Days after the Conservative government introduced its copyright reform bill in June 2010, Canadian Heritage Minister James Moore spoke out in support of the legislative package by notoriously labeling critics as
BlackRock president Robert Kapito is walking the firm’s talk.
Kapito, who helped found the world’s largest asset management firm, now has about 70% of his investment assets in dividend-paying global companies, and 30% in high-yield corporate bonds.
Those are both cornerstones of BlackRock’s new "Investing in a New World" initiative, which encourages investors to get out of idle cash and find assets that generate income in a slow-growth, low-rate environment.
Americans had a record $10 trillion deposited in their bank accounts at the end of 2011, noted Kapito. And with the Federal Reserve holding interest rates near historic lows, that cash is earning virtually nothing.
"People need to rethink the cost of cash, and think about income," said Kapito. "They’re worried they don’t earn enough and won’t have enough to retire on, but the longer they sit in cash, the longer they’ll have to work and they won’t be able to retire when they want to."
Century-old IBM hits fresh all-time high
Kapito said investors are much better off investing in dividend-paying stocks, which return between 3% and 5% a year, and so-called junk bonds, which yield between 5% and 6%. Both offer better returns than Treasuries, he added. The 10-year government note currently pays only about 2%.
High-yield bonds have been extremely popular among income-hungry investors this year. BlackRock’s iShares iBoxx High Yield Corporate Bond ETF () has raked in more than $3 billion so far in 2012, almost as much at the total amount of assets it brought in during all of 2011.
For dividend-paying stocks, Kapito said investors can gain exposure through individual companies, like AT&T (, Fortune 500), Pfizer (, Fortune 500), Verizon (, Fortune 500) and Johnson & Johnson (, Fortune 500), or buy shares of an ETF like the iShares High Dividend Equity Fund (), which launched last year and includes all of those companies and others like Procter & Gamble (, Fortune 500), Merck (, Fortune 500) and Intel (, Fortune 500).
Kapito said he also likes to invest in municipal bonds, particularly those issued in his current hometown of New York City, since those yield about 4% and are exempt from income taxes.
The chairman and chief executive of American Express Co. received a compensation package valued at $22.5 million for 2011, a 38 percent increase from a year earlier, according to an Associated Press analysis of a regulatory filing.
The company credited Kenneth Chenault and his management team for delivering revenue and profit growth, and gaining market share over the past two years.
The executive, who has been chairman and CEO since 2001, received $16.3 million in compensation in 2010.
Chenault, 60, received a base salary of $2 million, up 3 percent from the previous year, according to documents filed Friday with the Securities and Exchange Commission.
The executive also received a cash bonus of $2 million, unchanged from 2010.
But the bulk of Chenault’s compensation hike came in the form of stock awards, which were worth about $15.3 million at the time they were granted _ a sevenfold increase from $2.1 million worth of stock awards the year before.
Chenault also received option awards valued at about $2.2 million on the day they were granted, down 76 percent from $9.2 million a year earlier.
His other compensation declined 7 percent to about $1.02 million, and included $570,000 in company contributions to Chenault’s defined contribution plans; $395,439 for perks and other personal benefits; $53,458 in dividends and equivalents; and, $3,939 in life insurance.
Even with high unemployment and continued doubts about the strength of the economy, credit card use has been on the rise.
New York-based American Express, which caters to a more affluent customer than its peers, saw its 2011 profit climb to $4.94 billion, an increase of 22 percent from the year before. Full-year revenue rose 9 percent to $29.96 billion.
Shareholders saw the company’s stock price rise about 10 percent last year. The stock closed Friday at $52.99.
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive’s stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
The global economy faces
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U.K. house prices held their value for a second month in February, boosted by a seasonal increase in demand and a rush to beat the expiration of a property-tax exemption, Hometrack Ltd. said.
The average cost of a home in England and Wales was unchanged from January and 1.4 percent lower than a year earlier, the London-based property research company said in a report today. The number of potential buyers registering with estate agents rose 18 percent over the month, the largest gain for five years.
The figures partly reflect people looking to take advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home for less than 250,000 pounds ($396,000) before it ends next month. Hometrack said the supply-demand balance suggests property prices will resume their decline in the coming months as banks restrict lending and Britons are squeezed by government budget cuts and rising unemployment.
The new fund designed to spur science startups in Missouri has been declared unconstitutional by a judge in Cole County.
Circuit Judge Dan Green tossed out the Missouri Science and Innovation Reinvestment Act (MOSIRA) in a ruling Tuesday morning, saying that the way it was approved by lawmakers in last fall’s special legislative session violated the state constitution.
The measure would have dedicated some new tax revenue from science and technology companies in the state for a fund to help launch startups in those industries. Gov. Jay Nixon had proposed putting $4 million into the fund in his next budget.
But Green ruled that the bill approving it violated state law because it included a “contingency clause” saying it couldn’t go into effect unless a separate tax credit reform bill was also passed. That bill died in the General Assembly.
Right-to-Life groups that have long opposed MOSIRA over concerns that it could fund stem cell or human cloning research filed suit in December, and Green sided with them.
“Missouri Roundtable For Life is gratified that Judge Green has upheld the rule of law and protected the taxpayers and citizens of Missouri from state officials implementing an unconstitutional law,” said Fred Sauer of Missouri Roundtable For Life. “We are dedicated to ensuring that Missouri citizens understand all the details of the MOSIRA scheme, so that politicians and their special interest cronies will never try this again.”
MOSIRA has long been a top priority of the state’s high-tech and biotech industries, who say Missouri needs funds to invest in startups to compete with other states and grow jobs here. They have pushed the bill for several years now and won votes in both houses, only to see it die.
“It’s disappointing,” said Donn Rubin, president of the St. Louis biotech trade group BioSTL. “What’s frustrating is that something that is so broadly supported gets caught up in unrelated struggles over other issues like tax credit reform.”
While the ruling puts MOSIRA on ice for this year, it’s not clear what will happen next.
State officials could appeal the ruling - a spokesman for Gov. Jay Nixon did not immediately return calls seeking comment. Or a new version of the bill could be filed in the General Assembly. If passed on its own, it would not include the “contingency clause” that Green struck down.
But Senate Pro Tem Rob Mayer (R-Dexter) told the Kansas City Star that a new bill was unlikely to succeed without broader tax credit reform.
“That was true during the special session and that’s true now,” he said.
Read more here: http://midwestdemocracy.com/articles/missouri-judge-rules-mosira-unconstitutional/#storylink=cpy
Chinese Vice President Xi Jinping is wrapping up a pivotal four-day visit to the United State with a daylong series of events in Los Angeles with his American counterpart Joe Biden.
China’s soon-to-be leader met with Gov. Jerry Brown on Thursday and toured a shipping terminal at the giant Port of Los Angeles.
The visit was a reminder of China’s huge footprint at the busiest port in the United States. Nearly 60 percent of the imports moving through the Port of Los Angeles come from China, including $120 billion worth of computers, TVs, sneakers and other goods last year
On Friday, Biden and Xi start with a China trade forum in downtown Los Angeles, followed by a luncheon and school visit to meet children learning Mandarin. They’ll end the day with a governor’s forum at Disney Hall.
Xi’s U.S. tour comes at a politically challenging time in U.S.-China relations, with the White House sending stern messages on currency and trade policies and Republican presidential candidates claiming President Barack Obama isn’t doing enough to keep America competitive with the Chinese economy.
The Asian power sells four times as many goods to the U.S. as the United States sends in return to China. The U.S. shipped $13.5 billion in exports to China through the Los Angeles port last year.
In a carefully scripted event, Xi took a short walking tour through the China Shipping terminal with Brown and Mayor Antonio Villaraigosa. The facility sprawls over nearly 100 acres.
“We’re not just growing our ports, but we’re greening our ports,” Villaraigosa told Xi.
“When I heard that this is an environmentally friendly green port, I felt that this was a major achievement,” Xi later told a crowd in a brief statement after his stroll with Villaraigosa.
“This is a solid foundation for future U.S.-China trade and economic cooperation,” he said.
As with his previous travels, Xi was focusing on forging relationships.
Xi spent the morning Thursday in Iowa, where officials from the U.S. and China signed a five-year deal to guide discussions on food security, food safety and sustainable agriculture.
China became the top market for U.S. agricultural goods last year, purchasing $20 billion in U.S. agricultural exports, according to the U.S. Department of Agriculture.
Much of Xi’s visit, which began earlier this week in Washington, D.C., has been focused on agriculture. The strategic cooperation agreement signed Thursday outlines mutual goals and responsibilities of each nation.
“It charts the course and gives us a guiding document that we can reference and, over time, refine and improve,” said Scott Sindelar, the agricultural minister counselor at the U.S. embassy in Beijing, who attended the Des Moines conference.
According to the USDA, the value of U.S. farm exports to China supported more than 160,000 American jobs last year across a variety of business sectors.
U.S. Secretary of Agriculture Tom Vilsack said the two nations will have to work together to help feed a growing global population.
“We have the responsibility and opportunity to work together to address the causes of global hunger that effect more than 925 million people. Current populations trends mean that we must increase agricultural production by 70 percent in the year 2050 to feed nearly 9 billion people,” he said.
Not everyone celebrated the vice president’s arrival. The California Fair Trade Coalition, a San Francisco-based nonprofit that supports expanding trade while promoting economic justice, issued a statement calling on Brown to “address China’s predatory trade practices.”
“The economic potential for trade with China is massive, but if they aren’t forced to level the playing field, this can only be a losing proposition for U.S. workers,” said coalition director Tim Robertson.
After three days of delays, Greek coalition leaders began crucial debt talks Wednesday with the prime minister to review a draft deal on steep cutbacks demanded by creditors in return for a euro130 billion ($170 billion) bailout.
Leaders of three parties backing the three-month-old coalition are under intense pressure to accept the new austerity demands and shield the country from a looming bankruptcy.
Their decisions will be announced at a meeting with Prime Minister Lucas Papademos, after the parties were handed a 50-page English-language draft agreement, drawn up with international debt inspectors late Tuesday.
Athens has already accepted a demand to fire up to 15,000 workers in the public sector in 2012, but is under pressure to impose deeper cuts, including reductions in pension payments and the minimum wage.
A disorderly bankruptcy by Greece would likely lead to its exit from the eurozone, a situation that European officials have insisted is impossible because it would hurt other weak countries like Portugal, Ireland and Italy.
It was still not clear whether the parties _ the majority Socialists, main rival conservatives, and small right-wing LAOS _ would accept the austerity demands, particularly ahead of national elections provisionally set for late April.
“Austerity measures are like shoes that are too tight. Sooner or later, you want to kick them off,” LAOS leader George Karatzaferis was quoted as saying by state TV.
The coalition talks have been repeatedly postponed this week to make time for exhaustive negotiations with representatives of the European Union, the European Central Bank and the International Monetary Fund, on whose approval the continued flow of Greece’s vital rescue loans depends.
Without the bailout, Greece would not have enough money to pay off a big bond redemption payment due on March. 20, triggering a default that risks sending shockwaves throughout financial markets and the global economy.
As anger mounts in Greece at the prospect of further economic pain, patience is running out abroad.
German Chancellor Angela Merkel’s spokesman said Greece must swiftly return to a sustainable, viable path.
“This is not a question one can take a lot of time to tackle,” Steffen Seibert said. “It is important that the negotiations now come to an end.”
Late Tuesday, Greece’s private creditors signaled progress on a separate, linked agreement that would cut the country’s privately held debt load by 50 percent, or some euro100 billion ($131 billion).
The intention is to ensure that Greece’s long-term debts are sustainable. Banks, pension and hedge funds and other private sector holders of Greek debt are expected to swap their current bonds for new ones worth 50 percent less than the original face value, with longer repayment terms and a lower interest rate. They are also expected to get a euro30 billion payment as part of the bond swap deal.
“We face crucial decisions … that will determine the country’s course in coming years,” Deputy Finance Minister Philippos Sachinidis told Parliament. “These days are among the most crucial of our post-World War II history.”
The EU, ECB and IMF, known collectively as the “troika”, have demanded the additional measures which they say will improve Greece’s competitiveness and economic stability, as well as cuts in health, welfare and defense spending cash advance no fax.
Labor Minister Giorgos Koutroumanis warned Parliament last week that a demanded reduction in the euro751 ($985) minimum monthly wage would quicken the Greek economy’s contraction and hit the revenues of struggling pension funds that have already lost euro20 billion ($26 billion) since 2009.
But Athens has minimal ground for maneuver. Without the rescue loans, the country will default on its massive debts in March, when it faces a euro14.5 billion ($19 billion) bond redemption.
Greece has been kept solvent since May 2010 by payments from a euro110 billion ($145 billion) international rescue loan package. When it became clear the money would not be enough, a second bailout was decided last October.
Stocks advanced Wednesday, while the euro was trading near two-month highs, as global markets were hopeful a deal would be struck in Athens. Greek shares closed 0.9 percent higher.
“We are finally approaching the endgame of the Greek talks,” said Gary Jenkins, managing director at Swordfish Research. “Ultimately it is difficult to see how they can do anything other than agree a deal. After all, the alternative is a disorderly default which could lead to a much deeper economic depression and potential civil unrest.”
If a deal is struck, Papademos and Finance Minister Evangelos Venizelos will brief the rest of the 17-nation eurozone. That meeting of European finance ministers could happen as soon as Thursday in Brussels, according to officials.
Provided political leaders accept the demanded austerity, Greek officials say a cabinet meeting will approve the deal, likely later Wednesday. Parliament will then have to vote on the agreement over the weekend.
Ratification should prove simple provided all three coalition partners back the deal, as they control a combined 252 of Parliament’s 300 seats _ enough to carry the vote even if there is a limited backbencher rebellion.
Coalition parties remain at odds over when to call a general election _ initially planned for this month when the coalition was formed _ as they face an increasingly hostile public suffering from a fifth year of recession.
The Socialists say Papademos should govern for two more years, while the conservatives want elections in April.
Some 91 percent of Greeks believe the coalition government is taking the country in the “wrong direction,” according to a February tracking poll published Wednesday in Greek daily Kathimerini.
Support for the Socialists, who won a landslide election victory in 2009, has dropped to 8 percent, while the neo-Nazi Golden Dawn group has attracted 3 percent support _ enough to achieve representation in parliament, according to Public Issue survey. Conservative New Democracy led with 31 percent, which is not enough to form a government on its own. Sampling data was not available.
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