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3 efficient methods to get rid of credit card debts

2010-04-29T23:25:00.001-07:00

If your credit card debt is escalating rapidly everyday and you're unsure how to pay-off your debts, then it's the perfect time to get a credit card debt management program. These programs offer you easy to implement plans which can be implemented by anybody to eliminate credit card debt and start to accumulate some money.

The following are the three methods by which you can pay-off your credit card debts -

1. Debt snowball method: It is the method where the debtor pays off the accounts with the smaller balances first proceeding to the larger ones later. The basic steps of this method are -

• Commit to pay the minimum balance on every debt. Analyze how much more you can pay to the smallest debt.

• Pay the smallest debt alongwith the extra amount to the smallest debt until it is paid off and proceed to the second smallest debt.

• Add the payment of your last debt alongwith the minimum payment of this debt and pay it to the second debt.

• Continue this process untill all your debts are paid off.

2. Debt avalanche method: It is the method where the debtor pays off the accounts with the
highest interest rates proceeding to the lowest rates. The basic steps of this method are -

• Commit to pay the minimum balance on every debt. If you've an emergency fund, try to add all your unused income after paying your expenses to this debt.

• Continue paying this way till the debt is paid off and then proceed to the next highest debt.

• Continue this process untill all your debts are paid off.

3. Debt snowflake method: This method is similar to the Snowball method. The only
addition is that you need to save small earnings and make a little extra payment, after
making the minimum payment to each account. You can earn extra money by doing extra
jobs, online business, etc.

In order to get out of debt, you can follow any of these three credit card debt management program mentioned above, after choosing the one that will suit you the best.

EU Pledges $15 Billion for Climate Change

2009-12-12T22:33:00.000-08:00

BRUSSELS - EUROPEAN Union leaders said they have agreed to commit 7.2 billion euros (S$14.7 billion) over three years to an international global warming fund, a deal that should boost efforts to help poorer nations cope with climate change.

The offer, said French President Nicolas Sarkozy, 'puts Europe in a leadership role in Copenhagen'. All 27 members of the EU agreed on the figure after two days of difficult talks at a summit in Brussels.

The 'fast start' money of 2.4 billion euros a year until 2012 is part of a global annual fund of US$10 billion (S$13.9 billion) that rich nations are targeting as short-term help, until the new climate agreement kicks in.

'It is less expensive to protect the planet now than to repair it later,' said EU Commission chief Jose Manuel Barroso.

The pledge was praised by United Nations climate chief Yvo de Boer, who described it as a 'huge encouragement' to the talks unfolding in Copenhagen.

Europe's leaders hope to encourage more generosity through their own voluntary pledges, and had earlier proposed to make 100 billion euros available to poorer nations annually by 2020.

Source: straitstimes.com

Greek Finance Problem affects EURO

2009-12-12T04:52:00.000-08:00

The EU summit was grappling with a Greek financial crisis which threatens the euro and risks destabilising other economies.

Athens is already facing possible sanctions from Brussels for running a deficit way above the 3% maximum of GDP permitted under the eurozone stability rules.

But the true scale of the problem is worse than expected - at nearly 13%.
Greek government debt is also off the eurozone scale at well over 100% of GDP - compared with the maximum permitted debt ceiling of 60%.

Summit host Fredrik Reinfeldt, the Swedish prime minister, has put the issue on the Brussels summit agenda at the last moment, with German Chancellor Angela Merkel insisting that all EU leaders must "share responsibility" for the Greek situation.
But there was little sign of the hat being passed around the summit table for cash contributions towards a Greek bail-out.

"The economic situation in Greece is serious, for sure", said one EU official, "but it cannot be resolved by financial pledges at this summit. We already have mechanisms and targets in the eurozone for limiting public deficits and Government debt, and Greece is not the only country by a long way which has fallen significantly outside those margins."

Far from being bailed out, Greek prime minister George Papandreou might come under attack for his treasury's failure to reveal the scale of the crisis. Earlier this year the European Commission was caught unawares when it calculated a Greek deficit outside the 3% limit - but nothing like the 12.7% figure which was revealed when Athens issued a "revised projection".

Mr Karamanlis will tell his summit colleagues what his government said on Wednesday - that there will be drastic action to cut spending and restore stability. If not, the Commission could theoretically impose hefty financial penalties on the Greek government.

However, that is unlikely, as one Commission official suggested: "The problem we have faced in the past is that if you slap big fines on countries struggling with debt, you get accused of simply making matters worse."

Source: google.com

New Finance Minister will boast oil for Mexico

2009-12-10T04:27:00.000-08:00

Mexican President Felipe Calderon’s decision to appoint Social Development Minister Ernesto Cordero as finance minister may hinder the government’s ability to cut its dependence on oil revenue because he lacks the experience to build support in Congress, according to Barclays Capital.

Cordero, 41, may struggle to persuade Congress to pass laws broadening Mexico’s tax base, Barclays analysts Roberto Melzi and Jimena Zuniga said. Fitch Ratings last month cut Mexico’s rating to BBB, the second-lowest investment grade, citing a need for fiscal changes. Standard & Poor’s may decide on whether to lower it this month.

Calderon yesterday named Cordero to replace Agustin Carstens, who in turn he nominated central bank chief.

“Cordero’s nomination may bode ill for the passage of reforms, as Carstens’s ability to build consensus behind the scenes will be hard to match,” Melzi said in a note to clients.

Calderon, half-way through a six-year term, is seeking to reduce Mexico’s dependence on oil funds, which account for about 40 percent of the budget, after Congress raised taxes this year less than the president wanted. Calderon’s National Action Party, known as PAN, holds 143 of the lower house’s 500 seats.

‘Not the Best Man’

“We believe Cordero is not the best man for the finance minister post: he is a PAN loyalist and will be a less effective negotiator with Congress,” Nick Chamie, head of emerging-market research at RBC Capital Markets, said yesterday.

The peso fell as much as 0.8 percent after Calderon announced his decision to replace Carstens. The currency erased its decline and rose 0.2 percent by the end of the day to 12.8941 per dollar.

The yield on Mexico’s benchmark bond fell one basis point, or 0.01 percentage pmoint, to 8.13 percent. The price of the 10 percent security due in December 2024 rose 0.10 centavo to 116.17 centavos per peso, according to Banco Santander SA.

“Markets would prefer Carstens stay as finance minister, as the next year will be very challenging in terms of budgetary and overall economic policy,” said Win Thin, senior currency strategist at Brown Brothers Harriman & Co. in New York. “Such a move is not a good one for the peso.”

Carstens led Mexico’s response to the global financial crisis in 2008 and efforts to win approval this year for the tax increases aimed at offsetting falling oil revenue. If ratified, he’ll guide policies amid inflationary pressures from those tax increases and an economy recovering from a recession.

Deputy Minister

Cordero, who earned a masters degree in economics from the University of Pennsylvania, was deputy finance minister for spending from December 2006 to January 2008, when he was named to his current post, according to the presidential Web site.

Before joining the finance ministry, he served in 2003 as deputy energy minister responsible for planning and technology development.

Cordero’s advantage in the post will be the personal relationship he has built with Calderon, Allyson Benton, a Latin America analyst with the Eurasia Group in New York, wrote in a report yesterday.

The new minister will have to contend with quickening inflation and a budget deficit forecast to grow to 2.75 percent of GDP in 2010, the widest since 1989, according to JPMorgan. The deficit was 2.1 percent of GDP in 2009. Latin America’s second-biggest economy is forecast to grow as much as 3.5 percent next year and may shrink 7 percent this year, outgoing Central Bank Governor Guillermo Ortiz said Dec. 2.

‘Accentuated Weaknesses’

“The global economic and financial crisis and falling oil production have accentuated weaknesses in the sovereign’s fiscal profile,” Fitch Ratings said in a Nov. 23 statement.

The central bank on Dec. 2 raised its inflation forecasts for 2010 and said that consumer prices may rise as much as 5.25 percent on an annual basis in the third and fourth quarters of 2010, exceeding policy makers’ 3 percent target.

Mexico spent $1.17 billion to buy oil hedges for 2010 to protect against lower-than-expected production and a decline in prices. Mexico purchased put options that give it the option, not the obligation, to sell its oil for $57 a barrel next year, the Finance Ministry said in a Dec. 8 statement.

Carstens, who was chief economist at the bank from 1994 to 1999, said yesterday that his mandate at the central bank will be to promote a stable currency. He said Dec. 8 in New York that S&P will probably decide against lowering the rating on Mexico.

The bank will raise its 4.5 percent key lending rate in May, according to the median forecast of economists in a survey released Nov. 19 by Citigroup Inc.’s Banamex unit. The bank paused in August, September and October after cutting borrowing costs by 3.75 percentage points during the first seven meetings of this year.

Source: bloomberg.com

6 Months not enough to restructure Dubai Debt

2009-12-08T07:58:00.000-08:00

Six months is too short to restructure the debt of Dubai World and the company could be forced to sell some of its overseas assets to reduce its debt mountain, Dubai's finance chief said this morning.

Abdulrahman al-Saleh, Dubai's finance minister, told Al Arabiya televison that the Dubai Government would support the state-controlled conglomerate “as an owner” in repaying $60 billion (£36.5 billion) in debts but that it would not sell off government assets.

Mr al-Saleh said that it was too early to discuss cash injections into Nakheel, the group’s property developer. The six-month period would focus on sorting out the debt of Dubai World, he said.

"The main goal of the restructuring of Dubai World is to ensure the continuation of its operation as a viable commercial entity. The question is the future of the company," UAE news sources quoted the finance minister as saying.

The Dubai Financial Market fell 6.5 per cent this morning to a five-month low. The index has fallen by 22 per cent since the group requested a six-month extension on its debt repayments two weeks ago.

Dubai World met its six main creditors, including four British-listed banks, on Monday to discuss its request to delay repayment of $26 billion but no deal has yet been announced.

Dubai World owns a 20 per cent stake in Cirque du Soleil, the Canadian circus, as well as other assets including P&O. the ferry operator; Barney's, the luxury retailer in New York, and the QE2 liner.

Source: timesonline.co.uk

Disagreements about Finance in Copenhagen summit

2009-12-08T07:56:00.000-08:00

Copenhagen, Denmark - As international delegates arrive at the United Nations climate summit today, developing-country negotiators are waiting for the industrialized world to clarify how much money will be on the table.

European Union leaders stated in October that the world's wealthy countries should provide €100 billion ($150 billion) each year by 2020 to help poorer countries transition to a low-carbon development path and adapt to the damages of climate change.

European, U.S., and Japanese negotiators are divided, however, on whether the money will come from new or existing aid budgets.

"The question is: should double-counting be allowed or not," said Saleemul Huq, a senior fellow with the International Institute for Environment and Development.

An EU negotiating text obtained by The Guardian this week reveals that the European Union plans to oppose any requirements that climate funds be additional to or separate from current development aid.

Developing-country leaders and United Nations officials are insisting that climate funds be additional to existing aid deals. If not, they say, health, environment, and security programs that are already under-financed may be compromised.

"There are real concerns that we might miss Millennium Development Goals because of the climate change agenda," said Roberto Bertollini, environment and health policy coordinator with the World Health Organization.

The European countries that support a separate climate fund, such as Denmark, the Netherlands, Norway, and Sweden, regularly meet the international target of 0.7 percent of gross domestic product committed to official development assistance.

Countries that struggle to meet their development-aid targets would prefer that aid programs be repackaged into new climate funds. France and Germany, for instance, committed less than 0.4 percent of their GDP to development aid in 2007, and both want existing aid to be allocated to climate.

Last month, United Kingdom Prime Minister Gordon Brown proposed a "Copenhagen launch fund" that would run from 2010-2012 and accumulate $22 billion by 2013. The funding would be split evenly between mitigation and adaptation activities. He did not state whether the funding would be additional to existing aid.

"The British contribution to the $10 billion figure would be roughly about £800 million [$1.3 billion] - for which we've already budgeted," Brown said at the Commonwealth heads of government meeting in Trinidad and Tobago.

The United States has included $1.2 billion of international climate aid in its 2010 budget. Legislation passed by the U.S. House of Representatives and currently being debated in the Senate would raise funds for international climate aid from the sale of emission permits as part of a cap-and-trade system.

John Kerry, chairman of the Senate Foreign Relations Committee, requested that President Barack Obama's administration increase funding for mitigation and adaptation aid in the 2011 budget.

"I urge you to include $3 billion in international climate finance in the fiscal year 2011 budget to support our short-term climate finance obligations and create the necessary glide path to enable our federal agencies to fully and effectively utilize the increased resources Congress will make available to them through climate change legislation," Kerry wrote on Tuesday in a letter to Secretary of State Hilary Clinton.

Negotiators offered various proposals to raise new funds at the U.N. summit in Poznań, Poland last year. A Norwegian plan to generate revenue from auctioning national cap-and-trade permits received general support from industrialized nations. The negotiating bloc of least-developed countries suggested that airlines place a flat tax of $10-$15 on all international tickets. Mexico proposed a "World Climate Change Fund" that would collect money based on each country's unique situation of greenhouse gas emissions and economic growth.

Public and private funds have provided some $8 billion annually in recent years for developing countries to form low-carbon economies and $1 billion annually for adaptation programs. Estimates of how much money developing countries will need range from $140 billion to $675 billion each year for mitigation and $30 billion to $90 billion each year for adaptation, according to the World Bank.

Source: greenandsave.com

UK Minister to EU - Leave London alone!!!

2009-12-02T08:45:00.000-08:00

Britain's Finance Minister on Wednesday warned the European Union's new French finance chief not to interfere with the City of London.

Writing in the Times of London ahead of a meeting of EU finance ministers, Alistair Darling said it would be a "recipe for confusion" if institutions were supervised by the EU as well as national watchdogs and that Britain would not accept new laws that could lead to taxpayers picking up the bill for bailouts ordered by Brussels.

He said it was essential that national regulators like Britain's Financial Services Authority retained responsibility for supervising individual companies. He warned any change would drive financial services out of Europe.

"As Michel Barnier, the new EU Single Market Commissioner, takes over the reins of financial regulation, the stakes are high," he wrote. "Regulatory reform throughout the world is imperative, and Europe, home to the world's largest single market in financial services, has a particular responsibility.

"If we get it right, we have the potential to be the safest and strongest marketplace in the world, our regulatory framework a competitive advantage. Get it wrong and we risk losing business to less regulated jurisdictions. Nothing would be more self-defeating."

On Tuesday, French President Nicolas Sarkozy blamed the current financial crisis on a discredited Anglo-Saxon model, and that Barnier's appointment was a victory for European financial ideals.

"Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the City [of London]?" he asked reporters.

"I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism," he said.

However, Barnier appeared to take the sting out of Sarkozy's comments in a radio interview Monday. "I know the importance of the City. I know the importance of this major financial center for growth in Britain and for all of Europe's economy," he told Europe 1 radio, in quotes carried by Britain's Telegraph.

"It's not my job to be nice or nasty. I have to work in Europe's interest to draw lessons from the crisis, including in the City's interest to support this financial center, as well as others including Frankfurt and Paris."

Darling added that London can not be judged in the same way as other European financial centers.

"It is too simplistic to argue that financial centers in Europe are just competing among themselves," he said.

"The reality is the real competition to Europe's financial centers comes from outside our borders. And that London, whether others like it or not, is New York's only rival as a truly global financial center."

Source: edition.cnn.com

$400m DBS exposure is in trouble in Dubai

2009-12-01T07:03:00.000-08:00

The Singapore-based DBS Bank has said its total exposure to Dubai [ Images ] is around $1.28 billion and out of this only $400 million is to the troubled Dubai World, but the bank believes that the situation is manageable.

According to a bank statement released on Monday, a substantial portion of the $1.28 billion exposure is to Dubai government-owned companies operating in Asia that are sound, such as Labroy and South Beach, which is collateralised.

The bank further said that out of this, only $400 million is extended as a bilateral loan to Dubai World Finance, the financial services arm of the debt-ridden Dubai World.

"As of today, the only credit that is captured under the standstill notice is a $400 million bilateral loan to Dubai

World Finance which represents 0.2 percent of DBS' total balance sheet. The bank has no exposure to Nakheel (the troubled relaty arm of Dubai World). "DBS' exposure to the entire Middle East region accounts for around two percent of its balance sheet," the statement said.

DBS, one of the largest financial services groups in Asia with operations in 16 markets, is a well-capitalised bank with "AA-" and "Aa1" credit ratings.

Source: rediff.com

No guarantee on Dubai Worlds Debt

2009-11-30T06:33:00.001-08:00

"Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct," Abdulrahman al-Saleh, director general of Dubai's department of finance, said on Dubai TV, according to Reuters.

Dubai World, the state-owned conglomerate behind the emirate's astonishing rise, triggered a collapse in world equity markets last week when it said it would delay repaying its debts, raising fears about the knock-on effects on the fragile global recovery.

It has run up debts of $59bn (£36bn) creating the emirate's "Palm Islands" and buying stakes in high-profile assets such as the London Stock Exchange and US department store Barneys.

The comments raised worries about how companies with exposure to Dubai World will fare in a restructuring without government help.

Earlier, stock exchanges in Dubai and Abu Dhabi suffered record one-day losses on fears over debt defaults, pushing London's FTSE 100 index lower in morning trading.
Dubai's index sank 7.3pc, its biggest one-day fall since October last year. Abu Dhabi's Securities Exchange endured the largest one-day loss in its history as it ended the session down 8.3pc.

London's index of Britain's 100 biggest companies fell 54 - or 1pc - to 5191 points at one stage. Trading in the FTSE 100 has been volatile with the index opening up before falling. Bourses in Germany and France following a similar pattern as London.
Investors remained jittery about the possible fallout for banks which have loaned money to the Gulf state. The biggest fallers were state-owned Royal Bank of Scotland and bailed-out Lloyds, down 5.8pc and 4.3pc respectively. Barclays and Standard Chartered also fell, with HSBC slightly up.

Tim Hughes, head of sales trading at IG Index, said: "Today’s move in London could equally just be put down to a normal pullback after Friday’s rise. We are likely to see a lack of direction ahead of the US open and a steady session on Wall Street should ensure that markets return to normality for the rest of the week."

Nakheel, the troubled "Palm Islands" developer at the heart of Dubai's debt crisis, today asked the exchanges to stop trading its bonds until it was in a position to provide further information about the restructuring exercise to which it is being forcefully submitted.

Authorities in the United Arab Emirates sought to reassure investors again yesterday when its central bank issued a statement promising to "stand behind" local and foreign banks operating in the country.

"Central Bank has issued a notice to the UAE banks and branches of foreign banks operating in the UAE, making available to them a special additional liquidity facility linked to their current accounts," it said. The facility would be at 50 points above the Emirates inter-bank offered rate.

The announcement calmed international fears about exposure to a new debt crisis from the problems afflicting Dubai World, a state-run holding company, and a consequent further credit crunch.

Earlier in Asia, the MSCI Asia Pacific Index climbed 3.3pc, with banks and South Korean conglomerate Samsung, whose engineering arm is responsible for some of Dubai's prestige high-rises, both doing well.

Nakheel said it wanted the exchanges to halt trading on its three major sukuks, or Islamic bonds, including the $3.5bn (32.1bn) sukuk due in two weeks' time that is at the centre of the liquidity problems of Dubai World, its parent company.

“Following the announcement on Wednesday 25 November from the Government of Dubai, Nakheel has today asked for all three of their listed sukuks to be suspended until it is in a position to fully inform the market,” it said in a statement to the exchange, Nasdaq Dubai.
Both emirates are rampant with speculation about terms and conditions for a bail-out of Dubai World, but negotiations seem to be continuing at a political level even as the chief restructuring officer, Aidan Birkett of Deloitte, starts going through the books.

At issue are not only unpaid debts but also a string of unfinished property developments across Dubai - and out into the sea.

Nakheel is fully owned by Dubai World and has no listing.

Another subsidiary, DP World, though, the ports operator which bought P&O three years ago, fell 15pc to 36.6 cents, even though it has been excluded from the restructuring exercise.

Other big losers in Dubai were property companies. Emaar, another state-run firm, the largest developer in the UAE and the name behind the world's tallest building, Burj Dubai, fell 9.9pc to 3.75 dirhams.

Like DP World, its credit ratings were cut after the Dubai government statement on Wednesday, which said Dubai World was seeking a standstill on its debt repayments while it restructured.

National Bank of Abu Dhabi, which bought into a new $5bn bond issuance by the Dubai government's financial support fund on Wednesday, fell 9.7pc to 12.1 dirhams.

Source: telegraph.co.uk

Singapore Finance Ministry Launches 2010 Budget

2009-11-30T06:31:00.000-08:00

SINGAPORE: The Ministry of Finance (MOF) is seeking public views on the initiatives that next year's government budget can include to enable sustained and inclusive growth for Singapore.

Launching its Budget 2010 Feedback Exercise on Monday, the ministry is also looking to engage the public on issues related to public spending.

The feedback exercise runs till February 12 next year. The public can offer their views through the Budget 2010 website, via SMS at 9-Speak-Up (9-77325-87), mail, phone or fax.

The government's feedback unit REACH and the MOF will also have dialogue sessions in December and January.

To promote greater awareness of Singapore's budget and public financing issues among youths, two inter-school events – Budget Debate and Budget Quiz – will be conducted early next year.

Source: channelnewsasia.com

Fianance Obstacle

2009-11-30T06:27:00.000-08:00

Finance now threatens to become the main obstacle to securing a global climate deal at Copenhagen, writes the Guardian.

The Guardian has read confidential papers from the EU negotiating team indicating that the EU will not guarantee new additional funds to help developing countries to adapt to climate change.

Existing overseas aid might be channeled away from its original purpose to climate aid, and that would not be satisfactory for the developing countries, says Rob Bailey, Senior Policy Adviser of the NGO, Oxfam:

“No developing country will sign up to an agreement that could give them no extra money at all. The EU and other rich countries must provide new and additional finance, otherwise there will be no deal at all,” he says to the Guardian.

Developing countries want a minimum of 400 billion US dollars a year by 2020 for adaptation to climate change, the developed countries have proposed less than the half.

History shows that even though rich countries promise funding for climate adaptation it is not always going to happen. According to the Guardian, in 2001 the EU, Canada, Norway, Switzerland, Iceland and New Zealand promised 410 million dollars a year from 2005 to 2008 for that purpose. Barely 10 percent of the money has been delivered so far.

Source: cop15.dk

Korean Stocks in hot streak despite Dubai debt

2009-11-30T06:16:00.000-08:00

SEOUL, Nov 30 (Reuters) - Stocks on the move on Monday include:

As of 0059 GMT, the main KOSPI was up 2.17 percent at 1,557.58 points.

The index opened up 1.52 percent at 1,547.65 points.

**WOORI FINANCE JUMPS AS DUBAI WORRIES EASE**

Shares in Woori Finance Holdings ( WF - news - people ) jumped on Monday as Dubai debt fears eased, boosting sentiment towards the financial holding company of Woori Bank, which has exposure to Dubai.

'The primary reasons for Woori's rebound is that it had tumbled the most on Friday among key banking issues, due to its Dubai exposure,' said Ku Yong-uk, a market analyst at Daewoo Securities.

'Stocks are recovering as earlier fears have eased a bit,' Ku added.

A Woori Bank spokesman said that the bank's direct exposure to Dubai was about $7.4 million.

Shares in Woori Finance rallied 7.52 percent as of 0110 GMT.

0110 GMT

(Reporting by Jungyoun Park; Editing by Jonathan Hopfner) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: MARKETS KOREA HOT/

(jungyoun.park@thomsonreuters.com; +82 2 3704 5643; Reuters Messaging: jungyoun.park.reuters.com@reuters.net)

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Source: forbes.com

Rising Yen harmful to Japanese economy - Finance Minister

2009-11-26T19:43:00.000-08:00

TOKYO — The yen's sharp rise is harmful to Japan's export-led economy, the finance minister said Friday as the greenback traded around 85 yen, its lowest level since the mid-1990s.

Finance Minister Hirohisa Fujii did not signal Tokyo planned to immediately intervene in currency markets, something it last did in March 2004.

Fujii said the yen's rapid rise was one-sided and "harmful" to the economy and said the government was closely watching the currency fluctuations.

"We will take appropriate action toward disorderly movements," he said.

The dollar briefly dipped below 85 yen in early Asian trade, then bounced back and was changing hands at 85.88 yen in Tokyo at around 9:45 am (0045 GMT).

Fujii said Japan would have "discussion with the US and European financial authorities" as necessary, according to Jiji Press news agency.

Japan's economy is crawling out of a deep recession on rebounding exports but a stronger yen threatens the competitiveness of Japanese exporters.

Source: google.com

Dubai's debts affects the country's recovery.

2009-11-26T19:27:00.000-08:00

SEPTEMBER WAS an important month for Dubai, as schools reopened and the city started counting how many of its expatriates, stung by the global financial meltdown, had left.
To everyone’s surprise the classrooms were not empty and the exit was not as dramatic as expected.

For many residents, the city state might have been burdened by an $80 billion (€53.5 billion) debt mountain, but with a diversified economy and a more liberal culture than many of its neighbours, it remained the place to be.

The economic slowdown had even enhanced the lifestyle; it meant less traffic and fewer construction projects.

However negative the sentiment today, the rise of the emirate, and its claim to be the region’s business centre, had a convincing foundation.

Analysts pointed to lingering concerns about the real estate market but confidence was returning. Passenger numbers at the airport showed double-digit growth in the past five months and hotels had been busier, though occupancy rates remained down on last year.

“As the region’s only provider of world-class services, Dubai should . . . see export demand strengthen as activity strengthens elsewhere,” HSBC said in an October report.

But Wednesday’s announcement of a debt standstill at Dubai World, the government flagship property holding company, has raised questions about the city’s recovery.

Much of the optimistic business sentiment in recent months had rested on the assumption that Dubai was getting its house in order and would meet debt obligations. “While we have seen some improvement in the [United Arab Emirates’] confidence since mid-2009, rescheduling of Dubai World’s debt will provide a setback to sentiment,” said Monica Malik, economist at investment bank EFG-Hermes in Dubai.

Though she still expected to see a gradual improvement in Dubai’s economy over the next year, she added that, given “the high level of leverage by both individuals and corporates and exposure to the property sector, the UAE will have one of the weakest non-oil economic outlooks in the region”.

Dubai does not consolidate the finances of its various entities, and data is difficult to come by, a source of frustration for analysts. Statistics are often compiled for the whole UAE and not for Dubai alone.

According to a prospectus issued to investors last month, nominal gross domestic product (GDP) growth fell to 18 per cent in 2008 from 27.4 per cent the previous year. Many economists expect the UAE economy to have contracted this year.

It is the debt burden that has raised the most concern about Dubai’s future. After the heyday of borrowing, the government was, even before the crisis, trying to regroup companies under the leadership of the International Corporation of Dubai (ICD) to ensure it had a better handle on finances.

Dubai’s total debt of about $80 billion includes about $19 billion owed by the department of finance and ICD, as well as the $22 billion owed by Dubai World. Some $13 billion to $17 billion is thought to be due next year, and ratings agency Standard Poor’s estimates as much as $50 billion will have to be repaid by 2012.

That debt pile is the result of Dubai’s aggressive expansion in recent years. With much of the UAE’s oil wealth concentrated in Abu Dhabi, Dubai adopted an aggressive diversification strategy, developing trade, transport and tourism businesses, some of which, such as DP World, were then able to make their mark on the international stage.

By setting up a series of free zones, each dedicated to a specific sector, Dubai attracted foreign companies and established itself as the regional provider of services. Allowing foreigners to buy real estate in some of the gated communities brought more money into the economy.

In 2008 oil accounted for only 2 per cent of GDP, with wholesale and retail trade, real estate and business services making up much bigger shares.

But Dubai got carried away with its own success, with many projects in the fiercely competitive business environment financed with debt. With an over-ambitious ruler, Sheikh Mohammed bin Rashid, dreaming of bigger things and instituting a fiercely competitive business environment that encouraged his lieutenants to come up with new ideas and projects, many financed with debt, the emirate was heading for trouble.

Some of the biggest conglomerates created real estate and investment companies that competed with each other and then established subsidiaries that were also pushed into rivalry. As the real estate projects became more exuberant, the government lost track of the finances of entities it controlled. That the lines between the assets of the ruler and those of the government were blurred further confused the picture.

When the financial crisis hit, one of its first casualties was the realestate market. HSBC said in a recent report that the market lost 50 per cent of its value, compromising the quality of bank assets. – (Copyright The Financial Times Limited 2009).

Source: irishtimes.com

Metal & Finance Sectors surge high in Hong Kong and China

2009-11-24T06:31:00.000-08:00

Stocks in markets across Hong Kong and China recorded a substantial jump, especially in the metal and finance sectors, as the economies start showing signs of growth again. While metal prices were revived by the price of gold hitting an all time high, China's finance sector kicked up on the optimism that Beijing's easy monetary policies might just get extended till 2010.

A 0.92% jump was recorded by China's main stock index, taking it to the highest figure recorded in the past 3½ months, mainly on the back of carmakers, shares of who jumped high after Guangzhou Autoshow shared a much optimistic outlook for the sector.

Hong Kong's Hang Seng Index also closed 1.41%, or 315.55 points, higher, at 22,771.39 points. Despite this, the total turnover was recorded as HK$51.9 billion ($6.7 billion), the lowest since October 12 and down from Friday's HK$60.5 billion.

China, on the other hand, is definitely on the path to success. Experts are of the view that the country will achieve an 8.5% growth during the coming year, and there will be no major changes made to the lenient monetary policies currently followed.

topnews.com.sg

IRAQ WAR INQUIRY - Puts Gordon Brown on the hot seat

2009-11-24T06:26:00.000-08:00

As Chancellor of the Exchequer Gordon Brown was notorious for vanishing when the Government was in trouble - pushing a junior minister to take the flack in a TV studio or at the despatch box.

Such is his persistence in this regard that for some he calls to mind TS Eliot's poem: ‘Macavity's a Mystery Cat: he's called the Hidden Paw - / For he's the master criminal who can defy the Law. / He's the bafflement of Scotland Yard, the Flying Squad's despair: / For when they reach the scene of crime - Macavity's not there!’

I thought he would find ducking for cover rather harder since becoming Prime Minister but the practice has not been altogether abandoned. When he lost his nerve over calling an early election two years ago he developed a fondness for using the back entrance of Downing Street to avoid the media. He eventually left Andrew Marr to make the announcement that the election had been called off.

The Labour MP Sion Simon once said that Brown ‘is a man often judged by his absences’, adding that: ‘At times of more personal controversy - such as the frequently embarrassing escapades of his spin doctor Mr Charlie Whelan and his eventual sacking by Tony Blair - Brown disappears equally silkily into the sand.’

Despite being author of a book on courage this character flaw has been retained by Brown. Today we read that he will not give evidence to Sir John Chilcot's inquiry into the Iraq War.

The purpose of the Inquiry is to see what lessons could be learnt from the conflict - a theme that even its more ardent supporters would surely concede offers some scope. Naturally Tony Blair is expected to be asked some challenging questions. But one would also have thought that the current Prime Minister would have something to contribute.

He is a busy man but surely such an important matter would make it worth finding the time to take part. Brown was a supporter of Britain's participation in the conflict. But this is evidently not a matter he wants to remind people of in the run up to the General Election.

There is also a more particular reason why he should be giving evidence. Wars have a cost in treasure as well as blood. We could never have gone into the Iraq war if Brown, as the Chancellor of the Exchequer, had not agreed to finance it.

Before the war he set aside £1 billion for the cost of it. In fact the bill has been much higher. The cost of the war itself in 2003 was £1.3 billion and there has been another billion a year spent since then on maintaining the British military presence in that country. The cost last year had actually risen sharply to £1.9 billion.

Yet despite that huge total there were some pretty scandalous economies. Troops were sent to Iraq without boots or hats fit for the desert. Leaked documents that have just emerged include the comment from Lieutenant Col Dunn of the Royal Engineers that some soldiers ‘only had five rounds of ammunition each and only enough body armour for those in the front and rear vehicles’.

Then Lt Col John Power of the Royal Electrical and Mechanical Engineers commented on the supply chain chaos: ‘I know for a fact that there was one container full of skis in the desert.’ Ptarmigan, the main longer-distance radio, 'tended to drop out at around noon because of the heat' leaving soldiers in the midst of combat resorting to their mobile phones.

How many of the British soldiers killed in Iraq, such as Sgt Steven Roberts, would still be alive if there had not been shortages of the proper Enhanced Combat Body Armour? Before Sgt Roberts died he kept an audio diary, which his widow Samantha released, where he called supplies ‘a joke.’

The Government response to equipment shortages is to deny the problem exists - rather than take serious action to deal with it. In this respect it seems very few ‘lessons have been learned.’

Of course as the Prime Minister this is now ultimately Gordon Brown's responsibility. But as the Chancellor of the Exchequer he should have made it his business that there was enough money to do the job and that the considerable sums provided were effectively spent. Let him come before the inquiry and tell us what responsibility he took in this matter.

dailymail.co.uk

Finance Minister criticises against Banks

2009-11-23T08:49:00.000-08:00

The NI finance minister has criticised the local banks, saying they must increase lending to viable local businesses at reasonable terms.

Sammy Wilson was speaking after a meeting of a Stormont group which brings together representatives from the local financial sector.

He said he had told the bankers that without "reasonable lending practices" the recession will be prolonged.

He said he had heard reports of banks refusing to lend to small firms.

He added that he had "impressed upon the banks" their responsibilities in this area.

Mr Wilson also expressed concern over the relatively low take up of UK government and European Investment Bank schemes designed to increase business lending.

'Bad bank'

He said the schemes are mainly designed to help the type of small and medium local business which are currently struggling through the current economic downturn.

He has asked the local banks to improve the promotion of these initiatives

Mr Wilson said he had also used the meeting to update the group on the latest developments relating to the Irish government's proposed "bad bank", the National Asset Management Agency (Nama).

Nama is expected to take control of about 4.8bn euros of property-related assets in Northern Ireland, as part of the scheme to remove toxic loans from the balance sheets of Dublin-based banks.

Mr Wilson told members that Northern Ireland would have a direct input to the Nama process.

Source: bbc.co.uk

People's United expanding equiptment finance

2009-11-23T08:46:00.000-08:00

By Linda Shen

Nov. 23 (Bloomberg) -- People’s United Financial Inc., the Connecticut lender that had $2.5 billion earmarked for acquisitions, agreed to buy Financial Federal Corp. for $738 million in cash and stock to expand in equipment financing.

People’s United will pay Financial Federal shareholders $11.27 in cash and one share of People’s United common stock, Bridgeport-based People’s United said in a statement today. Based on closing prices on the Nasdaq Stock Market Nov. 20, the offer was worth $27.74 a share, 35 percent higher than Financial Federal’s closing price last week.

People’s United Chief Executive Officer Philip Sherringham said in July he was considering acquisition candidates with assets of $200 million to $400 million from Maine to Washington, D.C. Sherringham kept the bank profitable as borrowers lost jobs and foreclosures rose to a record last year.

Financial Federal, People’s United’s first purchase since its 2007 acquisition of Chittenden Corp., “provides a valuable complement to our existing business lines,” Sherringham said in the statement. “This transaction offers opportunities for People’s United to grow our highly profitable equipment- financing business with established, experienced staff in new markets throughout the country.”

People’s United gained 65 cents, or 4 percent, in composite trading at 9:41 a.m., while Financial Federal surged a record 37 percent to $28.05, the highest price since October 12, 2007.

Earnings Effect

The purchase of New York-based Financial Federal is expected to be “significantly accretive” to operating earnings in 2010 and to have a “slight positive effect” on the bank’s capital levels, People’s United said. The bank said in a regulatory filing that it would add 25 percent to operating earnings “based on consensus estimates.”

The acquisition is expected to close during the first quarter of 2010 and includes a termination fee of $26 million. The deal may also increase People’s United’s tangible common equity to 19 percent from 18.6 percent, the bank said.

Morgan Stanley advised People’s United on the deal, and its legal counsel was Simpson, Thacher & Bartlett LLP. Keefe, Bruyette & Woods advised Financial Federal and Covington & Burlington LLP acted as legal counsel.

Source: bloomberg.com

Finance Ministry raising borrowing limit by S$70b using govt securities

2009-11-23T08:31:00.000-08:00

SINGAPORE: The Finance Ministry plans to raise its borrowing limit by S$70 billion to S$320 billion by issuing government securities. The current borrowing limit is S$250 billion.

Moving a motion on the Government Securities Amendment Bill, Second Finance Minister Lim Hwee Hua said there are about S$234 billion worth of securities outstanding as at October 31.

These will reach about S$320 billion in the next five years.

This is due to the expected increase in CPF Board members' balances as a result of policy changes such as the CPF LIFE scheme and the increase in Minimum Sum, to build up members' retirement savings as well as higher CPF interest payments and the corresponding interest compounding effect.

Mrs Lim said: "Three-quarters of the outstanding government securities are expected to be used to absorb these higher members' balances.

"The remainder would be for the Monetary Authority of Singapore to grow the issuance of Singapore Government Securities so as to continue to enhance the efficiency and liquidity of Singapore's debt capital markets." - CNA/vm

Source: channelnewsasia.com

Financing Afghanistan War?

2009-11-21T16:39:00.000-08:00

BOSTON — The last time America had to borrow money to finance a war was during the Revolution and a cash-strapped Continental Congress took loans from France to fund a surge against the British.

That worked out pretty well.

But it’s hard to feel the spirit of 1776 in President Obama’s journey to China. He went as a representative of a borrowing nation to its primary lender amid a call for yet another costly military surge in the Long War that is escalating in Afghanistan even if it is hopefully winding down in Iraq.

As the president completes his journey to Asia, he returns to Washington to face what is the most consequential foreign policy decision of his presidency, a decision that this administration has not yet fully thought through.

That is whether to heed the counsel of his top commander in Afghanistan, General Stanley McChrystal, and call for a surge of 40,000 more troops in Afghanistan.
Obama is said to also be pondering a middle ground of calling up somewhere between 10,000 and 30,000 more troops.

Or, and this is shaping up as a long shot, he and his team of rivals in the Pentagon and the State Department could decide to rebuff McChrystal. In this scenario, Obama would refocus the mission but still hold to the general counterinsurgency plan that he originally spelled out in March and which increased U.S. troops by 21,000 to a total U.S. presence of 68,000 troops. That surge was just completed this fall.

From my experience talking with counterinsurgency experts and meeting with U.S. and coalition counterinsurgency leaders and trainers in Afghanistan over the summer, I am hoping Obama chooses to hold to the existing troops level. I am hoping he does that while refocusing his original plan to be more targeted on counterterrorism than the wider goal of classic counterinsurgency against the Taliban. He should stick to his guns and hold at the troop levels he has and make the troops who are there better and more effective and provided with better equipment and intelligence assets to get the job done. As I said in an earlier column, less is more right now in Afghanistan.
Every empire in history has regretted an escalation in Afghanistan and it is hard to see how America would be any different.

I do not envy the president and his team in making a very difficult and costly decision at a very hard time economically in America. Few presidents in history have had to face so many fateful decisions in their first year in the White House.
But despite all the pondering the president has given to whether to increase troops, it seems he has given far too little consideration to the overall cost of escalating the war and how it will undercut his ability to fund the ambitious domestic policy agenda he has set out from bank bailouts to health care reform.

With all the debt piling up, it seems to me there is a clear connection between his trip to China and these war costs in Afghanistan.

If you think about it, the hundreds of billions we borrow from China every year will go at least in part to fund the enormous cost of an escalation of troops in Afghanistan, a cost — in terms of lives and treasure.

The war in Iraq will end up costing this country more than 2 trillion dollars, according to the conservative projections of Linda Bilmes, an economist at the Harvard's Kennedy School of Government. The cost is higher still if you include interest on the debt, interest which will in a large measure be paid to China.
Bilmes has worked closely with the Nobel Prize-winning economist Joseph Stiglitz to do the long math on the wars in Iraq and Afghanistan, to factor in not just the military budget and the interest on the debt but also the extraordinary high cost on every level of soldiers who are wounded physically and mentally by war.

Bilmes is credited with highlighting the failure of the administration of President George W. Bush to give an accurate cost assessment of a war that escalated several hundred times beyond the original projection of just $50 billion to $60 billion made by the Pentagon at the start of the war in 2003. She’s been proven right and she’s worried that the Obama administration may be fatefully making another miscalculation on the cost of war in Afghanistan.

And we’ve hit a profound turning point in Afghanistan. In this new budget year, which started Oct. 1, for the first time, the war in Afghanistan will cost Americans more than the war in Iraq.

And, as Bilmes points out, fighting in Afghanistan is more costly than it is in Iraq because of the terrain and the difficulty in supplying troops and evacuating the wounded. She estimates that Afghanistan is as much as 1.6 times more expensive per soldier than Iraq.

“While this administration has brought great military expertise to thinking this through, there needs to be a greater focus on the cost. How are we going to pay for this? People are still not looking at the long term costs,” said Bilmes.
And so as the President stares out the window of Air Force One pondering the dark skies in the long journey back to Washington, one can only hope that he has thought through the extraordinary cost — on every level — of calling for an escalation of troops in Afghanistan.

Source: globalpost.com

Proposal - Code of Conduct for Credit and Debit Card Companies

2009-11-21T16:37:00.000-08:00

OTTAWA — Finance Minister Jim Flaherty is proposing a code of conduct for credit-and debit-card companies that he says will "level the playing field" for consumers and small businesses alike - but not before the Christmas shopping season.

The code, intended to promote fair business practices and ensure merchants and consumers clearly understand the costs and benefits of credit and debit cards, won't be finalized before early next year.

It aims to provide merchants with more pricing flexibility so consumers can choose the best payment option, Flaherty said, and it would allow merchants to choose which payment options they accept.

"The proposed code is based on ongoing discussions with merchant and consumer associations, debit-and credit-card networks, payment processors and credit-card issuers across Canada," Flaherty said Thursday.

"The proposed code would encourage choice and competition in the credit and debit market for the benefit of consumers and merchants. It would help ensure accountability and prevent unfair practices."

The new code doesn't deal with one of the major complaints by consumers over the years - that general credit-card interest rates are far above the level of normal borrowing costs and do not drop very much even in a period of low interest rates. The card companies say these rates are needed to recoup losses on many credit-card accounts.

However, Flaherty's proposed changes could help retailers and merchants, who have long complained about the high cost of card-processing fees. The Retail Council of Canada estimates credit-card fees cost merchants about $4.5 billion a year. Critics argue that such charges wind up in the cost of goods and services sold to consumers.
The Liberal Opposition said the voluntary code of conduct misses the mark after the government relegated the issue to the backburner for 11 months. Now Flaherty has told consumers and the industry they would have wait another 60 days, it said.
"There is a clear imbalance between the negotiating position of the card networks and merchants," said Liberal finance critic John McCallum.

"I remain very skeptical that two months from now these consultations are going to lead to a levelling of that playing field. Simply asking everyone to place nice where there are billions of dollars at stake is not a solution."

The changes come as competition is heating up in the payment processing industry as reports say Visa and Mastercard are poised to enter the Canadian debit-card market. That a market is currently dominated by the Interac Association, a network owned by the big banks and other financial companies that connects Canada's automated bank machines and point-of-sale debit-card terminals.

Critics say the entry of such giant players could raise debit-card processing fees for consumers and businesses, but the card companies say it would bring more technological innovation and choice.

Flaherty is putting the draft proposal out for input from stakeholders over the next 60 days and he said he expects the code will be made final early in the New Year.

Among other elements of the code:
-It would require credit-and debit-card companies to give merchants at least 90-days' notice of changes to transaction fees.

-It would allow merchants to cancel contracts with card issuers without penalty after notification of fee changes.

"We have been consulting on this for some months and these are not simple issues relating to debit and credit cards," Flaherty said.

"They're very important issues for consumers in Canada; they're very important issues for business in Canada - particularly small merchants as we go into the Christmas shopping season."

He said the government will make final revisions and additions to the code based on the feedback it receives, "then quickly move to bring the code into force as soon as possible early in the new year."

MasterCard said it plans on "actively participating" in the consultation process.
"Today's announcement and the code should resolve a commercial dispute for which the global retail lobby operating in Canada has sought government intervention over private negotiation," Mastercard president Kevin Stanton said in a statement.

"A code issued by the minister of finance must be taken seriously and establishes a de facto standard of conduct."

Stanton said MasterCard will pay particular attention to how the proposed code "could alter the competitive landscape" and pledged it would "take measures to safeguard its continued ability to deliver value and innovation to all stakeholders."
Visa Canada said it's encouraged that Ottawa supports transparency and choice in payments, "as Visa believes that these are fundamental to a well functioning economy."

It said it's also encouraged that the code applies to all payment networks equally.
"However, we believe choice of payments should be balanced between merchants and consumers and are disappointed that the code would allow merchants to supersede consumer choice at the point of sale," the company said.
"Merchants can and should decide whether they want to accept Visa Debit cards and merchants are free today to steer customers to the merchant's preferred choice of payment. But Visa believes that merchants should ultimately honour the consumer's choice."
The Canadian Federation of Independent Grocers called the new guidelines "a very positive step" that will help small businesses in Canada.

"Over the last two years, retailers across the country have been hammered by unrelenting fee increases, a lack of transparency and agreements forced on retailers that abused the dominant position of the credit-card companies in Canada," said John F.T. Scott, federation president and CEO.

"In particular, many small-and medium-size retailers simply do not have the clout to deal with credit card giants and payment processors."
Added Scott: "Just this week, our members had brought forward examples of new terms being imposed on retailers by payment processors that are frighteningly similar to the 'negative option' issue that landed the cable companies in hot water a few years ago."

Source: google.com

The nightmare for Finance Minister

2009-11-21T16:36:00.001-08:00

A stunning reversal of fortune is one way of describing the predicament Finance Minister Rod Gantefoer finds himself in halfway through the fiscal year that began with so much promise.

Even Gantefoer admitted that the elephant in the room -- the finance ministry's projected potash revenue of $1.9 billion -- was something that he worried about from Day One.

"I said when I tabled the budget that the one thing that was going to keep me awake was potash," Gantefoer told reporters. "I didn't think it would end up turning into a bit of a nightmare."

A nightmare is another way of describing the sickening feeling of seeing $1.9 billion in projected revenues plummet by two-thirds to $638 million in the first quarter, then plunge another 83 per cent to $109 million by mid-term.

A sickening slide also describes what happened to the finance ministry's projected potash production, which fell 62 per cent to 4.4 million tonnes, the lowest level in 37 years.

The ministry's miscalculation on potash shaved two percentage points off the province's projected economic growth of 2.1 per cent in the 2009-10 budget. Economic growth is now expected to come in at negative 2.9 per cent -- a full five-percentage-point drop from the budget projection.

For its part, the NDP Opposition called Gantefoer's gaffe "the biggest example of fiscal incompetence in the history of Saskatchewan.'' In absolute dollar terms, it may be.

From a projected deficit of $25 million (on a summary basis, which includes Crown corporations), the ministry is now forecasting a deficit of $1.05 billion in 2009-10 -- an unbudgeted $1-billlion shortfall.

NDP finance critic Trent Wotherspoon lays the blame for the province's current fiscal and economic problems clearly at the feet of Gantefoer and the Saskatchewan Party government. "This is a problem of the Wall government's own making,'' Wotherspoon said, citing "irresponsible revenue projections,'' equity stripping in the Crowns and "out of-control'' government spending.

So are Gantefoer and the Sask. Party government entirely to blame for the mess they find themselves in? With the benefit of hindsight, it goes without saying that the budget's economic and fiscal projections were far too rosy.

The more important question is: Were there signs that those projections were too optimistic even before the budget went to the printers?

Certainly, private economic forecasters were already signalling that the budget's economic projections were unrealistic.

According to the budget, the average of eight private sector forecasts was one-per-cent economic growth in 2009. And two of those forecasts had since been lowered (RBC from 2.8 per cent in January to 0.9 per cent and Scotiabank 0.6 per cent zero per cent, which would have lowered the average to 0.66 per cent).

Yet, contrary to previous practice, the finance ministry projected economic growth of 2.1 per cent -- more than twice the average of the private sector forecasts.

That's largely because they believed that potash prices and production would remain on par or higher than 2008 levels.

For example, the budget projected potash prices to average $550 US per tonne in 2009, $100 US higher than 2008, while potash production was projected to remain unchanged at 10 million tonnes. Instead, potash prices came in about $100 US per tonne lower than last year and production about 60-per-cent lower.

At the time, then-NDP finance critic Harry Van Mulligen warned production cuts announced by potash companies could easily derail the budget's revenue and economic projections.

"Bottom line,'' Van Mulligen said, "shaky economic and revenue assumptions, plus runaway spending, equals a potential fiscal trainwreck.''

As it turns out, Van Mulligen was remarkably prescient, unlike his counterpart in the government benches.

While Gantefoer can be excused for not forecasting the unprecedented cutbacks in potash production, he stands guilty as charged for failing to moderate his overly optimistic budget projections, despite the mounting evidence to the contrary.

Source: leaderpost.com

7 finance meeting will be hosted at Iqaluit

2009-11-21T16:28:00.000-08:00

The capital of Nunavut will host a major meeting of G7 finance ministers and central bank governors in February, federal officials announced Wednesday.

The Iqaluit meeting, slated for Feb. 5-6, will be the first of a series of important finance meetings to be held in Canada in 2010, Finance Minister Jim Flaherty told reporters in Ottawa.

It will be followed by the G8 and G20 leaders' summits to be held in June.

Flaherty said the G7 colleagues he spoke to in Italy last summer all expressed interest in travelling to Canada's Far North for the February meeting.

"We have to limit the size of the delegations so that we can use Iqaluit, but I'm really looking forward to showing my colleagues from around the world the beauty of the Canadian Arctic in February," he said.

"It's spectacularly pristine and gorgeous. And yes, it's very cold."

Flaherty was joined by Health Minister Leona Aglukkaq, the Conservative MP for Nunavut, at Wednesday's announcement.

The meeting will include discussion on actions to strengthen the global economy, ways of following through on financial sector reforms, and ways to strengthen international financial institutions.

G7 members include Canada, the United States, Britain, France and Germany, Italy and Japan.

Flaherty, who last visited Iqaluit with Prime Minister Stephen Harper in August, acknowledged that his counterparts from countries such as France, Japan and Italy may be shocked by Canada's cold winter conditions, especially in the Far North.

"I promised I would get them big coats and dress them properly," he said.

Flaherty said he is also not fazed by the possibility that a February blizzard could affect travel to and from the Nunavut captial.

"I've been stuck in a blizzard in Toronto in February," he remarked. "I mean, this is Canada, after all."

Source: cbc.ca

Tenn. finance head says state faces more cuts

2009-08-06T05:07:00.000-07:00

NASHVILLE, Tenn. -- Tennessee Finance Commissioner Dave Goetz said Wednesday that continued poor sales tax revenue means state departments will likely have to make more cuts.

Goetz told the state legislative Fiscal Review Committee that the state is experiencing the "fourth month in a row of double-digit sales tax losses." Sales taxes are about 60 percent of the state's money.

As a result, the commissioner said state departments won't be receiving $56.1 million that had been appropriated in the governor's budget. Reception of the money was contingent on whether the state met certain budget expectations for this year, but Goetz said projections have been complicated by the sales tax losses.

However, if the economy should take a turn for the better and revenue improves, Goetz said state departments could receive the money.

"If the economy comes back ... these funds don't have to be withheld," he said. "But we won't know that for a long time."

State Sen. Bill Ketron, a Murfreesboro Republican and chairman of the Fiscal Review Committee, said he agrees with releasing the funds if the economic climate improves, but warns state departments should be careful in their spending because cuts are still expected next year.

"When it comes back to them, I think they need to be very conservative ... in knowing that there are going to be possibly more cuts," Ketron said.

Goetz said state officials are currently reviewing departments' plans on how they intend to operate on the budgets they've been allotted. He said much of the savings are through not filling vacancies, and that Tennesseans will likely be affected by "responsiveness in agencies because of the vacancies."

"It's the nature of where we are," he said. "Our employees are stepping up and doing the best they can, but it may take a little longer to get some things done."

The agency hit hardest by withholding funding is TennCare, the state's expanded Medicaid program. It was to receive $20 million, but Goetz said services provided by the program shouldn't be affected because it still has millions of dollars in "reserves to fall back on."

Last month, Goetz sent out a memo to all state agency heads urging them to manage responsibly.

For instance, they were asked to limit in-state travel, and out-of-travel was to be for "emergency or mandatory situations only."

Source: forbes.com

Shriram Finance joins hands with small players, beats slowdown

2009-08-06T05:06:00.000-07:00

Three years ago, Deepak Dugar of Mahaveer Finance India, a Chennai-based private financier of light commercial vehicles (LCVs), had about 1,000 customers but not enough funds to service them. Today, his customer count has more than doubled to about 2,500, and funding problems are more or less a thing of the past.

Dugar gives credit to their franchise tie-up with Shriram Transport Finance for the buoyancy in business. “Earlier, funds were a major problem since banks were the only avenue and we had strict limits. So, then we couldn’t service more than 800-1,000 customers. The partnership with Shriram has helped double our business and improve profitability,” he says.

Shriram Transport Finance is one of the few organised financiers of used commercial vehicles in the country. According to its Managing Director R Sridhar, tie-ups with small private financiers are beneficial to both sides as cash-strapped small players get access to funds, while Shriram Transport gets the opportunity to tap local customer networks.

Besides Dugar, Shriram Finance has tied up with about 500 other private financiers across the country. Now, almost 10 per cent of Shriram Transport Finance’s loans flow through this channel and the firm is keen on growing its network. As part of the arrangement, the smaller partner is responsible for acquiring customers, collecting payments and pitching in with about 10-20 per cent of the loan amount. The remaining part of the loan is extended by Shriram Transport Finance. Profits or loss above the minimum internal rate of return (IRR) is shared 50:50.

Sridhar claims that innovative business models and the firm’s niche focus have helped Shriram Finance tide over the downturn that pulled down annual sales of new commercial vehicles by 29 per cent in 2008-09. Bankers corroborate Sridhar’s claim by saying that the new commercial vehicle financing industry has seen a drop of 30-35 per cent since the beginning of the year. Players such as IndusInd Bank say the year-on-year growth in their portfolios has been only 10-15 per cent. The country’s largest private lender, ICICI Bank, has shrunk its commercial vehicle loanbook by about 10 per cent in the June quarter on a sequential basis.

The country’s largest lender, State Bank of India, says unlike heavy commercial vehicles, demand for finance of LCVs has improved, driven by rural areas.

Since Shriram Finance has a strong network in rural India, the company stands to gain. It’s so because financing of pre-owned commercial vehicles rests mostly in the hands of private financiers. Banks consider this category of loans high-risk, because the owners are mini-truck operators who drive their own vehicles. Such vehicles usually ply short distances of less than 200 km and are used to transfer essential commodities.

However, 90 per cent of loans disbursed by Shriram Finance, which has assets worth Rs 24,274.87 crore as of June 30, 2009, are to this segment, which has proved relatively resilient to the slowdown.

For Shriram Finance, although the pace of growth in operating income has slowed to 23 per cent in the June 2009 quarter from 74 per cent a year ago, it is still a respectable percentage given the present economic environment. It has also managed to maintain a net interest margin, or the percentage difference between interest earned on loans and that paid on funds, of 6.5 per cent in the June quarter and restricted non-performing assets (NPAs) to 2.2 per cent of total advances. This is despite having an incremental cost of funds of 10.5 per cent—significantly higher than that for banks, which have access to low-cost retail deposits.

Shriram Transport Finance is able to maintain such strong margins because loans in the used commercial vehicles segment are issued at interest rates in the range of 18-24 per cent, while the coupon for new commercial vehicles is lower at 15-16 per cent. Pricing pressure from competition is not an issue because the only other players in this segment are private financiers, who lend at rates as high as 30 per cent.

However, Sridhar says the firm’s objective is not necessarily to increase margins, but to bring down the cost of financing for his customers.

“We lend to a segment which has no banking habits and no one else in the organised sector is willing to lend to them because they are considered extremely risky. We encourage our customers to become bankable and upgrade to new vehicles so that they can access cheaper financing from banks,” he says.

Source: business-standard.com

UPDATE 1-Romanian finance min sure IMF will OK deficit hike

2009-08-06T05:04:00.000-07:00

BUCHAREST, Aug 5 (Reuters) - Romania's Finance Minister said on Wednesday he was 'convinced' the International Monetary Fund will allow the country to run a bigger budget deficit this year, as the economy could contract by up to 8.5 percent.

'In 2009, the deficit could reach 7 percent of GDP,' Gheorghe Pogea was quoted as saying by state news agency Agerpres, referring to the country's gross domestic product.

An IMF mission is in Bucharest until Aug. 10, reviewing the European Union member's progress in meeting conditions attached to a 20 billion euro aid deal secured in March.

The deal set a 2009 budget shortfall of 4.6 percent of GDP based on a forecast for the economy to shrink 4.1 percent.

Conditions have deteriorated sharply since the deal was agreed, however, as the global financial crisis slashed both demand and lending, and the contraction is now seen more than doubling.

'The global recession ... will lead to an economic contraction that may reach 8 to 8.5 percent, and the first impact will be a drop in public revenues,' Pogea told reporters after a meeting of the center-left government.

'As a result, we will discuss with the IMF about raising the deficit, and I am firmly convinced that they will accept, but at the same time, we must certainly enforce structural reforms that will ensure budget balance.'

This week, the IMF's mission chief said the Fund will be flexible with Bucharest. However, the government must enforce deep reforms of its public administration, which employs about a third of Romania's total workforce of around 5 million people and is seen as bloated and largely inefficient.

On Wednesday, Prime Minister Emil Boc said the cabinet will thin out the state sector by cutting or merging state agencies, which will lead to a little more than 9,000 job losses.

He also said Romania will stick to its calendar for IMF-prescribed public sector reforms. A single wage bill should be approved in October, while pension reform should occur by December at the latest.

'These are laws that will shake the Romanian public system to its core,' Boc said.

Source: forbes.com

How suite it is to be Council Finance chief

2009-08-06T05:03:00.000-07:00

When times are tough, most people forget about remodeling. If the carpeting has holes and the paint is peeling, they live with it.

Not Chicago's most powerful alderman. Finance Committee Chairman Edward M. Burke (14th) is freshening up his third-floor suite at City Hall.

New carpeting is being installed to eliminate the need to cover holes with duct tape. Walls are being re-painted. A "small number" of chairs and cubicles are being replaced.

Acting General Services Commissioner Mark Maloney offered no cost estimate on the Finance Committee project.

"I was not aware that we were doing any work down there," he said.

Finance Committee spokesman Donal Quinlan also provided no budget. But he insisted that the touch-up was justified -- even after an early '90s remodeling that created a giant conference room in the suite.

"The Finance Committee was last re-carpeted in 1993-94. We have at least seven areas of carpeting that are torn. Many of them are patched over with wide, unsightly silver duct tape so people don't trip," Quinlan said, after taking a reporter on a tour of the office suite.

"See all these spots -- these taped wide areas. . . . And as you can see, some stains just won't come out."

No matter what the cost, the touch-up comes at the worst possible time from a public relations standpoint. Most of Chicago's unionized employees have been forced to take unpaid days off and make other cost-cutting concessions.

Source: suntimes.com

Move on nonperforming state firms put on hold amid economic crisis

2009-08-06T04:55:00.000-07:00

THE GOVERNMENT is not inclined to abolish any state-run firm while the country is reeling from an economic slowdown, since this would lead to job losses, the Finance department said.

"None. None for now. Because of the crisis, we cannot close any corporation," Finance Undersecretary Jeremias N. Paul said in a chance interview last Tuesday.

Mr. Paul, who heads the department’s corporate affairs group, claimed that they are already undertaking reforms to improve the management of government-owned companies.

Separately, Finance Secretary Margarito B. Teves said timing should be considered in deciding whether a state entity should be shuttered, given that the government is trying to preserve jobs to mitigate the impact of the global downturn.

Least cost

The Finance chief, however, maintained that in the long-run, the operation of state-owned firms should not be burdensome to taxpayers.

"In terms of what needs to be done over the long-term, we still go by the principle that we have to maintain GOCCs (government owned and controlled corporations) at the least cost possible to taxpayers," Mr. Teves said.

He added that the abolition of GOCCs may take time as this would have to undergo the usual process of legislating new measures.

"Abolition would require congressional approval since these GOCCs were created by Congress," Mr. Teves said.

The government aim is to make GOCCs financially independent.

For now, however, it is continuously providing them funding support to enable them to invest in areas that are not usually attractive to the private sector like rural electrification and socialized housing.

Earlier, Manila-based multilateral lender Asian Development Bank (ADB) scored the government for its supposed failure to reduce bleeding state firms, noting that some of these are suffering from weak institutional and regulatory frameworks.

ADB also urged the government to dissolve nonperforming corporations or to privatize them to ensure that these are not eating much funds from the government coffers.

Mr. Teves had previously said that his department will assess the performance of state-owned firms to see if they should be retained or deactivated.

He said he will not hesitate to recommend to Congress the closure of firms that pose burden to the public, whose taxes are being used to support their operations.

Subsidies double

Last month, the Finance Department reported that subsidies disbursed to state-run firms in the first half almost doubled from last year.

This, as the government also spent on infrastructure and social services to help prod private consumption and other economic activity amid the global slump that is not expected to ease until later next year.

Funds released to GOCCs and government financial institutions (GFIs) totaled P6.98 billion in the first six months, up by 90% from P3.67 billion last year.

On a month-on-month basis, subsidies extended to GOCCs and GFIs reached P1.95 billion in June, more than double the P942 million disbursed in May.

The top recipients of national government funds as of June were the National Housing Authority (P2.37 billion), National Home Mortgage Finance Corp. (P900 million), National Irrigation Administration (P892 million), National Electrification Administration (P509 million) and Philippine National Railways (P349 million). Other top recipients were the Philippine Coconut Authority (P322 million), Philippine Rice Research Institute (P210 million), National Livelihood Development Corp. (P200 million), the National Kidney Transplant Institute (P143 million), the Cultural Center of the Philippines (P128 million), the Philippine Children’s Medical Center (P126 million) and the Philippine Heart Center (P120 million). — Alexis Douglas B. Romero

Source: bworldonline.com

Housing Finance Bank gets sh50b

2009-07-30T16:55:00.000-07:00

THE Government plans to inject sh50b in the Housing Finance Bank. The housing state minister, Michael Werikhe, said the move was aimed at enabling more people to access credit and to promote development.

The boost follows sh40b that the bank had previously received from the Government.

Addressing journalists at the Media Centre in Kampala on Wednesday, Werikhe said over two million people lack housing units.

There is a deficiency of over 100,000 housing units in Kampala, he said, adding that the Government would address the problem.
The minister said they had established a housing policy and would pass other laws that guide the real estate development and housing constructions.

He explained that the Government was lobbying banks to provide mortgages to the public at affordable rates and other long-term loan facilities for development.
Werikhe noted that there were several slams in the country, but a slam upgrading strategy would be launched in October to facilitate the development of proper houses.

He said the construction sector, which is experiencing a boom had played a key role to socio-economic development and has been growing at 13% per annum.

Werikhe said the ministry had computerised the Kampala, Wakiso and Mpigi land registries to check forgeries of titles and would extend the programme countrywide.

He also announced the opening of the 7th annual construction exhibition and seminar at the Lugogo show grounds in Kampala that started yesterday.
The principal housing officer, Dane Khayangayanga, said the money they had received was generated from sales of the ministry’s houses.

Source: newvision.co.ug

L&T Finance not looking at equity listing for now

2009-07-30T16:54:00.000-07:00

L&T Finance Ltd (LTF), a non-banking finance company, is not looking at a listing of its equity shares for now, its Chairman, Mr Y.M. Deosthalee, has said.

The company may go in for a series of non-convertible debenture (NCD) issuances in the coming months after it establishes and creates liquidity in the proposed NCD instrument slated to hit the market in mid-August. Promoted by engineering major Larsen & Toubro in 1994, LTF is a wholly-owned subsidiary of L&T Capital Holdings Ltd (a subsidiary company of L&T).

Two days ago, LTF announced that it proposes to raise at least Rs 500 crore through NCDs, which are to be listed on the National Stock Exchange (NSE).

“This (NCD) is one option we want to make sure is available to us and use it from time to time after creating liquidity in existing NCD instrument through listing. We do understand that investors see a good opportunity in our equity story. But we are not ready (for listing) as yet. We have some homework to do,” Mr Deosthalee said here on Thursday. He was responding to a question on whether LTF intends to list its shares in the coming days. Mr Deosthalee said there were other options for price discovery that could always be explored by LTF.

Although the coupon rate for the proposed NCD instrument was yet to be finalised, Mr Deosthalee indicated that the rate will be higher than the yield of the 10-year G-sec paper. He also said that the NCD will have tenures of 5, 7, or 10 years.

“Our intent is to come up with a long-term instrument for the debt market. Through the NCDs we are also creating additional source of funding for the company. The idea is to make L&T finance a household name. We are also creating a market for NBFCs for retail funding,” he said.

Mr Deosthalee also said that LTF’s decision to come up with an NCD issue did not mean that the company would stop borrowing from banks and mutual funds.

On the possibility of merger with L&T Infrastructure Finance, he said that L&T Finance was not averse to any such move, but added that no decision has been taken on this front.

Asked about interest rates, Mr Deosthalee said that interest rates would remain stable for next few months. “After November or December, there is every likelihood of it going up. Now there is ample liquidity and credit needs of corporates have not gone up. I don’t think interest rates will come down in the near future.”

Source: thehindubusinessline.com

Finance Committee negotiations stall

2009-07-30T16:52:00.000-07:00

After being “on the edge of a deal” earlier this week, the Senate Finance Committee has stalled in its health care negotiations, and Senate Majority Leader Harry Reid is no longer promising that the committee will finish its work before the August recess.

Reid would only say he was “cautiously optimistic” that the committee would vote on a bill before the summer break begins next Friday. But in another blow to President Barack Obama’s attempt to move a bill through Congress by the recess, there were signs Thursday that Senate Democrats would not meet the latest deadline.

A morning negotiation session between the three Republicans and three Democrats did not happen as expected, and no further group meetings have been scheduled – an unusual break from the daily talks that have been ongoing for weeks. Finance Chairman Max Baucus (D-Mont.) spoke individually with senators, but there was confusion among Democratic and Republican staff as all sides tried to figure out where the talks stood.

Republicans, meanwhile, emphasized for the second consecutive day that the bipartisan group was not ready to reach an agreement.

“We're trying to do some really crazy stuff on a really short time frame," Sen. Mike Enzi (R-Wyo.), a member of the Finance committee, said Thursday.

The three Republicans on the Senate Finance Committee are under increasing pressure from their leadership not to cut a deal anytime soon, according to sources, and that message has been delivered frequently in recent weeks.

Baucus wanted to show progress on the negotiations before the August recess, either by announcing a deal or releasing the framework of a bill. He presented the senators Thursday with options for moving the process forward, sources said.

But Republicans decided that they did not want to operate on the Democratic timeline, GOP aides said. Despite the uptick in criticism from Enzi and Sen. Chuck Grassley (R-Iowa), there were no plans for them to leave the negotiations, aides said, but there is a desire to slow down the process.

"The Democrats' rush to produce a bill outline before recess was based more on political needs than policy progress," a GOP aide said, who spoke on the condition of anonymity to discuss strategy.

Grassley told National Public Radio Wednesday morning that the bipartisan group was "on the edge" of a deal by the weekend — an assessment he has walked back since then.

Source: politico.com

Pearson's shares soar after it beats expectations

2009-07-28T06:16:00.001-07:00

Pearson, the international media group, has shrugged off a dire advertising market to post half-year profits ahead of expectations, driven by a robust performance at its international education business.

Shares in Pearson, which owns Penguin books, soared by 73p to 679p yesterday, making it the FTSE 100's biggest riser, after said it expected full-year adjusted earnings per share to be "at or above" the 2008 level of 57.7p a share.

While underlying profit growth at FT Publishing, which includes the Financial Times, tumbled by 40 per cent, the group's education business – its main profit driver – traded ahead of expectations, delivering 5 per cent sales growth at constant currency over the half-year.

The group has substantially shifted its reliance away from advertising to focus on education and services, such as professional examination testing, and Pearson's chief executive, Dame Marjorie Scardino, struck up upbeat tone yesterday. She said: "The transformation we've been pursuing for a decade – from 'publishing' company to content, technology and services company – is paying off." She added: "Market conditions are tough and may stay that way; but we are confident that we will perform well this year and next."

For the half-year to the end of June, Pearson's pre-tax profits rose by 13 per cent to £62m. The group makes the bulk of its profits in the second half of the year, driven by spending on educational materials, as schools and universities start their new year. Over the six-month period, the group's international education division delivered underlying sales growth up 10 per cent to £446m.

Robin Freestone, finance director at Pearson, said that in North America the group was benefiting from the tough economy, particularly in the US, which is pushing more people back to college and university. North American education division grew sales by 1 per cent at constant exchange rates to £943m. Mr Freestone cited the "strength of our higher education business of selling books and digital products into US universities and colleges. You are seeing more students of 18 years old going to, or back to, college because of the tough job market."

Alex DeGroote, analyst at Panmure Gordon, said: "Ordinarily, H2 performance is most meaningful to full-year outcome due to the phasing of the education school year. Against a tough backdrop, however, Pearson talks of a 'stronger business performance offsetting negative currency impact'."

However, in the UK, underlying sales at FT Publishing, which includes the FT newspaper, tumbled by 40 per cent to £14m, hit by the fall in advertising in the financial and corporate sectors.

Mr Freestone said the global advertising market was down by between 20 and 40 per cent. He added: "The market is well down, but we are doing better than the market decline. Print advertising is bad, but online advertising is strong."

Pearson's group revenues were flat at £2.4bn, but adjusted operating profit jumped by 21 per cent to £158m. Pearson said it did not expect the advertising cycle to turn "any time soon", but said it expected its products to remain in demand and its subscription businesses to remain resilient.

The group has benefited from raising the cover price of the FT from £1 to £2 over the past two years. But the FT's circulation globally fell by 6 per cent to 421,429 over the half-year, as the financial crisis took its toll.

Source: independent.co.uk

Looking to use online tools to save? There are several with which you might click

2009-07-28T06:15:00.000-07:00

Technology has revolutionized the way many Americans manage money. With a click of a mouse or right from our smartphones, we can get a complete picture of our finances and recommendations for our money.

The sheer multitude of choices, however, can be overwhelming. I did a Google search for “personal finance software’’ and got 25 million results; for personal finance blogs, 50 million.

And no software, no matter how sophisticated, is a substitute for a qualified professional adviser. Fraud and incompetence lurk online, and many “educational’’ sites are simply trying to sell you something.

With those caveats in mind, it can be fun and enlightening to search for innovative financial websites and tools.

Worthy of note is www.mint.com, a free and secure site where you can set up an anonymous virtual account by entering brief information about your bank, investment, and credit card accounts, plus any home loans.

The site can be quite useful to people who are technology-oriented and have little time or disposition to keep track of their money.

Mint.com connects with more than 7,000 financial institutions, so chances are it includes yours. It can pull up your complete financial information in one place. You get weekly e-mails summarizing your spending, savings, and investments, plus alerts if, for example, a credit card bill is due or your bank balance is low.

A survey found 90 percent of Mint.com users have changed their spending patterns based on something they learned from the site.

Also highly useful is www.MoneyAisle.com, another free, automated site where more than 100 federally insured banks compete for your money. You enter the amount you have available for a certificate of deposit or high-yield savings account, and banks bid to offer the highest interest rate. You are not obligated to accept any bid.

Another site that helps people save and earn competitive rates is www.SmartyPig.com, which I can describe as a combined piggy bank/federally insured high-yielding online savings account. When you open an account, you establish a personal savings goal. You say how much money you want to save by when, and SmartyPig suggests an amount to deposit each month, automatically deducted from a checking or other account. To keep your SmartyPig account open, you must make this monthly contribution until you reach your goal.

You can make additional contributions at any time and invite family and friends to help you save by going online and adding to your account gifts for birthdays or other occasions. And you can place your SmartyPig widget on your Facebook or MySpace page to give all friends the opportunity to cheer you on toward your goal - and to contribute.

Source: boston.com

Wells Fargo Introduces Online Same Day Payments

2009-07-28T06:14:00.000-07:00

Wells Fargo & Company (NYSE:WFC) today announced the nationwide availability of its newest online bill pay feature, which allows customers to make "just in time” online bill payments to merchants, such as utility, auto finance and mortgage companies. The service helps customers avoid missing payments or making late payments.

According to Javelin Strategy & Research, nearly three out of four consumers initiated expedited payments last year and use is expected to continue to rise in the next five years.

"The launch of same day payments further highlights Wells Fargo’s commitment to listening to our customers and continued leadership and innovation in the online space,” said Adam Vancini, senior vice president of Wells Fargo Internet Services Group. "Our customers continue to discover the convenience and speed of paying bills electronically; the expedited payments service is an additional online bill pay option.”

Currently Wells Fargo offers same day payment options for a fee with a select group of payees; additional payees continue to be added on an ongoing basis. Wells Fargo teamed up with Western Union for the service.

"Western Union is pleased to join an industry leader like Wells Fargo to provide expedited bill payment,” said Ranjana Clark, executive vice president, Global Payments and Global Strategy. "Through its Global Payment Services division, Western Union is an expert in connecting consumers with billers. We understand that under current economic circumstances, consumers are managing their budgets more closely than ever and are looking for options that allow them to pay bills quickly, conveniently and without incurring costly late charges.”

Wells Fargo integrates customers’ bill pay data with optional online tools, such as its online budgeting tool My Spending Report with Budget Watch and archiving service Wells Fargo vSafeSM.

Wells Fargo’s bill pay service presents bills online for nearly 460 merchants, lenders and other billers.
Wells Fargo’s online and mobile bill pay alerts give customers more control by notifying them when bills arrive, if a bill didn’t arrive, when a bill is due, when a payment is sent, among other notifications.
With Wells Fargo Mobile, bill pay customers can schedule payments and pay bills with their mobile device while waiting in line, on a break, or anywhere else they want to access the mobile web or WF.com.
About Wells Fargo Online & Mobile Banking

Wells Fargo is a leading provider of online and mobile financial services for individual consumers, small and middle market businesses and large corporations with a full range of banking, money movement, investing, asset management and other financial and risk management products. Wells Fargo launched its personal computer banking service in 1989 and was the first bank to offer Internet banking through wellsfargo.com in May 1995. Since January 2009, Wells Fargo has been named the No. 1 Consumer Internet Bank in the United States by Global Finance Magazine, ranked the No. 1 website out of 68 leading U.S. corporations' websites for technology innovation by the Brookings Institution and was awarded two Monarch Innovation Awards by Barlow Research for online services for small business, including Foreign Exchange Online and My Spending Report with Budget Watch.

About Wells Fargo & Company

Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores and 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.

Source: newsticker.welt.de

Online Car Loans Available Through Low Car Loan Interest Rate

2009-07-28T06:06:00.000-07:00

We all love to shop online as its ease because it’s easy and simple to buy no matter whatever the thing is, including big purchases such as automobiles. Simply going to EBay Automotive will provide you thousands of choices, which offers you cheap car loans with low interest rates. Knowing of the average auto loan rates in the USA make certain that you can be no way be covered in debt though trying to keep up by the rates of interest on your car loan. Evaluating car loan rates would most certainly give you the idea while dealing with car loans.

Out here in the “actual world”, there are lot of credit organizations such as auto finance companies, banks, and car lenders where you can apply for a car loan. Searching for the best car loan and comparing different interest rates means you need to spend a lot of time. And it’s too not easy to go from one bank to the next in search of low interest car loan. It takes a lot of time to evaluate the various offers and alternatives “out there”. The only way out is to apply for an online car loan.

Online Car Loans made simple

If you’re looking for online car loans, the procedure is quite easy and it saves you money as well as time. In addition, you can compare the rate of interest of different banks as well as finance companies. It’s possible to save some money by applying for “free applications”. Normally, online auto loan rates are lower as compared to the loan rates offered by traditional car dealers or finance companies. Online car loans are approved very fast. Some loans are approved within an hour. While applying for online auto loans you won’t find any hidden fees, any bad credit frauds, and penalties. Once your online auto loan is approved, you will receive a check from the loan company. It’s like, you apply for a car loan today and can drive off in your brand new car tomorrow.

Source: nurido.at

On the Hill, Finance Officials Draw Battle Lines on Reform

2009-07-25T21:02:00.001-07:00

The nation's top economic policymakers aired their differences on how to remake financial regulation Friday, exposing disagreements within the government over the Obama administration's planned overhaul.

Treasury Secretary Timothy F. Geithner appeared before the House Financial Services Committee to make the case for the Obama plan, which among other things would establish a new agency to regulate consumer financial products. Then, a panel that included Federal Reserve Chairman Ben S. Bernanke, Federal Deposit Insurance Corp. Chairman Sheila C. Bair and other regulators took the stage, each voicing criticism on elements of the administration's proposal.

The House is preparing to take action on parts of the financial overhaul plan in the fall, and the debate looks increasingly likely to be contentious. The Obama plan faces opposition from the financial industry, Republicans and some centrist Democrats, as well as current banking regulators.

In addition to creating the new consumer protection agency, the administration also wants to give the Fed authority to regulate any financial institution whose size and complexity threaten the broader economy. But members of both parties are increasingly wary of the Fed's concentrated power and would prefer placing more of that authority with an independent council of financial regulators.

The positions of the agency heads are likely to influence lawmakers' decisions, and there were clear fault lines on Friday among the officials testifying.

On the question of creating a consumer regulator, Bernanke argued that the work the Fed does supervising banks complements its work protecting Americans from potentially risky financial products. John C. Dugan, head of the Office of the Comptroller of the Currency, said he was worried that the new law would explicitly give states the right to regulate banks' interactions with consumers, making it harder for national banks to offer uniform products across state lines.

"For the first time in the nearly 150 year history of the national banking system, federally chartered banks would be subject to this multiplicity of state operating standards," Dugan wrote in his testimony, echoing an argument from the large banks his agency regulates.

Geithner seemed to accuse the bank regulators of simply protecting their turf.

"I think it's perfectly reasonable and understandable that the institutions who have this authority . . . are not enthusiastic about giving up that authority," the Treasury secretary said, responding to a question about why he and Bernanke disagree. "They would just defend the traditional prerogatives of their agencies, and I think, frankly, all arguments need to be viewed through that basic prism."

On systemic risk, the Obama plan would make the Fed the primary overseer of companies whose workings pose threats to the larger financial system. It gives the central bank a prime role in responding to a financial crisis. Bernanke said Friday that he thinks there are around 25 firms that could threaten the financial system, the first time he has attached a number.

The administration would simultaneously create a council of top regulators to identify and respond to risks building in the financial system. That council would play a role deciding which firms were sufficiently intertwined to require special Fed oversight. Bair said Friday that she wants more of that systemic-risk oversight authority vested in the council and less in the Fed.

The administration's vision for the oversight council "currently lacks sufficient authority to effectively address systemic risks," said Bair, who has clashed with Geithner and Bernanke over numerous issues in responding to the financial crisis. She said that the council should be chaired by an independent presidential appointee, rather than the Treasury secretary. She wants the agency to set rules and minimum standards for financial institutions, for example.

"Some have suggested that a council approach would be less effective than having this authority vested in a single agency because of the perception that a deliberative council such as this would need additional time to address emergency situations," Bair said.

But she noted that the FDIC, which is overseen by a board, has been able to make rapid decisions when necessary, and said the council "will provide for an appropriate system of checks and balances to ensure that decisions reflect the various interests of public and private stakeholders."

Bernanke, as it happens, is one who has argued that a committee approach to systemic risk could be ineffective in responding to emergency situations.

Source: washingtonpost.com

75 enrol in finance programme

2009-07-25T21:01:00.001-07:00

SEVENTY five participants were enrolled in the fourth intake of the Financial Sector Talent Enrichment Programme (FSTEP) recently.

Of these participants, 36 were sponsored by various financial institutions under the pre-selected scheme that was announced in April, which enables financial institutions to select their own candidates into the programme.

The rest will be funded by the pro-gramame’s staff training fund.

FSTEP is a training programme driven by the financial services industry in collaboration with Bank Negara Malaysia, and is managed by Institut Bank-Bank Malaysia (IBBM).

The programme has since its inception, attracted high calibre graduates from local and foreign institutions of higher learning, as well as those working in the non-financial sector, who want to pursue careers in the financial services industry.

The one-year programme covers four core streams; conventional banking, investment banking, Islamic banking and insurance, and Takaful. Participants undergo a one-month intensive English course after which they have six months of classroom training. This is then followed by a five-month internship with financial institutions.

Upon graduation, the participants have the opportunity to be employed by the financial institution which sponsored them.

Participants will also undergo various personal development programmes as well as Outward Bound School activities to develop personal resilience, teamwork and leadership qualities.

FSTEP head Lee Khee Joo said that the support from financial institutions towards the programme was encouraging.

“We anticipate that more financial institutions will participate in the pre-selected scheme for future intakes,” he said.

Previously, participants were only recruited under the sponsorship of the programme’s staff training fund.

Source: thestar.com.my

Finance chief says Enrile power bills to cost gov’t P21 billion

2009-07-25T21:00:00.000-07:00

THE GOVERNMENT stands to lose about P21 billion in foregone revenues should Senate President Juan Ponce Enrile’s twin-power bills, designed to cut electricity prices, become law, Finance Secretary Margarito B. Teves told reporters yesterday.

Mr. Enrile’s Senate Bill (SB) 3282 seeks to reduce electricity rates by cutting to a flat 3% government royalties from the exploration, development and production of the country’s indigenous sources of energy from the current 60% of net proceeds from natural gas development, 60% of net proceeds from geothermal development and 30% of net proceeds from indigenous coal.

SB 3147, meanwhile, seeks to impose a franchise tax of 3% on gross distribution income on power utility firms in lieu of all other taxes, duties and fees.

"In terms of royalties, P14 billion, for franchise tax, it’s P7 billion," Mr. Teves said when asked of estimated revenue losses from both measures.

The finance chief, however, said that the initial estimates will still have to be validated further.

Regarding the possible increased economic activity to be generated by the projected reduction of power rates, Mr. Teves said the department will also study it.

"We’ll take note of that and try to see the timing of this versus the benefits, as suggested," he said.

Mr. Enrile said in a forum with the foreign press last Tuesday evening that the potential benefits outweigh any cost to government.

"The impact of a significant reduction in electricity prices, in a country reputed to have one of the highest power rates in the region, will be greatly felt," Mr. Enrile had said. "The ultimate effect will far outweigh the reduction of the royalty of government." — Jose Bimbo F. Santos

Source: bworldonline.com

National Finance Commission reconstituted

2009-07-25T20:59:00.000-07:00

ISLAMABAD: President Asif Ali Zardari on Saturday reconstituted the nine-member National Finance Commission (NFC) to finalise the much-awaited 6th NFC award.

Minister of State for Finance Hina Rabbani Khar has been dropped from the list of members of the newly reconstituted NFC as her appointment in the last NFC had sparked criticism from the smaller provinces.

According to a notification, the president reconstituted the NFC in pursuance of Article 160(1) of the constitution.

The commission will consist of the federal minister for finance as its chairman, Punjab Finance Minister Tanvir Ashraf Kaira, Sindh Chief Minister Qaim Ali Shah, NWFP Finance Minister Humayun Khan and Balochistan Finance Minister Mir Asim Kurd.

Abdul Ghafoor Mirza was nominated as a private member from Punjab, Kaiser Bengali from Sindh, Senator Haji Muhammad Adeel from NWFP and Gulfaraz Ahmad was nominated from Balochistan.

The commission will make recommendations on the sales tax on services (CE Mode), examine the question of rationalisation of payment of royalties on crude oil, and of a surcharge on natural gas collected by the federal government. The Finance Division will provide the Secretariat support to the Commission as per the Rules of Business 1973.

Share: The NFC would also finalise the share of the federal and provincial governments in federal tax revenue, a new mechanism for provincial borrowing from the federal government and interest payment with revised terms and conditions. The commission would facilitate the provinces to agree on a distribution mechanism for the royalty on crude oil production and surcharge on gas production.

According to official sources, Finance Adviser Shaukat Tareen is likely to be elected as the member of Senate on the seat left vacant after Senator Javed Leghari resigned from the House.

Tareen’s election to the Senate will elevate him to the status of federal minister and he will be able to chair the meetings of the seventh NFC award.

The government has already decided to finalised the new NFC award in consultation with all federating units before December 31.

Currently the portfolio of the federal minister for finance rests with Prime Minister Yousuf Raza Gilani, who owing to his hectic official schedule is unable to chair the meetings of the commission.

Source: dailytimes.com

Treasury nears end on financial reform proposals

2009-07-23T05:05:00.000-07:00

WASHINGTON (Reuters) - The Treasury Department on Wednesday gave lawmakers proposals to dampen financial firms' appetites for growing to giant size and said it was one step away from giving Congress its full package of reforms.

In the wake of a two-year-old financial crisis, the Obama administration has been sending pieces of its reform ideas to Congress piecemeal as they are prepared, including Wednesday's proposals for toughening capital rules for big firms.

On Thursday, it will send up a proposal for consolidating some banking regulatory agencies into a new national Bank Supervisor and, after that, has only to propose changes for how markets in hard-to-value derivatives work.

Treasury Assistant Secretary Michael Barr said the language on derivatives reforms would be given to lawmakers -- who must draft and approve final legislation for implementing a complete regulatory overhaul -- before they leave for an August recess.

"The overall trajectory of reform here I think is quite strong," Barr said, noting Congress will then have proposals covering every aspect of Treasury's proposals for creating a tougher regulatory framework that should be less subject to a meltdown such has occurred over the past two years.

Wednesday's proposals called for a new eight-member financial oversight council that would act as a coordinator for financial regulation, making the Federal Reserve the consolidated supervisor for all systemically important financial firms.

The plan would also impose stricter and more conservative standards for capital, liquidity and risk management for so-called tier one firms that are deemed to big to fail, from fear of the damage they would do the wider economy if they got into trouble.

"These standards will be set with a focus on the risks that these firms could pose to the financial system as a whole, not just the risks to each institution," the Treasury said in a fact sheet that it released to explain the proposals.

Barr, in a telephone press conference, said the new capital rules effectively create a clear disincentive for firms to become so big that they reach too-big-to-fail status. The bigger they are, the more capital that they would have to put up as a guard against possible economic downturn or failure.

Big firms can gain unfair competitive advantage through growth, because they are perceived as safer bets for investors and so get access to cheaper capital and make bigger profits.

But this had disastrous consequences for the U.S. economy when several big firms got into trouble last year and had to be bailed out, at the potential cost of billions of dollars to the U.S. taxpayer.

The proposals also would require banks or other firms that "securitize", or package asset-backed securities into new securities that are then resold to hold on to five percent of the credit risk. The proposal is colloquially known as making companies have "skin in the game" so they are less likely to try to package and resell risky securities that may fail.

Treasury said it wants to make sure that "robust, consolidated supervision and regulation" is applied to any company that controls a bank with the Fed in charge.

"The legislation will require all financial holding companies -- including tier one financial holding companies -- to be 'well capitalized' and 'well managed' on a consolidated basis, significantly raising minimum capital standards for these firms," the Treasury said.

Source: reuters.com

Back On Capitol Hill, Fed's Bernanke Faces Key Senate Panel

2009-07-23T05:04:00.001-07:00

WASHINGTON -(Dow Jones)- U.S. Federal Reserve Chairman Ben Bernanke, in a second day of Capitol Hill testimony, reiterated Wednesday that financial markets remain stressed and that a key interest rate is likely to stay at a record low near zero for some time.

Lawmakers, however, appear less interested in monetary policy and more interested in debating plans to expand the Fed's powers as a financial system regulator. They also are concerned about the weak labor market and tight credit markets.

Senators argued that while the Fed has taken extraordinary measures to stem the crisis, real families and small businesses are still suffering amid rising unemployment and a persistent housing market challenges.

"Mr. Chairman, I appreciate the work you've done...on the monetary policy side of the equation and the positive indicators that we've seen in recent weeks. But these positive indicators seem to be stuck at the top in the process," said Senate Banking Committee Chairman Christopher Dodd, D-Conn., in his opening remarks.

Dodd went on to call on the central bank to take more forceful action.

"I'm very supportive of the effort you've been trying to make as the chairman of the Federal Reserve, but I have serious issues about the institutional issues of all of this as we go forward," said Dodd.

Noting that the Fed regulates major banks, Dodd said "many are asking why that authority is not being exercised to convince these institutions that they need to be moving more aggressively when it comes to bank lending."

Similarly, the panel's top Republican, Richard Shelby of Alabama, said the Fed failed as a banking regulator in the run-up to the financial crisis.

"If the Fed had conducted its regulatory oversight with great diligence, I do not think the financial crisis would have achieved depth and scope that it did," said Shelby.

"In light of the Fed's record of failure as a bank regulator, it should come as no surprise that Congress would take a closer look at the Fed and reconsider its mandate."

Bernanke, who noted that unemployment is one of the Fed's most difficult challenges, faces tough questions from the Senate Banking Committee just as the chairman's term is running out and questions about his future are running rampant. Bernanke's term as chairman expires in only six months, and it's unclear if U.S. President Barack Obama will reappoint him.

Meanwhile, the banking panel is likely to play a key role in helping to decide if Bernanke is renominated.

During Tuesday's hearing before the House Financial Services Committee, there were no direct questions about Bernanke's future.

Instead, lawmakers laid out concerns about the commercial real estate market and inflation.

Lawmakers, who will have to decide how to overhaul finance rules in a way that could prevent future crises, also questioned whether the Fed should keep its consumer protection role.

They also debated a bill introduced by Fed critic U.S. Rep. Ron Paul, R-Texas, to have Congress' investigative arm audit the central bank. More than half of the House has signed on as co-sponsors of that bill.

Bernanke, however, argued that Government Accountability Office audits would be viewed as "a serious weakening of monetary policy."

Still, the legislation's growing popularity proves just how delicate a time this is for the central bank. Bernanke has argued that the government's actions have helped prevent a deeper recession. But the Fed has still come under attack for many of its financial market rescue efforts, including its role in Bank of America's Corp. (BAC) acquisition of Merrill Lynch. Some lawmakers, fed up over government bailouts for giant firms such as American International Group Inc. ( AIG), argue that the central bank is shrouded in secrecy and that the bank's crisis measures should be more transparent.

Still, others have warned lawmakers against going too far: more than 175 prominent economists recently warned that Fed critics are jeopardizing the Fed's independence and its ability to manage the economy.

Source: cnn.com

Why Banks Should Support a Consumer Financial Protection Agency

2009-07-23T05:03:00.000-07:00

In thinking about the forthcoming economic recovery, many people — including articulate corporate leaders — rightly emphasize the importance of consumer confidence. Our economy is largely consumer driven and while some increase in personal savings is surely warranted, if we collectively try to save “too much and too soon,” it will mean sluggish growth and persistently high unemployment.

At the same time, it is striking that many of the same corporate leaders — and their lobbyists — emphasize their determination to defeat the administration’s proposed Consumer Financial Protection Agency. This agency would act as a form of safety commission for financial products, with an eye to preventing the kinds of abuses that have characterized mortgage lending, credit cards and other retail financial products in the recent past.

Elizabeth Warren, head of the Congressional Oversight Panel, is advocating a Consumer Financial Protection Agency over the protests of financial institutions.
Elizabeth Warren, head of the Congressional Oversight Panel, has been the most articulate advocate of a consumer protection agency, including with a blog post Tuesday and a YouTube video released on Monday.

As Professor Warren points out in some detail, the primary counterarguments against the agency are based on either misunderstanding or misinformation. The consumer protection agency would not prevent the creation of products by the private sector, but it would make it much more likely that the products are not toxic for the people who use them — in the same way that we worry about the safety of cribs or medicine. This would actually encourage sensible forms of innovation.

But, in addition, there is an important reason to think that protecting consumer safety on financial products would support exactly the kind of broader confidence that business is looking for.

Many consumers were burned, one way or another, by a financial product in recent years. They are now suspicious. They can spend time looking for vanilla alternatives from reputable companies, but, frankly, everything is to some extent tainted.

What happens when there is a scare regarding food contamination in the United States or globally? People buy less of that food until the government assures them that: 1) we now understand the cause of the problem; and 2) it will not happen again.

Word has gotten around that many financial products are not safe — as well as the idea that the debt levels encouraged by the finance industry are not always healthy. Consumers are going to be more careful and, if there is no way to reassure them fully, they may be excessively careful.

In addition, we have learned that allowing financial firms to abuse consumers is bad for our overall financial system health — leading directly to the current crisis, loss of jobs and still rising unemployment; all of this further undermines confidence of all kinds. If the financial system can turn nasty or even nastier, we should all carry more “precautionary” savings.

There’s no question that some financial firms would like to return to abusive practices, figuring they can once again make money and then move on. Yet serious financial sector firms would prefer to clean up their acts and work with properly informed customers. These firms are making a bad mistake in opposing the consumer protection agency.

If the agency does not make it through Congress –- and right now it seems a tossup –- this will just feed the enmity against finance more generally and possibly in the 2010 midterm elections and beyond. There is no way that is good for overall confidence. It just doesn’t make sense for well-run financial firms to go down this road.

Thought leaders in the industry, the American Bankers Association, the Financial Services Roundtable and other interest groups should switch their positions and support the consumer protection agency — if they really want consumer confidence in financial products and in general to return.

Source: economix.blogs.nytimes.com

PNC Financial posts lower second-quarter profi

2009-07-23T05:02:00.000-07:00

NEW YORK (MarketWatch) -- PNC Financial Services Group Inc. (PNC 37.18, -0.23, -0.62%) said Thursday that its second-quarter net income fell to $207 million, or 14 cents a share, from $517 million, or $1.45 a share, in the year-earlier period. The Pittsburgh-based bank said that the latest results include a special FDIC assessment of 19 cents a share and integration costs of 20 cents a share. On average, analysts polled by FactSet Research were expecting earnings of 51 cents a share. Revenue rose to $3.99 billion from $2.04 billion, and net interest income more than doubled to $2.18 billion from $977 million.

Source: marketwatch.com

Newton finance panel backs tax increase on hotel rooms

2009-07-22T03:56:00.001-07:00

The Finance Committee of the Newton Board of Aldermen voted Monday to recommend a tax increase on local hotel rooms, but delayed action on a more-lucrative restaurant meals tax increase.

The eight-member committee voted 6 to 0, with Aldermen Scott Lennon and Ken Parker abstaining, to recommend increasing the tax on hotel rooms from 4 percent to 6 percent.

The proposal will go before the full Board of Aldermen at their Aug. 10 meeting.

Local-option taxes, enabled under the new budget signed this month by Governor Deval Patrick, are being examined in communities including Newton, Natick, Lexington, Milford, Millis, Plainville, and Wrentham.

In Newton, the committee voted 5 to 3, with Adlermen Paul Coletti, John Freedman, and Sydra Schnipper opposed, to place a hold a recommendation on an additional .75 percent tax on restaurant meals.

Committee clerk Danielle Delaney said the committee may hold a public information session on the meals tax and then take up the issue again.

Mayor David Cohen requested earlier this month that aldermen approve both taxes. He said the meals tax increase would generate about $800,000 this year and about $1.2 million in subsequent years.

The hotel tax increase, by contrast, would bring in around $367,000 this year and $550,000 in later years.

Source: boston.com

Senate Panel Takes Careful Approach to Crafting Health Bill

2009-07-22T03:55:00.000-07:00

While the issue of health-care reform has divided Democrats in the House and stirred relentless GOP attacks, members of the Senate Finance Committee have seemingly ignored the hubbub, and a presidential deadline, as they huddle daily in pursuit of a breakthrough bill.

Committee members say they are trying to resolve potential controversies behind closed doors, to produce a bill that can withstand the close scrutiny. And on Tuesday, senior panel members expressed confidence that they could complete committee action on such a bill before President Obama's Aug. 7 deadline -- and, in the process, attract significant bipartisan support.

The measure would meet Obama's goal of expanding coverage while lowering long-term health costs, without relying on a surtax on wealthy households as the House's bill would impose.

"The Finance Committee is the only place left where a bipartisan bill that also gets on top of the spiraling health-care costs can be achieved," Sen. Charles E. Grassley (Iowa), the panel's top GOP negotiator, told Iowa reporters Tuesday. "And that's what we're trying to do. We may fail, but I feel very positive and optimistic that we won't."

House Democratic leaders are closely monitoring the marathon huddles held daily in the office of Finance Committee Chairman Max Baucus (D-Mont.). Rank-and-file Democrats have recoiled at the surtax idea, and Rep. Mike Ross (D-Ark.), a leader of the rebellious Blue Dog Coalition, was unequivocal that the group wants a House bill that is "more closely aligned with what the Senate Finance Committee is going to do."

Obama brought the conservative Blue Dogs to the White House on Tuesday afternoon to negotiate a series of fixes with the aim of winning their support in the Energy and Commerce Committee, where the House bill has stalled. The president declared from the Rose Garden before the meeting that reform was "closer than ever." But after the session, Ross and other House lawmakers said numerous issues remain unresolved.

As negotiations intensify, and Obama prepares for a televised news conference Wednesday night to make his case to the public, a striking contrast has developed between the two chambers of Congress. The House still aims to meet Obama's timetable of completing committee action before the August recess, while the Senate is taking a far more deliberative approach.

"There are certain fundamental questions that have to be addressed, because at the end of the day, people are going to be asking those questions," Sen. Olympia J. Snowe (Maine), another Republican negotiator.

Baucus said: "We want to make sure that whatever we come up with is defensible. This is complicated."

A critical objective for both chambers is to "bend the curve" on skyrocketing health-care costs. White House budget chief Peter Orszag delivered a new round of savings proposals to Finance negotiators over the weekend, and he defended the administration against Republican attacks that it has not vigorously pursued both long- and short-term savings.

Already, Orszag said, Obama has outlined $650 billion in Medicare and Medicaid cuts that could be used to finance coverage for nearly 50 million people. And the White House has gained support among Blue Dogs and Senate Finance members for creating an independent panel to oversee Medicare reimbursement rates and broader reforms -- authority that now lies with Congress.

On Monday, Obama met with Douglas Elmendorf, director of the Congressional Budget Office, and a handful of economists to "make sure we had exhausted all the possibilities that could help on the long-term deficit picture," Orszag said. Elmendorf delivered a serious blow last week to the House effort, along with a separate Senate health committee bill, when he testified that the measures could raise long-term health costs.

Orszag also said the White House is open to a proposal by Sen. John F. Kerry (D-Mass.), a Finance Committee member, to tax insurers for very generous health policies. The idea is a variation on a provision that Baucus, Grassley and others on the committee had pushed: to tax beneficiaries who receive generous policies through their employers.

Obama staunchly opposed taxing beneficiaries as a candidate, and on Monday he threatened to veto a bill that targets individuals. But Orszag said that the White House is open to the Kerry alternative, noting that a fee on high-value policies would "create an incentive for companies to create more efficient plans."

A senior House leadership aide said Democratic lawmakers there are keenly interested in the Kerry provision, along with other revenue measures with consensus support in the Finance Committee, to replace the wealth surtax that Baucus and others have already declared dead on arrival. "Our guys want to see some movement there," the aide said. "They're loath to vote on a tax increase if it is not going anywhere in the Senate."

House Speaker Nancy Pelosi (D-Calif.) defended the surtax at a meeting of House Democrats on Tuesday, but she assured lawmakers that she would look for alternatives. One option Pelosi floated Monday would raise the income at which the surtax begins to take effect to $500,000 for individuals and $1 million for households, up from $280,000 for individuals and $350,000 for households. But some Democrats complained that small businesses would still be ensnared.

Finance members said the committee was leaning against requiring employers to provide health coverage, although it would impose a fee on individuals who do not purchase insurance. They also said the panel had rejected the government health plan that Obama wants to create and would instead adopt a cooperative model, similar to rural electricity providers.

Source: washingtonpost.com

Microsoft ends vendor finance deal with CIT

2009-07-22T03:54:00.000-07:00

SEATTLE, July 21 (Reuters) - Microsoft Corp (MSFT.O) said on Tuesday it had terminated a vendor-financing deal with lender CIT Group (CIT.N), but declined to give further details.

CIT makes loans to small and medium-sized businesses to buy equipment and it faces crushing losses on bad loans. The lender is hoping to stave off bankruptcy protection with emergency financing from private investors secured on Monday.

Microsoft did not put a value on the loans CIT had issued to customers under its pact.

"Microsoft works with a number of financial institutions, including CIT, that provide vendor services and we continue to offer financing to qualified customers as a way to pay for software and services," said Microsoft in a statement. "Microsoft Financing has contingency plans in place to protect our customers and partners needs." (Reporting by Bill Rigby; editing by Carol Bishopric).

Source: reuters.com

GE Committed to Keeping Finance Division Intact, Sherin

2009-07-18T05:39:00.000-07:00

July 17 (Bloomberg) -- General Electric Co. is committed to keeping its finance arm and expects to be able to fund the unit once a U.S. government bond-insurance program expires, Chief Financial Officer Keith Sherin said in an interview.

GE Capital, which is shrinking its balance sheet, has issued about $9 billion in bonds so far outside the Federal Deposit Insurance Corp. program, the most of any company, he said. Known as the Treasury Liquidity Guarantee Program, it expires in October.

“That’s more than any other issuer for long-term debt,” Sherin said in an interview. “We’ve made so much progress strengthening GE Capital.”

GE said today that profit at the finance arm declined 80 percent in the second quarter as the first global recession since World War II slashed consumer spending and real estate markets collapsed. GE remains an important source of lending to small and medium-sized businesses in the U.S., Sherin said on a call today with investors. The unit lent $69 billion in the first half of 2009.

It’s too early to tell whether the company will gain any business if New York-based CIT Group Inc. files bankruptcy, he said. CIT, a 101-year-old commercial finance company whose customers including Dunkin’ Brands Inc., said yesterday it’s “continuing to evaluate alternatives” after failing to receive federal guarantees for its bonds.

Unlike CIT, GE doesn’t provide factoring financing, or cash used by vendors to produce goods that retailers typically pay for later, usually within 90 days. GE does compete with CIT in offering loans to smaller companies and leasing planes.

‘Some Opportunities’

“There are some opportunities where we do have overlap,” Sherin said on the investors call. “We’ll have to wait and see how that plays out.”

The company, which isn’t a bank holding company and didn’t take money from the Federal Reserve’s Troubled Asset Relief Program, can take advantage of two government programs. In addition to using the FDIC bond-insurance, GE can sell into the Commercial Paper Funding Facility set up by the Fed, which it tapped once.

GE has already issued about $12 billion in notes, or about a third of the $35 billion to $40 billion it plans to refinance in 2010. The company has “prefunded” all of the $45 billion it planned to refinance this year.

The company remains “extremely committed” to keeping GE Capital, Chief Executive Officer Jeffrey Immelt said on the call with investors today, even as proposals that may force the separation of the parent and finance unit begin to work their way through Congress.

GE Capital Partner

In the interview, Sherin said he isn’t working on a scenario that would include giving ownership of the majority of GE Capital to a joint venture outside the parent company. Nicholas Heymann, a New York-based analyst with Sterne Agee & Leach Inc., expects GE to seek a partner for all of GE Capital in the second half of next year, he said in an interview with Bloomberg Radio.

GE doesn’t think it’s being targeted by President Barack Obama’s proposed law strengthening financial regulations. The company is fighting for so-called grandfathering that would allow the parent company to keep its finance arm even if the final version of the law is written in a way that would apply to GE, General Counsel Brackett Denniston said on the call. GE favors the proposed law’s broad themes on systemic regulation, Denniston said.

“GE has benefited from government assistance in the form of liquidity provisions” under the FDIC insurance program, said Gary Jenkins, a credit strategist at Evolution Securities in London. “In order to restore themselves to independent good health, they require no further economic shocks that would negatively impact their business.”

Commercial Paper Balances

GE has reduced its commercial paper balances to $50 billion from about $74 billion at the beginning of the year, ahead of schedule, the company said today.

Profit from GE’s continuing operations declined to $2.87 billion, or 26 cents a share, from $5.39 billion, or 54 cents, a year earlier, the company reported today. Analysts’ average estimate was 24 cents a share.

GE fell 75 cents, or 6 percent, to $11.65 at 4:01 p.m. in New York Stock Exchange composite trading, the most since April 9. The shares have gained 8.1 percent this week and are up from $5.73 on March 4, the lowest intraday price since December 1991.

Souce: bloomberg.com

Personal-Finance Help Migrates to the Web

2009-07-18T05:38:00.002-07:00

More Americans feel uneasy about the state of their finances -- and not because of any change to their income or expenses.

Instead, the latest bad news concerns software that many people use to manage their cash flow. One of these applications, Microsoft Money, perished at the end of June after Microsoft chose to stop developing it. Another, the Mac version of Intuit's Quicken -- which needed a rewrite when it shipped in 2006-- now won't get its next update until February, the latest in a long string of delays.

The Windows version of Quicken continues to chug along, but its users have to buy a new version every few years to retain access to the online services that automate most of its work.

In this stagnant market, most of the signs of life lie not in disc-based programs (though smaller developers are doing interesting work) but on the Web. There a few sites provide simpler ways to manage your money -- and do so for free.

Mint (http://mint.com), Intuit's Quicken Online (http://quickenonline.com) and Wesabe (http://wesabe.com), among others, automatically synchronize their records with those of your financial institutions, then categorize transactions to track your spending. There's no extra software to install -- though these three provide basic, free iPhone applications for on-the-go access.

The only catch is that in most cases, you must store your bank account passwords on these sites. (All three say they encrypt these data to block them from being misused.)

I handed over many of my own log-ins to these sites in May 2008, and I found them promising but limited; this time around, two of the three did significantly better.

Mint.com is now closer to the utility of Money or Quicken, thanks to a series of updates that added support for mortgages and such assets as houses and cars. (It uses Web sources to estimate values for the former but not the latter.)

Mint connected to all the bank, credit card, investment and mortgage accounts I tested, then correctly categorized most transactions in each. It was even smart enough to split ATM surcharges into separate transactions, though it didn't then file those charges under its "ATM Fee" category.

The site will set up budget goals based on your past spending, which you can and should adjust yourself. But you can't enter a pending transaction; if you write a large check, you must remember it's out there. Mint's automatic alerts of upcoming bills also missed some of mine, and it doesn't let you fix any oversights by adding your own alerts.

Mint, based in Mountain View, Calif., now claims more than a million active users. It makes its money by suggesting credit cards, banks and investments to fit your habits, then collecting referrals on accounts opened through these "Ways to Save" tips. Keep this advice in context -- a credit card's points rewards aren't as useful as cash back.

Quicken Online got its biggest upgrade when Intuit, also in Mountain View, dropped a $2.99 monthly fee, helping it win more than 1.3 million users. This time around, Quicken Online automatically categorized almost as many transactions as Mint and easily outdid that site at warning me of upcoming bills.

Source: washingtonpost.com

G.E.’s Earnings Fall 47%, Led by Finance Unit

2009-07-18T05:38:00.001-07:00

General Electric reported a steep fall in second-quarter earnings on Friday, weighed down by the continuing struggles of its big finance business, falling orders for industrial equipment and declining advertising spending at its NBC television network and local stations.

Yet analysts said that the giant multinational’s results showed a steady performance at a time of worldwide recession. They said G.E. was doing a good job of cutting costs and seemed to be progressing in paring the size and risks of its finance arm.

G.E., which has industrial businesses spanning energy, aviation and health care, reported earnings per share of 26 cents, down from 54 cents in the quarter a year earlier. The 26 cents was slightly more than analysts’ consensus estimate of 23 cents a share, as compiled by Thomson Reuters.

The company’s net income fell 47 percent, to $2.9 billion, down from $5.4 billion a year ago.

Given its global reach across product lines as diverse as gas turbines, power plants and aircraft engines, G.E. provides a concentrated glimpse of the health of capital spending in the industrial economy as a whole.

On that score, the G.E. report showed continued weakness. The company’s revenue fell 17 percent, to $39.08 billion. After adjusting for a stronger dollar, which reduces the value of overseas sales, sales were down 12 percent from the previous year. G.E.’s quarterly revenue was about $3 billion less than the Wall Street forecast.

Capital equipment orders for G.E. fell sharply, especially transportation machinery like locomotives and health care equipment like medical-imaging machines. In a conference call with analysts, company executives said they expected industrial equipment orders to be off about 25 percent for the year.

“That’s a pretty significant decline, but it’s not unexpected in this economy,” said Richard Tortoriello, an analyst at Standard & Poor’s.

Still, analysts said, the fall in industrial orders disappointed investors, sending G.E.’s shares down 6.05 percent, to $11.65.

Jeffrey R. Immelt, G.E.’s chief executive, said his management team was focused on cutting costs, operational improvements and repairing the finance unit, while still investing in businesses likely to prosper when the economy recovers. “We’re as well positioned as you can be in this environment,” Mr. Immelt said.

Analysts say two main concerns cloud the outlook for G.E. Its industrial side is a collection of capital-equipment businesses, and many customers will delay large purchases until genuine signs of economic recovery surface, they say.

The worry about the finance unit, analysts say, is the possibility that G.E. may not yet have seen the worst of losses and that it may have to set aside more money to cover them. But for a quarter at least, the trends looked encouraging.

The finance business was the biggest drag on G.E.’s results. Its operating profits fell 80 percent, to $590 million, down from $2.9 billion a year ago. And revenue in the finance unit, which includes home mortgages in Britain and private-label credit cards in the United States, declined 29 percent, to less than $12.8 billion, from nearly $18 billion.

G.E. has moved to strengthen the finance business. It said leverage, or the ratio of borrowings to equity, is down to 5.6 to 1, compared with 7 to 1 a year ago. And borrowing in the short-term commercial paper market is down to $50 billion, from $72 billion a year ago.

A new uncertainty about G.E.’s finance business was raised last month with the Treasury Department’s initial plans to overhaul the financial system. One recommendation, aimed at companies with large financial and nonfinancial businesses, would require G.E. to shed its big finance unit.

G.E. executives said the company would fight the proposal. “We are really committed to GE Capital,” Mr. Immelt said.

The company’s television network and movie studio unit, NBC Universal, also hurt the quarterly results, with earnings off 41 percent because of charge-offs and falling television advertising.

The impact of economic stimulus programs has not yet been evident, Mr. Immelt said. “We’ll see benefit from the global stimulus in the second half of the year,” he said.

Source: nytimes.com

Health Reform: But What Will Senate Finance Bill Say?

2009-07-18T05:29:00.000-07:00

If the government’s health care costs are high and rising, and you extend subsidized health insurance to millions more people without fundamentally changing the system, you’re going to put the government on the hook for a lot more money.

Douglas Elmendorf, the guy who heads the Congressional Budget Office, made that point yesterday and became the lead health-reform story of the day. (See coverage from the WSJ, Washington Post, the New York Times and Politico.)

But Elmendorf made clear he wasn’t referring to the bill expected any day now from the Senate Finance Committee, because leaders of the panel “have not yet released” that bill. Two other bills — one from the House and one from the Senate health committee — have been in the news this week.

All along, the conventional wisdom has been that the key health reform bill would come from Senate Finance. Max Baucus, the moderate Dem who chairs the committee, has said he wants a bipartisan bill, and he’s been working closely with Chuck Grassley, the committee’s ranking Republican — suggesting that the bill may be closer to the political center than the bills we’ve seen so far.

But the committee hasn’t been able to get a deal worked out, and said yesterday that they wouldn’t have anything until next week. So we’ll have to wait a bit more to see what the committee comes up with — and how it plays with the all-important CBO.

Source: blogs.wsj.com/

British liberal heads EU Parliament finance group

2009-07-16T07:52:00.000-07:00

BRUSSELS -- British liberal lawmaker Sharon Bowles was elected Thursday to lead a key European Parliament committee that will shape financial regulation over the next five years.

The EU parliament is slated to discuss and potentially alter new rules on hedge funds, bankers' pay and capital requirements in coming months. It must back any new financial rules.

The economic and monetary affairs committee regularly quizzes EU and European Central Bank officials, including ECB President Jean-Claude Trichet.

Bowles, 56, is a former patent attorney and a member of Britain's third largest political party, the Liberal Democrats.

Source: forbes.com

Boston Medical sues state for funds

2009-07-16T07:51:00.000-07:00

Boston Medical Center filed suit yesterday against the state, accusing officials of illegally cutting payments made to the hospital for treating thousands of poor patients, a decision executives said could financially unravel the urban hospital’s key services.

The 26-page complaint - filed in Suffolk Superior Court against Dr. JudyAnn Bigby, health and human services secretary - follows two years of payment negotiations between the state and its largest provider of medical care to poverty-stricken families. It argues that the state has financed its landmark health insurance law, a model for national healthcare overhaul, on the backs of poor residents by cutting money to the hospital that cares for many of them to pay for expanded coverage.

The lawsuit could influence the national debate on healthcare by warning of the potential repercussions for hospitals that treat the poor. “This absolutely has implications for the national debate,’’ said Larry Gage, president of the National Association of Public Hospitals.

Bigby, in a statement to the Globe last night, said: “The administration is greatly disappointed that BMC, which has received $1.5 billion in state funding in the past year, has chosen this path. At a time when everyone funded and served by state government is being asked to do more with less, BMC has been treated no differently.

“We are confident that the administration’s actions in this area comply with all applicable law and will be upheld,’’ she said.

In interviews with the Globe last week, state officials questioned BMC’s request for more funding, considering the state’s extraordinary budget crisis and the hospital’s large cash reserves.

The $1.5 billion the state paid the hospital in the past year went not just to the hospital, but also to its community health centers and health insurance plan, officials said.

BMC - where half of the patients earn less than $20,000 annually, 30 percent do not speak English, and one-third are on Medicaid - estimates that it will lose $175 million in the fiscal year starting Oct. 1, an 18 percent operating loss. By the end of this year, the hospital is likely to be $38 million in the red, its first loss in five years.

Hospital executives blame these projected losses on the state’s decision to slash the amount it pays BMC for treating a Medicaid patient in the hospital from $12,476 per admission last year to $9,323 this year and for paying what the hospital considers inadequate rates to care for uninsured patients and newly insured patients.

The state calculated the new Medicaid rate by considering the average cost of caring for Medicaid patients at Massachusetts hospitals, and paying 75 percent of that amount to encourage efficiency, the lawsuit says.

BMC argues this approach is illegal, because a 1991 law requires the state to pay hospitals that treat large numbers of poor patients based on each institution’s unique financial needs and BMC’s need is great. The hospital employs 75 translators, more than any other Boston hospital, and treats nearly 70 percent of the city’s trauma cases, among other added expenses required to care patients from the city’s poorest neighborhoods.

Source: boston.com

Fifth Street Finance investment income rises

2009-07-16T07:50:00.000-07:00

TEL AVIV (MarketWatch) -- Fifth Street Finance Corp., (FSC 9.45, +0.04, +0.43%) the White Plains, N.Y., provider of financing and investments for small and medium-sized companies, estimated that for the quarter ended June 30, net investment income was 34 cents to 36 cents a share, compared with 33 cents in the quarter ended March 31. The company on Wednesday estimated that its net asset value at the end of the June quarter was about flat with the $11.94 a share reported at March 31. The number of investments on non-accrual status also was about level with the previous quarter, Fifth Street Finance reported. Separately, the company plans a public offering of 6.5 million common shares. The underwriters will have an option on 975,000 more shares if demand for the offering requires. Wells Fargo and UBS will run the books for the offering. Fifth Street expects to use $16.5 million of the offering proceeds to pay down its secured revolving-credit line and the rest for investments.

Source: marketwatch.com

Avizent promotes finance chief to CEO

2009-07-15T02:16:00.000-07:00

A Central Ohio claims and risk management provider has a new CEO.

Avizent named Tom Watson as CEO of the Dublin-based company, which specializes in claims management, medical managed care and risk management services. He will oversee the company’s national property and casualty third party administrative services and Avizent’s managed care company, occupational preferred provider organization networks and alternative risk division.

Former CEO Lori Daughtery left “to pursue other professional interests,” the company said.

Watson had previously served as the company’s CFO and, before that, as president and chief operating officer at UnitedHealthcare Benefit Services and as CFO of OptumHealth Financial Services.

Avizent, which until April 2008 was known as Frank Gates Service Co., posted revenue last year of nearly $93 million. The privately held company has nearly 800 employees throughout the country with 232 in Ohio. It operates a branch in Cincinnati, which employs 10.

Source: izjournals.com

Bank of America to finance Tesla Roadster purchases

2009-07-15T02:14:00.000-07:00

With a Tesla -- like a Ferrari -- if you have to ask how much it costs, you can't afford it.

Starting at $109,000 and with just enough trunk space for a pitching wedge and a decent bottle of single malt, the all-electric Tesla Roadster would hardly appear to be the car for the guy who counts his every dime. But now, thanks to Bank of America, cheapskates (read: the lumpen masses) may finally have an entree into the electric sports car market.

The Charlotte, N.C.- based banking behemoth, long a leader in auto loans, will begin offering financing for the purchase of a Tesla. Qualified borrowers will be eligible for a loan of up to 75% of the value of the car and can have up to five years to pay it off.

According to Tesla Motors, based in San Carlos, Calif., that means for just $20,000 down, you too can get behind the wheel of the coveted Roadster.

Of course, that number isn't exactly accurate. It includes a $7,500 tax credit that you don't get until you file your taxes next year. It also doesn't account for $10,628 in sales tax and $1,322 in registration fees you'd pay if you were a resident of Los Angeles. (Sadly, the new car sales tax deduction included in this year's stimulus bill doesn't apply to cars that cost as much as a Tesla. Ditto for the Cash for Clunkers program.)

So, in reality, for just $30,237.50 down -- or about the sticker price for a Ford Mustang Premium GT, you too can get behind the wheel of the coveted Roadster.

Then you get to make monthly payments, which Tesla suggests could run at around a 5% annual rate, of a mere $1,700 a month. At the end of the day, you'll have paid just shy of $12,000 in interest on the electron-fired hot rod as well.

According to Tesla's Chief Executive Elon Musk, the loan program "will help advance EV adoption by allowing more Americans to experience the joy and convenience of owning a Tesla.”

Leaving aside the fact that there's a pretty darn long waiting list just to get a Tesla, one might wonder just how many Americans can afford $30 large down and a monthly nut as much as a nice one-bedroom apartment on the Westside just for the right to drive an electric car.

Another question also comes to mind: Which lasts longer, the monthly payment or the 6,831 lithium ion cells in the Tesla battery?

Source: latimesblogs.latimes.com

British Air to Sharpen Premium-Class Focus Amid Drop in Travel

2009-07-14T01:30:00.000-07:00

British Airways Plc, Europe’s third- largest airline, plans to sharpen its focus on business fliers as the recession saps travel demand, the carrier’s U.S. chief said.

All-business-class flights between London’s City Airport and New York start in September, and a promotion begins today offering U.S. executives free travel to Europe to promote their companies, said Simon Talling-Smith, British Airways’ executive vice president for the Americas.

“We will continue to position ourselves as a premium airline, that is absolutely core to our business model,” he said in an interview yesterday. “There is an ongoing demand for business travel, and that isn’t going to go away.”

The London-based airline is slashing jobs and grounding flights to help survive a slump that will cause $9 billion in worldwide industry losses this year, according to a June 8 forecast by the International Air Transport Association.

A return to pre-recession traffic levels like those seen in 2007 probably will take five years, Talling-Smith said. British Airways is mired in 10 straight months of declines in premium traffic, which measures kilometers flown by paying passengers in the first- and business-class cabins.

While British Airways hasn’t sold out its initial flights between London City and New York’s John F. Kennedy International Airport, the carrier is “pretty confident” demand will rise as the Sept. 29 start date nears, Talling-Smith said.

‘Good Return’

“Our biggest customers are telling us that they are very interested,” said Talling-Smith, who has worked for the carrier for 18 years. “We’re still confident we will make a good return on that flight.”

British Airways, working to promote its premium-class service to U.S. business passengers, will use some of its excess capacity for the “Face-to-Face” competition for free European trips on three special flights carrying 1,000 people.

“One of the only benefits of the economic climate is that we have quite a lot of empty seats, and a few spare aircraft so the cost of the promotion is pretty small,” Talling-Smith said.

British Airways said an advisory panel would help assess the free-flight requests, which require entrants to complete an online form that includes a 500-word essay on the value they would reap from an overseas trip.

British Airways has tumbled 30 percent this year in London trading, closing at 126.6 pence yesterday.

Source: bloomberg.com

The Small Business Surtax

2009-07-14T01:29:00.001-07:00

Jason Furman owes an apology to Michael Boskin, the Stanford economist who wrote a year ago on these pages that Barack Obama would raise American income tax rates nearly to 60%. Mr. Furman, then in the Obama campaign and now at the White House, claimed this was wrong and that Democrats would merely raise taxes back to their Clinton-era level.

House Democrats are now proving that Mr. Boskin had it right, and before it's over even he may have underestimated how high taxes will go. In the middle of a recession and with rising unemployment, Democrats have been letting it leak that they want to raise U.S. tax rates higher than they've been in nearly 30 years in order to finance government health care.

Every detail isn't known, but late last week Ways and Means Chairman Charlie Rangel disclosed that his draft bill would impose a "surtax" on individuals with adjusted gross income of more than $280,000 a year. This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study. That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.

In addition, many more smaller business owners with lower profits would be hit by the Rangel plan's payroll tax surcharge. That surcharge would apply to all firms with 25 or more workers that don't offer health insurance to their employees, and it would amount to an astonishing eight percentage point fee above the current 15% payroll levy.

Here's the ugly income-tax math. First, Mr. Obama has promised to let the lower Bush tax rates expire after 2010. This would raise the top personal income tax rate to 39.6% from 35%, and the next rate to 36% from 33%. The Bush expiration would also phase out various tax deductions and exemptions, bringing the top marginal rate to as high as 41%.

Then add the Rangel Surtax of one percentage point, starting at $280,000 ($350,000 for couples), plus another percentage point at $400,000 ($500,000 for couples), rising to three points on more than $800,000 ($1 million) in 2011. But wait, there's more. The surcharge could rise by two more percentage points in 2013 if health-care costs are larger than advertised -- which is a near-certainty. Add all of this up and the top marginal tax rate would climb to 46%, which hasn't been seen in the U.S. since the Reagan tax reform of 1986 cut the top rate to 28% from 50%.

States have also been raising their income tax rates, so in California and New York City the top rate would be around 58%. The Tax Foundation reports that at least half of all states would have combined state-federal tax rates of more than 50%.

Mr. Rangel also wants to apply his surcharges to investment income like capital gains. So the combined effect of repealing the Bush tax cuts and the new surcharges would be to raise the tax on stock appreciation by at least 60% -- to as high as 24% from 15% today. President Obama has been worrying about a capital squeeze on small businesses, but raising the capital gains tax would only further starve them of funds.

Democrats claim these tax increases on the rich won't do any economic harm. They should read the work of Christina Romer before she became chief White House economist. Ms. Romer and her husband, David Romer, a Berkeley economist, have published multiple studies on the impact of tax policy changes over the past 100 years. One of their findings is that "tax increases appear to have a very large, sustained and highly significant negative impact on output." In other words, tax hikes are an antistimulus.

Another implication of the Rangel plan is that America's successful small businesses would pay higher tax rates than the Fortune 500, and for that matter than most companies around the world. The corporate federal-state tax rate applied to General Electric and Google is about 39% in the U.S., and the business tax rate is about 25% in the OECD countries. So the U.S. would have close to the most punitive taxes on small business income anywhere on the globe.

Mr. Rangel and House Democrats are also banking on the idea that raising tax rates by 20% will raise 20% more tax revenue, but that's like telling Wal-Mart it can raise prices by 20% and get 20% more profit. When taxes on the rich rise, their reported income tends to decline. The last time the top federal income tax rate was 50%, the richest 1% paid only about 25% of all income taxes. Today, at a 35% rate they pay nearly 40%.

A new study by the Kaufman Foundation finds that small business entrepreneurs have led America out of its last seven post-World War II recessions. They also generate about two of every three new jobs during a recovery. The more the Obama Democrats reveal of their policies, the more it's clear that they prize income redistribution above all else, including job creation and economic growth.

Source: online.wsj.com

Google Finance Gets A Little More Fancy

2009-07-14T01:28:00.000-07:00

It's been more than a month since Google Finance shed its beta label, and finally today it is rolling out some design tweaks it has been testing out for the past few months.

In the screen shot above you can see most of the changes. There is now a persistent navigation bar on the left with links to news, portfolios, historical prices, and financials. In the left column, you also now see streaming live quotes for the most recent stock tickers you've entered. It is a sparer version of the left-hand column on Yahoo Finance, with more dynamic and personalized content.

The charting is also a little more sophisticated, with various technical charting capabilities available as an option via a drop down menu below each chart. Finally, the company comparison table is now more customizable, allowing you to choose which financial metrics you want to add or remove. It doesn't go as far as Wikinvest's recent redesign, which highlights much more insightful industry metrics for many stocks.

All in all, the tweaks to Google Finance are a step in teh right direction, but nothing too radical.

Source: washingtonpost.com

On Campaign Finance Board, Sotomayor Balked at Overstepping Law

2009-07-14T01:27:00.000-07:00

As Judge Sonia Sotomayor prepares for the second day of her Supreme Court confirmation hearings, a new document is being circulated as one that foreshadows her future injection into the debate over so-called “judicial activism.”

On Dec. 11, 1991, at a meeting of the New York City Campaign Finance Board, where she was a member from 1988 until she became a federal judge in 1992, Ms. Sotomayor objected to interpreting laws in a way that would alter the plain meaning of the text written by lawmakers – even if doing so would be an improvement on policy grounds.

Ms. Sotomayor made her remarks in response to a complaint by Carolyn Maloney, who at that time was a City Council member and who now is a Democratic congresswoman, over a board advisory opinion that said that expenditures by a political party did not count toward individual candidates’ spending limits under the city’s election financing law.

Ms. Maloney said that the board’s interpretation was “wrong” because it would allow “the political machines to ride roughshod over our good government efforts to limit campaign spending.” She said she was introducing legislation to override the advisory opinion, but also urged the board to “correct it” on its own.

Ms. Sotomayor replied:

I assume in any situation in which there is a board, or even judges, that the people who write the laws are going to disagree with the way we interpret them. I hope that you don’t take our decision with respect to the political party spending as being an endorsement of that concept, meaning that’s the way we, as a board, believe it should be.

Our decision was based on what we thought the law said. Not on what we thought would be right in the law. That question we leave to the Council to decide and if it changes it, so be it. That is their prerogative as legislators to change that if they disagree, but we wanted to make sure that the Council understands our decision was not based on what we think the law should be, but only what we thought the law said as it exists.
The New York City Campaign Finance Board provided the minutes from that meeting and several others to The New York Times on Monday. The paper had earlier requested all such documents related to Judge Sotomayor’s tenure at the agency, and most were provided weeks ago. A board staff member notified The Times on Monday that it had located the additional minutes and provided them to the newspaper.

Since her Supreme Court nomination, Judge Sotomayor’s conservative critics have frequently accused her of being an “activist” who “legislates from the bench.” Here is an article that examines the evidence supporting such claims.

In addition, The Times analyzed a set of Campaign Finance Board minutes that was previously unearthed as part of this story about Judge Sotomayor’s record on election financing regulations.

Source: hecaucus.blogs.nytimes.com

Obama’s Consumer Finance Plan Stirs Turf Tussle

2009-07-12T10:00:00.001-07:00

The Obama administration’s proposal to create a consumer money watchdog may get roughed up a bit in Capitol Hill turf battles.

The administration propsed creating an independent Consumer Financial Protection Agency to look out for users of such financial products as credit cards and mortgages.

The proposal would strip some authority from the Federal Trade Commission (FTC).

On Capitol Hill, one measure of a committee’s clout is the range of executive branch functions that panel oversees. Take authority away from the FTC, and that takes some power away from the committee that keeps watch over the FTC.

Obama’s proposal will be vetted not by the Energy and Commerce Committee, which has jurisdiction over the FTC, but by the Financial Services Committee.

Rep. John D. Dingell , D-Mich., who was ousted as committee chairman in November after 27 years as the top Democrat on Energy and Commerce, views the Obama proposal as an “unwarranted reassignment of FTC’s authority” and the decision to give the bill to Financial Services a raid on Energy and Commerce’s jurisdiction.

“I have significant concerns about these plans,” he said last week.

While not going as far as Dingell, Democrat Bobby L. Rush of Illinois said he was concerned that the new agency would not do enough for consumers in the short term. Rush, the chairman of the Subcommittee on Commerce, Trade and Consumer Protection, suggested the administration could instead give the FTC authority to regulate financial consumer products.

Michael Barr, assistant Treasury secretary for financial institutions, said the existing oversight structure was inadequate to take on greater responsibility.

“Our basic view is that the current system is fundamentally broken. We need to have one agency for one marketplace with one mission,” he said.

The Financial Services Committee, headed by Barney Frank , D-Mass., has taken the lead on the legislation authorizing the new agency and is expected to have a version ready for committee action before lawmakers leave town at the end of July.

The Energy and Commerce Committee could slow down the bill’s progress by insisting on its right to act on the portions dealing with changes to the FTC’s authority.

The FTC oversees consumer protection issues, including unfair and deceptive advertising, telemarketing and identity theft. Under current law, it can bring enforcement actions against non-bank financial entities, such as mortgage brokers and finance companies. However, banks, savings and loan institutions and credit unions are exempt from FTC oversight.

Source: cqpolitics.com

FACTBOX: Campaign finance, criminal cases await Sotomayor

2009-07-12T09:59:00.000-07:00

The federal campaign finance law, juvenile justice and several important business disputes are among the pending cases Judge Sonia Sotomayor will confront if approved by the Senate for the U.S. Supreme Court.

President Barack Obama has nominated Sotomayor, a federal appeals court judge from New York, as his first appointment to the nation's highest court. If confirmed, she would be the first Hispanic and the third woman on the court.

Sotomayor would replace liberal Justice David Souter, who retired at the end of June. She would not change the balance of power on the court, which has been divided with five conservatives and four liberals.

The Supreme Court has pending a number of major cases that will be argued and decided, including:

CAMPAIGN FINANCE LAW

* Arguments scheduled for a special session on September 9 on whether to uphold a ban on corporate spending in federal political elections. The case could affect the congressional elections in 2010 and the presidential race in 2012.

The case stemmed from a conservative advocacy group's challenge to the campaign finance law as part of its effort to broadcast and promote a movie critical of Hillary Clinton during her presidential campaign.

The group, Citizens United, released a 90-minute documentary film "Hillary: The Movie" in January 2008 when Clinton, then a U.S. senator from New York, was running for president. She later became Obama's secretary of state.

The justices heard arguments in the case in March but decided at the end of June to hear arguments again in September and to consider broader constitutional issues of whether to strike down a central provision of the law.

JUVENILE JUSTICE

* Whether a sentence of life in prison for juveniles who commit crimes other than murder violated the constitutional ban on cruel and unusual punishment.

The ruling could affect more than 2,500 individuals in the United States serving sentences of life imprisonment for crimes committed before they turned 18, human rights groups said.

The two Florida cases the Supreme Court will hear and decide involve a 13-year-old convicted of raping an elderly woman and a 17-year-old who took part in an armed home-invasion robbery while on probation for an earlier violent crime.

ANIMAL TORTURE VIDEOS

* Whether a federal law that makes it a crime to sell videos of animals being tortured or killed violated constitutional free-speech rights.

The U.S. Justice Department defended the 1999 law that Congress adopted in an effort to crack down on videos like those depicting dog fights. It compared animal cruelty to child pornography, which the Supreme Court has said does not qualify for free-speech protection.

Source: reuters.com

India Inc questions Finance Minister

2009-07-12T09:53:00.000-07:00

Is it much to do about nothing, a day after the Budget?
Well, in his first industry interaction, the Finance Minister has been frank about lot of issues.
But, there do not seem to be any solutions or the mention of a definitive roadmap on any of the big policy matters.
A day after the Budget, Pranab Mukherjee was in a candid mood, telling the industry that it was a conscious decision to push up expenditure and allowing FRBM targets to slip.

Mukherjee said, “ I had no option except to depend heavily on borrowings. In 7-8 months I shall have to start the strenuous work of fiscal tightening. I will address the fiscal deficit issue, as soon as the impact of meltdown is over. The government has to accept higher level of fiscal deficit in the short term."

With plainer speak on issues like GST, the minister indicated that all states might not come on board by April 2010.

“I know there are differences and do not rule out the possibility as in the case of VAT, when some states followed later,” he said.

And then the question many journalists, analysts and economists and corporates are asking—where is his divestment agenda?

"The Budget is not the document for mentioning disinvestment details," Mukherjee answered.

India Inc showed up in full force to meet the Finance Minister after his Budget, but were left wanting on many matters from tax benefits for R&D to affordable housing.

Shivinder Mohan Singh of Fortis Healthcare, said, ''This time the interaction has been different from the past many years. The fact that he is open and positive and says I agree with all of you but it has to happen at the last time. This is a departure from the past.''

Adi Godrej of Godrej Industries, said, "Generally I think it was a very positive meeting."

Are these politically correct reactions? Perhaps, but the questions persist—is the FM treading the path of big ideas with no serious roadmap of implementation?
Meanwhile, the industry awaits more clarity on policy matters by early August when the Budget gets passed in the parliament.

Source: profit.ndtv.com

Finance 101: Estate tax hits few ordinary people

2009-07-11T08:30:00.000-07:00

NEW YORK (AP) — As attention turns from Michael Jackson's death to the complex estate the pop icon left behind, experts are sorting through his holdings and putting price tags on their value — with an eye on the tax bill they will generate.

While the superstar's property is worth far more than ordinary people could ever dream of amassing, some of the issues that will come up surrounding Jackson's estate taxes reflect common concerns about the so-called "death tax."

The estate tax is a tax on the transfer of property when someone dies, which means that the estate itself — not the heirs — foots the bill. (Of course, it can significantly eat into the amount the heirs inherit.)

For the most part, only very large estates have to pay — in 2004, just 0.82 percent of all estates were taxed by the federal government. That figure will likely drop, according to the Internal Revenue Service, because the size of estates exempt from the tax more than doubled — to $3.5 million this year from $1.5 million in 2004.
Here are some questions and answers about the estate tax.

Q: What assets are included in an estate?
A: The federal estate tax is calculated by adding up the fair market value of what you own — cash and accounts, stocks and bonds, real estate, trusts, life insurance, businesses, personal property like art work or collectibles, and so forth — at the time of your death. In certain cases, it may also include money or property that was transferred during the deceased's lifetime. The total is called your "gross estate."
Then certain deductions may be taken, like mortgages and other debts, and property left to your spouse or to charity. The amount that remains is your "taxable estate."
Q: Who has to pay estate tax?

A: For 2009, up to $3.5 million per person in assets are excluded from the federal estate tax. The value of property above that level is taxed at a rate of 45 percent. An estate worth less than $3.5 million doesn't even have to file a federal return, said William E. Massey, senior tax analyst for Thomson Reuters.
State thresholds vary, and not every state has an estate tax. Check your state's tax department Web site for details.
Besides the first $3.5 million, everything that is left to a surviving spouse is exempt from federal estate tax. The taxable estate may also be reduced by deductions, funeral expenses and any claims against the estate.
In 2010, the federal tax as it currently stands will expire; if Congress does not change the law, there will be no estate tax next year. In 2011, the old exclusion of $1 million returns, and the top rate for holdings above that amount would jump back to 55 percent, where it was in 2001.
Several bills have been proposed in Congress to address the issue, but none has passed yet.
Whether or not a person has a will doesn't affect the tax their estate owes, said Lynette Atchley, an accountant and certified financial planner in Redlands, Calif.

Q: Are small business owners more at risk for having to pay the estate tax?
A: The value of a business can depend on a number of factors, including how closely associated it was with the deceased person. But business owners do have a challenge in planning for issues like succession and transfer of ownership, and the plans they make could greatly affect estate taxes, said Bill Rys, a tax counselor with the National Federation of Independent Business.
"You need to sit down with an adviser to get a good sense of what the value of your business is, and what works best for the kind of business that you have," he said.
There are provisions that allow family-owned businesses to put off paying the entire estate tax bill at once, said Steve Armstrong, director of transactional tax planning for Rehmann, a financial planning and consulting firm based in Saginaw, Mich., but sometimes it's necessary to sell off part of the company's holdings to pay the tax.

Q: Are there legal ways to reduce the size of an estate if it appears that it might be subject to estate tax?
A: There are several different steps that can be taken to reduce an estate tax bill, but they must be done before the person dies. Among the options are setting up different types of trusts, giving cash gifts or transferring property, particularly real estate or securities, to family or friends.
In some cases the value of the property or gifts may be added back into the estate, but it would be the value at the time of transfer, not including any appreciation that has happened since that time, Armstrong said.

Source: google.com

Rich nations can’t afford not to finance war on flu

2009-07-11T08:26:00.000-07:00

Although the global flu pandemic has been pushed off the front pages by coverage of pop star Michael Jackson’s death and before that South Carolina Gov. Mark Sanford’s infidelity, the spread of the novel influenza A (H1N1) virus continues at a worrisome rate. The latest data from the World Health Organization shows that 429 people have died and 94,000 have been infected in more than 70 counties.

As a result, U.N. Secretary-General Ban Ki-Moon is seeking at least $1 billion to help poor countries fight the flu epidemic. The money, of course, would have to come from rich nations.

It’s a tall order, given that the United States and other industrialized countries are struggling to weather the worldwide economic storm and are attempting to stimulate their own economies with huge amounts of government spending. Indeed, any suggestion that the rich should help the poor is bound to be met with vehement objection from citizens of the wealthy nations.

But, it would foolhardy for anyone to believe that the spread of the flu virus can be confined to those regions of the world most at risk. The movement of people around the world means that infections cannot be stopped.

It is noteworthy that the new swine flu virus first caused illness in Mexico and the United States in March and April. It is spread in the same way that regular seasonal influenza viruses spread, mainly through the coughs and sneezes of people who are sick with the virus. It may also be spread by touching infected objects and then touching your nose or mouth.

Mild strain

While the strain is mild and most people recover without needing treatment, it could have a more devastating impact in countries with populations fighting other health problems like AIDS, pneumonia, malaria and tuberculosis.

Hence, Secretary-General Ban’s contention that at least $1 billion is needed to ensure that poor countries get some vaccine doses and antivirals.

World Health Organization chief Margaret Chan has told potential donors that she wants to start a minimum stockpile of vaccines to 49 of the world’s least developed nations as a first step.

“Many of the developing countries have weak health systems,” Chan said. “They actually go into this pandemic what I call empty handed. They don’t have antivirals. They don’t have vaccines. They don’t have antibiotics.”

And it doesn’t matter that the rich countries like Britain and France have stockpiles of the antiviral Tamiflu, as well as orders for pandemic vaccine to cover their entire populations.

When people from rich countries travel to other countries, they are at risk — as illustrated by last week’s report that nine British students on a visit to the East African nation of Kenya were confirmed to be infected. The students, part of a group of 33, have been quarantined and receiving medication to attack the virus.

All the students have been confined to their hotel and all have been treated for swine flu.

The students were in contact with the staff of the hotel as well as pupils at various schools they visited.

The declaration of a pandemic — on June 11 the WHO raised the alert level to Phase 6 to reflect the global spread — is not to be taken lightly. Public health officials are well aware of the ease with which the virus can be transmitted, and no amount of warnings to take special care will stop the spread.

That is why the $1 billion or so would be money well spent — by the rich countries.

Source: vindy.com

Health-Care Plan Will Pass Finance Panel by August, Conrad Says

2009-07-11T08:19:00.000-07:00

The Senate Finance Committee will approve a U.S. health-care overhaul plan by early August, said Senator Kent Conrad, a top Democrat on the panel, even though setbacks have slowed the drive for a bipartisan compromise.

Conrad said while members of both parties are making substantial progress, Democrats probably won’t reach their goal of getting the bill through the full Senate before Congress’s month-long August recess.

“We can get it out of the Finance Committee,” Conrad, of North Dakota, said in an interview with Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “I don’t think we’ll be through the floor during this work period. I think that’s too big a lift, but that really isn’t that important.”

Conrad’s optimism stands in contrast to signs that the health-care bill is bogged down in the committee. Senate Majority Leader Harry Reid told panel Chairman Max Baucus there wasn’t strong support among Democrats or the public for a new tax on employer-provided health-care benefits, a key part of the plan to help cover the plan’s $1 trillion cost.

Conrad isn’t backing down from the tax plan.

Such a levy “has to be on the table,” said Conrad, 61, who also is chairman of the Senate Budget Committee. “To say we can’t touch any of it -- how about plans that are worth more than $30,000 a year?”

Right Direction

He insisted this week’s negotiations were “incredibly productive and that this is moving in the right direction.”

A health-care overhaul is President Barack Obama’s top domestic initiative. The president wants Congress to send him a bill by mid-October to slow the pace of cost increases and provide coverage to the 46 million Americans who don’t have health insurance.

Conrad said he supports having a commission impose spending reductions if the health-care plan doesn’t achieve its projected savings in four or five years. A federal panel -- similar to the one that recommended military-base closings -- would provide a list of cuts, and Congress would either approve or reject them.

Conrad said such an approach is vital for preventing the rapid rise in health costs from crippling the economy.

“Look, as a country, we’re headed for the cliff,” Conrad said. “We’re headed for a debt 100 percent of the total size of our economy.” The main part of “this fiscal problem is health- care costs,” he said.

Second Stimulus?

Turning to the U.S. economy, Conrad said it’s too early to consider enacting a second economic-stimulus package. Some Democrats, including House Majority Leader Steny Hoyer of Maryland, have said they are leaving open the possibility of another measure to augment the $787 billion plan passed in February.

Only about 15 percent of the first measure’s funds have been released into the economy, and another 50 percent or more will be spent during the next year, Conrad said.

“The package really is not working fully because it’s not been deployed in any serious measure at this point,” the senator said.

A health-care overhaul needs to be followed by broad changes in the U.S. tax code, Conrad said. The tax system is a “crazy quilt of provisions” that only collects 76 percent of what’s owed, partly because U.S. companies are using offshore tax havens.

‘On the Table’

“If you look at the leakage in the system, if you look at our competitive position in the world, if you look at basic equity and fairness and you look at how serious our long-term debt and deficit situation is, it’s got to be on the table,” he said.

He said he favors raising taxes on the wealthy and creating a value-added tax. Such a tax is imposed on each stage of production, often including retail sales to consumers.

“We very seriously have to consider a value-added tax in combination with a high-end income tax to keep the system progressing,” he said.

Conrad said Congress also must prepare to make some long- term changes to the Social Security retirement system to help curb the budget deficit. He said the eligibility age for receiving retirement benefits should be raised, and the inflation index that helps to set benefit levels should be adjusted downward to more accurately reflect the inflation rate.

“Even by a small amount over many years makes a big difference,” he said.

Source: bloomberg.com

US Senate Finance Panel Seeking $320 Bln For Health Bill

2009-07-09T19:52:00.001-07:00

WASHINGTON (Dow Jones)--Members of the Senate Finance Committee said Wednesday that the panel is seeking $320 billion in new revenue to pay for health-care legislation, which has become a harder task as proposals to tax health benefits have lost favor.

Senate Finance Chairman Max Baucus, D-Mont., and Sen. Kent Conrad, D-N.D., both pointed to a $320 billion gap between the cost of a bill to overhaul the U.S. health system and the revenue and cost savings they have generated so far under current proposals. Senate Democratic leaders on Tuesday warned Baucus not to tax health benefits, which has sent committee members searching for new sources of revenue.

Still, Baucus insisted Wednesday that taxing health benefits, which are excluded from any taxation under current law, is still possible. The committee could set a higher cap for the amount health benefits excluded from taxation than it had originally planned, he suggested.

"It really depends if there's a way to set a cap high enough that basically addresses most of the concerns of those who have the concerns," Baucus said.

But a higher cap would also generate less revenue. Conrad said that committee members discussed capping the tax exclusion at $25,000 per household, which he said would generate $90 billion. That would still require the committee to generate over $200 billion in new revenue.

Conrad said the committee also discussed a surtax on wealthy Americans, which Democrats in the House of Representatives are also discussing. But, he acknowledged, Republicans "are less likely to support" a tax skewed toward high-income earners.

The delicate negotiations illustrate how difficult it will be for Baucus to craft an agreement that both enjoys the support of liberal Democrats as well as at least some Republicans. Historically, the finance panel rarely approves major legislation without bipartisan support.

Source: online.wsj.com

Consumer education series on personal finance issues

2009-07-09T19:51:00.000-07:00

The National Association of Personal Financial Advisors (NAPFA), a professional association of fee-only financial advisors and advocate for consumer protection in the financial industry is launching a series of free webinars designed to help educate consumers about various personal finance topics and issues.

The series will begin on August 7, 2009 and will run each month for an entire year. Consumers will be able to register to attend the live session online or listen to the recorded session at a later time. Each session will last for 1 hour and start at 1pm Eastern time.

The dates and topics will include:

August 7, 2009 - Money 101: Knowing the Basics

September 4, 2009 - Kids & Money

October 2, 2009 - What is Financial Planning?

November 6, 2009 - Protecting What You Have

December 4, 2009 - Investments: The Basics

January 8, 2010 - Investments: Advanced Concepts

February 5, 2010 - Managing Your 401(k)

March 5, 2010 - Leaving a Legacy

April 2, 2010 - Women and Money

May 6, 2010 - Financial Planning and Small Business Owners

June 4, 2010 - Your Retirement

July 1, 2010 - Financial Windfalls

If you have any interest in learning more about these specific topics, I encourage you to register and attend. With the economy down, you certainly can’t beat the price.

Source: boston.com

Plan Offered to Finance Trade Center

2009-07-09T19:50:00.000-07:00

The Port Authority of New York and New Jersey made a proposal this week that it said could break the long impasse at ground zero and allow the developer Larry A. Silverstein to build two skyscrapers on the 16-acre site, providing he can raise $625 million.

But it does not appear that the proposal will lead to an immediate cessation of hostilities between the two sides or of the acrimony between the authority and Mayor Michael R. Bloomberg, who is concerned that the dispute could eventually halt work on the World Trade Center site.

For the first time, the authority, which owns the site, agreed to guarantee financing for both of Mr. Silverstein’s office towers, which are to be built along Church Street, at an estimated cost of $4.2 billion, according to a letter on Monday from the Port Authority to the Bloomberg administration and the office of Assembly Speaker Sheldon Silver.

But up to $1.2 billion in financing for the second tower would come only after Mr. Silverstein raised $625 million from investors or lenders, according to the proposal.

The letter, from Christopher O. Ward, the authority’s executive director, was sent to City Hall on the same day that Mr. Silverstein sought to start an arbitration process, angrily claiming that the Port Authority had violated the development agreement at ground zero. A spokesman for Mr. Silverstein declined to comment on Thursday. He does not view the proposal as a credible offer, according to an official who spoke with him

“I don’t believe it moves the ball forward,” said Mr. Silver, whose district includes Lower Manhattan. “I don’t believe it gets us closer to a deal.”

Mr. Silver, a consistent supporter of Mr. Silverstein, and Mayor Bloomberg organized a summit meeting in May in a so-far unsuccessful effort to broker a resolution.

Andrew Brent, a spokesman for Deputy Mayor Robert C. Lieber, who leads the city’s negotiating team, declined to comment on the proposal, citing an agreement among the parties not to negotiate in public. But two officials who had been briefed on the new proposal said that it was a step in the right direction, although they noted what they called some serious flaws.

One flaw, one of the officials said, is that the financial structure would make it nearly impossible for Mr. Silverstein to raise $625 million in the credit markets, where there is little money available for real estate projects.

The authority has been reluctant to finance more speculative office space at a time when rents are down and tenants scarce. Under a 2006 development agreement, Mr. Silverstein was to finance the towers with insurance money, tax-free bonds and private borrowing.

Stephen Sigmund, a spokesman for the authority, declined to discuss the proposal in detail, but said: “We have said all along that we will protect our limited public resources for the public projects on the site and the other vital transportation needs of the region.”

Source: nytimes.com

An Inside Look at the Senate Finance Committee's Revenue Options

2009-07-09T19:47:00.000-07:00

Earlier this afternoon, a Senate source let me look at the revenue options being considered by the Finance Committee. Some of them look pretty good. Some of them seem pretty small. And some seem downright strange.

There are three basic categories of revenue under consideration. The first, and largest, is "health." These are all ways of raising revenue within the health-care system. And they suggest that though a cap on the employer health-tax exclusion isn't being considered as the main funding source for health reform, it's not entirely off the table. One of the options is a cap at FEHBP + 30 percent, which means that the exclusion would cut off on plans that are 30 percent more expensive than the standard plan offered in the Federal Employee Health Benefits Program. This would raise $234 billion over 10 years. Another option is to cap at FEHBP + 60 percent, which would raise $90 billion over 10 years.

The biggest-ticket item under consideration on the health side is an increase of 0.3 percent on the employer and employee Medicare tax. That would raise $275 billion over 10 years. Another option would be to apply the Medicare tax to investment income above the Social Security tax cap. (That seems like a really good idea.) There's also a potential flat tax on insurance companies tied to their number of members or premium payments. That could bring in $75 billion to $100 billion over 10 years. Then there are a couple much smaller revenue options relating to fees on pharmaceutical companies and the medical itemized deduction cap.

The next category is "consumption." The big-ticket item here is a 5 percent value-added tax that exempts food, housing, and medical care. That would raise a trillion over 10 years. It's also a pretty strange idea: If the American people don't want a tax on medical benefits that would fall on only a small portion of the population, are they really going to embrace a national sales tax of 5 percent? Other options in this category include a 10-cent-per-ounce tax on sugar sodas that would raise $105 billion over 10 years, a three-cent-per-ounce tax on sugar soda that would raise $33 billion over 10 years, and a 14-cent-per-ounce tax on beer that would raise $40 billion over 10 years.

The final category is, simply enough, "income taxes." A 2 to 5 percent tax on high incomes -- I don't have the definition of high incomes -- would raise $300 billion to $500 billion. A "millionaires" tax would raise $350 billion. Limiting itemized deductions to 28 percent starting in 2013 (presumably to let the recession close out?) would bring in $267 billion, and 35 percent would bring in $90 billion over 10 years.

There's not a whole lot of analysis to be done on this list of options. I imagine the VAT proposal is pretty unlikely. Most of the rest seem like serious, thoughtful efforts to raise revenue. It's not clear, however, that they'll be any more popular than a more aggressive cap on the employer tax exclusion. And it's a little disconcerting to be this far into the health-care reform process and still be staring at the whiteboard on how to pay for it.

Source: washingtonpost.com

Pope urges 'world authority' to govern economy, finance

2009-07-08T04:29:00.000-07:00

Pope Benedict XVI is offering a solution for what ails the global economy: a "true world political authority" to manage it all.

In a so-called encyclical published today -- just as leaders of the world’s biggest economies gather in central Italy for a summit -- Benedict mostly focuses on his ideas for achieving "justice and the common good" in the modern economy.

His basic themes are well-traveled, including fairness to workers, the evils of "excessive" wealth disparities and regard for the environment.

But then he ventures onto controversial turf, suggesting that the authority to fix all of this be vested in global governing bodies, including the United Nations.

The pope writes:

In the face of the unrelenting growth of global interdependence, there is a strongly felt need, even in the midst of a global recession, for a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth.

Benedict To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration: for all this, there is urgent need of a true world political authority, as my predecessor Blessed John XXIII indicated some years ago.

Such an authority would need to be regulated by law, to observe consistently the principles of subsidiarity and solidarity, to seek to establish the common good, and to make a commitment to securing authentic integral human development inspired by the values of charity in truth.

Many of Benedict’s ideas might have been viewed as roadblocks to progress during the global economy’s boom years, but his message no doubt will resonate today with many people worldwide who believe that unbridled capitalism has been ruinous.

He has choice words for the world’s financiers:

Finance, therefore -- through the renewed structures and operating methods that have to be designed after its misuse, which wreaked such havoc on the real economy -- now needs to go back to being an instrument directed towards improved wealth creation and development. Insofar as they are instruments, the entire economy and finance, not just certain sectors, must be used in an ethical way so as to create suitable conditions for human development and for the development of peoples.

Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers.

-- Tom Petruno

Source: latimes.com

Sunoco Names Dell Executive MacDonald As New Finance Chief

2009-07-08T04:28:00.001-07:00

Sunoco Inc. (SUN) named Dell Inc. (DELL) executive Brian MacDonald as chief financial officer, replacing interim CFO Terence Delaney, who will pursue other opportunities.

Delaney took the job last fall after longtime finance chief Thomas Hofmann retired in a management shakeup at the second-largest U.S. independent oil refiner by volume after Valero Energy Corp. (VLO).

MacDonald, 43, will assume the post Aug. 10.

He most recently was finance chief of Dell's commercial business unit. Before taking that job last year, MacDonald was Dell's treasurer, leading the mergers and acquisitions organization and global treasury group. He previously worked at General Motors Corp. (GMGMQ).

In May, Sunoco said it swung to a first-quarter profit as its refining and supply business benefited from lower expenses. The company remains braced for a possibly difficult market for its refined products and chemicals and is going forward with cost-cutting measures.

Sunoco's shares recently traded at $21.85, down 1.8%, near their five-year low.

Source: wsj.com

India Inc questions Finance Minister

2009-07-08T04:26:00.000-07:00

Independence Day--Are you experiencing financial freedom?

2009-07-04T20:13:00.000-07:00

Happy July 4th! Today is our nation's independence day, the day we proclaimed ourselves free as a country. I love this day. It's always full of celebration. Whether it be hot dogs and hamburgers or wine and cheese, we always finish with fireworks. When I watch those fireworks, I think of our national anthem, especially the part where we sing, "bombs bursting in air." I'm always so grateful for the men and women who sacrificed themselves so that I could have the power of vote. To me, the vote signifies freedom.

As a Personal Financial Planning Examiner, I suppose I should somehow bring us to the subject of financial planning. It won't be painful. I promise. Let's just take a moment to think about independence and freedom and how they relate to our personal financial situation. Do you know your financial independence date -- the date when you no longer have to work? Have you actually thought about what it would feel like to be financially free? I encourage you to think about this seriously.

In order to achieve financial freedom, the equation is quite simple. You simply need to make more money than your expenses. For some people they limit their income solely to their job. However others try and find several revenue streams, including passive income. For the latter group, their goal is to have their passive income eclipse their expenses so they are financially free to spend their time doing what they love as opposed to working.

If financial freedom is something that you crave and are willing to make sacrifices for, I encourage you to find a mentor or advisor to guide you in this endeavor. It is completely and totally possible for you to achieve especially with guidance. Remember advice is cheap, mistakes are costly. The choice is yours!

Source: examiner.com

Kids & Money: McDonald's workers aim to pass this financial test

2009-07-04T20:11:00.000-07:00

Quarter pounders with cheese and quarter point credit-card interest-rate hikes.
Both cooking and financial skill-sets are being taught these days to more than 500,000 McDonald’s restaurant employees.

The Golden Arches is at the forefront of what it describes as the nation’s largest employer-provided financial education program. Since December, McDonald’s has teamed with credit-card issuer Visa Inc. to teach money-management skills to employees at its 14,000-plus restaurants nationwide.

Call it an employee benefit that promotes lifelong learning.

“McDonald’s realized teaching practical money skills is a quality of life issue for employees,” said Jason Alderman, who directs financial education for Visa.
It’s a productivity issue too — both for employees and the fast-food chain. If employees are not making wise choices about money, it affects their performance at work. Alderman said.

He makes a good point.

McDonald’s employs thousands of high school teens who are earning regular paychecks for the first time. Yet, many don’t know how to track their spending, balance their checkbook, or use credit cards wisely to keep debt manageable and live within their means.
That’s what prompted the restaurant chain to work with Visa, which previously had created online financial education products for schools through its Practical Money Skills for Life program.

Visa created a three-pronged program for McDonald’s. There’s an educational training video for employees to watch in their break room. Workers also are required to create a budgeting “journal” for a month to track their income and expenses. But the centerpiece of the program is a Web resource center — in both English and Spanish — that includes instructional exercises, games that test money smarts, and financial calculators on topics ranging from car loans to entertainment planning to credit cards.

Alderman emphasized that Visa is not out to market its credit card brand though he said there is some “light” promotion.

“This truly is about helping people manage their money,” he said.

McDonald’s offers incentives to make sure employees participate in all parts of the education program, said Alderman.

He likened the process to “getting people to eat their vegetables. It’s hard. But when your employer makes this a priority, you pay attention.”

Visa has stepped up its financial-education efforts this year and is also working with employees at the Domino’s pizza chain and the city of Chicago.

Will these workplace efforts sink in? I don’t see why not, though the payoff might come years from now. Frankly, I’m all for seeing this trend accelerate.

After all, developing financial smarts is not just a challenge for young fast-food workers or municipal employees. The majority of high school seniors across the country can’t pass a test on basic financial skills. What does that tell you?

Source: kansascity.com

Stanford clients sue insurance broker Willis Group

2009-07-04T20:10:00.000-07:00

NEW YORK (Reuters) - Several Mexican clients of Stanford Financial Group have sued insurance broker Willis Group Holdings Ltd (WSH.N), contending it was a willing participant in a $7 billion fraud at the Texas-based investment company.

The lawsuit, filed in federal court in Dallas, said Willis "crossed the line from being mere insurance brokers" to essentially acting as sales agents for Stanford.

The investors are seeking more than $1 billion in damages from Willis, which is domiciled in Bermuda and has large operations in New York and London. A Willis spokeswoman was not immediately available on Friday to comment on the case.

Stanford founder Allen Stanford, a Texas billionaire, and others face criminal and civil charges related to what U.S. federal prosecutors have called a $7 billion Ponzi scheme involving high-yielding certificates of deposits issued by his bank in Antigua.

Many Stanford customers were located throughout Latin America.

The lawsuit contends that Willis and other defendants provided Stanford Financial with certain "safe and soundness" letters that were intended to be used for marketing purposes to attract Stanford clients.

Willis lent recognition and credibility to Stanford's business, the lawsuit says.

The lawsuit was filed on Thursday by law firms Strasburger & Price LLP and Castillo Snyder PC.

"We intend to prove that the defendants willfully misrepresented the safety of the financial products offered by Stanford," attorney David Cibrian, one of the lawyers who brought the case, said in a statement.

The lawsuit seeks class-action status on behalf of other Stanford investors.

Stanford Financial has been under control of a court-appointed receiver since February, when the U.S. Securities and Exchange Commission sued Allen Stanford for civil fraud. Federal prosecutors brought criminal charges against him and others last month.

Stanford has been ordered held without bail until trial, currently set for August. He had spent the last 15 years living primarily in the Caribbean, where he was knighted by the Antiguan government.

Source: reuters.com

Bond-Market Finance Takes Hold

2009-07-04T20:07:00.000-07:00

LONDON -- An unprecedented rise in European companies' use of bond markets, rather than banks, to raise money could cool off in coming months. But the shift toward bond-market finance across the continent may be here to stay.

European companies have historically relied on lending from banks, rather than tapping the bond markets as U.S. companies tend to. Yet despite the fact that European politicians have loudly blamed "Anglo-Saxon capitalism" for the global financial crisis, companies across the continent have this year raised billions of dollars, American style, from the bond markets.

As banks curb lending in an effort to strengthen their own finances, the bond markets have come to life like never before, providing companies with a crucial lifeline amid a sharp recession. So far this year, with no help from government guarantees, European nonfinancial companies outside the U.K. have raised some $318 billion from the bond markets, up 45% from the whole of 2008 and more than any entire year on record, according to data provider Dealogic Inc.

Although official data show bank lending flattening rather than tumbling through the first quarter, companies and bank regulators report that banks are starting to retreat from lending as they rebuild their balance sheets.

One drawback with bond-market financing is that the market isn't always open for business. In fact, in the short term, such a setback may be in the cards. "The market has gotten a little ahead of itself," says Stephen Dulake, a credit analyst at J.P. Morgan Chase. According to J.P. Morgan, 60% of European credit investors plan to reduce their exposure or hold steady, even as more than half expect to have more money to manage.

Nigel Sillis, director of fixed-income and currency research at Baring Asset Management, says he remains "enthusiastic" about corporate debt but has grown more wary of where the market is headed. "We're certainly a lot keener on watching market developments," he says. Bond investors are questioning economic recovery, and worries about the financial strength of companies are beginning to revive. Also, some of the bond buyers in the recent rallies may have been speculating on market momentum rather than taking long-term views, suggesting a selloff is possible.

Source: online.wsj.com

Prospects uncertain for law on annexation; finance panel clears bill before sending it to full House

2009-07-03T02:08:00.000-07:00

The N.C. House Finance Committee voted 19-9 Thursday afternoon for an omnibus bill that would allow referendums on forced annexations.

But the final version of the bill now headed toward the House floor pleased neither involuntary annexation opponents nor the N.C. League of Municipalities, which lobbies for city interests.

The bill would allow a referendum on forced annexation if 15 percent of the registered voters in the annexing city and the area to be annexed signed a petition asking for the vote.

On the local front, four members of Good Neighbors of Rowan County attended the House Finance Committee's meeting and were part of a walkout staged by red-shirted opponents from across the state.

The annexation foes walked out when the committee approved a titling of the bill that will not allow amendments on the House floor.

Carl Eagle, vice president of Good Neighbors, said if both chambers of the General Assembly ended up passing the version forwarded to the full House today, he could live with it.

He said anti-annexation forces in Salisbury and the county could mobilize enough to meet the 15 percent requirement.

Also, just having the referendum provision is a foot in the door toward really changing the 50-year-old annexation law in North Carolina, Eagle said.

That said, Eagle remains skeptical of the bill's chances. He said he hates to be a cynic, but he fears something already has been worked out behind closed doors, and Eagle doubts this version will ever pass the Senate.

Marie Howell, another Good Neighbors member who has followed the annexation legislation closely, also has her doubts and described Thursday's proceedings as more or less window dressing.

"I took it to be a show," she said.

The 15 percent registered-voter petition requirement for a referendum will be virtually impossible to attain in larger metropolitan areas such as Charlotte and Greensboro, Howell said.

"For a small town, it might work," she added.

Howell said she thought Rep. Hugh Holliman, D-Davidson, introduced the amendment to allow a referendum because he might be in danger of losing his seat otherwise. But Holliman voted against the change in title that would have allowed amendments on the House floor, she noted.

Howell said all the amendments for meaningful reform were voted down Thursday.

A spokesman for the N.C. League of Municipalities, Kelli Kukura, told reporters the league would work against the version of the bill forwarded on Thursday.

In general, cities oppose any provision for a vote because it's essentially a veto. If people were for an annexation, city officials argue, they would seek it voluntarily, which already is a provision in N.C. law.

Two representatives of Salisbury city government attended the House Finance proceedings Thursday: Planning Director Joe Morris and Assistant to the City Manager Doug Paris.

"We're here to kind of monitor (the process)," Paris said from Raleigh, "because these things impact us. That's kind of my role to see what changes are coming."

Besides creating a chance for residents to vote on being annexed, the reform proposal would:

- Tighten restrictions on areas considered ripe for annexation.

- Make it easier for areas where many low-income families live to petition a local government to request annexation and city services.

- Require a municipality to extend water and sewer lines within three years to the entire annexed area.

- Block property tax collections and further expansion if city services aren't delivered within three years to an annexed area.

- Give new residents up to 20 years to pay assessments for water and sewer services to reach their properties.

Howell said the whole experience in trying to change North Carolina's annexation law has been "a disappointing and enlightening experience for me."

Last week was especially frustrating for annexation opponents from across the state who wanted to attend the House Judiciary II Committee meeting on the bill.

On June 23, members of the Rowan group learned during their drive to Raleigh that the meeting had been postponed until the next day.

On June 24, the opponents drove all the way to Raleigh only to find out just before entering the meeting room that it was postponed again.

On June 25, the group traveled to Raleigh and waited until the meeting convened at 4:30 p.m. They didn't arrive back in Rowan County until 10:30 p.m.

"Many folks had taken days off work for attending on Tuesday, canceled doctor appointments, got baby-sitters, etc.," Howell said. "Some couldn't go the next two days, but some of us did."

Howell described some of the proceedings in the House Judiciary II Committee meeting as "ridiculous."

"I agree wholeheartedly with Rep. Linda Johnson (R-Cabarrus), who said, 'We have had citizens crying out for reform for nine years, and we have not done what needs to be done,' " Howell said.

Mark Davis, president of Good Neighbors of Rowan County, agreed that last week's committee postponements and the whole process in general has been frustrating for average citizens.

"It's really hard to keep people motivated if they're going to be jerked around all the time," he said.

Source: salisburypost.com

EU to create micro-finance facility for unemployed

2009-07-03T02:06:00.000-07:00

BRUSSELS, July 2 (Reuters) - The European Commission said on Thursday it would create a 100 million euro ($141.1 million) micro-finance facility to provide credit to small businesses and encourage people who have lost jobs to start such enterprises.

The initial budget of the loan facility could leverage more than 500 million euros in joint ventures with other financial institutions such as the European Investment Bank, the executive arm of the 27-nation European Union said in a statement.

European small businesses and consumers have been hard hit by the worse recession since World War Two, which has made access to credit difficult and pushed unemployment rates to record levels as more workers are laid-off.

"The economic crisis will lead to 3.5 million job losses in the EU this year," EU Employment and Social Affairs Commissioner Vladimir Spidla said in the statement.

"The financial crisis has dried up credit to those wishing to start or develop their own businesses.

"In the current recession, we want to offer a new start to the unemployed through easier access to credit to set up or develop new businesses," he said.

Nearly 5.1 million people have joined jobless queues across the European Union in the 12 months from May 2008, data from the EU statistics office Eurostat said on Thursday. [ID:nL2714438]

The disadvantaged, including the young people who want to start or develop small businesses will benefit from guarantees, assistance, mentoring and training in preparing business plans, the Commission said.

It said the loans would be tailored to micro-enterprises employing fewer than 10 people, which would be eligible for loans up to 25,000 euros each. The plan could offer around 45,000 loans over a period of up to eight years.

The Commission said it expected the proposal to become operational by next year after it has been discussed and adopted by the EU ministers, the executive and European lawmakers. ($1=.7087 Euro) (Reporting by Bate Felix; Editing by David Brunnstrom and Jon Loades-Carter).

Source: reuters.com

Hecker's finances detailed in court filing

2009-07-03T02:05:00.000-07:00

Denny Hecker has $766.8 million in liabilities and $18.5 million in assets, according to court documents filed Wednesday in U.S. Bankruptcy Court.

Hecker, who filed for Chapter 7 bankruptcy in early June, said he owes $530.3 million to secured creditors, $236.3 million of nonpriority claims to unsecured creditors and $95,269 of priority claims to unsecured creditors. Those are gross claims prior to the value of collateral being deducted.

Hecker’s largest secured creditor is Farmington, Mich.-based Chrysler Financial, which is owed $476.9 million. Chrysler Financial won a judgement against Hecker in late April.

Other secured creditors include:

Axie Capital/SageCrest in Greenwich, Conn. ($15 million),
U.S. Bank in Minneapolis ($8.3 million),
TCF National Bank in Minneapolis ($6.5 million),
Cornerstone Bank in Fargo, N.D. ($4.8 million),
The Lake Bank in Two Harbors ($2.6 million), IRS ($2.6 million),
Alliance Bank in St. Paul ($2.5 million),
Associated Bank in St. Paul ($2.5 million) and
GELCO Corp. in Eden Prairie ($1.8 million).
The largest unsecured nonpriority claim is held by Mountain Valley, Calif.-based Hyundai Motor Finance Co., which is owed $55.2 million.

Other unsecured creditors include:

U.S. Bank in Minneapolis ($44.4 million),
Toyota Motor Credit Corp. in Minnetonka ($13.8 million),
VFS Financing Inc. in Danbury, Conn. ($13.8 million),
Bremer Bank in South St. Paul ($8.6 million),
NorthMarq Capital in Bloomington ($8.1 million) and
M&I Bank in Milwaukee ($8 million).
Meanwhile, Hecker listed $7.6 million in “real property,” and $10.9 million in “personal property.”

His “real property” includes a $4.4 million home in Crosslake and six other houses and condominiums he owns or leases.

His personal property includes a $300,000 53-foot Hatteras boat, $35,290 in watches, $25,000 in clothing, a $24,000 wedding ring, a John Deere riding lawnmower, four dirt bikes, seven snomobiles, three Vespa scooters, six four-wheelers, seven jet skis, eight sets of golf clubs, two shotguns and various home furnishings, as well as money he has in numerous bank accounts, stocks, IRAs, accounts receivable and other financial holdings.

Source: izjournals.com

Freud, the Consumer Finance Protection Agency and Madoff

2009-07-03T02:01:00.000-07:00

The Obama Administration has just submitted to Congress a 150-page proposal for the establishment of a Consumer Finance Protection Agency. As expected, banks and financial companies of all types are in strong opposition.

The intent of this agency is to centralize the oversight and regulation of financial products offered to consumers - mortgages and credit cards being the big two. As one who has studied both of these products for many years, I should have a strong feeling about whether increased government regulation is necessary yet somehow I'm just not sure.

As Freud has said, "the mind is an arena for the struggle of antagonistic impulses" and so a la Freud, here are my competing thoughts:

FOR a Consumer Finance Protection Agency:

1. In the last ten years, banks and financial services companies, pushing for increased profits, completely lost sight of treating people fairly. Mortgage and credit card documentation is difficult to understand - deliberately so.

2. Humans are human. If you give us too much rope, we will in fact hang ourselves.

3. If you've ever run anything, you know that whenever there are too many people (government agencies) responsible for the same objective, no one gets it done. In the company I run whenever I want to know why Bill didn't get something done, he suggests it was Mary's job who thought it was Jane's job and so on. Just substitute different government agencies for Bill, Mary and Jane.

AGAINST a Consumer Finance Protection Agency:

1. Whenever there is government regulation, the fear of enforcement keeps innovation in check. Today, in hindsight, everyone hates the mortgage products that were created earlier this decade allowing people to buy housing with low down payments. However, had housing prices continued to increase, people would be lauding these creative products for opening the housing market to lots of low-income and first-time buyers.

2. The government does not simplify - it complicates (witness the 150 pages of authorizing legislation). A confused mind (consumer) is a close cousin to an uninformed mind. Who here understands the Internal Revenue Code?

3. People need to take responsibility for their own actions. Although the banks and finance companies should have done a better job making documentation and business practices more consumer-friendly, the truth is that as to mortgages and credit cards, there are only a half dozen or so basic points consumers need to understand. This stuff is not rocket science. There is a side of me that would much rather see our country put increased resources and energy behind financial education (especially for young adults) rather than more regulation.

MADOFF: How does all this tie in with Madoff? Here, too, I disclose the competing thoughts in my mind when I hear the stories of people who lost their life savings investing with him. On the one hand my heart is broken for these people. On the other hand when I hear calls for the government (translation: you and me) to cover their losses, I wonder whether these people should be made whole in light of the fact that they violated every basic rule of investing: a) diversify, b) only invest in what you understand, c) when the reward is out of line with competing products, there must be risk, and d) the stock market can never produce constant, predictable returns.

What are my conclusions? Not sure ... just using this post to disclose "antagonistic impulses."

Source: huffingtonpost.com

School finance

2009-07-01T08:59:00.002-07:00

Colorado lawmakers once again are looking at changing the way the state funds its schools. This is a recurring effort that deserves serious attention, both because education is so important and because it is the largest expense in state government.

Although reformers already have too much to consider, this time, the effort also should address its effect on charter schools. The mechanics of school funding should not work against experimentation and innovation.

The state sends tax money to school districts with the amounts adjusted to reflect enrollment numbers, the cost of living and the number of at-risk students. The goal is to equalize school spending so students in poorer areas are not deprived of the education those in an upscale community might get. There is no way to overcome all disadvantages, but Colorado tries to level the field on education.

But there is never enough money to do everything. There always are more worthwhile programs than funding. The interests of parents, teachers, administrators and students are not always perfectly aligned. Rural and urban areas have different needs. And everyone in the state - students, parents, prospective employers or taxpayers - has a stake in the outcome.

As such, education spending is an ongoing fight. Rural school districts complain about the transportation costs associated with their greater distances. Critics say special education is not adequately funded and the system does too little to help individual students excel. All of those represent legitimate concerns.

Beyond that, though, the current system sets up an inherent resistance to educational alternatives outside existing school systems. Because state funding is allocated on a per-pupil basis, each student effectively comes with a check - in the case of Durango High School, about $7,000. If that student goes elsewhere, so does the check.

The idea that spending is proportionate to the number of students seems reasonable, and in a broad sense it is. But costs do not track exactly. Many expenses do not change with the addition or subtraction of a few, or a few dozen, students.

But officials estimate the student population of Durango High School will decline by as many as 200 students this fall. That represents an approximately $1.4 million hit to the school's budget. In response, the high school has laid off teachers and staff members, and eliminated one assistant principal position.

Much of that drop in enrollment is simple variance in the local population. But of the 200, 60 or 70 students are expected to go from Durango High School to the new Animas High charter school - and with them will go about $400,000 in state money.

That sets up an unconstructive situation. Teachers and administrators at Durango High School cannot help but be concerned about the charter school's effect on their jobs and their school. At the same time, supporters of Animas High School are forced to defend what should be celebrated as a welcome attempt to try something different.

We no longer are the industrial nation that high schools supported, nor do we have the agrarian economy our school schedules were designed around. The 21st century will require something new.

Charter schools have not always fared well. But new models and new ideas should be welcomed in education and experimentation sometimes requires a new platform.

How we fund schools should not discourage that.

Source: durangoherald.com

Japan's Yosano: expects to stay as finance minister

2009-07-01T08:59:00.001-07:00

TOKYO, July 1 (Reuters) - Japanese Finance Minister Kaoru Yosano said on Wednesday he expected to stay on as finance minister, after Japanese media said he would lose one of his three financial portfolios. Japanese TV reported a former defence minister, Toshimasa Hayashi, would become the new economics minister. [ID:nTFD006287]

"I expect to retain my portfolios in charge of the Ministry of Finance and the Financial Services Agency," Yosano told reporters at a briefing.

Asked about reports that he would lose the post of economics minister, Yosano said: "No member of the cabinet can expect to keep their position indefinitely." (Reporting by Stanley White; Writing by Rodney Joyce)

Source: reuters.com

Finance Lobby Cut Spending as Feds Targeted Wall Street

2009-07-01T08:58:00.000-07:00

WASHINGTON -- The financial industry cut spending on lobbying and campaign contributions this year, even as the Obama administration drafted a sweeping plan to tighten federal control over its players.

In the first three months of 2009, the financial sector spent $104.7 million to lobby Congress and the administration, down 8% from the same period last year, according to a Wall Street Journal analysis of the most recent data collected by the Center for Responsive Politics, a nonpartisan group that tracks the lobbying business. In each of the previous five years, the industry's spending had risen.

The health-care industry -- which three years ago surpassed finance as the top lobbying spender and faces a major overhaul initiative in Washington -- increased outlays in the first quarter by 12% to $127.1 million. Lobbying spending across all business sectors was flat in the period, after rising 15% from 2007 to 2008.

Source: wsj.com

Money Tips: Be less personal in managing household finances

2009-07-01T08:56:00.000-07:00

MANILA - Money is not a topic that families usually talk about, especially since it is a common cause for fights and squabbles. However, practical sense points to openly discussing money matters to prevent debt or running family finances down.

"Families always fight about money. So if they are educated, I think they wouldn't fight as much. Just like disease, debt prevention is better than cure," said Randell Tiongson, president of the Personal Finance Advisers Philippines Corporation, in a recent interview on ABS-CBN's "Shoptalk."

Tiongson, a personal finances coach, describes the household as having the same principles as that of a business, where families have to match revenues (household income and savings) with expenses. He said this is exactly why handling family finances should be handled in a less personal, but more business-like manner.

One business trick that can be incorporated into the home is proper asset allocation. In a household setting, this means spending for those that are necessary for the household's goals.

"You have to identify your budget, you have to identify your expenses, and then you manage it from there. Of course, if you don't stick to your budget, be prepared that you won't reach your goals," Tiongson said.

In fact, setting goals is a great way to determine how much a household should save, both for immediate and future expenses. A simple business rule to follow is that your cash flow output should never be bigger than your input.

In other words, never spend beyond your means and always have money saved up, just in case life throws you surprises like an unexpected illness or a drastic rise in school tuition.

"Money is always good to have on hand for the different cycles of life. When you're younger, you want to raise your family. And then your kids go to college. And then later on, there's healthcare, retirement, and all of these things that require a lot of money. The cost always surprises a lot of people. Make sure those goals are achieved," he explained.

Important decisions

Another way to ensure that the household, like a business, is working properly is to determine clear tasks among members, such as who is in charge of monitoring expenses and who is in charge of keeping the money.

Tiongson said that the decision-making process, as much as possible, should involve all stakeholders or members of the household, especially the husband and wife.

"Everyone in the family should be in on it. Personally, when I coach people about personal finances, I always like talking to couples because money decisions are a couple thing. Like, I never make a decision without my wife's approval," he said.

Setting routine spending plans like deciding what to and what not to put in grocery shopping lists could help a family's finances in the long run. Tiongson personally sets a spending limit for every trip to the market, with a small allowance of plus or minus 10 percent.

Tiongson added that objectives, plans, and projects should always be practical and feasible. He said it is good to save money, but not by extreme measures like completely scrimping on the family's leisure or pleasure activities.

"There should always be a balance. Like, I always hear people who say, 'okay, I want to go to Europe at 50. So the family won't eat out and can't go out.' That's too extreme. There is always a price to pay. But the question is, are you willing to pay that price," he added.

Keep in mind that the goal of financial planning is to maximize a quality lifestyle (as much as you can afford) without breaking your back.

"At the end of the day, I always tell people, when you die, you don't take your money with you. So financial planning is a tool to help you enjoy your life without going into too much trouble," he said.

Source: abs-cbnnews.com

SBI to Finance Indonesia-India Trade

2009-07-01T08:52:00.000-07:00

JAKARTA -- State Bank of India, India's largest lender by assets, will serve as a foreign exchange bank to facilitate trade between India and Indonesia, handling about $350 million initially, an executive at the bank said Tuesday.

Subramanian Sathyamurthy, operations director at local unit PT SBI Indonesia, told Dow Jones Newswires that trade between India and Indonesia last year was worth $10 billion.

Given that SBI handles about 35% of total foreign exchange business in India, its potential market share share of bilateral trade between the South and Southeast Asian nations could eventually be $3.5 billion annually, Mr. Sathyamurthy said.

"Of this $3.5 billion, we aim to garner about 10% initially, which is a decent sum to start with," he said.

Mr. Sathyamurthy said SBI Indonesia previously functioned as a local bank but was given a license this week by Indonesian regulators to operate as a foreign exchange bank. The lender has been seeking such a license for several years.

India is a major importer of Indonesian export goods such as crude palm oil and coal. However, many export transactions are conducted via third parties in Singapore, as there are few local financial houses that specialize in trade and services between the two countries.

Officials at SBI Indonesia, which until last month was named PT Bank IndoMonex, have told local media previously that the bank would be able to offer trade finance and advisory services to Indian companies doing business in Indonesia, as well as remittance services to the Indian expatriate community here, which numbers about 10,000.

SBI owns 76% of SBI Indonesia.

SBI Indonesia has 10 branches in major Indonesian cities, and has said it plans to open more branches in years to come.

Mr. Sathyamurthy declined to comment on a media report Tuesday that said SBI is considering buying another bank in Indonesia, saying he had no knowledge of the matter.

India's The Economic Times reported that SBI is in talks with Indonesia's PT Bank Eksekutif Internasional to acquire a majority stake in it as a strategic investment.

Bank Eksekutif has 13 branches in Indonesia and 491 employees, the report said.

Source: online.wsj.com

Campaign finance charge dropped for lawyer

2009-06-30T07:49:00.000-07:00

LOS ANGELES—A federal judge has dismissed the last campaign finance charge against Los Angeles attorney Pierce O'Donnell, who faced three felony counts of campaign finance irregularities.

Judge S. James Otero signed an order prepared by both prosecutors and defense attorneys Monday. The order allows prosecutors to charge O'Donnell again, pending an appeal to the 9th Circuit Court of Appeals.

After the judge threw out two other charges against O'Donnell earlier this month, prosecutors decided to appeal.

Prosecutors had accused O'Donnell of providing $26,000 in campaign contributions through employees of his law firm to then-Sen. John Edwards' campaign for the 2004 Democratic presidential nomination.

Source: mercurynews.com

MOCA has gifts, officers and trustees; pronounces finances fixed

2009-06-30T07:48:00.000-07:00

L.A.'s Museum of Contemporary Art says it has raised $56.9 million in the six months since it accepted a helping hand from Eli Broad, who in a MOCA news release characterizes the feat as "the biggest turnaround of any cultural institution in recent history."

Said Charles E. Young, the museum's chief executive, who was asked by Broad to serve for an interim period while MOCA got back on its financial feet: "I am pleased that we have enabled a successful turnaround in such a short amount of time."

At their board meeting Thursday, MOCA's trustees elected Maria Arena Bell to join incumbent David Johnson as co-chair. Bell, the co-creative producer of "The Young and the Restless" soap opera, has been a longtime MOCA supporter and is co-chairing the museum's 30th anniversary gala in November with Broad. The Bel-Air resident's husband, William J. Bell Jr., was a MOCA trustee from 1997 until last year. She also has affiliations with New York's Guggenheim Museum, the Aspen Art Museum and the Hirshhorn Museum and Sculpture Garden in Washington.

Tom Unterman, the investment executive who co-chaired MOCA with film producer Johnson during its crisis, and had led the museum's finance committee, becomes a life trustee -- an honor, also held by Broad, that doesn't include voting rights.

Broad has anted up more than half the $56.9 million himself through the Eli and Edythe Broad Foundation, which pledged $30 million in December as the cornerstone of MOCA's self-rescue plan. The remaining $26.9 million includes $16.4 million in special rescue-giving from members of MOCA's board, $1.9 million in regular board giving toward ongoing operations, $3 million in gifts from patrons who aren't board members, and $5.6 million collected from various other sources, including corporate donations, fundraising events, and the fees paid by museum members.

The $56.9 million total, however, depends on a certain amount of chicken counting of still-unhatched eggs. Of the Broad pledge, half is a regular gift with no strings attached, to be paid over five years, with the money earmarked for funding exhibitions. The other $15 million isn't quite so bankable -- it's contingent on MOCA coming up with a dollar-for-dollar match, with those contributions and the Broad match pegged to replenish an endowment that Broad has said totaled $5 million last December.

Gradual borrowing from what was once a $38 million endowment to pay operating expenses (rather than the Arts Management 101 method that calls for either raising the needed money or cutting spending) is what put MOCA in need of a rescue in the first place.

The recovery bid involves cuts as well as fundraising, as MOCA makes do with an operating budget of $15.5 million, down from pre-crisis budgets that had exceeded $20 million.

At their board meeting Thursday, the museum's trustees appropriated $4.25 million toward the endowment, drawing a matching amount from the Broad Foundation. That leaves MOCA $10.75 million short of having raised the $56.9 million it claims. Still, raising $46.15 million in six months is an accomplishment.

As for whether MOCA's financial comeback is "the biggest turnaround of any cultural institution in recent history," as Broad, pictured at left, says, there's competition from the San Diego Symphony. That orchestra went silent for 2 1/2 years after going bankrupt in 1996, regrouped, then had its future secured with a staggering $100 million donation and bequest in 2002 from Qualcomm chief executive Irwin Jacobs, pictured at right, and his wife, Joan.

In other MOCA board business Thursday, trustees re-elected Jeffrey Soros as president, and Fred Sands, who recently donated $2 million, was chosen as vice president. Three new trustees were elected: writer-producer Darren Star, whose credits include "Sex and the City," "Melrose Place" and "Beverly Hills, 90210"; Carolyn Clark Powers, who also is on the collectors' committee at the Los Angeles County Museum of Art and the Music Center's dance association; and Marc I. Stern, an investment executive who chairs Los Angeles Opera and is a board member of the Music Center, California Science Center and the Kennedy Center for the Performing Arts in Washington.

Young, the MOCA chief executive, said there has been discussion of how to proceed with the board's most crucial task besides fundraising: hiring a new museum director to replace Jeremy Strick, who in December took the fall for the financial distress, but soon landed on his feet as director of the Nasher Sculpture Center in Dallas. So far, Young said, no decisions have been made on a time frame, appointing a search committee of board members, or on whether to hire a search firm to identify possible candidates.

Source: latimes.com

TCF Inventory Finance, Inc. Assumes Floorplan Financing Programs

2009-06-30T07:47:00.000-07:00

TCF Inventory Finance, Inc. (“TCFIF”), a subsidiary of TCF National Bank, announced today an agreement with Textron Financial Corporation (“Textron Financial”) to assume the rights to existing Textron Financial programs that will enable TCFIF to originate certain floorplan financing receivables for retailers of lawn and garden products. TCFIF did not acquire any existing floorplan financing receivables from Textron Financial.

The assumption of these programs by TCFIF represents the opportunity to originate future floorplan financing receivables from 4,600 retailers who acquire products from the industry’s major suppliers. TCFIF will begin originating receivables under the programs this month and expects that balances from these receivables could exceed $150 million before the end of 2009.

“By assuming these floorplan finance programs from Textron Financial, TCFIF makes a clear statement of commitment to support retailers and suppliers in the lawn and garden industry in the United States and Canada. In the current environment, with unpredictable and diminishing credit availability, TCFIF is both truly excited and completely dedicated to provide liquidity and a high level of service to our customers,” said Mr. Ross Perrelli, President and CEO of TCFIF.

“TCF is committed to expanding lending across all of its business lines,” said William Cooper, Chairman and CEO of TCF Financial Corporation. “These lawn and garden relationships will be beneficial for TCF and the 4,600 retailers who will continue to receive first-class service from the TCFIF team.”

TCFIF (www.tcfif.com) offers a full range of inventory financing solutions to retailers in the consumer electronics and household appliances industries and now the lawn and garden industry throughout the United States and Canada. TCFIF is an indirect subsidiary of TCF Financial Corporation (NYSE: TCB) (www.tcfbank.com), a Wayzata, Minnesota-based national financial holding company with $18.1 billion in total assets. TCF has 449 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts leasing and equipment finance business in all 50 states.

Textron Financial is a diversified commercial finance company. Additional information about the company is available at www.textronfinancial.com.

Source: sys-con.com

Spartan Motors Names Joseph M. Nowicki as Chief Financial Officer

2009-06-30T07:46:00.000-07:00

CHARLOTTE, Mich., June 30 /PRNewswire-FirstCall/ -- Spartan Motors, Inc. (Nasdaq: SPAR) today announced it has named former Herman Miller finance executive Joseph M. Nowicki, C.P.A., as chief financial officer. Nowicki succeeds James Knapp, who previously announced his retirement.

Spartan Motors, the leading manufacturer of custom chassis and emergency-rescue vehicles, said Nowicki brings more than two decades of financial management and operations expertise to the position, including extensive manufacturing and international experience. Nowicki spent 17 years with Zeeland, Mich.-based Herman Miller, Inc., most recently as Treasurer and a member of key leadership.

"We are pleased to attract someone of this caliber to our senior management team," said John Sztykiel, president and chief executive officer of Spartan Motors. "Joe is an accomplished finance executive who also brings strategic and operational experience, a background in global operations, and a track record with the investment community that make him an ideal candidate for this role. As Spartan looks to expand our product offerings into new market niches, both here and abroad, we expect Joe to bring a relevant and fresh perspective to managing our business that will benefit all our stakeholders."

At Herman Miller, Nowicki was responsible for all treasury activities, including establishing the company's overall capital and debt structure, overseeing the company's pension and investment strategy and leading investor relations activities for the $1.6 billion furniture manufacturer. During his career at Herman Miller, Nowicki also served as vice president of international finance and vice president within North American finance, and was involved in multiple acquisitions. Before joining Herman Miller, he held several operations and finance positions, including working for IBM and General Motors, and spent several years in public accounting.

"I'm looking forward to joining the Spartan team and think my experience is a great fit with their culture of innovation and focused execution," said Nowicki. "Their emphasis on Return on Invested Capital (ROIC) aligns with my background with economic value-added financial management, and their long-term strategic plan focused on organic growth, new market entries and establishing a global footprint are ideally suited for my experience."

Nowicki holds a master of business administration degree in finance from the University of Michigan and a bachelor's degree in accounting from Canisius College in Buffalo, NY.

About Spartan Motors

Spartan Motors, Inc. (www.spartanmotors.com) designs, engineers and manufactures custom chassis and vehicles for the recreational vehicle, fire truck, ambulance, emergency-rescue and custom vehicle markets. The company's brand names - Spartan(TM), Crimson Fire(TM), Crimson Fire Aerials(TM), and Road Rescue(TM) - are known for quality, value, service and being the first to market with innovative products. The company employs approximately 1,200 at facilities in Michigan, Pennsylvania, South Carolina and South Dakota. Spartan reported sales of $844.4 million in 2008 and is focused on becoming the premier manufacturer of custom vehicles and chassis in North America.

This release contains forward-looking statements, including, without limitation, statements concerning our business, future plans and objectives and the performance of our products. Forward looking statements are identifiable by words such as "believe," "anticipate," "will," "sustain," and "continue." These forward-looking statements involve certain risks and uncertainties that ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Technical complications may arise that could prevent the prompt implementation of the plans outlined above. The company cautions that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in the company's Annual Report on Form 10-K filing and other filings with the United States Securities and Exchange Commission (available at http://www.sec.gov). Government contracts and subcontracts typically involve long payment and purchase cycles, competitive bidding, qualification requirements, delays or changes in funding, extensive specification development and changes, price negotiations and milestone requirements. An announced award of a governmental contract is not equivalent to a finalized executed contract and does not assure that orders will be issued and filled. Government agencies also often retain some portion of fees payable upon completion of a project and collection of contract fees may be delayed for long periods, which can negatively impact both prime contractors and subcontractors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise, except as required by law.

Souce: redorbit.com

Japanese, S Korean finance ministers talk on Pyongyang, economic recovery

2009-06-30T07:42:00.000-07:00

TOKYO, June 27 (Xinhua) -- Japanese and South Korean finance ministers met in Tokyo Saturday on Pyongyang's recent nuclear tests as well as economic recovery prospects.

Japanese finance minister Kaoru Yosano and his South Korean counterpart Yoon Jeung Hyun agreed that the two countries will continue to work closely to address Pyongyang's nuclear ambitions, Yosano said.

The finance ministers also shared the same view that the two countries' economies have recently been "brightening slightly," Yosano told reporters after attending a one-day finance meeting in Tokyo.

The two did not discuss issues regarding whether Japan and South Korea would work together to impose economic and financial sanctions on Democratic People's Republic of Korea (DPRK), Yosano said.

Japan and South Korea agreed in 2005 to hold a finance ministerial meeting every year.

The first meeting was held in 2006 in Tokyo and the second in 2007 near Seoul.

Source: xinhuanet.com

Hartford Financial gets $3.4 billion in TARP funds

2009-06-29T09:45:00.001-07:00

SAN FRANCISCO (MarketWatch) -- Hartford Financial Services Group Inc. /quotes/comstock/13*!hig/quotes/nls/hig (HIG 12.05, +0.06, +0.50%) said Friday it received $3.4 billion in funds from the U.S. Treasury's Troubled Asset Relief Program. Under its agreement with the Treasury, Hartford sold non-voting senior preferred shares with a 5% annual dividend for the first five years and 9% dividend thereafter. Treasury also received warrants to buy common stock equal to 15% of the preferred investment, or $510 million. The exercise price of the warrants is $9.79 a share, Hartford said.

Source: marketwatch.com

Dreaded College Financial-Aid Form Gets Simpler

2009-06-29T09:44:00.001-07:00

Every year, many parents and college students dread filling out the Free Application for Federal Student Aid, or Fafsa, but the process is about to get shorter and more user friendly, the US. Department of Education announced yesterday.

The Fafsa, a tedious application that requests detailed information about a student’s family income, savings and assets, is what the government uses to determine a student’s eligibility for financial aid, including Pell grants, student loans, and college work-study programs. Most colleges also use it to gauge a student’s financial need.

About 98% of students apply online, but filling out the form–which has over 150 questions in the paper version–can still be a daunting but necessary process for college students, especially the first time around.

Some of the changes to the application–which involve eliminating questions, providing quicker estimates and streamlining information from the Internal Revenue Service–are already in place, and the rest will be rolled out over the next few months.

“The improvements will reduce the burden on the 16 million students and families who apply for federal financial aid every year, and are designed to help increase college enrollment among low-income and middle income students by making it easier to apply for financial aid,” U.S. Secretary of Education Arne Duncan said in a statement.

About 1.5 million students who are probably eligible for Pell grants fail to apply each year, according to the Department of Education.

Critics say the form can be an obstacle preventing some students from getting the aid that they need and hope the shorter application will change that.

Starting this summer, the new and simpler application will allow students to skip questions that don’t apply to them. For example, those who are at least 24 years old or married will be able to skip 11 questions about their parents, because they’re exempt from having to provide their parents’ financial information.

In January, students applying for financial aid for the spring semester will be able to easily retrieve income information from the IRS when applying online. The ultimate goal is for the information to be automatically imported, but a Department of Education spokesman said that may take some time.

Students with low incomes won’t be asked for asset information, which is not used to determine aid eligibility, and only returning students will be asked about prior drug convictions. And the department plans to coordinate with states help them gather information they need, but the federal government does not.

The department says it is already providing students with instant estimates of Pell grant and student-loan eligibility, instead of having to wait weeks.

Also yesterday, Secretary Duncan called on Congress to enact legislation that would let students and their families apply for financial aid needing only the information on their tax returns—when they currently also need bank statements, investment information and documentation of untaxed income.

Wallet Readers: What do you like or dislike about filling out the Fafsa? Will the changes encourage more people to apply for financial aid?

Source: wsj.com

Geithner: administration pushing financial reform

2009-06-29T09:43:00.000-07:00

WASHINGTON (AP) — Treasury Secretary Timothy Geithner said Thursday the administration will send legislative language to Congress in the next few days to create a consumer financial products agency, one of the key parts of its overhaul plan.

Following a meeting with the president's working group on financial markets, Geithner told reporters the administration was moving quickly to get the measure through Congress and to promote better coordination among regulators.

But he refused to answer a question on whether he had been informed ahead of time by Citigroup Inc. of its plans to modify its salary arrangements for many bank employees.

The administration last week unveiled a sweeping plan to overhaul the way the government regulates financial markets in the wake of the worst economic crisis to hit the U.S. in seven decades.

The administration plan would give the Federal Reserve expanded powers to oversee institutions whose failure could destabilize the entire financial system. The proposal also calls for creation of a new agency to oversee various types of financial products provided to consumers from mortgages to credit cards.

The idea for a consumer agency has generated sizable opposition from the finance industry which argues that it would stifle development of new products. But the proposal is supported by the Democratic chairmen of two key committees, House Finance Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd.

Frank on Wednesday said his committee would begin reviewing legislation in July to create the Consumer Protection Financial Agency.

Geithner on Thursday signaled that the administration is pressing for quick movement, saying it would "provide within the next few days" proposed legislative language to set up the consumer agency.

"We are going to try to make sure we are making progress on a range of things that we need to do to make these markets safer, more stable — a more balanced mix of innovation and stability in the future," Geithner said.

That working group, which was created after the 1987 stock market crash, includes the heads of key regulatory agencies from the Fed, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

The administration did not go as far as some had urged in consolidating all of the government's banking agencies into a single regulator, although it calls for merging the functions of the Office of Thrift Supervision and the comptroller's office into a single agency.

Geithner remained silent when a reporter asked if he had been informed by Citigroup of a plan to increase the base salaries of many of its employees in response to government restrictions on bonuses awarded to companies that have received sizable support from the government's $700 billion bailout fund.

Source: google.com

GuestLogix Delivers 150%

2009-06-29T09:42:00.000-07:00

GuestLogix Delivers 150% Year-Over-Year Revenue Growth and Achieves Profitability in Q2 Fiscal 2009

TORONTO, ONTARIO, Jun 29, 2009 (MARKETWIRE via COMTEX) -- GuestLogix Inc. /quotes/comstock/11v!gxi (CA:GXI 0.98, -0.01, -1.01%) ("GuestLogix" or the "Company"), the leading provider of onboard retail solutions to the airline industry, announces its financial and operational results for the three- and six-month periods ended May 31, 2009. All results are reported in Canadian dollars.

Q2 F2009 Financial Highlights

- Increased revenue 150% to $4.6 million, up from $1.8 million in Q2 fiscal 2008

-- Excluding foreign exchange impact, revenue for Q2 fiscal 2009 was $4.8 million

- Monthly revenue run-rate of $1.5 million in May 2009

- Generated $1.0 million in EBITDA, up from $(0.3) million in Q2 fiscal 2008

- Achieved a net profit of $0.03 million, up from $(1.1) million in Q2 fiscal 2008

- Cash and cash equivalents including restricted cash was $3.6 million as at May 31, 2009, compared to $5.5 million as at November 30, 2008.

Source: marketwatch.com

KB Financial Dismisses Rts Issue Underwriters-Sources

2009-06-29T09:41:00.000-07:00

DOW JONES NEWSWIRES

South Korea's KB Financial Group (105560.SE) has dismissed four of six underwriters for its planned KRW2 trillion-KRW3 trillion ($1.6 billion-$2.3 billion) rights issue, four people familiar with the deal said Monday.

KB Financial has dismissed JP Morgan Chase & Co. (JPM), Bank of America Merrill Lynch, Citigroup Inc. (C) and Credit Suisse Group (CS) over new fee-related terms that the four investment banks raised, the people said. They were dismissed last week, two people said.

The South Korean company has hired in their place Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS), the people said.

It has retained its underwriting mandates with two local firms: Samsung Securities Co. (016360.SE) and Korea Investment & Securities.

The four original foreign banks on the deal had initially offered to underwrite the deal for a fee of 0.6% of the proceeds of the KRW2 trillion-KRW3 trillion rights issue, well below the 2.5% charged by the banks that underwrote the KRW1.5 trillion rights issue by South Korea's Shinhan Financial Group (055550.SE) in February, one person said. He said that KB Financial dismissed the four banks when they sought to charge a higher fee later.

It wasn't immediately clear how much Goldman and Morgan Stanley are charging to underwrite the deal.

KB Financial will decide on whether to proceed with the rights issue at a board meeting next month.

If the plan is approved, KB Financial is expected to offer new shares in the early part of the third quarter, three of the people said.

An official at KB Financial said KB will use the proceeds for, among other things, mergers and acquisitions in non-banking businesses.

One person said that that could involve buying Korea Exchange Bank (004940.SE) from Dallas-based private equity firm Lone Star Funds, in a revival of a sale that has been plagued by mishaps. Alternatively, KB Financial could use the funds to expand its exposure to brokerages, the person said.

In November 2007, KB Financial, which wholly owns Kookmin Bank, South Korea's largest bank by assets, expanded beyond pure banking by buying Hannuri Investment & Securities Co.

Kookmin, Korea's largest retail bank by assets, had an agreement to buy a controlling stake in Korea Exchange Bank from Lone Star in 2006, but the deal was canceled amid a probe into circumstances under which the bank was sold to Lone Star.

Lone Star subsequently reached an agreement to sell the KEB stake to HSBC Holdings PLC (HBC), but the U.K. bank scrapped the sale last year amid turmoil in the global financial market.

Source: online.wsj.com

Bernard Madoff Gets 150 Years in Jail for Epic Fraud

2009-06-29T09:30:00.000-07:00

June 29 (Bloomberg) -- Bernard Madoff was sentenced to 150 years for masterminding the largest Ponzi scheme in history, six times longer than the penalties meted out to the chief executives of WorldCom Inc. and Enron Corp.

Madoff appeared in court today before U.S. District Judge Denny Chin for the first time since his March 12 guilty plea for an epic swindle that may have reached $65 billion.

“I don’t ask for any forgiveness,” Madoff, 71, told Chin. He said he deceived his brothers, his two sons and his wife, none of whom was in the court. The courtroom burst into applause as Chin imposed the sentence.

Madoff pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the SEC and theft from an employee benefit plan.

Madoff today was led into the 11th floor courtroom in Manhattan federal court wearing a suit and flanked by federal marshals. Seated beside defense attorney Ira Sorkin, Madoff sat silently as nine former investors assailed him for a fraud that cost many their life savings.

Madoff has shown “no remorse,” said victim Carla Hirschhorn, of Manalapan, New Jersey, at the hearing. She told Chin her life is a “living hell,” her mother is dependent on social security and her daughter works two jobs to pay tuition. “Don’t fail us,” she told the judge.

Dreams Shattered

Sharon Lissauer, a model who lives in Manhattan, said the money manager “shattered my dreams” and lost her mother’s inheritance. Miriam Siegman, of Stamford, Connecticut, told Chin Madoff “discarded me like road kill,” and that she now relies on food stamps, collecting recyclable bottles and digging through dumpsters.

Madoff apologized to his victims in a statement to the court, saying he “left a legacy of shame,” and that he lives “in a tormented state now.” He couldn’t admit his error in judgment, he said, and thought he could “work his way out” of the fraud.

Hundreds of onlookers and dozens of television cameras were outside the lower Manhattan courthouse where Madoff was sentenced.

Sorkin told the court after the victims spoke that his client is a “deeply flawed human being.”

Claim Challenged

Sorkin challenged the government’s claim that his client’s fraud has so far led to $13.3 billion in losses. He said the amount should be offset by $1.3 billion held by the trustee for Bernard L. Madoff Investment Securities LLC; by $1.3 billion already recovered by the trustee; and by letters sent by the trustee, Irving Picard, seeking to “claw back” $735 million from Madoff investors.

Sorkin also cited the $10 billion demanded in various other “clawback” lawsuits as an offset, in a letter filed with the court yesterday.

“Thus, if the trustee is successful in his lawsuits, losses will be substantially reduced,” Sorkin wrote. “The media hysteria that the Ponzi scheme was approximately $65 billion and that Mr. Madoff lined his pockets with billions is simply not correct.”

Chin said no other fraud case is comparable to Madoff’s. He added that no letters were submitted to vouch for Madoff’s character, and that the “symbolism” of the 150-year sentence is “important.”

Picard, tasked with unwinding Madoff’s firm said in another letter filed with the court today that the former money manager hasn’t provided “any meaningful cooperation” since his arrest.

David Sheehan, a lawyer for trustee Picard, disputed a claim by Madoff’s attorney that his client had cooperated.

Downfall

Madoff’s sentencing caps the downfall of an acclaimed investment adviser who told the world his fortune came through an eponymous firm that specialized in making markets, trading securities and advising wealthy clients.

Over three decades, he built a reputation as a brilliant stock picker who delivered steady returns through both bull and bear markets. He attracted an international client roster that included celebrities including filmmaker Steven Spielberg, fund managers such as J. Ezra Merkin, charities, universities, friends and even European royalty.

Big Lie

His facade shattered on Dec. 11, as Madoff confessed to authorities that his firm, Bernard L. Madoff Investment Securities LLC, was “one big lie.” Under immense pressure from a rush of investor redemptions, he admitted he used money from new investors to pay old ones. Regulators later said that his investment advisory business hadn’t made a trade in at least 13 years.

Some of his thousands of investors lost their life savings. Thierry Magon de La Villehuchet, chief executive officer of Access International Advisors, which managed $3 billion, was driven to suicide because of his firm’s Madoff-related losses, his brother, Bertrand Magon de la Villehuchet, said in January.

Madoff received the maximum sentence on the 11 fraud charges to which he pleaded guilty. Before his sentencing, he consulted with Herbert Hoelter of the National Center on Institutions and Alternatives, a prisoner advocacy group, according to court records.

Stewart and Vick

Other Hoelter clients have included lifestyle doyenne Martha Stewart, who was jailed for obstructing justice, and football player Michael Vick, who served time for helping to run a dog-fighting ring.

The U.S. Bureau of Prisons will now decide where Madoff serves his term. Since being locked up in March, he’s been housed in the maximum security Metropolitan Correctional Center next door to the courthouse.

Other aging white-collar convicts are in low-security prisons. Former WorldCom Inc. Chief Executive Officer Bernard Ebbers, 67, is housed at the Federal Correctional Institution in Oakdale, Louisiana. John Rigas, 84, the ex-CEO of Adelphia Communications Corp., is imprisoned at the Federal Correctional Institution in Butner, North Carolina.

At his guilty plea in March, Madoff said that in the early 1990s, with the U.S. in a recession, he felt “compelled” to provide the returns his investors expected and began stealing investor money. He said the proprietary trading and market- making units of his business, both run by his sons, were “legitimate,” and his U.K.-based affiliate, Madoff Securities International Ltd., was an “honestly run” business.

Criminal Deeds

“I am actually grateful for this opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed,” Madoff said in court at the time. “I knew what I was doing was wrong, indeed criminal.”

The case doesn’t end with the sentencing. Investigators have seized control of Madoff offices at the lipstick-shaped building at 885 Third Avenue in Manhattan, where Madoff Securities operated out of three floors.

Prosecutors are probing whether his subordinates helped him swindle investors. A central issue is whether employees knew of the fraud. Madoff’s accountant, David Friehling, has been indicted on federal charges of lying to Madoff investors about whether he audited the firm.

No one else at the firm has been charged, and Madoff has not publicly implicated others. His sons Andrew and Mark Madoff ran the proprietary trading operations at Madoff’s firm. They turned their father in to authorities on Dec. 10 after he confessed to them, their attorney, Martin Flumenbaum, has said.

Civil Litigation

There has been a burst of civil litigation as well. Stephen Harbeck, president of the Securities Investor Protection Corp., which is liquidating Madoff Securities, said in May that it may take longer than 10 years to finish locating the company’s assets and paying back victims.

Investors have filed lawsuits against funds that invested with Madoff and were wiped out, including Fairfield Greenwich Group and Gabriel Capital LP. SIPC has also filed “clawback” suits against the feeder funds. Fairfield Greenwich is being sued for the $3.5 billion it withdrew before the fraud unraveled.

The case is U.S. v. Madoff, 09-cr-00213, U.S. District Court for the Southern District of New York (Manhattan).

Source: bloomberg.com