Finance Blog number 1

May 17, 2012

GM to stop advertising on Facebook

Filed under: Crisis, marketing — Tags: , , , — Sun @ 3:12 am

General Motors said Tuesday that it will stop paid advertising on Facebook.

The automaker says it will still be on the social networking site, it just won’t be spending money to buy ads.

"We regularly review our overall media spend and make adjustments as needed," GM said in a statement. "This happens as a regular course of business and it’s not unusual for us to move things around various media outlets."

GM (, Fortune 500) has fan pages for its various brands, such as Buick, Chevrolet and Opel, as well as for General Motors itself. Those pages will continue to be updated, according to the company.

But the social media paid ads simply weren’t delivering the hoped-for buyers, according to a report in the Wall Street Journal Tuesday.

GM had been spending $10 million on paid Facebook ads, according to the Journal report.

A spokesman for GM would not confirm how much money GM spent on Facebook ads cash advance no faxing. Facebook, also, did not immediately respond to a request for comment.

GM’s advertising represents a tiny part of the $3.7 billion Facebook brought in in advertising revenue last year, but the move does indicate that ads placed on the site have proven disappointing for at least one major advertiser.

GM rival Ford (, Fortune 500), meanwhile, says it is accelerating its advertising efforts on Facebook and other social media platforms.

"We’ve found Facebook ads to be very effective when strategically combined with engagement, great content and innovative ways of storytelling," Ford spokeswoman Kelli Felker said in an e-mail.

Facebook will soon launch an initial public offering. 

Source

May 2, 2012

Swiss bank UBS reports 54 pct profit drop for Q1

Filed under: Crisis, loans — Tags: , , , — Sun @ 12:52 pm

Switzerland’s biggest bank UBS AG reported a 54 percent drop in first-quarter net profit for 2012 that it blamed Wednesday on a loss at the investment bank, an accounting charge on its debt and difficult market conditions.

First-quarter net profit fell to 827 million francs ($910 million) from 1.81 billion francs in the same period last year, the bank reported before trading opened in Zurich. The results did not meet analysts’ average estimate for a net profit of 1.2 billion Swiss francs ($1.32 billion).

UBS also offered a somewhat grim outlook for the second quarter of 2012, owing to Europe’s sovereign debt crisis, the U.S. federal deficit and continuing global uncertainties.

“Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely and would have the potential to continue the headwinds for revenue growth, net interest margins and net new money,” the bank reported.

Chief Executive Officer Sergio P. Ermotti said despite the “challenging market conditions” the bank had performed well.

“We improved operational performance across all our businesses, strengthened our leading capital ratios further, reduced risk-weighted assets and remained vigilant on costs,” he said in a statement. “The strong net new money inflows in our wealth management businesses provide further clear evidence of the trust our clients place in UBS.”

It was just the second quarter for the bank under the leadership of Ermotti, who took over in September with the aim of restoring clients’ trust following a case of alleged rogue trading in its investment bank that cost UBS $2 billion. Ermotti pledged to tighten oversight at UBS and restructure the ailing investment banking unit where the trading scandal occurred.

Last month, the specter of a damaging tax evasion case rose again. After resolving a long-running tax probe in the United States with a $780 million fine and the handover of thousands of client files, UBS now faces allegations by former staff in France that it also helped French clients cheat on their taxes.

The bank strenuously denies the allegations and says it will defend itself using “appropriate legal means.”

The first-quarter results for 2012 also were a turnaround from the last quarter of 2011 when the bank, Switzerland’s biggest by market capitalization, posted a net profit of 319 million francs.

Rival Credit Suisse reported a 95 percent drop in first-quarter net profit last week due to writedowns, staff severance costs, bonus payments and the strong Swiss franc.

Source

April 22, 2012

Unauthorized biography spills Simon Cowell secrets

Filed under: Crisis, lenders — Tags: , , , — Sun @ 7:08 pm

He gets colonic irrigations, Botox injections and vitamin drips, and insists on black toilet paper in his home.

A revealing new biography offers intimate _ some might say too intimate _ details about Simon Cowell, along with a portrait of the entertainment mogul’s savvy business side.

“Sweet Revenge: The Intimate Life of Simon Cowell” is written by British journalist and biographer Tom Bower, whose previous subjects include former British Prime Minister Gordon Brown, jailed media mogul Conrad Black and ex-Harrods owner Mohammad al-Fayed.

His latest portrait of power centers on the tanned and brush-cut Cowell, 52, who has gained fame in both Britain and North America as producer and an acerbic judge on TV talent shows including “The X Factor” and “America’s Got Talent.”

Bower says he became fascinated by the story of a middle-aged music producer who struck gold by turning the old-fashioned talent contest into a slick 21st-century phenomenon _ and in the process earned a fortune estimated at 200 million pounds ($320 million) by the Sunday Times Rich List.

The book paints a picture of a man who struggled for years in the music business, spurred on to success out of a desire to prove his detractors wrong.

“He had 20 years _ more than 20 years _ of humiliation,” Bower said. “At school he was a total failure and as a music producer he was a total failure.

“But what he did have was charm and an ability to understand the music business because of all this failure.”

“Sweet Revenge,” published in the U.S. by Ballantine Books on Tuesday, is billed as the first book about Cowell written with the mogul’s participation _ though not his authorization. Bower spent many hours with Cowell aboard his private jet, at his Los Angeles home and on his yacht in the south of France and the Caribbean.

But he says Cowell told some friends and associates not to talk to him. Writing the book became “a cat and mouse game” between him and his subject.

“He clearly wanted his story told properly, but there are parts he didn’t want told and it was up to me to find out about them,” Bower said.

Cowell has stressed that the book was not written with his approval, tweeting: “This book is not written by me. It is unauthorized. The writer is Tom Bower.”

Cowell can’t have enjoyed the revelations in The Sun tabloid, which has been serializing the more salacious bits of Bower’s book.

Among the details: Cowell gets regular colonic irrigations because “it’s so cleansing _ and it makes my eyes shine brighter.” He is put on a drip of vitamins and nutrients for a half hour each week.

He’s not gay, despite long-standing rumors. The book reveals bedroom secrets including a brief affair with former “X Factor” judge Danii Minogue. But Bower says that Cowell isn’t interested in serious relationships.

“He is only interested in women who are uninhibited and uncomplicated,” Bower said. “He is not interested in relationships. He’s a schoolboy my credit score.”

He is, however, generous. Bower says Cowell gave his ex-fiance Mezhgan Hussainy, a makeup artist on “American Idol,” a $5 million Beverly Hills house as a parting gift. Most of his exes have refrained from spilling the beans in the media.

While Britain’s tabloids have focused on Cowell’s sex life, Bower is more interested in the story of money and power, of “business rivalry and the skullduggery.”

At the heart of the book is Cowell’s feud with fellow svengali and former Spice Girls manager Simon Fuller. The pair fell out over the 2001 British musical talent-show, “Pop Idol,” progenitor of “American Idol.” Fuller was listed as creator of the show despite what Cowell said was a verbal agreement to split the credit.

A legal battle between the two men was settled out of court, with Fuller getting the creator credit for “Idol” _ though Bower says he found “overwhelming” evidence that Cowell played a vital role.

Bower said Cowell was “naive and humiliated by Fuller’s dexterity.”

“He didn’t understand the importance of owning a format,” Bower said. “He learnt his lesson.”

He said Cowell became “incensed” by the “created by Simon Fuller” credit on “Pop Idol” and “American Idol,” and vowed to create his own rival show.

The result was singing competition “X Factor,” which had its debut in Britain in 2004 and in the U.S. last fall. Cowell also created “Britain’s Got Talent” and executive produces its U.S. spinoff, “America’s got Talent.”

Cowell’s response to the book, published in Britain on Friday, is so far unknown.

Publicist Max Clifford _ who says Cowell pays him hundreds of thousands of dollars a year to keep stories out of the press _ said he had advised Cowell not to speak to Bower, because it would undo years of carefully protected privacy.

“He knows it was a mistake,” Clifford said.

“For Simon, who has protected his privacy and never, ever spoken about his relationships with anybody, to suddenly be quoted about this, that and the other is to me very damaging.

“Having created an image that’s been hugely successful, to see him damage it like that is sad and disappointing,” Clifford said.

Bower, though, thinks the book’s portrait of Cowell is fairly positive.

While Bower has been openly hostile to some of his previous subjects _ he called Gordon Brown a ruthless bully and Conrad Black a crook _ he has a soft spot for Cowell.

“He’s not a crook,” Bower said. “So far he hasn’t sued me. And it was good fun.

“He doesn’t sit on his laurels. That’s what’s endearing about him. Although he is vain, he is a perfectionist and a professional _ and he understands the business better than most.”

____

Jill Lawless can be reached at: http://twitter.com/JillLawless

Source

March 25, 2012

Japan and Canada to start free trade talks

Filed under: Crisis, mortgage — Tags: , , , — Sun @ 8:08 pm

Japan and Canada agreed Sunday to formally start talks aimed at forging a free trade agreement between the two countries.

If established, the pact would be Japan’s first with a country from the Group of Eight major economies.

Japanese Prime Minister Yoshihiko Noda and his Canadian counterpart, Stephen Harper, said they would also seek to boost economic, energy and security relations between the two countries.

“This is a truly historic step that will help create jobs and growth in both countries,” Harper told a joint news conference. “The negotiations we are announcing today complement Canada’s ambitious trade agenda.”

Japan is Canada’s fourth-largest export market, and a free trade deal could potentially increase that “by as much as two-thirds,” Harper said.

Japan’s main exports to Canada are cars, machinery and other industrial products. Its chief imports from Canada are natural resources and agricultural products including soybeans and pork. Both countries are seeking to join the U.S.-led trans-Pacific multilateral trade pact known as TPP. Japan’s highly protected farm sector is seen as a main obstacle.

Noda stressed the importance of accelerating private-sector cooperation on the trade of natural gas and other energy resources.

Japan is struggling to secure a stable supply of energy resources due to concerns about a serious power crunch stemming from the nuclear crisis set off by last year’s massive earthquake and tsunami paydayloans.

The March 11, 2011, disasters destroyed power and cooling functions at the Fukushima Dai-ichi nuclear power plant, sending three reactors into meltdown and forcing 100,000 people to relocate.

The crisis also raised public concerns and opposition to restart reactors idled for regular safety checks. Only two of Japan’s 54 reactors are currently running, with all of them expected to go offline by the end of April if none are resumed by then.

During the talks Sunday, Japan and Canada also agreed to strengthen cooperation in defense and security in the Asia-Pacific region, Noda said. The two leaders are heading to Seoul to attend this week’s Nuclear Security Summit.

“We reaffirmed the importance to tackle outstanding global issues, particularly the issues surrounding North Korea and others in the Asia-Pacific region, as we cooperate as partners,” Noda said.

North Korea says it will launch an observation satellite on a long-range rocket next month. Japan shares fear by the U.S. and South Korea that Pyongyang wants to test long-range missiles that could eventually deliver nuclear warheads.

Source

March 6, 2012

Oil below $107 after US, Israel meet on Iran

Filed under: Crisis, lenders — Tags: , , , — Sun @ 8:52 am

Oil prices hovered below $107 a barrel Tuesday in Asia after U.S. and Israel leaders met to discuss growing tensions over Iran’s nuclear program.

Benchmark oil for April delivery was down 2 cents to $106.70 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at $106.72 per barrel in New York on Monday.

Brent crude was steady at $123.80 per barrel in London.

After a meeting Monday in Washington, President Barack Obama and Israeli Prime Minister Benjamin Netanyahu showed no sign of give on competing ways to resolve the crisis. Obama urged pressure and diplomacy to prevent Iran from getting a nuclear bomb while Netanyahu emphasized his nation’s right to a pre-emptive attack.

The U.S., Europe, Israel and other nations fear that Iran may be building a nuclear weapon. Iran, the world’s third-largest oil exporter, denies the charge.

“The Iranian fear premium didn’t change in our view,” energy consultant Ritterbusch and Associates said in a report.

Crude has risen from $96 last month amid investor concern that a military conflict aimed at destroying Iran’s nuclear capabilities would disrupt global oil supplies. Analysts say Saudi Arabia and other oil producers do not have enough spare capacity to quickly make up for Iran’s 4 million barrels a day of crude.

Analysts estimate crude would jump to $150 in the wake of an attack by Israel on Iran’s nuclear operations.

“The risk of a supply disruption due to geopolitical factors is uncomfortably high and increasing,” said Richard Soultanian of NUS Consulting.

In other energy trading, heating oil fell 0.6 cent to $3.21 per gallon and gasoline futures were steady at $3.26 per gallon. Natural gas fell 0.5 cent at $2.35 per 1,000 cubic feet.

Source

February 24, 2012

Three St. Louis-area groups win $230M in federal development tax credits

Filed under: Crisis, legal — Tags: , , , — Sun @ 12:20 am

Two St. Louis-area organizations, and a third group with a large office in Clayton, received a combined $230 million in federal New Markets Tax Credits, the U.S. Department of Treasury said Thursday.

The credits are designed to draw investment in businesses and real estate projects in low-income neighborhoods. Recipients - typically banks and community development groups - offer the credits as an incentive to investors in projects in qualifying Census tracts. They are worth 39 cents on the dollar, so the $230 million equates to $89.7 million.

In past years in St. Louis, these credits have been used to help fund everything from downtown office projects to equity investments in local businesses.

Recipients with local ties include:

U.S. Bancorp Community Development Corp., which is based in St. Louis but works on tax-credit financing nationwide, received a $100 million award. St. Louis Development Corp., the city-run development agency, received $50 million. Advantage Capital Community Development Fund, which is based in New Orleans but has a large office in Clayton, received $80 million.

The funds to not have to be used in a recipient’s home region - though they likely will be in the case of SLDC - and projects here have drawn New Markets credits from national lenders in the past.

This year, the awards include a set-aside to finance “healthy food” projects in so-called “food deserts” - areas with little access to quality groceries. One-fourth of SLDC’s award must go towards healthy food financing, and one-fifth of U.S. Bancorp’s.

All told, the Treasury Department awarded $3.6 billion in New Markets credits on Thursday. It received $26.7 billion worth of applications. President Obama is seeking $5 billion for New Markets Tax Credits in his 2013 budget.

Source

February 4, 2012

Stingy bankers stall housing market, economist says

Filed under: Crisis, money — Tags: , , , — Sun @ 12:52 pm

Tightwad lenders are prolonging the housing bust and killing home sales, says the National Association of Realtors’ chief economist.

“If credit standards just went back to normal, you’d have a 15 to 20 percent more sales right away,” said Lawrence Yun, who spoke to the St. Louis Association of Realtors today.

Yun thinks it’s too hard to get a loan these days. Before the housing boom, and the subprime mortgage debacle, the typical person getting a loan backed by Fannie Mae loan had a credit score of 720. Now it’s 762.

The FHA used to have a typical score of 650. Now it’s 698, says Yun. The FHA is the government agency designed to back loans to people with minor credit blotches and little money for down payments.

It’s not all the bankers fault, Yun acknowledged. They’re scared that Fannie Mae and Freddie Mac will leave them holding a bag of bad mortgages.

Fannie and Freddie buy mortgages from lenders. The mortgage giants hold some of them, and package others into securities for sale to investors. After the housing bust, Fannie and Freddie were holding so many failing mortgages that the government had to nationalize the companies to prevent collapse.

Now Fannie and Freddie are trying to force the banks that originally made those mortgage to buy many of them back, claiming that the banks misrepresented the loans.

That’s frightened lenders, who could face gigantic losses. To stop it from happening again, bankers say they’re insisting that home buyers meet standards even higher than those set by Fannie and Freddie.

That shows up in the default figures. Of loans made in 2009, after the bust, 1.2 percent were in default after 18 months, Yun noted. On those made in 2007, 29 percent went bad.

The dilemma points out the conflicting goals of the government-run mortgage giants. On one hand, they’re supposed to keep mortgages flowing smoothly to aid the economic recovery. On the other, their government managers want to limit losses to the taxpayers. The government expects the Fannie and Freddie bailouts to cost $124 billion through 2014.

Lending could get tougher later this year if federal agencies go ahead with proposals to require borrowers to place 20 percent down on a home to get the best mortgage rates, Yun noted

Stingy lending and high unemployment are blocking what, by other measures, looks like a housing market ripe for a turnaround.

Housing prices are down and mortgages rates are near historic lows. “These are the best affordability conditions ever,” says Yun.

Yun suspects that pent-up demand for homes is building. America adds about 3 million people a year, and housing construction has slowed dramatically. Young people have moved back home, or taken in roommates, and they’ll want their own places. Rents are also rising, making home ownership look better.

As for the future: “Many many metrics point to the fact that it can’t get any worse than this,” said Yun.

Source

January 25, 2012

Obama Calls for Higher Taxes on Wealthy - Bloomberg

Filed under: Crisis, mortgage — Tags: , , , — Sun @ 7:20 pm

President Barack Obama, offering an election-year prescription to spur the economy, said the wealthiest Americans should pay more taxes in the name of fairness, to bring down the deficit and ensure those trying to make ends meet don

January 22, 2012

Italian divers find body in cruise ship corridor

Filed under: Crisis, economics — Tags: , , , — Sun @ 1:36 pm

The body of a woman wearing a life vest was recovered by Italian coast guard divers Saturday from a narrow underwater corridor of the capsized cruise ship Costa Concordia, raising the death toll to 12 in the week-old accident that has sent some light fuel spilling into the Mediterranean off Tuscany.

Coast Guard Cmdr. Cosimo Nicastro told The Associated Press that the victim was found during a particularly risky inspection of an evacuation staging point at the ship’s rear.

“The corridor was very narrow, and the divers’ lines risked snagging” on objects in the passageway, Nicastro said. To permit the coast guard divers to get into the area, Italian navy divers had preceded them, setting off charges to blast holes for easier entrance and exit, he said.

The woman’s nationality and identity were not immediately known.

Before the corpse was found, 21 people were listed as missing. One of the women on the list is a Peruvian crew member, the others are passengers.

Three bodies were found in the waters near the ship in the first hours after the accident’ since then the rest of the victims have all been found inside the Concordia, apparently unable to get off the ship during a chaotic evacuation via lifeboats and later by helicopters. Some survivors jumped off and swam to safety.

The Concordia hit a reef and ran aground on Jan. 14, while passengers dined, about two hours after the ship had set sail from the port of Civitavecchia on the Tyrrhenian Sea. Costa Crociere has said the captain had deviated without permission from the vessels in an apparent maneuver to sail close to Giglio, a Tuscan island, to impress passengers aboard.

Search and rescue efforts for survivors and bodies have meant that an operation to remove heavy fuel in the Concordia’s tanks hasn’t yet begun, although specialized equipment has been standing by for days.

On Saturday, light fuel, apparently from machinery aboard the capsized Costa Concordia, was detected near the ship.

But Nicastro said there was no indication that any of the nearly 500,000 gallons (2,200 metric tons) of heavy fuel oil has leaked from the ship’s double-bottomed tanks. He said the leaked substance appears to be diesel, which is used to fuel rescue boats and dinghies and as a lubricant for ship machinery.

There are 185 tons of diesel and lubricants on board the crippled vessel, which is lying on its side just outside Giglio’s port. Nicastro described the light fuel’s presence in the sea as “very light, very superficial” and appearing to be under control.

Although attention has been concentrated on the heavy fuel oil in the tanks, “we must not forget that on that ship there are oils, solvents, detergents, everything that a city of 4,000 people needs,” Franco Gabrielli, the head of Italy’s civil protection agency, told reporters in Giglio.

Gabrielli, who is leading rescue, search and anti-pollution efforts for the Concordia, was referring to the roughly 3,200 passengers and 1,000 crew who were aboard the cruise liner when it ran into the reef, and then, with sea water rushing into a 70-meter (230-foot) gash in its hull, listed and finally fell onto its side.

Considering all the substances aboard the Concordia, “contamination of the environment, ladies and gentlemen, already occurred” when the cruise liner capsized, Gabrielli told a news conference.

Vessels equipped with machinery to suck out the light fuel oil were in the area, officials told Italian TV.

Earlier on Saturday, crews removed oil-absorbing booms used to prevent environmental damage in case of a leak. Originally white, the booms were grayish.

Divers resumed their search of the wreckage Saturday after data indicated the cruise ship had stabilized in the sea off Tuscany. Italian news reports said that the divers were also trying to locate the captain’s safe, in case it might contain documentation useful to the criminal probe.

The Italian captain, Francesco Schettino, is under house arrest for investigation of alleged manslaughter, causing a shipwreck and abandoning the ship before all were evacuated. Schettino insists he helped coordinate the evacuation from Giglio’s docks after leaving the ship when the Concordia lurched to one side.

The search had been suspended Friday after the Concordia shifted, prompting fears the ship could roll off a rocky ledge of sea bed and plunge deeper into the sea. An abrupt shift could also cause a leak in the Concordia’s fuel tanks, polluting the pristine waters around Giglio, part of a seven-island Tuscan archipelago.

Source

January 17, 2012

Strikes hit Athens as debt inspectors return

Filed under: Crisis, finance — Tags: , , , — Sun @ 4:36 pm

Strikes and demonstrations against Greek austerity measures hit the capital Athens on Tuesday, as international debt inspectors returned to decide whether the country’s reforms are strong enough for it to secure a vital bailout.

The officials from the European Union, European Central Bank and International Monetary Fund, which are lending money to Greece to keep it from bankruptcy, are expected to press the government for faster cost-cutting reforms.

Greece’s continued access to bailout loans depends not only on delivery on its austerity promises but also on negotiations with private creditors on a bond swap deal aiming to cut its debt by euro100 billion ($127 billion). It needs to get an agreement soon if it is to secure more rescue loans, with a bond repayment of euro14.5 billion due in late March.

Some 10,000 protesters took part in rallies in central Athens over potential pay cuts in the recession-battered private sector. Anti-austerity strikes in the capital disrupted public transport and other services. Journalist unions also launched a 48-hour strike.

Police said a plain-clothed officer from the anti-terrorism division was beaten and seriously injured by a group of some 30 protesters who took his handgun. The rally was otherwise peaceful.

Under government pressure, unions and employers are due to launch talks Wednesday to explore ways of slashing labor costs. Lower-level members of the debt of the debt inspection team started the talks in Athens on Tuesday, with the mission chiefs due Friday.

Meanwhile, Greece saw its borrowing rates ease marginally in a bill auction on Tuesday. Unable to issue long-term debt due to untenably high borrowing interest rates of 33 percent, the country maintains a market presence through regular treasury bill auctions.

The public debt agency said it raised euro1.625 billion ($2.06 billion) in a sale of 13-week treasury bills, an interest rate of 4.64 percent, compared with 4.68 percent in the last such auction in December.

Demand for the bills was 2.90 times the amount on offer, roughly the same as last month.

Source

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