Friday, October 31, 2014

oil producers reining in spending

Top U.S. oil producers, which already were reining in spending before crude prices started to slip in June, are now looking to trim more fat from their budgets while reminding investors they must spend to grow.
Exxon Mobil Corp (XOM.N) on Friday it would keep its current spending plan intact, though it is about 15 percent less than 2013. ConocoPhillips (COP.N) said it will spend less money next year, and Chevron Corp (CVX.N) said it is looking for budget "flexibility."
Crude oil prices have slumped 25 percent since June as global supplies grow and demand weakens.
Exxon, which sets budgets using a long-term horizon, still expects to spend a little bit less than $37 billion a year from 2015 to 2017, an executive told investors on Friday on a conference call.
"We always are mindful of what's happening in the near future but I keep on pulling back that we are a long-term investor," said Jeff Woodbury, Exxon's head of investor relations.
Exxon tests projects "across the full range of economic parameters including price" to ensure favorable returns, he said.
The Irving, Texas company saw capital spending peak at $42.5 billion last year when it was advancing projects to deliver future production growth. Exxon has spent $28 billion so far this year, down 14 percent versus the first nine months of 2013.
ConocoPhillips, the largest independent oil and gas company, said on Thursday it plans to spend less than $16 billion next year, below the $16.7 billion it expects to spend in 2014.

Thursday, October 30, 2014

long cable car in the world’s largest cave

Phong Nha Ke Bang, Quang Binh, Vietnam
Phong Nha Ke Bang, Quang Binh, Vietnam (Photo credit: Wikipedia)
A Vietnamese resort company has been granted approval to begin surveys to build a 10.6 kilometer (6.6 mi) long cable car in the world’s largest cave, the UNESCO-listed Son Doong in north-central Quang Binh province in Vietnam. If completed it would make it the longest cable car ride in the world, ahead of Tianmen Shan in China.
Vietnam has a fondness for cable cars. They pop up in many tourist spots, from the Ba Na hills in the center of the country to provincial spots popular with domestic tourists such as Nui Ba Den (Black Lady Mountain), south of Saigon. However, the prospect of this cable car, to be built by the large Sun Group (which owns the InterContinental Hotel in Danang and built the Ba Na hills cable car system), has upset environmentalists, the cave’s original discoverers and inspired an online petition.
The proposed $212 million cable car system would travel through Tien Son and Phong Nha caves (the latter was formerly believed to be the largest cave in Vietnam) and then Son Doong cave, with three of its seven stations in the 9 kilometer long Son Doong.
Son Doong was discovered by local Ho Khanh in 1991 and explored by a group from the British Cave Research Association in 2009, led by Howard and Deb Limbert. The UNESCO-listed cave receives under 250 visitors a year who all trek with the one travel company licensed to offer tours, Oxacis Tours. Those doing so have to trek and camp, with porters carrying baggage and food.
Whilst Son Doong still hosts few visitors the other caves, such as Phong Nha, within the Phong Nha-Ke Bang national park are far more touristed. The area has received 2.5 million visitors this year so far and this may rise to three million in 2015, according to Vietnamese news sources. The impacts of mass tourism are already being felt and experts worry that extending that to the pristine Son Doong, which is so large it contains a jungle and could fit skyscrapers within it, would be reckless at best.
Dang Minh Truong, Sun’s CEO, told Saigon-based Tuoi Tre News that the project will involve foreign experts and satisfy UNESCO’s criteria for sustainable development. He also noted that 80 UNESCO-listed sites already have cable car systems (though it should be noted that none of those are in remote cave systems within national parks).

Wednesday, October 29, 2014

rapid-fire investors get access to market-moving documents

Hedge funds and other
English: The U.S. Securities and Exchange Comm...
English: The U.S. Securities and Exchange Commission headquarters located at 100 F Street, NE in the Near Northeast neighborhood of Washington, D.C. (Photo credit: Wikipedia)
rapid-fire investors get access to market-moving documents before other users of the Securities and Exchange Commission's system for distributing company filings, giving them a possible edge on the rest of the market, the Wall Street Journal reported, citing two independent studies.
The two sets of researchers have been examining when paying subscribers receive SEC filings compared with when they become available on the agency's website, the newspaper reported.
They found a wide variation in the lag time, from no delay to one lasting more than a minute. The ability to get the information before it is on the SEC website can give traders extra seconds to act on the news, WSJ said.
The studies focus on the SEC's Electronic Data Gathering, Analysis and Retrieval system, or Edgar, which is used to disseminate earnings reports and other documents filed to the regulator.
Representatives for the SEC were not immediately available to comment on the report outside regular U.S. business hours.
However, an SEC spokeswoman told the Journal that the agency has reviewed the working paper and was conducting a thorough assessment of the dissemination process to make necessary systems modifications.
A book by best-selling author Michael Lewis that asserted equities markets are rigged by high-frequency traders - who can dip in and out of markets in fractions of a second - triggered renewed regulatory scrutiny earlier this year.

Tuesday, October 28, 2014

AT&T fined again

Logo of the United States Federal Communicatio...
Logo of the United States Federal Communications Commission, used on their website and some publications since the early 2000s. (Photo credit: Wikipedia)
The FTC said on Tuesday that the second-largest U.S. cellular phone network charged its customers for "unlimited data," but nevertheless reduced their browsing speeds. In some cases, speeds dropped by close to 90 percent.
Filed in the U.S. District Court of Northern California [PDF], the federal agency charged with protecting consumer's rights said the company had performed a "deceptive failure" to disclose its mobile throttling plan.
FTC chairwoman Edith Ramirez summed up her sentiment in three words: "Unlimited means unlimited."
She added: "AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise."
Here's the nutshell to the FTC's complaint.
The FTC said despite "unequivocal promises" by the company to its customers that they would receive unlimited data, AT&T began in 2011 throttling data after they used just 2GB of data in a billing — which most average users can go through quite easily.
About 3.5 million individual customers may have been throttled more than two-dozen times, the agency claims.
Simply put: AT&T broke the law by changing the terms of the customers' unlimited data plans while they were still under contract. And, AT&T didn't "adequately" disclose its throttling program.
Although AT&T falls within the realm of the Federal Communications Commission's jurisdiction, FCC staff were consulted and worked closely with the FTC on bringing charges.
It's the second time this month the company has been bitten by the federal government.
Earlier in October, AT&T was forced to pay $80 million back to consumers after it billed customers for unauthorized third-party charges.

Monday, October 27, 2014

McDonald’s showing a 3.3 per cent drop in customer traffic worldwide

English: McDonalds' sign in Harlem.
English: McDonalds' sign in Harlem. (Photo credit: Wikipedia)
The Coca-Cola logo is an example of a widely-r...
The Coca-Cola logo is an example of a widely-recognized trademark representing a global brand. (Photo credit: Wikipedia)
Some of the biggest companies serving consumers are showing signs of stress this week, with McDonald’s showing a 3.3 per cent drop in customer traffic worldwide and worldwide sales by Coca-Cola flat.

A more discriminating and health-conscious consumer is eating into profits at both companies, and the strategies they’ve taken to change their product offerings have not caught on as hoped.

In the case of McDonald’s, a significant misstep in China also hurt its prospects throughout Asia

Sales there are down 9.9 per cent after a McDonald’s supplier based in China was shown on TV repackaging expired beef.

Reputation hurt in China


McDonald’s previously had a reputation for quality control, consistency and safe food in China, a country that has an uneven record on food safety. It seemed modern and Western in a place where 25 years ago dining rooms were concrete bunkers where customers commonly rinsed their dishes with tea to sanitize them before being served.

McDonald’s apologized and stopped buying from the offending factory, which resulted in shortages of beef and chicken throughout its Asian operations. Its reputation is still suffering.


Revenue declined to $6.99 billion US, short of the $7.23 billion Wall Street expected. Net income declined to $1.07 billion, or $1.09 per share, also missing expectations.

In North America, McDonald’s, like Coca-Cola, is fighting to hold on to customers amid shifting tastes in food and heightened health-consciousness.


To defend the image of its food, McDonald's launched a social media campaign last week in the U.S. inviting customers to ask questions about the ingredients it uses. Among the first questions McDonald's was forced to address were "Why doesn't your food rot?" and "Do you use real chicken in your Chicken McNuggets?"
Customers are shunning burgers, but new McDonald's menu items have not caught on in the same way. The chain, with 14,000 U.S. restaurants, is losing out to rivals such as Chipotle, which emphasizes the freshness of its ingredients.

Sunday, October 26, 2014

Web sales dipped for PetMed Express Inc.


Lead Photo

Web sales accounted for 80% of the retailer’s sales but decreased 3.6% from the second quarter of fiscal 2014.
Web sales dipped for PetMed Express Inc. in the second quarter of fiscal 2015 compared to the same quarter last year, though e-commerce accounted for a higher percentage of the company’s declining sales.
PetMed Express sells prescription and non-prescription pet medications and other health products for dogs and cats online at 1800PetMeds.com and over the phone at 1-800-PetMeds.
The second quarter was especially rough, said Menderes Akdag, the chairman, president and CEO, on the company’s Q2 earnings conference call because flea and tick season started late, possibly decreasing sales of medication designed to keep dogs and cats free of the pests. Despite that, the average order size was up to $75 compared to $73 in the same quarter last year.
The company’s advertising cost of acquiring a customer rose to $45 for the quarter and $50 for the first six months, Akdag said. That’s an increase from $41 and $46, respectively, from 2014. Akdag attributed the increase to higher advertising costs, and said the advertising costs for online channels increased faster than for TV channels.
For the second quarter ended Sept. 30, PetMed Express reported:
  • PetMed Express didn’t break out web sales in dollars in its second quarter earnings filing, but did report that the web accounted for 80% of total sales for the quarter, compared with 79% in the previous quarter. Based on those percentages, web sales totaled $46.08 million in Q2 2015, a 3.6% decline from $47.80million in Q2 2014.
  • Total sales decreased 4.8%to $57.6 million from $60.5 million.
  • Net income decreased 9.5% to $3.8 millionfrom net income of $4.2 million in the second quarter of 2014.
For the first six months of fiscal 2015 PetMed Express did not break out web sales but did report:
  • Total sales decreased 3.4% to $130.1 million from $134.7 million in the first six months of fiscal 2014.
  • Net income decreased 1.1% to $8.8 million from net income of $8.9 million in the same period last year.

Saturday, October 25, 2014

Professor Ballmer shows up on Tuesday and Thursday mornings to teach

Steve Ballmer, CEO of Microsoft.
Steve Ballmer, CEO of Microsoft. (Photo credit: Wikipedia)
The truth is that Ballmer is a thoughtful man who operates not in one mode but four or five modes. Most of us oscillate among different flavors of our personalities, depending on the situation. Ballmer, I think, has more extreme shifts.
There’s the bombastic guy everyone knows: He’s the Ballmer now running the Los Angeles Clippers, the guy we profiled in this week’s cover story. Then there’s the man in the Stanford office–much more on him below–who paces around and tugs at the window shade chain and pokes me in the shoulder and makes wild gestures, all while speaking in mostly measured tones. That Ballmer showed up at a lot of Microsoft meetings. There’s also the guy at the steakhouse who is calm, analytical, fun to talk to, and deft at hopping from subject to subject. And, of late, there’s Professor Ballmer, more self-aware than people would imagine and contemplating his future with the same vigor his students bring to mulling theirs.
Professor Ballmer shows up on Tuesday and Thursday mornings to teach 80 or so MBA hopefuls. His class, Leading Organizations, runs two hours to covers topics ranging from accountability to time allocation. I popped in recently for a class dubbed “storytelling,” which mostly hit on the thinking that went into marketing products at Microsoft—and whether or not the various approaches worked. Ballmer teaches the class with Susan Athey, a well-regarded economics professor, and they were joined on this day by Mark Penn, the pollster and political strategist who has done work for the Clintons, Tony Blair, and Microsoft.

Friday, October 24, 2014

Tesla store on Tmall.com opens today

The Tesla store on Tmall.com opens today, offering a Model S for nearly $170,000.
Oct. 20 (Bloomberg) -- Tesla Motors Inc. began taking online orders for its Model S electric car in China today, joining General Motors Co. and Volkswagen AG in selling vehicles through Alibaba Group Holding Ltd.’s online shopping mall.
Buyers can place a 50,000-yuan ($8,200) deposit for the electric car through Alibaba’s Tmall.com, according to Tesla China spokeswoman Peggy Yang. “Tmall offers us an opportunity to reach out to general customers,” she said by telephone.
[The full price of this limited-edition Model S is about 1 million yuan ($170,000), Tesla says. A customer pays the balance at a physical Tesla location in China. In the United States, the Tesla Model S starts at $69,900. The price in China includes transportation and import duties.—Internet Retailer]
Tesla, led by billionaire Elon Musk, began deliveries of the Model S to the world’s largest auto market in April. The automaker is seeking to cut down the time required to ramp up its sales by selling directly through the web rather than set up a network of dealerships across the country.
“We know that it’s a big, big challenge for all car manufacturers to penetrate into the huge mainland,” Klaus Paur, London-based global head of automotive at researcher Ipsos, said by phone. “This plays perfectly into their strategy. Tesla came into the market doing things differently.”
A total of 18 pre-configured cars are being offered through the marketplace, meaning consumers can’t choose their trim and other features, Yang said.
Besides Tesla, Buick, Chevrolet, Geely Automobile Holdings Ltd. and Shanghai Volkswagen also have official sites on Tmall.com. Chevrolet sold 245 cars through the online mall this month, according to its web site on the marketplace.

Thursday, October 23, 2014

Netflix’s total revenue tops $1.4 billion

In a quarter that included a major European expansion, Netflix’s total revenue tops $1.4 billion, but fewer than expected new consumers signed up.
Netflix Inc. revenue climbed 27.5% and net income 86% in the third quarter, but the video streaming company fell short of its forecast for new customers. The e-retailer reported today that it added 3.02 million new customers in Q3; its forecast was 3.69 million.  
Most the customers who signed up, 2.04 million, came from outside the United States. International streaming revenue grew 89% year over year and accounted for 28% of total revenue. In September, Netflix launched streaming services in France, Germany, Austria, Switzerland, Belgium and Luxembourg.
In their letter to shareholders, Netflix CEO Reed Hastings and chief financial officer David Wells also addressed the competitive threat HBO plays. News broke today that HBO will begin to offer HBO as a streaming service separate from any cable or satellite company. “It was inevitable and sensible that they would eventually offer their service as a standalone application,” they wrote. “Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely that we both prosper as consumers move to Internet TV.”
For the quarter ended Sept. 30, Netflix, No. 7 in the 2014 Internet Retailer Top 500 Guide, reported:
•Total revenue of $1.41 billion, up 27.0% from $1.11 billion in Q3 2013. Total revenue for the nine months ending Sept. 30 is $4.02 billion, up 25.6% from $3.20 billion.

Wednesday, October 22, 2014

consumers may do more of their spending online

 U.S. consumers may do more of their spending online than ever before this holiday season, adding pressure on shopping malls already struggling to lure traffic.
44% of the average consumer’s shopping will be on the web, compared with about 40% last year, according to a survey released today by the National Retail Federation. That proportion, which includes browsing sessions where shoppers don’t make a purchase, is the highest since at least 2006, when the NRF first asked the question.
“Online has done a much better job of captivating the consumer with prices and early promotions,” Marshal Cohen, chief industry analyst at consulting firm NPD Group Inc., said in an interview. “The more people spend online, the less people are in the stores, and the less the impulse purchasing.”
U.S. retail sales are expected to rise 4.1% to $617 billion in November and December, the most in three years, according to an earlier report by the NRF. Employment gains are lifting consumer confidence and giving more shoppers the money to buy gifts this year. Given the online shift, brick-and- mortar stores may miss out on a chunk of this resurgence in spending.
According to the NRF, consumers also will spend less on themselves this holiday season, with 57% planning to spend $126.68 on non-gifts, down from $134.77 last year. On top of that, the survey found that shoppers will be more discerning, with 36% planning to check products and prices before they buy, the highest proportion in at least four years.

Tuesday, October 21, 2014

eBay cuts outlook

EBay Inc (EBAY.O) on Wednesday joined Wal-Mart Stores Inc (WMT.N) in cutting its outlook for the all-important holiday season, suggesting that the fourth quarter may turn out to be weaker than some analysts predicted as recently as last week.
The warnings from two of the retail industry's most influential players comes as investors re-assess the state of the global economy after weak data this week from the two largest countries, the United States and China.
EBay and Wal-Mart blamed divergent factors such as food stamp reductions and unfavorable search-engine optimization for the lower outlooks.
Both complained about the stronger dollar putting the skids on their forecasts, lowering the value of overseas sales once converted into the U.S. currency.
But analysts say stagnant incomes are also prompting U.S. consumers to curtail spending.
"EBay, especially on the marketplaces side, is actually suffering from company-specific setbacks," Wedbush Securities analyst Gil Luria said. "But overall, if e-commerce was growing faster or as fast as it was last year or a couple years ago, it would have probably helped them hide that."

DOLLARS AND CENTS
EBay's fourth-quarter outlook was undercut by the strength of the dollar against the British pound, the euro and the Australian dollar, which together account for 35 percent of eBay's volume.
The stronger dollar alone forced eBay to cut its fourth-quarter revenue outlook by $120 million. Coupled with slower-than-expected growth in its marketplaces division, eBay was forced to lop off $300 million from its annual revenue forecast.

"As expected, (retail) sales have accelerated in the second half of the year, though economic signals remain mixed and consumers are still facing headwinds such as weak income growth," Moody's analyst Michael Zuccaro wrote on Wednesday.

Monday, October 20, 2014

Netflix Inc signed up fewer video streaming subscribers

Netflix Inc signed up fewer video streaming subscribers than forecast for the quarter that ended in September as its U.S. growth slowed markedly, sending its shares plunging as much as 27 percent.
The company blamed a $1 price hike to $8.99 a month for discouraging new sign-ups. It lured 3.02 million new streaming customers globally, versus the 3.69 million it projected in July.
Netflix attracted about 980,000 new customers in the United States, its largest market, down from 1.29 million in the same period a year earlier.
The news came after Time Warner Inc's HBO said on Wednesday it will offer new competition next year with a streaming service that does not require a pay TV subscription.
"Year-on-year net additions in the U.S. were down," Netflix said in a quarterly letter to shareholders. "As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago."
Shares of Netflix fell 25 percent to $333.53 in after-hours trading, from their $448.59 close on Nasdaq.
Netflix, waving off fears that a standalone HBO would draw users away, argued that many will subscribe to both services because they offer different shows.
"It is likely we both prosper as consumers move to Internet TV," the company's letter said.
Chief Executive Reed Hastings said in an interview that he expected other premium channels such as Showtime and Starz to sell programming directly to consumers. CBS-owned Showtime said it was weighing such a move. Starz has announced plans to offer that type of service overseas.
Netflix has invested in original series such as "House of Cards" and "Orange is the New Black" to compete with HBO, Amazon.com Inc and on-demand offerings from pay TV providers.

Netflix also is pushing into original movies, financing four Adam Sandler films and a sequel to martial-arts drama "Crouching Tiger, Hidden Dragon."

Sunday, October 19, 2014

Cyber-criminals have infected ATMs in Russia, Europe, United States, India, and China

Kaspersky Lab
Kaspersky Lab (Photo credit: Wikipedia)
Cyber-criminals have infected ATMs in Russia, Europe, United States, India, and China with malware to empty cash stored in the machines, Kaspersky Lab researchers said this week.
Attackers unlock the ATM case, possibly with a default master key, and use a bootable CD to infect the machiene with the Tyupkin malware, Kaspersky Lab researchers said in a post on SecureList Tuesday. The malware is designed to accept commands in the middle of the night Sundays and Mondays, and quiet the rest of the week, making it difficult to detect.
Malware's PathOnce the malware is loaded onto the ATM, attackers can see how much money is still in the cassettes in the machine. The attacker has to be physically in front of the ATM to enter a specially generated six-digit PIN generated by the malware in order to withdraw money. They can take up to 40 bills at a time without having to swipe an ATM card or enter any account information, Kaspersky Lab said. Approximately 50 machines have been infected this way, according to the report, which was part of a joint investigation with Interpol.
"A unique six-digit combination key based on random numbers is freshly generated for every session. This ensures that no person outside the gang could accidentally profit from the fraud. Then the malicious operator receives instructions by phone from another member of the gang who knows the algorithm and is able to generate a session key based on the number shown. This ensures that the mules collecting the cash do not try to go it alone," according to the blog post.
Interestingly, if the wrong key is entered, the malware disables the entire network. Kaspersky researchers were not sure why the network was disabled. It could be a way to delay remote investigators from analyzing the malware.

Saturday, October 18, 2014

World Wide Web Consortium (W3C) is working to develop open standards

The World Wide Web Consortium (W3C) is working to develop open standards that will enable companies and individuals to make secure payments over the web. Today (Wednesday 15 October) it launched a Payments Interest Group, which it hopes will attract industry participants from banks and card providers, e-commerce companies, merchants, the suppliers of browsers and digital wallets, telecoms operators and other interested parties, including regulatory bodies.
The W3C says its payments platform will cover "international low-value remittances, general retail payments, bill payments, and utility payments. The group will study the current gaps in Web technology regarding usability, security, and privacy, and recommend new work to fill those gaps."
It has no plans to develop its own digital wallet, and so on. However, it will develop open standards that enable different products to interoperate. It recognises that some industry giants already have payments systems — including Apple and Google — but the W3C aims to attract thousands of smaller suppliers. If the open "web commerce API" is strong enough, most companies will want to use it, if only to save development time.
The W3C has already spent about four years organizing discussions about web payments, but it’s a very complex area. It requires a range of technical developments including signed HTTP messages, secure messaging, identity credentials and digital receipts, as well as a payments infrastructure. Some of this work is being done by different groups, including the cryptography and NFC working groups.
The W3C says there are problems with the systems in use today. One is poor usability: it reckons that "the average shopping cart abandonment rate is 97 percent on mobile devices". Another is fraud. It says: "The rate of fraud in 'card not present' transactions (such as those common for transactions via Web sites) is 10 times higher than that when physical cards are used. These risks must be addressed if online commerce is to flourish."
The W3C system will include the facility for in-app payments. The web is becoming less important to smartphone and tablet users, who tend to prefer apps. The app stores also attract developers who see them as a way to monetize their work.

Friday, October 17, 2014

HBO will offer a stand-alone streaming service

english: This is the american HBO brand logo. ...
english: This is the american HBO brand logo. ® 2008 Home Box Office, Inc. All Rights Reserved. portugu√™s: Este √© o logotipo da marca estadunidense HBO. ® 2008 Home Box Office, Inc. Todos os Direitos Rervados. (Photo credit: Wikipedia)
HBO will offer a stand-alone streaming service to customers in the U.S. next year, removing a big brick from the shaky foundations of the cable-TV industry. ”It’s time to remove all barriers to those who want HBO,” said HBO Chief Executive Richard Plepler at Time Warner’s (TWX) investor meeting on Wednesday, Oct. 15.
Specifics are practically nonexistent. Plepler didn’t say how much such a service would cost, whether it would include a full slate of content, or even how people would buy it. A spokesman for HBO declined to give any additional details. But his remarks should be enough to strike fear into the likes of Comcast (CMCSA) and Cablevision (CVC), whose business models are based on maintaining barriers to highly coveted cable programming.
The biggest open questions are about how HBO pursues a more direct relationship with customers than it has had in the past. The cable network has hinted it would work with broadband providers to make it possible for subscribers to pay an additional fee to get the streaming service, even if they don’t pay for cable TV. Internet-service providers (which are often the same as cable-TV providers) want to stay in the loop, and maintaining good relations with them is still important for HBO. Selling a new streaming product this way would probably help appease them. And it would also save HBO from having to build its own infrastructure for billing and customers relations—although everyone is still going to blame HBO when the service goes down during Game of Thrones.
But HBO could decide it wants to deal directly with customers. Simply opening up its HBO Go website to anyone with a credit card would be the most straightforward thing to do from the customer’s perspective. It would also benefit HBO, which right now gets some information about what’s being watched but has no access to the valuable demographic data that drive decisions at Netflix (NFLX) and other players in the streaming-video industry.
While this seems like a pure win for people who want to live without cable, there are clear limitations for cord-cutters. So far HBO has taken a liberal approach to people sharing accounts on its streaming website, which is supposed to be available only to HBO’s cable subscribers. Once it starts offering a paid streaming service, however, the company could decide that the free ride for password sharers is over. There are simple steps HBO could quickly take to make the practice much more difficult, such as banning simultaneous users on a single account and tracking log-in locations to identify suspicious activity.

Thursday, October 16, 2014

Volatility in the market

Volatility has suddenly returned to U.S. stocks, and for the first time all year it doesn't appear that the weakness in equities will go away quietly in the span of a few days.
While the S&P 500 is still up 3.1 percent for the year, the index is off about 5 percent from its record high reached in mid-September, and closed out this week at the lowest level since May 23.
"We're still in a bull market, but in the near term things are a little bit dicey, and I don't think the decline is over with yet," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida. The S&P also posted back-to-back intraday moves of more than 40 points this week for the first time in three years. Wall Street's fear gauge, the CBOE Volatility Index .VIX, ended at 21.24 on Friday, its highest level since early February.
Investors said they were concerned about the eventual end of Federal Reserve stimulus, as well as weak growth overseas and its potential effect on U.S. earnings. The slide in oil prices has also served as a harbinger for poor demand, and investors in general got caught betting heavily on further market gains at a time when this stew boiled over.
The volatility recalls the last major period of big market gyrations in the second half of 2011, when the first-ever credit downgrade of the United States and the threat of a debt default kept investors on their toes for several months. It is unclear whether the current turmoil will last as long.

"What is interesting about what is going on is that you have several themes all feeding into the same action, and that action is to mitigate risk," said Peter Kenny, chief market strategist of Clearpool Group in New York.

Wednesday, October 15, 2014

Pimco had total assets under management of $1.973 trillion

Pacific Investment Management Co., whose co-founder Bill Gross stunningly departed on Sept. 26, said late Friday that the Newport Beach, Calif.-firm had assets under management of $1.876 trillion as of Sept. 30, a 5 percent drop in the third quarter.
Pimco had total assets under management of $1.973 trillion as of June 30, 2014 and total assets under management of $1.92 trillion as of Dec. 31, 2013.
In a statement on its website, Pimco said "changes in AUM (assets under management) are a function of a number of factors, including portfolio returns, currency changes and net client flows."
Gross, one of the bond market's most renowned investors and the former manager of the flagship Pimco Total Return Fund, quit Pimco for distant rival Janus Capital Group Inc (JNS.N).
According to two sources familiar with the matter, he was expected to be fired the next day from the firm he helped launch more than four decades ago and built into a $2 trillion investment powerhouse.
Since Gross's departure, Pimco has seen heavy outflows, with $23.5 billion leaving the Pimco Total Return Fund in September alone.

Tuesday, October 14, 2014

More security breaches

Retailer Sears Holdings Corp said the payment data systems at its Kmart stores had been compromised, the latest in a series of computer security breaches to hit U.S. companies in recent months.
The U.S. Secret Service confirmed it was investigating the breach, which occurred in September and compromised the systems of Kmart, which has about 1,200 stores across the United States. The breach did not affect the Sears department store chain.
Sears said it believes hackers made off with some credit and debit card numbers but that the personal information, debit card PIN numbers, email addresses and social security numbers of its customers remained safe.
Security professionals said they were not surprised to learn that yet another major retailer was reporting a breach, adding they believe many big merchants do not have adequate systems for detecting cyberattacks, which means they still remain easy prey for hackers.
“This is going to continue indefinitely until people change their practices,” said Shawn Henry, a former senior cyber cop with the FBI who is now of the president of cyber forensics firm CrowdStrike Services.
He said that hackers are able to get into networks because they are “so broad and vast” that attackers will always find a way in. Retailers need to do a better job of quickly detecting them before they begin to steal data, he said.
Sears said that the attackers used malicious software that was undetectible using anti-virus software.
Tom Kellermann, chief cybersecurity officer with security software maker Trend Micro, said that retailers need to be prepared to deal with malicious software crafted specifically for the purposes of burglarizing retailers.
“It is debatable whether they had sufficient security in place to thwart these thieves. The real question that needs to be asked is why haven’t they learned the lessons from the attacks on Target and others.”

Kmart, which launched an investigation into the hacking, apologized to its customers on Friday and said it was working with federal authorities, banking partners and security firms in the probe.

Monday, October 13, 2014

Venezuela must pay Exxon Mobil Corp around $1.6 billion

A World Bank arbitration tribunal has determined Venezuela must pay Exxon Mobil Corp around $1.6 billion to compensate for a 2007 nationalization, the award posted on the ICSID website on Thursday showed.
The award is far below the amount of up to $10 billion Exxon had originally sought and also the $6 billion at which the International Centre for Settlement of Investment Disputes (ICSID) capped the case, excluding a tax claim.
A separate decision by the Paris-based ICC in 2012 ordered Venezuela state oil company PDVSA pay Exxon $908 million.
There will be no double compensation for the nationalization of the large heavy crude project in the Orinoco region, the tribunal added.
"The Tribunal takes note in both cases of the Claimants’ representation that, in the event of favorable award, the Claimants are willing to make the required reimbursements to PDVSA. Double recovery will thus be avoided," the ICSID award said.
Still, the decision comes at a bad time for cash-strapped Venezuela, which is already struggling with an economy widely seen as in recession, rampant inflation, and looming bond payments.
Venezuela has the option of seeking to annul the decision. It is unlikely the award will be nullified, but the move would likely buy Venezuela some time and potentially allow for parallel negotiations.
PDVSA declined to comment. Calls and e-mails to Venezuela's Oil Ministry went unanswered.

 Exxon, the world's largest publicly traded oil company, said separately that the decision shows Venezuela "failed to provide fair compensation."

Sunday, October 12, 2014

Canada risks being left behind in clean energy

The shift to clean energy is producing huge economic gains, but Canada risks being left behind if the federal government doesn’t get on board, a new report warns.
That’s the message from energy and climate think tank Clean Energy Canada, which paints a picture of a world increasingly embracing – and investing in – green energy alternatives.
Clean energy is now “business as usual, it is not boutique any more,” said Merran Smith, director of Clean Energy Canada. “This is where the puck is going … The world has changed and there is no going back.”
The report, to be released Monday on the eve of the United Nation’s global climate summit in New York, says that thanks to government support and dramatic increases in private investment, “companies, countries and whole economies are steadily reducing their dependence on fossil fuels and embracing clean and renewable energy.”
It cites China, for example, where new renewable energy plant construction has now surpassed investments in coal generation. The country has embarked on an enormous effort to build solar and wind power generating facilities, along with a massive electrified high-speed rain network.
At the same time individual corporations – including some big players such as Google Inc., Wal-Mart Stores Inc., Apple Inc. and Ikea AB – have jumped on the bandwagon, investing in renewable energy projects in order to cut their own greenhouse gas emissions. Consequently, almost 6.5 million people now work in the renewable energy sector around the globe.
Over all, private investment in green energy is growing dramatically, the report says. In 2013, $207-billion (U.S.) was invested in clean energy deployment, not far below the $270-billion invested in fossil fuel power generation. While China, the United States and Japan lead the way, Canada ranks seventh among G20 countries with $6.5-billion in clean energy investment in 2013.
While carbon-based fuels will still be important for a long time, “for the first time in more than a century, multiple signs suggest that their dominance is beginning to wane,” the report said.

Saturday, October 11, 2014

Cross border shopping

Cross-border shopping by Canadians in the U.S. rose 72 per cent between 2006 and 2012, but still represents less than two per cent of Canadian retail sales, indicate statistics released today.
A study by Statistics Canada estimates Canadians spent about $8 billion Cdn in cross-border shopping in 2012, up from $4.7 billion in 2006.
In 2006, the Canadian dollar fluctuated between 85 and 90 cents US; in 2012, it went from 99 cents US to $1.03 US.
That change in the value of the loonie made retail goods in the U.S. less expensive in 2012 than at any point in the previous six years.

56 million visits

About three-quarters of Canadians live within 160 kilometres of a border crossing and take advantage of shopping opportunities in the U.S. with single-day and overnight trips.
In 2012, Canadians made almost 56 million visits to the U.S., up 38 per cent from 2006.
Gasoline and groceries, which are traditionally lower priced in the U.S., were among the most purchased items, according to Statistics Canada.
The amount Canadians spent rose annually, except in 2009 at the height of the financial crisis, when consumer confidence was low and both Canadian and U.S. retail sales plunged.
U.S. retail goods brought into Canada by courier or post also jumped in that six-year period — by 50 per cent to $3.1 billion in 2012. That reflects the widespread adoption of online shopping among Canadians.
Different pricing and selection in the U.S. and changes in the retail landscape at home may also be affecting the cross-border shopping trend.
Statistics Canada said cross-border shopping accounted for 1.7 per cent of total Canadian retail sales in 2012.
It did not give an estimate for 2014 — with the Canadian dollar falling to the 90-cent US range.

Retail Council calls for end to 'price gap'

That big increase in cross-border shopping worries the Retail Council of Canada.
In a reaction to the study today, it said “Canada needs to implement changes to address the Canada/U.S. price gap.”
The Harper government has promised to close the price gap by addressing “country pricing,” a policy by vendors and retailers that results in prices being higher in Canada than the U.S.

Friday, October 10, 2014

decreasing income among retired women

Social mobility is often thought of as a challenge facing children and working-age adults, but sharp drops in income are a real threat for millions of elderly Americans. Widowhood and divorce are often the culprits behind this downward intragenerational mobility—especially for women. The 2012 elderly poverty rate for widowed and divorced women was nearly three times that for married women and the elderly poverty rate for divorced women stood at nearly twice that for divorced men.

Losing a Husband, Then Losing Benefits


Two facts help to explain this risk: men earn more, but women live longer. Higher lifetime wages  for men, and the associated retirement assets and benefits, mean that divorce is more of a poverty risk factor for women than for men. Longer life expectancy can also disproportionately impact women who spend down family assets to care for a sick husband or who find their household retirement benefits cut when their spouse dies. 


Declining marriage rates have of course reduced the risk of widowhood or divorce, but also reduced women’s access to benefits in the first place. More women are entering retirement without any claim on their spouses’ Social Security benefits—marriages must last ten years for a spouse to qualify. Between 1990 and 2009, the share of 50–59 year old women who were never married for more than a decade more than doubled from 7.5 percent to 16.2 percent. Among African-American women, the share skyrocketed from 13.4 percent to 33.9 percent.


Working Women Do Better


While marriage patterns have hurt women’s retirement incomes, their increased labor force participation and higher wages have been a positive factor. Since 1970, labor force participation rates for married women rose from 40.5 percent to 61.0 percent, approaching those for single men and women. Women are also taking less time off of work to provide care to children or elderly parents. As a consequence, women are now more likely to qualify for Social Security or private-sector retirement benefits in their own right, rather than through a husband.


These countervailing marriage and labor force trends have impacted demographic groups differently. Women with more education and subsequently higher wages will be better off, as their retirement security will be secured by their own income and assets regardless of divorce or the death of a spouse. But women with less education and lower wages, who perhaps would have been married for longer than a decade in the past, may now see their hopes of a poverty-free retirement evaporate.

Party politics seems set to trump concerns about the competence and suitability

English: This image shows Jean-Claude Juncker,...
English: This image shows Jean-Claude Juncker, the Prime Minister of Luxembourg. He is talking with students of the University of Aachen (RWTH) in Germany, one day before receiving the International Charlemagne Prize of the city of Aachen. According to the legal situation in Germany, I asked the University of Aachen for permission before taking this photo. (Photo credit: Wikipedia)
Party politics seems set to trump concerns about the competence and suitability of several candidates for the European Commission when lawmakers pass judgment on Jean-Claude Juncker's most controversial nominees this week.
The European Parliament has flexed its muscles by recalling Britain's Jonathan Hill for a second hearing on Tuesday on his fitness to be in charge of banking and financial services.
The French, Hungarian and Czech aspirants are being forced to take written re-sits. Parliament's lawyers are scrutinizing the financial statements of Spain's nominee for the energy and climate change portfolio, Miguel Arias Canete, who is also under fire over his family's oil industry ties.
And the former Slovenian prime minister, who nominated herself after losing an election, faces a bumpy ride on Monday.
Yet mutual dependence between the EU's two main political families -- Juncker's center-right European People's Party (EPP) and the center-left Socialists and Democrats (S&D) of European Parliament president Martin Schulz -- means any major rejections seem unlikely.
"The worst case scenario that we keep all the bad candidates because they cut a deal cannot be ruled out," said Sylvie Goulard, a member of the centrist ALDE group on the economic committee, which grilled Hill and France's Pierre Moscovici.
She said Juncker would do better to reshuffle his pack so that weaker nominees are moved to less sensitive jobs but added: "That is not the direction things are going in."
A senior EU official, reflecting the institutional fears of Commission veterans, said score settling by the political groups had taken over from the examination of competence.
"It is no longer about the right candidate. It is a political game between the parties in parliament -- taking hostages and exchanging them," he said.
Juncker's spokeswoman said he was satisfied with the performance of all the candidates in their hearings, especially Hill. A source close to the former Luxembourg prime minister said he spent the weekend working the telephones to parliament leaders and Schulz "to cool things down".

THREE POWER STRUGGLES
There are at least three power struggles in play: between Juncker and the parliament; among the main political groups in the legislature; and between lawmakers and the member states.
Parliament forced the replacement of nominees in 2004 and 2009 and some lawmakers want to wield that power again to assert the Commission's accountability to the elected assembly.
Schulz was Juncker's unsuccessful center-left opponent in the May European elections and may have a personal motive for flexing the legislature's prerogatives.
However Juncker can claim democratic legitimacy of his own since unlike his predecessor, Jose Manuel Barroso, he was the EPP's declared lead candidate in the election campaign.
Aides to the incoming president say he recognizes that parliament needs to get something out of the confirmation process, but he hopes it will be satisfied with fuller answers to the follow-up questionnaires and won't insist on scalps.
The two main political groups are dependent on each other for a majority due to the influx of Euroskeptic far-left and far-right members after the pan-European elections, so a sort of "mutual assured destruction" may impose an armistice.

Some deputies are keen to inflict defeats on the British and Hungarian nominees because of Britain's Euroskeptic outlook and Hungary's record on media freedom and the rule of law.

Thursday, October 09, 2014

World policymakers gather in Washington later this week

World policymakers gather in Washington later this week to ponder how to sustain economic recovery at a time when the United States is about to turn off its money taps.
Given the same G20 finance ministers and central bankers met in Australia only two weeks ago it is not hard to guess how the debate will go: most of the western world will urge the euro zone to do more to foster growth and Germany will warn against letting up on austerity.
That debate has circled within the G20 for three years and is fizzing now in Europe with France, Italy and others pressing for a loosening of fiscal strait-jackets to allow time for economic reforms in defiance of Berlin's wishes.
"Existing flexibility within the rules should allow governments to address the budgetary costs of major structural reforms, to support demand and to achieve a more growth-friendly composition of fiscal policies," European Central Bank President Mario Draghi said on Thursday after a monthly policy meeting.
The Federal Reserve will end its program of bond-buying with new money later this month, a prospect that has already driven the dollar higher and created jitters about a reversal of money flows out of emerging markets back into the United States.
The euro zone in the guise of the ECB has been doing its best to come up with new stimulus, though it has shied away from full quantitative easing so far.
Its most effective card may be euro weakness, the flipside of dollar strength.
The euro is down almost 10 percent from a peak against the dollar in May. With U.S. money printing about to end and speculation about the timing of a first interest rate rise, there are good reasons to think this trend could continue.
The strong U.S. jobs report on Friday did little to change the picture.
"I don't think it changes the Fed dynamics. I still think the first rate hike is maybe mid-year," said Kim Rupert, managing director at Action Economics in San Francisco. "We are trying to gauge whether it's March or June."
If the euro keeps falling, it would push the prices of imports up while making it easier for euro zone countries to sell abroad which should have an upward impact on both growth and inflation. The impact won’t be immediate though, as last week’s inflation reading of just 0.3 percent demonstrated.
As with Japan last year, G20 policymakers gathered in Washington for the annual meeting of the International Monetary Fund and World Bank are in a poor position to complain about competitive devaluation having demanded stronger European growth for so long.
The IMF will release its latest World Economic Outlook before the meeting starts.

Ontario won't stop double-ending

Ontario moves to tighten rules around real estate agents 'double-ending,' but won't ban the practice If legislation is pa...