A new online store launched by the Cronkite School of Journalism and Mass Communication at ASU is giving enables students, alumni, family and fans of the J-school a way to wear their pride — literally.
CronkiteStore.com launched at the school this week, offering an array of branded apparel and gifts with the logo of the Cronkite School at Arizona State University. Among the site's offerings are T-shirts; drinkware and gifts; and bags for carrying golf clubs, laptops and books. The online store also is expected to carry items such as Cronkite-branded Nike Dri-FIT shirts.
"The Cronkite Store offers our alumni and students a way to show school pride when they're off campus and even in the workplace," said Kelli Solomkin, director of events and alumni relations payday loan. "For the first time, they can boast being part of the Cronkite School family with clothes and products."
More items, including a section for luxury and seasonal items will be added soon, said Linda Davis, Cronkite's design
director who spearheaded the Cronkite Store project and designed the products.
The Cronkite School has 1,300 students and nearly 8,000 alumni. To shop, go to http://cronkitestore.com.
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One of the nation’s top banking regulators has taken a swipe at what has become a signature piece of Senate Democrats’ Wall Street reform package: cracking down on complex financial products.
Federal Deposit of Insurance Corp. Chair Sheila Bair said she’s concerned that the Senate bill goes too far, in a letter sent Friday to the authors of the measure, Sens. Christopher Dodd, D-Conn., and Sen. Blanche Lincoln, D-Ark.
Bair is taking aim at a provision that blocks all banks from trading complex financial contracts called derivatives. The bill would force banks to spin off the desks that trade derivatives, known as swaps desks.
"One unintended outcome of this provision would be weakened, not strengthened, protection of the insured bank and the Deposit Insurance Fund, which I know is not the result any of us want," Bair wrote in the letter.
The provision in question is among key controversial hang-ups for lawmakers debating the Wall Street overhaul on the Senate floor this week.
Congress generally wants to get tougher on these complex financial products that are currently traded with no oversight, which were responsible for the taxpayer bailout at American International Group (AIG, Fortune 500). But lawmakers disagree about how much to regulate them.
The measure banning bank swaps goes farther than the so-called Volcker rule, named for former Federal Reserve Chairman Paul Volcker, which only blocks some banks from doing such trades for their own purposes and accounts, called "proprietary trading." The Dodd-Lincoln proposal blocks banks from all derivatives.
In the letter, Bair argued that banks have legitimate uses for derivatives, especially when it comes to locking in an interest rate in their financial dealings. She said that if Congress were to pass the legislation, such trading would continue "but in less regulated and more highly leveraged venues," according to the letter.
Many companies and Wall Street banks use derivatives, whose value is derived from another financial product, to cut the risk that they’ll lose money on a deal. Derivatives are also used to lock in the price of a commodity, the way farmers do with the corn they hope to sell after a harvest.
A House bill that passed in December would allow all banks to trade derivatives in a more transparent way. However that bill also allows some trades between some banks and certain companies, such as airlines, to continue without regulation.
But Senate Democrats are tougher on derivatives, in the aftermath of fraud charges that the Securities and Exchange Commission levied against Goldman Sachs (GS, Fortune 500) for selling a complex mortgage-related derivative to investors while failing to tell them that a hedge fund was betting against the product.
The bill says that banks can no longer make such complex financial trades and have access to emergency government-backed loans when they get in trouble.
However, Bair said in the letter that she believes that the Volcker rule goes far enough in accomplishing the same goal, ensuring that taxpayers won’t be stuck supporting unnecessarily risky bets.
"To be sure, there are certain activities, such as speculative derivatives trading, that should have no place in banks or bank holding companies," she wrote. "We believe the Volcker rule addresses that issue."
Spokesmen for Dodd and Lincoln didn’t return requests for comment on Monday.
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SHANGHAI — It’s not quite as foldable as the vehicle that cartoon figure George Jetson pops into his briefcase as he bops into the office.
But the EN-V concept car, GM’s "automobile solution" for the future, just might fit into an apartment foyer.
General Motors and its Chinese partner SAIC are showcasing the "Electric Networked-Vehicle" launched Wednesday in their joint pavilion at the Shanghai Expo, which opens May 1 and runs for six months.
The EN-V, pronounced "envy," is GM’s latest effort to burnish its credentials as a future-focused, environmentally friendly company and shed its image as the bastion of the gas guzzling Hummer. The automaker is in the process of winding down Hummer after a deal collapsed to sell it.
The two-wheel, two-seater EN-V, which looks like an oversized vacuum cleaner, is not just about making vehicles small, lightweight and emission-free, the company says.
With the trunk-less EN-V, GM has jettisoned the traditional "three box" system and gasoline-fueled engine in place of a pure-electric minivehicle meant for city driving faxless cash advances.
Five fit in the parking space needed for one conventional vehicle, says Kevin Wale, president and managing director for GM China Group.
"GM’s vision with SAIC is petroleum-free, emission-free, accident-free and congestion-free," said Wale. "We think we can do that by combining the benefits of electricity and connectivity."
The approximately 5 foot by 5 foot EN-V appears to build on GM’s earlier work with Segway Inc. in developing the PUMA, or Personal Urban Mobility and Accessibility, vehicle. It will use the same types of battery cells as the Segway and the same battery supplier, Valence Technology Inc., said Christopher Borroni-Bird, GM’s director of advanced technology vehicle concepts.
The EN-V’s maximum speed of only 24 mph and other high-tech features reduce the need for heavy, high-stress steel, bumpers, air bags and crumple zones, Albano says.
Hot or iced, with whipped topping or not — Seattle’s Best Coffee fans can soon have it their way.
Burger King (BKC) will start serving up the Starbucks (SBUX, Fortune 500)-owned brand at 7,250 of its restaurants across the United States by September, for $1 to $2.79 a cup, the company announced today.
"The addition of Seattle’s Best Coffee expands on our ‘Have it Your Way’ brand promise by offering our guests even more beverage options and strengthens our ability to remain competitive in a continuously changing industry," the restaurant chain’s senior marketing VP, John Schaufelberger, said in a statement.
The news comes amid a weak economy in which consumers seem to be pinching pennies and avoiding burgers, soda and beer.
Last week McDonald’s posted same-store sales were down 0.7% in January in its U.S. restaurants. Burger King competes with McDonalds’ McCafe to attract morning customers. Burger King doesn’t post monthly figures, but showed same-store sales in the U.S. and Canada were down 3.3% in the second quarter of 2010.
Seattle’s Best Coffee will replace Burger King’s BK Joe coffee menu, launched in 2005.
The sandwich chain Subway also signed a deal with Seattle’s Best back in November and now sells its coffee in 8,500 stores.
Germany’s Axel Weber leads the race to succeed Jean-Claude Trichet as president of the European Central Bank and Portugal’s Vitor Constancio is likely to be his deputy, a survey of economists shows.
Of 27 economists in the Bloomberg News survey, 24 said Weber will be chosen to replace Trichet, whose term ends on Oct. 31 next year. Only three picked Italy’s Mario Draghi, Weber’s main rival for the job. Twenty economists said Constancio will succeed Lucas Papademos as vice president when his term expires on May 31 this year. Euro-region finance ministers are due to vote on the vice president post today.
Jockeying for the ECB presidency has already started as governments across the 16-nation euro region grapple with a fiscal crisis that has prompted investors to question the sustainability of the monetary union. Installing Weber at the ECB’s helm next year would give Europe an outspoken inflation fighter who has stressed the need for fiscal discipline to protect the euro.
“Weber has a very strong personality and will definitely give the euro a very powerful and visible face,” said Laurent Bilke, a former ECB economist now at Nomura International Plc in London, who expects Bundesbank President Weber to win. “He’s a recognized economist and will make a difference. Under him, the ECB may even grow in its international stature.”
Weber’s Influence
Weber, 52, has sped to the top of European policy making. Like Federal Reserve Chairman Ben S. Bernanke, he is a former academic. He joined the Bundesbank as president from the University of Cologne in 2004 after a scandal over hotel expenses forced predecessor Ernst Welteke to resign.
Weber quickly established himself as one of the most influential of the ECB’s 22 Governing Council members, often pre-empting policy shifts and moving currency and bond markets with his comments.
He landed on Trichet’s so-called “Black List” last November by revealing the ECB would tighten its lending to banks. The remarks breached ECB protocol that major announcements be made by the president and also came within a week of a council meeting, when officials are supposed to refrain from commenting on policy.
Weber is perceived by economists as one of the ECB’s toughest inflation-fighting “hawks” because of the emphasis he places on curbing risks to price stability.
Hawks and Doves
If Constancio wins the ECB vice presidency, he would strengthen Weber’s chances by lending balance to his ticket. Constancio, Portugal’s central bank chief, is known as a “dove” who pays more attention to economic growth. Between them they would also ensure representation from northern and southern Europe at the top of the ECB.
Luxembourg’s Yves Mersch and Belgium’s Peter Praet are also on the ballot for the vice presidency business cards design. If finance ministers pick Mersch, who like Weber has a reputation as an inflation hawk, Draghi’s chances of replacing Trichet would rise.
Draghi, 62, left Goldman Sachs Group Inc. to become governor of the Italian central bank in January 2006. He replaced Antonio Fazio, who resigned after a criminal investigation was opened into his handling of Italian bank mergers. A former economics professor like Weber, Draghi chairs the Financial Stability Board and has pushed for limits on bankers’ pay and stronger capital requirements.
A spokesman for Italian Prime Minister Silvio Berlusconi said last week that the government backs Draghi for the ECB job.
‘Neck and Neck’
German Chancellor Angela Merkel has won French President Nicolas Sarkozy’s support for Weber’s candidacy, German magazines Spiegel and WirtschaftsWoche reported this month.
“It will be a neck-and-neck race,” said Holger Sandte, chief European economist at WestLB Equity Markets in Dusseldorf, who expects Draghi to win. “Policy makers probably want someone who’s a bit more diplomatic than Weber,” he said, adding the ECB “resides in Frankfurt and it’s pretty much designed in a German way.”
Germany, Europe’s largest economy, hasn’t held a major European policy position since Walter Hallstein led the Commission of the European Economic Community from 1958 to 1967. It didn’t put up a candidate when the ECB’s first president was picked in 1998, pushing instead for Wim Duisenberg of the Netherlands in exchange for the ECB being headquartered in Frankfurt, Germany’s financial capital.
The decision on Trichet’s successor “ultimately comes down to politics,” said Nick Matthews, senior economist at Royal Bank of Scotland Group Plc in London, who believes Weber will prevail. “I would imagine the argument that ‘it’s Germany’s turn’ is being used in the discussion.”
Musical Chairs
Whoever takes over from Trichet, the ECB’s six-member Executive Board may need to be reconfigured to ensure one country doesn’t dominate it.
With Juergen Stark and Lorenzo Bini Smaghi, Germany and Italy are already represented on the board. Economists said one of them will probably have to step down before his term expires to make way for Weber or Draghi and avoid giving either country too much weight in the ECB’s decision making.
“Stark will be upgraded to Bundesbank president,” said Carsten Brzeski, senior economist at ING Group in Brussels, who believes Weber will win the race. “Stark is a good Prussian. He’s dutiful and does everything that’s good for his fatherland. He’ll clean his desk.”
Production in the U.S. rose for a sixth consecutive month, consumers gained confidence and price increases slowed, indicating the economic recovery is being sustained into 2010 without generating inflation.
Output climbed 0.6 percent in December for a second month, according to figures from the Federal Reserve issued today in Washington. The cost of living increased 0.1 percent last month, less than the median forecast of economists surveyed by Bloomberg News, and sentiment reached a four-month high in January, other reports showed.
Manufacturers may ramp up assembly lines in coming months to replenish stockpiles and meet rising global demand that’s lifting profits at companies including Intel Corp. The rebound so far has soaked up a quarter of the excess capacity created by the worst recession since the 1930s, giving the Fed scope to keep interest rates close to zero through the first half of the year.
“The economy is on a pretty good track on the recovery side and inflation is not a problem,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the increase in consumer prices. “The Fed can be pretty relaxed, at least for the moment, and focus on making sure this recovery is sustainable.”
Stocks Drop
The Standard & Poor’s 500 Index dropped from a 15-month high after JPMorgan Chase & Co. reported a loss in its retail banking division and a stronger dollar pulled down commodity prices. The S&P 500 was down 1.2 percent to 1,134.75 at 12 p.m. in New York.
The increase in production matched the median forecast of 76 economists surveyed by Bloomberg. Estimates ranged from no change to a gain of 1.1 percent. The stretch of increases at the end of 2009 was the longest in a decade.
Production was propelled by a jump in utility use as temperatures turned colder. Utility demand climbed 5.9 percent, the biggest jump in two decades. December was colder than average, according to the National Oceanic and Atmospheric Administration, prompting Americans to turn up the heat.
Manufacturing dropped 0.1 percent as losses in auto and mineral production offset a 0.9 percent gain in business equipment. Demand for computers, communications gear and semiconductors improved, signaling investment may be picking up.
Another report today showed manufacturing accelerated in the New York Fed region this month. The Fed Bank of New York’s general economic index rose to 15.9 from 4.5 in December. Readings above zero in the so-called Empire State Index signal manufacturing expansion in the state and parts of New Jersey and Connecticut.
‘Solid’ Quarter
“We’re turning up,” said Joseph LaVorgna, chief U small personal loans.S. economist at Deutsche Bank Securities Inc. in New York. “Inventories are the spark of the recovery,” he said, and growth “looks pretty solid for the fourth quarter.”
Intel, the world’s largest chipmaker, yesterday projected bigger first-quarter sales than analysts had estimated, a sign the computer industry has shaken off the effects of the recession. The Santa Clara, California-based company, which supplies chips to more than 80 percent of the world’s computers, expects its profit margin to hit a 10-year high this year as consumers snap up laptops and businesses loosen the purse strings on technology budgets.
“My expectation for 2010 is that we’re going to see robust unit growth,” Chief Financial Officer Stacy Smith said in an interview. “The consumer segments of the market will stay pretty strong, and I do believe we are going to see a resurgence in PC client sales.”
Spare Capacity
Capacity utilization, which measures the proportion of plants in use, increased to 72 percent in December, the highest level in a year, from 71.5 the prior month, the Fed’s production report also showed. It was forecast to rise to 71.8 percent, according to the survey median.
The plant-use rate averaged 80 percent over the past two decades and reached a record low 68.3 percent in June. Excess capacity is one reason economists project inflation will remain low.
The increase in the consumer-price index last month followed a 0.4 percent gain in November, the Labor Department reported. The median forecast of economists surveyed projected a 0.2 percent advance.
Excluding food and energy costs, the so-called core index also increased 0.1 percent. Companies may have little success raising prices with unemployment projected to average 10 percent this year, the highest annual rate in seven decades.
“Consumer pricing pressures remain very subdued,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who accurately forecast the rise in the core rate. “It gives the Fed further leeway to continue keeping rates where they are well through 2010.”
The Reuters/University of Michigan preliminary index of consumer sentiment for January increased to 72.8, less than anticipated, from 72.5 in December. The gauge averaged 66.3 last year after reaching a record 28-year low of 55.3 in November 2008.
New Zealand’s economy grew less than economists estimated in the third quarter, driving the nation’s currency to a three-month low on speculation the central bank may not need to raise interest rates until mid-2010.
Gross domestic product rose 0.2 percent from the previous quarter, Statistics New Zealand said in Wellington today. That was half the median forecast of a 0.4 percent gain in a Bloomberg survey of 12 economists.
A decline in construction, manufacturing and business investment hobbled New Zealand’s recovery from its worst recession in 30 years. Reserve Bank Governor Alan Bollard said this month the bank may raise the benchmark interest rate from a record low sooner than he previously indicated should the economic rebound be sustained.
“The recovery is in train, but has been off to a subdued start,” said Khoon Goh, senior markets economist at ANZ National Bank Ltd. in Wellington. The data doesn’t “warrant hiking rates as early as March. We see June 2010 as the central case for when the tightening cycle starts.”
New Zealand’s dollar dropped to 69.75 U.S. cents, the lowest since Sept. 14, from 70.20 cents before the report was released. It bought 69.91 cents at 6:30 p.m. in Wellington. The currency had climbed 12 percent against the U.S. dollar the past six months and the NZX 50 stock index gained 14 percent on signs of a pickup in the economy.
Global Rates
Swaps traders are betting that the Reserve Bank of New Zealand will increase the benchmark rate by 203 basis points over the next 12 months, according to a Credit Suisse index.
“The recovery remains fragile,” Finance Minister Bill English said today. “To climb back up the world income ladder and to replace jobs lost during the recession, we need businesses to have the confidence to invest and create jobs.”
Central bankers around the world are assessing when to remove stimulus as the global recession abates. Australia and Norway have started raising rates and the Federal Reserve has committed to scale down buying of mortgage-backed debt.
Europe’s economy emerged from its worst slump in more than six decades, growing 0.4 percent in the third quarter from the previous three months. The U.S. economy grew at a revised 2.2 percent annual pace last quarter. Australia’s economy expanded in the three months through September for a third straight quarter.
Governor’s Comments
New Zealand’s central bank may begin to “remove monetary stimulus around the middle of 2010,” Bollard said on Dec. 10. In October, the governor said the nation’s benchmark interest rate would be kept on hold until the second half of next year.
The economy shrank 1.3 percent in the third quarter from a year earlier, today’s report showed. That compared with a 1.2 percent contraction estimated by economists.
“The central bank needs strong data in order to bring forward its tightening cycle to the same degree as the market has priced in,” said Stephen Toplis, head of research at Bank of New Zealand Ltd. in Wellington. “Is this the sort of data that would shift the Reserve Bank from its published view? You’d have to say no.”
Business investment fell 0.9 percent, the fifth straight decline, as companies spent less on plant and machinery, today’s report showed. Manufacturing dropped 1.9 percent and construction declined 4.4 percent.
Manufacturers, Retailers
Bridgestone Corp., the world’s largest tiremaker by sales, said in October it would close a plant in Christchurch, New Zealand, by the end of the year because of lower cost competitiveness.
Fisher & Paykel Appliances Holdings Ltd., the country’s biggest manufacturer of washers and dryers, said sales in the three months ended Sept. 30 fell 11 percent from a year earlier. Sales are likely to remain flat for the rest of the fiscal year, Chief Executive Officer Stuart Broadhurst said Nov. 27.
Smiths City Group Ltd. yesterday said sales at its furniture and appliance stores dropped 6.2 percent in the six months ended Oct. 31. “The retail environment has continued to be very tough and in big ticket, the worst for 20 years,” Chairman Craig Boyce said.
Warehouse Group Ltd., the nation’s biggest discount retailer, last month said sales were below expectations in the three months ended Nov. 1.
Household Spending
Household spending, which makes up 60 percent of the economy, rose 0.8 percent in the third quarter. Sales of cars, home appliances and other so-called durable goods gained 2 percent. Purchases of food and non-durable items fell.
Exports of goods and services were unchanged in the third quarter as increased spending by tourists offset a decline in commodity exports including meat and seafood.
The GDP deflator, a measure of prices, rose 2 percent in the year ended Sept. 30.
“GDP growth is showing little upward momentum from one quarter to the next,” said Ian Pollick, economics strategist at TD Securities in Toronto. “From a monetary policy perspective, this particular report is unlikely to light a fire under the RBNZ.”
The number of first-time filers for unemployment insurance was unchanged last week, holding at the lowest level since January, said a government report released Thursday.
There were 505,000 initial jobless claims filed in the week ended Nov. 14, the same as the revised figure the previous week, the Labor Department said in a weekly report.
A consensus estimate of economists surveyed by Briefing.com expected 504,000 new claims.
The 4-week moving average of initial claims was 514,000, down 6,500 from the previous week’s revised average of 520,500.
"After two hefty declines, claims were due a pause this week," said Ian Shepherdson, economist at High Frequency Economics, in a research note.
"Even when the underlying trend is clear, claims tend not to run in the same direction week after week," Shepherdson added.
Claims are "heading in the right direction," Shepherdson said, and he believes employment will level off in the first half of next year — possibly as soon as the end of the first quarter.
Continuing claims: The government said 5,611,000 people filed continuing claims in the week ended Nov. 7, the most recent data available. That’s down 39,000 from the preceding week’s ongoing claims.
The 4-week moving average for ongoing claims fell by 83,500 to 5,711,500.
But the slide in continuing claims may signal that more filers are falling off those rolls and into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.
State-by-state data: Only one state reported a decline in initial claims of more than 1,000 for the week ended Nov. 7, the most recent data available.
Claims in Florida fell by 1,915, which a state-supplied comment attributed to fewer layoffs in the construction, trade, service, manufacturing and agriculture sectors.
Eighteen states said that claims increased by more than 1,000. Michigan reported the most new claims with 6,001; New Jersey’s rose by 4,153; Pennsylvania saw a jump of 3,552; New York had 3,508 new claims; and Ohio’s increased by 3,292.
The U.S. Securities and Exchange Commission will focus on who should be responsible for overseeing new rules for “sponsored naked access” to stock markets, and when those rules should be applied, as it develops proposals, an SEC official said on Wednesday.
The SEC is considering curbs to the practice where brokers allow trading firms to use their license, giving them unfettered access to markets. The firms, often high-frequency traders, are then able to shave valuable microseconds from the time it takes to trade stocks.
The SEC will focus on “who controls the controls,” as well as whether the new risk controls should be applied before or after the trade is made, David Shillman, associate director of the regulator’s trading and markets division, told a conference here.
Some exchanges, banks, and investors have raised concerns that naked assess is dangerous if a computer algorithm at one trading firm malfunctions, causing chaos for others in the market. Brokers and exchanges now use a patchwork of oversight rules to monitor naked access.
Shillman said the SEC would likely build on a proposal by Nasdaq Stock Market parent Nasdaq OMX for market-wide pre-trade standards. Nasdaq submitted its proposal nearly a year ago, and updated it as recently as last month.
(Reporting by Jonathan Spicer; Editing by Tim Dobbyn)
Calpers, the nation’s largest public pension fund, does not face “moral hazard” despite state guarantees of pension solvency, the funds chief investment officer said on CNBC on Wednesday, in comments responding to a Reuters report.
“Does the ultimate taxpayer guarantee mean we take excessive risk? No,” California Public Employees’ Retirement System Chief Investment Officer Joseph Dear said, when asked if the prospect of a state bailout if the fund ran low on funds created incentives to take extra risk.
Public policy and financial industry experts and officials in a Reuters special report on Calpers risk management published last week argued that the California pension system’s risk management policies put taxpayers at risk and needed reforming.
“Well, all pension funds for the public sector have the nature of a public taxpayer backup for what we do,” Dear said on CNBC.
Calpers has told government agencies using the fund to manage their pensions that their contribution rates to the system are at risk of rising as a result of the fund’s losses.
Critics note the California state guarantee of Calpers is more clear than the implicit federal promise to save Wall Street banks “too big to fail” savings account payday advance. The Wall Street bank bailouts sparked widespread debates about “moral hazard”, the idea that bailouts only encourage risk taking.
Calpers recently raised its asset allocation to private equity, considered one of the riskiest areas of investment. A rise in the commitment to private equity in June to 14 percent of the fund from 10 percent looked “gigantic”, Dear said, but reflected the reality that the fund’s allocation had already passed its 10 percent target, hitting 13 percent.
“Again, if you have a long horizon and you have a reasonable return target, and you have a globally diversified portfolio, you’ll be able to make, in our case, 7.75 percent return we need,” he said.
Other financial professionals quoted in the report questioned that outlook. Laurence Fink, chief of gargantuan asset manager BlackRock told the Calpers board in July he didn’t think the fund would hit its target 7.75 percent return target. “I think it’s going to be subpar for many years,” he said, suggesting that cuts in benefits be considered.
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