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Showing posts from June 12, 2014

The leveraged-up less well off and profits

Americans are borrowing more, renting more rather than owning, eating in class="mandelbrot_refrag"> restaurants more and saving less, leading inevitably to questions of sustainability. That’s true both for Americans and for the corporations whose profits they create. What’s more, the kind of financing backing all this indicates that a goodly bit of the balance sheet straining activity is concentrated lower down the income and wealth scale. Juxtapose this with vertiginous rates of corporate profitability (and intriguing hints that a top may have been hit) and you have the making of some serious upcoming tests for the class="mandelbrot_refrag"> economy and stock market.   true       First, let’s look at Americans and their cars. A record 27.9 percent of all new car sales so far this year were leases, according to Edmunds.com, while those who did decide to buy did so with record-long loan terms of 66 months on average. Interestingly, leasing, which

Silicon Valley's ageist culture is bad for workers - and business

class="mandelbrot_refrag"> Google confessed last week that it has a miserable record hiring and retaining women and minorities. The tech giant responded to public pressure - including protests led by the Rev. Jesse Jackson at the company's annual meeting - by releasing data about the gender and ethnic makeup of its workforce, and the numbers aren't pretty. Women make up just 30 percent of Google's workforce, and the company is 61 percent white. Asians represent 30 percent of Google's workers, but Hispanics represent 3 percent and African Americans just 2 percent. Yet class="mandelbrot_refrag"> Google didn't disclose one of the most important diversity statistic about its workers: their age.   true       Age plays second fiddle in Corporate America to racial and gender workforce diversity, but it needs to be addressed. The country is getting grayer; workers need - and want - to stay employed longer. "It is hard to address thes

Pimco's Gross sees 'New Neutral' real policy rate close to zero percent

Bill Gross, manager of the world's largest bond fund at Pimco, said Thursday the firm believes the 'new neutral' inflation-adjusted federal funds rate will be close to 0 percent as opposed to 2-3 percent in prior decades. "If 'The New Neutral' rates stay low, it supports current prices of financial assets," Gross said in his latest investment letter. "They would appear to be less bubbly." Pacific class="mandelbrot_refrag"> Investment Management Co, which manages $1.94 trillion in assets, introduced its new-neutral outlook in May. New Neutral suggests the global class="mandelbrot_refrag"> economy is transforming from a post-financial crisis recovery period called the New Normal in 2009, toward stability characterized by modest economic growth over the next three-to-five years. "Commonsensically it seems to me that the more finance-based and highly levered an class="mandelbrot_refrag"> economy

Brokers' slip-ups add to Wall Street's cyber-attack anxiety

The most cutting-edge technology cannot contain one of the biggest cyber hacking threats on Wall Street: sloppy actions by brokers and other industry employees. Brokerage firm workers have taped sensitive passwords to their computer monitors and stored them in binders labeled "passwords," according to officials from the Financial Industry Regulatory Authority (FINRA), Wall Street's industry-funded watchdog. Some firms give login information to temporary workers and forget to cut them off after their assignment is complete. At the regulator's conference in May, examiners traded tales of brokerage firm behaviors they had found that could lead to security breaches. One firm, for example, used the very-guessable "username" as the username and "password" for the password that gave access to the company's router, enabling access to the firm's sensitive data. The problems are coming to light as major online security breaches in other industr

Building a financial advice business you can sell

Isn't it ironic? Most independent financial advisers have no exit strategy and let their firms die through attrition, according to research from Fidelity Investments and consulting firm FP Transitions. That scenario is bad for clients, and it means advisers reap no benefits from the businesses they invested years building. A firm is an adviser’s largest asset, says Waldemar Kohl, vice president of practice management for Fidelity Institutional Wealth Services. “It’s bigger than their home, bigger than their retirement plan" so advisers should think about how they can tap that value when they leave the industry. Advisers who formulate a plan to sell - either via succession plan to employees or a family member - or to an unrelated third party, can secure a lifetime income stream and a business that continues to serve valued clients. CREATING VALUE After an adviser friend sold her practice for a significant sum, Olympia, Washington-based planner Nancy Nelson sought a valu

JPM investment bank boss says 'laser focus' on costs cuts

JPMorgan's new solo head of its investment bank said he would be "laser focused" on reducing costs as the industry is likely to face a tough couple of years in terms of growing revenues. "For the next year or two the industry's top-line will probably struggle. The long-term trends are good, but in the short term we need to adjust to the new reality," said Daniel Pinto, London-based chief executive of the corporate and investment bank (CIB) at class="mandelbrot_refrag"> JPMorgan Chase & Co ., the biggest U.S. bank by assets. Rivals including Barclays and UBS are in the process of shrinking their investment class="mandelbrot_refrag"> banks in a bid to slash costs, after a slump in trading revenues over the past year and tougher regulations are forcing banks to hold more capital and making some areas unprofitable. But Pinto, who took sole charge of CIB in March after running it for two years with Michael Cavanagh, said ther

Blackstone seeded hedge fund Sureview Capital shuts down: sources

Sureview Capital, a small hedge fund which received starting capital from one of the industry's most powerful investors, Blackstone Group, shut down last month, people familiar with the matter said on Friday. The fund was founded by John Wu with seed money from Blackstone Alternative Asset Management in 2011 and last reported assets of $427 million on a regulatory filing. At the end of the first quarter Sureview, which specialized in picking class="mandelbrot_refrag"> stocks , listed class="mandelbrot_refrag"> CBS Corp as its biggest position and said it owned shares in class="mandelbrot_refrag"> Yahoo Inc and class="mandelbrot_refrag"> Facebook Inc, all of which suffered losses in March and early April. Sureview, based in Greenwich, Connecticut, did not respond to phone calls seeking comment. The industry sources requested anonymity because class="mandelbrot_refrag"> hedge funds are private. When it la

Thai junta tracks Internet posting to capture protest leader

EU says firms like Google and Facebook must meet privacy rules

Companies based outside the European Union must meet Europe's data protection rules, ministers agreed on Friday, although governments remain divided over how to enforce them on companies operating across the bloc. The agreement to force Internet companies such as Google ( id="symbol_GOOGL.O_0"> GOOGL.O ) and class="mandelbrot_refrag"> Facebook ( id="symbol_FB.O_1"> FB.O ) to abide by EU-wide rules is a first step in a wider reform package to tighten privacy laws - an issue that has gained prominence following revelations of U.S. spying in Europe. Vodafone's ( id="symbol_VOD.L_2"> VOD.L ) disclosure on Friday of the extent of telephone call surveillance in European countries showed the practice is not limited to the United States. The world's second-largest mobile phone company, Vodafone is headquartered in the United Kingdom. "All companies operating on European soil have to apply the rules," EU Justice Co

Mexican iFone to seek damages after iPhone ruling

Mexican telecommunications company iFone said on Friday, after winning a trademark ruling, it aims to seek damages from three local cellphone providers for using the Apple brand iPhone to sell services. _0"> The Mexican Institute for Industrial Property (IMPI), Mexico's trademark body, on Thursday said it had ruled against class="mandelbrot_refrag"> America Movil , Telefonica and Iusacell. It upheld a complaint by iFone SA de C.V. that their use of the "iPhone" name to market smartphone plans infringed the Mexican company's rights. Iusacell is jointly owned by Televisa and TV Azteca, which dominate the television market. That decision opened the door to a civil suit against the three cellphone providers, which iFone lawyer Eduardo Gallastegui said the company would pursue. "So as to claim the damages the law gives us a right to due to the infringement," he said. According to the law, Gallastegui said, iFone could expect to claim

U.S. spy agency joins Facebook, Twitter

The CIA, which has long trolled social media to try to uncover global trends and track evil-doers, officially joined Twitter and class="mandelbrot_refrag"> Facebook on Friday. _0"> The spy agency cast the move as an effort to better get out its message and engage directly with the public, but its first Twitter message, sent out shortly before 2 p.m. EDT (1800 GMT), did not indicate there would be major revelations. It said simply: "We can neither confirm nor deny that this is our first tweet." The lack of content did not dampen interest: in less than 90 minutes, the CIA account had nearly 84,000 followers, and that number was climbing fast. The Central Intelligence Agency has long had a public website, and maintains official accounts on YouTube and Flickr, the photo-sharing site. "By expanding to these platforms ( class="mandelbrot_refrag"> Facebook and Twitter), CIA will be able to more directly engage with the public and prov

UPDATE 2-Uber snags $1.2 bln in new funding; seen valued at $18 bln

Uber Inc has raised $1.2 billion from mutual funds and other investors in a funding round valuing the fast-growing rides-on-demand service at $18.2 billion, one of the highest valuations ever for a Silicon Valley startup. Uber Chief Executive Officer Travis Kalanick announced the funding round on Uber's blog Friday. The funding, eclipsed only by the likes of class="mandelbrot_refrag"> Facebook Inc before it went public, is a vote of confidence by investors in four-year-old Uber's growth potential. "Uber is one of the most rapidly growing companies ever, and we believe there are opportunities for continued tremendous growth," Joan Miller, a spokeswoman for Summit Partners, an investor in the funding round, said by telephone. Investors hope the company, which allows users to summon a ride on their smartphones, can expand globally and diversify into logistics. The investors in the round valued Uber "pre-money" at $17 billion, the blog post

UPDATE 1-U.S. FDA approves Biogen's hemophilia A drug Eloctate

The U.S. Food and Drug Administration said on Friday it approved class="mandelbrot_refrag"> Biogen Idec Inc's long-lasting hemophilia A drug, Eloctate, adding another product to the company's nascent portfolio of drugs for non-malignant blood disorders. Hemophilia A is a rare, inherited blood-clotting disorder that can lead to prolonged bleeding, bruising and joint and tissue damage. It is caused by deficient levels in the body of factor VIII, a protein needed to clot the blood.   true       The FDA's ruling followed its approval in March of Biogen's hemophilia B treatment, Alprolix. Biogen developed both drugs with Swedish Orphan Biovitrum AB, or Sobi, and expects the products to form the basis of a new non-malignant blood disorder portfolio. "We see Alprolix and Eloctate as the anchor tenants in a growing franchise," said Douglas Williams, Biogen's head of research and development. "We're in this space to stay." Biogen&

Blackstone seeded hedge fund Sureview Capital shuts down - sources

Sureview Capital, a small hedge fund which received starting capital from one of the industry's most powerful investors, Blackstone Group, shut down last month, people familiar with the matter said on Friday. The fund was founded by John Wu with seed money from Blackstone Alternative Asset Management in 2011 and last reported assets of $427 million on a regulatory filing. At the end of the first quarter Sureview, which specialized in picking class="mandelbrot_refrag"> stocks , listed class="mandelbrot_refrag"> CBS Corp as its biggest position and said it owned shares in class="mandelbrot_refrag"> Yahoo Inc and class="mandelbrot_refrag"> Facebook Inc, all of which suffered losses in March and early April. Sureview, based in Greenwich, Connecticut, did not respond to phone calls seeking comment.   true       The industry sources requested anonymity because class="mandelbrot_refrag"> hedge funds are private