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Microsoft CEO Search Reveals Board Rifts

Wall Street Journal Online - Fri, 10/11/2013 - 7:01pm
Microsoft's search for a new CEO is exposing divisions among directors over the 38-year-old company's future direction and what it needs in its next leader.
Categories: Financial News

U.K. Blocks Bank Overseer

Wall Street Journal Online - Fri, 10/11/2013 - 6:26pm
Britain is blocking final approval of a powerful new supervisor for euro-zone banks until it receives further guarantees that countries outside the currency union won't be disadvantaged.
Categories: Financial News

Google's New Ad Star: You

Wall Street Journal Online - Fri, 10/11/2013 - 6:26pm
Google plans to make its users the stars of advertisements—without first asking for permission. The move encourages word-of-mouth marketing but is bound to raise privacy alarms.
Categories: Financial News

Don't Shoot Messaging, Fed Official Says

Wall Street Journal Online - Fri, 10/11/2013 - 6:18pm
A Fed governor pushed back against criticism that the central bank's communication efforts have misfired, contending that market expectations are now better aligned with the Fed's thinking.
Categories: Financial News

Alitalia Gets Boost

Wall Street Journal Online - Fri, 10/11/2013 - 5:24pm
The struggling airline's board approved steps for €500 million in desperately needed funding.
Categories: Financial News

Mexico Tries to Lure Firms Back to Oil Patch

Wall Street Journal Online - Fri, 10/11/2013 - 4:16pm
Mexico wants to allow private companies back into the country's oil patch, hoping to reverse years of declining production. At issue is under what terms private firms would be invited in.
Categories: Financial News

Broadcasters Seek to Close Aereo

Wall Street Journal Online - Fri, 10/11/2013 - 3:28pm
Major TV broadcasters petitioned the Supreme Court to shut down Aereo, a streaming-video startup backed by Barry Diller, alleging it is stealing their content and putting their business model at risk.
Categories: Financial News

Consol Energy Explores Splitting Off Coal Assets

Wall Street Journal Online - Fri, 10/11/2013 - 2:43pm
Consol Energy is exploring splitting up its coal and gas businesses, or selling off its coal assets.
Categories: Financial News

FBI Mounts Criminal Investigation of Actions in Forex Market

Wall Street Journal Online - Fri, 10/11/2013 - 2:34pm
The Federal Bureau of Investigation has begun a criminal investigation into possible rigging of foreign-exchange markets, according to a person familiar with the matter.
Categories: Financial News

CFTC's Gensler Warns Firms on Swaps Trading

Wall Street Journal Online - Fri, 10/11/2013 - 1:32pm
Commodity Futures Trading Commission Chairman Gary Gensler warned new trading venues that handle derivatives transactions not to give preferential treatment to certain traders.
Categories: Financial News

Alitalia Board Approves Capital Increase

Time Magazine Latest Money News - Fri, 10/11/2013 - 1:22pm
(MILAN) — The Alitalia board on Friday approved a 300 million euro ($400 million) capital increase as part of a rescue plan for the struggling flagship airline. The capital increase includes up to 75 million euros from the Italian Postal Services, and the rest from the consortium that runs Alitalia and a bridge loan from banks. Italian Premier Enrico Letta said in a statement Thursday that the entrance of Poste Italiane SpA into the shareholder structure must include an overhaul of the business plan. On top of the capital increase, banks Intesa San Paolo and Unicredit are preparing a 200-million-euro line of credit. Alitalia lost 294 million euros in the first half of the year, compared with a 201 million loss in the first half of 2012. Net debt was 946 million euros at the end of June. Alitalia has focused mostly on domestic routes since a group of Italian businessmen relaunched a slimmed-down airline in 2009 after Air France-KLM’s failed takeover bid. Air France remains the main shareholder with a 25-percent stake. Analysts say the rescue would better position Alitalia to negotiate other alliances to help it reposition itself in the market. The government hailed the synergies between Alitalia and the postal service, citing the postal services cargo and passenger service. However, airline analyst Oliviero Baccelli at Milan’s Bocconi University said the postal services participation would be mostly a financial one, and that there were not true synergies given that Alitalia sold off its cargo business five years ago, and that the postal service operates different aircraft than Alitalia and from an airport in Brescia not served by Alitalia. To return to profitability, Alitalia should focus on longer-range flights toward the Middle East, Asia and South America, Baccelli said. The airline’s margins have been hurt by Italy’s recession, higher fuel prices and higher environmental and airport taxes.  
Categories: Financial News

J.P. Morgan Reels From Legal Costs

Wall Street Journal Online - Fri, 10/11/2013 - 1:14pm
J.P. Morgan swung to a third-quarter loss of $380 million, compared with a profit of $5.71 billion a year earlier, as the bank reeled from more than $9 billion in legal costs.
Categories: Financial News

States: No Thanks, We’ll Keep National Parks Closed

Time Magazine Latest Money News - Fri, 10/11/2013 - 11:51am
On Thursday, President Obama announced that even as the federal shutdown continued, states could open national parks within their borders, with one caveat: States must use their own money to cover expenses. Several states reacted by essentially saying, “Thanks, but no thanks.” By one estimate, national parks and nearby communities have been losing $76 million for each day that park gates have been closed due to the ongoing federal government shutdown. The closures have provoked anger—and in some cases, defiance—at national parks around the country. Last weekend, crowds of protesters climbed over gates and illegally entered Zion, Acadia, Badlands, and other national parks. According to one report, as of last Monday rangers had handed out citations to 21 people who were in Grand Canyon while it was closed. Last Friday, an innkeeper along the federal-run Blue Ridge Parkway in North Carolina defied orders and opened his gift shop and restaurant for a couple of hours before rangers shut the operation down. In southern Utah, where the local economy is particularly reliant on national parks, several counties recently felt forced to declare a state of emergency because business has essentially come to a standstill. (MORE: Three Parts of the U.S. Being Hammered Economically by the Shutdown) Unsurprisingly, Utah is one of the states jumping at the chance to reopen national parks after getting the green light from the feds. Late on Thursday, Gov. Gary Herbert signed an agreement to wire $1.7 million in state taxpayer money to the federal government to cover the tab for keeping five national parks (Arches, Bryce Canyon, Canyonlands, Capitol Reef, Zion) and other national recreation areas open for 10 days. The parks should open by Saturday morning of this all-important holiday weekend. “C’mon down to Southern Utah,” Herbert said during the ceremony in which he agreed for Utah to pay the national parks’ $167,000-per-day costs, according to the Salt Lake Tribune. “We expect you’ll have a great time in Southern Utah and our parks are open.” Neighboring Colorado is also at least partially on board with the
Categories: Financial News

Bob's Discount Furniture Up for Sale

Wall Street Journal Online - Fri, 10/11/2013 - 11:34am
Bob's Discount Furniture's majority owner, Apax Partners, has hired advisers to sell the discount company, which could fetch more than $350 million.
Categories: Financial News

EDF Nears U.K. Nuclear Deal

Wall Street Journal Online - Fri, 10/11/2013 - 11:17am
A proposed $22.4 billion deal would see the French power giant build and operate a pair of nuclear reactors on the west coast of England.
Categories: Financial News

Money Talking: Crisis Could Weaken the Almighty Dollar

Time Magazine Latest Money News - Fri, 10/11/2013 - 10:47am
The U.S. dollar is the world’s reserve currency of choice. It’s the currency that most of the planet’s business is conducted in, and it’s what most nations hold in their central banks, in addition to national currencies, in case of catastrophe. The idea is that since the U.S. government is always good for it’s money, and always pays its bills, the dollar and U.S. treasury bills are the safest bets around. But what if they aren’t? What happens if thanks to our repeated debt ceiling debacles and threats to go into default, people stop trusting in the dollar? That’s the question that Joe Nocera, Charlie Herman and I discussed on this week’s episode of WNYC’s Money talking; you can listen below. If you look at foreign purchases of treasury bills before and during debt ceiling fights over the last three years, it’s a legitimate question to be asking. A recent Goldman Sachs research report shows that during the last standoff in August of 2011, purchases went down significantly and rebounded only after Congress had come to an agreement to raise the ceiling and honor US debt. At some point, if we keep making markets nervous, it’s reasonable to think that central banks around the world will get fed up and start moving to a different balance of reserve currencies—perhaps putting more in euros, especially given that Europe is now in better shape than it was two years ago, or, eventually, into emerging market currencies like the RMB. To be fair, we’re a long way from the dollar’s position being usurped. But it’s worth remembering that even before this crisis, economists around the world have been advocating for a new reserve system based on a basket of global currencies, rather than just the dollar, for financial security reasons. After all, the fact that we have such a privileged borrowing position is one of the reasons that we can rack up so much debt, run a huge current account deficit and make the global financial system as unbalanced as it is. If
Categories: Financial News

Why the FBI Can’t Get Its Hands on Silk Road Kingpin’s $80 Million Hoard

Time Magazine Latest Money News - Fri, 10/11/2013 - 10:40am
The FBI made headlines last week when it announced that it had shut down the illegal online drug bazaar Silk Road and arrested its alleged operator Ross Ulbricht. According to the FBI’s complaint, the arrest led to the seizure of $3.6 million in bitcoins—the virtual currency Silk Road users employed to buy and sell illegal drugs online. Though the FBI’s seizure was the second most valuable act of bitcoin confiscation ever, the Feds were actually unable to appropriate the vast majority of bitcoins associated with the Silk Road enterprise, Ulbricht’s personal stash. According to Forbes, roughly $80 million worth of bitcoins—the personal fortune Ulbricht amassed by running Silk Road—remains untouched by the government So why can’t the FBI get its hands on the money? The reason has to do with the design of bitcoins themselves. A bitcoin cannot be transferred  from one user to another without the first users “private key,” or password to verify the transaction. Unless Ulbricht hands over his password, the FBI will be unable take possession of the money. But can the government force Ulbricht to hand over a password? Is it conceivable that even if Ulbritch is convicted that the government could end up never seizing his riches? (MORE: Meet Hershey’s New Candy Brand) According to Susan Brenner a professor of law and technology at the University of Dayton, Ulbricht could be protected by the fifth amendment from having to hand over the key to his  wealth. The 5th amendment protects citizens from being forced to incriminate themselves, and producing a password that enables access to these coins could be construed as an act of self-incrimination. Brennan explains: “In order to take the 5th Amendment privilege and refuse to produce something, the act of producing it must communicate that (i) it exists (which may seem obvious, but sometimes producing the thing says it exists), (ii) you have it (or have control over it) and (iii) this is the thing you were ordered to produce (authentication . . . i.e., this is my gun, my money, etc.). The Supreme Court has held that
Categories: Financial News

Disruptive TV Startup Aereo Is Winning in Court

Time Magazine Latest Money News - Fri, 10/11/2013 - 10:36am
Aereo, the scrappy Internet video service that’s become an enemy of major TV broadcasters, scored another win this week when a federal judge in Boston refused to issue an injunction shutting down the company. Aereo’s victory comes three months after the U.S. Second Circuit Court of Appeals in New York declined to reconsider an April ruling in which that court also refused to issue an injunction halting the service. Faced with repeated legal setbacks, the major broadcasters are now reportedly preparing to take their case to the U.S. Supreme Court, in what would be a major copyright law test case. Aereo launched in February 2012, after raising more than $20 million from media mogul Barry Diller’s Internet conglomerate IAC and other investors, and was immediately sued by the major broadcasting titans, including Comcast-owned NBC, News Corp.-owned Fox, Disney-owned ABC, and CBS. Aereo picks up free, over-the-air broadcast signals using an array of tiny antennas, and then sends those signals to its customers via the Internet. Aereo’s users technically lease the tiny antennas, which the company houses in nearby “antenna farms.” Aereo says that because each user receives programming over the Internet via his or her own leased antenna, the system is legal. The broadcasters maintain that Aereo — which doesn’t pay for the TV signals it captures over the air — is violating copyright law and stealing their programming. After the Second Circuit Court of Appeals declined to revisit an earlier ruling in which a three-judge panel refused to shut down the service, a Fox spokesperson told TIME that the media giant was considering seeking a hearing on the case before the U.S. Supreme Court. (MORE: Aereo Spat Could Prompt Fox Supreme Court Challenge) On Wednesday, the entertainment industry publication Variety reported that the major broadcasters plan to petition the Supreme Court to review the Second Circuit Court of Appeals rulings in favor of Aereo. Citing “sources familiar with the case,” Variety reported that “a decision has been made to file a petition, or writ of certoriari, by a deadline of Oct. 15.” Reached by TIME Thursday, a
Categories: Financial News

Fisker May Find a Second Life in Sale

Time Magazine Latest Money News - Fri, 10/11/2013 - 10:30am
It’s been a rough few years for Fisker Automotive, the defunct maker of tony electric cars. The U.S. government froze a $528 million loan back in 2011 amid delays in production, having dispensed only $192 million of it. Then, in 2012, the company’s electric battery supplier went bottom up, curbing production indefinitely. Hurricane Sandy destroyed much of its remaining stock. This April, having not put out a car in nearly a year, the company laid off three-quarters of its employers. What’s left of the automaker could still have some life left in it yet. On Friday, the Department of Energy is expected to auction off the remaining $168 million loan, following an initial seizure of $28 million. The loan, expected to sell at a huge discount, could give the winning bidder access to some of the ailing firm’s most coveted assets. ”This is not the last of Fisker that we will see,” says TrueCar analyst Jesse Toprak.  “They’re going to resurface in some shape or another.” On the brink of bankruptcy, Fisker still has some valuable assets. Aside from factory space in Delaware, it owns the intellectual property behind the unique and widely praised aesthetic design of its mainstay product, the Karma hybrid plug-in electric. The Anaheim, California-based automaker, founded in 2007 by proven auto-designer Henrik Fisker, raised more than $1 billion in funding, including the massive 2009 government loan, to produce its plug-in electric cars. Fisker, a former designer for BMW and Aston Martin, penned the original design for the Tesla Model S, which is selling well. The Karma, costing more than $100,000, was released in 2011 as a luxury head-turner. The company’s smaller Fisker Atlantic, also a high-end model, was indefinitely pushed back amid financial woes. (MORE: The Key to Fixing America’s Savings Crisis) What remains has already drawn interested buyers. In May, Reuters reported that a boutique carmaker led by former General Motors executive Bob Lutz had teamed up with Wanxiang, China’s largest auto parts suppliers, in talks to acquire Fisker through a pre-packaged bankruptcy. Other reports had investors in Hong Kong
Categories: Financial News

Jeff Bezos’ Biological Father Didn’t Know His Son Was a Billionaire

Time Magazine Latest Money News - Fri, 10/11/2013 - 10:07am
The long-lost biological father of Jeff Bezos only learned his son was the billionaire CEO of one of the world’s most successful companies when Bezos’ biographer tracked the man down in late 2012 at the Arizona bike shop he owns. In an excerpt from his new book “The Everything Store: Jeff Bezos and the Age of Amazon,” a history of the retailer Amazon and its notoriously brilliant and mercurial CEO, Brad Stone writes of how he found Ted Jorgensen, the man who abandoned Bezos and the boy’s mother decades ago. The last time Jorgensen saw his son the boy was three years old. “’Your son is one of the most successful men on the planet,’ I told him,” Stone writes. “I showed him some Internet photographs on my smartphone , and for the first time in 45 years, Jorgensen saw his biological son. His eyes filled with sorrow and disbelief.” Jorgensen was a hard-drinking 18-year-old circus performer when he married Bezos’ then 16-year-old mother. Jorgensen couldn’t hold down a job and dropped out of school and the marriage quickly fell apart. The mother remarried and made Jorgensen promise to stay out of the family’s life forever. He did. Stone writes that Jorgensen seems ashamed that he agreed to stay out of his life all those years ago. “I wasn’t a good father or a husband,” he said. “It was really all my fault.” Bezos, 49, lives in Seattle, Washington and is worth $27.2 billion today. He’s ranked by Forbes as the 19th richest person on the planet. Bezos did not grant an interview to Stone for the book. [Businessweek]
Categories: Financial News


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