Facebook plans to simplify privacy settings

Facebook plans to simplify privacy settings

(NEW YORK) Facebook is overhauling its privacy controls over the next several weeks in an attempt to simplify its users’ ability to control who sees the information they share on the site.

Privacy has been a central, often thorny issue for Facebook because so many people use it to share personal information with their friends and family and beyond.

But as the five-year-old social networking service has expanded its user base and added features, its privacy controls have grown increasingly complicated.

The Palo Alto, California-based company said on Wednesday that the new settings will give people greater control over what photos, updates and personal details they share with their friends, family and strangers on Facebook and, eventually, the wider Internet.

To make the settings easier, Facebook is consolidating its existing six privacy pages and more than 30 settings onto a single privacy page. It will also standardise the options for each setting so the choices are always the same, something that hasn’t always been the case.

That means that for various pieces of content, users will be able to click on a lock icon to choose whether to show it to everyone, only their friends, friends of friends, members of professional or school networks or people on a customised list.

Previously, users had to navigate page after page to exclude, if they want, bosses or co-workers from seeing their photo albums, status updates or shared links.

And because the privacy settings were dispersed on different pages, even after making a profile visible to friends only, the photos on that profile could remain public.

Facebook’s chief privacy officer, Chris Kelly, said in a conference call with reporters that the changes don’t have anything to do with advertising or the information Facebook is going to make available to advertisers.

Rather, he said, the site wants people ‘to be able to share information with as many or as few people as they choose’.

One of Facebook’s most notable privacy mishaps was a tracking tool called ‘Beacon’, which in late 2007 caught users off- guard by broadcasting information about their activities at other websites, including their purchase of holiday gifts for those who could see the information. The company ultimately allowed users to turn Beacon off.

Other changes, too, have often met with user uproar. Earlier this year Facebook let its users vote on the site’s guiding principles after tens of thousands joined online protests over who controls the information they share on the site.

To prevent another backlash, Facebook will gradually roll out the latest changes. Facebook will start by testing them out on small groups of users and tweak the final version of the controls based on feedback. Facebook said it would take more than three weeks to reach every user.

‘They are learning how to listen carefully to their users,’ said Jules Polonetsky, co-chairman and director of the Washington-based Future of Privacy Forum and former chief privacy officer at AOL. He added that Facebook has learned from the past that suddenly making big changes, whatever they are, has not been the most effective approach.

The privacy changes come as Facebook tries to become a broadly used destination, competing not just with other social networks like Twitter and MySpace but also more established hubs like Google and Yahoo.

To do this, Facebook needs its 200 million-plus users to share content and interact with more people than their close friends and families.

The site will soon let users assign different privacy settings to each piece of information they make available, including photos, contact information and work info, as well as status updates, links and photos. — AP

Source : Business Times - 03 July 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

AIG has ‘excellent chance’ of repaying govt: CEO

AIG has ‘excellent chance’ of repaying govt: CEO

(NEW YORK) American International Group Inc, the insurer bailed out by the US, has an ‘excellent chance’ of repaying the government, chief executive officer Edward Liddy said on Tuesday at the company’s annual meeting.

AIG said last week it would reduce its debt under a Federal Reserve credit line by US$25 billion by handing over stakes in two life insurance units that operate outside the US. The New York-based company has tapped about US$40 billion from the line.

AIG has received four bailouts, totalling US$182.5 billion, after agreeing in September to turn over a majority stake to the US when the company was overwhelmed by losses on bad bets tied to the US housing market. In addition to a US$60 billion credit line, the rescue includes US$52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as US$70 billion.

‘We believe there is an excellent chance that we can repay the government,’ Mr Liddy said.

Tuesday’s meeting, previously scheduled for May 13, had been postponed as the trustees overseeing the US stake sought newcomers for the board. Mr Liddy has said that he plans to step down from the board and that the chairman and CEO posts should be split. — Bloomberg

Source : Business Times - 02 July 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

AIG signals more losses on derivatives sold to banks

AIG signals more losses on derivatives sold to banks

(NEW YORK) American International Group Inc said the risk of losses on derivatives sold to European banks may last ‘longer than anticipated’ if the contracts aren’t terminated.

AIG’s new board reflects the muscle wielded by federal authorities since taxpayers ponied up billions of dollars to keep the insurer afloat.

‘Given the size of the credit exposure, a decline in the fair value of this portfolio could have a material adverse effect on AIG’s consolidated results,’ the New York-based insurer said on Monday in a regulatory filing updating its 2008 annual report.

Meanwhile, AIG set to pad out its shrinking board yesterday when a new slate of directors stood for election at its annual meeting.

The nominees will help rebuild a board decimated in the past year by seven resignations, one retirement and three other directors not standing for re-election.

The meeting, to be held on Wall Street, will be the first public opportunity for shareholders to vent frustration since the insurer’s financial implosion last year.

Shareholders were all but wiped out as AIG recorded US$99 billion in losses last year, largely stemming from a financial product unit’s foray into risky derivatives. Shares have plummeted to just above US$1 following the dilutive effect of the government’s move to take majority ownership.

AIG had delayed its annual meeting, usually held in May, to allow time to reshuffle directors. The board that emerges will feature many new faces.

Apart from George Miles and Morris Offit, who have served as directors since 2005, the 11-member board will have been entirely elected within the last year.

Joining the board since 2008, were Suzanne Nora Johnson, a former Goldman Sachs vice-chairman; Dennis Dammerman, former General Electric Co finance chief, and Ed Liddy, chief executive and chairman, although he plans to stand down as soon as successors are found. The rest of the board will be comprised of nominees: Harvey Golub, Laurette Koellner, Christopher Lynch, Arthur Martinez, Robert S Miller and Douglas Steenland.

The new board reflects the muscle wielded by federal authorities since taxpayers ponied up billions of dollars to keep AIG afloat. Trustees appointed to have oversight of the government’s 80 per cent stake in AIG wanted to shake up the board to raise corporate governance standards, they said last month.

At least seven of the new directors were recommended by either the US Treasury or the trustees.

In a May statement, Mr Liddy said, ‘adding these individuals to the AIG Board will help AIG achieve its goals of maximising the value of AIG’s core businesses and repaying US taxpayers.’ Mr Dammerman, tapped by government officials to join AIG’s board last November, is leading the search for a new chairman and CEO.

AIG is to hold the shareholder meeting at its 72 Wall Street building, adjacent to 70 Pine Street headquarters. It recently agreed to sell both buildings, although it still occupies them for now.

Alongside prime real estate sales, AIG has been trying to find buyers for many of its businesses around the world. It needs to raise enough to pay off some US$83 billion in federal loans.

Last week AIG said it had finalised a deal to give the New York Federal Reserve stakes in two large life insurers, a development expected to reduce the debt eventually by about US$25 billion.

The units are being positioned for initial public offerings, as is AIG’s large global property-casualty division, AIU Holdings. Other AIG asset sales have included much of its stake in reinsurer Transatlantic, a US personal lines business and other units in Switzerland, Mexico, Thailand and Russia. — Bloomberg, Reuters

Source : Business Times - 01 July 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Worst over for US Treasuries, say dealers

Worst over for US Treasuries, say dealers

Benchmark 10-year note yield seen finishing year little changed at 3.58%

(NEW YORK) Wall Street’s largest bond-trading firms say that the worst may be over for investors in Treasuries after government securities posted their biggest first-half losses in at least three decades.

The 16 primary dealers, which trade directly with the Federal Reserve and are obligated to bid at Treasury auctions, forecast that the benchmark 10-year note yield will finish the year little changed at 3.58 per cent, after rising from 2.21 per cent at the end of 2008, according to a survey by Bloomberg News.

The dealers, which include JPMorgan Chase & Co and Goldman Sachs Group Inc, said that the sell-off will slow after signs emerged this month that foreign buyers are scooping up record amounts of debt being sold by the Obama administration. Plus, yields at the highest since November are luring investors speculating that the economy’s recovery may be slow.

‘We have seen an incredible amount of demand,’ said Richard Tang, head of fixed-income sales at primary dealer RBS Securities Inc in Stamford, Connecticut. ‘A lot of it is asset reallocation, out of risk assets and commodities. It’s been significant.’

The firms have been accurate so far this year. A survey in January showed that they predicted that Treasuries would fall as efforts to spur the economy gain traction and the flight to safety that drove the best returns in government debt since 1995 waned. Ten-year notes would lose 3.5 per cent, based on the median forecast of yields in January.

The value of US government debt has actually declined 4.41 per cent since December, and is on a pace to post a loss for only the third time since Merrill Lynch & Co started calculating returns with its US Treasury Master index in 1978. The index rose 14 per cent last year as the global economy lapsed into the worst recession in six decades.

If yields stayed constant for the remainder of the year, investors would still realise a loss for 2009 even after collecting interest payments.

Bonds rallied last week as indirect bidders, a class of investors that includes foreign central banks, purchased 67.2 per cent of the record US$27 billion in seven-year notes sold on June 25, or double the amount of bids than at the last sale in May.

The ratio was also the highest since 2004 on the sale of a US$37 billion in five-year notes the day before, while the US$40 billion in two-year notes auctioned on June 23 attracted the most indirect bids in at least six years.

‘There was fear about central bank selling,’ said Jeffry Feigenwinter, head of Treasury trading in New York at primary dealer BNP Paribas Securities. ‘When they showed up at these auctions, some of those fears were put to rest.’

The surge in demand cannot be ignored even with a change in a rule that went into effect this month that may have raised the levels of indirect bids by eliminating a provision allowing some customer awards to be classified as dealer bids, said William O’Donnell, head of Treasury strategy at RBS.

The Fed’s holdings of Treasuries on behalf of central banks and institutions from China to Norway rose by US$257.2 billion this year, or 15 per cent, according to data compiled by Bloomberg. That compares with an increase of US$127.3 billion, or 10 per cent, in the first half of 2008.

The US relies on foreign investors to finance the federal budget deficit. About 51 per cent of the US$6.45 trillion in marketable Treasuries are held outside the US, up from 35 per cent in 2000, according to data compiled by the government.

Concern that international investors would pull back from American financial assets have grown as the US Dollar Index weakened 9.4 per cent since February after President Barack Obama and Fed chairman Ben Bernanke committed US$12.8 trillion to thaw frozen credit markets and snap the longest US economic slump since the 1930s.

New York-based Goldman Sachs, another primary dealer, estimated that the US may borrow a record US$3.25 trillion this fiscal year ending Sept 30, almost four times the US$892 billion in 2008, to finance the budget deficit.

‘The debt is expected to explode, as we all know,’ said John Spinello, chief technical strategist in New York at primary dealer Jefferies Group Inc. ‘Will they maintain that 50 per cent share? We don’t know.’

People’s Bank of China governor Zhou Xiaochuan said that the nation will not change its currency reserve policy suddenly, speaking to reporters at a central bankers’ meeting on Sunday in Basel, Switzerland.

The US dollar fell against most of its major counterparts on June 26 after China repeated its call for a supranational currency ‘delinked’ from sovereign nations. The People’s Bank of China said that the International Monetary Fund should manage more of members’ foreign exchange reserves.

‘To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,’ the People’s Bank said in its 2008 review. China is the biggest foreign holder of Treasuries, with US$763.5 billion as at April. — Bloomberg

Source : Business Times - 30 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Top teams to pull out of F1 races

Top teams to pull out of F1 races

By Leonard Lim

F1 WITHOUT THE STARS? Without the top teams and stars like McLaren’s Lewis Hamilton (left) and current championship leader Jenson Button of Brawn GP, Singapore and the 16 other venues on the F1 circuit will be looking at a second-tier championship next year.
THE crown jewel of Singapore’s tourism calendar is in the balance, after eight top Formula One teams announced sensationally that they are taking steps to start a rival championship from next year.

They dropped the bombshell late on Thursday amid a worsening row between the F1 Teams Association (Fota) and world motorsport boss Max Mosley, who wants to limit the amount teams spend.

With marquee names like McLaren and Ferrari threatening to pull out, this is the worst crisis to engulf the sport in its 60-year history.

The sport’s governing body responded swiftly yesterday, saying it would take legal action against champions Ferrari and the other teams.

The International Automobile Federation (FIA), which Mr Mosley heads, said their actions breached legal obligations, among other things. It also said it was delaying announcing the 2010 line-up, which had been due today.

The absence of stars like McLaren’s Lewis Hamilton, Ferrari’s Felipe Massa and current championship leader Jenson Button of Brawn GP will result in an entirely different F1 series.

Unless the two sides compromise, Singapore and the 16 other venues on the F1 circuit will be looking at a second-tier championship next year.

That prospect is worrying both tourism industry players and fans alike, less than a year since the successful inaugural Singapore Grand Prix last September.

A race minus big names would hit the bottom line hard, predicted Park Royal Hotel general manager Ian Ekers. ‘If they break away, a lot of the crowd will follow,’ he said.

SIM University chancellor Cham Tao Soon, a Ferrari fan who has followed the sport for about 30 years, said: ‘If Singapore is obliged to carry on for three more years with Mickey Mouse teams, it will be very disappointing. I’ll probably switch to the other championship.’

At the Singapore Sports Awards last night, Deputy Prime Minister Teo Chee Hean said: ‘This is something the teams and the F1 management have to sort out. We hope that they will be able to come to some agreement for the good of motorsport as a whole.’

The current chaos had been building up over several months, ever since Mr Mosley proposed a voluntary budget cap on teams’ spending for the next season. Teams that do not comply would face technical restrictions.

The Fota teams - Ferrari, McLaren, Renault, Toyota, BMW, Brawn GP, Red Bull Racing and Toro Rosso - rejected the idea, saying F1 is based on technical excellence and constant innovation.

They said they would take part next year only if the rules were revised.

But the FIA refused to budge, arguing that the teams’ hefty spending of up to US$300 million (S$436 million) annually is not sustainable, not least in these difficult economic times.

Yesterday, Fota said it had no choice but to start preparing for ‘a new championship which reflects the values of its participants and partners’.

Carrying out that threat, however, will be fraught with obstacles. Deals must be struck with television companies and host venues.

Mr Bernie Ecclestone, 78, the sport’s commercial rights holder, said yesterday that the eight teams could do what they want. ‘I’m not here to tell them what to do,’ he said.

For Singapore, this year’s night race on Sept 27 is safe.

Last year, it drew 40,000 visitors who brought in about $168 million in tourism receipts over a weekend.

Singapore has a five-year deal to stage the F1, with an option for a five-year extension after 2012.

Singapore GP chairman Teo Hock Seng did not want to comment on the prospect of a future with two rival F1 races.

But Mr Andrew Ing of nightspot group St James Holdings said: ‘We’ll miss the party mood if we don’t get the full teams. It would be a shame.’

HOW IT GOT TO THIS
IN MARCH, the International Automobile Federation (FIA) proposed a budget cap of £30 million (S$72 million) per team. The motorsports governing body was concerned that given the economic environment, teams’ ballooning spending would be unsustainable.

Lower spending would also attract new teams which have been daunted by astronomical budgets of up to £180 million a year.

But most of the 10 Formula One teams said no, arguing that F1 is about cutting-edge technology and constant innovation. The teams were also angry that the FIA had not consulted them before making the proposal.

As negotiations between both sides dragged on, the FIA raised the proposed budget cap to £40 million.

Things came to a head as yesterday’s deadline for teams to submit entries to the 2010 series drew near. Then, on Thursday night, the Formula One Teams Association (Fota) dropped a bombshell, saying it was taking steps to prepare for a breakaway championship.

Fota comprises Brawn GP, Ferrari, McLaren, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso.

The FIA, which said yesterday it will not be held to ransom, is set to announce the 2010 line-up today.

WHAT IF THERE’S NO COMPROMISE?

FROM the current F1 line-up, only Force India and Williams have said they will participate unconditionally next year.

With star names like McLaren’s Lewis Hamilton and Ferrari’s Felipe Massa missing, TV broadcasters, fans and host cities are staring at what might be a second-tier F1.

Source : Straits Times - 20 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Oei’s Obama assassination fears

Oei’s Obama assassination fears

Court papers give an insight into tycoon’s dealings, show how he lost millions in the past year

By CHEW XIANG

COURT papers filed in an ongoing suit lodged by tycoon Oei Hong Leong against Citibank’s private banking arm shine a rare spotlight on the way the famed investor has handled some of his finances - and lost hundreds of millions over the last year.

For instance, last November, as Barack Obama was elected US president, Mr Oei believed that bond yields would fall sharply, implying a jump in bond prices, ‘especially if his fears that President-elect Obama might be assassinated were realised’.

Although Mr Obama wasn’t shot, bond prices still jumped sharply through the month, causing Mr Oei undisclosed losses. He had an uncovered exposure to US$600 million of put and call options on 30-year US Treasury bonds and wanted to buy US$600 million from Citi to cover the positions.

One part of the dispute with Citi centres on Mr Oei’s claims that his orders to do this at a lower price were repeatedly not carried out by the Citi banking team, causing him considerable losses when he had to meet his obligations later at a less favourable price.

The court papers also show that Mr Oei dealt heavily in forex trades. Between Sept 16 and Oct 6 last year, he sold 13 options in various currencies including the sterling, US dollar, euro and the yen - entering in total over US$1 billion in trades over that three-week period.

And according to the documents, Mr Oei lost US$518.3 million when liquidating 23 further forex contracts at the end of October. The contracts involve a range of straight cash deals, options, forex hedges, strips, bonds, and one targeted accrual redemption note.

To cover margin shortfalls due to the losses, Mr Oei apparently offered to pledge C$250 million (S$322 million) in Canadian properties as well as valuable antiques to avoid further liquidations at a loss.

In one instance of his market savviness, Mr Oei claimed in the documents that he foresaw the downturn as early as 2007, and so decided to trim his trading positions with Citi, then valued at about US$7 billion. He also decided to routinely maintain a margin surplus of at least US$100 million above that required by the bank.

That year, Mr Oei also began selling out of a number of other assets - according to reports, he gained S$14 million in just ten months from the sale of a 55,000 square foot plot of land in Pasir Panjang, and also netted millions through offloading stakes in SC Global and Centillion Environment and Recycling.

The lawsuit, filed last month and set for a first pre-trial conference in July, alleges that Citibank gave him inaccurate information on his trading positions on a number of occasions, causing him millions of dollars in losses. Mr Oei also alleges that Citi failed to carry out its duty to execute market orders, causing him losses.

Source : Business Times - 20 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

F1 in crisis as 8 teams move to start rival

F1 in crisis as 8 teams move to start rival

(Silverstone, England)

FORMULA One plunged into its biggest crisis in 60 years yesterday with eight of the 10 teams announcing plans to set up their own championship.

The teams association FOTA said that BMW-Sauber, Brawn, Ferrari, McLaren, Red Bull, Renault, Toro Rosso and Toyota were united in a decision that would split the sport in two if carried through.

Responding to the threat, Formula One’s governing body, FIA, said in a statement that it will sue FOTA over what ‘amount to serious violations of law including wilful interference with contractual relations, direct breaches of Ferrari’s legal obligations and a grave violation of competition law’.

The FIA statement read: ‘The FIA’s lawyers have now examined the FOTA threat to begin a breakaway series.

‘The FIA will be issuing legal proceedings without delay. Preparations for the 2010 FIA Formula One World Championship continue but publication of the final 2010 entry list will be put on hold while the FIA asserts its legal rights.’

 
The eight teams accounted for 47 per cent of Formula One’s total revenue generation in 2008 through sponsorship, supplier deals and team owner contributions, according to industry monitor Formula Money.

The teams will take more than US$2 billion of annual investment with them if they leave the FIA Formula One championship and set up their own series, Formula Money said.

‘The teams cannot continue to compromise on the fundamental values of the sport, and have declined to alter their original conditional entries to the 2010 world championship,’ said a statement.

‘These teams therefore have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners.’

The governing International Automobile Federation (FIA) had set a deadline yesterday for teams to make their entries unconditional or risk exclusion in favour of would-be new competitors.

The eight FOTA teams had submitted entries conditional on the 2010 rules, which include a controversial budget cap, being rewritten and the signing of a new commercial agreement governing the sport.

Attempts by both sides to reach a compromise failed, with the FIA accusing teams earlier in the week of wanting to take over the sport.

FOTA said that their new series would encourage more entrants, listen to the wishes of fans and have transparent governance.

The teams, which are due to race in the British Grand Prix tomorrow, also promised ‘lower prices for spectators worldwide, partners and other important stakeholders’.

‘The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series,’ it added.

Two-times drivers world champion Spaniard Fernando Alonso said yesterday that Formula One is ‘finished’ if the split materialises.

The 27-year-old Renault driver said that he would leave and join the new series after weeks of discussions and negotiations failed to deliver a compromise agreement.

He added: ‘There is no solution so it is sad news, but that is the way it is. So I think that Formula One is finished. It will be standard engines for everyone, small teams and no drivers - for me, this is not the Formula One that the people want.

‘The new series will be very attractive, with the biggest teams and the best drivers so everything stays the same, just maybe not name. This will be the new F1.’

Alonso’s comments were among a series of different reactions in the paddock as many close observers of the sport talked about the split created by the FIA’s proposals for a £40 million (S$95.3 million) budget cap.

Former three-time champion Jackie Stewart, a long-time adversary of FIA president Max Mosley, said that he felt that Mr Mosley had ‘gone too far this time’.

He said: ‘Max’s way of ruling is bully-boy tactics - that’s why the teams have got fed up. Someone will stand up to a bully eventually and stop it. That’s the way it works.’

As he spoke, the eight rebel teams were locked in crisis talks inside the Ferrari motor home.

Mr Stewart said that he believed that it was necessary, if not imperative, for Mr Mosley to step down and leave if the two sides were to reach a compromise agreement and save Formula One from a damaging schism.

He said: ‘The teams have made a decision that they cannot continue with the governance in its present form - I think they do want Max to go because, frankly, some of his decisions over the years have been questionable.

‘For example, there was the US$100 million fine on McLaren for something that was never proven. Never in the history of sport has such an amount of money been levied by a sporting authority - and that was something that he drove.’ — Reuters, AP, AFP

Source : Business Times - 20 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

10 US banks repay $99b of bailout funds

10 US banks repay $99b of bailout funds
Banks race to free themselves from govt restrictions tied to relief scheme

NEW YORK: - Ten of the largest US banks have repaid more than US$68 billion (S$99 billion) of taxpayer bailout funds, as they race to extract themselves from government restrictions on pay for top executives.
Banks are returning money taken from the US$700 billion Troubled Asset Relief Programme (Tarp), which was once intended to spur lending but is now viewed as a sign that recipients are too weak to survive on their own. In most cases, the banks issued preferred shares that carried 5 per cent dividends in exchange for the money.

JPMorgan Chase said it repaid US$25 billion to Tarp, while Goldman Sachs and Morgan Stanley said they repaid US$10 billion each.

Among other banks, US Bancorp said it repaid US$6.6 billion, Capital One Financial Corp US$3.6 billion, American Express US$3.4 billion, BB&T Corp US$3.1 billion, Bank of New York Mellon Corp US$3 billion, State Street Corp US$2 billion and Northern Trust Corp US$1.57 billion.

Apart from Northern Trust, all of these banks underwent government ’stress tests’ of their ability to withstand a deep recession and the government gave these 10 permission to repay the funds last week.

Several of the banks that underwent the tests were ordered to plug capital shortfalls, including Bank of America and Citigroup, which did not get a green light to repay Tarp.

Each took US$45 billion from the programme, and the government is in the process of taking a potential 34 per cent equity stake in Citigroup. Bank of America has said it would like to start returning government funds later this year.

American Express, Bank of New York Mellon, BB&T, JPMorgan, Northern Trust and US Bancorp also intend to buy back warrants for their common stock from the US Treasury, which they awarded when they took the bailout money.

The warrants give the Treasury the right for up to 10 years to buy common stock in the banks at a set price. Banks can buy back the warrants at ‘fair market value’, the Treasury said.

BB&T is negotiating a buyback, a spokesman said. The other banks did not comment on the status of buybacks or potential terms.

As a condition for being allowed to repay, banks had to show they could raise money from the private sector by selling stock and issuing debt without the help of government guarantees.

The Federal Reserve also had to agree that their capital levels were adequate to allow them to continue lending.

In connection with the early repayment and associated dividends, several banks are taking second-quarter charges.

Goldman Sachs said it paid a dividend of US$425 million, which will reduce second-quarter earnings by about 77 US cents a share, while Morgan Stanley said it expects a US$892 million charge in the second quarter relating to the early repayment.

At least 22 smaller banks have been allowed to repay some or all of their Tarp money, although most must still negotiate terms to buy back or extinguish their associated warrants.

REUTERS

Source : Straits Times - 19 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

US Federal Reserve given big reform role

US Federal Reserve given big reform role

(WASHINGTON) Some of the reforms proposed under President Barack Obama’s plan:

A new Financial Services Oversight Council of regulators led by the Treasury to identify emerging ’systemic’ risks and improve inter-agency cooperation.

New authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability, even those that do not own banks.

Stronger capital and other prudential standards for all financial firms, and even higher standards for large firms.

A new National Bank Supervisor to supervise all federally chartered banks.

Elimination of the federal thrift charter and other loopholes that allowed some depository institutions to avoid bank holding company regulation by the Federal Reserve.

Registration of advisers of hedge funds and other private pools of capital with the SEC.

New requirements for market transparency, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitised loans.

Comprehensive regulation of all over-the-counter derivatives.

New authority for the Federal Reserve to oversee payment, clearing, and settlement systems.

A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive and abusive practices.

More powers for the SEC to strengthen protection for investors.

A new regime to resolve non-bank financial institutions whose failure could have serious systemic effects.

Revisions to the Federal Reserve’s emergency lending authority to improve accountability. — AFP

Source : Business Times - 19 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Obama’s ‘big bang’ seen as a mixed bag

Obama’s ‘big bang’ seen as a mixed bag

Fed’s new powers raise some concern; issue of ‘too-big-to-fail’ banks not addressed

By JOYCE KOH
IN NEW YORK

IT has been billed as the most sweeping overhaul of America’s financial system since the post-Great Depression reforms, but President Barack Obama’s plan for regulatory reform has drawn mixed reactions from analysts and barely budged the markets.

All in the Fed’s hands: Federal Reserve chairman Ben Bernanke holding a copy of the plan on Wednesday. Many are questioning the expanded role being given to the Fed in policing financial institutions.
The Obama plan, which was unveiled on Wednesday, has been praised for its comprehensive efforts to remake the financial landscape which has been deeply scarred by the crisis. But many question the expanded role given to the US Federal Reserve in policing financial institutions. Others complain that an opportunity has been lost to pare down the number of regulators in the system.

Under the proposal, the Office of Thrift Supervision and Office of the Comptroller of the Currency would be combined into a single National Bank Supervisor, merely shaving the number of banking regulators in the country from six to five. The survivors like the Securities & Exchange Commission (SEC) and Federal Deposit Insurance Corp (FDIC) would still closely guard their domains. At the same time, new agencies to protect consumers and oversee the insurance industry will emerge.

While there’s no doubt that the tide in Washington has tilted towards more regulation, many are asking whether smarter regulation is what’s needed instead.

The new plan does not seek to dismantle ‘too-big- to-fail’ financial institutions nor enforce any structural division of the industry between commercial and investment banks like what the Glass-Steagall Act did after the crash of 1929. Many commentators, including Nobel Prize-winning economist Joseph Stiglitz, have called for such policies.

Other critics suggest that merely overhauling regulatory rules misses the point. For instance, R Christopher Whalen, managing director of Institutional Risk Analytics, told National Public Radio: ‘The fundamental point is that we don’t need new tools; we need political will to clean up the mess.’

On Thursday morning, Treasury Secretary Tim Geithner defended the plan before the Senate banking committee. He was grilled on why the Fed was being given expanded powers despite previous regulatory failures and a possible conflict with its monetary-policy duties.

Mr Geithner responded that the Fed has ‘greater knowledge and feel for broader market developments’ than any other US banking agency.

When the widely anticipated plan was unveiled on Wednesday afternoon, the market gave it a tepid response. The Dow Jones slipped 0.1 per cent to 8,497.18 points, while the S&P 500 slipped 0.1 per cent to 910.71.

Bank stocks, under pressure the previous few sessions as the White House prepared to lay out its plan, also slumped.

Perhaps the most contentious issue for many analysts and economists is the move to make the Fed the uber-regulator - giving it new powers, when it has been held responsible for stoking the asset bubble in the first place.

Still, others on Wall Street concede that the central bank might be the best candidate for the role as it was better staffed and commanded more respect than other agencies.

As one senior banker told the Financial Times: ‘We should be able to do business with the Federal Reserve as long as all these new powers do not go to its head.’

On Wednesday, arguing for the selection of the Fed, Mr Geithner said the administration had studied a range of alternatives and found that countries that split the functions of systemic regulator and central banker often suffered deeper financial problems during periods of crisis.

Besides the Fed’s role, the retention of the current regulatory structure with most of its agencies intact also raised some eyebrows.

The Brookings Institution, a liberal Washington- based think-tank, said political constraints have caused the administration to ’stop short of a full solution in certain areas’.

Joe Nocera, a columnist for the New York Times, wrote: ‘The Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself. Without question, the latter would be more difficult, more contentious and probably more expensive. But it would also have more lasting value.’

Even as analysts, commentators and economists toss up the merits of Mr Obama’s financial plan, the political wrangling is just beginning. President Obama, who said the reform proposals are necessary to avoid another crisis, hopes to complete the overhaul by year-end.

But moving his plans through Congress is far from a sure bet. In its present form, the plan will almost certainly come up against resistance from bankers, lawmakers and even some government agencies.

The broad strokes have been painted to remake the US financial sector. But it will take a while before the details are filled in and we know for sure what is going to change.

Source : Business Times - 19 June 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com