Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

China services growth adds to economic revival hopes






BEIJING (Reuters) – Growth in China‘s increasingly important services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world’s second-largest economy.


China’s official purchasing managers’ index (PMI) for the non-manufacturing sector rose to 56.1 in December from 55.6 in November, the National Bureau of Statistics (NBS) said on Thursday.






Two PMIs on the manufacturing sector earlier this week also suggested China’s economic growth was picking up late in 2012, although signs persist it depends primarily on state-led investment.


Data so far suggests only a muted revival in economic growth, rather than a return to the double-digit pace seen in China over the past three decades, Hong Kong-based economist Dariusz Kowalczyk said.


“Absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity,” Kowalczyk, Credit Agricole’s senior economist for Asia except Japan, said.


He said economic growth picked up in the fourth quarter of 2012 after sliding for seven straight quarters, but in sharp contrast to China’s previous, more pronounced bull runs, it could fade after the first quarter of 2013.


The greatest driver in the pick up in the non-manufacturing sector in December was a jump in construction services to 61.9 from 61.3 in November. Industries including transport slumped, the NBS said in an accompanying statement.


A reading above 50 indicates growth is accelerating, while one below 50 indicates it is slowing.


The strength in construction services is consistent with other indicators, including rising land prices, that point to a revival in China’s property markets, which support about 40 other industries. Signs of a pick up come despite central government protestations that it will not relax credit and purchasing curbs that have stifled the sector in the past two years.


The transport slowdown is also consistent with weak demand for China’s exports in the face of euro area and Japan recessions and an uncertain fiscal outlook in the United States.


SERVICES GROW IN IMPORTANCE


The official manufacturing PMI survey in December matched November’s seven-month high of 50.6, the NBS said on Tuesday, while a complementary survey with a greater focus on the private sector reached 51.5, its highest since May 2011.


China’s fast-growing services industry has so far weathered the global slowdown much better than the factory sector, with the PMI consistently signaling healthy expansion and hitting a 10-month high of 58.0 in March.


That’s partly due to a maturing economy as well as a historic shift in the last decade leading a majority of Chinese to live and work in cities rather than the countryside.


China’s services sector generated 43 percent of China’s GDP in 2010 and by 2011 provided nearly 36 percent of new jobs, exceeding the agricultural sector for the first time.


Beijing has acknowledged that greater consumer activity is needed to reduce the economy’s reliance on the exports sector and investment-led growth.


“Expanding domestic demand will be a major stimulus for China’s economic growth, and the greatest potential will come from the service sector,” Xia Nong, deputy director-general of the Department of Industry under the National Development and Reform Commission, said on Friday, according to the China Daily.


Xia pledged to open the services sector to more foreign competition as well as encouraging Chinese service firms to go overseas.


Foreign investment into the service sector of $ 47.57 billion in the first 11 months of 2012 surpassed that directed to the manufacturing industry, which slumped by 7.1 percent, the China Daily said over the weekend, citing Ministry of Commerce data.


The growing services sector has taken up some of the slack from the property sector, which has struggled with investment and purchasing restrictions as well as a credit crunch.


Overseas company investment into China’s urban transportation surged 24-fold in the first 11 months from a year ago, followed by a 12-fold rise in telecommunications and other information services, and a sevenfold increase in pipeline transportation industries, at sevenfold, the China Daily said, again citing Ministry of Commerce figures.


The sector, formerly the bastion of smaller private businesses, is now important enough to have its own five-year plan, issued in September.


(Editing by Neil Fullick)


Economy News Headlines – Yahoo! News





Title Post: China services growth adds to economic revival hopes
Url Post: http://www.news.fluser.com/china-services-growth-adds-to-economic-revival-hopes/
Link To Post : China services growth adds to economic revival hopes
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Obama praises ‘fiscal cliff’ deal









Barack Obama: “The deficit is still too high”



Barack Obama has hailed a deal reached to stave off a “fiscal cliff” of drastic taxation and spending measures as “just one step in the broader effort to strengthen the economy”.


The US president was speaking after the House of Representatives passed a Senate-backed bill by 257 votes to 167.


It raises taxes for the wealthy and delays spending cuts for two months.


There had been intense pressure for the vote to be passed before financial markets reopened on Wednesday.


In Tuesday night’s house vote, 172 Democrats and 85 Republicans voted in favour of the bill.


It had been passed in the Senate less than 24 hours earlier by 89 votes to eight after lengthy talks between Vice-President Joe Biden and Senate Republicans.


Economists’ warnings


Continue reading the main story

At the scene




In the end, it was settled after a tense meeting of House Republicans in a basement conference room.


When a stony-faced Speaker John Boehner left the room an hour later, one Congressman was overheard telling someone on the phone it was “looking like a long night”. Out of the basement, the smell of pizza wafted through the ornate House corridors. If the fiscal cliff was going to hurt ordinary Americans, the threat of it did no harm to one pizza parlour just a short hop down Pennsylvania Avenue.


Before the final vote, dissenters and supporters lined up to make their point. “Common sense has prevailed,” one Democrat declared; a prominent Republican said he simply did not believe spending cuts would eventually be delivered. But as the votes rolled in, House members stood on the floor and watched as the scoreboard lit up, and applauded – briefly – when the crucial 217th vote was cast.



Speaking before returning to Hawaii for his interrupted Christmas holiday, Mr Obama said that in signing the law he was fulfilling a campaign pledge.


“I will sign a law that raises taxes on the wealthiest 2% of Americans… while preventing a middle-class tax hike,” he told a White House press conference.


The US deficit was still too high, he said: While open to compromise on budgetary issues, he would not offer Congress spending cuts in return for lifting the government’s borrowing limit, known as the debt ceiling.


“There is a path forward, if we focus not on politics, but on what’s right for the country,” added Mr Obama.


The “fiscal cliff” measures – cutting spending and increasing taxes dramatically – came into effect automatically at midnight on Monday when George W Bush-era tax cuts expired.


The 1 January deadline triggered tax increases of about $ 536bn and spending cuts of $ 109bn from domestic and military programmes.


Continue reading the main story

What is the fiscal cliff?


  • On 1 January 2013, tax rises and huge spending cuts come into force – the so-called fiscal cliff

  • The deadline was put in place in 2011 to force the president and Congress to reach agreement on the budget over the next 10 years

  • Date coincides with expiry of Bush-era tax cuts

  • There are fears that raising taxes while massively cutting spending will have a huge impact on households and businesses

  • The fiscal squeeze could also push the US into recession, and have a global impact


Economists had warned that if the full effects of the fiscal cliff were allowed to take hold, the resulting reduction in consumer spending could have sparked a new recession.


The compromise deal extends the tax cuts for Americans earning under $ 400,000 (£246,000) – up from the $ 250,000 level Democrats had originally sought.


In addition to the income tax rates and spending cuts, the package includes:


  • Rises in inheritance taxes from 35% to 40% after the first $ 5m for an individual and $ 10m for a couple

  • Rises in capital taxes – affecting some investment income – of up to 20%, but less than the 39.6% that would prevail without a deal

  • One-year extension for unemployment benefits, affecting two million people

  • Five-year extension for tax credits that help poorer and middle-class families

BBC News – Business





Title Post: Obama praises ‘fiscal cliff’ deal
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

China’s Futile War on Web Pseudonyms






Chinese Internet cops are at it again. On Dec. 28, the Standing Committee of the National People’s Congress came out with new regulations forbidding Chinese citizens from using pseudonyms when signing up for Internet service.


The official Xinhua news agency quickly tried to reassure everyone not to worry about any chilling effect on Chinese cyberspace. “Instead of depriving netizens’ freedom and entitlement, the rules protect the legal rights of every Internet user,” Xinhua reported in a commentary helpfully titled “Nothing to fear from new Internet ID policy.” The new rules, Xinhua added, “will ultimately help to create a better online environment in China.”






Given China’s record of censoring blogs, banning YouTube (GOOG) and Facebook (FB), and blocking foreign news sites, not everyone is convinced of the government’s good intentions, of course. “Anti-corruption campaigns online have deeply tarnished the party and the government’s image, and social media discussions have increased instability in certain regions,” Zhang Zhi’an, an adjunct professor at Sun Yat-sen University in Guangzhou, told Bloomberg News. “Enforcing real-name registration will make Web users more cautious when posting comments online.”


It’s far from certain, however, that the Chinese government will be able to succeed in this latest attempt at controlling the Net. To understand why, I spoke today to Mark Natkin, the managing director and founder of Marbridge Consulting, a research firm in Beijing. Natkin says this isn’t the first time Chinese authorities have tried to force Internet users to register using their real names. He’s seen at least three of these campaigns. Indeed, the Xinhua commentary points out that the country’s three telecom operators have required real-name registration since September 2010.


Natkin is waiting to hear specifics about the new requirement before assuming the worst. “How do you enforce it? What are the penalties?” he asks. “If there are no answers to that, there is really no change.”


Earlier moves by authorities to document all of China’s Internet users have had limited impact. For instance, anybody who wants to sign up for fixed-line broadband access has to show ID. Likewise, somebody who goes to a China Mobile store for mobile Internet access has to show papers before getting a new SIM card.


There are lots of other ways to get online in China, though. People can buy SIM cards from the supermarket or from the local newsstand, Natkin says. Even before the government came out with the new rules, those vendors were supposed to be carding would-be Internet customers. Few do, says Natkin. And good luck forcing them to do it now, since these small vendors often don’t have the network infrastructure to verify ID cards and ensure that they’re genuine.


Changing that equation won’t be easy, given how thin the vendors’ margins are. “The amount of money a kiosk can make on a new SIM card or a recharge is small enough—are they now going to go to the extra hassle of checking your ID card, writing down your name, and sending it to the authorities?” he says. “Managing that whole process for an ocean of little kiosks and supermarkets is so enormous a task.”


The government could prevent such vendors from selling SIM cards, but that would cut out an important source of revenue for the country’s three cellular operators, China Mobile (CHL), China Unicom (CHU), and China Telecom (CHA)—all of them owned by the state. Ending sales via kiosks and supermarkets would “be potentially huge hit to the operators,” says Natkin.


Businessweek.com — Top News





Title Post: China’s Futile War on Web Pseudonyms
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Behind the Bidding War For a Gene Sequencing Firm






In June, Complete Genomics (GNOM), the struggling maker of the world’s most accurate gene-sequencing machine, put itself up for sale. Nothing happened initially. Analysts predicted the company would soon need to wind down operations.


Cut to December. A pair of genomics superpowers, China’s BGI and San Diego-based Illumina (ILMN), have suddenly made competing bids to buy Complete, and politicians and regulators want to weigh in on its future. The question is whether foreign ownership might create a national security threat to the U.S. “This budding research area has the opportunity to really advance the development of bioweapons,” says Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which reports to Congress. He’s concerned that Complete will “advance China’s capabilities in that area beyond what they already have.”






Founded in 2005, Complete has offices in a sedate office park across the street from Google (GOOG) in Mountain View, Calif. It makes a machine that can decode strands of DNA, but unlike most of its rivals offers a sequencing service instead of selling the machine to customers. In its most recent quarter, Complete posted revenue of $ 7.3 million and a net loss of $ 18 million.


Complete’s machines stand out for their ability to accurately sequence entire human genomes, instead of just portions of a person’s DNA. That’s much needed in clinical settings where physicians want to know for sure whether a patient has a particular illness. Complete also has been able to amass a large database of precise genomic information. Finding patterns among that data, comprising thousands of DNA sequences, could be useful in developing novel therapies.


The unique properties of Complete’s sequencers, which have been used for studies of cancer, aging, and disease traits, make them a good fit for BGI. Backed by loans from government-run banks, BGI has spent more than a decade creating a huge DNA database. Believed to be the world’s largest purchaser of sequencing machines, it’s been opening offices worldwide to offer services that complement its research. But BGI lacks the know-how to build its own sequencer, an area in which the U.S. remains far ahead of other countries.


In September, BGI offered $ 118 million to acquire Complete, and Complete’s board approved. Together the companies would have a database of 30,000 whole human genomes—about 10 times larger than that of their nearest competitor, says George Church, a professor of genetics at Harvard Medical School. With such a vast trove of data, BGI could gain a leg up in the race to create therapies and diagnostic tools using sequencing information. “I think this is a very big deal,” says Church, who advises dozens of companies in the industry including BGI, Illumina, and Complete.


The possibility of BGI and Complete uniting has not been lost on Illumina, the world’s biggest seller of sequencing machines, which counts BGI as a top customer. In November, Illumina offered a $ 123.5 million counterbid for Complete, which the company’s board rejected, saying regulators would not approve the deal because of Illumina’s market dominance. (Illumina claims its machines produce 90 percent of the world’s sequencing data.)


This in turn prompted Illumina Chief Executive Officer Jay Flatley to raise national security and privacy concerns about BGI’s bid in a letter to Complete’s board that the board later made public. An Illumina spokesperson declined to comment. In a statement, Complete CEO Cliff Reid said, “There’s no risk to U.S. national security raised by Complete Genomics merging with BGI.” Church and others have speculated that the real reason Illumina wants to keep BGI from acquiring sequencing machine technology is that it wants to avoid losing the company as a customer.


Both the Federal Trade Commission and the Committee on Foreign Investment in the U.S. (CFIUS), which weighs national security issues, are reviewing BGI’s bid and will make a recommendation that will likely determine if the deal goes through. Last year, Huawei Technologies, a Chinese maker of telecommunications equipment, abandoned its acquisition of hardware startup 3Leaf Systems, when CFIUS recommended rejecting the deal before it was reviewed by President Obama.


It’s hard to find a genomics expert who sees real national security concerns in a BGI-Complete deal. DNA sequencing machines are readily available, and Complete’s technology isn’t considered uniquely capable of some uniquely nefarious use. Several startups around the world are developing a new generation of sequencing machines that could soon make today’s obsolete. Church, though, says the Complete kerfuffle has provided U.S. regulators with “a good wake-up call” about the potential for this technology and the need for the U.S. to keep investing in its DNA sequencing lead. “Our politicians don’t follow technology as well as they should,” he says.


The bottom line: A BGI-Complete deal could lead to one entity owning 30,000 human genomes, 10 times more than its nearest competitor.


Businessweek.com — Top News





Title Post: Behind the Bidding War For a Gene Sequencing Firm
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Starbucks expands cup campaign aimed at U.S. fiscal deal






(Reuters) – Starbucks Corp is expanding its campaign of using messages written on coffee cups to inspire U.S. lawmakers to reach a deal and avoid going over the “fiscal cliff” of automatic tax hikes and government spending cuts.


As President Barack Obama and congressional leaders were in a final effort to reach a budget agreement before year’s end, Starbucks this week began urging workers in its roughly 120 Washington, D.C.-area shops to write the words “come together” on customers’ cups.






A spokesman for the world’s largest coffee chain said the company would expand the effort to all U.S. stores, continuing through next week.


“Stores from across the country have been asking if they could join in and we have been saying absolutely yes,” Starbucks spokesman Jim Olson said in an email late Friday.


“Based on this unprecedented response, we are inviting all of our partners at U.S. stores to start signing their customers’ cups with Come Together through next Friday,” Olson said.


Starbucks’ cup campaign aims to send a message to sharply divided politicians and serve as a rallying cry for the public in the days leading up to the January 1 deadline to avert harsh across-the-board government spending reductions and tax increases that could send the U.S. economy back into recession.


“We believe the (Washington) DC effort caught on so swiftly because they Come Together message is such a simple and respectful gesture that expresses the optimism that is core to our country’s heritage and to Starbucks mission,” Olson said.


“This is an important moment for Starbucks to use its scale for good and give Come Together an even louder voice – as we move from signing tens of thousands of cups in DC to tens of millions of cups across the U.S. over the course of next week.”


(Reporting by Julie Ingwersen; Editing by Vicki Allen)


Business News Headlines – Yahoo! News





Title Post: Starbucks expands cup campaign aimed at U.S. fiscal deal
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Wall Street ends sour week with fifth straight decline






NEW YORK (Reuters) – Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500‘s longest losing streak in three months as the federal government edged closer to the “fiscal cliff” with no solution in sight.


President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.






“I was stunned Obama didn’t have another plan, and that’s absolutely why we sold off,” said Mike Shea, managing partner at Direct Access Partners LLC in New York. “He’s going to force the House to come to him with something different. I think that’s a surprise. The entire market is disappointed in a lack of leadership in Washington.”


In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street‘s favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.</.vix>


The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor’s 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.</.ixic></.spx></.dji>


For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.


Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.


All 10 S&P 500 sectors fell during Friday’s regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.


An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $ 85.10, and Chevron Corp off 1.9 percent at $ 106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $ 23.03.</.gspm></.gspe>


Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.


“We’ve been whipsawing around on low volume and rumors that come out on the cliff,” said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $ 7 billion in assets.


With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor’s said an impasse on the cliff wouldn’t affect the sovereign credit rating of the United States.


“We’re not as concerned with January 1 as the market seems to be,” said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. “Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive.”


Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.


Highlighting Wall Street’s sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.


Positive economic data failed to alter the market’s mood.


The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.


“Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data,” said Weiss, who helps oversee about $ 125 billion in assets. “All else being equal, we see any further decline as a buying opportunity.”


Barnes & Noble Inc rose 4.3 percent to $ 14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.


Shares of magicJack VocalTec Ltd jumped 10.3 percent to $ 17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.


The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $ 2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.


(Reporting by Ryan Vlastelica; Editing by Jan Paschal)


Business News Headlines – Yahoo! News





Title Post: Wall Street ends sour week with fifth straight decline
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Toyota poised to put legal troubles in rear view mirror






DETROIT/NEW YORK (Reuters) – Toyota Motor Corp eliminated a huge obstacle with a U.S. settlement over unintended acceleration in its cars and trucks, leaving it to fight smaller cases that will be harder for plaintiffs to prove and less likely to damage the company’s growing sales.


While the Japanese automaker still faces possibly hundreds of personal injury lawsuits related to claims that its vehicles accelerated unintentionally, Wednesday’s $ 1.1 billion settlement announcement will remove the last big roadblock to putting the issue behind it.






Sean Kane, president of Safety Research & Strategies and an outspoken critic of Toyota who has assisted plaintiffs’ attorneys against the automaker, said the settlement covered the biggest financial hit for Toyota.


“Those are not billion-dollar cases,” he said of the pending personal-injury lawsuits. “Those are at best million-dollar cases or multimillion-dollar cases. With a company like Toyota, that’s not even something that’s a blip on their radar.”


At the time, the recall around the unintended acceleration issue and resulting lawsuits were a surprise for a company long associated with quality and reliability, and the resulting fallout led President Akio Toyoda to apologize publicly.


Lee Kaplan, a product liability lawyer in Houston, said plaintiffs in the injury and death cases also will have an uphill battle in court because they will need to prove deficiencies in Toyota’s equipment.


“I have never seen anyone identify the single cause of the problem,” he said. “Without identifying a true scientific or technical basis, pinning a verdict on Toyota will be hard.”


Toyota said it agreed to spend $ 1.1 billion to settle sweeping U.S. class-action litigation over claims millions of its vehicles accelerated unintentionally. The recall fallout related to the issue was a $ 2 billion hit to earnings in the company’s 2010 fiscal year.


Judge James Selna is expected to review the settlement on Friday in U.S. District Court in Santa Ana, California. However, final approval and disbursement of the money may not occur for several months.


The proposed settlement will compensate customers for economic losses related to possible safety defects in Toyota vehicles, covering most of the litigation involving unintended acceleration.


WRONGFUL DEATH


About 16 million Toyota, Lexus and Scion vehicles sold in the United States spanning the model years 1998 to 2010 are covered by the settlement. Company officials have maintained the electronic throttle control system was not at fault, blaming ill-fitting floor mats and sticky gas pedals. A study by federal safety officials at the National Highway Traffic Safety Administration and NASA found no link between reports of unintended acceleration and Toyota’s electronic throttle control system.


Toyota, the No. 3 automaker in the U.S. market, admitted no fault in proposing the settlement, one of the largest U.S. mass class-action litigations in the automotive sector. One plaintiff’s law firm called it the largest settlement in U.S. history involving auto defects.


However, the deal does not cover wrongful death or injury lawsuits, which according to a June Toyota filing totaled more than 300.


Those cases will be handled by Toyota one by one, with the first slated to go to trial in February 2013 in Judge Selna’s California court, involving a Utah crash that killed two people. However, one wrongful death case in Houston was dropped last year due to lack of evidence and the largest such lawsuit, over the death of the family of off-duty California Highway Patrol officer Mark Saylor, was settled out of court for $ 10 million in late 2010.


SALES REBOUND


Toyota’s recall of its vehicles between 2009 and 2011 relating to the unintended acceleration issue hurt its reputation for reliability and safety.


But the automaker’s sales were up almost 29 percent in 2012 through November, compared with a 14-percent increase in the industry, and Toyota’s share of the U.S. market has risen to 14.4 percent from 12.7 percent in 2011. Last year’s Toyota sales were depressed by the March earthquake and tsunami in Japan.


The full effect of the acceleration issue on Toyota’s U.S. sales may not be known for years, until the current owners affected by it need to buy another vehicle.


Yet with its U.S. sales rising at double the industry’s rate and the company expected to reclaim the global sales crown this year, analysts said Toyota has seemingly shaken off any lingering damage to its reputation.


“Toyota is the Teflon company,” Edmunds.com analyst Michelle Krebs said. “They always bounce back.


“The consumer doesn’t seem to care,” she added. “The consumer keeps on buying Toyotas.”


(Writing by Ben Klayman; Additional reporting by Bernie Woodall and Deepa Seetharaman in Detroit and Dan Levin in San Francisco; Editing by Ben Berkowitz and Dan Grebler)


Business News Headlines – Yahoo! News





Title Post: Toyota poised to put legal troubles in rear view mirror
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Toyota agrees $1bn US recall deal







Japanese carmaker Toyota has agreed to pay an estimated $ 1.1bn (£680m; 830m euros) in a settlement of hundreds of lawsuits from US owners.






The deal would compensate owners for economic losses and for the cost of safety changes to their cars.


Since 2009, Toyota has recalled more than 14 million vehicles worldwide after floor mats became trapped under the accelerator.


The settlement will have to be approved by a US judge.


Toyota owners argued that the company’s technology rather than trapped floor mats was responsible for sudden cases of acceleration.


In a statement, Toyota US group vice president Christopher Reynolds said the settlement was “a difficult decision” because the accelerator controls had been confirmed as safe. But, he said, it was better for the company and its customers to turn the page.


US District Judge James Selna is expected to consider the deal on 28 December.


Badly tarnished


The company paid almost $ 50m in fines in 2010 because of the recall scandal, and the US Congress carried out a lengthy investigation.


But problems with pedals becoming trapped in floor mats have continued to dog Toyota.


Earlier this month the US National Highway Traffic Safety Administration said Toyota had agreed to pay $ 17m for allegedly failing to report a safety fault this year in two Lexus models “in a timely manner”.


Other recalls have involved faulty window switches, fuel leaks and, most recently, steering wheels and water pumps.


The company’s reputation was badly tarnished by the repeated recalls and it lost its place as the world’s biggest carmaker in 2011.


However, the Japanese firm said earlier on Wednesday that it anticipated a 22% increase in group sales for 2012, reaching 9.7 million vehicles globally, and returning it to the position of biggest car manufacturer.


BBC News – Business





Title Post: Toyota agrees $1bn US recall deal
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Sale shoppers ‘set to spend £3bn’







British shoppers are expected to spend almost £3bn in the Boxing Day sales, experts have predicted.






Millions of bargain-hunters are set to descend on High Streets and shopping centres across the UK.


Shops will be cutting prices and opening as early as 06:00 GMT in a bid to tempt customers in.


Market analyst Experian says online spending is expected to be the “biggest and busiest ever”, accounting for almost £500m on Boxing Day.


Tube strike


Amazon UK said it had seen sales on Christmas Day increase by 263% over the last five years.


This was partly due to the growth in home broadband and the popularity of tablets and smartphones.


MoneySupermarket.com said shoppers were set to spend £2.9bn in the Boxing Day sales.


A survey for the website found that four million people plan to head to the stores, as well as five million who will shop online.


However, there could be problems for shoppers in London because of a strike by Tube drivers – although extra buses will be provided to the West End and the Westfield shopping centres in Stratford and White City.


Experian said visits to retail websites were expected to reach 126 million on Boxing Day, an increase of 31% on last year.


James Murray, from Experian, said: “Christmas 2012 is on track to be another record-breaker for online retail, outstripping 2011 on all fronts.


“The current market trends suggest that in the UK, Boxing Day will be the biggest day for online retail, with an estimated 126 million visits to online retail outlets and a massive 17 million hours spent online shopping on this day alone.”


But comparison website Pricerunner said figures suggested that almost half people asked were not planning on buying anything in the sales.


Business failures


The British Retail Consortium (BRC) said Christmas spending in shops this year was “acceptable but not exceptional”.


BRC spokesman Richard Dodd said poor accessibility on high streets, lack of parking and weak consumer demand were more of a threat than an increase in online shopping.


He said some High Street retailers would “undoubtedly” fail after Christmas.


“Retail sales over the weekend have been up to expectations but expectations were relatively modest. Christmas will turn out to be acceptable but not exceptional,” he said.


“There are a lot of myths around online retail. Ten per cent of overall retailing over the year comes from online shopping and actually it presents lots of opportunities for the retail sector.”


But business recovery group Begbies Traynor warned that High Street retailers faced the threat of closure as more people shopped online.


BBC News – Business





Title Post: Sale shoppers ‘set to spend £3bn’
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Macy’s: Here’s What an All-Night Retail Binge Looks Like






Earlier this month, Macy’s, the second-largest department store chain in the nation, announced it would be keeping most of its stores open all night the Friday and Saturday before Christmas. To check out the early morning scene, Bloomberg Businessweek sent three reporters from the Billfold to various Macy’s around the country.


Macy’s Herald Square, New York, Saturday, Dec. 22., 12:20 a.m. East Coast Time






Outside the entrance to the 10-floor Macy’s (M) flagship outlet at Herald Square, two teenaged girls put down their shopping bags and pose for an iPhone self portrait in front of the illuminated storefront. They look at the photo and squeal with approval.


“We’re here!” they yell and head inside.


This Macy’s, once crowned the “World’s Largest Store,” opened at 7 a.m. Friday and won’t close until midnight on Sunday. Many stores have extended hours in the days leading up to Christmas; Macy’s has typically pulled one all-nighter, but this year’s 64-hour continuous shop-a-thon is considered a first—and a bellwether. “If it works well for Macy’s, I can guarantee it will be a trend next year,” Dan Butler, vice president for merchandising and retail at the National Retail Federation, told Bloomberg Businessweek earlier this year.


It’s a marathon, and not just for employees. A group of men has formed a motley congregation near a set of doors, all checking their phones. “She wants boots,” one of them says. “They all want boots,” says another.


The teenage girls head for the famous old wooden escalators, which, as legend has it (or at least, as a security guard told me), are maintained by one woman whose sole job is to keep the slatted wooden steps in top condition.


The escalators take the girls on a winding path upward through the store, the music changing as they ascend: a trancey hip-hop Little Drummer Boy on shoes, Jessica Simpson and Nick Lachey singing Baby, It’s Cold Outside in juniors. Bedding, with a twinkling classical soundtrack, is deserted.


The girls get off on the children’s floor and walk to the bustling McDonald’s (MCD). They pass two black-clad employees straightening a display of stuffed animals, snow globes, and mugs, all emblazoned with the Macy’s logo. A manager with a clipboard passes by. “You doing overnights?” he asks.


“All three, baby,” one of them says. The manager whistles. “Keep it up,” he says, and moves on.


•••


Macy’s South Coast Plaza, Costa Mesa, Calif., Saturday, Dec. 22, 1:08 a.m. West Coast Time


During normal shopping hours, Macy’s South Coast Plaza—the largest Macy’s in the O.C. and located in an upscale shopping center trafficked by buyers from around the world—is swamped. After dark, with neighbors Prada (1913), Dior (CDI), Yves Saint Laurent (PP), and Oscar de la Renta closed for the night, the department store is eerily quiet. Staff outnumber shoppers, and some sections show no sign of life.


A handful of people are wandering around. Cassie Brooker, 30, and her husband John, 34, who reside in Santa Ana, found it difficult to shop during previous weeks because of their work schedules—she’s a teacher, he works in an emergency room. Rayshandra Williams and her daughter, Bria Ruffin, who just turned 19, are here from Culver City, shopping for themselves and spending some quality mother-daughter time.


“We plan on staying until the sun comes up, but we’re already getting tired,” Ruffin says. “We got here at 10:30.”


“We thought they would be a lot busier,” says her mother.


Except for the novelty of being in a department store at such an odd hour, there’s little to get excited about. The holiday-shopping frenzy that makes the malls crazy during the day is gone. It’s a great time to shop. Employees are available and attentive, even eager to help. There are no lines for the dressing rooms or the bathrooms. There’s plenty of room in the aisles. If only it weren’t past my bedtime.


•••


Macy’s South Coast Plaza, Costa Mesa, Calif., Saturday, Dec. 22., 1:44 a.m. West Coast Time


On the third floor, six baristas are manning a Starbucks (SBUX) counter overlooking an empty seating area. They’re in good spirits, chatting about Christmas plans and work schedules. Leonard Cohen’s Hallelujah plays softly overhead.


“We’re not closing until 6 p.m. on Christmas Eve. But it’s not busy like it was on Black Friday,” says one barista, looking out onto the shopping floor. “We had a line of customers wrapping around the store. It’s so dead right now.”


Comparisons to Black Friday are inevitable. The 64 Hours Before Christmas come up short on chaos, enthusiasm and, quite possibly, sales. Absent nonstop hype and deep discounts, Macy’s has attracted a different kind of shopper. The company said its all-nighters are designed for the convenience of its customers, but very few find the hours between midnight and 6 a.m. to be a convenient time to shop. Unlike the Black Friday shopper—ambitious, focused and competitive—the person who does Christmas shopping at 2 a.m., less than 72 hours before the holiday, is likely to be an insomniac procrastinator.


In Costa Mesa, a Macy’s manager from the men’s department walks over to the counter. “Hey guys, we’re not allowed to talk to reporters,” he says and walks away. The baristas look at each other and grow quiet. With no one talking, Leonard Cohen grows deafening.


•••


Macy’s Herald Square, New York, Saturday, Dec. 22, 2:05 a.m. East Coast Time


The men’s section has been carefully decorated to look like a Men’s Section. The entrance has the feel of a festive-yet-sexy hunting lodge. Wooden beams across the top are festooned with lights that hang over plaid shirts and slim-cut raw denim. It’s the only area in the store where male shoppers outnumber the women.


Slipping in and out of the clothes racks is Tyrone Burton, a janitor who lives in Manhattan. He’s working the overnight shift from now until the store closes. He has worked at Macy’s for 14 years and doesn’t mind the hours. “Housekeeping is 24-7,” he says. “If you don’t work overnights, you’re out of the game.”


With gloves on, he sweeps up the dust behind distracted shoppers and moves trash off the floor and into the garbage bag on his cart. In Burton’s eyes, overnight shifts are always the same, even when all these holiday customers are around. “They’ll disappear at 3 a.m. And if they don’t, you just work around them,” he says.


For the employees, staying open means staying up. Watchful security guards, supervisors wearing three-piece suits, and the occasional police officer pace each floor. At the front of the store stand two men holding white plastic hats, adjacent to the Impatient Husbands Brigade but present for an entirely different reason: fire safety.


“See that?” says John Rossi, a dark-haired man from Westchester. He points to a huge, silvery wing to the right of the entrance. “They just finished that.” He points left, to a wing whose scaffolding is shrouded in neutral hangings. “They were supposed to finish [that] by now, too,” adds Bill Franklin, who hails from Long Island.


Rossi and Franklin are both working 11 p.m. to 7 a.m. They’ve been doing this for 18 months, supervising retail crowds whenever a store is working with new construction. “The worst-case scenario is an electrical fire, having to evacuate all these customers,” says Rossi.


Franklin has never had a fire emergency occur on his watch, but Rossi has. “I probably shouldn’t say where,” he says. “Let’s just say people aren’t always very good at getting down the escalators.”


•••


Macy’s Herald Square, New York, Saturday, Dec. 22, 2:45 a.m. East Coast Time


Tim Zhang and Ramon Perez, from Long Island and the Bronx, respectively, stand outside the fitting room in the juniors section, waiting for their girlfriends. They’re both sophomores at New York University, pre-med, and they’ve just finished their last final. It’s been an exhausting semester—”Organic chemistry, man,” Ramon wails mournfully—and the boys are trying to muster the energy to shop for their families before they go home tomorrow afternoon.


“I really should get some stuff,” says Zhang, surveying the rainbow array of colored denim that surrounds him. “But I just don’t even know where to start.”


Zhang and Perez are part of a breakdance crew called Animal House, and two of their friends are doing flares in front of the cash register as the confused cashier folds sequined tank tops. Then suddenly, two girls are standing in the doorway of the fitting room, resplendent in trendy blue cocktail dresses. “Damn!” the boys say, applauding.


The girls are Anusha Jayaram, from Ohio, and Loriah Pope, from Texas. They too are NYU sophomores fresh out of exams, and—like Zhang—they’re blowing off their familial present-buying obligations. “To be honest, this is pure retail therapy,” says Jayaram. “It’s pretty great that Macy’s is open right now.”


Ramon checks his watch. “Yeah, I mean, it’s 2:45.” Outside the Herald Square store, the city is alive with holiday revelers, but the group is keeping it low-key. “We’ll probably get halal after this,” Tim says. “Hang out for a little. Call it a night.”


Downstairs, just a dozen feet from the Macy’s entrance, the halal carts have already anticipated these post-shopping cravings. Two men operate identical carts, handing out kebabs to employees as they take their breaks and to customers exiting the superstore in need of replenishment.


One of the vendors, a green-eyed, stubbly man with a slight accent, shrugs when asked how his night is going. “Too slow,” he says. Still, he’ll be posted here each night until the store closes for Christmas. His first name is Mahmoud. His last name, he says, is “Michael Jackson.”


•••


Macy’s Westminster Mall, Westminster, Calif. Saturday, Dec. 22, 3:05 a.m. West Coast Time


The Westminster Mall is 10 miles northwest of South Coast Plaza, and the parking lot to the front entrance of the department store is nearly empty, save for three compact cars. A security guard is standing at the entrance with her palms pressed against the glass of a perfume cabinet, as if she’s preparing to do wall push-ups.


“Yes, we are open,” she says. “Please shop as much as you’d like, and take your time.”


Had the parking lot not given away that there were going to be few shoppers in the store, the empty sections would have. Near a Ralph Lauren (RL) display, Carlos Macias and Melissa Moon, 24, both students who live in Westminster, were busy pulling shirts off of a sale rack.


“I’m only here because he can’t sleep,” Moon said stretching her neck toward Macias. “I don’t know why we would be here if he could.”


•••
SUNDAY


Macy’s Lynnhaven Mall, Virginia Beach, Va., Sunday. Dec 23, 1:20 a.m. East Coast Time


It’s early Sunday, about two-thirds of the way through this holiday shop-a-thon. Lynnhaven Mall in Virginia Beach, Va., has been closed for three hours and looks it. A few cars are parked in front of the main entrance and a police cruiser sits in a corner. At the backside of the mall, there’s a sense of some life by the well-lit Macy’s. There are clusters of cars, maybe a dozen at the entrance to the men’s section, more at the women’s. A family of three—mom, dad, teenage daughter, each holding large Macy’s bags—walk to their car at the far end of the parking lot.


The mall is a 10-minute drive from the Atlantic Ocean and four minutes to Oceana Naval Air Station, home to F/A-18 hornets and Superhornets and the jet noise that, during daylight hours, is a sound-barrier-breaking reminder that Virgina Beach is a military town. This is a suburban store, the crown jewel of one-stop-shopping in a long stretch of strip malls and box stores.


Inside the store, it’s quiet. Christmas music plays, and from any vantage point, one can see a few shoppers—a couple looking at watches, a woman feeling the scarves, another working a stroller around the maze of shoes. Employees with carts and baskets appear now and then from behind displays. The work being done now is recovery, facing, straightening. Employees are supposed to do this all day, continuously, but during the holidays, given the number of people unfolding sweaters, destroying stacks of gloves, picking up one item and leaving it somewhere else—it’s a losing battle.


So now, in a nearly empty store, the employees straighten. If the store were closed, the work would go faster—there would be the promise of clocking out early, or at least not having to stay late. But with the store open, the work of restoring order is slow. There aren’t very many customers right now, and it will be slow for several hours. The employees have all the time in the world. And the shoppers don’t have anywhere they must be, either.


•••


Macy’s, Lynnhaven Mall, Virginia Beach, Va., 3:24 a.m. East Coast Time


An employee—”I’d prefer to remain anonymous, but I only have good things to say about Macy’s”—in black slacks, a collared shirt, and hat and scarf is leaning against the jewelry counter, looking over his break schedule. There are no customers to be seen.


It’s his first Christmas season working retail. He looks alert—maybe even well-rested, considering he worked the same shift the night before. He went home, he said, slept a while, had coffee and vitamins, did his own holiday shopping, and came back to work.


He has never worked an overnight shift before (“I never thought I’d have to!”) but he volunteered to do this shift and he’s been happy with it. There’s no extra money, just the extra hours. There is coffee and fruit in the break room—that’s typical—and this time of year, there’s been more food. It helps so much, he says, to grab a piece of fruit on break. Still, he’ll probably go to McDonald’s for his lunch, which is coming up at 4 a.m. The one in front of the mall is open all night.


He is a part-time permanent employee and usually assigned to men’s clothing. For the holidays, he’s been working in watches. It’s better than selling clothes: “Helping people pick out watches is more personal, it’s more than just ringing up their purchases.” In the watch department, he also gets commissions, unlike the compensation in men’s. Shoes, suits, fragrances, and watches are all commission-based in the store, he says. Will there be an opportunity to stay in watches after the holidays? “That’s the hope,” he says, smiling and lifting up his hands to show fingers crossed.


I wish him good luck and head for the exits. The same woman who was tidying the gloves when I walked in is still there—her work has made a difference, and the gloves look great. I say as much, and she smiles and says, “Why there needs to be this many styles of gloves, I’ll never know.”


For the most part, the employees don’t seem to mind working these odd hours. Most are happy to have the extra money before Christmas. They’ll use that money to do their own last-minute shopping, but it won’t necessarily be here. We hear Toys R Us is also open 24 hours, and is just down the road.


•••


Macy’s South Coast Plaza, Costa Mesa, Calif., Sunday, Dec. 23., 1:25 a.m. West Coast Time


This Macy’s store redeemed itself in the early hours of Sunday morning, when a respectable amount of shoppers gazed at shoes, browsed through racks of dresses, and left tables of clothing in disarray. Robert Sanchez, a supervisor at Costco (COST) who lives in Santa Ana, got off work at 11 p.m. and immediately went to Macy’s to finish Christmas shopping with his roommate.


“It’s super busy at Costco, so it’s hard to find time to get shopping done,” he said. “I needed to shop for four people, and I have two people done so far. I’m tired, but nobody is rushing me here, so it’s pretty good.”


Sanchez says he loves the idea of Macy’s being open all weekend and hopes the company will consider doing it again. “I just spent $ 200, and I’ll probably spend another $ 200 before I leave tonight,” he says. “And my roommate is planning on spending $ 500, so that’s $ 1,000 for two people. The store’s not full, but the store being open right now allowed two people to come in and spend, easily, $ 1,000.”


Not everyone is willing to spend so freely. Near the east entrance of the department store, Viridiana Luna is looking for sale signs. Luna, 28, from Costa Mesa, says she was hoping to find dressy tops as a gift for her boyfriend’s mother, but has come up empty-handed.


“I thought that there was going to be more of a Black Friday kind of atmosphere, with a lot of crazier deals, so I’m kind of disappointed,” she says. “If I don’t see anything I like, I’m just going to postpone buying gifts.”


An hour later, at the Macy’s Irvine Spectrum Center, 11 miles southeast of South Coast Plaza, the 108-foot tall, Italian hand-crafted Ferris wheel is still, its 12,500 lights dark. There are no people around to brave a ride, and no people around to shop either. The employees inside walk around, determined to find something to do. Two employees in the home department puzzle over a display. An employee in the men’s section is combing racks for stray hangers.


“Good morning, sir!” the workers say cheerfully as I circle around the store.


In a city that never sleeps, restless New Yorkers will always find a reason to go shopping in the dead of night. Customers in sleepy suburban areas may need more motivation to get out of bed and open their wallets. They need doorbuster specials, huge discounts, and can’t-miss promotions—they needed Black Friday Part II. The problem with sequels, though, is that they often struggle to live up to expectations.


Businessweek.com — Top News





Title Post: Macy’s: Here’s What an All-Night Retail Binge Looks Like
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

‘Acceptable’ festive sales predicted







Christmas sales figures are likely to be “acceptable” rather than “exceptional”, the British Retail Consortium (BRC) has predicted.






It has estimated that £5bn will have been spent in Britain’s shops over the weekend, as millions of people stocked up on food, drink and presents.


The BRC says many shoppers waited until the last minute to pick up a bargain.


Meanwhile, several retailers are reportedly bringing their online sales forward to Christmas Eve.


High streets, shopping centres and supermarkets were reportedly packed with shoppers on the last few trading days before Christmas.


Many retailers have already started discounting products in advance of the traditional “Boxing Day” sales.


Saturday was expected to have been the busiest day of the year on the high street, with credit card company Visa Europe predicting more than 31 million transactions.


52 million sprouts


Richard Dodd, head of media and campaigns at the BRC, said: “People have left it very late this year because of their reluctance to spend. They are holding out for bargains.


“It’s been a very busy weekend which will be crucial to delivering a Christmas that is acceptable, rather than exceptional,” he added.


Supermarket chain Sainsbury’s said the hour between 12:00 and 13:00 GMT on Sunday was its busiest hour ever in terms of the number of customers served.


The company said it expected to sell 225,000 bottles of champagne, 56 million mince pies, 52 million Brussels sprouts and 6,500 tonnes of potatoes over the festive period.


Traders in London’s West End had predicted that one million people would shop in the area during the three days leading to Christmas Eve, spending an estimated £100m.


‘Bumper weekend’


At Brent Cross shopping centre in north London, centre manager Tom Nathan said the weekend would be their busiest period because schools had broken up late and Christmas Day was on a Tuesday.


Elsewhere, Bluewater shopping centre in Kent expected more than 275,000 shoppers to pass through in the days before Christmas Eve, while Birmingham’s Bullring centre predicted it would welcome about 340,000 consumers.


Bullring general manager Tim Walley said: “This Christmas we essentially have an extra weekend of trading in comparison to December 2011, so we’re expecting a bumper weekend.”


But despite optimism in some quarters, the Local Government Association (LGA) said confidence on the high street remained low.


Its annual Christmas survey found that 84% of town centre managers said confidence among shoppers had either not improved or worsened compared to Christmas 2011.


A cold and wet start to the winter could also be taking its toll on the number of shoppers visiting town centres, the LGA concluded.


BBC News – Business





Title Post: ‘Acceptable’ festive sales predicted
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

The Hedge Fund Hunger Games






The first idea that Tim Harrington, Brian Tomeo, and Spencer Deering had for a business was to gather up brand-new hedge funds and nurture them. They’d invite them to make use of their office in Miami Beach, where they could get advice, legal help, expensive software, and eventually an introduction to investors, with the three benefactors collecting a fee. The second idea, the one the trio went with, was the exact opposite. They would assemble the hedge funds and make them fight.


1b7e6  investing hedgefundhunger52  02  inline202 The Hedge Fund Hunger GamesGrant Cornett for Bloomberg BusinessweekHarrington got into hedge funds in college






This was back in April. The three had been introduced by mutual friends and colleagues over the years: Harrington, a 37-year-old with prematurely white hair who’d gone straight into hedge funds out of college, met Tomeo, 40, a broken-nosed former Princeton lacrosse champion, at a party not long after the latter left JPMorgan Chase (JPM) as a managing director in 2007. Deering, 37, had come late to finance after first working as a teacher and writer; he had promise as a model-handsome charmer of wealthy investors. Together they sensed there was money in the nascent Miami hedge fund scene. Much like investing in a young tech company, hooking up a new hedge fund with seed capital—including, perhaps, some of their own—can be lucrative. The problem was that Harrington and his partners couldn’t tell which of the new funds asking for their money were any good.


It wasn’t easy for the aspiring hedge fund managers they were talking to, either. Investors won’t give capital to managers who have no experience, but managers can’t get experience without capital. Most fledgling funds try to get past this paradox by offering back-tested results, modeling how their trading algorithms would have performed in years past. This is basically historical fiction, and it ignores a fundamental truth of investing: What happened yesterday doesn’t predict what the market will do tomorrow.


What matters is actual performance, which is how Tomeo and Harrington came up with the idea to run a tournament to fill their incubator, weeding out pretenders by making managers compete in real time with real money. The finisher who made the most while risking the least would win the right to manage seven figures of capital. They called their company Battle-Fin.


1b7e6  investing hedgefundhunger52  01  inline202 The Hedge Fund Hunger GamesGrant Cornett for Bloomberg Businessweek“The system is completely broken,” says Tomeo


A trial tournament in July proved that the mechanics of the concept worked. It also demonstrated how difficult it was to win: Tomeo entered and finished fifth out of six. For the next tournament, which they considered their real debut, the three men secured $ 10 million in money to manage from a capital provider in New York named Liquid Holdings Group. Winners would be chosen in three divisions. The “elite” category was for managers who were already running other people’s money. The winner here would run $ 5 million of the prize capital. The “professional” division was for entrants risking any amount of their own money. The winner would run $ 3 million. And the “launch” division was for contestants trading only on paper. There would be two winners in this division, each to be allocated $ 1 million.


Battle-Fin restricted the tournament to quants—managers who develop computer-run algorithms that set rules for trading. Quants aren’t new to Wall Street by any means, but if you’re looking for innovative ideas, then computational finance isn’t a bad place to start. And hedge funds badly need new blood. With notable exceptions, they’ve been clobbered by the plain-old stock market in the last four years. In 2012, the average hedge fund has returned 3 percent; the Standard & Poor’s 500-stock index has returned 15 percent. Investors, meanwhile, pay dearly for the privilege of underperforming—managers typically keep 20 percent of any profit, plus a 2 percent management fee.


“We want to find great people, help them build their business, and build a great business on our own,” Harrington says. “If that turns the hedge fund industry on its head, that’s not our worry.”
 
 
In August, Alon Bochman was sitting at the desk he rents at an office near Grand Central Terminal in New York, reading posts in a LinkedIn (LNKD) group for emerging managers, when he came across one from Harrington. “Our real-time, real-capital tournaments democratically and objectively identify tomorrow’s best and brightest computational financiers—wherever they might be,” it read. A few clicks and an e-mail exchange later, Bochman was in the tournament.


Two and a half years ago, Bochman was earning a comfortable six figures as a portfolio manager at SC Fundamental, a New York hedge fund notable for launching the careers of a handful of wildly successful managers, including David Einhorn. One day he noticed an anomaly in the way a certain kind of exchange-traded fund behaved, so he devised a trading strategy for his personal account that wouldn’t require a lot of monitoring. “I never really looked at it. I had a full-time job I liked very much,” he says. “Then, around December, I got a statement from my broker. And I was like, Huh.” Bochman’s returns had passed 30 percent a year. In March he quit to start his own fund.


Even with his connections, Bochman, 39, found it tough to get a piece of the money streaming into billion-dollar funds. He knew that, as in any industry, pitching hedge fund investors meant hearing “no” a lot. What he wasn’t prepared for were the questionnaires from due diligence firms, the industry’s post-Madoff gatekeepers, which struck him as both invasive and superficial. Asking about strategy and risk tolerance made sense. But his heart condition? Whether he was in the midst of a divorce?


Of every dollar flowing into the industry, 96¢ go to the biggest hedge funds, those with more than $ 5 billion under management. For upstarts, getting capitalized usually means hitting up friends and family, then approaching professional contacts, and gradually moving upward. Performance is the most important factor for attracting money, but allocations are often won or lost on the margins of personality—knowing the right people, having impressive literature, nailing the interview. “The hedge fund industry is supposed to be merit-based, and it’s supposed to be entrepreneurial,” says Bochman. “I think that people have been so shell-shocked by the financial crisis and Bernie Madoff that they’ve given up on merit. They’ll settle on a checklist that ensures you belong to certain clubs, know the right people.” He found the tournament concept refreshing. “What they’re doing is important. They’re one of the few guys saying, ‘This is a contest of ideas, and may the best strategy win.’ This is something that our industry really, really needs.”


Bochman was one of about 3,000 visitors to Battle-Fin’s website after Harrington and Deering began promoting it, which in the small world of aspiring quant hedge fund managers is a lot. About 130 applied.


1b7e6  investing hedgefundhunger52  03  inline202 The Hedge Fund Hunger GamesGrant Cornett for Bloomberg BusinessweekDeering once taught English and wrote a novel


“The pedigree of the guys who are coming across our screen—it’s crazy,” says Deering. (One of the two finalists in the trial tournament was a group of Massachusetts Institute of Technology Ph.D.’s.) “The fact that these guys are coming to us, in these little tournaments that we’re running? It’s so evident that the system is cocked up.”


The funds chosen—26 in all—were run by a motley bunch. Two master-level chess players headed one, which they called Chessica, after the original name, Genius Hedge Fund, failed to go over well with investors. Another fund, ProForza Advisors, boasted a rocket scientist who had worked for NASA, studying weather in the magnetosphere. Yet another contender, Stephen Longo, a Fu Manchu–mustache-sporting Long Islander, had spent 20 years as an engineer at General Motors (GM). He had been racking up impressive gains on a theoretical trading platform for years, making millions, but only on paper; winning the tournament would give him a chance to prove his investing chops without a safety net. Martin Rosenburgh, who managed $ 1 million of friends-and-family money from home on a 27-inch iMac, was also optimistic. Should he win, he hoped to focus on his fund full time. “It’s like American Idol for quant strategies,” he says.


Several contestants spoke of the difficulty of getting in the room with potential investors. “We’re extremely good at the statistical analysis and data visualization and so forth,” says Mark Maldonis, 48. “But marketing skills? God was not good to me.”


Trading began on Oct. 1. From their offices in New York, Los Angeles, London, and elsewhere, the contestants tracked each other’s gains on a leader board updated daily at battle-fin.com. The launch category, where the gains or losses were all on paper, was naturally the most volatile. Longo was up 10 percent after just seven days, with a strategy that took its cues from volatility in the S&P 500. In the $ 5 million elite category—where the contestants were managing real money belonging to real clients—the range was much tighter, within a point or two of zero. Two weeks in, with the stock market down, even flat returns could be regarded as an accomplishment.


Perhaps the most impressive performance was in the intermediate division, where the managers’ own money was at stake. Rosenburgh, 45, had gained nearly 4 percent by the end of October, but he was quickly left in the dust by the 10 percent returns of a fund manager listed on the tournament scoreboard as Z. Liu. Nobody could dig up much information on him, but with a strategy built on the statistical analysis of historical trading data, he seemed proof that the Battle-Fin tournament might be able to pick managers better than Wall Street.
 
 
Dealing with startups often means forgiving a certain amount of amateur behavior. As the contestants entered the second month, several realized something: Battle-Fin was just as much a startup as they were.


Harrington handled the tournament’s day-to-day operations—checking in with contestants, putting out fires, and generally behaving like a theater manager on opening night. Tomeo was the high-level strategist. Deering was in charge of marketing. They had put the tournament concept into practice as rapidly as they could after inventing it. This meant hiccups, corner-cutting, and a lot of improvisation.


1b7e6  investing hedgefundhunger52  04  inline405 The Hedge Fund Hunger Games


John LaChance, a former vice president at JPMorgan, logged on to battle-fin.com one day to discover an organization called “LaChance Capital” next to his name. “There’s no such thing,” he says with a laugh. “I guess they just put that down. I don’t think I’d name it that, either.” Several competitors noticed that five funds disappeared from the leader board without explanation. The head of ProForza Advisors, Sunil Pai, hadn’t even signed up to enter the tournament. One day over the summer, he says, he had called Harrington to learn more about the contest after seeing a LinkedIn post. The next thing he knew, ProForza was listed in the elite category. Harrington “entered us into the competition. I hadn’t actually applied for it,” says Pai, 49.


Midway through the tournament, even some high-level decisions had been left up in the air. “It’s definitely a work in progress,” Harrington says. Who was Battle-Fin’s chief executive officer, anyway? “I don’t know,” Tomeo says. “Who do you think it is?”


All three founders were concerned that two months was too short for a tournament and that they’d end up crowning the merely lucky. The partners also hadn’t figured out how to split revenue on the fees they’d collect from connecting the tournament winners to the capital providers. “One, we trust each other, and two, we’re not fighting over future spoils that haven’t even appeared yet,” Harrington says. “I’ve seen so many businesses where people are fighting and clawing for percentages that never even end up working out.”


There are no signs of tension among the three—the reverse, actually, thanks mostly to Deering’s nonstop comedy routine. A college lacrosse player like Tomeo, Deering taught English at a Chicago-area high school after graduating and self-published a novel about a man, a motorcycle, and the West. Today, he may be the only man in hedge funds who’s written about Southern food for Esquire and relationships, under a pen name, for Cosmopolitan. (“If you’re feeling the love itch, chances are he is as well but is too chicken to be the initiator.”) A theater director in Charleston, S.C., where he lives, nicknamed him Johnny Touchdown.


Harrington had traced a semi-charmed path through the hedge fund world. He started with an internship in college; skipping the usual period of apprenticeship at an investment bank, Harrington then bounced from one billion-dollar operation to the next—Galleon Group, SAC Capital Advisors, JPMorgan. (At the moment, two of those firms are known for scandal: Galleon’s founder, Raj Rajaratnam, was convicted in 2011 of securities fraud, and SAC, headed by Steven Cohen, is the subject of a federal investigation into insider trading. Harrington declined to discuss the topic.) He left JPMorgan in 2009 to start his own business, a hedge fund seeder called Lion’s Path Capital, which is tied to Battle-Fin in several ways. It staked the $ 1 million prize for the company’s trial tournament, and winners use Lion’s Path’s trading platform to manage the capital they win access to.


In Miami Beach, where the finance scene is tiny, Battle-Fin rents office space from Ray Langston, a hedge fund manager who’s a generation older and represents the success the trio hope to have and the old guard they mean to destroy. Langston collects Ferraris, drives away from lunch in a $ 440,000 Porsche Carrera GT roadster, and doesn’t care what you make of his calling President Obama a socialist. Hedgies of Langston’s era had the good fortune to trade amid a decades-long bull market. Back in Battle-Fin’s conference room, Tomeo says the managers in his tournament, with their computational skills, would eat Langston alive. “I just say, Hey, Ray, I would love to see you make it today,” says Tomeo. “I’d love to put you against these guys that I find.”
 
 
The contestants were putting up strong numbers. In the tournament’s final days, 8 out of 10 funds in the real-money divisions were beating the S&P.


LaChance, 37, lives in Pittstown, N.J.—horse country—in a 5,100-square-foot house with a three-car garage on two acres that he bought in 2006, at the absolute top of the market. It’s beautiful, an hour and 40 minutes from New York, and the school bus picks up his twin 12-year-old boys right at the curb. The Tuesday after Thanksgiving, a wet snow is falling, and LaChance misses nothing about his old commute, back when he was a JPMorgan trader. Wearing a North Face fleece and socks, he walks into his ground-floor home office, equipped with three widescreen monitors tracking $ 2.5 million of friends-and-family money in his portfolio. He is up 4 percent in the tournament’s top category—too high for anyone to catch up. For him, winning will be anticlimactic. Harrington has already had him record a victory video.


LaChance runs a handful of strategies at any given time. He mostly trades ADRs—American depositary receipts, or securities of foreign companies that trade on U.S. markets—that he believes are mispriced. LaChance says it’s profitable but not very scalable. “On some of these things, I’m literally the only person trading it,” he says.


In the 12 months leading up to the tournament, LaChance’s return was 39.9 percent. If he repeats that performance in 2013, with $ 5 million in Battle-Fin money in his portfolio, he stands to make an extra $ 399,000 in fee income. If his strategy goes bust, he’ll make nothing: Hedge funds ordinarily charge a 2 percent fee on their assets under management, which guarantees them revenue even in a down year, but Battle-Fin’s rules restrict winners from doing this.


For Longo, 54, winning is more surreal. The former General Motors engineer held on to his early lead in the launch category, giving the paper trader $ 1 million in real capital to invest. “I’m slightly speechless,” he says. “It’s kind of a double-edged sword. I’m obviously happy that I won. The other side is that now the real competition starts, with the markets.” Longo is truly speechless when a reporter points out something Battle-Fin had never told him: They’d be keeping the first 5 percent of any gains he made on the $ 1 million, in exchange for taking a risk on a total unknown. The asterisk applies only to his category. After recovering, Longo says there’s no hard feelings. “There might be a few misunderstandings or a few things that are unclear at this point, but again, the opportunity still far outweighs any of that,” he says.


Rosenburgh fared better under Battle-Fin’s make-it-up-as-we-go-along approach. He never climbed out of second place in the intermediate division but was thrilled to discover that he’d won something anyway. Battle-Fin had decided not to name two winners in the launch division after all, in favor of a floating $ 1 million “wild card.” In late November, Rosenburgh joined the other winners at the Lion’s Path offices in Manhattan, grinning in a group photo with Harrington.


Afterward, the victors walked to a nearby bar. Among them: the mysterious Z. (Zongjian) Liu. He had posted an astonishing 14 percent return in just two months in the intermediate division, risking his own money. As Liu began to explain his strategy and his background, it quickly became clear that he had not thought through the implications of winning $ 3 million to manage—or even competing in the tournament in the first place.


Liu, 34, has a full-time job at a major bank. Every bank’s rules are different about what employees are allowed to do with their investments, but publicly traded, highly regulated banks generally want to know if their employees are running hedge funds in their spare time. Liu hadn’t cleared his participation in the tournament with the compliance department. “Ideally, I should not do this,” he says in nearly perfect English. “Because there will be conflict of interest. Although in my case, there is no conflict of interest.” In two months, Liu says, he will probably quit to manage his portfolio full time. His plan is simply to not let the bank’s compliance officers find out.


Before the tournament, Liu says, he ran about $ 390,000 in friends-and-family money. If he keeps up his annualized 2012 rate of 43.6 percent next year, performance fees on $ 3 million in Battle-Fin money would run to $ 295,608. That may be more than his bank salary, but Liu would also be taking on a huge personal risk. If his models stop working as well and he merely matches the industry’s average 2012 return of 2.9 percent, performance fees on that $ 3 million would total only $ 17,400. Before expenses and taxes.


On the last day of the tournament, Nov. 30, Harrington is unsure how the man he has entrusted with $ 3 million is handling the situation. “We say to people, ‘Look, you have to get clearance from your employer to see if there’s any conflict of interest.’ His whole thing is he said he plans to quit. So, I mean, it’s a little—that’s the one that I don’t know how …” Harrington doesn’t finish the thought.


There are grander plans to discuss. Harrington has just come from a meeting with an investor who’s considering fronting as much as $ 50 million for a third tournament. At the same time, the trio want to take the concept beyond quant trading strategies to commodities, currencies, real estate. “The whole asset management industry is ripe for a technology that turns it upside down,” says Tomeo. Of course, they also want to go global. “We’re going to do Battle-Fin Latin America,” Harrington says. “We’re going to do Battle-Fin Canada. We’re going to do Battle-Fin Asia and Battle-Fin Global, which is when we’re going to take all of the winners and bring them to Miami for kind of a conference and showcase them to different people.”


A few days later, Harrington e-mails to say he’s hopeful the company will win a patent on the tournament. “Things are really moving fast,” he writes. Below his signature is a new Battle-Fin slogan: Time to sink or swim.


Businessweek.com — Top News





Title Post: The Hedge Fund Hunger Games
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

The Year’s Best & Worst Investments






Winners
Best International Stock (+283%): India consumes more than $ 20 billion worth of whiskey each year—the most in the world—and United Spirits (UNSP) is the nation’s largest distiller. The company’s sales doubled in four years. The United Kingdom’s Diageo (DEO) bought a controlling stake in United Spirits in November.
 
1f6ae  inv bestworst2 202 The Years Best & Worst InvestmentsBest U.S. Large-Cap Stock (+224%): The good news for Regeneron Pharmaceuticals (REGN) shareholders included strong sales for a treatment for eye diseases. Total revenue jumped fourfold last quarter. The Tarrytown (N.Y.)-based company also won approval for a chemotherapy drug and is developing treatments for rheumatoid arthritis and high cholesterol.
 
Best Bond Fund (+26%): The GMO Emerging Country Debt Fund (GMCDX) invests in debt issued by emerging-market countries, a strategy that’s worked in nine of the last 10 years. Its top holding is Venezuelan bonds, a sign that its managers are willing to take risks in particularly unstable countries.
 
1f6ae  inv bestworst3 202 The Years Best & Worst InvestmentsBest Initial Public Offering (+105%): Retailer Five Below (FIVE) sells candy, stationery, and beauty products priced at $ 5 or less and aimed at teenagers. Sales are growing 47 percent a year.
 
Best Equity Mutual Fund (+39%): The Fidelity Select Biotechnology Portfolio (FBIOX) spreads $ 2.7 billion in assets over 131 biotechnology stocks. A top holding: Gilead Sciences (GILD), the California-based biopharmaceutical company.
 
1f6ae  inv bestworst4 2021 The Years Best & Worst InvestmentsBest Commodity (+24%): Wheat prices rose in 2012 as drought cut into supply from the grain belts of Russia, Australia, and the U.S. Wheat is a $ 14.4 billion crop in the U.S., where it ranks fourth behind corn, soybeans, and hay.
 
Best Exchange-Traded Fund (+77%): Signs of a housing recovery sent shares of homebuilders soaring this year, boosting the IShares Dow Jones U.S. Home Construction Index Fund (ITB).
 
Losers
Worst Exchange-Traded Fund (-79%): The ProShares VIX Short-Term Futures ETF (VIXY) holds futures contracts that are profitable when the VIX index, a measure of U.S. stock market volatility, rises. 2012 was a calm year.
 
1f6ae  inv bestworst7 202 The Years Best & Worst InvestmentsWorst Commodity (-35%): Abundant supply is depressing coffee prices. Brazil, the world’s largest grower, has almost doubled its output in the past decade, producing another record crop this year.
 
Worst Equity Mutual Fund (-17%): The Federated Prudent Bear Fund (BEARX) holds gold mining stocks and other investments it expects will do well in times of financial stress. That strategy suffers in years such as 2012, when stocks rise.
 
1f6ae  inv bestworst8 202 The Years Best & Worst InvestmentsWorst Initial Public Offering (-30%): Facebook (FB) plunged as much as 53 percent after its $ 16 billion debut in May. The stock rallied on news that third-quarter sales rose 32 percent, beating analysts’ estimates.
 
Worst Bond Fund (+.12%): While the GMO U.S. Treasury Fund (GUSTX) may just barely be holding its value at yearend, its extremely cautious strategy means returns aren’t keeping up with inflation. The fund is invested entirely in U.S. Treasury bills, government debt that matures in less than a year.
 
1f6ae  inv bestworst10 202 The Years Best & Worst InvestmentsWorst U.S. Large-Cap Stock (-43%): Hewlett-Packard’s (HPQ)annus horribilis was marked by a third-quarter loss that was its worst ever, including an $ 8 billion writedown related to the dwindling value of its enterprise services business. HP later took an $ 8.8 billion writedown related to accounting problems at Autonomy, a software maker it acquired last year. In September, HP announced plans for 29,000 job cuts.
 
Worst International Stock (-81%): The biggest target for the European Union’s bailout fund for Spanish banks, Bankia (BKIA), forecasts it will lose $ 25 billion in 2012. The bank, formed last year from the merger of seven regional savings banks damaged by Spain’s real estate downturn, is in the midst of cutting more than a quarter of its workforce.


Data compiled by Bloomberg from Dec. 31, 2011, to Dec. 17, 2012. Criteria – Bond Funds: 725 bond mutual funds based in the U.S. with assets of $ 500 million or more. Commodities: 18 global commodities tracked by Bloomberg. Equity Mutual Funds: 796 U.S.-based equity mutual funds with assets of $ 1 billion or more. Exchange-Traded Funds: 1,062 U.S.-based ETFs, excluding those that use leverage. Initial Public Offerings: 103 U.S. IPOs with an offer size of at least $ 100 million. International Stocks: The MSCI AC World Index. Large-Cap Stocks: 367 stocks on U.S. exchanges with market value of more than $ 10 billion.






Businessweek.com — Top News





Title Post: The Year’s Best & Worst Investments
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..