posted by Bina | Monday, July 16, 2007
Good piece here on how San Francisco Bay Area millionaires are taking their gold out of the Golden State.
“The Bay Area’s wealth boom is producing an explosion of millionaires–in Nevada, Wyoming and perhaps Canada. Wealth managers and other advisers to the well-heeled say “wealth migration”–taking the money and running–is behind a surprising drop in the number of Bay Area millionaires.”
The net loss of millionaires knocks the extremely rich and fertile Bay Area down near the bottom of a millionaire creation list with laggards such as Detroit, Pittsburgh and Cleveland.
Of course, the middle classes have been fleeing California for years. High house prices have been the main culprit. Long commutes and deteriorating public services are two more reasons.
But the flight of millionaires is something new. The reason? You guessed it. Taxes.
“I’m hearing from more California baby boomers, 'I need to get out,’ ” said Diane Kennedy, a Phoenix accountant and financial adviser to the wealthy. “You can still make a lot of money in California. The problem is, then you have to pay taxes on that money,” said Kennedy, who recently helped a California client with annual income of about $1 million save $96,000 annually by making their home in Jackson Hole, Wyo., their primary residence.
“Effectively, you have the state of California subsidizing their relocation through tax savings,” Kennedy said.
I love this story. Not of because of what it is doing to California. But because it proves that tax rates indeed influence behavior. Here's another great quote from the story:
“California is punishing people for being successful,” said a professor at Ohio University and a visiting scholar at the American Enterprise Institute.
No kidding. I would love to hear from readers who feel they are being punished for their success. Particularly, I would love to hear about your growing tax woes, combined with cost of living woes, in states such as California, New York, Massachusetts and others.
Have you moved for tax (and/or cost of living) reasons? Have you thought about such a move? Where would you go?
Post your comments below. Oh, and here’s a great book on the subject.
Jane Croft on the revised by RBS-led consortium for ABN Amro
The per share offer, which is competing against a rival all-share bid from Barclays, remains at €38.40 even though the deal no longer includes LaSalle, the US bank which ABN Amro has agreed to sell.
The consortium, which includes Santander of Spain and Belgo-Dutch bank Fortis, said its revised offer was the most valuable option for ABN Amro and worth 13.7 per cent more than Barclays’ offer based on Friday’s closing share prices.
Sir Fred Goodwin, chief executive of RBS said: “It’s materially higher than their [Barclays’] offer.”
The Barclays bid is worth around €64bn, or almost €4 a share less than the consortium bid.
It is now up to Barclays to decide whether to raise its offer. The UK bank has until July 23 to submit a new one.
Sir Fred said he was prepared to “expect the unexpected” from Barclays. He said RBS shareholders were supportive of its continued interest in ABN Amro, and he had been encouraged by assurances from the Dutch bank that the two bids would be dealt with on a level playing field.
The consortium needed to change its original offer which had been conditional on ABN Amro not selling LaSalle, after the Dutch Supreme Court ruled last Friday that ABN Amro could go ahead with the $21bn sale to Bank of America.
Sir Fred said “we would have preferred to get LaSalle, there’s no two ways about that.” But he added that “we never thought of withdrawing. Going ahead without LaSalle is every bit as attractive as going ahead with it.”
The contribution of Santander and Fortis to the consortium bid is unchanged as, if the original bid had succeeded, RBS was to have owned LaSalle.
Under the new offer, RBS would take the cash ABN Amro is receiving for LaSalle so RBS’s contribution to the new offer is of €16bn in cash – net of the LaSalle proceeds – including €5bn in equity.
As a result, the revised consortium bid comprises €35.60 a share in cash and 0.296 new RBS shares for each ABN Amro share. The total cash consideration would be €66bn, up from €56bn in the earlier bid.
RBS said it would buy ABN Amro’s global wholesale business and international retail businesses. It said the transaction would provide “enhanced growth prospects and attractive financial returns”.
It has adjusted its forecasts of synergies it could achieve in North America, because of the LaSalle sale, and now predicts cost savings of €1.24bn plus its €82m share of central costs savings, and net revenue gains of €481m by the end of 2010.
The internal rate of return on the transaction was estimated at 15.5 per cent post-tax by RBS, comfortably above its 12 per cent hurdle rate. It expects the acquisition to deliver a post-tax return on investment of 13.2 per cent in 2010 and to increase its earnings per share by 2 per cent in 2009 and by 7 per cent in 2010.
Sir Fred said buying ABN Amro “remains compelling from a financial point of view” and would produce “essentially the same earnings enhancement for the group, despite the smaller size of the transaction.”
In early trading ABN shares were 2.9 per cent higher at €36.90. RBS rose 1.2 per cent to 647½p while Barclays gained 2.4 per cent to 741 ½p.
Sarkozy made the visit to announce that Paris might fall short of its objective of achieving a balanced budget by 2010, should gross domestic product growth fall below forecast. By doing so, he also forced the July 10 meeting of the U.N.'s Economic and Finance Committee to deliberate the merits of strict adherence to the Stability and Growth Pact (SGP)--a general commitment among European Union member states to achieve a budgetary position that is close to balance or in surplus over the medium term.
Sarkozy's visit was unprecedented but not unexpected. As a presidential candidate, he made it clear he would use fiscal policy to stimulate growth, and, once elected, he said he would communicate this to the Eurogroup. His self-invitation to the informal gathering prompted widespread speculation that the credibility of European fiscal coordination is again in doubt. This built on existing concerns caused by Sarkozy's criticism of the European Central Bank for ignoring the euro-dollar exchange rate and his insistence that market competition be omitted as an explicit objective of European integration in the negotiating mandate for a new E.U. Reform Treaty.
Media accounts also pointed to the debate between the European Commission and Italian Finance Minister Tomaso Padoa-Schioppa about the pace of fiscal consolidation in Italy.
However, such discussions about the credibility of European policy coordination (including fiscal policy) tend not to specify what is supposed to be credible, and for whom. The presumption is that the goal of European fiscal policy coordination is to ensure prudent management of government accounts. Should coordination fail, some accounts will be more prudently managed than others.
In such circumstances, financial markets, specifically those in long-term government debt, ought to react by demanding a greater risk premium on some long bond yields. Long-term government bond yields should converge where coordination is credible, and diverge where it is not.
However, the dispersion of euro-area government bond yields (excluding new entrant Slovenia) does not seem to bear this thesis out. While financial markets may simply be failing to exert sufficient discipline, another interpretation is that markets do not doubt the credibility of euro-area fiscal policy and expect that larger states will sometimes break the rules.
Moreover, it is not clear whether France ought to be singled out, as a comparison with the U.K. makes clear. While the U.K. is not an E.U. member, it is involved in fiscal policy coordination and is a signatory to the SGP. Moreover, of the two countries only London is under supervision for its failure to comply with the European requirement to "avoid excessive deficits," though this supervision is nonbinding, since the U.K. negotiated an opt-out when the procedure was negotiated.
By contrast, France emerged from the excessive deficits procedure last January, and, even if it delays its further consolidation of fiscal accounts, as has Sarkozy warned, there is no doubt about its continued avoidance of "excessive deficits." Paris' breach of the letter of the agreement is thus less serious than is supposed.
On the other hand, there is evidence that small countries, or countries eager to join the E.U., will put their commitment to prudent fiscal policy coordination first. An obvious example is the furious Dutch response to France and Germany's abrogation of 2003, shortly before the Netherlands came under supervision for its own excessive deficits the following spring. Similar behavior is also evident in recent efforts by Malta to qualify for membership in the euro area and by Hungary to fulfill its obligations (albeit very belatedly) under the excessive deficits procedure.
Sarkozy's warning on fiscal policy only reinforces widespread acceptance that large member states will pay more attention to domestic growth than to European rules. Yet that does not mean that smaller member states or candidates for the single currency will insist on doing the same, or that any government should miss the opportunity of strong growth to undertake prudent fiscal consolidation. The E.U. has moved away from unrealistic interpretations of the SGP. As a result, European commitment to fiscal policy coordination is more (and not less) credible.
Announcing second-quarter results on Monday, the 116-year old Dutch company revealed further details of plans to offload stakes in a range of non-core companies and restructure its balance sheet by taking on more debt.
Pierre-Jean Sivignon, chief financial officer, said this would involve reducing its stake in LG.Philips LCD, the South Korean electronics group, from 32.9 per cent to less than 20 per cent “as a first step” once a lock-up period expires on July 22.
Philips – which is also the world’s largest lighting maker and one of the top three manufacturers of hospital equipment – is also looking to sell all or part of its 19.9 per cent stake in NXP, Europe’s third-largest chipmaker.
It will also sell its remaining 8.1 per cent holding in chipmaker Taiwan Semiconductor Manufacturing (TSMC) before 2010, having already reduced its stake in the last quarter from 16.2 per cent.
The proposed asset sales are part of Philips’ wholesale withdrawal from the semiconductor business amid a renewed focus on its core businesses of consumer electronics, domestic appliances, lighting and medical systems. No details of potential acquisitions were made available by the company.
According to the company, as of June 11, its 32.9 per cent stake in LG.Philips LCD was worth just over €4bn; its holding in TSMC, €3.4bn; and its NXP stake, €854m.
Philips already holds €6.2bn in cash and plans to increase its leverage “to an appropriate level” in the future, something Mr Sivignon said cleared the way to raising an additional €3bn-€4bn in debt.
It is already engaged in a €4bn share buyback programme and plans to keep its dividend yield “north of 2 per cent” with a dividend payout ratio of between 40-50 per cent, Mr Sivignon said.
Philips reported a sharp gain in second-quarter net income to €1.57bn, from €301m in the same period last year, largely due to a one-off gain of €1.22bn from the sale of 8.2 per cent of TSMC.
Earnings before interest, tax and amortisation – its preferred measure of performance – were €389m, equivalent to 6.4 per cent of sales, up from 4.5 per cent of sales in the same period last year. It argues this measure offers a more accurate account of operations given the company’s asset disposal and M&A activities.
Revenues dropped 4.4 per cent to €6.1bn, marginally below analysts’ expectations, as a stronger than expected performance by its domestic appliances operations failed to compensate for disappointing earnings from its medical and consumer electronics operations.
Domestic appliances, which makes shavers, electric toothbrushes and coffee machines, reported 14 per cent growth in sales. Sales at consumer electronics dropped 11 per cent.
Philips said it expected to meet its targets of 5-6 per cent average annual sales growth and ebitda of at least 7.5 per cent of sales in 2007.
Shares in Philips were 1 per cent lower at €32.03 in early afternoon trading.
General Electric's (nyse: GE - news - people ) 10% increase in second quarter earnings was a gift horse to a market ready to trade on any kind of good news. With more than 200,000 GE options contracts moving in the hours after the report, the sheer level of volume was no surprise given the kind of hale and hearty earnings GE reported. More interesting still was the steep drop-off in implied volatility. Ahead of Friday’s earnings release, GE volatility had risen dramatically, peaking as the highest of the 30 Dow Industrials, on a relative basis.
Following the release, volatility declined sharply, which often happens once an earnings release clears the air of climactic uncertainty. In the case of GE, volatility declined by about a quarter to 16.5, slightly below what might be considered "normal," an arbitrary estimate being 17.5. We wondered if the drop-off might have been due to the announcement accompanying Friday's earnings report that GE is well in the process of cutting back its residential subprime mortgage exposure, subprime worries being the source of so much volatility in equity markets these days and the rise of the VIX "fear index" earlier in the week.
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Call volume swelled to about four and a half times the number of puts traded on Friday afternoon, concentrated at the August 40.0 strike, where more than 60,000 lots, and the 42.5 strike, where more than 15,000 lots had moved as of Friday afternoon.
For options traders seeking volatility, this week’s bumpy ride for Sallie Mae (nyse: SLM - news - people ) offered plenty of bang for the volatility buck, after a consortium led by J.C. Flowers moved to abort its bid to buy Sallie Mae due to the imminent passage of a House bill curtailing federal student loan subsidies. Impied volatility on Sallie Mae options shoe up some 147% in the wake of Wednesday’s news. Traders positioned for 39% volatility on what has traditionally been a fairly static Sallie Mae share (as of Wednesday, its historical share price volatility was just 7.8). Volume surged to 26 and a half times the daily average as traders made a mad dash to shed calls--some 9,350 lots at the July 55.0 strike were sold and traders rushed to pick up July puts at the 55, 50, 45 and 40 strikes at premiums driven up some $3 in price--a classic case of selling shares and buying volatility.
Sallie Mae shares--and its call volume in options--regained some equanimity by week’s end, trading at $53.63 after analysts pointed to the drop in share prices as a buying opportunity. The argument was that that the House bill did not change the terms of the acquisition agreement, and that J.C. Flowers may simply have seized a legislative opportunity to lock in a lower price. On the day after the carnage, more than 95,000 Sallie Mae options contracts were in play, with puts outmoving calls by a factor of 1.25, but a robust level of interest on both sides.
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Last week we noted a pickup in call-side activity in retail giant Target (nyse: TGT - news - people ) on rumors that the discount chain might be looking to divest its credit card business. This week’s action saw another jump in call-side volume concurrent with a story reported on Thursday that activist investor William Ackman may have acquired a 5% stake in the company. With shares surging nearly 7% to close at $70.00 on Thursday, options activity saw volume of around 9,000 lots in the 67.5 July call strike and 10,600 in the same strike in the August call series.
Since then, open interest at each strike tripled and quintupled respectively. In the case of the July call, these contracts were trading at premiums as low as $0.40 last week, and now command as much as $3.40, while the August contract, trading at premiums as low as $1.40 a week back now has an asking price of $4.60. Some of the volume here may be a matter of options traders looking to take profits on an intraweek surge in premiums on the flurry of rumors. Today options traders focused on the July 70 calls where close to 25,000 contracts changed hands. At current premiums investors are predicting that shares will expire at $71.50 next weekend.
Takeover chatter was the driver behind some curious option trading involving power toolmaker Black and Decker (nyse: BDK - news - people ). A sharp increase in option play late in the week further extended recent gains in relative volume and call-side interest for the ticker. We noted that these gains seemed at odds with the current earnings pressure and sober guidance for retailers and manufacturers with exposure to the housing and home improvement sectors.
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Underlying shares closed nearly seven% higher on Thursday, at $95.94. Black & Decker was also one of that day’s top implied volatility gainers, up 41.3% to 39%. Activity centered on the call side, where buyers were looking to snap up quick at-the-money calls at the July 95.0 strike before expiry, paying premiums of $2.60--a near doubling in premium price--in order to do so. Premiums are also way, way up--in excess of two and three dollars--at the August 95.0 and 100 strikes, where volume in excess of 1,350 circulated in early trading.
In truth, the takeover talk may all be bluster--so far, the only name tipped as a possible buyer was General Electric, a prospect quickly nixed with the release of GE earnings.
In other news, shares in Alcoa (nyse: AA - news - people ) moved dramatically after news of the purchase of Canadian aluminum producer Alcan (nyse: AL - news - people ) by London-based Rio Tinto, staging an 8.6% rally Thursday through the stock's all-time high set in 2001. The deal rips Alcan from the jaws of Alcoa in what had become a nasty spat. Traders are now focused on the likelihood of a bid from Australian mineral producer, BHP Billiton (nyse: BBL - news - people ).
It seems that all of those Alcoa bulls finally got this one right--yet some perhaps wise cautionary protection was taken on the put side early Thursday. On the call side more than 20,000 contracts traded at the 45.0 strike in both July and August with shares up at $46.09. Speculation grew that Alcoa’s shares would keep going up, with fresh trading in the 47.50 strike from July to October. On the defensive side of trading the 42.5 and 45.0 strikes were heaviest traded in July and August earlier in the session.
In Europe the market for lending to private equity executives is estimated to be about €1bn ($1.37bn), with HBOS, Citigroup and Royal Bank of Scotland among the banks involved.
In the US market, thought to be bigger, JPMorgan, Deutsche Bank, Citigroup and RBS are said to be active.
In the rush to win buy-out titans as clients, some banks are offering them attractive terms, with unsecured loans that sometimes have no recourse against personal assets. Demand for loans to buy-out executives has emerged as the size of funds raised by private equity firms has ballooned in recent years.
Investors generally insist the professionals at a private equity firm put their own money into any fund they raise, usually equivalent to 1-5 per cent of the total. A 2 per cent investment by staff at Permira and Apax Partners, which both recently raised €11bn funds, would mean finding €220m between the executives.
“A 35 year old graduate of Harvard or Cambridge joining a top firm in 2002, who is asked to put money into funds in 2002, 2005 and 2007 while they also have school fees and a mortgage, is often being caught short,” said a top UK-based private banker.
“We can lend to them, killing two birds with one stone, both supporting our investment bank and looking after the top guys in the industry,” he said.
An executive at one of the UK’s biggest private equity firms said loans were mostly needed by the younger company members.
“Unless you have been a partner for three or four cycles, then the money you are asked for is very substantial, especially if you live in London, with a house, school fees and investments,” he said.
Source : www.ft.com
What, then, is a video-sharing site like Sony Pictures Entertainment's Grouper.com supposed to do? Sony is betting that the answer lies in going upscale.
To this end, the company is unveiling today a complete overhaul of Grouper, which it acquired last August for $65 million. Rechristened "Crackle," the revamped site aspires to become a "streaming entertainment network" that will focus on discovering and developing promising new video talent.
Crackle's new animation, short-film and "sketch variety" channels will hold quarterly contests through which winners will get the opportunity to pitch their projects to television and film executives at Sony Pictures. A new stand-up comedy channel will spotlight the best submissions every month, with the winners getting the chance to appear at an improv comedy club.
Crackle will also provide production funding and marketing support for some of the best submissions. By offering the prospect of working with professionals at its animation, film and television divisions, Sony is hoping to generate a polished stock of exclusive video content that will be appealing to both viewers and advertisers.
During a conference call last week to discuss Crackle, Sony Pictures Senior Executive Vice President Sean Carey said that "given our pedigree as a producer and distributor, it just made all the sense in the world" to transform Grouper into a site featuring higher-quality content. He said the company had viewed traditional user-generated video "as a short-term phenomenon."
Crackle co-president and Grouper co-founder Josh Felser acknowledged that traditional user-generated video is "not a business for us," noting that the content is rarely exclusive and is hard to pitch to advertisers. Advertisers want predictability and don't want their ads appearing next to a video of someone jumping off a roof and landing on their head, Felser said.
News Corp.'s (nyse: NWS - news - people ) Fox, CBS (nyse: CBS - news - people ) and General Electric's (nyse: GE - news - people ) NBC Universal have been busy building online distribution networks to distribute their TV programming online. But Felser said Crackle isn't interested in distributing film and TV content because it wouldn't be able to get it exclusively and because it "won't have the same viralty that the content we are securing will."
The World Food Programme feeds people in countries including Chad, Uganda and Ethiopia, but reaches a fraction of the 850m people it estimates suffers from hunger. It spent about $600m buying food in 2006. So far, the WFP has not cut its reach because of high commodities prices, but now says it could be forced to do so unless donor countries provide extra funds.
Josette Sheeran, WFP executive director, said in an interview with the Financial Times: “In a world where our contributions are holding fairly steady, this [cost increase] means we are able to reach far less people.”
She said policymakers were becoming more concerned about the impact of biofuel demand on food prices and how the world would continue to feed its expanding population.
The warning could re-ignite the debate on food versus fuel amid concerns biofuel production will sustain food inflation and hit the world’s poorest people.
The WFP said its purchasing costs had risen “almost 50 per cent in the last five years”. The UN organisation said the price it pays for maize had risen up to 120 per cent in the past sixth months in some countries.
Biofuel demand is soaking up grain production as is rising consumption in emerging countries for animal feed.
“We face the tightest agriculture markets in decades and, in same cases, on record,” Ms Sheeran said. Global wheat stocks have fallen to the lowest level in 25 years, according to the US Department of Agriculture.
Ms Sheeran added: “We are no longer in a surplus world.”
Source : www.ft.com
Security researchers at Symantec (nasdaq: SYMC - news - people ) announced Friday, July 6, that they'd detected small transactions made with stolen credit card numbers, funneling money to some unexpected destinations: charities like Christian Aid, Islamic Relief and the Red Cross.
These cyberscammers aren't suffering from pangs of conscience, says Zulfikar Ramzam, a senior principal researcher at Symantec. He speculates that the money transfers, which move only $5 or $10, are used to test whether stolen account information is still valid and usable.
Ramzam says that identity thieves frequently test credit card information by moving small sums of money, and banks have responded by scanning transactions records looking for unusual recipients of what look like test transactions. "Even a $5 transaction can raise eyebrows if it goes to someone the person has never done business with before, located in, say, Romania," Ramzam says. "Small donations to charities are less suspicious, even if the donor has never made them before."
Even if the charity test is performed on just a small fraction of stolen card numbers, the contributions could add up. The Federal Trade Commission recorded 670,000 cases of reported identity theft and fraud in 2006, 60% of which began with Internet solicitations. And corporate breaches spill millions of customers' credit card information into the black market: A breach in January at the retailer TJ Maxx (nyse: TJX - news - people ) revealed the private financial data of more than 46 million customers, while Certegy Credit Systems, a branch of Fidelity National Information Services, announced last week that a former employee had stolen and sold customers' data, exposing as many as 2.3 million accounts.
Given that Symantec's researchers see the charity test as a growing trend, the tactic could mean significant sums of money moving into philanthropic coffers, if only in $5 and $10 increments.
Ramzam admits that the motivation for the donations is still a subject of speculation. "The mindset of these kind of attackers is always a bit of a mystery," he says. "It could be that they've all suddenly become kindhearted. But I doubt it."
The struggling Detroit-based carmaker said on Sunday it was not presently in talks with any other company about a Volvo sale. It added, however, that “we are continuing to assess all our operations and looking at strategic options”.
Ford has already sold or is in the process of entertaining bids for the other three marques of its luxury car division, known as the Premier Automotive Group.
It disposed of Aston Martin earlier this year, and its financial advisers have set July 19 as a deadline for expressions of interest for Jaguar and Land Rover. Analysts at Merrill Lynch have estimated that Volvo would fetch about $8bn.
Ford bought Volvo in 1999 as part of an aggressive expansion strategy. The brand has built a strong reputation for safety, but sales have stagnated in recent years, including a 3.6 per cent drop in 2006 to around 430,000 vehicles.
Volvo is seeking to regain traction with a flurry of new models, helping to boost sales in the final quarter of last year and early 2007. It has recently sought to expand in China, Russia and other emerging economies.
Ford lost $12.7bn last year and has borrowed heavily to shore up liquidity in anticipation of a further cash drain this year and in 2008.
PAG reported a $327m pre-tax loss last year, but recovered to a $402m profit in the first quarter. Ford does not break out results for individual marques, but Volvo is widely assumed to be profitable. Second-quarter results are due to be published on July 26.
Ford officials ruled out a Volvo sale earlier this year, but have recently taken a more ambivalent approach.
Frederik Arp, Volvo’s chief executive, recently declined to comment on industry speculation about a sale because “it's not in the interest of Volvo car stakeholders, customers, dealers or anybody else, and [because] I don't own the business.”
Ironically, even as Ford is retreating from the international luxury-car market, its domestic luxury brand Lincoln has shown signs of revival, with sales increases for the past nine months in a row.
One person familiar with the bidding process for Jaguar and Land Rover said that talks were still at an early stage. Ford would prefer to sell the two brands – which share many central management functions – together, but it has made preparations to sell them separately if necessary.
Goldman Sachs, Morgan Stanley and HSBC are advising Ford.
Source : www.ft.com
"I asked for $80,000," he says. "When the guy on the phone agreed immediately without consulting his boss, I knew I should have asked for much more."
In fact, the unnamed agency eventually bargained the price for the information, an exploitable bug in the Linux server program Samba, down to $50,000. And what did the agency do with its newly purchased security hole? Miller received his check and didn't ask questions.
"They didn't buy it in order to patch it," Miller says. "I can speculate that it wasn't exactly used for the common good."
Miller's experience, described in a paper he presented to the Workshop on the Economics of Information Security at Carnegie Mellon last June, highlights a growing problem in computer security. When the industry's ever-larger ranks of independent researchers find exploitable vulnerabilities in software, they're forced to price their discoveries on an ad hoc basis with no sense of fair market value. And even worse, independent researchers are often tempted to sell to the highest bidder, not the buyer most likely to use the data responsibly, or even one whose identity and motives are clear.
Today, several IT security companies are moving into that chaotic marketplace to broker a more equitable exchange of software bugs for dollars. These vulnerability traders argue that they're giving hackers a less harmful avenue to profit from their skills. But they also raise questions about where to draw the line in legitimizing an industry that some security professionals say borders on extortion.
The newest market-maker in the IT security field has a strange name: WabiSabiLabi. But the Chiasso, Switzerland-based company has a serious purpose: It offers an eBay (nasdaq: EBAY - news - people )-style Web auction platform for security bugs. Launched last Tuesday, the site is already auctioning off four exploitable software flaws, including one in Yahoo!'s (nasdaq: YHOO - news - people ) instant messenger program, which has a minimum bid of 2,000 euros.
Even in a seemingly trivial program like Yahoo! Messenger, a vulnerability can be used to steal data from corporate or government servers, says WabiSabiLabi's Chief Executive Herman Zampariolo. He says the company performs background checks on all buyers to ensure that they have no record of criminal hacking. Bugs sold on the site are intended only for legitimate purposes like penetration testing.
Zampariolo notes that a small fraction of the site's 34,000 unique visitors have come from the U.S. military. Software companies themselves can also buy information about flaws in their own programs, but rarely do, for fear that offering a bounty would only draw more hackers to their products.
WabiSabiLabi, whose name combines a Japanese word for "imperfection" and a German abbreviation for "laboratory," tests each vulnerability to ensure it fits the seller's description, and in six months plans to begin charging a 10% commission for its services.
"The IT security market is totally based on finding vulnerabilities," says the company's strategic director, Roberto Preatoni. "But the industry doesn't properly value independent researchers. They're told that to be ethical, they must disclose their findings for free. It's like blackmail. We believe they should be able to profit from their work."
So does Adriel Desautels, whose company, Netragard, also buys and sells vulnerabilities, sometimes paying researchers as much as $200,000 for a single flaw. Desautels performs background checks on all clients and sees his company as a healthy alternative to the black market, which is always hungry for new ways to steal corporate secrets and credit card data.
But Dave Aitel, chief technology officer of another vulnerabilities broker called Immunity, says that security professionals will never be able to offer hackers as much money for software bugs as the bad guys. "It's hard to say no if the black market offers you $300,000," Aitel says. "But with us, at least you get a fair valuation and you know that we're bound by the law. The mafia tends to break your knees if they want a cheaper price."
In the eyes of some security professionals, Immunity and Netragard themselves are far from saintly: Neither company reports all of its vulnerabilities to the software's manufacturer upon acquiring them, since doing so would devalue the bugs they purchase. In other words, the vulnerabilities they buy often stay vulnerable, and so do the software's users.
3Com's (nasdaq: COMS - news - people ) Zero-Day Initiative, by contrast, always reports its bug-buying immediately. That means weaknesses are quickly patched, making users more secure but reducing the price the company can pay hackers. The Zero-Day Initiative won't say how much it offers for each vulnerability, but Miller estimates that the company pays a maximum of around $10,000 per flaw. That's not enough to have kept him from looking to more generous--and less virtuous-- buyers, Miller says.
According to IBM's (nyse: IBM - news - people ) X-force Research security team, that's one more reason that buying bugs, even with the intention of reporting them, is only encouraging an industry that thrives on extortion. "It's a false economy," says X-force's Team Manager David Dewey.
Dewey sorts hackers into three types: Blacks hats, white hats and gray hats. "The black hats will always sell to the highest bidder, which is the underground," he says. "The white hats aren't motivated by money. So the best you can do with a bug bounty program is sway some of the grays, at the expense of security technology as a whole."
Dewey argues that the money spent buying bugs from hackers could be better invested in full-time research teams: The only way to control a freelance hacker, he says, is to give him a job. But as the IT security field matures and becomes more mainstream, Dewey admits that more independent researchers than ever are flooding the software vulnerabilities market.
So how to keep them from selling their findings to the criminal underground?
"It can't be prevented," says Dewey. "As long as there are talented researchers and someone to pay them, it's going to keep happening. We just have to find the bugs first."
ABN Amro rose 3.9 per cent to €37.24 as Royal Bank of Scotland, up 2.3 per cent to 642p, sweetened the terms of its proposed bid for the Dutch lender.
While RBS kept its offer at €38.4-a-share, the bank raised the cash element of its €71.1bn proposal from 79 pert cent to 93 per cent.
The RBS move puts further pressure on Barclays agreed €35-a-share merger with ABN.
Barclays rose 1.5 per cent to 735p on hopes it would be taken off should the RBS bid succeed.
Other bank stocks also gained, with Alliance & Leicester up 3.7 per cent to £11.65 and Sociéte Générale 1.6 per cent higher at €138.11.
In the wider market, the FTSE Eurofirst 300 was up 3.59 points, or 0.2 per cent, to 1,630.9, its highest level since November 2000.
Elsewhere, Bayer rose 1.3 per cent to €57.05 as JPMorgan lifted its price target on the chemicals and pharmaceuticals group from €63 to €70.
Hennes & Mauritz gained 0.5 per cent to SKr 417.5 as comparable sales at the Swedish clothing chain rose 17 per cent in June.
Source : www.ft.com
According to a Symantec (nasdaq: SYMC - news - people ) report at the end of 2006, Beijing is now home to the world's largest collection of malware-infected computers, nearly 5% of the world's total. Research by the security company Sophos in April showed that China has overtaken the U.S. in hosting Web pages that secretly install malicious programs on computers to steal private information or send spam e-mails. And another report from Sophos earlier that month showed that Europe produces more spam than any other continent; one Polish Internet service provider alone produces fully 5% of the world's spam.
Cybercrime this geographically diverse isn't just hard to stop; it's hard to track. Common tactics like phishing and spam are usually achieved with "botnets," herds of PCs hijacked with malware unbeknownst to their owners. Botnet attacks can usually be traced only to the zombie computers, not to their original source. That means the majority of studies mapping botnet attacks point to every place in the world that has vulnerable PCs, with no real sense of where the attacks begin.
In Pictures: The Cybercriminals' Map Of The World
Researchers at Sophos Labs say they have a solution: They can roughly identify the host country of malicious software by tracing the default language of the computer on which it was programmed. According to their analysis of the default language linked with about 19,000 samples at the end of last year, Americans and other non-British English speakers still produce the most malware, more than a third of the world’s total. Close behind is China, producing 30%, followed by Brazil, with 14.2%. Russia places fourth with 4.1% of the world’s malware.
Bill Pennington of White Hat Security attributes these developing countries' bad behavior to an overabundance of technologically trained young people with low-paying jobs. "If you’re in Russia or China and you have a computer science degree," he says, "You can either go work for nothing or you can make money using your skills for nefarious purposes."
Cybercrime isn't merely spreading to certain foreign countries, it's becoming cosmopolitan, says James Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies. As crime syndicates in Europe and Asia move into online scams, Lewis says that a single cybercrime operation can now be distributed among many different groups in several countries. One may create a "botnet" while another rents those computers to send credit scam e-mails and a third party transfers funds using the fraudulently obtained banking information. Sometimes each operation is on a different continent.
"The big problem here is political. It’s sovereignty," Lewis says. "The FBI cannot go enforce American law without the consent of the country where cybercrime is being carried out. So even if U.S. laws were perfect, it wouldn’t be enough to protect you." He describes a "Bonnie and Clyde" situation, where police stop at the edge of their jurisdiction rather than pursue criminals to their hideouts.
The growth areas of the malware industry aren't easily predicted. India, for instance, is one of the world’s most technologically booming developing countries, but ranks surprisingly low on Sophos' list. The U.K. and India together contribute only 1.3% of the world's malware--both use British English as a default language, so their samples couldn't be separated--and Sophos researchers say the majority of that criminal activity comes from the U.K. Eugene Kaspersky, Russian security guru and head of Kaspersky Labs, can only explain India’s lack of cybercrime as a "cultural difference."
Nandkumar Saravade, director of cyber security for India's National Association of Software and Service Companies, says that India has so far avoided a cybercrime epidemic thanks to the success of its legitimate IT industry. "Today, it is a fact that any person in India with marketable computer skills has a few job offers in hand," he says.
But Saravade and Kaspersky both warn that security professionals should expect the subcontinent’s malware contribution to grow in coming years. When it does, India likely won't be ready to contain the problem: The country's last major cybercrime law was created in 2000, long before botnets became an issue.
India isn't alone in being unprepared: Kaspersky says that the growing industry of malware professionals around the world hasn't been fully recognized by international legal bodies or the software industry, which continues to build vulnerable programs.
"We in the security industry need to attract the attention of government authorities, educate users and encourage changes in basic operating systems," he says. "Alone, we don’t have a chance."
”The reactor has been shut down,” IAEA chief Mohamed ElBaradei told reporters in Bangkok, according to Reuters. ”We have verified the shutdown of the reactor.”
The next step would be to verify that other North Korean nuclear facilities had been shuttered, he said. ”After tomorrow, we will be able to report, hopefully, that all of the five facilities have been shut down.”
North Korea confirmed on Sunday it had shut down the reactor, taking a big step towards implementing a February agreement aimed at dismantling its nuclear facilities.
Closure of the Yongbyon reactor was critical to progress because the facility produced the plutonium used in last year’s nuclear test. United Nations inspectors arrived in Pyongyang on Saturday and are expected to verify the shutdown this week.
The White House said North Korea appeared to be telling the truth, an assessment shared by China and South Korea. Stephen Hadley, US national security adviser, told Fox News: “It appears that the facility is shut down and we are finally implementing the February 13 agreement. It means they will no longer be able to produce the plutonium for those nuclear weapons made out of plutonium.”
The breakthrough came hours after North Korea received its first delivery of heavy fuel oil from South Korea as part of the deal between the US, North and South Korea, China, Japan and Russia. Pyongyang was offered 50,000 tonnes of oil as an incentive to shut Yongbyon down.
The parties to the deal are scheduled to meet in Beijing on Wednesday to discuss the next steps towards dismantling the North Korean nuclear facilities and normalising ties with the US.
Yongbyon was supposed to be mothballed within 60 days of the February agreement but the shutdown was delayed by wrangling over the release of $25m of North Korean funds frozen in a Macao bank. The dispute ended last month when Russia agreed to help transfer the funds to Pyongyang.
In a statement carried by North Korea’s official KCNA news agency, the foreign ministry in Pyongyang was quoted as saying: “We have shut down the nuclear facilities at Yongbyon after we received the first shipment of heavy oil.”
North Korea said it had fulfilled its promises and warned that the complete implementation of the February deal depended on how the other five parties responded, especially what steps the US and Japan took to end their hostile policies against the isolated state.
Kim Myong-gil, a North Korean diplomat at the UN, told the Associated Press that Pyongyang was ready to start disabling its nuclear programmes as long as Washington lifted all sanctions against it, raising hope for further progress on disarmament.
South Korea said the closure of Yongbyon represented “encouraging progress” in efforts to resolve the nuclear problems.
“North Korea’s moves to shut down its Yongbyon nuclear facilities and the return of the IAEA verification team have a significant meaning in that they were the first step to put denuclearisation pledges into action,” the South Korean foreign ministry said in a statement.
But Christopher Hill, the senior US negotiator at the six-party talks said in Tokyo that Pyongyang had simply taken the “first step” in implementing the accord.
“I would caution everyone to understand that this is the first step, it’s only meaningful in so far as we take additional steps,” Mr Hill said. “We’ve still got a lot of work to do. Obviously we are very pleased by this step, but we realise how long it took to get here so I think we have to really work very hard for the additional steps that are very necessary.”
Experts say that negotiating the next phase, which calls for Pyongyang to disclose all of its nuclear weapons programmes facilities and disable them in return for progressively more fuel oil – would be more difficult.
Source : www.ft.com
The UK-based do-it-yourself group has four stores already in Russia, trading under its Castorama banner, after entering the market last year. A fifth is due to open in September and it plans to double the total to 10 next year.
"The population are very hungry [for DIY goods] and have a lot of projects to finish in their apartments and houses," Oleg Pisklov, managing director of Castorama Russia, told an investor meeting in Moscow last week.
"We want to have up to 15 stores in Moscow, five in St Petersburg and a couple of big box stores in each regional city."
The announcement highlights the attractions of the fast-growing Russian consumer market.
It also shows that UK companies are still ready to invest, despite worsening political relations and last month's decision by DSG, Britain's biggest electrical retailer, to abandon the planned purchase of Eldorado, Russia's leading electrical goods retailer.
Kingfisher's plans are among the most ambitious announced so far by a British group. But several already have a Russian presence, often through franchises, including Marks and Spencer, BHS and Mothercare.
A construction boom is fuelling demand for DIY goods, with more than 50m sq m of housing added last year, the equivalent of more than 700,000 typical-sized apartments. Rising incomes are also enabling Russians for the first time to renovate crumbling Soviet-era apartments.
Natalia Morozova, Castorama Russia's marketing manager, told investors that DIY retailing had more potential now than grocery retailing, since it was three to four years behind in its development.
There are also few strong home-grown competitors in Russian DIY, unlike in groceries or electrical goods.
Germany's OBI and France's Leroy Merlin have both established a strong presence in the Moscow DIY market.
Source : www.ft.com
Amid intense speculation that Britain will expel Russian diplomats from London for the first time in more than a decade, David Miliband, the UK foreign secretary, is preparing to outline the action to be taken in a statement to parliament this afternoon.
Officials have been tight-lipped about how Mr Miliband will approach what – barring a last-minute change of plan – will be the first big foreign policy test for Gordon Brown’s government. But one well-placed ministerial source said the British response would be “heavy”.
The foreign secretary on Sunday underlined that, while economic relations between the UK and Russia have “never been stronger”, the Litvinenko murder was “a very serious crime” and that the judicial process “must be seen through.” He also markedly refused to rule out the possibility of expulsions.
If Britain expels Russian diplomats, it will be the first time London has taken such action since 1996. The danger for the UK is that expulsions may trigger a “tit-for-tat” response by Moscow, as has often happened insimilar disputes.
Mr Brown is understood to have been kept fully involved in developments over the Litvinenko case. His government is determined to defend the integrity of the UK judicial system but it wants to avoid any negative impact on trade relations between the two countries.
Senior figures in Moscow have strongly indicated that the expulsion of diplomats would have serious consequences. Konstantin Kosachev, chairman of the foreign affairs committee of Russia’s lower house of parliament, recently said the expulsion of diplomats “would denote a failure in British policy towards Russia for many years, for which the responsibility would lie wholly on the British side”.
The stand-off between London and Moscow comes at a particularly bad moment in relations between Russia and the west. Over the weekend, President Vladimir Putin suspended the application of a key cold war arms control treaty.
Russia said it would suspend participation in the 1990 Conventional Forces in Europe treaty – which puts ceilings on equipment such as tanks and combat aircraft in Europe – in five monthsunless other countries ratified an adapted version of the treaty signed in 1999.
The White House said it was “disappointed” by Russia’s decision – a move that follows months of rising tensions over US plans to build part of its proposed missile defence system in central Europe.
Mr Litvinenko, a former Russian security agent and fierce critic of Mr Putin, died in a London hospital in November from a fatal dose of the rare radioactive isotope polonium 210. UK prosecutors said in May they would seek extradition of Mr Lugovoi to face trial for the murder.
Western officials in Moscow are bracing themselves for further pressure on the British Council. The UK cultural body has already faced tax probes and delays to opening of a new St Petersburg building. It was forced to close a language centre after suddenly being told it needed a teaching licence.
Source : www.ft.com
Vodafone has not yet approached Verizon with the plan and sources cautioned that there is no certainty the British mobile group will pursue the idea. Nevertheless, the move would be aimed, squarely, at settling uncertainty over the future of Vodafone’s US mobile interests — acquiring the whole of Verizon as the route to buying the 55 per cent of its mobile division, Verizon Wireless, that Vodafone does not currently own.
The audacious plan has been discussed in recent weeks as Vodafone has considered whether to trigger a little-known put option it holds over part of its stake in Verizon Wireless — a move that, accompanied by an asset revaluation at the American company, could allow it to suck up to $20bn out of Verizon and distribute this to its shareholders.
The extreme alternative of bidding for Verizon would create a business capitalised at around $300bn — bigger than AT&T, currently the world’s largest telecoms business.
According to well placed financiers, in contemplating such a move, Vodafone has looked at a range of deal structures. These include a plan to buy the whole of Verizon and then simultaneously spin-off its fixed line interests to a private equity consortium. The company has also looked at whether it could part-fund the deal with the issue of a tracker stock for US investors.
If pursued, the private equity side deal alone, valued at around $90bn, would constitute the largest leverage buyout on record.
News of Vodafone’s ambitions — with its stubborn commitment to continued growth by acquisition — is likely to flummox critics who have pressed chief executive Arun Sarin to scale back expansion plans and focus instead on cash generation. Most recently, a growing group of rebel shareholders, including former Marconi boss John Mayo, has pressed for the sale of Vodafone’s 45 per cent holding in Verizon Wireless and the return of cash to investors.
Such a move on Verizon would also be seen as a risky and hugely expensive catch-up exercise in the US following the failed attempt to buy AT&T Wireless in 2004. After a fevered auction, that business was acquired by Cingular Wireless for $41bn.
An all-share deal for Verizon would be highly controversial amongst Vodafone shareholders, who in the past have had to digest some of the heaviest issues of new paper on record - culminating in the $183bn share issue used to buy Mannesmann in 2000.
At the same time, part financing a deal through an LBO of Verizon’s fixed line business, would test the world’s increasingly jittery credit markets, which would be asked to fund around $75bn of debt.
Nevertheless, Mr Sarin’s focus on the plan has been sharpened by the largely unpublicised put option agreement, whereby Vodafone currently has the right to demand that Verizon buy shares from it in Verizon Wireless worth up to $10bn. In assessing whether to exercise the put, which expires in the middle of next month, Vodafone has been re-evaluating its entire US strategy.
One option here has been to press Verizon into gate-crashing the $27.5bn deal hatched by Goldman Sachs’ private equity arm and TPG Capital to acquire Alltel Corp, the fifth largest mobile operator in the US — a deal on which shareholders still have to vote.
In the event that it were to exercise its put option, Vodafone has been working on the assumption that it could generate a tax free payment of $7.5bn from Verizon by reducing its holding in the mobile business to about 41 per cent. At the same time, a further $12bn tax-related payment to Vodafone could be triggered by an asset revaluation.
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or many people call calciopoli. The team include in calciopoli cause is Juventus, AC. Milan, Fiorentina, Regina. And only one team have degradated on serie B, this team is Juventus.
On the begining serie A season, AC. Milan milan have spirits to make Intermilan, the real enemy from the sames city Milan, have trouble if meet AC. Milan, but it's out of plans! AC. Milan have many trouble, on striker position Milan have super Pipo ( Pilipo Inzaghi ), Alberto Gilardino, Ricardo Olieviera, Marco Boriello ( have casus with psycotropical, and scorsing on some moon ), but no another one have gret skill to make a goal, even spektakuler goal. Until Middle of season, Milan still like that.
On the mid season transfer player, Milan buy a great striker, our can call her hero for Milan, who is this? No another like her, Ronaldo..yes Ronaldo the striker of samba team. He's realy-realy save Milan from hell. His goal make Milan have a great spirit again. But his come in Milan make relation two big team in Milan city, get the separated.
With Ronaldo on the front, Milan have many progress, it's all didn't about strategy Carlo Anceloti, it's all about team work and composition of Kaka and Ronaldo on the front. On the end of season serie A league AC.Milan have 4th position, and take one ticket to champion league, next sesion. Congratulation AC. Milan..!
But that's all not real selebration, the real selebration is on Athena city, at Olympic stadium, Milan be a winner after make Liverpool back to home with runner up position on Champion League. This is will be big moment on this year for AC. Milan. Milan win from Liverpool with score 2 - 1 ( P.Inzaghi 45', P.Inzaghi 80' - Dirk Kuyt 90' ). Milan play with full spirit, Pilipo Inzaghi will be a hero for Milan. Kaka have top skorer of Champion League on this year. That's all will be good moment. Bravo Kaka, Forza Milan..!!
“The Bay Area’s wealth boom is producing an explosion of millionaires–in Nevada, Wyoming and perhaps Canada. Wealth managers and other advisers to the well-heeled say “wealth migration”–taking the money and running–is behind a surprising drop in the number of Bay Area millionaires.”
The net loss of millionaires knocks the extremely rich and fertile Bay Area down near the bottom of a millionaire creation list with laggards such as Detroit, Pittsburgh and Cleveland.
Of course, the middle classes have been fleeing California for years. High house prices have been the main culprit. Long commutes and deteriorating public services are two more reasons.
But the flight of millionaires is something new. The reason? You guessed it. Taxes.
“I’m hearing from more California baby boomers, 'I need to get out,’ ” said Diane Kennedy, a Phoenix accountant and financial adviser to the wealthy. “You can still make a lot of money in California. The problem is, then you have to pay taxes on that money,” said Kennedy, who recently helped a California client with annual income of about $1 million save $96,000 annually by making their home in Jackson Hole, Wyo., their primary residence.
“Effectively, you have the state of California subsidizing their relocation through tax savings,” Kennedy said.
I love this story. Not of because of what it is doing to California. But because it proves that tax rates indeed influence behavior. Here's another great quote from the story:
“California is punishing people for being successful,” said a professor at Ohio University and a visiting scholar at the American Enterprise Institute.
No kidding. I would love to hear from readers who feel they are being punished for their success. Particularly, I would love to hear about your growing tax woes, combined with cost of living woes, in states such as California, New York, Massachusetts and others.
Have you moved for tax (and/or cost of living) reasons? Have you thought about such a move? Where would you go?
Post your comments below. Oh, and here’s a great book on the subject.
Labels: money
posted by Bina | The Royal Bank of Scotland-led consortium on Monday detailed its new offer for ABN Amro, holding its bid for the Dutch bank at the same price but lifting the cash element to 93 per cent of the €71.1bn ($98bn) total value.Jane Croft on the revised by RBS-led consortium for ABN Amro
The per share offer, which is competing against a rival all-share bid from Barclays, remains at €38.40 even though the deal no longer includes LaSalle, the US bank which ABN Amro has agreed to sell.
The consortium, which includes Santander of Spain and Belgo-Dutch bank Fortis, said its revised offer was the most valuable option for ABN Amro and worth 13.7 per cent more than Barclays’ offer based on Friday’s closing share prices.
Sir Fred Goodwin, chief executive of RBS said: “It’s materially higher than their [Barclays’] offer.”
The Barclays bid is worth around €64bn, or almost €4 a share less than the consortium bid.
It is now up to Barclays to decide whether to raise its offer. The UK bank has until July 23 to submit a new one.
Sir Fred said he was prepared to “expect the unexpected” from Barclays. He said RBS shareholders were supportive of its continued interest in ABN Amro, and he had been encouraged by assurances from the Dutch bank that the two bids would be dealt with on a level playing field.
The consortium needed to change its original offer which had been conditional on ABN Amro not selling LaSalle, after the Dutch Supreme Court ruled last Friday that ABN Amro could go ahead with the $21bn sale to Bank of America.
Sir Fred said “we would have preferred to get LaSalle, there’s no two ways about that.” But he added that “we never thought of withdrawing. Going ahead without LaSalle is every bit as attractive as going ahead with it.”
The contribution of Santander and Fortis to the consortium bid is unchanged as, if the original bid had succeeded, RBS was to have owned LaSalle.
Under the new offer, RBS would take the cash ABN Amro is receiving for LaSalle so RBS’s contribution to the new offer is of €16bn in cash – net of the LaSalle proceeds – including €5bn in equity.
As a result, the revised consortium bid comprises €35.60 a share in cash and 0.296 new RBS shares for each ABN Amro share. The total cash consideration would be €66bn, up from €56bn in the earlier bid.
RBS said it would buy ABN Amro’s global wholesale business and international retail businesses. It said the transaction would provide “enhanced growth prospects and attractive financial returns”.
It has adjusted its forecasts of synergies it could achieve in North America, because of the LaSalle sale, and now predicts cost savings of €1.24bn plus its €82m share of central costs savings, and net revenue gains of €481m by the end of 2010.
The internal rate of return on the transaction was estimated at 15.5 per cent post-tax by RBS, comfortably above its 12 per cent hurdle rate. It expects the acquisition to deliver a post-tax return on investment of 13.2 per cent in 2010 and to increase its earnings per share by 2 per cent in 2009 and by 7 per cent in 2010.
Sir Fred said buying ABN Amro “remains compelling from a financial point of view” and would produce “essentially the same earnings enhancement for the group, despite the smaller size of the transaction.”
In early trading ABN shares were 2.9 per cent higher at €36.90. RBS rose 1.2 per cent to 647½p while Barclays gained 2.4 per cent to 741 ½p.
Labels: general
posted by Bina | French President Nicolas Sarkozy made an unprecedented appearance at the informal meeting of the "Eurogroup"--the economics and finance ministers of the euro-area countries--on July 9.Sarkozy made the visit to announce that Paris might fall short of its objective of achieving a balanced budget by 2010, should gross domestic product growth fall below forecast. By doing so, he also forced the July 10 meeting of the U.N.'s Economic and Finance Committee to deliberate the merits of strict adherence to the Stability and Growth Pact (SGP)--a general commitment among European Union member states to achieve a budgetary position that is close to balance or in surplus over the medium term.
Sarkozy's visit was unprecedented but not unexpected. As a presidential candidate, he made it clear he would use fiscal policy to stimulate growth, and, once elected, he said he would communicate this to the Eurogroup. His self-invitation to the informal gathering prompted widespread speculation that the credibility of European fiscal coordination is again in doubt. This built on existing concerns caused by Sarkozy's criticism of the European Central Bank for ignoring the euro-dollar exchange rate and his insistence that market competition be omitted as an explicit objective of European integration in the negotiating mandate for a new E.U. Reform Treaty.
Media accounts also pointed to the debate between the European Commission and Italian Finance Minister Tomaso Padoa-Schioppa about the pace of fiscal consolidation in Italy.
However, such discussions about the credibility of European policy coordination (including fiscal policy) tend not to specify what is supposed to be credible, and for whom. The presumption is that the goal of European fiscal policy coordination is to ensure prudent management of government accounts. Should coordination fail, some accounts will be more prudently managed than others.
In such circumstances, financial markets, specifically those in long-term government debt, ought to react by demanding a greater risk premium on some long bond yields. Long-term government bond yields should converge where coordination is credible, and diverge where it is not.
However, the dispersion of euro-area government bond yields (excluding new entrant Slovenia) does not seem to bear this thesis out. While financial markets may simply be failing to exert sufficient discipline, another interpretation is that markets do not doubt the credibility of euro-area fiscal policy and expect that larger states will sometimes break the rules.
Moreover, it is not clear whether France ought to be singled out, as a comparison with the U.K. makes clear. While the U.K. is not an E.U. member, it is involved in fiscal policy coordination and is a signatory to the SGP. Moreover, of the two countries only London is under supervision for its failure to comply with the European requirement to "avoid excessive deficits," though this supervision is nonbinding, since the U.K. negotiated an opt-out when the procedure was negotiated.
By contrast, France emerged from the excessive deficits procedure last January, and, even if it delays its further consolidation of fiscal accounts, as has Sarkozy warned, there is no doubt about its continued avoidance of "excessive deficits." Paris' breach of the letter of the agreement is thus less serious than is supposed.
On the other hand, there is evidence that small countries, or countries eager to join the E.U., will put their commitment to prudent fiscal policy coordination first. An obvious example is the furious Dutch response to France and Germany's abrogation of 2003, shortly before the Netherlands came under supervision for its own excessive deficits the following spring. Similar behavior is also evident in recent efforts by Malta to qualify for membership in the euro area and by Hungary to fulfill its obligations (albeit very belatedly) under the excessive deficits procedure.
Sarkozy's warning on fiscal policy only reinforces widespread acceptance that large member states will pay more attention to domestic growth than to European rules. Yet that does not mean that smaller member states or candidates for the single currency will insist on doing the same, or that any government should miss the opportunity of strong growth to undertake prudent fiscal consolidation. The E.U. has moved away from unrealistic interpretations of the SGP. As a result, European commitment to fiscal policy coordination is more (and not less) credible.
Labels: money
posted by Bina | Royal Philips Electronics, Europe’s largest consumer electronics manufacturer, will have amassed a €15bn to €20bn ($27bn) warchest within the next three years to finance acquisitions, buy back shares and bolster dividends.Announcing second-quarter results on Monday, the 116-year old Dutch company revealed further details of plans to offload stakes in a range of non-core companies and restructure its balance sheet by taking on more debt.
Pierre-Jean Sivignon, chief financial officer, said this would involve reducing its stake in LG.Philips LCD, the South Korean electronics group, from 32.9 per cent to less than 20 per cent “as a first step” once a lock-up period expires on July 22.
Philips – which is also the world’s largest lighting maker and one of the top three manufacturers of hospital equipment – is also looking to sell all or part of its 19.9 per cent stake in NXP, Europe’s third-largest chipmaker.
It will also sell its remaining 8.1 per cent holding in chipmaker Taiwan Semiconductor Manufacturing (TSMC) before 2010, having already reduced its stake in the last quarter from 16.2 per cent.
The proposed asset sales are part of Philips’ wholesale withdrawal from the semiconductor business amid a renewed focus on its core businesses of consumer electronics, domestic appliances, lighting and medical systems. No details of potential acquisitions were made available by the company.
According to the company, as of June 11, its 32.9 per cent stake in LG.Philips LCD was worth just over €4bn; its holding in TSMC, €3.4bn; and its NXP stake, €854m.
Philips already holds €6.2bn in cash and plans to increase its leverage “to an appropriate level” in the future, something Mr Sivignon said cleared the way to raising an additional €3bn-€4bn in debt.
It is already engaged in a €4bn share buyback programme and plans to keep its dividend yield “north of 2 per cent” with a dividend payout ratio of between 40-50 per cent, Mr Sivignon said.
Philips reported a sharp gain in second-quarter net income to €1.57bn, from €301m in the same period last year, largely due to a one-off gain of €1.22bn from the sale of 8.2 per cent of TSMC.
Earnings before interest, tax and amortisation – its preferred measure of performance – were €389m, equivalent to 6.4 per cent of sales, up from 4.5 per cent of sales in the same period last year. It argues this measure offers a more accurate account of operations given the company’s asset disposal and M&A activities.
Revenues dropped 4.4 per cent to €6.1bn, marginally below analysts’ expectations, as a stronger than expected performance by its domestic appliances operations failed to compensate for disappointing earnings from its medical and consumer electronics operations.
Domestic appliances, which makes shavers, electric toothbrushes and coffee machines, reported 14 per cent growth in sales. Sales at consumer electronics dropped 11 per cent.
Philips said it expected to meet its targets of 5-6 per cent average annual sales growth and ebitda of at least 7.5 per cent of sales in 2007.
Shares in Philips were 1 per cent lower at €32.03 in early afternoon trading.
Labels: general
posted by Bina | The week in options capped off with a note of bumper earnings, bullish action, but sharply diminished volatility.Click here for the best August expiration calls to buy now to play the strength in metals producers like Alcoa and Southern Copper, now in Option Strategist.General Electric's (nyse: GE - news - people ) 10% increase in second quarter earnings was a gift horse to a market ready to trade on any kind of good news. With more than 200,000 GE options contracts moving in the hours after the report, the sheer level of volume was no surprise given the kind of hale and hearty earnings GE reported. More interesting still was the steep drop-off in implied volatility. Ahead of Friday’s earnings release, GE volatility had risen dramatically, peaking as the highest of the 30 Dow Industrials, on a relative basis.
Following the release, volatility declined sharply, which often happens once an earnings release clears the air of climactic uncertainty. In the case of GE, volatility declined by about a quarter to 16.5, slightly below what might be considered "normal," an arbitrary estimate being 17.5. We wondered if the drop-off might have been due to the announcement accompanying Friday's earnings report that GE is well in the process of cutting back its residential subprime mortgage exposure, subprime worries being the source of so much volatility in equity markets these days and the rise of the VIX "fear index" earlier in the week.
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Call volume swelled to about four and a half times the number of puts traded on Friday afternoon, concentrated at the August 40.0 strike, where more than 60,000 lots, and the 42.5 strike, where more than 15,000 lots had moved as of Friday afternoon.
For options traders seeking volatility, this week’s bumpy ride for Sallie Mae (nyse: SLM - news - people ) offered plenty of bang for the volatility buck, after a consortium led by J.C. Flowers moved to abort its bid to buy Sallie Mae due to the imminent passage of a House bill curtailing federal student loan subsidies. Impied volatility on Sallie Mae options shoe up some 147% in the wake of Wednesday’s news. Traders positioned for 39% volatility on what has traditionally been a fairly static Sallie Mae share (as of Wednesday, its historical share price volatility was just 7.8). Volume surged to 26 and a half times the daily average as traders made a mad dash to shed calls--some 9,350 lots at the July 55.0 strike were sold and traders rushed to pick up July puts at the 55, 50, 45 and 40 strikes at premiums driven up some $3 in price--a classic case of selling shares and buying volatility.
Sallie Mae shares--and its call volume in options--regained some equanimity by week’s end, trading at $53.63 after analysts pointed to the drop in share prices as a buying opportunity. The argument was that that the House bill did not change the terms of the acquisition agreement, and that J.C. Flowers may simply have seized a legislative opportunity to lock in a lower price. On the day after the carnage, more than 95,000 Sallie Mae options contracts were in play, with puts outmoving calls by a factor of 1.25, but a robust level of interest on both sides.
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Last week we noted a pickup in call-side activity in retail giant Target (nyse: TGT - news - people ) on rumors that the discount chain might be looking to divest its credit card business. This week’s action saw another jump in call-side volume concurrent with a story reported on Thursday that activist investor William Ackman may have acquired a 5% stake in the company. With shares surging nearly 7% to close at $70.00 on Thursday, options activity saw volume of around 9,000 lots in the 67.5 July call strike and 10,600 in the same strike in the August call series.
Since then, open interest at each strike tripled and quintupled respectively. In the case of the July call, these contracts were trading at premiums as low as $0.40 last week, and now command as much as $3.40, while the August contract, trading at premiums as low as $1.40 a week back now has an asking price of $4.60. Some of the volume here may be a matter of options traders looking to take profits on an intraweek surge in premiums on the flurry of rumors. Today options traders focused on the July 70 calls where close to 25,000 contracts changed hands. At current premiums investors are predicting that shares will expire at $71.50 next weekend.
Takeover chatter was the driver behind some curious option trading involving power toolmaker Black and Decker (nyse: BDK - news - people ). A sharp increase in option play late in the week further extended recent gains in relative volume and call-side interest for the ticker. We noted that these gains seemed at odds with the current earnings pressure and sober guidance for retailers and manufacturers with exposure to the housing and home improvement sectors.
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Underlying shares closed nearly seven% higher on Thursday, at $95.94. Black & Decker was also one of that day’s top implied volatility gainers, up 41.3% to 39%. Activity centered on the call side, where buyers were looking to snap up quick at-the-money calls at the July 95.0 strike before expiry, paying premiums of $2.60--a near doubling in premium price--in order to do so. Premiums are also way, way up--in excess of two and three dollars--at the August 95.0 and 100 strikes, where volume in excess of 1,350 circulated in early trading.
In truth, the takeover talk may all be bluster--so far, the only name tipped as a possible buyer was General Electric, a prospect quickly nixed with the release of GE earnings.
In other news, shares in Alcoa (nyse: AA - news - people ) moved dramatically after news of the purchase of Canadian aluminum producer Alcan (nyse: AL - news - people ) by London-based Rio Tinto, staging an 8.6% rally Thursday through the stock's all-time high set in 2001. The deal rips Alcan from the jaws of Alcoa in what had become a nasty spat. Traders are now focused on the likelihood of a bid from Australian mineral producer, BHP Billiton (nyse: BBL - news - people ).
It seems that all of those Alcoa bulls finally got this one right--yet some perhaps wise cautionary protection was taken on the put side early Thursday. On the call side more than 20,000 contracts traded at the 45.0 strike in both July and August with shares up at $46.09. Speculation grew that Alcoa’s shares would keep going up, with fresh trading in the 47.50 strike from July to October. On the defensive side of trading the 42.5 and 45.0 strikes were heaviest traded in July and August earlier in the session.
Labels: general
posted by Bina | Private banks are rushing into a surprising new market: lending to high-flying private equity executives who are strapped for cash to invest in their own funds.In Europe the market for lending to private equity executives is estimated to be about €1bn ($1.37bn), with HBOS, Citigroup and Royal Bank of Scotland among the banks involved.
In the US market, thought to be bigger, JPMorgan, Deutsche Bank, Citigroup and RBS are said to be active.
In the rush to win buy-out titans as clients, some banks are offering them attractive terms, with unsecured loans that sometimes have no recourse against personal assets. Demand for loans to buy-out executives has emerged as the size of funds raised by private equity firms has ballooned in recent years.
Investors generally insist the professionals at a private equity firm put their own money into any fund they raise, usually equivalent to 1-5 per cent of the total. A 2 per cent investment by staff at Permira and Apax Partners, which both recently raised €11bn funds, would mean finding €220m between the executives.
“A 35 year old graduate of Harvard or Cambridge joining a top firm in 2002, who is asked to put money into funds in 2002, 2005 and 2007 while they also have school fees and a mortgage, is often being caught short,” said a top UK-based private banker.
“We can lend to them, killing two birds with one stone, both supporting our investment bank and looking after the top guys in the industry,” he said.
An executive at one of the UK’s biggest private equity firms said loans were mostly needed by the younger company members.
“Unless you have been a partner for three or four cycles, then the money you are asked for is very substantial, especially if you live in London, with a house, school fees and investments,” he said.
Source : www.ft.com
Labels: money
posted by Bina | The clips found on user-generated video sites can be entertaining to watch, but they're just as often inane, stupid or of questionable taste or legal status. So it's no big surprise that many advertisers remain leery of associating themselves with the stuff.What, then, is a video-sharing site like Sony Pictures Entertainment's Grouper.com supposed to do? Sony is betting that the answer lies in going upscale.
To this end, the company is unveiling today a complete overhaul of Grouper, which it acquired last August for $65 million. Rechristened "Crackle," the revamped site aspires to become a "streaming entertainment network" that will focus on discovering and developing promising new video talent.
Crackle's new animation, short-film and "sketch variety" channels will hold quarterly contests through which winners will get the opportunity to pitch their projects to television and film executives at Sony Pictures. A new stand-up comedy channel will spotlight the best submissions every month, with the winners getting the chance to appear at an improv comedy club.
Crackle will also provide production funding and marketing support for some of the best submissions. By offering the prospect of working with professionals at its animation, film and television divisions, Sony is hoping to generate a polished stock of exclusive video content that will be appealing to both viewers and advertisers.
During a conference call last week to discuss Crackle, Sony Pictures Senior Executive Vice President Sean Carey said that "given our pedigree as a producer and distributor, it just made all the sense in the world" to transform Grouper into a site featuring higher-quality content. He said the company had viewed traditional user-generated video "as a short-term phenomenon."
Crackle co-president and Grouper co-founder Josh Felser acknowledged that traditional user-generated video is "not a business for us," noting that the content is rarely exclusive and is hard to pitch to advertisers. Advertisers want predictability and don't want their ads appearing next to a video of someone jumping off a roof and landing on their head, Felser said.
News Corp.'s (nyse: NWS - news - people ) Fox, CBS (nyse: CBS - news - people ) and General Electric's (nyse: GE - news - people ) NBC Universal have been busy building online distribution networks to distribute their TV programming online. But Felser said Crackle isn't interested in distributing film and TV content because it wouldn't be able to get it exclusively and because it "won't have the same viralty that the content we are securing will."
Labels: general
posted by Bina | Rising prices for food have led the United Nations programme fighting famine in Africa and other regions to warn that it can no longer afford to feed the 90m people it has helped for each of the past five years on its budget.The World Food Programme feeds people in countries including Chad, Uganda and Ethiopia, but reaches a fraction of the 850m people it estimates suffers from hunger. It spent about $600m buying food in 2006. So far, the WFP has not cut its reach because of high commodities prices, but now says it could be forced to do so unless donor countries provide extra funds.
Josette Sheeran, WFP executive director, said in an interview with the Financial Times: “In a world where our contributions are holding fairly steady, this [cost increase] means we are able to reach far less people.”
She said policymakers were becoming more concerned about the impact of biofuel demand on food prices and how the world would continue to feed its expanding population.
The warning could re-ignite the debate on food versus fuel amid concerns biofuel production will sustain food inflation and hit the world’s poorest people.
The WFP said its purchasing costs had risen “almost 50 per cent in the last five years”. The UN organisation said the price it pays for maize had risen up to 120 per cent in the past sixth months in some countries.
Biofuel demand is soaking up grain production as is rising consumption in emerging countries for animal feed.
“We face the tightest agriculture markets in decades and, in same cases, on record,” Ms Sheeran said. Global wheat stocks have fallen to the lowest level in 25 years, according to the US Department of Agriculture.
Ms Sheeran added: “We are no longer in a surplus world.”
Source : www.ft.com
Labels: general
posted by Bina | Think cybercriminals are morally bankrupt? In fact, a few seem to be learning the value of philanthropy.Security researchers at Symantec (nasdaq: SYMC - news - people ) announced Friday, July 6, that they'd detected small transactions made with stolen credit card numbers, funneling money to some unexpected destinations: charities like Christian Aid, Islamic Relief and the Red Cross.
These cyberscammers aren't suffering from pangs of conscience, says Zulfikar Ramzam, a senior principal researcher at Symantec. He speculates that the money transfers, which move only $5 or $10, are used to test whether stolen account information is still valid and usable.
Ramzam says that identity thieves frequently test credit card information by moving small sums of money, and banks have responded by scanning transactions records looking for unusual recipients of what look like test transactions. "Even a $5 transaction can raise eyebrows if it goes to someone the person has never done business with before, located in, say, Romania," Ramzam says. "Small donations to charities are less suspicious, even if the donor has never made them before."
Even if the charity test is performed on just a small fraction of stolen card numbers, the contributions could add up. The Federal Trade Commission recorded 670,000 cases of reported identity theft and fraud in 2006, 60% of which began with Internet solicitations. And corporate breaches spill millions of customers' credit card information into the black market: A breach in January at the retailer TJ Maxx (nyse: TJX - news - people ) revealed the private financial data of more than 46 million customers, while Certegy Credit Systems, a branch of Fidelity National Information Services, announced last week that a former employee had stolen and sold customers' data, exposing as many as 2.3 million accounts.
Given that Symantec's researchers see the charity test as a growing trend, the tactic could mean significant sums of money moving into philanthropic coffers, if only in $5 and $10 increments.
Ramzam admits that the motivation for the donations is still a subject of speculation. "The mindset of these kind of attackers is always a bit of a mystery," he says. "It could be that they've all suddenly become kindhearted. But I doubt it."
Labels: general
posted by Bina | Ford Motor is considering the sale of its Swedish-based Volvo car division, a move that would mark the final dismemberment of its luxury car business outside North America.The struggling Detroit-based carmaker said on Sunday it was not presently in talks with any other company about a Volvo sale. It added, however, that “we are continuing to assess all our operations and looking at strategic options”.
Ford has already sold or is in the process of entertaining bids for the other three marques of its luxury car division, known as the Premier Automotive Group.
It disposed of Aston Martin earlier this year, and its financial advisers have set July 19 as a deadline for expressions of interest for Jaguar and Land Rover. Analysts at Merrill Lynch have estimated that Volvo would fetch about $8bn.
Ford bought Volvo in 1999 as part of an aggressive expansion strategy. The brand has built a strong reputation for safety, but sales have stagnated in recent years, including a 3.6 per cent drop in 2006 to around 430,000 vehicles.
Volvo is seeking to regain traction with a flurry of new models, helping to boost sales in the final quarter of last year and early 2007. It has recently sought to expand in China, Russia and other emerging economies.
Ford lost $12.7bn last year and has borrowed heavily to shore up liquidity in anticipation of a further cash drain this year and in 2008.
PAG reported a $327m pre-tax loss last year, but recovered to a $402m profit in the first quarter. Ford does not break out results for individual marques, but Volvo is widely assumed to be profitable. Second-quarter results are due to be published on July 26.
Ford officials ruled out a Volvo sale earlier this year, but have recently taken a more ambivalent approach.
Frederik Arp, Volvo’s chief executive, recently declined to comment on industry speculation about a sale because “it's not in the interest of Volvo car stakeholders, customers, dealers or anybody else, and [because] I don't own the business.”
Ironically, even as Ford is retreating from the international luxury-car market, its domestic luxury brand Lincoln has shown signs of revival, with sales increases for the past nine months in a row.
One person familiar with the bidding process for Jaguar and Land Rover said that talks were still at an early stage. Ford would prefer to sell the two brands – which share many central management functions – together, but it has made preparations to sell them separately if necessary.
Goldman Sachs, Morgan Stanley and HSBC are advising Ford.
Source : www.ft.com
Labels: general
posted by Bina | In the summer of 2005, Charlie Miller was working in his living room when he discovered a hackable vulnerability in a common species of server software. Miller knew he had found something dangerous. But until he offered his prize to a government agency five months later, he had no idea just how much it was worth."I asked for $80,000," he says. "When the guy on the phone agreed immediately without consulting his boss, I knew I should have asked for much more."
In fact, the unnamed agency eventually bargained the price for the information, an exploitable bug in the Linux server program Samba, down to $50,000. And what did the agency do with its newly purchased security hole? Miller received his check and didn't ask questions.
"They didn't buy it in order to patch it," Miller says. "I can speculate that it wasn't exactly used for the common good."
Miller's experience, described in a paper he presented to the Workshop on the Economics of Information Security at Carnegie Mellon last June, highlights a growing problem in computer security. When the industry's ever-larger ranks of independent researchers find exploitable vulnerabilities in software, they're forced to price their discoveries on an ad hoc basis with no sense of fair market value. And even worse, independent researchers are often tempted to sell to the highest bidder, not the buyer most likely to use the data responsibly, or even one whose identity and motives are clear.
Today, several IT security companies are moving into that chaotic marketplace to broker a more equitable exchange of software bugs for dollars. These vulnerability traders argue that they're giving hackers a less harmful avenue to profit from their skills. But they also raise questions about where to draw the line in legitimizing an industry that some security professionals say borders on extortion.
The newest market-maker in the IT security field has a strange name: WabiSabiLabi. But the Chiasso, Switzerland-based company has a serious purpose: It offers an eBay (nasdaq: EBAY - news - people )-style Web auction platform for security bugs. Launched last Tuesday, the site is already auctioning off four exploitable software flaws, including one in Yahoo!'s (nasdaq: YHOO - news - people ) instant messenger program, which has a minimum bid of 2,000 euros.
Even in a seemingly trivial program like Yahoo! Messenger, a vulnerability can be used to steal data from corporate or government servers, says WabiSabiLabi's Chief Executive Herman Zampariolo. He says the company performs background checks on all buyers to ensure that they have no record of criminal hacking. Bugs sold on the site are intended only for legitimate purposes like penetration testing.
Zampariolo notes that a small fraction of the site's 34,000 unique visitors have come from the U.S. military. Software companies themselves can also buy information about flaws in their own programs, but rarely do, for fear that offering a bounty would only draw more hackers to their products.
WabiSabiLabi, whose name combines a Japanese word for "imperfection" and a German abbreviation for "laboratory," tests each vulnerability to ensure it fits the seller's description, and in six months plans to begin charging a 10% commission for its services.
"The IT security market is totally based on finding vulnerabilities," says the company's strategic director, Roberto Preatoni. "But the industry doesn't properly value independent researchers. They're told that to be ethical, they must disclose their findings for free. It's like blackmail. We believe they should be able to profit from their work."
So does Adriel Desautels, whose company, Netragard, also buys and sells vulnerabilities, sometimes paying researchers as much as $200,000 for a single flaw. Desautels performs background checks on all clients and sees his company as a healthy alternative to the black market, which is always hungry for new ways to steal corporate secrets and credit card data.
But Dave Aitel, chief technology officer of another vulnerabilities broker called Immunity, says that security professionals will never be able to offer hackers as much money for software bugs as the bad guys. "It's hard to say no if the black market offers you $300,000," Aitel says. "But with us, at least you get a fair valuation and you know that we're bound by the law. The mafia tends to break your knees if they want a cheaper price."
In the eyes of some security professionals, Immunity and Netragard themselves are far from saintly: Neither company reports all of its vulnerabilities to the software's manufacturer upon acquiring them, since doing so would devalue the bugs they purchase. In other words, the vulnerabilities they buy often stay vulnerable, and so do the software's users.
3Com's (nasdaq: COMS - news - people ) Zero-Day Initiative, by contrast, always reports its bug-buying immediately. That means weaknesses are quickly patched, making users more secure but reducing the price the company can pay hackers. The Zero-Day Initiative won't say how much it offers for each vulnerability, but Miller estimates that the company pays a maximum of around $10,000 per flaw. That's not enough to have kept him from looking to more generous--and less virtuous-- buyers, Miller says.
According to IBM's (nyse: IBM - news - people ) X-force Research security team, that's one more reason that buying bugs, even with the intention of reporting them, is only encouraging an industry that thrives on extortion. "It's a false economy," says X-force's Team Manager David Dewey.
Dewey sorts hackers into three types: Blacks hats, white hats and gray hats. "The black hats will always sell to the highest bidder, which is the underground," he says. "The white hats aren't motivated by money. So the best you can do with a bug bounty program is sway some of the grays, at the expense of security technology as a whole."
Dewey argues that the money spent buying bugs from hackers could be better invested in full-time research teams: The only way to control a freelance hacker, he says, is to give him a job. But as the IT security field matures and becomes more mainstream, Dewey admits that more independent researchers than ever are flooding the software vulnerabilities market.
So how to keep them from selling their findings to the criminal underground?
"It can't be prevented," says Dewey. "As long as there are talented researchers and someone to pay them, it's going to keep happening. We just have to find the bugs first."
Labels: general
posted by Bina | European shares hit fresh six-and-a-half year highs on Monday amid gains in the financials sector.ABN Amro rose 3.9 per cent to €37.24 as Royal Bank of Scotland, up 2.3 per cent to 642p, sweetened the terms of its proposed bid for the Dutch lender.
While RBS kept its offer at €38.4-a-share, the bank raised the cash element of its €71.1bn proposal from 79 pert cent to 93 per cent.
The RBS move puts further pressure on Barclays agreed €35-a-share merger with ABN.
Barclays rose 1.5 per cent to 735p on hopes it would be taken off should the RBS bid succeed.
Other bank stocks also gained, with Alliance & Leicester up 3.7 per cent to £11.65 and Sociéte Générale 1.6 per cent higher at €138.11.
In the wider market, the FTSE Eurofirst 300 was up 3.59 points, or 0.2 per cent, to 1,630.9, its highest level since November 2000.
Elsewhere, Bayer rose 1.3 per cent to €57.05 as JPMorgan lifted its price target on the chemicals and pharmaceuticals group from €63 to €70.
Hennes & Mauritz gained 0.5 per cent to SKr 417.5 as comparable sales at the Swedish clothing chain rose 17 per cent in June.
Source : www.ft.com
Labels: money
posted by Bina | Cybercrime, like every digital industry, is outsourcing. Though the U.S. still produces more malware, spam and viruses than any country in the world, illicit IT jobs are increasingly scattered across an anarchic and international Internet, where labor is cheap, legitimate IT jobs are scarce and scammers are insulated from the laws that protect their victims by thousands of miles. As Thomas Friedman might say, the criminal underworld is flat.According to a Symantec (nasdaq: SYMC - news - people ) report at the end of 2006, Beijing is now home to the world's largest collection of malware-infected computers, nearly 5% of the world's total. Research by the security company Sophos in April showed that China has overtaken the U.S. in hosting Web pages that secretly install malicious programs on computers to steal private information or send spam e-mails. And another report from Sophos earlier that month showed that Europe produces more spam than any other continent; one Polish Internet service provider alone produces fully 5% of the world's spam.
Cybercrime this geographically diverse isn't just hard to stop; it's hard to track. Common tactics like phishing and spam are usually achieved with "botnets," herds of PCs hijacked with malware unbeknownst to their owners. Botnet attacks can usually be traced only to the zombie computers, not to their original source. That means the majority of studies mapping botnet attacks point to every place in the world that has vulnerable PCs, with no real sense of where the attacks begin.
In Pictures: The Cybercriminals' Map Of The World
Researchers at Sophos Labs say they have a solution: They can roughly identify the host country of malicious software by tracing the default language of the computer on which it was programmed. According to their analysis of the default language linked with about 19,000 samples at the end of last year, Americans and other non-British English speakers still produce the most malware, more than a third of the world’s total. Close behind is China, producing 30%, followed by Brazil, with 14.2%. Russia places fourth with 4.1% of the world’s malware.
Bill Pennington of White Hat Security attributes these developing countries' bad behavior to an overabundance of technologically trained young people with low-paying jobs. "If you’re in Russia or China and you have a computer science degree," he says, "You can either go work for nothing or you can make money using your skills for nefarious purposes."
Cybercrime isn't merely spreading to certain foreign countries, it's becoming cosmopolitan, says James Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies. As crime syndicates in Europe and Asia move into online scams, Lewis says that a single cybercrime operation can now be distributed among many different groups in several countries. One may create a "botnet" while another rents those computers to send credit scam e-mails and a third party transfers funds using the fraudulently obtained banking information. Sometimes each operation is on a different continent.
"The big problem here is political. It’s sovereignty," Lewis says. "The FBI cannot go enforce American law without the consent of the country where cybercrime is being carried out. So even if U.S. laws were perfect, it wouldn’t be enough to protect you." He describes a "Bonnie and Clyde" situation, where police stop at the edge of their jurisdiction rather than pursue criminals to their hideouts.
The growth areas of the malware industry aren't easily predicted. India, for instance, is one of the world’s most technologically booming developing countries, but ranks surprisingly low on Sophos' list. The U.K. and India together contribute only 1.3% of the world's malware--both use British English as a default language, so their samples couldn't be separated--and Sophos researchers say the majority of that criminal activity comes from the U.K. Eugene Kaspersky, Russian security guru and head of Kaspersky Labs, can only explain India’s lack of cybercrime as a "cultural difference."
Nandkumar Saravade, director of cyber security for India's National Association of Software and Service Companies, says that India has so far avoided a cybercrime epidemic thanks to the success of its legitimate IT industry. "Today, it is a fact that any person in India with marketable computer skills has a few job offers in hand," he says.
But Saravade and Kaspersky both warn that security professionals should expect the subcontinent’s malware contribution to grow in coming years. When it does, India likely won't be ready to contain the problem: The country's last major cybercrime law was created in 2000, long before botnets became an issue.
India isn't alone in being unprepared: Kaspersky says that the growing industry of malware professionals around the world hasn't been fully recognized by international legal bodies or the software industry, which continues to build vulnerable programs.
"We in the security industry need to attract the attention of government authorities, educate users and encourage changes in basic operating systems," he says. "Alone, we don’t have a chance."
Labels: general
posted by Bina | UN inspectors have verified that North Korea has shut down the nuclear reactor at the heart of its atomic weapons programme, the head of the International Atomic Energy Agency said on Monday.”The reactor has been shut down,” IAEA chief Mohamed ElBaradei told reporters in Bangkok, according to Reuters. ”We have verified the shutdown of the reactor.”
The next step would be to verify that other North Korean nuclear facilities had been shuttered, he said. ”After tomorrow, we will be able to report, hopefully, that all of the five facilities have been shut down.”
North Korea confirmed on Sunday it had shut down the reactor, taking a big step towards implementing a February agreement aimed at dismantling its nuclear facilities.
Closure of the Yongbyon reactor was critical to progress because the facility produced the plutonium used in last year’s nuclear test. United Nations inspectors arrived in Pyongyang on Saturday and are expected to verify the shutdown this week.
The White House said North Korea appeared to be telling the truth, an assessment shared by China and South Korea. Stephen Hadley, US national security adviser, told Fox News: “It appears that the facility is shut down and we are finally implementing the February 13 agreement. It means they will no longer be able to produce the plutonium for those nuclear weapons made out of plutonium.”
The breakthrough came hours after North Korea received its first delivery of heavy fuel oil from South Korea as part of the deal between the US, North and South Korea, China, Japan and Russia. Pyongyang was offered 50,000 tonnes of oil as an incentive to shut Yongbyon down.
The parties to the deal are scheduled to meet in Beijing on Wednesday to discuss the next steps towards dismantling the North Korean nuclear facilities and normalising ties with the US.
Yongbyon was supposed to be mothballed within 60 days of the February agreement but the shutdown was delayed by wrangling over the release of $25m of North Korean funds frozen in a Macao bank. The dispute ended last month when Russia agreed to help transfer the funds to Pyongyang.
In a statement carried by North Korea’s official KCNA news agency, the foreign ministry in Pyongyang was quoted as saying: “We have shut down the nuclear facilities at Yongbyon after we received the first shipment of heavy oil.”
North Korea said it had fulfilled its promises and warned that the complete implementation of the February deal depended on how the other five parties responded, especially what steps the US and Japan took to end their hostile policies against the isolated state.
Kim Myong-gil, a North Korean diplomat at the UN, told the Associated Press that Pyongyang was ready to start disabling its nuclear programmes as long as Washington lifted all sanctions against it, raising hope for further progress on disarmament.
South Korea said the closure of Yongbyon represented “encouraging progress” in efforts to resolve the nuclear problems.
“North Korea’s moves to shut down its Yongbyon nuclear facilities and the return of the IAEA verification team have a significant meaning in that they were the first step to put denuclearisation pledges into action,” the South Korean foreign ministry said in a statement.
But Christopher Hill, the senior US negotiator at the six-party talks said in Tokyo that Pyongyang had simply taken the “first step” in implementing the accord.
“I would caution everyone to understand that this is the first step, it’s only meaningful in so far as we take additional steps,” Mr Hill said. “We’ve still got a lot of work to do. Obviously we are very pleased by this step, but we realise how long it took to get here so I think we have to really work very hard for the additional steps that are very necessary.”
Experts say that negotiating the next phase, which calls for Pyongyang to disclose all of its nuclear weapons programmes facilities and disable them in return for progressively more fuel oil – would be more difficult.
Source : www.ft.com
Labels: general
posted by Bina | Kingfisher plans to open 50 stores in Russia at a cost of about £250m over the next 10 years, with the aim of becoming market leader in the estimated £10bn-a-year Russian home improvement market.The UK-based do-it-yourself group has four stores already in Russia, trading under its Castorama banner, after entering the market last year. A fifth is due to open in September and it plans to double the total to 10 next year.
"The population are very hungry [for DIY goods] and have a lot of projects to finish in their apartments and houses," Oleg Pisklov, managing director of Castorama Russia, told an investor meeting in Moscow last week.
"We want to have up to 15 stores in Moscow, five in St Petersburg and a couple of big box stores in each regional city."
The announcement highlights the attractions of the fast-growing Russian consumer market.
It also shows that UK companies are still ready to invest, despite worsening political relations and last month's decision by DSG, Britain's biggest electrical retailer, to abandon the planned purchase of Eldorado, Russia's leading electrical goods retailer.
Kingfisher's plans are among the most ambitious announced so far by a British group. But several already have a Russian presence, often through franchises, including Marks and Spencer, BHS and Mothercare.
A construction boom is fuelling demand for DIY goods, with more than 50m sq m of housing added last year, the equivalent of more than 700,000 typical-sized apartments. Rising incomes are also enabling Russians for the first time to renovate crumbling Soviet-era apartments.
Natalia Morozova, Castorama Russia's marketing manager, told investors that DIY retailing had more potential now than grocery retailing, since it was three to four years behind in its development.
There are also few strong home-grown competitors in Russian DIY, unlike in groceries or electrical goods.
Germany's OBI and France's Leroy Merlin have both established a strong presence in the Moscow DIY market.
Source : www.ft.com
Labels: general
posted by Bina | Britain and Russia are on Monday braced for a major diplomatic stand-off, as London formally responds to Moscow’s refusal to extradite Andrei Lugovoi, wanted by UK authorities for the murder of former KGB agent Alexander Litvinenko.Amid intense speculation that Britain will expel Russian diplomats from London for the first time in more than a decade, David Miliband, the UK foreign secretary, is preparing to outline the action to be taken in a statement to parliament this afternoon.
Officials have been tight-lipped about how Mr Miliband will approach what – barring a last-minute change of plan – will be the first big foreign policy test for Gordon Brown’s government. But one well-placed ministerial source said the British response would be “heavy”.
The foreign secretary on Sunday underlined that, while economic relations between the UK and Russia have “never been stronger”, the Litvinenko murder was “a very serious crime” and that the judicial process “must be seen through.” He also markedly refused to rule out the possibility of expulsions.
If Britain expels Russian diplomats, it will be the first time London has taken such action since 1996. The danger for the UK is that expulsions may trigger a “tit-for-tat” response by Moscow, as has often happened insimilar disputes.
Mr Brown is understood to have been kept fully involved in developments over the Litvinenko case. His government is determined to defend the integrity of the UK judicial system but it wants to avoid any negative impact on trade relations between the two countries.
Senior figures in Moscow have strongly indicated that the expulsion of diplomats would have serious consequences. Konstantin Kosachev, chairman of the foreign affairs committee of Russia’s lower house of parliament, recently said the expulsion of diplomats “would denote a failure in British policy towards Russia for many years, for which the responsibility would lie wholly on the British side”.
The stand-off between London and Moscow comes at a particularly bad moment in relations between Russia and the west. Over the weekend, President Vladimir Putin suspended the application of a key cold war arms control treaty.
Russia said it would suspend participation in the 1990 Conventional Forces in Europe treaty – which puts ceilings on equipment such as tanks and combat aircraft in Europe – in five monthsunless other countries ratified an adapted version of the treaty signed in 1999.
The White House said it was “disappointed” by Russia’s decision – a move that follows months of rising tensions over US plans to build part of its proposed missile defence system in central Europe.
Mr Litvinenko, a former Russian security agent and fierce critic of Mr Putin, died in a London hospital in November from a fatal dose of the rare radioactive isotope polonium 210. UK prosecutors said in May they would seek extradition of Mr Lugovoi to face trial for the murder.
Western officials in Moscow are bracing themselves for further pressure on the British Council. The UK cultural body has already faced tax probes and delays to opening of a new St Petersburg building. It was forced to close a language centre after suddenly being told it needed a teaching licence.
Source : www.ft.com
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posted by Bina | Mobile phone group Vodafone has been considering a $160bn takeover bid for its American peer and partner, Verizon Communications — a deal that, if consummated, would rival AOL’s takeover of Time Warner and Vodafone’s earlier acquisition of Germany’s Mannesmann as one of the largest M&A transactions on record, FT Alphaville has learned.Vodafone has not yet approached Verizon with the plan and sources cautioned that there is no certainty the British mobile group will pursue the idea. Nevertheless, the move would be aimed, squarely, at settling uncertainty over the future of Vodafone’s US mobile interests — acquiring the whole of Verizon as the route to buying the 55 per cent of its mobile division, Verizon Wireless, that Vodafone does not currently own.
The audacious plan has been discussed in recent weeks as Vodafone has considered whether to trigger a little-known put option it holds over part of its stake in Verizon Wireless — a move that, accompanied by an asset revaluation at the American company, could allow it to suck up to $20bn out of Verizon and distribute this to its shareholders.
The extreme alternative of bidding for Verizon would create a business capitalised at around $300bn — bigger than AT&T, currently the world’s largest telecoms business.
According to well placed financiers, in contemplating such a move, Vodafone has looked at a range of deal structures. These include a plan to buy the whole of Verizon and then simultaneously spin-off its fixed line interests to a private equity consortium. The company has also looked at whether it could part-fund the deal with the issue of a tracker stock for US investors.
If pursued, the private equity side deal alone, valued at around $90bn, would constitute the largest leverage buyout on record.
News of Vodafone’s ambitions — with its stubborn commitment to continued growth by acquisition — is likely to flummox critics who have pressed chief executive Arun Sarin to scale back expansion plans and focus instead on cash generation. Most recently, a growing group of rebel shareholders, including former Marconi boss John Mayo, has pressed for the sale of Vodafone’s 45 per cent holding in Verizon Wireless and the return of cash to investors.
Such a move on Verizon would also be seen as a risky and hugely expensive catch-up exercise in the US following the failed attempt to buy AT&T Wireless in 2004. After a fevered auction, that business was acquired by Cingular Wireless for $41bn.
An all-share deal for Verizon would be highly controversial amongst Vodafone shareholders, who in the past have had to digest some of the heaviest issues of new paper on record - culminating in the $183bn share issue used to buy Mannesmann in 2000.
At the same time, part financing a deal through an LBO of Verizon’s fixed line business, would test the world’s increasingly jittery credit markets, which would be asked to fund around $75bn of debt.
Nevertheless, Mr Sarin’s focus on the plan has been sharpened by the largely unpublicised put option agreement, whereby Vodafone currently has the right to demand that Verizon buy shares from it in Verizon Wireless worth up to $10bn. In assessing whether to exercise the put, which expires in the middle of next month, Vodafone has been re-evaluating its entire US strategy.
One option here has been to press Verizon into gate-crashing the $27.5bn deal hatched by Goldman Sachs’ private equity arm and TPG Capital to acquire Alltel Corp, the fifth largest mobile operator in the US — a deal on which shareholders still have to vote.
In the event that it were to exercise its put option, Vodafone has been working on the assumption that it could generate a tax free payment of $7.5bn from Verizon by reducing its holding in the mobile business to about 41 per cent. At the same time, a further $12bn tax-related payment to Vodafone could be triggered by an asset revaluation.
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posted by Bina | Saturday, July 7, 2007 Anybody use symbian cellphones, do you use music player for mp3 on your cellphone? Maybe many of you just use common mp3 player, like ultra mp3, graviti, alon, etc. But, i tell you, Lonely Cat release a new product mp3 player. This is LCG Jukebox this application not like another mp3 player application, in jukebox you can choose equalizer with your favorite music type, like rock, pop, reggae, maybe another, you can custom the equalizer with your imagination. In jukebox you also can use song lyrics. Just rename your lyrics sames like song title, and change the extension from .txt to .lrc and then paste under file mp3 songs.Don't have LCG Jukebox on your cellphone? Ready for a new application music player on your cellphone? Download free application, click here :
lcg_jukebox.v2.12.s60.sis
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posted by Bina | Wednesday, July 4, 2007 AC. Milan start the season on srie A league with minus 8 point, this about Luciano Moggi polior many people call calciopoli. The team include in calciopoli cause is Juventus, AC. Milan, Fiorentina, Regina. And only one team have degradated on serie B, this team is Juventus.
On the begining serie A season, AC. Milan milan have spirits to make Intermilan, the real enemy from the sames city Milan, have trouble if meet AC. Milan, but it's out of plans! AC. Milan have many trouble, on striker position Milan have super Pipo ( Pilipo Inzaghi ), Alberto Gilardino, Ricardo Olieviera, Marco Boriello ( have casus with psycotropical, and scorsing on some moon ), but no another one have gret skill to make a goal, even spektakuler goal. Until Middle of season, Milan still like that.
On the mid season transfer player, Milan buy a great striker, our can call her hero for Milan, who is this? No another like her, Ronaldo..yes Ronaldo the striker of samba team. He's realy-realy save Milan from hell. His goal make Milan have a great spirit again. But his come in Milan make relation two big team in Milan city, get the separated.
With Ronaldo on the front, Milan have many progress, it's all didn't about strategy Carlo Anceloti, it's all about team work and composition of Kaka and Ronaldo on the front. On the end of season serie A league AC.Milan have 4th position, and take one ticket to champion league, next sesion. Congratulation AC. Milan..!
But that's all not real selebration, the real selebration is on Athena city, at Olympic stadium, Milan be a winner after make Liverpool back to home with runner up position on Champion League. This is will be big moment on this year for AC. Milan. Milan win from Liverpool with score 2 - 1 ( P.Inzaghi 45', P.Inzaghi 80' - Dirk Kuyt 90' ). Milan play with full spirit, Pilipo Inzaghi will be a hero for Milan. Kaka have top skorer of Champion League on this year. That's all will be good moment. Bravo Kaka, Forza Milan..!!
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posted by Bina | Have problem in your life? Never asking for help from God? God is all, His have everything you want. Just how we talk to God and ask. God never leave you alone, His always with you. Share and talk to me about your problem. Sharing and talk about rohanian topic here : Gospel.comLabels: general
