employees had to be unemployed when they were brought on board – they could not have worked more than 40 hours over the past 60 days. Additionally, they cannot be related to the company owner. “It’s a perk,” said Jude Coard, a tax partner for Berdon, an accounting firm with an office in Jericho. “But it’s not going to create a mass hiring campaign.” For an employee earning $40,000 per year, for instance, the company would save about $1,800 over three quarters. The 6.2 percent savings only applies to the first $106,800 of a qualified employee’s wages. According to Coard, many of his smaller clients say the act will have no impact on them because they’re not hiring. “They can’t hire people if they don’t have the work for them,” he said. However, for companies on the verge of bringing someone on board, it could be the extra incentive needed. “I have a couple of clients who took advantage of this,” said Salvatore Albanese, a certified public accountant with an office in Hicksville. “One hired one person and the other hired two, and this savings helped tip them in that direction.” Barry L. Sunshine, a tax partner at Grassi & Co. in Jericho, has a client that opened a restaurant chain. “The company is looking to make additions, and if any of the new hires were unemployed, this tax exemption will help the company,” he said. There is some paperwork involved. New employees must sign an affidavit stating that they meet the criteria, and payroll systems must be adjusted to reflect the exemption. “But there’s really no down side, except that it doesn’t go farther than it does,” said Richard Daniele, a tax partner with PricewaterhouseCoopers in Melville. “It won’t be a cure-all, but it’s a positive for small businesses.” The HIRE Act applies to both part-time and full-time workers as well as students and seasonal workers as long as they qualify, but not household help. Open positions can only qualify if the people who held them before left voluntarily or were let go for cause. Companies can’t institute layoffs just to bring on replacements in order to take advantage of the exemption. However, if there were past layoffs and the company has had a change in circumstances, such as new clients, it should qualify for the exemption. “We heard a story where a company was asking if it could fire employees and then hire them back,” Sunshine said. The answer would be no. Eligible employers can claim the payroll tax benefit on the federal employment tax return they file, typically quarterly, with the Internal Revenue Service. They will be able to claim the tax exemption for the second quarter of 2010, and is retroactive to part of the first quarter if the employees were hired before that time. The HIRE Act also has a retention piece. Employers are entitled to a tax credit of up to $1,000 for each qualified new employee that they retain for 52 weeks. Companies may claim the tax credit when they file their 2011 tax returns, provided the employee’s wages during the second 26 weeks of the period are at least 80 percent of the wages over the first half. “What that essentially means is, you can’t hire someone at full pay for the first six months and then give them $1 for the last six months,” Sunshine said. There are several other components of the HIRE Act, the most significant of which is an extension of the enhanced Section 179 deduction into 2010. Businesses can now write off up to $250,000 of qualified equipment and software purchased during the 2010 tax year in the first year, rather than over several years. “Companies that were considering purchasing equipment can accelerate expenses and save the tax dollars today, which will improve their cash flow,” Daniele said. Share this:EmailPrintFacebookLinkedInTwitterGoogle +1 HIRE Act tax exemptions unemployment 8:10 am Wed, June 16, 2010 Long Island Business News Bernadette Starzee Tagged with: HIRE Act tax exemptions unemployment Previous: Shinnecocks stake claim to land Next: Pall expects $370M from debt refinancing

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FORTUNE: The man who brought organics to Main StreetWhole Foods CEO John Mackey tells Fortune's Matthew Boyle he's looking for new ways to please Wall Street - and steer clear of the FTC. By Matthew Boyle, Fortune writerJuly 12 2007: 11:02 AM EDT(Fortune Magazine) -- Whole Foods' (Charts, Fortune 500) $5.6 billion in sales make it the largest purveyor of organic and natural food. Its planned acquisition of Wild Oats (Charts) would make it even bigger, but the government wants to halt the deal. The 53-year-old founder and CEO answers your questions about the merger as well as some from Fortune's Matthew Boyle. Do you feel singled out by the [Federal Trade Commission's] attempt to block the Wild Oats merger? - Name withheld, Orlando Whole Foods CEO John Mackey Questions for... Martha Stewart Author, TV host, and the founder of Martha Stewart Omnimedia answers your questions in the Dec. 8 issue of Fortune.Now's your chance to ask Stewart about launching your own company, how the market turmoil has impacted her empire, and what�s next for the titan of homemaking? Outside U.S. * Your questions: Previous Q&As 'The economy will come around' More from John Bogle 'Be prepared for a lot of bumps' Comcast CEO: Investors are wrong about us Carly Fiorina talks tough More from Fortune Look at the track record of the Federal Trade Commission [FTC] in the last six years. They have approved 96 oil and gas mergers. They approved Smithfield buying the No. 2 pork producer, giving them around 30% market share in the U.S. [In 1999] they approved Exxon and Mobil merging. It's ludicrous to single [us] out for anticompetitive reasons. [The rules] are obviously being selectively enforced. Whole Foods CEO panned rival online Has the conflict made you disillusioned about the grocery business or business in general? - William Hong, Berkeley No. Whole Foods will try to avoid tangling with the FTC ever again in the future. It's ironic: You can open as many stores as you want without permission from the FTC, but if you try to buy stores, that requires permission. The solution is obvious: We won't be buying stores, we'll be opening them. You don't see Wal-Mart (Charts, Fortune 500) acquiring anyone in the U.S. anymore. It's easier for them and us to just open stores. If the Wild Oats acquisition succeeds, what impact will it have on your prices? - Rian Jurvick, Virginia Beach It will have a positive impact on Wild Oats prices, because we will lower prices there. It will not have much of an impact on our prices, because we have already announced we will sell off farmers' markets like Sun Harvest and Henry's and close down some redundant stores. We will get $700 million of sales out of Wild Oats, but that is only 10% of the combined company. So it will not give us a huge increase in our purchasing scale. It shouldn't do anything to our prices. Our prices are more constrained by [rival upscale grocers] H-E-B and Wegmans. That's who we price against. Whole Foods: Can it win back the trust? With organic foods gaining popularity among the masses, are there any plans to expand Whole Foods to smaller cities? - Mark Lee, Rogers, Ariz. We are in a number of small cities and towns. Great examples would be Santa Fe, Boulder, and Winston-Salem. There you have to tailor your store to the market. We do not have a prototype store that we roll out. We are more like custom-home builders. In London we've got an organic pub where you can get organic draft beer and wines. But many of the innovations we introduce are in small stores. If they work, they end up spreading. What are your plans to compete with the likes of Wal-Mart and Kroger (Charts, Fortune 500) as they expand their lines of organic and natural foods? - Anand Shukla, Elk Grove Village, Ill. We're going to continue to try to compete with them in terms of better service, quality, and larger selection. We're innovating on the product side: We have a commitment to ethically traded products. We're upgrading our animal-welfare program, and in London we've introduced our five-step animal-welfare process. It's coming to the U.S. soon. We'll rate all our animal producers in terms of their welfare standards from one to five. We'll have that on the packaging or the case. Much of the meat sold in conventional supermarkets wouldn't meet our No. 1 standard. Producers will want to know what they can do to get their rating from a 2 to a 3. Competitiveness solves that problem. Have you thought of a scaled-down format that offers the same high quality, but in a less lavish and smaller store? - Rick Ferlito, San Diego We have thought about that, and it's very likely we will experiment in that direction over the next year. I don't want to say how it would look, though. It is still in the planning stages. What demographic and other factors do you consider when deciding where to expand? - Corbin See, Oklahoma City The most important thing is the density of college grads, which is why we do so well in New York City. That's a better indicator for us than income. Everyone thinks we cater to the rich, but it's really not true. We cater to the well-educated. The reason is that for people to change their dietary habits requires that they be well informed. There's a growing trend among your core customers to prefer locally produced food over organically produced food. What are you doing to address this change in consumer demand? - Shamsuddin Syed, Bloomfield Hills, Mich. We're doing quite a bit there. We've tripled our supply of local food in the past year. We've also begun loaning up to $10 million a year to help local producers. We've made 13 loans so far. Fortune's Matthew Boyle asksWe've heard that some people go after real estate in neighborhoods where a Whole Foods is slated to open. Have you studied your impact on the real estate market?We haven't commissioned any studies, but I understand that when we opened in Chelsea [in New York City], condos above the store went up 10% in price on the first day. I can look out my window in Austin, where we have our flagship store, and people are building condos all around. The joke is that we could have made a lot more money just buying up real estate around our stores and developing it than we could make selling groceries. That's one reason we have a lot of landlords aggressively [trying] to get us in as tenants. In Miami and Sarasota, for example, we will have condos built nearby as part of a mixed-use project.It's rare for a CEO's blog to make news, but yours has during this Federal Trade Commission flap. Some say your words could be used against you. Do you feel that this is the proper role for a CEO's blog?I don't like that question. I don't want to say what the proper role for a CEO's blog is. We want to communicate as honestly as we can. I am talking about the things I most care about. I don't do what other bloggers do. I don't post all the time. The great thing about blogging is that I don't need you journalists to interpret me anymore. Whole Foods: Merger to avoid price war Whole Foods halts sales of live lobstersFrom the July 23, 2007 issue SAVE | EMAIL | PRINT | | REPRINT Investors cheer India election's reform potential Top StoriesInvestors cheer India's electionYahoo pays ousted exec $58 millionGoogle stock sinks on missed expectationsGoogle's future phoneFeel good Wednesday: Markets up 1% Sponsors

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About Robert The College InvestorYoung Adult Personal Finance and InvestingHome Ditch Your Student Loans Learn to Invest Millionaire Series Canadian Energy Stocks are Especially Appealing October 8, 2013 By Jonathan Yates In previous articles, the case for oil stocks as long term invests was made, particularly those in North America. The global demand for oil and natural gas is increasing, which makes these excellent long term investments. Due to political instability and other issues around the world in oil producing regions, it is not just North American oil and natural gas stocks that are particularly appealing, both especially those in Canada. Repsol (PINK: REPYY), a major Spanish oil and natural gas company, is looking to spend billions to buy North American energy assets. Like all others in the sector, Repsol wants a secure, stable source of natural resources to fuel its operations for the future. At present, much of the world’s oil and natural gas comes from unstable or dangerous areas such as the Middle East and Africa. That is what has led Repsol to the North American energy sector. Canada is Part of the North American Energy Sector But in North America, the United States can be treacherous for oil and natural gas operations, too. BP (NYSE: BP), the British oil giant, is a long way from leaving its troubles behind in the Gulf of Mexico. In addition, it is the United States, not Canada, which is holding up The Keystone Pipeline. Intended to carry oil and natural gas from Canada to refineries primarily in Texas, The Keystone Pipeline was first proposed by TransCanada Corporation in 2005. Construction was approved by Canada in 2007. It is still awaiting final approval in the United States, despite the myriad of much-needed economic benefits it will create for both countries. For investors ranging from Repsol to the individual there are a wide range of choices in publicly traded companies operating in the Canadian oil and natural gas sector. Top Canadian Energy Performers Warren Buffett, considered by many to be the best investor ever, is a major shareholder in Suncor Energy (NYSE: SU). The stock performance of Suncor has certainly rewarded Buffett and other shareholders, as has its above average dividend yield. For 2013, Suncor Energy is up almost 10%. Over the last quarter of market action, however, Suncor Energy has risen more than 20%. Also promising over the last two quarters have been developments for two small cap oil and natural gas firms in the Canadian energy industry. Octagon 88 (OTCBB: OCTX) is up more than 50% due to promising studies about its assets in Canada. It could be a member of the “billion barrel club” if reports prove to be correct. Octagon 88 just received approval for a drilling license, which is a very positive development. For its most recent quarter, Americas Petrogas reported a 75% increase in net revenue and a significant jump in sales volume. Like Octagon 88, Americas Petrogas has also received bullish reports in on its energy holdings. To maximize shareholder value, Americas Petrogas has hired the investment banking firm of Jefferies LLC, which is also very positive for the owners of the stock. According to the US Energy Administration agency, global energy consumption should rise nearly 60% over the next 30 years. Based on the current turmoil in the Middle East and Africa, energy assets in North America should increase in value over that period. Those in Canada should be the most appealing of all, due to the unique alluring features of the energy sector for that country. What are your thoughts on Canadian energy stocks? Free Investing Video Training SeriesIn this free video series Robert reveals "How To Start Investing in Minutes." Enter your email for a video course series of the EXACTLY what you need to do to get started, along with extremely helpful tips and tactics.Sign Up Now Filed Under: Daily Market Insight Tagged With: Americas Petrogas, Canada, Canadian Energy, Canadian Energy Stocks, Energy Sector, Octagon 88, Repsol, Suncor EnergyAbout Jonathan YatesJonathan Yates is a financial writer with degrees from Harvard, Johns Hopkins and Georgetown University Law Center. While much of his career was spent working for Members of Congress on Capitol Hill, he was also General Counsel for a publicly traded corporation; and worked in the research department of a brokerage house. http://www.prop-trading.com/ Torey Thompson Definitely a good option for investing, Jonathan. Considering that the financial market in the US is a bit volatile at the moment. However, how do you think the US’ strive to be independent of foreign oil affect its energy sector? Most seem to assume that this very reason is good enough to start investing in it. Hello! My Name is Robert1. I Hate Student Loan Debt2. I Want To Help You Invest and learn how to earn more money!Sign up below to learn how you can ditch your student loans and start investing today! As Featured On Follow The College Investor When to Expect My Tax Refund? FedLoan Servicing - The Worst Student Loan Servicer The 19 Best Investment Blogs You Can Learn From The Top 10 Investors of All Time IRS Where's My Refund Reference Codes The College Student's Guide to Investing 5 Things Your Millionaire Neighbor Isn't Telling You Fannie and Freddie Shareholders: Hedge Funds vs Government Marijuana Stocks and Other Ways to Invest in Cannabis 101 Essential Tips and Resources for College Freshmen Privacy Policy • Terms of ServiceCopyright © 2014 The College Investor · Designed by Nuts and Bolts Media

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Financial News Releases Historical Stock Price Proxy Notices UTI HOME AUTO / DIESEL / COLLISION NASCAR TECH MARINE Financial News Releases Universal Technical Institute Announces Leadership Changes in Marketing and Operations SCOTTSDALE, Ariz., Aug. 20, 2012 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), a leading provider of technical education training, today announced key leadership changes in its Marketing and Operations organizations. Effective immediately, Thomas E. Riggs, the current Senior Vice President of Operations will now serve as the company's Senior Vice President of Marketing. Mr. Riggs succeeds Richard P. Crain, Senior Vice President of Marketing and Strategy. Mr. Crain will be leaving the Company effective immediately. Mr. Riggs has been with UTI for seven years, starting as Vice President of People Services (Human Resources), and most recently as Senior Vice President of Operations. In light of Mr. Riggs new appointment, the company has announced that Sherrell E. Smith will return to UTI as Senior Vice President of Operations, effective August 20, 2012. Prior to his departure from UTI in 2009, Mr. Smith was with UTI for 23 years. During his previous tenure with the company, Mr. Smith contributed to the organization in many leadership roles: Campus President, Regional Vice President of Operations and Executive Vice President of Operations. After his departure from UTI, Mr. Smith had been advising a private equity firm on acquisition opportunities in the education field as well as served as the Chief Executive Officer of American Institute of Technology "With these changes in leadership, we look forward to building a stronger marketing competency while bringing a high level of experience back to our operations organization," said Kim McWaters, chief executive officer, UTI. "Tom has been highly involved with initiatives and ongoing process changes on the front-end of the business and has an excellent track record of building organization capability. Additionally, we are pleased to welcome Sherrell back to UTI. His deep understanding of our operations and his dedication to our company's mission will allow for a seamless transition as we continue to drive operational efficiencies and improvements to student outcomes." About Universal Technical Institute: Headquartered in Scottsdale, Arizona, Universal Technical Institute, Inc. (NYSE: UTI) is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. With more than 160,000 graduates in its 47-year history, UTI offers undergraduate degree, diploma and certificate programs at 11 campuses across the United States, as well as manufacturer-specific training programs at dedicated training centers. Through its campus-based school system, UTI provides specialized post-secondary education programs under the banner of several well-known brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NTI). To learn more about UTI and its training services, log on to www.uti.edu. All statements contained herein, other than statements of historical fact, are "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, as amended. Such statements are based upon management's current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company's actual results include, among other things, changes to federal and state educational funding, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or expanding campuses, potential increased competition, changes in demand for the programs offered by UTI, increased investment in management and capital resources, the effectiveness of the recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic conditions of the Company and other risks that are described from time to time in the Company's public filings. Further information on these and other potential factors that could affect the financial results or condition may be found in the Company's filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. Except as required by law, the Company expressly disclaims any obligation to publicly update any forward-looking statements whether as a result of new information, future events, changes in expectations, any changes in events, conditions or circumstances, or otherwise. SOURCE Universal Technical Institute, Inc. Investor RelationsColleen Weldin623-445-0993cweldin@uti.edu © 1999-2010 Universal Technical Institute, Inc. About Us | Regulatory Information | Privacy | Legal Notice | Careers @ UTI | Investors | News Room | UTI Foundation | Employers | Management

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Banking execs won't find prison nearly as easy to scam as their ATM racket Michael Cooney (Network World) Two executives at a company that owned and dispensed automated teller machines have been sent to jail for defrauding the Domestic Bank of Cranston, Rhode Island of about $4.8 million. According to the FBI, New England Cash Dispensing Systems (NECDS) Joseph Sarlo, the chief executive and John DeMilo, 44, general manager were as sentenced to 42 and 22 months respectively in prison, plus four years probation each for their role in a scheme that the FBI said began in 2000 and resulted in millions of dollars of lost cash for the bank. MORE: The weirdest, wackiest and coolest sci/tech stories of 2012 (so far!) US warning: Big uptick in Reveton malware impersonating the FBI According to the FBI, Sarlo's directed NECDS personnel, including DeMilo, Mirza Baig, and Gary Vestuti (who are already in jail for their roles), implemented a scheme to defraud Domestic Bank out of cash that it supplied for use in NECDS's ATM network. While ATMs in the NECDS network bore the logo of Domestic Bank, NECDS was responsible for contracting with merchants and placing the ATMs in their establishments. Ultimately, there were three funding sources for ATMs within the NECDS network: Domestic Bank provided the cash for specified ATMs in the network, NECDS supplied cash for other ATMs in the network, and certain merchants supplied cash for other ATMs. Over the course of time, the number of ATMs in the network that were funded by Domestic Bank increased, while the number of ATMs funded by NECDS decreased, the FBI stated. The FBI said that as part of the scheme, NECDS personnel ordered excess cash from Domestic Bank and used it to refill ATMs that would otherwise have been refilled with NECDS's funds. The co-conspirators also engaged in a cover-up to prevent the bank from recognizing that money was missing by "floating" Domestic Bank's money. Specifically, the co-conspirators would order extra money for an ATM that was funded by Domestic Bank knowing that the extra cash would be used to fill another ATM that previously had been shorted cash. This was done regularly over several years and resulted in Domestic Bank receiving false information through the periodic replenishment process indicating that its cash was appropriately accounted for, the FBI said. Domestic Bank ultimately lost approximately $4.8 million in funds that it had supplied to NECDS. Baig, who is now serving a 51-month sentence, has admitted that he took approximately $2 million of the misappropriated cash. A portion of the stolen cash was used by NECDS to pay business expenses. The defendants have been ordered to pay $4,805,540 in restitution. In addition, Baig has been ordered to forfeit an interest in his house of up to $1.2 million, as well as two vehicles. Follow Michael Cooney on Twitter: nwwlayer8 and on Facebook Read more about wide area network in Network World's Wide Area Network section. Case Study: ETEL Limited

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Netcentives Files for Bankruptcy Protection, Sells E-mail Business Online incentive and e-mail services provider Netcentives Inc. yesterday filed for bankruptcy protection under Chapter 11. The company said that it plans to maintain operation of all existing loyalty programs, including its ClickRewards, Delta SkyMiles Shopping and United MileagePlus Shopping rewards programs. The San Francisco-based company also said it signed a letter of intent to sell its Email Marketing Group to Plum Acquisition Corp. Financial terms of the sale were not disclosed. "The filing is an important step in protecting the value of our loyalty and e-mail business operations and the underlying intellectual property, patents and source code as we seek to sell the company's business operations," said Eric Larsen, Netcentives' CEO. He also said that the bankruptcy filing is an extension of the company's reorganization, begun earlier this year. On Sept. 13 Netcentives announced a workforce reduction of 50 people, bringing its total employee base to 130. On the same day, Nasdaq delisted the company's shares from trading on the National Market for failing to trade above $1 for more than 30 days. Netcentives' shares thereafter were traded on the OTC Bulletin Board. Circuit City files for bankruptcy protection Mal Dunn Associates files for Chapter 11 bankruptcy protection Sharper Image files for bankruptcy KB Toys files for bankruptcy Brands turn to triggered e-mails to build loyalty and drive customer engagement Next Article in Digital Marketing Promo Milks Teens&#39; Fondness for Video Games Sponsored Links

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Hong Kong (EN) Jaeger-LeCoultre – Unique Auction Tuesday 29 November 2011, Hotel Marcel-Dassault, ParisThe vintage watch market grown considerably in recent years, and ARTCURIAL Briest-Poulain-F.Tajan, the leading French auction house, is delighted to announce a historic sale to be held on 29 November 2011: Jaeger-LeCoultre Unique Auction. Jaeger-LeCoultre is lending support to the event by providing an extract from the archives for every timepiece in the sale. Among the sale highlights, Jaeger-LeCoultre presents the unique Atmos 561 by Marc Newson that will be sold in aid of charity, to the benefit of AMM, Monaco Association against Duchenne Muscular Dystrophy. AMM aims at collecting funds to finance research, organize scientific roundtables and improve the quality of life of the children, teenagers and young adults affected by the genetic illness. Progressively serious, Duchenne Muscular Dystrophy is characterized by a weakening of muscles and leads to lung and cardiac complications that become fatal with the onset of adulthood. The Atmos is the world’s only clock movement that runs on thin air. The unique Atmos 561 by Marc Newson is completely balanced and simple in design, as unexpected as it is obvious, yielding a spare form that borders on a sketch. Designer Marc Newson, who has always been fascinated by the Atmos clock, has designed its case as a Baccarat crystal bubble, which brings out its ethereal nature, lends it a futuristic elegance and catapults it into the ranks of today’s great designs. For this unique Atmos piece, Baccarat customized its crystal using all its expertise and following numerous manufacturing operations. The “unpolished” technique was applied first to the exterior surface of the crystal which was subsequently immersed into acid baths to obtain a sandblasted crystal effect. During this operation, certain areas of the crystal were protected, which allowed to show several shades of the sandblasted crystal. Exceptional Viewings for an Exceptional Sale. The first viewing will be a partial presentation of the sale at the Hôtel Hermitage in Monte Carlo from July 23-26, during Artcurial's prestige jewellery and watch sales in Monaco. The watches from the Jaeger-LeCoultre auction will then be on show in Geneva from November 11-14, coinciding with the frontline international watch sales. The final viewing will be at the Hôtel Marcel-Dassault in Paris from November 24-28, prior to the auction on Tuesday 29 November 2011 (7pm).

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Debt-laden Puerto Rico’s credit rating cut to ‘junk’ status By Agence France-PresseTuesday, February 4, 2014 18:07 EDT TweetStandard & Poor’s on Tuesday cut the debt rating of Puerto Rico to junk status, saying the US territory is facing a liquidity squeeze due to high debts and a high deficit. S&P lowered Puerto Rico’s rating by one step to the “speculative” grade of BB+ as the territory was testing markets to raise a fresh $2 billion in financing. The government and official agencies of the Caribbean island territory, with a population of 3.7 million, have some $70 billion in debt, and its constitution essentially forbids it from a default. But S&P said nevertheless that it “has limited liquidity” which cannot be fully financed by the territory’s Government Development Bank. The GDB’s own rating was dropped a step to BB, one notch lower than the government debt grade. “Puerto Rico has limited liquidity without access to the debt market by either GDB or directly by the Commonwealth for sizeable amounts of debt,” S&P said. Yet the territory will need further borrowing to finance a possible deficit in fiscal 2015, even if it makes headway in reducing the government’s financing shortfall, S&P said. The rating agency added that the currently planned sale of new bonds to refinance GDB debt will come at a price, “adding to an already high debt service burden.” And faced with a continued government deficit and weak island economy, S&P said, the risks of not being able to meet its needs will remain high — reason for the agency placing Puerto Rico on a negative watch, for another possible downgrade. “In our view, there is little margin for error over the next two years,” S&P said. On the other hand, the agency said the government’s progress in cutting its operating deficit and reforming pensions explains why it did not receive a lower rating. “We view the reform as significant and could contribute to a sustainable path to fiscal stability.” The island’s financial problems have shaken the $3.7 trillion market for US municipal bonds, especially in the wake of the default last year by Detroit. Enjoying broader tax breaks than most issuers in that market, Puerto Rico was able to sell huge amounts of debt over the past decade, which was meant to finance a buildup of infrastructure and revitalize the island’s economy. But the economy has continued to stumble, contracting every year since 2006 even as the US economy has rebounded in the past four years. The official unemployment rate is 14.7 percent, more than double that of the United States, and the debt burden is equivalent to 93 percent of the island’s gross domestic product, or economic output, more than the debt-to-GDP ratio of troubled Spain. The White House last year mobilized a team to help the government strengthen its finances and avoid a default, but investors have sold off its bonds as the risks grew. While the S&P downgrade was expected, Puerto Rico Treasury Secretary Melba Acosta Febo and GDB Chairman David Chafey expressed disappointment. “We remain committed to the implementation of our fiscal and economic development plans,” they said in a statement. They said the were confident that the government has the liquidity it needs through the end of the fiscal year on June 30, and were in discussions with lenders for additional financing. [Image via Agence France-Presse]

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The Fed, the Eurosystem, and the Bank of Japan: More similarities or differences? Francesco Paolo Mongelli, Dieter Gerdesmeier , Barbara Roffia, 7 February 2009 This column systematically compares the US Federal Reserve System, the Eurozone central banking system, and the Bank of Japan’s institutional structures and monetary policy frameworks. Central banks have always been important players in financial markets. They set key interest rates, which are at the origination of the monetary transmission process, they are monopoly suppliers of base money, and they perform a number of other tasks and functions. Central banks can better perform their mission and fulfil their goals when they are understood by the public and other policy makers. One of the youngest members of the central banking community is the Eurosystem (a supranational central banking system). The purpose of this column is to highlight some of its organisational features through a systematic comparison with other central banks. The Eurosystem comprises the European Central Bank (ECB) and the national central banks (NCBs) of those EU Member States that have adopted the euro (and, therefore, make up the euro area). With the launch of the euro on 1 January 1999, the Eurosystem acquired responsibility for setting the single monetary policy in the euro area. The Eurosystem is led by the Governing Council of the ECB, which is in charge of formulating monetary policy. We compare the Eurosystem to the US Federal Reserve System (the “Fed”, which was established in 1914), and the Bank of Japan (“BoJ”, which was established in 1882). Organisational framework and institutional features The governing bodies of the Eurosystem are the Governing Council and the Executive Board. The latter consists of the President, the Vice President, and four board members. Its main task is to implement the decisions of the Governing Council, which currently consists of the Executive Board members plus the 16 governors of the euro area NCBs (see Figure 1). Figure 1. Organisational framework of the Eurosystem Note: NCBs refers to the National Central Banks of the 16 euro area countries from January 2009. Source: Gerdesmeier, Mongelli and Roffia (2007). The institutional arrangements of the Eurosystem in some ways resemble those of the Fed (see Figure 2) –, both are federal central bank systems. The Fed became more centralised with the Banking Act of 1935. For its part, the ECB has in principle a role similar to that of the Fed’s Board of Governors, while the 16 NCBs of the Eurosystem play a role similar to the 12 regional Federal Reserve Banks in the US. In a similar fashion, the President of the ECB chairs the Governing Council meetings in much the same way as the Chairman of the Fed’s Board of Governors chairs meetings of the Federal Open Market Committee (FOMC) that is responsible for formulating monetary policy in the US. While the structures of the Eurosystem and the Fed share many similarities, there are also some key differences. One concerns voting rights. Currently, all NCB governors have an equal vote in all policy decisions taken by the Eurosystem Governing Council. Participation in FOMC voting, in contrast, is more restricted – all seven members of the Board of Governors of the Federal Reserve System have a permanent voting right, as does the President of the New York Fed, whereas the Presidents of the Chicago and Cleveland branches alternate annually, and the other nine reserve bank presidents share only four votes on a rotating basis, although they do all attend the FOMC meetings and participate in the discussions even when they cannot vote. The voting system of the Governing Council will change when more countries adopt the euro. Figure 2. Organisational framework of the Federal Reserve System Notes: FRBs are the regional Federal Reserve Banks of the 12 districts. The solid arrow in the implementation stage denotes the fact that the FRBNY is entrusted with a conduct of open market operations. The dashed arrow in the implementation stage denotes the fact that the Board of Directors of each Fed bank sets the discount rate (subject to the approval of the Board of Governors). Source: Pollard (2003). The Bank of Japan’s decision-making body is its Poicy Board (see Figure 3). The Board comprises the Governor, two Deputy Governors, and six appointed members. Each of these nine members is appointed by the Cabinet for five years, and his or her appointment must be approved by the Diet. The board members elect the Chairman of the Policy Board among themselves. Since September 2006, the Governor of the Bank has also been appointed Chairman of the Policy Board. The Policy Board takes its decisions by a majority vote. The BoJ operates more as a head office than a federal system of central banks and is in charge of 32 domestic local branches (LBs) and 12 local offices (LOs). Figure 3. Organisational framework of the Bank of Japan Source: Bank of Japan (2003). The monetary policy framework The table below provides an overview of the institutional and policy-making frameworks of the Eurosystem, the US Federal Reserve System, and the Bank of Japan. There are some differences in the terms and length of the appointments of policy makers, and all three central banks emphasise the importance of independence. Table 1. Monetary policy frameworks Established/ Made independent Monetary policy decision-making body Governing Council, comprising 22 members: the ECB Executive Board (6 members) and the Governors of the 16 NCBs of the Eurosystem Federal Open Market Committee (FOMC),12 members: 7 Board Governors, President of the New York Fed, and 4 of the 11 other reserve banks FedPresidents on rotating basis; 19 participants Policy Board, 9 members Appointment of policy makers President and Governing Councilmembers appointed for 8 years by nationalgovernments; ratified by European Parliament Governors (14 year terms)/Chairman(4 year term) appointed by the President and approved by the Congress; Bank Presidents selected by Bank directors (largely local banking/ business community) Board members appointed for 5 years by the cabinet;parliamentary ratification required Independence from political influence Yes. Enshrined in the Maastricht Treaty Yes. Fed is a “creature of the Congress” and must report regularly, but enjoys substantial independence by long-standing tradition Yes. Established in the 1998 BoJ law, but (at times) not well respected by the political establishment Monetary policy objective(s)/ Mandate Price stability is the primary objective as set in the Maastricht Treaty. The ECB has quantified this as medium-term inflation goal of “below but close to 2%” Multiple objectives: to promote maximum employment, pricestability, and moderate long-term interest rates. Price stability not defined, but widely viewed as 1-2% comfort zone (skewed toward upper portion) for core PCE inflation Multiple objectives: price stability and the stability of the financial system. Price stability objective is set in qualitative terms in the 1998 law and policy board has quantified this as a range of 0% to 2% inflation in the medium term Monetary policy strategy Two pillar strategy. First pillar focuses on shorter-term economic and pricedevelopments (“economic pillar”); Second pillar focuses on longer-term inflation outlook based on monetary analysis Focus on economic forecasts; rates adjusted to optimise expected outcomes and minimise risks of deviating from those outcomes (factoring in costs of those deviations). Preference forgradualism unless risks dictate more aggressive action Two perspectives strategy, the first focusing on short-term inflation developments and the second on economic and inflation developments as well as financial stability in a longer-termperspective Decision-making style Consensual, with the President assuming the role of moderator; dissents are rare Consensual (less so under Bernanke than Greenspan), with Chairman clearly first among equals. Dissents are infrequent, multiple dissents are very rare By majority vote; dissents are frequent (55% of decisions since the BoJ law was enacted were taken with at least one dissenter); Governor is generally opinion leader Role of monetaryaggregates and asset prices Both play a significant role Neither plays a significant role independent of their effects on growth and inflation a. Immediate pressconference after Council meetings with introductory statement and Q&A (2:30 pm local time) a. Immediate announcement following the FOMC, with voting record (2:15 pm local time) a. Immediate announcement after monetary policy meetings (around 12 noon local time) with voting record, followed by Governor's press conference (3:30 pm local time) b. Annual Report to EU institutions andpresentations to theEuropean Parliament b. Meeting minutes three weeks later b. Minutes (generally a month later, three days after next monetary policy meeting) c. Monthly Bulletin published c. Full transcripts of meetings five years later c. Monthly Report of the Policy Board 34-40 days after meetings d. Speeches d. Frequent speeches by FOMC participants e. Semi-annual monetary policy report to Congress; other hearings e. Semi-annual report to the Diet Sources: Websites and other publications of BoJ, ECB and the Fed. See also Gerdesmeier, Mongelli, and Roffia (2007) and references therein. The economic and financial environment in which the central banks operate A factor that is contributing to reducing the differences between the Eurosystem, the Fed, and the BoJ are the declining “internal” differentials in their economic and financial environment. A few examples will suffice. From 1980 to 2008, inflation dispersion in the US remained within a considerably narrow range, whereas in the euro area it trended downward reaching levels comparable to those in the US just prior to the launch of the euro (ECB 2008). Inflation differentials in Japan have remained at a very low level since the 1980s. Differentials in economic growth have all sharply declined over the last 10-15 years. All things considered, the Fed and the BoJ still operate in a more harmonious economic and financial environment. Other tasks of the Eurosystem, the Fed, and the BoJ In addition to the monetary policy function, all three central banks perform diverse other functions and tasks (see table below) most of which are relatively similar, although some vary on the grounds of other factors (some of which historical) that are not addressed here (for more information in this regard, see Gerdesmeier, Lichtenberger and Mongelli, 2005). Table 2. Other tasks Eurosystem1 Issue banknotes Conduct foreign exchange operations Hold and manage official reserves NCBs Act as the fiscal agent for the government Promote stability and financial system Supervise banks Some NCBs On a contractual basis Promote the smooth operation of the payments system Collect statistical information Participate in meetings of international monetary institutions Sources: BoJ (2003a), ECB (2004), Gerdesmeier, Mongelli and Roffia (2007) and Pollard (2003). 1 The acronym NCBs here refers to the national central banks of the Eurosystem. The status and the mandate of the three central banks differ somewhat. This reflects different historical conditions, as well as national characteristics, at the time of their creation. However, changes to central banking practices (especially trends towards greater independence and transparency) and changes to the general economic and financial environment over the past two decades have clearly reduced the differences among these monetary authorities. In particular, regarding the monetary policy strategy, the ECB has a two-pillar strategy, the FED has multiple indicators, and the BoJ has multiple indicators and focuses on money and financial assets. In terms of objectives, the ECB has a price stability objective, the Fed has multiple objectives, and the BoJ has a range for inflation developments. In this column, we compared the institutional structures and monetary policy frameworks of the three most important central banks. In future work, we will investigate the frequency and amplitude of the setting of the respective key policy interest rates in a descriptive analysis and from the perspective of a Taylor-rule framework. This may allow us to judge how much the actual monetary policies differ among the three central banks. Note: The views expressed are those of the authors and do not necessarily reflect those of the European Central Bank. Bank of Japan (2003), “About the Bank of Japan.” Annual Review, 78-118. Blinder, Alan S. (2004), The Quiet Revolution: Central Banking Goes Modern, New Haven: Yale University Press. European Central Bank (2004), The Monetary Policy of the ECB, 2nd edition, European Central Bank, Frankfurt am Main. European Central Bank (2008), 10th Anniversary of the ECB, Special Edition of the ECB Monthly Bulletin, June 2008. Gerdesmeier, Dieter, Jung-Duk Lichtenberger and Francesco P. Mongelli (2005), “A Brief Comparison of the Eurosystem, the US Federal Reserve System, and the Bank of Japan.” In Elements of the Euro Area: Integrating Financial Markets, edited by Jesper Berg, Mauro Grande and Francesco Paolo Mongelli, pp: 33-52. Aldershot: Global Financial Series, Ashgate. Gerdesmeier, Dieter, Barbara Roffia and Francesco P. Mongelli (2007), “The Eurosystem, the US Federal Reserve, and the Bank of Japan: Similarities and Differences.” Journal of Money, Credit and Banking, 39:7, 1785-1819. Pollard, Patricia S. (2003), “A Look inside Two Central Banks: The European Central Bank and the Federal Reserve.” Review of the Federal Reserve Bank of St. Louis, January/February, 11-30. Topics: Monetary policy Tags: Central Banks, monetary policy frameworks Dieter Gerdesmeier Principal Economist, Directorate Monetary Policy of the European Central Bank Francesco Paolo Mongelli Professor, JW Goethe University of Frankfurt Barbara Roffia Senior Economist, Directorate Monetary Policy of the European Central Bank This MonthAll Time Internationalisation, innovation, and productivity of firmsAltomonte, Aquilante, Békés, Ottaviano How rich nations benefit from EU membershipCampos, Coricelli, Moretti The ECB should do QE via forex interventionFrankel The chartbook of economic inequalityAtkinson, Morelli Predicting economic turning pointsAhir, Loungani more A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke The ECB’s stealth bailoutSinn Educated in America: College graduates and high school dropoutsHeckman, LaFontaine Eurozone breakup would trigger the mother of all financial crisesEichengreen Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji more Vox Talks

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Meta Navigation: ContactSitemapSearchMobileDeutsch Primary Navigation: HomeCompanyInvestor RelationsMediaResponsibilityCareers MediaPress Releases2006 Secondary Navigation: Press Releases Speeches / PresentationsReports / PublicationsManagementEventsPhotosFootageNewsletterContact for journalistsSocial Media Frankfurt am Main, January 23, 2006 Koch-Weser to join Deutsche Bank as Vice Chairman Deutsche Bank today announced the appointment of Caio Koch-Weser as Vice Chairman of the Deutsche Bank Group, reporting to Josef Ackermann, Spokesman of the Management Board and Chairman of the bank's Group Executive Committee. Koch-Weser, 61, a German and Brazilian national, will act as a non-executive senior advisor to the Group Executive Committee and the bank's clients on financial, economic and strategic developments, and will represent the bank in key public forums worldwide. For the last six years, Koch-Weser was Deputy Finance Minister for Germany and, since 2002, Chairman of the Supervisory Board of the German Federal Financial Supervisory Authority (BaFin). As Deputy Minister, Koch-Weser was responsible for international finance, European economic and financial affairs, money and credit (capital markets, banking and insurance). At a European level, Koch-Weser was in 2003 elected and served as Chairman of the European Economic and Financial Committee of the Ecofin/Euro Group of Finance Ministers. From 1999, Koch-Weser was Finance Deputy of the G7 and Deputy for Germany of the G20. "Caio brings a wealth of experience in government affairs, international finance and global economics. He will be a valuable asset to the bank and its clients," said Ackermann. Before his governmental duties, Koch-Weser spent 25 years at the World Bank, most recently as Managing Director of Operations, based in Washington. He was also Chairman of the World Bank Policy Committee and a member of the Executive Management Committee. During his time at the World Bank, Koch-Weser worked in all regions of the world. Among his senior assignments in Asia, Latin America, East Europe, the Middle East and Africa, he was instrumental in developing the World Bank's China programme in the 1980s, working with the Chinese government on strategy for shifting China to a market-based economy. At Deutsche Bank, Koch-Weser will be based in London. For further information, please call: Deutsche Bank Press and Media Relations Alfredo Flores + 49 69 910 47300Jezz Farr + 44 20 754 57506 About Deutsche Bank With Euro 972 billion in assets and 63,751 employees, Deutsche Bank offers unparalleled financial services in 74 countries throughout the world. Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people. Deutsche Bank ranks among the global leaders in corporate banking and securities, transaction banking, asset management, and private wealth management, and has a significant private and business banking franchise in Germany and other selected countries in Continental Europe. www.db.com to overview Tweets by @Deutsche_News More Tweets: twitter.com/Deutsche_News Social Media Deutsche Bank provides current information via several social media platforms. Follow our Tweets, view current videos and photos or subscribe to our news updates using your preferred channel. more RSS & Podcast Receive current Deutsche Bank press releases automatically with our RSS news feeds and podcasts. more Footer Navigation: ImprintLegal ResourcesAccessibility Last Update: 2.9.2013

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Don't Overlook These Beverage Stocks in 2013 By Madhukar Dubey - DPS, PEP, SBUX Madhukar is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. The Center for Science in the Public Interest (CSPI), a non-profit organization, has recently filed a petition with the FDA asking it to set a safe level for added sugar in beverages. If implemented, it will have a significant impact on the beverage industry. But I see two reasons why this shouldn’t be on the table very soon. One – The American Beverage Association (ABA) will again fight this one out like they have in the past. Secondly, for two decades soft drinks have held the title of the single greatest source of added sugar in the American diet, but now it has lost the belt to the food industry. Whatever is the case, the immediate future of the beverage industry looks safe from the outcomes. In this article, I have picked three beverage stocks that offer good long potential this year. PepsiCo Incorporated (NYSE: PEP) The impact of the 17% rise in its earnings was pretty clear on PepsiCo’s stock price. With the declaration of 4Q12 results the company's stock jumped by ~4%. It also announced guidance for 2013, in which it expects revenue growth of 7% year-over-year and a rise in organic sales by mid-single digits. Historically, the company has been a consistent performer, and its guidance is in accordance with the recent cost cutting initiatives. 2012 began with the implementation of an additional program to improve PepsiCo’s productivity. The combined productivity plan is expected to generate ~$1 billion of savings in each of the next three years. Last year, this plan was successful in achieving its yearly target and it is expected that the same success shall be repeated in 2013 as well. The program includes leveraging new technologies across businesses, simplifying organizational structure, which includes lay-offs and uniting manufacturing, warehousing, and sales facilities. Investor's Returns 2013 will also be in focus because of the recently authorized repurchase plan and the increase in the annualized dividend. PepsiCo has initiated a new share repurchase program of $10 billion to be executed in the next three years. Along with this, the company has also announced a 5.6% increase in the annual dividend effective June 2013. Last year, PepsiCo repaid its investors around $6.5 billion in the form of buybacks and dividend payments and expects to return ~$6.4 billion in 2013 too. This shows the inclination of the company to reward its investors. The company's diversified product line is beneficial for its reach, but at the same time the company is heavily exposed to currency fluctuation. The stock’s future seems strong because of its robust product line, well-planned productivity program, and the announcements regarding repayment to the investors. I am bullish about the stock, hence I'll rate it a Buy. Dr Pepper Snapple Group Incorporated (NYSE: DPS) After the declaration of 4Q12 and full year 2012 results, investor disappointment was evident from the fall in Dr Pepper's share price. Dr Pepper reported a rise in revenue by ~2%, but a decline in overall sales volume was seen. Additionally, a modest guidance for 2013 added fuel to the fire. But I feel that the decline in price has created a good entry point, because the company has a strong product line and the new variants should be successful in the future. Future Pipeline Recently Dr Pepper announced few new variants of its popular brands like 7Up, Canada Dry, Sunkist, A&W, and RC on the TEN platform. The specialty of the TEN platform is that it provides taste with health. Twelve ounces of a TEN platform drink comes with only 10 calories. With the increasing health conscious consumers in the market, the drinks should sell well. To boost the expected sales from the variants, Dr Pepper is also planning to invest around $30 million on the marketing of the platform. In the long run TEN can be a champ. Additionally, the agreement of the company with Zaxby's, a Georgia-based chain food franchise, will increase the reach of the company in the Southeast US. According to the agreement, Zaxby's will introduce brands of Dr Pepper in all of its current and future locations. At present, it operates 565 locations spread over 13 states. Zaxby's specialty chicken fingers and boneless wings are a southeastern favorite. The noticeable payoff from the new platform and increased reach should strengthen the company's performance in the near future. Starbucks Corporation (NASDAQ: SBUX) Starbucks posted solid 1Q13 results for its investors. The EPS of $0.57 was in-line with the analyst consensus, strong same-store-sale (SSS) showed better-than-expected holiday sales, and a continued growth abroad justifies its future expansion endeavors. Expanding horizon Starbucks has planned to open nearly 1300 new stores worldwide in FY13. This includes ~600 each in the American and China Asia Pacific (CAP) regions. The company has already successfully opened 212 new stores in the first quarter of FY13. Same stor sales in the American region increased by ~7% because of the rise in traffic. The out-sized growth in gift cards and mobile reloads aided the SSS, and a continuous growth is expected to help the comps in the coming quarters as well. As for CAP, half of the expansion plan in the region is dedicated to China. The country has the highest co-operated store-margin in the company at ~30%, and one year return on investment is somewhere around 67%. The company's recent decision of opening nearly 300 stores, revising the past target of 250, is in accordance with the longer term outlook of making China the second largest market for Starbucks. Along with it, I see its investment in India as a positive opportunity. Although it is too early to say anything about the expansion plans since it has opened only one store to date, the recent opening of the roasting and packaging plant in the country increases my faith in the investment. Looking at all this I feel that Starbucks’ stock should remain strong in the future as well. Pepsi's productivity related initiatives seems effective and should achieve the required cost savings. This, along with the company's commitment to repay its investors, makes the stock strong. Dr Pepper's roll-out of new products in the market could help it to secure a profitable position. And, the expansion plans, may it be Dr Pepper's introduction in Zaxby's or Starbucks’s expansion in the American and CAP regions, should help increase the reach of each company's products in the future. Therefore, I recommend a buy on all three stocks. madhudube has no position in any stocks mentioned. The Motley Fool recommends PepsiCo and Starbucks. The Motley Fool owns shares of PepsiCo and Starbucks. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own! Email Madhukar Dubey madhudube Madhukar Dubey is a member of The Motley Fool Blog Network Also On This Topic Fantasy Football Meets Million Dollar Reality Did David Einhorn Give Up on His Green Mountain Short? 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