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Swiss Re Group
08 июля, 01:06

President Obama Announces More Key Administration Posts

WASHINGTON, DC – Today, President Barack Obama announced his intent to nominate the following individuals to key Administration posts: Kim J. Walker – Inspector General, Export-Import Bank of the United States John M. Huff – Member, Board of Directors of the National Association of Registered Agents and Brokers Robert Suglia – Member, Board of Directors of the National Association of Registered Agents and Brokers Lori Wing-Heier – Member, Board of Directors of the National Association of Registered Agents and Brokers President Obama also announced his intent to appoint the following individuals to key Administration posts: Babette Ceccotti – Member, Advisory Committee to the Pension Benefit Guaranty Corporation Terry Guen – Member, Advisory Council on Historic Preservation Dorothy T. Lippert – Member, Advisory Council on Historic Preservation Jordan E. Tannenbaum – Member, Advisory Council on Historic Preservation John E. Frank – Member, Committee for the Preservation of the White House Richard Kidd IV – Executive Director, Federal Permitting Improvement Steering Council General John P. Abizaid – Member, President’s Intelligence Advisory Board Mary B. DeRosa – Member, President’s Intelligence Advisory Board President Obama announced his appointment of the following individuals to key Administration posts: Sylvia Trimble Bozeman – Member, President’s Committee on the National Medal of Science John T. Cacioppo – Member, President’s Committee on the National Medal of Science President Obama said, These fine public servants bring a depth of experience and tremendous dedication to their important roles I look forward to working with them. President Obama announced his intent to nominate the following individuals to key Administration posts: Kim J. Walker, Nominee for Inspector General, Export-Import Bank of the United States Kim J. Walker is Of Counsel at the law firm of Faegre Baker Daniels Mr. Walker joined the firm in 1990 as a founding partner of the Des Moines, Iowa office, a position he held through 2015 Mr. Walker worked as an associate then partner at Nyemaster Goode, P.C. from 1981 to 1990.  From 1979 to 1981, he held a clerkship for the Chief Judge of the U.S. District Court for the Southern District of Iowa Mr. Walker has served on the boards of various civic organizations in Des Moines, and currently is on the board of the Greater Des Moines Public Art Foundation and the Iowa Law School Foundation Mr. Walker received a B.S. from the University of Iowa and a J.D. from the University of Iowa College of Law John M. Huff, Nominee for Member, Board of Directors of the National Association of Registered Agents and Brokers John M. Huff is the Director of the Missouri Department of Insurance, Financial Institutions and Professional Registration, a position he has held since 2009, and is the 2016 President of the National Association of Insurance Commissioners Mr. Huff also serves as an Adjunct Professor of Law at the Washington University School of Law in Saint Louis and the Saint Louis University School of Law, positions he has held since 2012 and 2014, respectively.  From 2006 to 2009, Mr. Huff was a Managing Director with The Swiss Re Group Prior to that role, Mr. Huff was a Senior Vice President with GE Insurance Solutions from 1998 to 2006 From 1992 to 1998, Mr. Huff was first an associate then partner during his time at the law firm, Field, Gentry and Benjamin P.C Starting in 2010, Mr. Huff served two terms as a non-voting member of the U.S. Financial Stability Oversight Council until 2014 Mr. Huff received a B.S. from the Harrison College of Business at Southeast Missouri State University, an M.B.A. from Saint Louis University, and a J.D. from the Washington University School of Law. Robert Suglia, Nominee for Member, Board of Directors of the National Association of Registered Agents and Brokers Robert Suglia is Senior Vice President and General Counsel at Amica Mutual Insurance Company (Amica), a position he has held since 2008.  Since first joining the company in 1994, Mr. Suglia has held multiple positions including, Vice President and General Counsel from 2006 to 2008; Senior Assistant Vice President and Assistant General Counsel from 2004 to 2006; Assistant Vice President and Assistant General Counsel from 2001 to 2004; Assistant General Counsel from 1996 to 2001; Counsel from 1994 to 1996.  Concurrently, from 2008 to 2014, Mr. Suglia was appointed to a seat on the Commonwealth Automobile Insurers Governing Committee.  He has represented Amica on insurance industry boards and trade association committees through Amica’s membership in the Property and Casualty Insurers Association of America and the National Association of Mutual Insurance Companies.  Mr. Suglia received a B.A. from Rhode Island College and a J.D. from Boston University School of Law. Lori Wing-Heier, Nominee for Member, Board of Directors of the National Association of Registered Agents and Brokers Lori Wing-Heier is the Director of the Division of Insurance of the Department of Commerce, Community and Economic Development for the State of Alaska, a position she has held since 2014 From 2004 to 2013, she served as the Director of Risk Management for the Arctic Slope Regional Corporation.  From 1988 to 2004, she served as a Senior Vice President for Marsh USA From 1986 to 1988, she was an Account Executive for Aon Corporation's Rollins Burdick Hunter Previously, she was a Customer Insurance Representative for Homestate Insurance Brokers from 1985 to 1986 From 1984 to 1985, she was a Customer Insurance Representative for Jay Riggs Insurance Agency Ms. Wing-Heier received an A.D. from North Central Michigan College. President Obama announced his intent to appoint the following individuals to key Administration posts: Babette Ceccotti, Appointee for Member, Advisory Committee to the Pension Benefit Guaranty Corporation Babette Ceccotti is a retired partner from the law firm Cohen, Weiss and Simon LLP Ms. Ceccotti was a partner from 1990 through 2014 and an associate in the firm's employee benefits practice and bankruptcy practice from 1983 through 1989 Ms. Ceccotti was appointed by President Bill Clinton to the National Bankruptcy Review Commission from 1995 to 1997 She served on the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11 from 2012 to 2014 and became a conferee of the National Bankruptcy Conference in 2014.  Ms. Ceccotti received a B.A. from Clark University and a J.D. from New York Law School Terry Guen, Appointee for Member, Advisory Council on Historic Preservation Terry Guen is President and Design Principal of Terry Guen Design Associates, Inc., positions she has held since 1997 Ms. Guen is currently Master Landscape Architect of Millennium Park in Chicago, a position she has held since 2000 She was Lead Landscape Architect and Urban Designer for the Charles River Basin Plan in Boston from 1991 to 1992 and the West Side Waterfront - Hudson River Park Plan in New York City from 1989 to 1990.  Ms. Guen served as a member of the Design Faculty at the Illinois Institute of Technology Program of Landscape Architecture from 2009 to 2012 She was first appointed to the Advisory Council on Historic Preservation in 2011 and she was a Fellow of the American Society of Landscape Architects in 2009 Ms. Guen received a B.A. from Bowdoin College and an M.A. from the University of Pennsylvania. Dr. Dorothy T. Lippert, Appointee for Member, Advisory Council on Historic Preservation Dr. Dorothy T. Lippert is a Supervisory Archaeologist in the Repatriation Office of the National Museum of Natural History at the Smithsonian Institution, a position she has held since 2001 Dr. Lippert worked as the Education Coordinator for the John P. McGovern Hall of the Americas at the Houston Museum of Natural Science from 1999 to 2001 She formerly served as a member on the World Archaeological Congress Executive from 2003 to 2013 and the Board of Directors for the Society for American Archaeology from 2006 to 2009 Dr. Lippert was first appointed to the Advisory Council on Historic Preservation in 2011 Dr. Lippert received a B.A. from Rice University and an M.A. and Ph.D. from The University of Texas at Austin. Jordan E. Tannenbaum, Appointee for Member, Advisory Council on Historic Preservation Jordan E. Tannenbaum is Chief Development Officer at the U.S. Holocaust Memorial Museum, a position he has held since 2004 Mr. Tannenbaum served in the Judge Advocate General’s Corps of the U.S. Army Reserves from 1983 to 2010 He was Vice President of Hillel: The Foundation for Jewish Campus Life from 1999 to 2004 and Executive Director for Resources Development at the National Trust for Historic Preservation from 1996 to 1999 Mr. Tannenbaum also worked in senior development positions at The Wharton School at the University of Pennsylvania from 1993 to 1996, Georgetown University from 1988 to 1993, and B'nai B'rith International from 1986 to 1988 He served as Chief of the Eastern Division of Project Review for the Advisory Council on Historic Preservation from 1972 to 1982 Mr. Tannenbaum was appointed to the Fairfax County History Commission in 2016 and was awarded the Legion of Merit by the U.S. Army in 2010 Mr. Tannenbaum received a B.A. from Brandeis University and a J.D. from American University. John E. Frank, Appointee for Member, Committee for the Preservation of the White House John E. Frank is Microsoft's Vice President for European Union Government Affairs, a position he has held since 2015 From 2002 to 2015, Mr. Frank served as Vice President, Deputy General Counsel, and Chief of Staff in Microsoft’s Legal and Corporate Affairs Department He worked as Associate General Counsel for Microsoft Europe, Middle East, and Africa from 1996 to 2002 and Corporate Attorney for Microsoft Europe from 1994 to 1996 Mr. Frank was an Associate Attorney with Skadden, Arps, Slate, Meagher & Flom from 1988 to 1994 and with Orrick, Herrington & Sutcliffe LLP from 1985 to 1987 He is a member of the Board of Trustees for the Seattle Art Museum and served as Board Chair from 2013 to 2015 Mr. Frank received an A.B. from Princeton University and a J.D. from Columbia Law School. Richard Kidd IV, Appointee for Executive Director, Federal Permitting Improvement Steering Council Richard Kidd IV serves as Deputy Assistant Secretary of the Army for Energy & Sustainability, a position he has held since 2010 From 2008 to 2010, he served as a Program Manager for the Federal Energy Management Program at the Department of Energy Previously, Mr. Kidd held various roles at the Department of State’s Bureau of Political-Military Affairs from 2001 to 2008, including Special Assistant, Office Director, and Acting Deputy Assistant Secretary From 1999 to 2001 he was a Program Manager for the Vietnam Veterans of America Foundation, and from 1993 to 1999 he was a Country Director, Operators Manager, and Emergency Logistics Officer for the United Nations Additionally, Mr. Kidd served as an Infantry Captain and Officer in the U.S. Army from 1986 to 1991 Mr. Kidd received a B.S. from the U.S. Military Academy at West Point and an M.P.P.M. from the Yale School of Management. General John P. Abizaid, Appointee for Member, President’s Intelligence Advisory Board General John P. Abizaid is the Founder and Senior Partner at JPA Partners, LLC, positions he has held since 2007 General Abizaid also serves as Distinguished Chair Emeritus at West Point’s Combating Terrorism Center and sits on the board of directors of RPM International and USAA From 2007 to 2010, General Abizaid was the first Annenberg Distinguished Visiting Fellow at Stanford University’s Hoover Institution General Abizaid is a retired U.S. Army four-star general and served as Commander of the United States Central Command from 2003 to 2007 and as Deputy Commander from 2002 to 2003 From 2001 to 2002, he served on the Joint Staff as Director and as Director of Strategic Plans and Policy from 2000 to 2001 General Abizaid was the Commanding General of the First Infantry Division headquartered in Wurzburg, Germany from 1999 to 2000 He was the 66th Commandant of Cadets at the United States Military Academy at West Point from 1997 to 1999 General Abizaid was an Olmstead Scholar at the University of Jordan He received a B.S. from the United States Military Academy and an M.A. from Harvard University Mary B. DeRosa, Appointee for Member, President’s Intelligence Advisory Board   Mary B. DeRosa is a Distinguished Visitor from Practice at the Georgetown University Law Center, a position she has held since 2012 In 2011, Ms. DeRosa served as an Alternate Representative of the United States to the 66th Session of the United Nations General Assembly She previously served at the White House as Deputy Counsel to the President and National Security Council Legal Adviser from 2009 to 2011 Ms. DeRosa was Chief Counsel for National Security for the Senate Judiciary Committee from 2007 to 2008 She was a Senior Fellow at the Center for Strategic and International Studies from 2002 to 2007, Special Assistant to the President and National Security Council Legal Adviser from 2000 to 2001, National Security Council Deputy Legal Adviser from 1997 to 2000, and Special Counsel to the General Counsel at the Department of Defense from 1995 to 1997 Earlier in her career, Ms. DeRosa spent several years in private practice at Arnold & Porter LLP and clerked for the Honorable Richard Cardamone of the United States Court of Appeals for the Second Circuit Ms. DeRosa received a B.A. from the University of Virginia and a J.D. from The George Washington University President Obama announced his appointment of the following individuals to key Administration posts: Dr. Sylvia Trimble Bozeman, Appointed as Member, President’s Committee on the National Medal of Science Dr. Sylvia Trimble Bozeman is Professor Emerita at Spelman College, a position she has held since 2013 Dr. Bozeman was previously a Professor of Mathematics from 1991 to 2013 Dr. Bozeman also served at Spelman College as Associate Provost for Science and Mathematics from 1998 to 2002 She joined the faculty of the Department of Mathematics in 1974, and served as Department Chair from 1982 to 1993 Dr. Bozeman co-founded the Enhancing Diversity in Graduate Education program in 1998 and served on the executive boards of the Mathematical Association of America, American Mathematical Society, Association for Women in Mathematics, and National Association of Mathematicians Dr. Bozeman was named a Fellow of the American Mathematical Society in 2013 and was elected a Fellow of the American Association for the Advancement of Science in 2010 She received a Lifetime Service Award from the National Association of Mathematicians in 2012.  Dr. Bozeman received a B.S. from Alabama A&M University, an M.A. from Vanderbilt University, and a Ph.D. from Emory University Dr. John T. Cacioppo, Appointed as Member, President’s Committee on the National Medal of Science Dr. John T. Cacioppo is the Tiffany and Margaret Blake Distinguished Service Professor at The University of Chicago, a position he has held since 1999 Dr. Cacioppo is also the Founding Director of the Center for Cognitive and Social Neuroscience and the Founding Faculty Director of the Arete Initiative at The University of Chicago He has previously held teaching positions at The Ohio State University, University of Iowa, and University of Notre Dame Dr. Cacioppo is a member of the Society of Experimental Psychologists, the American Academy of Arts and Sciences, and the Society of Experimental Social Psychologists He is a fellow of the American Association for the Advancement of Science, the American Psychological Association, and the Royal Society of Arts Dr. Cacioppo was first appointed to the President’s Committee on the National Medal of Science in 2014 Dr. Cacioppo received a B.S. from the University of Missouri, and an M.A. and Ph.D. from The Ohio State University.

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16 сентября 2013, 19:00

Can Building Great Products Help You Build Great Teams?

Silicon Valley was built on amazing products, not on stellar leadership skills. In fact, veterans of some of the world’s most successful tech companies often look with skepticism, even disdain, on efforts to build strong management skills. The premise is that all energy should be focused solely on turning fabulous ideas into hyper growth. It’s true that if a start-up fails — or is sold — the need for enduring leadership may never arise. And in the earliest stages of a company, the need to organize, motivate and inspire large groups of people to accomplish shared goals may not be obvious. But neglecting the art of people management has significant costs for any company that aspires to be around for a while. Despite employment woes in many sectors of the economy, the talent wars are alive and well in the tech field. Recruitment and retention take up significant mindshare for most leaders. It’s well-documented that dissatisfaction with a manager is a top reason for employees to leave a job. Great managers can help improve job satisfaction and employee retention by leading their organizations with a strong vision, strategic execution and opportunities for career growth. My prediction is that in the next five years, we’ll see a focus on people management catch on with the same enthusiasm that product management has in Silicon Valley and beyond. In my 20 years leading product and user experience teams at several world-class companies, including LinkedIn and Google, I’ve come to adopt what I call my “Seven Principles to Product Bliss.” Every new member of my product team at LinkedIn gets a personal review of these principles delivered by yours truly. In the course of giving the review many dozens of times, I’ve realized that the seven product principles have direct corollaries to principles for being an effective people manager, and I now work to make sure the managers on my team and I adhere to these corollaries. Below you’ll find my seven product tenets and how I see them connecting to managing people. Rule 1: Know your audience. For managing products, this means getting out of your office to figure out who your users and customers are, and what makes them tick. This may require opening up meaningful dialog with perfect strangers, and then building their feedback into your product. For managing people, this principle means getting out of your peer group to really get to know your employees and team members–what they care about, what motivates them and what bothers them about the way things are done. Start with a regular cadence of internal communications–skip-level meetings, town halls, meals with star performers, on-boarding sessions for new hires and team offsites are all good. When you meet with people, listen carefully. Share values and principles that are important to you and your company. Then ask big, open-ended questions about what your team members think–or have seen elsewhere–so that you can interpret and address common challenges together. There’s no better way to get to know your team than to jointly tackle a hard problem. Rule 2: Simplify. Successful product managers know that customers respond best when the only product features are the ones they want. It’s more important to spend time deciding which features to omit than which to add. A canonical example of the dangers of complexity is the trajectory of Microsoft Word. Between 1984 and 2003, this once-popular software application went from 40 features to more than 1500, with 35 tool bars! Users were overwhelmed, and many turned to simpler alternatives. Simple is a feature of great management too. Employees of today’s flat organizations are more empowered than ever to gather insights, pursue ideas and make decisions, but they’re also often overcome by choices–how to prioritize their day, whether to go to a particular meeting and which emails to read. Superior people managers can draw a clear mission for their teams–articulating group goals and conveying a strong direction–and then get out of the way to enable their people to make day-to-day decisions. Rule 3: Embrace constraints. Warren Buffett famously said: “Happiness is not getting what you want but wanting what you have.” When it comes to product management, constraints on time, resources and attention spans can actually make us more creative and responsive to user needs. I love the story of how Napoleonic-era Swiss chocolatiers made hazelnut the most popular flavor of chocolates by using it as a filler during a trade embargo imposed by France. More recently, when moving from web-based to mobile-ready products, the most successful product managers didn’t just scrunch products to fit a small screen–they completely rethought and reinvented their products around mobile users and their usage patterns. When it comes to leading people, you can actually unleash their creativity by providing a few well-chosen constraints. At LinkedIn, employees sometimes pitch a “venture bet”– a long-shot idea that they’re passionate about. We give them a set amount of time and resources to build that idea and report back periodically. In this context, constraints are necessary safeguards that help simulate real-world constraints faced by any seed-funded startup. The successful bets go on to become part of LinkedIn’s product portfolio. Rule 4: Data is your guide. The classic example of using data to achieve product success is the multi-step e-commerce checkout process. Amazon’s famous “1-click buying” system materially reduced the buying funnel dropout rates. While you can’t control what users will do with your product once it’s in their hands, you can learn from their interactions and build on this data to improve the product experience. Data is becoming increasingly relevant for people managers. With tools like LinkedIn, organizations are recruiting, retaining and grooming talent with unprecedented precision. Social tools can enable coworkers to collaborate and build relationships, creating and maintaining a positive culture. At LinkedIn, periodic employee surveys and employee-only networking groups on Linkedin.com allow us to track employee sentiment in a measured, data-rich way. As global leaders, we can’t be everywhere at all times, and we can’t allow ourselves to be swayed by rumors or anecdotal feedback from a few voices who happen to be proximate. Instead, we need to deploy data-driven methods to make the best global decisions. Rule 5: Innovation is not instant. The beauty of the iPhone is how it combined the best features of its predecessors–the Blackberry’s email features, the Razr’s design aesthetics, the iPod’s music capabilities and the Palm Pilot’s touch screen. Don’t chase brilliant one-offs when seeking innovation–it takes lots of lead bullets to make a silver bullet that enables a step change in user experience. Similarly, effective leadership takes time, tenacity and regular engagement with the people you’re leading. Gone are the days of “command-and-control” leaders. Today, it’s essential to build an ongoing relationship of trust and authenticity based on open and transparent communication and collaboration. This process of relationship-building takes more time, but those moments of the day are well-spent. Rule 6: Be fast, flexible and ready to adapt. Some of the most popular tech products today emerged as a result of a major strategic pivot. YouTube got started as a video-dating site. PayPal was created to exchange money between two Palm Pilots. It’s best to be very open-minded when launching a product so that you can build in customer feedback and adapt as necessary. Netflix is a great example. This company that made Blockbuster irrelevant has reinvented itself to move from DVD rentals through the mail to an online streaming and original content entertainment company. Now one-third of downstream internet bandwidth in North America is used by Netflix. As leaders, we need to continue to take the pulse of our teams regularly, and change our behavior when necessary. We see US presidential candidates go through this process during campaign season, reacting to the input they get from polls. Recently at LinkedIn, a senior executive learned from an employee survey that people were unclear about how their performance was being measured. The executive took immediate corrective action. Within a week of receiving the data, he had pulled together a clear and detailed explanation and held a town hall to explain the performance management process clearly and transparently. The team’s results are now on the upswing. Rule 7: Build for scale. In the tech world, we talk about creating flexible architectures that can “scale,” or grow quickly: “prototype for 1x, build for 10x and engineer for 100x.” The truth is that technology companies can become obsolete quickly–95 percent companies listed on the NASDAQ don’t maintain an independent existence after 20 years. If you want to build a company that lasts — especially a tech company — you need to focus on establishing culture and values that are strong and flexible enough to endure changes. And you need to hire people who are at least as focused on building amazing products as part of a team as they are on their own personal star trajectory. As I like to say, never hire anyone whose blast radius will be bigger than his or her impact radius. As successful companies mature, investing in strong leadership skills can help create and sustain a culture of innovation by empowering teams to make better decisions, take intelligent risks and execute on a winning business strategy. 

09 сентября 2013, 06:46

Financial services firms eye up world's poorest as potential customers

MetLife (MET), Prudential (PRU), Swiss RE (SSREY.OB, SSREF.OB), and JPMorgan (JPM) are among those investing in a new $400M P-E fund being put together by Leapfrog Investments to sell financial services in developing countries.The group will disclose Monday it has raised $204M thus far and plans to raise another $200M in coming months.The fund is looking at prospective investments in India, Indonesia, and Sri Lanka, as well as parts of sub-Saharan Africa.It's no secret developed market insurers have looked to emerging economies for growth, but those efforts previously were aimed at hitting relatively prosperous emerging middle classes, and avoiding the high volume, low margin business of offering financial services to the world's poorest people. This has changed of late and Leapfrog says the big players are increasingly interested in this area. "We see decades of opportunity ahead," says Leapfrog founder Andrew Kuper. 1 comment!

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03 сентября 2013, 13:53

Libya at a crossroads as strikes threaten oil supplies

Production slumps as workers seize ports in protest at Tripoli's failure to revive moribund economy despite bumper oil revenuesLibya is facing its most critical moment since the ousting of Muammar Gaddafi with armed groups blockading oil fields and terminals, choking output to a 10th of normal levels and threatening economic disaster.With the government forced to import fuel to keep power stations running and queues growing at petrol stations, the prime minister, Ali Zaidan, has repeatedly threatened to send troops to retake striking ports.But the leader of rebels blockading ports in Cyrenaica, home to the bulk of Libya's oil, said such a move would be tantamount to a "declaration of war".Ibrahim Ali Jathran, commander of troops who have defected to seize the terminals, warned his soldiers would fight back. "We will resist," he said.The blockade has spread to western Libya, with the Elephant field on the Algerian border at a standstill and rebel oil guards further north around Zintan cutting pipelines.The government controls just two oil ports, with production at about 160,000 barrels a day. The National Oil Corporation admits even this is guesswork, because its measuring gauges are broken, forcing officials to rely on dead reckoning.Jathran insisted the strike was in reaction to what he said was a seizure of power – and oil revenues – by the Muslim Brotherhood in Tripoli."The Brotherhood has hijacked the state and parliament. It has infiltrated the oil ministry witharmed groups," he said.Government officials deny the claim, saying the strikers are trying to sell oil themselves and are holding the country to ransom.BP declined to comment on the situation in Libya but industry experts with close links to the company said it was keeping a watchful eye on the situation."The fact is BP do not really need to do anything currently as they have no real investments or personnel in the country yet," said one source. "The first sign of concern will be if they postpone drilling offshore. BP have said very publicly they planned to drill next year but they are likely to just put plans back, not announce a pull-out, like Shell."Zaidan last week made good his threat to "bomb by air or sea" any tanker trying to buy oil direct from the rebels. TV footage released by the navy showed the crew of a patrol boat firing automatic weapons close to an empty Liberian-registered tanker as it approached the eastern coast.That footage has made shippers nervous, and international oil companies are considering scaling down operations, with all eyes on BP, the largest exploration company left in Libya after Shell left last year.The British petrol giant re-entered Libya in 2007, after a deal cemented by Tony Blair and Gaddafi, but the Arab spring and subsequent violence meant it has continually postponed drilling. Now some wonder if it will quit the country again."The bellwether is BP," said John Hamilton of London oil analysts CBI. "In terms of companies thinking about the future, BP is the biggest. If they go, everyone else is going to say that's a big signal."The striking oil workers span a disparate range of causes, from more pay and regional spending to autonomy for Cyrenaica. But the common thread is exasperation with the failure of successive governments to revive a moribund economy despite bumper oil revenues. The government is, meanwhile, struggling to assert its control across much of the country amid an upsurge of intra-militia violence and jihadist bombings in the east.Added to that is nervousness about the government's decision to spend 900m dinars (£450m) on the Libya Shield, a militia force garrisoning Tripoli, with many Libyans saying the money should go to regular police and army units."We are currently witnessing the collapse of state in Libya, and the country is getting closer to local wars for oil revenues," said Swiss oil analysts Petromatrix.The blockade comes a fortnight before London hosts the biggest Libyan investment conference held since the end of the 2011 Arab spring.LibyaMiddle East and North AfricaAfricaOilCommoditiesChris Stephentheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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28 марта 2013, 19:01

Berkshire Hathaway in Swiss Re settlement

Buffett group agrees to pay reinsurer $610m over agreement to provide retrocession to the Zurich-based company’s US life and health arm

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28 марта 2013, 19:01

Berkshire Hathaway in Swiss Re settlement

Buffett group agrees to pay reinsurer $610m over agreement to provide retrocession to the Zurich-based company’s US life and health arm

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28 марта 2013, 14:23

ECONOMIC TIMES: Swiss Re to take $610 mn and end dispute with Buffett

ZURICH: Swiss Re, one of the world's biggest reinsurance groups, on Thursday said it had settled a dispute with billionaire Warren Buffett's Berkshire Hathaway over a 2010 insurance policies deal, and would accept a settlement of $610 million from the US company.Swiss Re said in a statement it had agreed to take back some of the risks covered by a reinsurance contract with Berkshire Hathaway. The total protection provided by the US firm to Swiss Re will be reduced from $1.5 billion to $1.05 billion, it added. In 2009, Berkshire Hathaway had provided funds to help the Swiss reinsurer bounce back after it announced a 2008 loss of one billion Swiss francs ($1.05 billion, 820 million euros). In January 2010, the two groups agreed to a retrocession transaction, under which Berkshire Hathaway took ona portfolio of Swiss Re's annually renewable life insurance policies that dated from before 2004, limiting Swiss Re's exposure to claims. The second part of the transaction involved a stop loss agreement provided by Swiss Re that limited Berkshire Hathaway's exposure from the overall deal to $1.5 billion. Berkshire Hathaway subsequently served notice of damages and as required by the contract, the two sides negotiated the deal which has just been reached. Swiss Re will thus "recapture" some of the risk, in exchange for payment by Berkshire Hathaway of $610 million, an operation which will have the effect of providing the Swiss group with an initial gain of around $100 million in the first quarter of 2013. Discuss this topic @ Share Investor Forum - Register free Read the full transcript of the October 24 2012 Squawk Box Interview with Warren BuffettDownload the 2010 Berkshire Hathaway Annual ReportDownload the 1977 - 2011 Warren Buffett Letter's to Berkshire Hathaway ShareholdersWarren Buffett @ Amazon Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book by Carol J. Loomis Buy new: $16.66 / Used from: $11.95Usually ships in 24 hoursWarren Buffett's 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations by Preston George Pysh Buy new: $12.99 / Used from: $16.04

09 марта 2013, 18:06

An Accidental Rainmaker For Lobbyists

WASHINGTON -- Carl Levin will be remembered as the powerful chairman of the Senate Armed Services Committee, a Michigan man who fiercely championed the auto industry and its unions, and a jealous guardian of the traditions of the Senate. But K Street will remember the Democratic senator differently, and fondly, as an accidental rainmaker for lawyers and lobbyists specializing in corporate crisis response. Levin, who announced Thursday that he will retire at the end of 2014, will also give up the gavel of the Permanent Subcommittee on Investigations, known to insiders simply as PSI -- "the most feared committee" in Washington, as one lobbyist put it. "If WilmerHale were a publicly traded company, I'd be shorting the s*** out of them today because they've probably got partners who've put their kids through college off the billables they've racked up dealing with PSI," joked one Democratic super lobbyist who has made enough PSI money himself to put a few kids through school. "I don't think people think about it that way," said Reginald Brown, a leading congressional investigations lawyer at massive law firm WilmerHale. "The committee's got a long history that predates Senator Levin, but he's clearly one of the giants in the oversight community and it's frankly hard to envision what the space looks like without him in it." A member of the oversight panel since 1999, Levin chaired the PSI from 2001 to 2003 and again from 2007 to the present. A committee spokesman declined to comment for this story. PSI has been so lucrative for Washington's permanent establishment because it has done what an investigative committee is supposed to do -- pursued its targets with nonpartisan vigor, eschewing the media spotlight and instead seeking real results. Levin's investigations have led to prison terms, sparked lawsuits and, in the case of Swiss banking secrecy, earned billions of dollars for the U.S. Treasury and changed the way international banking is done. His peek into the causes of the financial crisis uncovered rampant criminality, the evidence of which was forwarded to the Justice Department, an indictment wrapped in a bow. (Attorney General Eric Holder didn't file charges and earlier this week said his department has been concerned that prosecuting major banks could harm the economy.) The contrast between Levin's investigations and those carried out by the House Oversight and Government Reform Committee (OGR) couldn't be starker. Chaired today by Rep. Darrell Issa (R-Calif.) and previously by Rep. Henry Waxman (D-Calif.), the latter panel has long been better at getting press than driving indictments. "Goldman Sachs took [a PSI investigation] really, really seriously in a way that -- OGR has reputational downside, because they're so aggressive with the press, but PSI is setting precedents for lawyers and lawsuits and criminal investigations. There's so much more at stake," said one Republican lobbyist who worked with Goldman and who, like a few others who spoke to The Huffington Post, requested anonymity to talk freely about influential lawmakers still in office. "Issa and Waxman were more interested in a quick bang and a headline. I don't think Levin was interested in a headline. He wasn't driven by press. It doesn't smack of pure politics." What has distinguished Levin from Issa and Waxman, in large part, has been political ambition. Both hard-charging House members appeared to see bigger things for themselves beyond the oversight panel. But Levin, who was first elected to the Senate in 1978, has long had the air of somebody who knew he was finished rising through the ranks. He seemed satisfied with his chairmanships, and he has made the most of them. "He probably knew he was going to be retiring today the day he assumed the chairmanship. He was less ambitious, had already proven himself. He just has a tone of more seriousness," said the GOP lobbyist. "There is a difference that is, I think, historical, but the gravitational pull is toward the Levin approach," said WilmerHale's Brown. "His approach has been bipartisan and detail-oriented and very, very substantive. The record on the House side is sometimes more mixed, but I think [the Levin model is] the same direction that Chairman Issa and Congressman Cummings are saying they want to move in the current Congress." (Rep. Elijah Cummings, of Maryland, is the ranking Democrat on the House Oversight Committee.) Issa's and Waxman's offices did not immediately respond to request for comment. Clients were willing to throw tremendous amounts of money around to try to thwart or blunt a Levin investigation, said lobbyists who spoke for this article. "They don't know what to do. There's only like six people you can call, guys who can go above the rim," said the GOP lobbyist. When his firm pitched one client facing a Levin probe in recent years, he said that another lobbyist, who had worked more closely with such investigations, told him that the fee the firm was demanding -- $20,000 per month -- would make them look unserious and suggested raising the bid to 10 times that amount. Levin's most high-profile investigation of recent years involved the financial crisis, but instead of forming the basis for indictments, its legacy is a comprehensive story by Rolling Stone reporter Matt Taibbi. More influential was Levin's look into the Swiss bank UBS' practice of sheltering U.S. assets: It led to jail time for some UBS clients, a massive settlement with the Internal Revenue Service, a change in the way Swiss banks do business, and an IRS amnesty program that has brought billions into the Treasury. Levin's investigative work preceded his time leading PSI. As the chair of the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Levin directly targeted Washington lawyers and lobbyists and the companies that hired them. These investigations found major loopholes in the nation's lobbying disclosure and ethics laws and led directly to the passage of the 1995 Lobbying Disclosure Act. One such inquiry found in 1991 that the top six defense contractors had failed to disclose millions of dollars in lobbying expenses. In the late 1980s, another investigation into the awarding of contracts under a Small Business Administration program to the heavily connected New York company Wedtech uncovered corruption and collusion among political appointees, lobbyists and corporations, leading to a massive overhaul of contracting at the agency and new laws to prevent abuse. In his retirement announcement, Levin declared that he would use his last two years at the PSI helm to pressure the IRS into providing proper oversight of the explosion in tax-exempt groups that appear to be almost exclusively engaged in politics. "Our tax laws are supposed to prevent secret contributions to tax exempt organizations for political purposes," Levin said in his March 7 statement. "My Permanent Subcommittee on Investigations needs to look into the failure of the IRS to enforce our tax laws and stem the flood of hundreds of millions of secret dollars flowing into our elections, eroding public confidence in our democracy." These so-called dark money groups, which include the Koch brothers' Americans for Prosperity and Karl Rove's Crossroads GPS, identify themselves as nonprofits under section 501(c)(4) of the U.S. tax code to avoid disclosing their donors while engaging in political activity. Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, applauded Levin's assertion that he will investigate the IRS' failure to enforce its own rules and called on him to issue subpoenas. "He could issue subpoenas and find out who's supporting these groups," Sloan said. "I think he should subpoena all the (c)(4) groups that were active in the last election cycle." Levin has already helped expose the IRS' weak explanation for failing to provide oversight and enforcement through a series of letters exchanged with the tax agency. The IRS' argument that it is simply enforcing the rules as written 50 years ago, according to Levin, is "not an excuse if new abuses require a review of an IRS regulation." He also said that the agency "is not enforcing the law in the face of the avalanche of evidence that our laws are being flouted." Beyond the IRS' failure on the campaign finance front, Levin also declared that he will continue investigations into tax avoidance schemes by wealthy individuals and large corporations. Washington's investigation defense lawyers are well aware that Levin holds the gavel for two more years. "He's not gone, and I don't think that he intends to rest on his laurels for the next year and a half," Brown said.

09 марта 2013, 18:06

An Accidental Rainmaker For Lobbyists

WASHINGTON -- Carl Levin will be remembered as the powerful chairman of the Senate Armed Services Committee, a Michigan man who fiercely championed the auto industry and its unions, and a jealous guardian of the traditions of the Senate. But K Street will remember the Democratic senator differently, and fondly, as an accidental rainmaker for lawyers and lobbyists specializing in corporate crisis response. Levin, who announced Thursday that he will retire at the end of 2014, will also give up the gavel of the Permanent Subcommittee on Investigations, known to insiders simply as PSI -- "the most feared committee" in Washington, as one lobbyist put it. "If WilmerHale were a publicly traded company, I'd be shorting the s*** out of them today because they've probably got partners who've put their kids through college off the billables they've racked up dealing with PSI," joked one Democratic super lobbyist who has made enough PSI money himself to put a few kids through school. "I don't think people think about it that way," said Reginald Brown, a leading congressional investigations lawyer at massive law firm WilmerHale. "The committee's got a long history that predates Senator Levin, but he's clearly one of the giants in the oversight community and it's frankly hard to envision what the space looks like without him in it." A member of the oversight panel since 1999, Levin chaired the PSI from 2001 to 2003 and again from 2007 to the present. A committee spokesman declined to comment for this story. PSI has been so lucrative for Washington's permanent establishment because it has done what an investigative committee is supposed to do -- pursued its targets with nonpartisan vigor, eschewing the media spotlight and instead seeking real results. Levin's investigations have led to prison terms, sparked lawsuits and, in the case of Swiss banking secrecy, earned billions of dollars for the U.S. Treasury and changed the way international banking is done. His peek into the causes of the financial crisis uncovered rampant criminality, the evidence of which was forwarded to the Justice Department, an indictment wrapped in a bow. (Attorney General Eric Holder didn't file charges and earlier this week said his department has been concerned that prosecuting major banks could harm the economy.) The contrast between Levin's investigations and those carried out by the House Oversight and Government Reform Committee (OGR) couldn't be starker. Chaired today by Rep. Darrell Issa (R-Calif.) and previously by Rep. Henry Waxman (D-Calif.), the latter panel has long been better at getting press than driving indictments. "Goldman Sachs took [a PSI investigation] really, really seriously in a way that -- OGR has reputational downside, because they're so aggressive with the press, but PSI is setting precedents for lawyers and lawsuits and criminal investigations. There's so much more at stake," said one Republican lobbyist who worked with Goldman and who, like a few others who spoke to The Huffington Post, requested anonymity to talk freely about influential lawmakers still in office. "Issa and Waxman were more interested in a quick bang and a headline. I don't think Levin was interested in a headline. He wasn't driven by press. It doesn't smack of pure politics." What has distinguished Levin from Issa and Waxman, in large part, has been political ambition. Both hard-charging House members appeared to see bigger things for themselves beyond the oversight panel. But Levin, who was first elected to the Senate in 1978, has long had the air of somebody who knew he was finished rising through the ranks. He seemed satisfied with his chairmanships, and he has made the most of them. "He probably knew he was going to be retiring today the day he assumed the chairmanship. He was less ambitious, had already proven himself. He just has a tone of more seriousness," said the GOP lobbyist. "There is a difference that is, I think, historical, but the gravitational pull is toward the Levin approach," said WilmerHale's Brown. "His approach has been bipartisan and detail-oriented and very, very substantive. The record on the House side is sometimes more mixed, but I think [the Levin model is] the same direction that Chairman Issa and Congressman Cummings are saying they want to move in the current Congress." (Rep. Elijah Cummings, of Maryland, is the ranking Democrat on the House Oversight Committee.) Issa's and Waxman's offices did not immediately respond to request for comment. Clients were willing to throw tremendous amounts of money around to try to thwart or blunt a Levin investigation, said lobbyists who spoke for this article. "They don't know what to do. There's only like six people you can call, guys who can go above the rim," said the GOP lobbyist. When his firm pitched one client facing a Levin probe in recent years, he said that another lobbyist, who had worked more closely with such investigations, told him that the fee the firm was demanding -- $20,000 per month -- would make them look unserious and suggested raising the bid to 10 times that amount. Levin's most high-profile investigation of recent years involved the financial crisis, but instead of forming the basis for indictments, its legacy is a comprehensive story by Rolling Stone reporter Matt Taibbi. More influential was Levin's look into the Swiss bank UBS' practice of sheltering U.S. assets: It led to jail time for some UBS clients, a massive settlement with the Internal Revenue Service, a change in the way Swiss banks do business, and an IRS amnesty program that has brought billions into the Treasury. Levin's investigative work preceded his time leading PSI. As the chair of the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Levin directly targeted Washington lawyers and lobbyists and the companies that hired them. These investigations found major loopholes in the nation's lobbying disclosure and ethics laws and led directly to the passage of the 1995 Lobbying Disclosure Act. One such inquiry found in 1991 that the top six defense contractors had failed to disclose millions of dollars in lobbying expenses. In the late 1980s, another investigation into the awarding of contracts under a Small Business Administration program to the heavily connected New York company Wedtech uncovered corruption and collusion among political appointees, lobbyists and corporations, leading to a massive overhaul of contracting at the agency and new laws to prevent abuse. In his retirement announcement, Levin declared that he would use his last two years at the PSI helm to pressure the IRS into providing proper oversight of the explosion in tax-exempt groups that appear to be almost exclusively engaged in politics. "Our tax laws are supposed to prevent secret contributions to tax exempt organizations for political purposes," Levin said in his March 7 statement. "My Permanent Subcommittee on Investigations needs to look into the failure of the IRS to enforce our tax laws and stem the flood of hundreds of millions of secret dollars flowing into our elections, eroding public confidence in our democracy." These so-called dark money groups, which include the Koch brothers' Americans for Prosperity and Karl Rove's Crossroads GPS, identify themselves as nonprofits under section 501(c)(4) of the U.S. tax code to avoid disclosing their donors while engaging in political activity. Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, applauded Levin's assertion that he will investigate the IRS' failure to enforce its own rules and called on him to issue subpoenas. "He could issue subpoenas and find out who's supporting these groups," Sloan said. "I think he should subpoena all the (c)(4) groups that were active in the last election cycle." Levin has already helped expose the IRS' weak explanation for failing to provide oversight and enforcement through a series of letters exchanged with the tax agency. The IRS' argument that it is simply enforcing the rules as written 50 years ago, according to Levin, is "not an excuse if new abuses require a review of an IRS regulation." He also said that the agency "is not enforcing the law in the face of the avalanche of evidence that our laws are being flouted." Beyond the IRS' failure on the campaign finance front, Levin also declared that he will continue investigations into tax avoidance schemes by wealthy individuals and large corporations. Washington's investigation defense lawyers are well aware that Levin holds the gavel for two more years. "He's not gone, and I don't think that he intends to rest on his laurels for the next year and a half," Brown said.

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04 марта 2013, 17:00

Forget About That Cash Bonus

In the corner of my home office sits a cabinet full of tchotchkes and gifts that neither I nor my wife can quite bear to part with. It includes a silver Tiffany picture frame I received from Columbia Business School for 10 years of teaching and a company-embossed Swiss army knife that my wife got one Christmas, back in her days as a consultant. While many might see this sort of gift giving as a sign of the boss's kindness and generosity, economists mostly see inefficiency: why can't Columbia just pay me a cash bonus rather than offering presents that collect dust? One answer comes from a classic study by Nobel Laureate George Akerlof, a pioneer in the field of behavioral economics, which focuses on the idea of gift exchange in the workplace. Acts of kindness by employers, the reasoning goes, elicit more effort from their employees in return, hence the utility knives and picture frames. But Akerlof mostly had in mind monetary rewards — you pay me above-market wages, and I'll repay the favor by working harder — which can't quite account for the booming corporate gift business. A study published last year by German and Swiss researchers took a more literal position on the gift exchange hypothesis, suggesting that economists' focus on cash might often be misplaced. The researchers found that gifts were far more motivating to short-term employees than unexpected cash bonuses, effectively paying for themselves by improving productivity. The findings provide some guidance on the types of gifts that are likely to engender the greatest motivation and loyalty. The study was inspired, in part, by the need to catalog books at a German university's economics library. Student catalogers were recruited to spend half a day helping out, with an advertised hourly wage of 12 Euros. While somewhat removed from the corporate context that most managers inhabit, the study has the merit of focusing on a task for which it's easy to measure productivity: how fast and accurately employees catalog their books. It was also a situation in which employees wouldn't expect their productivity to elicit further gifts or payments later on, since they were told explicitly that the job wouldn't continue past the morning's work. Before the students started to catalog the books, the experimenters told some of them that they would receive an unexpected seven-Euro bonus — a 20% pay hike relative to the promised wage of 36 Euros for the three-hour job. Another group was given a gift-wrapped water bottle that was worth around seven Euros. (In some versions of the experiment, a price tag was left on and catalogers were informed of the present's value, to ensure that the employees didn't overestimate it.) Crucially, a separate set of students didn't receive any bonus at all, to serve as a baseline to measure the effects of gifts and extra cash. The cash bonus didn't have any effect on the speed or accuracy with which the students did their jobs. However, those receiving the free bottle reciprocated by upping their data entry rate by 25%, a productivity increase that more than offset the cost of the bottle itself. It's not that the workers particularly loved their bottles — in fact, in a separate experiment in which catalogers were offered the choice between a bottle versus seven Euros, 80% took the cash (and still worked a lot harder). Rather, it was the thought that counted, and simply handing out a few more Euros hardly takes much thought. Even offering the option of a gift showed that the employer cared. An intriguing final version of the experiment underscored the importance, in the eyes of the employees, of the thought and effort bosses put into their gifts. In this treatment, the cash was delivered as a five-Euro note folded into an origami shirt and a two-Euro coin with a smiley face painted on it. The origami money-gift generated the highest increase in productivity of all. (While the researchers never handed out gift cards or other easy-to-obtain cash equivalents that are common and efficient employee rewards, one can imagine that a Starbucks gift card doesn't exactly scream "I Care.") The study has its limitations. It's hard to imagine that the average Wall Street trader would work harder for a pink Cadillac than a six-figure bonus. The motivational effects of cash surely become more important when the stakes get higher, and gifts probably work best when tailored to the particular set of employees involved. That's how you really show you care. And that, more than gifts versus cash, is really the study's takeaway. Many employees toiling away in stores, factories, and cubicles are desperate for a sense of meaning in their work lives. Even the smallest gesture of kindness that shows they're part of an organization that actually cares can give them purpose — and that leads to motivation.

22 февраля 2013, 03:25

Amy Davidsen: Time to Put the Climate Beyond Party Politics

In his State of the Union address, President Obama restated his inaugural commitment to respond to the threat of climate change, calling on Congress to pursue a "bipartisan, market-based solution." If Congress doesn't act, he vowed to take "executive actions" instead. Whichever path the president decides to pursue, legislation or regulation, bipartisanship will be critical. Even if every Democrat in Congress today were to vote in unison (a rarity for energy-related issues), the president would still need support from at least 18 Republicans in the House and five Republicans in the Senate to pass a new climate policy. And new carbon regulations under the Clean Air Act would also be subject to congressional review, suggesting that they, too, would benefit from bipartisan support. However, the need for bipartisanship doesn't mean that the president's second-term climate goals are destined to fail. The politics of climate are beginning to change. Following Hurricane Sandy, a poll by Zogby Analytics found that 69 percent of Americans, including half of Republicans, are "worried about the growing cost and risks of extreme weather disasters fueled by climate change" -- findings consistent with other recent polls by Rasmussen Reports, National Journal and Siena Research Institute. Pollster John Zogby commented on the shift, saying, "It's a major change from our 2009 poll, which showed two-thirds of Republicans saying they were 'not at all concerned' about global climate change." But changes in national polls alone have not been enough to change the minds of Members of Congress, who are more concerned with the opinions of their constituents. For that to begin to change, Americans in their districts need to hear more about the threat and opportunity presented by climate change, from non-partisan leaders who genuinely share their interests. This process is also underway. Leaders representing faith, health, agriculture, academia, armed services, industry, sports and other sectors have begun to engage their members on what a changing climate means for them. At Climate Week NYC 2012 -- an annual leadership summit hosted by The Climate Group in partnership with New York City -- leaders from the World Evangelical Association, World Medical Association, National Farmers Union, and major businesses from Swiss Re to Philips gathered together to discuss how to advance an American "clean revolution," a swift, massive scale up of clean energy that could generate up to $3 trillion in additional GDP by 2050, if the right investments are made today. Ending climate partisanship will not be easy. But the foundation for a more honest, less divisive conversation has been set by leaders outside of Washington, and by climate disruptions already being experienced throughout the country. After making a strong commitment in his State of the Union address, it is now up to President Obama to build on this progress by engaging more Americans, especially conservatives, in his effort to respond to the threat of climate change from the very start.

16 февраля 2013, 00:26

Davos 2013: Open Forum: War against Obesity -- Fat Invoice?

Open Forum: War against Obesity -- Fat Invoice? Obesity is the fastest-growing chronic disease, killing 2.8 million adults every year. With 1.4 billion overweight adults, we live in a world where unhealthy food, labour-saving devices, motorized transport and sedentary work are prevalent, and fast food sales are on the rise, blurring the boundaries between meals and snacks. - What are the key drivers of the obesity epidemic? - What societal and economic priorities challenge efforts to reduce obesity? - What policies need to be implemented, and how should they be aligned with business? - How can physical activity create a balance between energy intake and output? • Paul Bulcke, Chief Executive Officer, Nestlé, Switzerland • Linda P. Fried, Dean and DeLamar Professor of Public Health, Mailman School of Public Health, Columbia University, USA; Global Agenda Council on Ageing • Lisa MacCallum Carter, Vice-President, Access to Sport, Nike, USA; Young Global Leader; Global Agenda Council on Well-being & Mental Health • Alison Martin, Member of the Group Management Board and Head, Life and Health, Swiss Re, United Kingdom • Marc Van Ameringen, Executive Director, GAIN (Global Alliance for Improved Nutrition), Switzerland Moderated by • Jason Li Yat-Sen, Director, The George Institute for Global Health, People's Republic of China; Young Global Leader; Global Agenda Council on China http://www.weforum.org/

15 февраля 2013, 03:24

Positive-sum currency wars

Brazil’s finance minister coined the term “currency wars” in 2010 to describe how the Federal Reserve’s quantitative easing was pushing up other countries’ currencies. Headline writers and policy makers have resurrected the phrase to describe the Japanese government and central bank’s pursuit of a much more aggressive monetary policy, motivated in part by the strength of the yen.The clear implication of the term “war” is that these policies are zero-sum games: America and Japan are trying to push down their currencies to boost exports and limit imports, and thereby divert demand from their trading partners to themselves. Currency warriors regularly invoke the 1930s as a cautionary tale. In their retelling, countries that abandoned the gold standard enjoyed a de facto devaluation, luring others into beggar-thy-neighbor devaluations that sucked the world into vortex of protectionism and economic self-destruction.But as our leader this week argues, this story fundamentally misrepresents what is going on now, and as I will argue below, what went on in the 1930s. To understand why, consider how monetary policy influences the trade balance and the exchange rate.Typically, a central bank eases by lowering the short-term interest rate. When that rate is stuck at zero, it can buy bonds, i.e. conduct quantitative easing (QE), or verbally commit to keep the short rate low for longer, or it can raise expected inflation. All these conventional and unconventional actions work the same way: by lowering the real (inflation-adjusted) interest rate, they stimulate domestic demand and consumption. America, Britain and Japan are all doing this, although only Japan has explicitly sought to raise expected inflation; America and Britain have done so implicitly. This pushes the exchange rate down in two ways. First, a lower interest rate reduces a currency’s relative expected return, so it has to cheapen until expected future appreciation overcomes the unfavorable interest rate differential. This boosts exports and depresses imports, raising the trade balance. Second, higher inflation reduces a currency’s real value and thus ought to lead to depreciation. But higher inflation also erodes the competitive benefit of the lower exchange rate, offsetting any positive impact on trade.If this were the end of the story, the currency warriors would have a point. But it isn’t. The whole point of lowering real interest rates is to stimulate consumption and investment which ordinarily leads to higher, not lower, imports. If this is done in conjunction with looser fiscal policy (as is now the case in Japan), the boost to imports is even stronger. Thus, QE’s impact on its trading partners may be positive or negative; it depends on a country’s trade intensity, the substitutability between its and its competitors’ products, and how sensitive domestic demand is to lower rates. The point is that this is not a zero sum game; QE raises a country’s GDP by more than any improvement in the trade balance.There are other spillovers. Lower interest rates in one country will generally tend to send investors searching for better returns in another, lowering that country's interest rates and raising its asset prices. By loosening foreign monetary conditions, that boosts growth, though this may not be welcome if those countries are already battling excess demand and inflation.Determining whether QE is good or bad for a country's trading partners requires working through all these different channels. In 2011, the International Monetary Fund concluded the spillover of the Fed’s first round of QE onto its trading partners was significantly positive, raising their output by as much as a third of a percentage point, while the spillover of the second round was slightly positive. As the nearby charts show, the IMF concludes the weaker dollar was indeed slightly negative for the rest of the world, but this was more than offset by the positive impact of lower interest rates and higher equity prices. The 1930s are often cited as a lesson in the evils of competitive devaluation, but they actually show something quite different.In the 1980s, Barry Eichengreen at the University of California, Berkeley and his co-authors demonstrated that the first countries to abandon the gold standard recovered much more quickly from the Depression than those that stayed on gold longer. Mr Eichengreen has just written a new paper, to be published soon in the Journal of Policy Modeling, elaborating on the international spillovers as countries quit gold, and their implications for today. I strongly recommend it. In it, Mr Eichengreen describes three channels by which leaving the gold standard boosted a country's output:First, central banks engaged in what we would now call forward guidance.  They committed to keeping interest rates low, expanding supplies of money and credit, and raising the domestic currency price of gold for as long as it took for conditions to normalize … Second, the change in monetary policy had a positive impact on asset prices and therefore on investment. Third …[c]ountries  abandoning the gold standard and taking steps to depreciate their currencies were able to expand their exports relative to countries remaining on gold.  This channel is controversial because the expansion of exports took place at the expense of other countries, worsening the latter’s economic difficulties…As Mr Eichengreen notes, determining the net effect of these spillovers on other countries is muddied by these offsetting effects. The direct spillover of depreciation was negative, while the spillover of increased money and credit was positive, as capital outflows "helped to relax conditions in money and  credit markets and moderate expected deflation in other countries." Nonetheless, he concludes that from both calibration exercises and historical literature, the spillover effect was net negative. This might have been averted if everyone adopted the same monetary policy, i.e. quit gold at the same time:In circumstances where different countries had all experienced the same deflationary shock, the appropriate foreign response was to meet monetary expansion with monetary expansion and currency depreciation with currency depreciation.  Two dozen countries, primarily trade and financial partners of  the United Kingdom, responded by depreciating their currencies along with sterling.   In other countries, considerations of history, politics and ideology delayed or even precluded recourse to this first-best response.  Some countries in this position responded with capital controls and trade restrictions designed  to switch demand toward local producers.   This was less efficient than the first-best response both for them and for their foreign partners.An international coordinated response, it was argued then and has been argued since, would have been better.  But … the sum of the first-best unilateral responses was also the global optimum. Explicit coordination was not needed to achieve it.  With few exceptions, countries had arrived at this set of policies (the depreciation of  currencies against gold was all but universal) by the end of 1936. The irony is that to the extent devaluation led to protectionism and falling trade volume, it was more due to countries that did not devalue. In an earlier paper, Mr Eichengreen and Doug Irwin of Dartmouth College note that countries that remained on gold were more likely to erect protectionist measures against imports than countries those that quit. So while imports did collapse, they fell far less for countries that abandoned gold (like Britain, whose imports rose slightly between 1928 and 1935) than for those that stayed with it, like France, whose imports fell 15% (see nearby chart).EnlargeWhat are the lessons for today? The key insight of Mr Eichengreen’s work was that the more countries abandoned gold, the more positive become the spillover effects: "what are now referred to as currency wars were part of the solution, not part of the problem." The analogy for today is that countries whose currencies are rising because of easier foreign monetary policy should ease monetary policy as well, assuming they, too, suffer from weak demand and low inflation. In fact, America’s QE and the resulting upward pressure on the yen was one of the key reasons Shinzo Abe, Japan’s prime minister, demanded the Bank of Japan take a more determined assault against deflation. The fact that global stock markets have been chasing the Nikkei higher as Mr Abe's programme is put in place suggests investors believe this is virtuous, not vicious, cycle. This also implies that the euro zone ought to respond with easier monetary policy which would both neutralize upward pressure on the euro and combat recession in the euro zone.But Mr Eichengreen notes that unlike in the 1930s, today there is a large group of emerging economies who did not suffer a deflationary shock and thus would not benefit from easier monetary policy. Their optimal response, he says, would be to tighten fiscal policy, which would cool demand, putting downward pressure on interest rates and their currencies. But, as in the 1930s, he notes that there are political and institutional barriers to doing so, and instead they are opting for second-best policies such as capital controls, currency intervention, and in some cases, import restrictions.Those actions have yet to trigger a significant backlash because they are, for the most part, simply trying to slow rising currencies. The countries that have embarked on QE have so far largely steered clear of those measures, with one exception, Switzerland (which I discuss below.) Indeed, Mr Abe’s rhetorical assault on the yen constitutes currency war only insofar as traders think it will be followed by intervention. If Japan stays out of the markets, as the G7’s recent statement suggests, there is no reason to attribute the yen's decline to anything other than the Bank of Japan’s monetary policy.There’s an interesting debate over whether even intervention constitutes currency war. Economists traditionally thought such intervention had limited effect. If the central bank intervenes but does not change expectations about interest rates, investors will simply buy up all the currency that the central bank sells until expected returns were once again equal across all markets.But Joseph Gagnon of the Peterson Institute for International Economics challenges this conventional wisdom. Studies that found intervention does not work were done in the 1980s and 1990s when the sums were far smaller, he says. Central bank intervention is now hundreds of times larger. He explains in an interview: Japan did $177 billion of intervention in 2011. When countries intervene on that magnitude, I don’t think all the hedge funds and investment banks in the world are enough to neutralize that effect. They’re not willing to gamble more than a few tens of billions. Hedge funds need differential rates of return to induce them to take opposing positions. And the riskier it is, the more they have exposed, and the higher return they need. They expect to make money because government is distorting markets in a way they think is not sustainable, but governments can distort markets longer than you can stay solvent. This has parallels to the debate over QE. Skeptics like Michael Woodford believe that if the central bank does not change the public’s expectations of interest rates or inflation, no amount of bond buying will alter asset values or stimulate growth. But advocates like Mr Gagnon believe investors have a “preferred habitat;” they hold certain types of bonds or assets because of legal or institutional constraints, even if their returns seem too low relative to their own expectations of interest rates.   Most intervention is sterilized: the central bank is selling currency previously held by the public, so the money supply does not change. Unsterilized intervention, in which the central bank prints the currency it sells, as the Swiss National Bank has done, has different implications. It is, in practice, QE plus sterilized intervention. Imagine an investor sells euros to the SNB and gets newly printed Swiss francs. He invests them in Swiss government bonds, buoying their prices. The result is exactly the same as if the SNB had bought Swiss government bonds with newly printed money, then sold those bonds in order to buy foreign exchange. Based on our analysis here, it is getting one thing right (the QE) and one wrong (the intervention). The SNB justified its action based on the fact that its domestic bond market was too small to acommodate QE in sufficient size. Its trading partners must have agreed, because they didn't kick up much fuss. Or perhaps Switzerland is too small to matter. Japan should not assume it would get the same, hands-off treatment.

14 февраля 2013, 23:23

REUTERS: Buffett, Brazil's 3G team up for $23 billion Heinz buyout

By Ben Berkowitz and Martinne Geller Thu Feb 14, 2013 7:13pm GMT (Reuters) - Warren Buffett's Berkshire Hathaway and Brazilian private equity firm 3G Capital will buy ketchup maker H.J. Heinz Co for 14.9 billion pounds ($23.2 billion ) in cash, a deal that combines 3G's ambitions in the food industry with Buffett's hunt for growth. Including debt assumption, Heinz valued the transaction, which it called the largest in its industry's history, at $28 billion. Berkshire and 3G will pay $72.50 per share, a 19 percent premium to the stock's previous all-time high. Heinz shares initially rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid and the stock fell back below that mark by midday. The stock has been on a tear, almost doubling over the last four years, though analysts said the price seemed fair. They also said the deal could be the first step in a broader wave of mergers for the food and beverage industry. "Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense," Edward Jones analyst Jack Russo said. Companies like General Mills and Campbell Soup - itself long seen as a potential Heinz merge partner - rose on the news. Any acquisition could help Heinz further diversify and broaden its international profile. It already dominates the ketchup business, with a nearly 26 percent share of the global market and a 59 percent share domestically, according to Euromonitor International. The company actually generates the largest portion of its sales in Europe, though its traditional North American consumer products business is the most profitable. But its real growth engine has been the Asia/Pacific region, where sales increased nearly 11 percent in the last fiscal year, in part on demand for sauces and infant foods in China. BUFFETT HUNTING GROWTH The surprise purchase satisfies, at least in part, Buffett's hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two unnamed deals in excess of $20 billion and said he might have to do a $30 billion deal this year to help fuel Berkshire's growth engine. In this case, Berkshire is putting up about $12 billion to $13 billion cash, Buffett told CNBC, leaving it ample room for another major transaction. Barclays Capital analyst Jay Gelb, in a client note, said he understood the investment consisted of $8 billion in preferred shares and $4.5 billion in common stock. He also said the deal's valuation appeared high at 19 times Heinz's expected 2014 earnings per share, but that it would enhance Berkshire's consumer portfolio. Berkshire Hathaway already has a variety of food assets, including the Dairy Queen ice cream chain, chocolatier See's Candies and the food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz's products already and that this was "my kind of deal." It does represent an unusual teaming of Berkshire with private equity, though; historically, Buffett's purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December. One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically. "We're a little hesitant on the staple companies because they don't have any leverage in the United States," said Bill Smead, chief investment officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a "home run." A second investor, Michael Yoshikami of Destination Wealth Management in Walnut Creek, California, said he liked the purchase because it provided cash flow for other deals. "This is a better use of cash than current money market instruments," said Yoshikami, the firm's CEO and chairman of its investment committee. 3G EXPANDS For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake. Historically, 3G was more of an investor than an acquirer. Its biggest shareholdings include Delphi Automotive, Newell Rubbermaid and Anadarko Petroleum. Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev. Forbes ranks him as the world's 69th-richest billionaire, with a fortune of $12 billion. 3G's Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference on Thursday with Heinz management to discuss the deal - and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy. But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations. PITTSBURGH ROOTS Also to be determined is whether CEO Bill Johnson would stay on. Only the fifth chairman in the company's history, Johnson is widely credited with Heinz's recent strong growth. "I am way too young to retire," he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz's future management. The company, known for its iconic ketchup bottles, Heinz 57 sauces as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row. Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners. Heinz shares soared 19.7 percent, or $11.92, to $72.40 on the New York Stock Exchange. A week ago the stock hit a long-term high of $61 a share - near records it set in 1998 - having risen almost 5 percent this year and nearly 12 percent since the beginning of 2012. The deal is also a potential boon for new U.S. Secretary of State John Kerry, whose wife Teresa is the widow of H.J. Heinz Co heir John Heinz. Kerry's most recent financial disclosures from his time in the U.S. Senate show a position in Heinz shares of more than $1 million, although the precise size is unclear. Centerview Partners and BofA Merrill Lynch were financial advisers to Heinz, with Davis Polk & Wardwell LLP the legal adviser. Moelis & Company was financial adviser to the transaction committee of Heinz's board and Wachtell, Lipton, Rosen & Katz served as its legal adviser. Lazard served as lead financial adviser. J.P. Morgan and Wells Fargo also served as financial advisers to the investment consortium. Kirkland & Ellis LLP was legal adviser to 3G Capital, and Munger, Tolles & Olson LLP was legal adviser to Berkshire Hathaway. (Additional reporting by Olivia Oran in New York; Editing by Maureen Bavdek and Leslie Gevirtz) Discuss this topic @ Share Investor Forum - Register free Read the full transcript of the October 24 2012 Squawk Box Interview with Warren BuffettDownload the 2010 Berkshire Hathaway Annual ReportDownload the 1977 - 2011 Warren Buffett Letter's to Berkshire Hathaway Shareholders Warren Buffett @ Amazon Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book by Carol J. Loomis Buy new: $16.66 / Used from: $11.95Usually ships in 24 hours Warren Buffett's 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations by Preston George Pysh Buy new: $12.99 / Used from: $16.04Usually ships in 24 hours

14 февраля 2013, 23:09

THE STAR: Warren Buffett to acquire Heinz for $23B

World famous ketchup company purchased by Berkshire Hathaway and 3G Capital and will concentrate on emerging markets TOBY TALBOT / AP H.J. Heinz Co. says it agreed to be acquired by an investment consortium including billionaire investor Warren Buffett in a deal valued at $23 billion. (AP Photo/Toby Talbot, File) By: Reuters, Published on Thu Feb 14 2013 Including debt assumption, Heinz valued the transaction, which it called the largest in its industry’s history, at $28 billion. Berkshire and 3G will pay $72.50 per share, a 19 per cent premium to the stock’s previous all-time high. Heinz shares actually rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid. Analysts said the deal could be the first step in a broader wave of mergers for the food and beverage industry. “Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense,” Edward Jones analyst Jack Russo said. Companies like General Mills and Campbell Soup - itself long seen as a potential Heinz merge partner - rose on the news. The surprise purchase satisfies, at least in part, Buffett’s hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two deals in excess of $20 billion and said he might have to do a $30 billion deal this year to help fuel Berkshire’s growth engine. In this case, Berkshire is putting up about $12 billion to $13 billion cash, Buffett told CNBC, leaving it ample room for another major transaction. Berkshire Hathaway already has a variety of food assets, including the Dairy Queen ice cream chain, chocolatier See’s Candies and the food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz’s products already and that this was “my kind of deal.” It does represent an unusual teaming of Berkshire with private equity, though; historically, Buffett’s purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December. One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically. “We’re a little hesitant on the staple companies because they don’t have any leverage in the United States,” said Bill Smead, chief investment officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a “home run.” For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake. Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev. 3G’s Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference on Thursday with Heinz management to discuss the deal - and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy. But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations. Also to be determined is whether CEO Bill Johnson would stay on. Only the fifth chairman in the company’s history, Johnson is widely credited with Heinz’s recent strong growth. “I am way too young to retire,” he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz’s future management. The company, known for its iconic ketchup bottles, Heinz 57 sauces as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row. Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners. Discuss this topic @ Share Investor Forum - Register free Read the full transcript of the October 24 2012 Squawk Box Interview with Warren BuffettDownload the 2010 Berkshire Hathaway Annual ReportDownload the 1977 - 2011 Warren Buffett Letter's to Berkshire Hathaway Shareholders Warren Buffett @ Amazon Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book by Carol J. Loomis Buy new: $16.66 / Used from: $11.95Usually ships in 24 hours Warren Buffett's 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations by Preston George Pysh Buy new: $12.99 / Used from: $16.04Usually ships in 24 hours

14 февраля 2013, 22:51

STUFF.CO.NZ: Warren Buffett's 3G Capital to buy Heinz

BEN BERKOWITZ AND MARTINNE GELLER Last updated 07:31 15/02/2013 Last updated 07:31 15/02/2013 Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital will buy ketchup and baby food maker HJ Heinz Co for US$23.2 billion (NZ$ 27b) in cash, a deal that combines 3G's ambitions in the food industry with Buffett's hunt for growth. Including debt assumption, Heinz valued the transaction, which it called the largest in its industry's history, at US$28b. Berkshire and 3G will pay US$72.50 per share, a 19 per cent premium to the stock's previous all-time high. Heinz shares actually rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid. Analysts said the deal could be the first step in a broader wave of mergers for the food and beverage industry. "Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense," Edward Jones analyst Jack Russo said. Companies like General Mills and Campbell Soup - itself long seen as a potential Heinz merge partner - rose on the news.BUFFETT HUNTING GROWTH The surprise purchase satisfies, at least in part, Buffett's hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two deals in excess of US$20b and said he might have to do a US$30b deal this year to help fuel Berkshire's growth engine. In this case, Berkshire is putting up about US$12b to US$13b cash, Buffett told CNBC, leaving it ample room for another major transaction. Berkshire Hathaway already has a variety of food assets, including the Dairy Queen ice cream chain, chocolatier See's Candies and the food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz's products already and that this was "my kind of deal." It does represent an unusual teaming of Berkshire with private equity, though; historically, Buffett's purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December. One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically. "We're a little hesitant on the staple companies because they don't have any leverage in the United States," said Bill Smead, chief investment officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a "home run." For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake.3G EXPANDS Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev. 3G's Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference with Heinz management to discuss the deal - and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy. But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations. PITTSBURGH ROOTS Also to be determined is whether CEO Bill Johnson would stay on. Only the fifth chairman in the company's history, Johnson is widely credited with Heinz's recent strong growth. "I am way too young to retire," he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz's future management. The company, known for its iconic ketchup bottles, Heinz 57 sauces as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row. Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from JP Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners. Heinz shares soared 19.9 per cent, or US$12.06, to US$72.54 on the New York Stock Exchange. A week ago the stock hit an all-time high of US$61 a share, having risen almost 5 per cent this year and nearly 12 per cent since the beginning of 2012. The deal is also a potential boon for new U.S. Secretary of State John Kerry, whose wife Teresa is the widow of H.J. Heinz Co heir John Heinz. Kerry's most recent financial disclosures from his time in the U.S. Senate show a position in Heinz shares of more than US$1 million, although the precise size is unclear. Centerview Partners and BofA Merrill Lynch were financial advisers to Heinz, with Davis Polk & Wardwell LLP the legal adviser. Moelis & Company was financial adviser to the transaction committee of Heinz's board and Wachtell, Lipton, Rosen & Katz served as its legal adviser. Lazard served as lead financial adviser. J.P. Morgan and Wells Fargo also served as financial advisers to the investment consortium. Kirkland & Ellis LLP was legal adviser to 3G Capital, and Munger, Tolles & Olson LLP was legal adviser to Berkshire Hathaway. Discuss this topic @ Share Investor Forum - Register free Read the full transcript of the October 24 2012 Squawk Box Interview with Warren BuffettDownload the 2010 Berkshire Hathaway Annual ReportDownload the 1977 - 2011 Warren Buffett Letter's to Berkshire Hathaway Shareholders Warren Buffett @ Amazon Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book by Carol J. Loomis Buy new: $16.66 / Used from: $11.95Usually ships in 24 hours Warren Buffett's 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations by Preston George Pysh Buy new: $12.99 / Used from: $16.04Usually ships in 24 hours

03 февраля 2013, 22:16

Greek Isles Cut Off From Mainland For Sixth Day As Strikes Return With A Vengeance

When Europe's politicians boldly said a few weeks ago what they have been repeatedly saying every year for the past three, namely that "Europe is fixed" usually just before it breaks all over again, what they meant was that the various stock markets were up. Because if they were actually referring to the European economies, Europe just broke (no pun intended) once more, with the Greek economy once again back to its "new normal" baseline state: a near complete halt as the cold of winter dissipates, and protests and strikes return. In this case, the biggest losers are the thousands of people living on various Greek islands who have now been cut off from the mainland for the 6th consecutive day. And everyone else, of course, reliant on the Greek economy actually posting an uptick one of these centuries. From Reuters: "Greek seamen extended a strike to protest against government austerity for a further 48 hours on Sunday, meaning dozens of islands will have been cut off from the mainland for six days." They were not alone: "Farmers also briefly disrupted traffic on major motorways across Greece in the latest wave of protest over budget cuts and labor reform that is needed to satisfy international lenders." And that is just the start: "Greece's biggest labor union has called a general 24-hour strike for February 20." Happy days are back again, and with them, the warm up of the Syntagma Square riotcam, unless of course said riotcam was pledged long ago as ECB collateral for yet another loan which promptly ended up in G-Pap's or Venizelos' Swiss bank account, and is now long gone. Caption of a ship generating zero GDP From Reuters: The seamen are demanding months of unpaid wages and the repeal of a draft law that weakens their union by introducing a new employment contract between shipowners and crew.   "The law wipes out the seamen's profession and all the rules underpinning it," the PNO union said.   The strike, which started on Thursday, has begun causing shortages on grocery shelves and is hindering agricultural exports to the Balkans and beyond, the Athens Central Vegetable Market Association said in a statement.   The farmers disrupted traffic with sit-ins and by distributing free rice to drivers, to protest against tax increases that form part of the country's bailout.   "We have no choice but to go on, we're on the brink of desperation," one farmer told state television NET. Greece's latest austerity package mandates lower tax refunds and fuel subsidies for farmers and increases the social security contributions they must pay.   The Greek government is holding talks with the protesters but refuses to budge on any demands that might undermine its deficit cutting efforts, a condition of bailout funds and debt relief from the European Union and International Monetary Fund. While in the past most labor strikes have been resolved peacefully, Greece is now at a point where even one day of economic standstill has unknown consequences as the economy is already on empty. Which is why last month the country invoked rarely used emergency powers to break a strike of subway workers, serving military-style orders instructing them to return to work or face arrest. Should the same "militant" intervention be used to break up wholesale day strikes, the path to full blown social unrest, mediated by what's left of the Greek army, will be a very short one. Merchant shipping minister Costis Mousouroulis suggested on Sunday that the government might do the same against the seamen. "We can't be shutting our ears to islanders' desperate calls," he said.   Austerity has fuelled social unrest and extremism. Police on Friday arrested two bank robbers who turned out to be suspected members of a left-wing extremist group, Conspiracy of Fire Cells, which has claimed a spate of bomb attacks across the country since 2009.   Golden Dawn, an ultra-right, anti-immigrant party which ranks third in the opinion polls, staged its biggest rally ever in Athens late on Saturday, mustering about 5,000 supporters. Needless to say, by the time full blown civil war is raging in Greece, we expect to be able to collect not less than par for the several torn up and completely worthless Greek bonds collecting dust in our collective attic.

30 января 2013, 02:08

Don Tapscott: Examining the True Meaning of Davos

(DAVOS, Switzerland) The European skiers have once again checked into the hotels of this small Swiss village, replacing the attendees of the Annual Meeting of the World Economic Forum. One occurrence this week caused me to stand back and reflect more broadly on the meaning of this event and the challenge of improving the state of the world. It came from unexpected source. I received a call from the producers of The Current, the national CBC radio public affairs program, asking me to go on air to debate Aditya Chakrabortty of the Guardian newspaper. He had written an article saying Davos was an elitist gabfest. You can listen to the CBC discussion here. Mr. Chakrabortty argued that Davos is a privileged club of white male billionaires and millionaires who pretend to discuss issues of concern to society; that the real action is away from the public sessions and occurs in many secretive meetings in which capitalists conspire to grow their wealth. The forum "is the most perfect case study of how the practitioners of free-market, globalized capitalism give the public one explanation for what they are doing and why, while privately pursuing the complete opposite," he wrote. I told the host, Anna Maria Tremonti, that it was odd for me to listen to this broadside, as earlier that day I had several incidents that weren't exactly part of his storyline. I ran into Geoff Cape, co-founder of Evergreen, a Toronto-based national charity working to make cities more livable. He was beaming to tell me that Accenture and Cisco had just agreed to become strategic partners. Then I ran into Canada's Marc Kielburger, co-founder of Free the Children, who had made enormous progress getting support for his initiative Me to We. After that I spoke with Juliana Rotich, co-founder of the amazing organization Ushahadi, which is based in Kenya but is enabling social change and human rights projects around around the world. She said she had just met with a Latin American government minister who showed her how they were using Ushahidi to map poverty down to the individual-residence level, in an effort to turn the tide. The CBC discussion was cut short, so I want to complete my thoughts here. But first let me summarize my radio argument about why Chakrabortty was factually wrong writing from his perch in London -- much like someone describing what is happening on the surface of Mars when they're not there. The culture of Davos To begin, it's not just white men in Davos. The Forum pays a lot of attention to diversity and the crowd at Davos reflects that. I don't have the data, but in almost every meeting there are many women and people from every part of the world. There will be a Forum meeting on Latin America this April in Peru, and a meeting focused on Africa in Cape Town this May. They will be followed by Forum meetings in Jordan, Myanmar, China and India. All in all, the Forum organizes meetings in cities and countries around the world. Mr. Chakrabortty is not right about the Forum delegates all being corporate fat cats either. Almost half of the attendees come from NGOs and other civil society organizations, universities, governments and the arts. Even if it were a meeting of business leaders, what's the point of assuming it would be a bad thing? That argument presupposes that all corporations and their leaders are evil. Are there business executives in the financial services industry here who one might disagree with? You bet. That's neither here nor there. There are executives present who make trucks, trains, food, fabrics, office towers, clothes, software, networks and satellites. All of the biggest wealth creators and entrepreneurs of the world are here. There are the people who are trying to create jobs. There are people from hundreds of the hottest startups on the planet -- many of them social innovators. Fully 80 per cent of new jobs come from companies less than 5 years old. Does Mr. Chakrabortty not believe that a market economy is a good idea? Mr. Chakrabortty goes on a diatribe about Sharon Stone being at Davos, which, for starters, wasn't proven. But what's the point anyway? The Forum recognizes good work done by people around the world, and sometimes that will include those in the film industry. This year, Oscar-winning actress and HIV and AIDS campaigner Charlize Theron was given the Forum's Crystal Award. Theron received the award because of her commitment to improving the lives of African youth -- in particular, those suffering from HIV and AIDS, through the Charlize Theron Africa Outreach project. Pakistani Emmy and Oscar-winning filmmaker Sharmeen Obaid-Chinoy was another winner. A recent film of hers persuaded politicians in Pakistan to treat acid attacks as an act of terrorism and be punished with prison terms. I don't think it's accurate to describe the Forum as a gabfest designed to help businesses make more money. I attended one of the "private meetings" Mr. Chakrabortty ranted about hosted by the consulting company McKinsey & Company on overcoming youth unemployment. This is a huge problem, with the jobless rate for young people more than 50 percent in Spain and Greece, and close to 25 percent in Sweden. But there are also millions of unfilled jobs. How do we overcome the skills mismatch? McKinsey announced some deep research at the meeting, since there is a complete lack of reliable information on the topic, explaining what could be learned from more successful countries such as Germany. In another meeting hosted a private Ukrainian foundation, educators, policy makers and business people had sessions dealing with higher education, and the potential for massive open online courses, or MOOCs. Representatives from Harvard, Stanford and MIT all came to Davos to discuss the issue. See my article on that extraordinary discussion here. To be sure, business executives have private meetings to discuss new opportunities and partnerships or sell their goods and services. Country leaders meet with business executives to pitch their countries for investments too. But the norm is more like the Forum event I attended yesterday on the "moral economy," where executive after executive discussed practical mechanisms that would force corporations to be more fully responsible members of society. One speaker was Bill George, a former CEO of Medtronic and now a professor at Harvard Business School. He made a strong case that the purpose of a corporation is not simply to make a profit. Rather, society gives a licence to corporations to perform certain functions, including to create employment, innovate and create broader social value to society. After Michael Porter wrote his famous article in the Harvard Business Review that capitalism has to be rethought along "shared value" principles, he immediately headed to the 2011 Davos meeting to promote his concept. He knew he would be talking to thought leaders from around the world. As for the fact that there are cocktail parties? As someone who speaks at 60 conferences a year, I can't remember one cocktail-free. True, some of the private events hosted by unnamed web entrepreneurs might be over the top. But I'm not sure we should all agree that having fun is a bad idea. A curator of communities I find Davos productive for a number of reasons. It's intellectually rewarding; for example, there was a dinner last night with 10 Nobel Prize winners in attendance. And yes, there is great networking. But what drives me, and, I'm guessing, most people, is that the Forum helps me make a difference in the world. If you are a defender of the status quo, you're not going to have a very good time at Davos, because the discussion is a lot about change. Which brings me to my main point of discussion: What is the Forum, and what is its real meaning in terms of improving the state of the world? The Forum began four decades ago as a meeting for European executives to discuss pressing global problems. It evolved into a think tank, researching various issues and convening other events. Today you could think of the organization as a "do tank" that is engendering at least a dozen communities that are researching, discussing and taking action on many global problems. Earlier this week I discussed the Forum's Network of Global Agenda Councils, which were created in 2008. They bring together more than 1,500 of the world's most relevant experts from academia, business, civil society, government and international organizations. The councils are the vehicle for the Forum to achieve its year-round dialogue. Through its Women Leaders and Gender Parity Programme, the Forum is getting high-level leaders to pledge personal and organizational commitments towards gender parity. The goal is to close the economic gender gap through best practice exchange, collaboration and innovation. The Forum also helped form a group known as the Young Global Leaders, which brings together 700 exceptional young people under the age of 40 who share a commitment to shaping the global future. Members come from all around the world, and represent business, government, civil society, arts and culture, academia and media, as well as social entrepreneurs. The group is an independent not-for-profit foundation supervised by the Swiss government. It works closely with the Forum to integrate young leaders into deep interaction with other stakeholders of global society. In a trip to Sao Paulo last year, I met with a number of my young Twitter followers who created a hashtag #coffeewithDon. One of these, 25-year-old Tomás de Lara, was building a successful crowd-sourcing platform to finance social entrepreneurs in Brazil. He asked me about the Forum and I told him about the Global Shapers -- a Forum community of thousands of young leaders under the age of 30 in cities around the world. I arrived at Davos this year to learn that Mr. de Lara was one of the Global Shapers in attendance. We celebrated his success and discussed his plans going forward. The meaning of Davos The key point is that the Forum is really an example of a new model of global problem solving, co-operation and governance. Throughout the 20th century, nation-states cooperated to build global institutions to facilitate joint action and address global problems. Many of these organizations were created in the aftermath of the Second World War. They include the International Monetary Fund, the World Bank, the United Nations, the G8, the World Trade Organization and numerous other organizations based on nation-states. For decades, these large international institutions, including the European Union, have wrestled with some of the world's most intractable problems -the kind of problems that don't fit neatly into departmental pigeonholes. But progress has been slow or non-existent. Just look at the inability of the G8 and G20 to address the global economic crisis; the Doha Development Round of the World Trade Organization; and the Copenhagen and Cancun conferences on climate change. They show that formal international systems for co-operation are failing in achieving world goals of economic growth, climate protection, poverty eradication, conflict avoidance, human security and behaviour based on shared values. Conversely, many of the positive developments happening around the world, such as the struggles for democracy in North Africa, are not being made because of our global systems for co-operation but rather through new networks of citizens, civil society organizations and other stakeholders uniting around a common cause. Today we see a fundamental change emerging regarding how global problems can be solved. New non-state networks of civil society, private-sector, government and individual stakeholders are achieving new forms of co-operation, social change and even the production of global public value. They address every conceivable issue facing humanity, from poverty, human rights, health and the environment, to economic policy, war and even the governance of the Internet itself. Enabled by the digital revolution, these networks are now proliferating across the planet and increasingly having an important impact in solving global problems and enabling global cooperation and governance. Call them global solution networks, of which the World Economic Forum is a prime example. It was a network of governments, private companies, civil society organizations, and individual citizens -- the new four pillars of society -- that organized to solve the crisis in Haiti. Rather than building more massive global bureaucracies, it makes sense to embrace more agile, networked structures enabled by global networks for new kinds of collaboration. As I said in the CBC exchange with Mr. Chakrabortty, people like him throw mud on the windshield of progress. They do a disservice to the hard-working people around the world in organizations like the Forum that are trying to make a difference. To be sure, there are tough issues with all these new networks. To whom are they accountable? They may be inspired, but are they legitimate? Ultimately, these new approaches will be measured by their efficacy -- as the world scrutinizes their actual impact on solving global problems. But if you ask Marc Kielburger, Geoff Cape, Juliana Rotich or Tomás de Lara, they'll tell you that this is, in fact, progress. Don Tapscott is an adjunct professor at the Rotman School of Management and the author of 14 books. He just released a TED book (with Anthony D. Williams) called Radical Openness: Four Unexpected Principles for Success. You can follow him on Twitter @dtapscott. Originally published in TheGlobeandMail.com

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29 января 2013, 17:01

RBS Faces Criminal Libor Charges

Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, The Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go: Thing One: Prosecutors Could Get Used To This 'Criminal Charges' Thing: So maybe too-big-to-fail banks aren't too big to jail after all. At least, it is starting to look as if tiny, digestible chunks of big banks are potentially subject to criminal charges, if the bank's evil deeds are obvious and egregious enough. The Wall Street Journal reports today that U.S. government officials are within days of announcing a $790 million fine and possible criminal charges for Royal Bank of Scotland over manipulation of the key short-term interest rate known as Libor. A deal could come in the next couple of weeks, the WSJ writes, but RBS officials are balking at the idea of pleading guilty to criminal charges. It is hard to blame RBS officials for balking -- only recently have U.S. prosecutors gotten brave enough to actually file criminal charges of any sort against banks. They started with the Swiss bank UBS, whose Japanese unit pleaded guilty last month to criminal charges to help settle that bank's massive Libor headache. Before that, ginormous banks such as Barclays (Libor) and HSBC (money-laundering) managed to dodge any criminal charges at all because officials were terrified of rattling the global financial system. When the world didn't end after UBS criminal charges, officials got a little bolder, the WSJ writes, meaning RBS might have to ritually sacrifice one of its own Asian subsidiaries. So that's good news: Actual criminal charges are likely to have more of a deterrent effect than the usual wrist-stinging fines and avoidance of admitting wrongdoing. Also helpful would be actual charges against individuals, of which there have been noticeably few in the Libor scandal. The BBC reported recently that dumb trader emails about Libor in the RBS case are "particularly lurid," which is really saying something, considering the history of dumb trader emails in this wide-ranging scandal. That suggests there could be grounds for some people to be sent to jail. And who knows? Maybe if prosecutors discover that they can send some people to jail over Libor without the world ending, then they might be emboldened to revisit the possibility of sending people to jail for the even more damaging mortgage-market shenanigans leading up to the financial crisis. Ah, but that's probably too much to ask. Thing Two: Immigration As Stimulus: President Obama today will announce immigration-reform plans that will be more liberal than the roadmap introduced by a group of Senators yesterday, including a quicker path to citizenship for millions of people in the U.S. illegally, writes the Washington Post. Though this is sure to get many conservatives' blood a-boiling, it could also be a boon to the U.S. economy, writes Edward Krudy of Reuters: "Relaxed immigration rules could encourage entrepreneurship, increase demand for housing, raise tax revenues and help reduce the budget deficit, economists said." See, the world's biggest economies all have demographic headaches, including rapidly aging populations. An influx of new blood could help solve that problem in the U.S., giving it an economic advantage. Thing Three: Fed Watch! The Federal Reserve starts a two-day policy meeting this morning, where it will discuss just how much money it wants to print to keep the U.S. economy moving along. Economists estimate the Fed will end up buying more than $1.1 trillion worth of bonds under its latest bond-buying program by 2014, Bloomberg writes. But economists aren't exactly sure how much this bond-buying will actually, you know, help the economy. And Fed officials are starting to get nervous about the possible side effects of all of this money flying around, Quartz's Simone Foxman wrote recently. Thing Four: Here In My Car I Feel Safest Of All: U.S. auto makers start telling us about their 2012 profits today, starting with Ford, which reported a $1.6 billion profit. Taken together, the past two years have been among the most profitable for the U.S. auto industry "in decades," the Wall Street Journal writes. Pretty impressive, considering two of the Big Three went bust just a few years ago. And now they have something to shoot for: Toyota last year regained the title of the world's biggest auto maker, overcoming natural disaster and recalls to sell 9.75 million units, compared with 9.29 for GM, the WSJ writes. Thing Five: Slow Down, You Move Too Fast: U.S. officials have been looking into whether media companies, including Bloomberg, Dow Jones and Thomson Reuters, have been letting critical economic data slip a few microseconds too early, giving high-speed trading robots an advantage, the Wall Street Journal reports. They decided against filing criminal charges, in part because it's too hard to figure out what stuff got released too early and whether it actually helped any traders. Thing Six: Runaway Pay: Bailed-out U.S. companies such as GM and AIG have given their executives big raises for the past two years, while the Treasury Department twiddled its thumbs, according to a new report by the special inspector general for the Troubled Asset Relief Program, Christy Romero. She said Treasury essentially outsourced decisions about executive pay to the companies themselves, despite the fact that the U.S. government was still a stakeholder in those companies. Thing Seven: Mortgage Skimming: Federal prosecutors yesterday charged a former trader at the brokerage firm Jefferies & Co. of skimming a little bit of money here and there from clients in trades of residential mortgage-backed securities, writes the New York Times. Among the victims were funds set up by TARP to help bolster the market for RMBS, according to the government. The probe was led by Romero's busy TARP watchdog office. The total amount allegedly taken was not much, a little more than $2 million, but the case is an example of Romero's aggressive approach to enforcement, writes the NYT's Peter Lattman. Feel free to compare and contrast that to the approach taken by other government agencies (cough, Justice Department, cough). Thing Seven And One Half: The Yankees Still Suck: On this day in 1900 baseball's American League was founded in Philadelphia. The league originally consisted of eight teams, including the progenitors of today's New York Yankees (then called the Baltimore Orioles; today's Orioles were then called the Milwaukee Brewers) and Boston Red Sox (then called the Boston Americans). Only one of those teams, the Detroit Tigers, still has the same name and location as it did 112 years ago. Detroit also happens to be the most recent AL champion. The AL champion in the league's first year of play, 1901, was the Chicago White Stockings, now White Sox. Now Arriving By Email: If you'd like this newsletter delivered daily to your email inbox, then please just feed your email address to the thin box over on the right side of this page, wedged narrowly between the ad and all the social-media buttons. OR, if you are logged into a HuffPost account, you could simply click on this link and tick the box labeled "7.5 Things" (and any other kind of news alert you'd like to get). Nothing bad will happen to you if you do, unless you consider getting this newsletter delivered daily to your email inbox a bad thing. Calendar Du Jour: Economic Data: 9:00 a.m. ET: S&P/Case-Shiller Home Price Index for November 10:00 a.m. ET: Consumer Confidence for January Corporate Earnings: Amazon.com Ford Harley-Davidson Pfizer U.S. Steel Heard On The Tweets: Barnes & Noble to close 20 stores a year. For the next 600 years. $BKS— Downtown Josh Brown (@ReformedBroker) January 28, 2013 Hey guys, wondering if the SAG Awards were full of class AND sass--- oh never mind. The CNN front page answered that exact question for me.— Kumail Nanjiani (@kumailn) January 28, 2013 I've been voted Most Likely To Never Exercise for three years not running!— Derek Lawler (@RowdyBowden) January 28, 2013 Me: want me to help you cook? Mom: no, all you ever make in the kitchen is a mess. Me: False. I've made several stellar fires.— Manda (@lilgapeach30) January 28, 2013 "Gangster Squad" is such a dumb name for that movie. It should be called "Ryan Gosling Is In This".— Robin McCauley (@RobinMcCauley) January 25, 2013 -- Calendar and tweets rounded up by Alexis Kleinman. And you can follow us on Twitter, too, if you want, no pressure: @AlexisKleinman and @MarkGongloff