Finance Blog number 1

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.

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April 24, 2012

China official says Proview owns iPad trademark

Filed under: legal, loans — Tags: , , , — Sun @ 10:04 am

Apple Inc. risks losing the right to use the iPad trademark in China, a senior official suggested Tuesday, as a Chinese court was seeking to mediate a settlement between the technology giant and a local company challenging its use of the iPad name.

Yan Xiaohong, deputy director of the National Copyright Administration, told reporters in Beijing that the government regards Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers. His remarks could add to pressure on Apple to find a solution to the standoff.

Yan’s comments followed news that the Guangdong High Court in southern China is seeking to arrange a settlement in the case. In late February, the court began hearing Apple’s appeal of a lower court ruling that favored Proview in the trademark dispute.

“The dispute between Apple and Shenzhen Proview concerning the iPad trademark is going through the judicial process,” Yan said in a news conference carried on the Internet.

But he added that “according to our government’s laws, Shenzhen Proview is still the lawful representative and user of the trademark.”

China has sought to showcase its determination to protect trademarks and other intellectual property, but with hundreds of thousands employed in the assembly of Apple’s iPhones and iPads is unlikely to want to disrupt the company’s production and marketing in China.

Ma Dongxiao, a lawyer for Proview said the company had expected all along to settle with Apple, with the key sticking point being the amount of money involved.

“It is likely that we will settle out of court. The Guangdong High Court is helping to arrange it and the court also expects to do so,” Ma said in a phone interview.

Court officials contacted by phone said they were not authorized to comment on the issue to foreign media.

“Given the wide implications of this case we need to wait to see the final ruling of the court, which will decide the ownership rights for the trademark,” Yan said. “We will proceed with the case in a prudent manner.”

He said commercial authorities that had received complaints about Apple’s use of the iPad trademark were collecting evidence.

“Once the ruling emerges we will handle the case according to the evidence we have,” he said.

Chinese courts often try to mediate agreements out of court. But it is unclear whether Apple is open to that option.

Proview, a financially troubled maker of computer displays and LED lights, says it registered the iPad trademark more than a decade ago. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though the registration was never transferred for China.

Proview’s other worldwide trademarks for the iPad name were owned by another subsidiary of the Proview Group, Taiwan-based Proview Electronics. But the mainland China trademark was registered by Shenzhen Proview.

An Apple spokeswoman, Carolyn Wu, said the company had no new comment on the possibility of a settlement with Proview.

In a statement, Apple reiterated its earlier insistence that it would never “knowingly abuse someone else’s trademarks.”

The statement adds that Proview “still owe a lot of people a lot of money, they are now unfairly trying to get more from Apple for a trademark we already paid for.”

___

Researcher Fu Ting contributed to this report.

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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

April 4, 2012

Muddy Waters: Be wary of Hong Kong listed Chinese companies

Filed under: Uncategorized, finance — Tags: , , , — Sun @ 1:36 pm

For the past two years, Muddy Waters has been the ultimate whistle blower of questionable accounting practices by Chinese companies trading on U.S. and Canadian stock exchanges. Now, the research firm says investors need to beware of Chinese companies trading in Hong Kong.

"There was a propensity for fraudulent Chinese companies to list their shares in the West, but I think that trend has slowed down quite a bit ever since short sellers like Muddy Waters have come onto the scene," Muddy Waters founder Carson Block told CNNMoney during an interview at the Council of Institutional Investors spring conference in Washington, D.C.

"Now we’re starting to hear rumblings out of Hong Kong," Block said. "Could Hong Kong be the next bastion of fraudulent revelations? It’s difficult to say. But investors need to be wary."

He noted that in the last month, Deloitte — one of the Big Four accounting firms — quit as auditor of two Hong Kong-listed Chinese companies.

Boshiwa International, a maker of children’s clothing, and milk formula producer Daqing Dairy Holdings both announced Deloitte’s resignations and said they are looking for replacement firms. Both companies’ shares have been suspended from trading in Hong Kong since mid March, when the accounting firm stepped down.

Deloitte China confirmed it resigned from both firms, but declined further comment.

Sino-Forest sues Muddy Waters for defamation

Meanwhile, Moody’s Investor Services withdrew its rating on Daqing Dairy last week, and issued a negative outlook amid concerns about the company’s financial reporting after Deloitte’s resignation paydayloans.

Block told CNNMoney that his firm will issue a report and a "sell rating" on a Chinese company within a few weeks, but declined to disclose any further details.

Block also said that Muddy Waters has been probing companies "outside the China realm" and will likely take a short position on a non-Chinese company sometime this year. A short position is essentially a bet that a stock will decline.

Muddy Waters made a name for itself last year, after the company accused Chinese timber company Sino-Forest of fraud. The scathing report triggered a massive sell-off in shares of Toronto-listed Sino-Forest before they were eventually suspended, and forced hedge fund high roller John Paulson to book deep losses.

Reports out of Muddy Waters have brought down several other companies including Rino International () and China MediaExpress ().

Muddy Waters’ most recent fraud allegations against Chinese digital market firm Focus Media () initially sparked a sharp sell of in the company’s stock. But shares of Focus Media have recovered since the November report.  

Source

April 2, 2012

Illumina urges shareholders to reject buyout

Filed under: online, technology — Tags: , , , — Sun @ 10:52 pm

Illumina urged its shareholders Monday to reject a sweetened buyout offer from the Swiss drugmaker Roche, saying that the $6.5 billion deal still undervalues the California maker of genetic analysis instruments.

Roche raised its proposed price for Illumina last week, but Illumina CEO Jay Flatley says the offer is still not good enough. He calls the deal “opportunistic” and says his San Diego-based company is poised to deliver better returns through higher sales and profits.

Roche Holding AG did not immediately provide comment on Illumina’s statement.

Illumina shares fell 88 cents, or 1.7 percent, to $51.73 after word of the latest rejection.

Swiss drug company Roche Holding AG proposed to buy Illumina in January for $44.50 per share, or about $5.7 billion. Roche said the deal would strengthen Roche’s position in life sciences diagnostics because its technologies are complementary with Illumina’s.

Illumina’s board unanimously turned down Roche’s offer, saying it was “grossly inadequate” and that shareholders should not tender their stock to Roche.

Last week, Roche raised its offer to $51 per share, or about $6.5 billion, an increase of almost 15 percent.

Earlier Monday, Illumina said that its first-quarter revenue will be about $270 million on strong demand for its research instruments. The estimate tops current Wall Street expectations.

The company also said that it expects its adjusted earnings for the quarter will match of beat current Wall Street expectations. Analysts expect earnings of 31 cents per share on revenue of $258 million, according to a survey by FactSet.

Illumina said the numbers could change by the time it reports its final earnings results later this month.

Illumina makes equipment that biotechnology researchers can use to sequence genes or do other tasks.

Flatley said that during the first quarter, the company’s “book-to-bill” ratio showed that customer orders were outpacing deliveries for the third consecutive quarter. He said more customers are “getting back to work,” and boosting demand.

Illumina’s shares rose sharply after Roche made its initial offer for the company, and the stock is up about 65 percent for the year.

Source

March 30, 2012

JetBlue says crew will stay quiet about incident

Filed under: marketing, technology — Tags: , , , — Sun @ 4:48 pm

JetBlue says the crew of Las Vegas-bound flight 191 _ which had to make an emergency landing in Texas because of the strange and frightening behavior of its pilot _ will remain quiet about the incident.

“We understand and appreciate everyone’s desire to hear directly from the crew regarding their experience, but the crew has decided to decline all media opportunities in order to spend time with their families,” JetBlue Airways Corp. said in a statement Friday.

The flight Tuesday that started in New York proceeded normally for most of the trip. But pilot Clayton Osbon became increasingly incoherent, left the cockpit and later sprinted down the cabin yelling jumbled remarks about Sept. 11 and Iran, documents and witnesses say. Co-pilot Jason Dowd brought an off-duty JetBlue captain who was flying as a passenger into the cockpit to assist and locked the door.

When Osbon tried to re-enter by banging on the door, the co-pilot gave an order through the intercom to restrain Osbon, according to the documents, which don’t mention Dowd by name. Passengers wrestled Osbon to the ground, and Dowd diverted the flight from New York to Amarillo, Texas. No one onboard was seriously injured.

Dowd’s quick thinking and calm management of the emergency landing brought comparisons to `Miracle on the Hudson’ Capt. Chesley Sullenberger. The pilot’s bizarre behavior also drew references to another crewmember’s behavior that JetBlue likely would like to forget.

In 2010, JetBlue flight attendant Steven Slater pulled the emergency chute on a flight after it landed at John F. Kennedy International Airport. He went on the public-address system, swore at a passenger, grabbed a beer and slid down onto the tarmac. He was sentenced to probation, counseling and substance abuse treatment for attempted criminal mischief.

JetBlue is encouraging the public to send messages to the crew of Flight 191 through its blog at http://blog.jetblue.com.

Source

March 27, 2012

Hungary to Hold EU

Filed under: business, mortgage — Tags: , , , — Sun @ 10:56 am

Hungary

March 22, 2012

HP merges printer unit with PC business

Filed under: legal, term — Tags: , , , — Sun @ 2:20 pm

Hewlett-Packard is shaking up its business yet again, combining its printer and personal computer divisions. One of HP’s longest-tenured and most-admired executives is retiring as a result.

HP’s printing group was once its shining star, returning ridiculously high profit margins on ink cartridge sales. But that business stagnated over the past decade and particularly slumped in the last few years. HP’s printing profit fell 10% last year as sales remained flat.

The holiday season was particularly tough. Ink sales fell 6%, office printers fell 5% and consumer printer sales tumbled 15% in the company’s fiscal first quarter, which ended in January.

As it lumps printers and PCs together, HP (, Fortune 500) said that imaging and printing group chief Vyomesh "VJ" Joshi was stepping down. Joshi, the division’s leader for the past decade, served in various roles at HP throughout his 32-year career there. His tenure dates back to the golden years of "Bill and Dave," when Bill Hewlett and Dave Packard still had active roles at the company they founded.

"VJ embodies the spirit of HP and his impact on the company has been tremendous," HP CEO Meg Whitman said in a written statement. "We wish him the very best as he embarks on a new chapter in his life."

After Ann Livermore stepped down as HP’s enterprise chief last year, Joshi was the last remaining top HP executive to have ties to the Bill and Dave era. He is well-respected throughout the industry and had long been considered a superstar executive.

Joshi was forced off of Yahoo (, Fortune 500)’s board in that company’s shakeup last month. He had been a Yahoo director for seven years.

The merging of the printing and PC units means HP Personal Systems Group executive Todd Bradley will now oversee two struggling businesses. HP considered spinning off its PC unit last year. The board later decided that it would hang onto the business-critical but low-margin unit.

The overall PC industry is stuck in neutral, but HP, the world’s largest computer maker, is traveling at high speed in reverse. PC sales fell 3% last year and 15% during the holiday quarter, with consumer computer sales tumbling 25%.

Whitman said on recent conference calls with investors that she hopes to streamline HP’s businesses and ensure that individual business groups work together in the future. She also said that the company’s divisions have been too separate in the past, leading to too much competition within the ranks. 

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March 20, 2012

TaxMasters files for bankruptcy

Filed under: lenders, term — Tags: , , , — Sun @ 11:16 pm

TaxMasters, the Houston-based firm that advertises it can help consumers facing problems with taxes, filed for bankruptcy protection Sunday.

The firm, which had a prominent ad campaign featuring CEO Patrick Cox on numerous cable networks, has already been facing complaints from the attorneys general of Texas and Minnesota, which accused it of deceptive practices.

The complaint from Texas Attorney General Greg Abbott, first filed nearly two years ago, brought a slew of consumer accusations against TaxMasters (). The civil trial in that case finally got underway Monday afternoon when TaxMasters’ request for a continuance was denied.

The Texas charges included unlawfully misleading customers about their service contract terms, failing to disclose its no-refunds policy, and falsely claiming that the firm’s employees would immediately begin work on a case. Sometimes the fact that TaxMasters did not actually start to work on a case until customers paid in full meant that taxpayers missed significant IRS deadlines.

Tax breaks for the unemployed

The complaint from Minnesota Attorney General Lori Swanson, filed in December 2010, alleges TaxMasters got customers to pay advance fees of $2,000 to $8,000 by misstating the help it would provide people with unpaid tax bills. In some cases, the company claimed it could reduce people’s tax bills by up to 90%, but then delivered little or no help, according to the complaint, pocketing the non-refundable deposits.

This complaint was settled in August of last year, with TaxMasters denying any wrongdoing but agreeing to reform its business practices in the state and pay $500,000.

In addition, the Better Business Bureau says it has received more than 1,000 complaints about TaxMasters over the course of the last three years.

The bankruptcy filing said TaxMasters owes creditors between $1 million and $10 million, and that its assets total only $50,000 or less. It did not list its creditors but it said it owes money to between 1,000 and 5,000 people and businesses payday loan.

Robert McKenzie, a tax attorney and partner with Chicago firm Arnstein & Lehr, said this is the third such tax settlement service to go bankrupt recently, following the demise of Roni Deutch and another firm, JK Harris. All three had been actively advertising their services.

"There are certainly reputable people doing this work," said McKenzie. "The problem with the ones that are failing is they’ve budgeted large amounts for advertising, and the intake interviews are done not by tax professionals but by sales people working on commission, and thus making unrealistic promises."

The company’s most recent financial reports show it spent nearly $16 million on advertising in 2010, eating up about 37% of its revenue. Among the networks TaxMasters advertised on was CNN, one of the parents of CNNMoney.

TaxMasters recently restated results to show a $4.7 million loss in 2010, and essentially break-even results in the first quarter of 2011, the most recent quarter for which it has reported results.

McKenzie said that the Internal Revenue Service is willing to settle cases for less than the taxes owed, but that in almost all the cases they end up taking the taxpayer’s home and other assets, in addition to payments out of future earnings. He said almost three-quarters of taxpayers who apply to pay less than they owe have those applications rejected by the IRS.

Beware of tax scams

Calls to Taxmasters and its attorney for comments about the bankruptcy filing and complaints were not immediately returned.

The company’s Web site made no mention of the bankruptcy filing Monday, even though it had signaled a bankruptcy filing was planned in a filing with the Securities and Exchange Commission on Friday.

The bankruptcy filing was made in Houston. 

Source

March 19, 2012

IMF

Filed under: economics, technology — Tags: , , , — Sun @ 8:28 am

International Monetary Fund official Zhu Min said China will avoid an economic hard-landing even as government data showed property prices falling in most of the nation

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