Is The U.S. Kicking Out Wall Street?

Sentiment for Wall Street hasn’t been the warmest in the aftermath of 2008 but will the hostility and regulation against banks hurt the country in the long run? That’s what bank analyst Dick Bove argues in a note today.

Read the original:

Sentiment for Wall Street hasn’t been the warmest in the aftermath of 2008 but will the hostility and regulation against banks hurt the country in the long run?

That’s what bank analyst Dick Bove argues in a note today. He says the U.S. feels big banks are bad for the country, its economy and its financial system and therefore does not want them. As a result, banks are taking their business (read: jobs) elsewhere and never coming back.

It sounds a bit harsh but it’s certainly true that a number of top Wall Street firms are cutting their staff and in some cases opening up new positions overseas in their place.

Today Goldman Sachs said it would eliminate 230 jobs in New York beginning in September, and Bank of America cut 60 jobs in equity sales and trading while Barclays and Credit Suisse plan to reduce their investment banking staff.

According to the Bureau of Labor Statistics, U.S. financial-industry jobs dropped to 7.61 million in May. They fell for the fourth straight year to an average of 7.63 million in 2010.

Bove says while some of this may be in response to poor trading environments the larger reason for the reduction is the U.S. burdensome rules and regulations that are prohibiting the firms from growing and profiting.

From Bove:

Simply stated, the United States does not want them. A series of rules have been put in place to assure that these banks are inhibited in both their growth and profit goals: Punitive capital and liquidity rules have been established to limit growth; A myriad set of rules that impact the pricing and flexibility of many bank businesses such as credit and debit cards, overdraft functions (Reg. E), Interest rate flexibility (Reg. Q), FDIC policies, proprietary trading rules, and many more have been established to lower revenues; and New regulatory oversight and reporting functions have been instituted to raise operating costs.

New York being the financial capital of the world has the most at stake but its government isn’t doing much to prevent big business from fleeing its borders.

The response of the United States is the opposite of what one might consider necessary. It is increasing the disincentives for large, successful American financial companies to operate in New York. The state’s governor is anti-the financial industry. The country’s President and Congress is anti-financial industry. The New York press is anti-financial industry. The average American has been trained by all of the above to be anti-financial industry.

The assumption by all of the above is that this will not matter; this will not impact New York’s primacy. Apparently, they are not correct. Should another city with more cash, intellectual capital, and manufacturing capacity assume New York’s role in the global financial markets one likely result would be a higher cost of funding the national debt. However, this is also not likely to be understood or believed by those committed to breaking the big American banks.

So how serious should we take this flight to less regulated regions? I wouldn’t take it that seriously considering the few options most big firms have to move their headquarters to.Europe you say? Sure there’s no equivalent of Dodd-Frank there (yet) but consider just last fall Goldman CEO Lloyd Blankfein was making threats to flee Europe because of its regulatory burden.

At a conference organized by Eurofi, a European think tank focused on financial services, the Goldman Sachs CEO warned that “mismatched regulation” in Europe could force banks there to move to cheaper and less intrusive regions.

I suppose there’s always China and Brazil.

Also Read

Stocks dipped in June, but some think it’s a blip (AP)

NEW YORK – Stocks are headed for a correction. No, stocks are rallying

Here is the original post:

NEW YORK – Stocks are headed for a correction. No, stocks are rallying. Wait, stocks are down again. Or up — a lot.

For investors, June was one long seesaw ride that began with a deep plunge on the first day of the month. Six days of declines were followed by a week of give and take and then four days of gains. The month ended with strong earnings from a consumer bellwether and signs that a European debt crisis could be averted. That led to a 4-day advance in the three major stock indexes.

The Dow Jones industrial average rose 480 points, or 4 percent, the last four days of the month and the Standard & Poor’s 500 index is on track for its best weekly return for since July 2010.

That strong ending didn’t make June a winner. Stocks were down about 2 percent for the month, the second straight month that the market finished lower. Only the Dow Jones industrial average eked out a gain, of 0.8 percent, for the quarter.

All three indexes are still up for the year. The Dow is up the most, 7.2 percent. The S&P 500 and Nasdaq are up 5 percent and 4.6 percent respectively. The Dow was down 6.3 percent at this time last year.

Concerns about the strength of the U.S. economy and a possible debt default by Greece spooked investors much of the month. One the first day of June investors were greeted with reports that American manufacturing output had expanded at the slowest pace in 20 months, that auto sales had tumbled in May, and that private companies added the fewest number of employees since September. By June 15, the S&P had lost nearly all of its gains for the year, before dividends.

Market declines mean different things to different people. Rather than retreat further, some investors came to believe that stocks were relatively cheap. Stocks began to reverse course.

The upward climb continued this week when Nike Inc.’s earnings came in much higher than analysts had been expecting. That indicated that higher gas prices haven’t stopped consumers from splurging on things like pricey sneakers and sportswear. In the last four days of the month, the S&P rose 4.1 percent.

Even so, the S&P 500 lost 1.8 percent for the month, the Dow finished down 1.2 percent for the month. The Nasdaq composite fell 2.2 percent. For the second quarter, the Dow gained 0.7 percent between April and June. The S&P 500 and Nasdaq, however, lost 0.4 percent and 0.3 percent, respectively.

Most economists, analysts and investors agree that, at the very least, the U.S. economy has struggled through a soft patch. The weakness was brought on by gas prices that hit $4 a gallon, problems getting computer chips and auto parts from Japan and severe weather in the South. These factors weighed on consumer spending and confidence and made recession-weary companies reluctant to hire employees or expand domestically.

Whether the late June rally continues into July depends partly on results from upcoming earnings reports and lingering effects of that soft patch.

Most stock analysts think the economy’s troubles are temporary. Few have lowered their estimates over the last month despite a dip in consumer spending and continued high unemployment. One reason: even if U.S. consumers spend less, American companies continue to make a significant portion of their profits overseas. As of 2010, 40 percent of the profits for U.S. companies in the S&P 500 came from overseas.

Alcoa Inc. is the first major U.S. company to report earnings every quarter. Many investors look to those results for indications of how the results of other major corporations might turn out. The aluminum maker, which tends to do well when the global economy is growing, reports its quarterly results on July 11.

Mark Schultz, portfolio manager for the $240 million MTB Mid-Cap Growth fund, believes that the impact of higher gas prices on U.S. corporate profits will be balanced out by growing revenue coming from sales in countries like China and Brazil, where companies are still expanding.

Some market strategists say the stock market is in for another up and down ride in July as earnings reports come out.

“We’re worried that the earnings season will capture the soft patch in the second quarter,” says Ron Florance, the managing director of investing strategy at Wells Fargo Private Bank. “If analysts haven’t factored that into their estimates then we could be set up for disappointments.”

Earnings season also gives investors a glimpse of what’s to come. When companies report for the quarter, their executives often lay out their expectations for revenue and earnings for the next quarter. Gloomy predictions from key companies like JPMorgan Chase & Co, IBM and Caterpillar could make a second-half stock rally difficult.

On the other hand, if those forecasts are more bullish, that will bolster the belief that effects from the Japanese earthquake and tsunami and high oil prices will be short-lived.

“The misses will probably not be repeatable because they could come from weather and commodity price spikes,” says Phil Orlando, the chief market strategist at Federated Investors. “We all know that the third quarter will be better.”

Of course, there’s one unknown looming: Politics. The federal government will reach its debt limit on Aug. 2. If Republicans and Democrats in Congress can’t reach a deal to prevent that from happening, the U.S. could find itself unable to borrow more money to meet all of its financial obligations.

The government would be forced to choose which payments it won’t make. Those could include Social Security checks to more than 52 million recipients or military salaries for the 1.4 million currently in the armed forces. Alarming, yes. But skipping bond interest payments could be even worse. A default would lead to a sharp rise in interest rates and possibly trigger a recession.

As of now, many investors are betting that a deal will be reached. But look for big swings in the market if a deal isn’t reached by mid-July, says Kevin Shacknofsky, co-manager of the $635 million Alpine Dynamic Dividend fund. “If we don’t have signs that there’s a deal by (then), you have to start positioning your portfolio for the worst.”

Feds charge 3 CEOs with penny-stock fraud

WASHINGTON (AP) — Three CEOs face civil and criminal charges of stock manipulation after regulators said they tried to bribe undercover FBI agents to buy shares of their companies so that the stock prices would rise. The executives thought they were bribing a corrupt broker and representatives of a corrupt pension plan trustee, the Securities and Exchange Commission said Thursday.

Read the original here:

WASHINGTON (AP) — Three CEOs face civil and criminal charges of stock manipulation after regulators said they tried to bribe undercover FBI agents to buy shares of their companies so that the stock prices would rise.

The executives thought they were bribing a corrupt broker and representatives of a corrupt pension plan trustee, the Securities and Exchange Commission said Thursday.

The sting also netted a consultant and a marketer who created a website with false testimonials to make a stock more attractive, the SEC and the U.S. Attorney’s office for the Southern District of Florida said.

The charges involve so-called penny stocks, which trade for less than a dollar. Their low value makes penny stocks vulnerable to price manipulation because a relatively small trade can change the share price significantly.

Among the allegations described Thursday:

— Donald Klein, 40, of Frisco, Texas, president and CEO of KCM Holdings Inc.; and Douglas Newton, 66, or Rancho Mirage, Calif., CEO of Real American Brands Inc., both tried to funnel and then conceal kickbacks to the supposed pension plan trustee in exchange for fund’s purchasing millions of shares of their stocks, the SEC said. They also tried to bribe a broker to buy KCM stock for the broker’s clients, the regulator said. Both the broker and the trustee actually were FBI agents.

— Thomas Schroepfer, 54, of Las Vegas, president and CEO of SmokeFree Innotec Inc. paid kickbacks to the supposed trustee in exchange for the fund’s buying shares of SmokeFree, the SEC said. SmokeFree stock promoter Charles Fuentes, 66, of Dana Point, Calif., also was charged.

— Brian Gibson, 63, of Coconut Creek, Fla., created a website called Roaringpennystocks.com to promote shares of Xtreme Motorsports International Inc., the SEC said. He allegedly promoted the site by sending email blasts to potential investors and posting false testimonials about the success of the website’s stock picks.

The sting was part of a securities and investment fraud initiative in South Florida announced last year by the SEC, FBI, U.S. Attorney and other state and local law-enforcement agencies. In October and December 2010, the SEC filed civil charges against more than a dozen companies and penny-stock promoters for similar stock manipulation schemes. The U.S. Attorney’s office has obtained 16 criminal convictions related to fraud involving penny stocks.

Investors were not harmed by the undercover operation, officials said.

A call to a phone number listed as Klein’s was not answered. A man identifying himself as Newton answered the phone but ended the call quickly without commenting. Neither Fuentes nor Schroepfer could be located for comment Thursday afternoon. Gibson did not immediately respond to a phone message seeking comment.

Summary Box: Stocks extend rally on Greek vote (AP)

GREECE: Stocks rose after Greek lawmakers passed a cost-cutting bill that had to be approved before international lenders would release $17 billion in rescue funds.

See the original post here:

GREECE: Stocks rose after Greek lawmakers passed a cost-cutting bill that had to be approved before international lenders would release $17 billion in rescue funds.

CHICAGO SUPRISE: A trade group reported that manufacturing in the Chicago region sped up unexpectedly in June. Analysts had forecast a decline. The report helped the stock market reach its fourth straight day of gains.

THE INDEXES: The Dow rose 152.92 points, or 1.2 percent, to close at 12,414.34. The S&P 500 rose 13.23, or 1 percent, to 1,320.64. The Nasdaq rose 33.03, or 1.2 percent, to 2,773.52.

Google+ tops Android Apps of the Week (Appolicious)

Google is percolating something new, feeding us bit-by-bit the details of its latest social coup. The search engine is testing the waters of today’s social web culture, launching Google+ in private beta

Follow this link:

Google is percolating something new, feeding us bit-by-bit the details of its latest social coup. The search engine is testing the waters of today’s social web culture, launching Google+ in private beta. The project comes with an Android app, syncing photos and other content with your socially-enhanced Google profile. Google+’s biggest adversary, Facebook, has updated its Android app too, finally adding video uploads.

In Google’s latest attempt at socializing its search engine, the company’s revealing slices of its strategy, the latest being Google+. This new profile aggregates your social activity, centralizing the management of your personal, social cloud. With an accompanying Android app, you can upload and sync photos to private or public clouds, share your location, interact with groups called Circles, and group message with private groups called Huddles. The idea is to manage your stream of content only with the folks you select.

Facebook’s added a significant update to its Android app, letting you upload video directly from the device’s camera app. It’s a tad late for such a feature update, considering how integral content sharing is amongst Android apps. Video upload has been an option for iPhone users for a while, and it’s partially due to the difference between iOS and Android. Facebook’s latest version 1.6 works best on Android 2.2 Froyo devices, a reflection of the app’s closer integration with newer Android OS versions. Other upgrades include Facebook Pages access through feeds, which have been opened up to support more types of posts.

With the magazine craze in full swing on mobile devices, Dolphin Browser HD takes an opportunity to beautify the web. One of the notable new features is called Webzine, allowing you to fill your home page with media icons for all the topics and websites you want to follow. Click on an icon and you’ll get a streamlined view of the site’s contents, with oriented headlines, images and smidgens of text. Ads are stripped down in an effort to class-up the minimal real estate a mobile device offers, though such abbreviated excerpts are no match for dedicated webzine apps.

Communication is going to the cloud, and YouMail is making it easier to access. The latest version of its Android Visual Voicemail Plus app makes it simpler to search and add custom greetings for specified dialers or entire groups. A number search has been incorporated into the app as well, giving you additional information on a caller. A new magnifying glass icon appears during voicemail playback, querying the caller’s phone number, city and state. There’s even an option to view a caller’s location on a map. YouMail demonstrates the high level of customization you can apply to your automated communication tools, but also acts as a centralized management tool as well.

Mozy is expanding its consumer back-up solution to include business users, taking another step into the enterprise. Similar to the existing MozyHome app for consumers, today’s release gives Pro business users a mobile version as well. From here, MozyPro administrators can provide access to their end users, managing the mobile access of documents and sharing with clients and colleagues. With a distinct security slant, Mozy’s really about the protected sharing of files, and this is a key component for business users sharing sensitive documents.

Noom Weight Loss is part of a growing brood of health apps, personalized to help you achieve your goals. This Android app does so through exercise tracking, food logs and motivation perks, all set around a custom weight loss plan for documenting your progress. Noom sends exercise reminders, charts your walking and yoga routines, and lets you share the entire process with friends via Facebook and Twitter. With support for uploading meal photos, home screen widgets for quick entries and visual charts, Noom Weight Loss aims to be a low-maintenance app, so as not to deter you from tracking or the exercising itself.

Download the free Appolicious Android app

Rye Patch Gold Corp. (RPMGF: OTC Link) | Rye Patch Corporate Update

Rye Patch Corporate Update Jun 30, 2011 OTC Disclosure & News Service Vancouver, BC, Canada -

Read the original here:
Rye Patch Gold Corp. (RPMGF: OTC Link) | Rye Patch Corporate Update

Rye Patch Gold Corp. (RPMGF: OTC Link) | Rye Patch Corporate Update

Rye Patch Corporate Update Jun 30, 2011 OTC Disclosure & News Service Vancouver, BC, Canada -

Read more:
Rye Patch Gold Corp. (RPMGF: OTC Link) | Rye Patch Corporate Update

Amazon Will Dump Affiliates To Fight California Tax Law (NewsFactor)

Amazon.com is calling a new sales-tax law in California unconstitutional. Amazon appears ready to challenge the law, which states that having affiliates in the state is the same as online retailers having a physical presence there. Amazon is moving to terminate its affiliate program in California

View post:

Amazon.com is calling a new sales-tax law in California unconstitutional. Amazon appears ready to challenge the law, which states that having affiliates in the state is the same as online retailers having a physical presence there.

Amazon is moving to terminate its affiliate program in California. In a letter to affiliates, Amazon said it will end contracts with all California residents that are participants in the Amazon Associates Program as soon as the law goes into effect.

“We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors,” the letter argued. “Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.”

No Beating Taxes

Rob Enderle, principal analyst at the Enderle Group, said the California law puts increasing tax pressure on online retailers. In the consumer’s mind, the offset for the shipping costs associated with online purchases is the savings on sales taxes. But California and other states that have enacted such laws have a different view.

“States are so hard up for cash, I think they are having a real issue providing an incentive for someone not to pay taxes in the state and have an advantage by so doing against companies that are paying taxes in the state,” Enderle said.

“This is the future, whether Amazon or anybody else likes it or not. The reality is the states need the money and they are not going to give up sales-tax revenue if they can avoid it,” he added. “In the end, they are going to find a way to tax Amazon for anything they sell in the state regardless. Think of this as an interim step.”

Enderle isn’t optimistic that Amazon can block the new law or work around it. It’s true that the U.S. Supreme Court has ruled that a state can’t collect sales tax from companies without a physical presence within the state, but California skirted that ruling by changing its definition of physical presence to cover companies with affiliates there.

“I don’t know how you avoid paying taxes if in fact the law in the state is to pay taxes,” Enderle said. “If the law was badly written, they’ll just fix the law. So eventually they are going to address this issue. Amazon through litigation may be able to delay the impact. I don’t think they can reasonably avoid it indefinitely.”

The E-Commerce Impact

What about the impact on e-commerce? If more states move to charge sales tax on online purchases, will it dampen the market for online retail? Enderle doesn’t think so.

E-commerce is ingrained in shopping habits. Shopping online isn’t as much about saving money, he said, it’s the convenience of online purchases.

“The online purchaser is the consumer who wants it easy and the person who wants it quick,” Enderle said. “Taxes — unless they are huge — are not going to change that.”

Android Leads as Smartphone Use Grows in U.S. (NewsFactor)

A new Nielsen survey released Thursday indicates that 38 percent of all U.S.

See the article here:

A new Nielsen survey released Thursday indicates that 38 percent of all U.S. mobile consumers now own smartphones. Of those, 55 percent are recent handset purchasers who selected a smartphone. By contrast, only 28 percent of U.S. mobile consumers were equipped with smartphones in the third quarter of last year — when 41 percent of recent buyers said they had purchased a smartphone, according to the FCC.

Nielsen’s survey also found that Android continued to be the most popular smartphone platform among U.S. consumers in May. Among those respondents who purchased a new smartphone in the past three months, Android was the U.S. market leader.

However, the growth of Google’s mobile platform remained flat at 38 percent during May in comparison with survey results from previous months. By contrast, the popularity of Apple’s iPhone rose six percentage points over the last three months to 27 percent, according to Nielsen.

Awaiting Mango

Apple’s recent U.S. market gains have come primarily at the expense of Research In Motion. According to Nielsen, BlackBerry handsets accounted for 21 percent of the total number of smartphones owned by U.S. customers in May.

Surprisingly, Microsoft’s old Windows Mobile platform still accounts for nine percent of all U.S. smartphone owners. By contrast, the software giant’s new Windows Phone 7 platform only represented one percent of all U.S. smartphone users, according to Nielsen.

Windows Phone 7 hasn’t seen any uptick in growth over the past three months. Some industry observers believe many potential buyers are waiting for Mango — the next-generation mobile OS that Microsoft has promised to release this autumn.

Still, IDC recently predicted that if all goes smoothly with Nokia’s transition to Mango, the Windows Phone 7 platform could attain a 20 percent global market share in 2015. “Windows Phone 7 will benefit from Nokia’s support, scope and breadth within markets where Nokia has historically had a strong presence,” the firm’s analysts said.

Mobile Apps and Brand Loyalty

Now that more U.S. consumers are using smartphones, mobile apps are becoming of greater importance. According to another Nielsen survey released earlier this month, app usage now accounts for 56 percent of all user activity on Android smartphones. By contrast 19 percent of user activity is devoted to e-mail, while 15 percent involves telephone calls, and only nine percent of user activity is browsing the web, on average.

According to a new Futuresource Consulting survey, iPhone users are downloading the most games and most frequently paying for content. The firm’s recent survey of mobile-device users in the U.S. and the U.K. shows that one out of every three iPhone users are making “in App” purchases.

By contrast, only one in 10 Blackberry and Android users were doing the same. Moreover, 64 percent of iPhone users are viewing video on their devices, whereas only 32 percent of other smartphone users said the same.

The consulting firm’s latest Living with Digital study also demonstrates the huge importance of the non-transferable nature of mobile apps as a driver of brand loyalty. Among the iPhone owners the firm surveyed, 54 percent indicated they are committed to the Apple brand so they can retain the apps they have come to depend upon.

“Apps for smartphones and tablets continue to offer significant opportunities for promoting and monetizing games, books, movie and TV content,” said Alison Casey, head of global content at Futuresource. “Although the market is in its early stages, tablets will become the portable device for entertainment in the future, generating a new breed of applications and services that will breathe additional life into this already lucrative market segment.”

Toyota aiming for parent-only operating profit: Nikkei (Reuters)

(Reuters) – Toyota Motor Corp (7203.T) will continue to slash costs in a bid to swing back to an operating profit on a parent-only basis, The Nikkei business daily reported.

Originally posted here:

(Reuters) – Toyota Motor Corp (7203.T) will continue to slash costs in a bid to swing back to an operating profit on a parent-only basis, The Nikkei business daily reported.

Toyota is trying to compete with South Korean and Chinese cars by reducing procurement costs by up to 30 percent, Chief Financial Officer Satoshi Ozawa told Nikkei in an interview.

The company also expects to launch a new line of cars in 2013, Ozawa told the daily. “We’ll also hike per-car sales prices. If we shift offshore, we can’t come back,” the Nikkei quoted Ozawa as saying.

To achieve its target of earning 1 trillion yen ($12.38 billion)in operating profit, Toyota needs to break even on a parent-only operating basis, the daily reported.

Last fiscal, Toyota posted a parent-only operating loss of 480.9 billion yen, according to the Nikkei.

Ozawa told the daily that Toyota would be able to create a break-even structure next fiscal year.

(Reporting by Kartick Jagtap in Bangalore; Editing by Prem Udayabhanu)

« Previous Page — Next Page »