03.18.10
Posted in All, Free blog Tips, news, online, world of money tagged news, opinion, politics, reviews, work at 6:06 am by carydalton
NEW YORK (MarketWatch) — John Thain won a reputation on Wall Street as Mr. Fixit.
He was known for rebuilding the New York Stock Exchange after the controversial reign of Richard Grasso and selling Merrill Lynch & Co. at a premium to Bank of America Corp.
CIT Group Inc. is a different challenge altogether. Thain, on Wednesday, laid out the dire situation: CIT’s book value, $41.99 a share, is at a premium to its stock price by 16%. The lender lost $3.8 billion in 2009. Thain’s is struggling with personnel. He’s trying to beef up the senior ranks. See full report on Thain’s discussion of CIT.
“We’re going to have to focus on that debt structure to get ourselves in a position where the funding costs are more in line with our businesses,” Thain said.
CIT’s model of lending to small- and medium-sized businesses and then repackaging that debt is as broken as the debt market on which it depends. The company did report a fourth-quarter profit of $3.15 billion after it emerged from bankruptcy at the end of last year, but without bankruptcy, CIT would have lost $1 billion and some analysts believe the company will lose money in 2010 business card templates.
If there is little confidence in CIT, there is confidence in Thain. CIT shares added 4% in early trading Wednesday after Thain hosted his first conference call with investors. He said credit quality is improving at CIT. Charge-offs improved to 4.77% of finance receiveables in the final quarter of 2009, about half the level of the previous quarter. See WSJ story on CIT credit provisions.
Ultimately, Thain will have to convince the market that CIT’s $46.1 billion in finance and leasing assets are solid. The quality of the assets needs to be established. And Thain seems to be getting an initial break from the market even though his record at Merrill in disclosing bad assets is dubious.
Thain has a measure of confidence for now, but ultimately CIT’s business model, not the CEO, will make or break the company’s fortunes.
- David Weidner
MarketWatch First Take: Thain has no magical fix for CIT
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03.14.10
Posted in .com, All, Free blog Tips, shortly, world of money tagged economics, economy, financial, marketing, reviews at 10:06 am by carydalton
LONDON (Reuters) – The euro zone has agreed a multi-billion euro bailout for heavily indebted Greece as part of a package to support the euro, the Guardian newspaper reported on Saturday.
The 16 euro zone members have agreed on "coordinated bilateral contributions" in the form of loans or loan guarantees to Greece if Athens is unable to refinance its debts and asks the European Union for help, the Guardian quoted a senior European Commission official as saying.
The agreement was reached despite strong resistance by Germany, and Berlin has played the pivotal role in organizing the deal, the paper quoted other sources as saying.
Euro zone finance ministers will finalize the package on Monday, the paper said.
The aid to be made available by the bailout could reach 25 billion euros, the paper quoted its sources as saying. Greece's borrowing needs for the whole of 2010 total 53.2 billion euros.
Greece, laboring under a crippling debt burden, announced a 4.8 billion euro package of austerity measures last week designed to reduce its budget deficit to 8.7 percent of GDP this year from 12.7 percent in 2009.
It has been paying a high premium over benchmark European bonds to raise funds, the yield spread of 10-year Greek government paper over bunds topping 400 basis points in January.
The bailout "will be a coordinated approach of bilateral contributions … a bilateral contribution can be a loan or a loan guarantee. The guarantees will facilitate the kind of funds potentially needed in this context," the paper quoted the senior Commission official as saying auto loans.
The agreement has been tailored to avoid breaking the ban, in the rules governing the operation of the euro currency, on a bailout for a country on the brink of bankruptcy, and to avoid a challenge by Germany's supreme court, the official said.
The Commission is also rushing through tougher rules for the euro zone to set up rigorous "budgetary surveillance" of the 16 member states, the Guardian said. Greece has in the past provided the European Union with misleading economic statistics.
"The Greek case is a turning point for the euro zone," the Guardian also quoted EU Economic and Monetary Affairs Commissioner Olli Rehn as saying in an interview with it and other European papers.
"If Greece fails and we fail, this will do serious and maybe permanent damage to the credibility of the European Union. The euro is not only a monetary arrangement but a core political project of the European Union … in that sense we are at a crossroads."
Rehn said he would propose next month a regime of "rigorous surveillance of national budgets" including giving Eurostat, the EU statistics agency, big new auditing powers over the accounts of euro zone member states.
(Reporting by Tim Pearce)
Euro zone agrees bailout for Greece: report
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03.10.10
Posted in .com, Free blog Tips, hot news, online, world of money tagged All, markets, money, news, reviews at 2:30 pm by carydalton
SAN FRANCISCO (MarketWatch) — Citigroup Inc. shares rallied almost 7% Tuesday on speculation about mergers and acquisitions in the U.S. banking industry and after a bullish research note came out on the bank.
Barclays PLC is considering another major acquisition in the United States, and is hunting for a retail bank that would give it more deposits and extend the presence of its Barclays Capital unit in the country, The Wall Street Journal reported Tuesday, citing unidentified people familiar with the matter.
Bull-market birthday
As the bull market notches its first year anniversary, the News Hub panel weighs in on whether investors can still make money and how the market will react when the interest rates inevitably adjust.
The bank, in response to potential changes in banking regulation, has designated an internal team to assess possible targets, the newspaper added no teletrack payday loans.
Citigroup is “back from the brink and back in business,” research firm CreditSights wrote in a report released late Monday evening.
“Citi is still a work in progress,” the research firm said, but the bank’s debt and equity should benefit from its branch-light configuration, international consumer exposure, improving liquidity and the fact that the stock “is just plain cheap.”
Citi climbed 6.7% to $3.80 in afternoon action on Tuesday. More than 630 million shares were traded.
Citigroup shares rally on M&A speculation
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03.02.10
Posted in .com, Free blog Tips, hot news, online, world of money tagged business, finance, life, marketing, world at 6:05 pm by carydalton
LONDON – Inflation in the 16 countries that use the euro fell in February, official figures showed Tuesday, in a further sign that price pressures remain subdued in the wake of the recession.
Eurostat, the EU’s statistics office, said that eurozone prices are estimated to have risen by 0.9 percent in February from the year before. That rate is down from the 11-month high of 1 percent recorded in January.
The decline was unexpected — the consensus in the markets was for inflation to hold steady at 1 percent.
No further details were provided, but more information will come when Eurostat publishes its full release on March 16.
Nevertheless, the figures give further evidence that inflationary pressures remain constrained by a near 10 percent unemployment rate and subdued money growth.
This view was further underlined by another release from Eurostat showing that prices at the factory gate fell by 1 percent in January from the year before.
The figures are also likely to reinforce market expectations that the European Central Bank will not be raising its benchmark interest rate from the current record low of 1 percent anytime soon business card. The bank is tasked with keeping inflation at or just below 2 percent.
“In all, then, we still expect headline inflation to ease back towards zero over the remainder of the year, suggesting that it will be a long while yet before the ECB begins thinking about raising interest rates,” said Ben May, European economist at Capital Economics.
Though an interest rate increase is not thought to be imminent, the central bank’s president Jean-Claude Trichet is expected to announce on Thursday, at the conclusion of the latest monetary policy meeting, that special liquidity measures introduced to prop up the banking system during the financial crisis and the recession will continue to be wound down.
Eurozone inflation drops to 0.9 percent in Feb
Hot News: Titanium Metals reports sharp drop in 4Q profit
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Posted in .com, All, Free blog Tips, business, top tagged campaign, finance, markets, personal, reviews at 6:00 am by carydalton
FORT WORTH, Texas – Natural gas and oil producer Quicksilver Resources Inc. posted a fourth-quarter profit of $32.5 million, or 19 cents per share, Monday as revenue grew, compared with a loss a year earlier, when it recorded several charges.
A year earlier, the company lost $467 million, or $2.79 per share.
The results, which beat Wall Street’s expectations, sent Quicksilver’s shares up 50 cents, or 3.4 percent, to $15.42. The stock has traded the past 52 weeks at $3.98 to $16.59.
Excluding one-time items, the company earned $47.3 million, or 27 cents per share, up from an adjusted profit of $39.3 million, or 23 cents per share, a year earlier home kerosene heaters.
Revenue rose 12 percent to $234.1 million from $208.9 million.
Analysts, on average, were expecting a profit of 25 cents per share on sales of $217.4 million, according to a poll by Thomson Reuters.
For the full year, Quicksilver posted a loss of $557.5 million, or $3.30 per share, compared with a loss of $378.3 million, or $2.33 per share, a year earlier.
Adjusted earnings were 86 cents per share for 2009.
Revenue rose to $832.7 million from $800.6 million.
Quicksilver reports profitable 4Q, shares climb
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03.01.10
Posted in Free blog Tips, economic, money, news, shortly tagged blogs, marketing, markets, people, politics at 4:54 am by carydalton
Merck of Germany said on Sunday that it had agreed to buy Millipore, an American provider of purifiers and filters for biotechnology laboratories, for about $7.2 billion, including debt.
With the Millipore acquisition, Merck will become the latest health care company to strike a deal during a period of industrywide consolidation. The takeover will give the German drug maker a big presence in products for the biotechnology industry.
Under the terms of the deal, Merck will pay $107 a share in cash, a 13 percent premium to Millipore’s closing price of $94.41 on Friday.
“This transaction is very attractive to shareholders, customers and employees of both companies,” Karl-Ludwig Kley, Merck’s chairman, said in a statement. “This is a combination with an excellent strategic fit.”
Millipore shares have risen more than 34 percent since last week, when news reports said that it had received a $6 billion bid from another company, Thermo Fisher Scientific bad credit pay day loans. Millipore later confirmed that was considering selling itself.
Millipore, based in Billerica, Mass., had $1.7 billion in sales last year. It has about 6,000 employees in more than 30 countries.
The deal is expected to close in the second half of the year.
Merck plans to pay for the deal with a mix of cash on hand and loans from Bank of America Merrill Lynch, BNP Paribas and Commerzbank, though it expects to issue bonds to replace some of the bank financing.
Merck was advised by Guggenheim Securities, Perella Weinberg Partners and the law firm Skadden, Arps, Slate, Meagher & Flom. Millipore was advised by Goldman Sachs and the law firms Cravath, Swaine & Moore and Ropes & Gray.
Merck to Pay $7.2 Billion for Millipore
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02.15.10
Posted in All, Free blog Tips, economic, hot news, news tagged All, business, money, politics, reviews at 1:42 am by carydalton
ANCHORAGE, Alaska – Rain, low clouds and predicted high winds Sunday grounded searchers seeking the body of a ConocoPhillips Alaska employee missing and presumed dead in an avalanche that killed the head of the company.
The avalanche at around noon Saturday on the Kenai Peninsula buried Jim Bowles, 57, head of ConocoPhillips Alaska, and Alan Gage, 39, part of the company’s capital projects team in Anchorage. Gage remains missing.
“The weather is not cooperating and it’s not conducive to search,” said Megan Peters, a spokeswoman for the Alaska State Troopers.
The men were in a party of 12 snowmobilers in the Grandview wilderness area, part of the Chugach National Forest, between the tiny communities of Moose Pass and Portage.
Bowles was buried for about 45 minutes before companions using avalanche beacons dug him out. He was pronounced dead at the scene.
Gage apparently was not wearing an avalanche beacon, troopers said.
Troopers and U.S. Forest Service personnel rode snowmobiles 15 miles to reach the scene. The railroad brought in Girdwood Fire Department personnel and a trooper helicopter flew in from Anchorage.
Ridgetop winds Saturday averaged 10 to 20 mph and mountain temperatures were in the mid-20s to low 30s. Conditions deteriorated overnight, with two inches of new snow falling at Turnagain Pass, about 15 miles north of Grandview.
Ridgetop winds Sunday ramped up, averaging 30 mph with gusts to 40. A strong low pressure area in the Gulf of Alaska was expected to bring gale to storm force easterly winds, rain at sea level, and up to 12 inches of new snow at higher elevations.
The Chugach National Forest Avalanche Information Center said the avalanche danger rose to “considerable” with pockets of “high” hazard as the storm progressed.
“We pretty much hit the tipping point the last few days, and this next storm will just add more stress to a snowpack with significant buried weak layers,” said forecaster Lisa Portune on the center’s Web site free credit scores.
Forecaster Carl Skustad said the snowmobile party was in moderate terrain, with probably a 35 to 40 degree slope. However, with the weak snow layer underneath, that can be enough for snow to let loose, he said.
Emergency officials said a search would resume when weather improved and avalanche danger subsided.
Bowles joined Conoco in 1974. He was named head of Alaska operations, overseeing about 900 employees since in late 2004. Jim Mulva, ConocoPhillips chairman and chief executive officer, said in a statement Sunday that Bowles presided over developments that ensured the company’s place and standing in Alaska.
“On behalf of everyone at ConocoPhillips, including those who had the privilege to know and work with these two gentlemen and those who did not, I want to extend our sincere condolences to the Bowles family and our heartfelt best wishes to the Gage family and make sure they know the high regard in which we hold Jim and Alan, both as co-workers and as friends.”
Gov. Sean Parnell issued a statement saying he and his wife, Sandy, were saddened by Bowles’ death and lauded his work in Alaska.
“Jim brought so much to our state: his love of the great outdoors, his leadership of ConocoPhillips Alaska, and his dedication to making Alaska a better place for all of us to call home,” Parnell said.
U.S. Sen. Lisa Murkowski, R-Alaska, said Bowles was a great partner in the responsible development of Alaska’s natural resources.
A third man was caught in another avalanche and killed Saturday near Eagle River on Anchorage’s north side.
William Brasher Schorr, 60, was skiing alone near the top of a ridge while a friend waited near the bottom for his arrival. A witness saw the slide begin from his home. Schorr’s body was recovered about 45 minutes later.
Weather halts Alaska search for avalanche victim
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02.12.10
Posted in Free blog Tips, economic, money, news, top tagged economics, economy, finance, marketing, newsreports at 11:12 am by carydalton
RIGA, Latvia — The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause.
Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels.
“Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga. “The euro is not looking so attractive now.”
Latvia has been on track to adopt the euro in 2014, as has Lithuania, with Estonia eyeing its inclusion by 2011.
These governments have reason to fear that, like Athens, they will be caught in a vise: unable to pay for expensive social programs demanded by citizens while staying within the euro zone’s debt limits.
Enthusiastic for years about adopting the euro, Latvia had undertaken painful austerity measures. Even as the global economy contracted, the government slashed spending. The program included cuts of 50 percent or more in the salaries of public-sector employees and a 40 percent reduction in hospital budgets.
The result, many economists say, has been deepening unemployment and the worst recession of any country in the 27-nation European Union.
Latvia’s gross domestic product has declined by an estimated 24 percent since the recession began — a steeper drop than America’s during the Great Depression.
To keep a faltering country’s economy in line with the euro “is a tall and very unpleasant order,” Mr. Vanags said.
One of the constraints of joining the euro zone would be that Latvia would be unable to devalue its currency by printing more money. The current members of the euro zone that are weaker, like Spain and Portugal, are feeling such constraints now.
Despite some negative effects, devaluations have helped many countries over the years, giving a lift to their economies by making foreign goods more expensive and domestic goods more attractive.
Latvia has already taken some steps that limit its ability to bolster its economy. Since 2004, the Latvian central bank has pegged its currency, the lat, to the euro, to prepare for adhering to the common currency.
In 2008, Latvia accepted austerity as a condition of a bailout led by the International Monetary Fund that allowed it to remain on track to adopt the euro. After sharply cutting salaries in the public sector, the government encouraged the private sector to do the same. The policy, in fact, worked to balance the trade deficit. But the country is now being severely hurt by the very policies needed to get into the euro zone.
Andris Liepins, deputy minister of economy in Latvia, said in an interview that Latvia remained committed to a currency peg and to adopting the euro short term personal loan. “Greece’s problems are temporary,” he said. “Greece needs the same reforms as Latvia.”
The austerity programs imposed by the I.M.F., Mr. Liepins said, would help Latvia’s economy restructure over the long term, by cutting health care outlays and encouraging companies to become more efficient. Devaluing the currency would help only in the short term, he said. It would also push more homeowners to default on their mortgages, which are often denominated in foreign currencies. “We would lose competitiveness as an economy,” he said.
The policies should be judged three or four years from now, he said, when policies like encouraging outsourcing has made companies more competitive while creating opportunity for new small business.
Latvia’s economy contracted an extraordinary 18 percent in 2009, according to preliminary figures. If the number holds, it would mark the sharpest contraction in the world, though it followed what was widely regarded as an unsustainable burst of growth just before the global crisis.
Casting about for ways to raise cash during the crisis, the Latvian government grasped at times at unconventional methods.
In January, it auctioned off a ghost town along with an abandoned Soviet radar base called Skrunda-1 for 1.5 million lats ($2.89 million).
A Russian company bought it.
The economy began growing slowly in the fourth quarter of last year. Rating agencies also noted an improved outlook on the country’s creditworthiness.
Still, the government’s reliance on layoffs and deep wage cuts has not been popular.
But the response has been more measured in the Baltic countries so far than in Greece, struggling with public employee strikes and protests.
Slava Ushakov, who had a small business, sympathizes with the employees of the Greek government. When his business failed in the recession, Mr. Ushakov took a job chipping ice from city sidewalks under a government work program.
When he slipped and broke a rib, his already meager pay was docked for the days that he had missed. So now he comes to work injured. “I just wrapped it,” Mr. Ushakov said, lifting his sweater and gingerly touching bandages.
The work program, designed by the World Bank and partly financed by the European Union, pays Mr. Ushakov 100 lats ($192) a month. Still, the jobs are coveted, in a sign of the depth of troubles in Europe’s most recession-plagued economy.
“I am still working every day,” Mr. Ushakov said. He added that these days in Latvia, “if you want to buy a chicken, you have to think pretty highly of yourself.”
With Greece’s Woes, Nations Rethink Push Into Euro Zone
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02.09.10
Posted in All, Free blog Tips, economic, money, top tagged All, blogs, financial, people, world at 5:35 pm by carydalton
LINCOLNSHIRE, Ill. – Zebra Technologies Corp. made a profit in the fourth quarter, free of the one-time expenses that left it with a loss a year ago.
The company, which makes bar code and plastic card printers, also offered a first-quarter forecast above Wall Street expectations.
Its shares rose 7 cents to $27.41 in midday trading.
Zebra earned $17.6 million, or 30 cents per share, in the three months ended Dec. 31. It lost $117.4 million, or $1.88 per share, a year ago, when the company booked hefty charges related to restructuring and the falling value of its assets.
Zebra said the latest results included 3 cents per share in restructuring costs.
Revenue slipped 4 percent to $222.5 million from $232.6 million a year ago best payday advance.
Analysts polled by Thomson Reuters, who typically exclude one-time costs, expected lower earnings of 25 cents per share and lower revenue of $206.6 million.
Full-year earnings came to $47.1 million, or 79 cents per share, compared with a loss of $38.4 million, or 60 cents per share, in 2008. Revenue fell to $803.6 million from $976.7 million.
Zebra said it expects a first-quarter profit of 25 cents to 32 cents per share, including 2 cents worth of restructuring charges. It expects sales of between $217 million and $230 million.
Analysts expected 26 cents per share and $203.7 million.
Zebra posts 4Q profit of $17.6 million
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02.07.10
Posted in Free blog Tips, money, online, shortly, top tagged All, life, money, opinion, personal at 3:00 am by carydalton
SHORTLY after Sept. 11, 2001, a soon-to-be familiar figure appeared in the news media. He was a young Muslim who wanted nothing more than to strap on a belt laden with explosives and blow himself up in an area crowded with infidels. He thought his reward would be eternity in paradise with 72 virgins.
But was he truly the face of Islamic terrorism? Eli Berman, a professor of economics at the University of California, San Diego, says otherwise in “Radical, Religious, and Violent: The New Economics of Terrorism” (M.I.T. Press, 300 pages).
“The pious Jihadist, programmed with an ideology of hate to be a human guided missile, or dreaming of virgins in heaven, makes for compelling news broadcasts and emotional sound bites, but in concept does not stand up to scrutiny,” he says.
Professor Berman has written an engaging book that brings new insight to an extremely polarizing subject. He argues that many terrorists are actually more rational than we might like to think. And that, of course, is a chilling notion.
The author is neither a pacifist nor an apologist for terrorists. He says, however, that if we stop looking at them as cartoon characters, we may do a better job of deterring them. In his view, we need to understand the economic forces that govern their behavior.
Professor Berman says that some of the most effective and resilient groups with terrorist links are in some ways economic clubs, run by “radical altruists.” He puts Hamas, Hezbollah and the Taliban (the United States has tied all three to terrorism) in this category. Some of these militant soldiers of Islam may sometimes commit atrocities. But Professor Berman contends that they genuinely want to help their members. They raise money from foreign governments — or, in the case of the Taliban, by selling opium — and provide social services and jobs to adherents.
The author notes that in South Lebanon, Hezbollah operates two private hospitals and a number of schools. It collects garbage, provides water and even manages an electricity grid. He says the Taliban operate 13 “guerilla law courts” in Afghanistan where locals can have disputes resolved.
Granted, the Taliban’s underground judicial system may not be as expensive to operate as a hospital or a garbage pickup service, but it has the same effect of forging a tighter bond of between the operation and its constituents.
However, Professor Berman writes, radical Islamic groups extract sacrifices from their members that have economic consequences. Families are encouraged to have lots of children, and the women are less likely to get jobs and have money to spend.
Professor Berman says that these organizations also prefer that their members send their children to Islamic schools, whose graduates are less likely to obtain jobs that pay them enough money to explore the market and its temptations cashadvance. Indeed, he says, these are some of the ways that radical believers ensure that their followers remain loyal.
Now there have been many so-called terrorist groups. But most of them don’t last because the authorities find someone who will give them information, which short-circuits the activities of the groups.
Professor Berman points out that Israeli security forces had little trouble shutting down the Jewish Underground, a less tightly organized group linked to terrorist acts, because its members were more willing to become informants than many of their Islamic peers. Al Qaeda does not offer social services, he says, and it has had more trouble historically with disloyal members.
So what does Professor Berman think should be done to put terrorists out of business? He says we need to do more to stop their revenue streams. He recommends that we discourage gulf states from contributing money to Hamas and cut off the Taliban’s inflows of cash from illegal activities.
In Professor Berman’s opinion, the United States needs to compete by offering the same kind of social services in Iraq and Afghanistan, though he concedes that terrorist groups will do everything to stop such efforts. He says aid providers must be protected — and he concedes that this will be expensive. But he points out that we are already spending billions of dollars on domestic security.
“In the long run,” Professor Berman writes, “those constructive approaches may well be cost-effective for the United States and other developed countries that are subject to international terrorism, because they are potentially sustainable.” In other words, they could be good investments.
Professor Berman is shrewd enough not to repeat the left-wing fallacy that terrorism itself is a product of economic deprivation. He seems reluctant, however, to explore why Islam is such a breeding ground for these practices.
He says the rise of militant Islam is just another wave of religious extremism, the likes of which have occurred throughout history. As he points out, the peace-loving Mennonites belong to a branch of Christianity that was once considered radical and dangerous.
Then again, today’s terrorists may soon get their hands on a nuclear device. Would Mennonites of old have detonated it? We don’t know. But Professor Berman’s “radical altruists” might.
Off the Shelf: Terrorism and the Pocketbook
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02.04.10
Posted in .com, All, Free blog Tips, hot news, shortly tagged economics, events, markets, political, politics at 6:12 am by carydalton
GENEVA – In an embarrassment to Switzerland’s government, the country’s top court said Wednesday that at least $4.6 million in Swiss bank accounts previously awarded to charities must be returned to the family of Haiti’s ex-dictator Jean-Claude “Baby Doc” Duvalier.
The decision was reached on Jan. 12, just hours before the devastating earthquake that struck Haiti, killing at least 150,000 people. The ruling is urelated to the disaster, but the amount of money contested could feed more than a million Haitians for two weeks.
The court’s decision was only published Wednesday, prompting the Swiss government to issue an emergency decree to keep the money frozen in a Swiss bank until a new law can be passed allowing it to be donated to aid groups working in Haiti.
“This is a public relations disaster for Switzerland,” said Mark Pieth, a Swiss professor with a long resume in international corruption cases such as the U.N. oil-for-food scandal.
In the decision, the Federal Supreme Court reversed a lower court’s ruling that the money should have gone to aid groups working in the impoverished nation because the statute of limitations on any crimes committed by the Duvalier clan would have expired in 2001.
Delays are common in Switzerland between court verdicts and their public announcements, but the release of the decision could not have come at a worse time. Beyond depriving Haiti’s relief efforts of additional money, the ruling also strikes a blow at Switzerland’s long-standing efforts to shed its image as an investment haven for the world’s dictators.
“We assume that this money doesn’t belong to the Duvalier family,” said Eveline Widmer-Schlumpf, the Swiss justice minister. “We’ve blocked the money again today to prevent that it goes somewhere that it shouldn’t for political reasons. We really hope that this money finally goes back to the country.”
Many Haitians accuse Duvalier and his entourage of robbing millions from public funds before he was ousted in 1986. Duvalier is believed to be living in exile in France and has always denied wrongdoing.
The decision cannot be appealed, but the Swiss Foreign Ministry said it would try to keep the money from being withdrawn while it works on a better national law for dealing with assets of “criminal origin.” It said the amount of money actually totaled $5.7 million, though the reason for the discrepancy was unclear.
The government “wants to avoid the Swiss financial center serving as a haven for illegally acquired assets,” it said in a statement, adding that a new law working retroactively could be ready this month. Widmer-Schlumpf was less optimistic, but said the law could come into effect as early as 2011.
Switzerland has traditionally been a favorite location for potentate money because of its banking secrecy rules. But reforms over the last two decades have made it harder to hide money in Switzerland, and the country has become a world leader in returning cash.
Virtually all of about $730 million in Swiss accounts linked to the late Nigerian dictator Sani Abacha has been sent back to the African country, while the Philippines recouped hundreds of millions stashed in Swiss banks by late dictator Ferdinand Marcos low cost payday loans.
Problems have nonetheless persisted, particularly linked to the statute of limitations. Last year, the heirs of late Congo dictator Mobutu Sese Seko recovered about $7.4 million, even though Swiss Foreign Minister Micheline Calmy-Rey had promised in 2007 to return the cash to the Congolese government.
Swiss officials gave few details about the new law they hoped to create to make it easier for assets belonging to deposed dictators to be repatriated to national governments. The current rules only allow Switzerland to return cash when asked for by a national government that is pursuing its own criminal investigation — a handicap in countries where amnesty laws, corruption or weak legal systems hinder prosecution of past leaders.
Haiti made its first request for the money in 1986, shortly after Duvalier’s ouster.
But it has been frozen ever since because Switzerland would not give it back while the Haitian government wasn’t pursuing Duvalier under its own justice system. As a way out, the Swiss government had proposed giving the money to aid groups working in Haiti.
“At a time when everyone tries to help Haiti, issuing a decision that the money belongs to the dictator’s family because of the statute of limitations is very clumsy,” Pieth said. “You have a head of state with a secret army that tortures people, and at the same time he empties the state treasury. The people cannot defend themselves. It’s robbing from the people, and this aspect has to be addressed by the court.”
The U.N. says about $2 billion has already been donated to various relief efforts in Haiti. But the country’s long-term problems related to infrastructure, endemic poverty and criminality means more will be needed to stabilize the country.
The $4.6 million may represent only a drop in the bucket, but the U.N. food agency could use it to feed 1.25 million Haitians for two weeks, said spokeswoman Emilia Casella.
The Supreme Court said it was unhappy about the ruling but that its hands were legally tied, forcing it to reverse an August decision that said the Duvalier family had essentially acted as a “criminal organization” by diverting public funds through a Liechtenstein foundation to accounts at UBS AG, Switzerland’s largest bank.
UBS declined to comment, but said the bank and its employees have donated $3 million to Haiti.
The Swiss government’s decision to keep the money blocked is based on an article in the Swiss Constitution giving it the power to issue emergency decrees to protect national interests. Officials wouldn’t explain the move further.
__
Associated Press writers Bradley S. Klapper and Frank Jordans contributed to this report.
Haiti, Swiss gov’t losers in Duvalier cash ruling
Hot News: Civil Madoff-related fraud charges dismissed
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02.01.10
Posted in All, Free blog Tips, hot news, money, news tagged financial, opinion, politics, work, world at 10:06 am by carydalton
WASHINGTON (Reuters) – The economic recovery is suddenly looking more robust. If it is going to stay that way, the labor market will need to catch up soon.
In the United States, Canada and China, 2009 ended with a surprisingly strong burst of growth. Some of that was driven by fleeting factors, particularly in the United States where shifts in business inventories accounted for more than half of the fourth quarter's 5.7 percent annual rate of growth.
The next big test of the revival's staying power comes on Friday when the U.S. employment report for January is released. Economists polled by Reuters are looking for a slim gain, probably not enough to put a dent in the 10 percent unemployment rate.
"Employment growth may never have been more important for a recovery than in the current one," said Sal Guatieri, senior economist with BMO Capital Markets in Toronto. "With bank credit still tight and households rebuilding savings, income growth is badly needed to drive spending higher."
A high jobless rate breeds a host of other ills, including sluggish consumer spending, rising credit defaults and foreclosures, all of which puts a drag on global growth. Consumer spending accounts for roughly 70 percent of U.S. economic activity.
Elevated unemployment is also a big factor in why central banks in the world's major advanced economies are not in a hurry to raise interest rates. Wages are typically the biggest driver of inflation, and with so many people out of work labor costs are unlikely to spike.
The U.S. Federal Reserve said last week that it would probably keep short-term borrowing costs unusually low for some time. The European Central Bank and Bank of England hold their policy-setting meetings on Thursday, and both are expected to keep rates at record lows.
WHEN WILL JOBS RETURN?
With interest rates already about as low as they can go, there is not much more that monetary policy can do to encourage hiring. Using fiscal policy to help create jobs opens up a whole new set of problems.
Government budgets were battered by costly crisis-fighting efforts, and concerns have been growing over the state of public finances across the developed world.
Those worries will be on display when the White House unveils its budget proposals on Monday fast payday loans. President Barack Obama has already said he plans to freeze spending for three years starting in 2011, although he excluded two of the biggest expenses — defense and health-care programs.
At the same time, Obama has pledged an assortment of tax breaks and spending programs to try to bring down the jobless rate, which has become a political imperative with many lawmakers facing elections in November.
There is a debate brewing among economists about how quickly the U.S. job market will recover. Some argue that because companies slashed payrolls so aggressively in the darkest days of the recession, they will need to rapidly rehire now that demand is beginning to revive.
"Since employment and hours worked were cut sharply below levels warranted by the decline in output, we expect a stronger-than-consensus jobs recovery," Ethan Harris, head of North American economics for BofA Merrill Lynch Global Research, wrote in a note to clients.
Others say that while this may be true for larger manufacturers, there is evidence that small businesses — typically the biggest source of U.S. job creation — remain reluctant to hire.
A survey in January by the National Federation of Independent Business of small businesses showed that 15 percent expected to cut jobs in the next three months, and just 8 percent planned to create new jobs.
Confidence in the sustainability of the economic recovery is low, and credit remains tight. Some who want to expand and hire can't get loans, and many who can are wary of taking on more debt.
Kate Drew-Wilkinson, who designs and makes jewelry that she sells at her store in Bisbee, Arizona, said she had been thinking about hiring as many as four more workers, and was encouraged by Obama's pledge to focus on job creation. Yet the thought of taking on more debt to expand gave her pause.
"One hates to borrow, but I suppose if there was some kind of financial incentive that made sense to me… I would do it," she said.
(With additional reporting by Tim Gaynor in Phoenix, Arizona; editing by Leslie Adler)
Help wanted to sustain the recovery
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01.25.10
Posted in All, Free blog Tips, money, online, top tagged All, blogs, finance, marketing, money at 5:12 pm by carydalton
WASHINGTON – The top Senate Democrat wants to make it more difficult to run up the deficit with new tax cuts or expansions of federal benefit programs.
Majority Leader Harry Reid’s plan would make it difficult to again extend emergency unemployment benefits or health insurance subsides for laid off workers. It would also make it harder to render new assistance for state Medicaid payments.
The Nevada Democrat is pressing the plan to get legislation passed permitting the government to continue to borrow money to finance its operations no fax cash loans. Under the pay-as-you-go concept, program cuts or revenue increases would be needed to cover the cost of any new policies or programs. If not, across-the-board spending cuts would kick in.
Top Senate Democrat lays out deficit curbs
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