ING Groep NV plans to raise 7.5 billion euros ($11.3 billion) in a rights offering and sell its insurance units as the biggest Dutch financial services company seeks European Union approval for a taxpayer-funded bailout. ING, which traces its roots to 1743, fell the most in seven months after saying it planned to sell shares to finance the repurchase of 5 billion euros of core tier 1 securities held by the government. It will shed the insurance units through initial public offerings and sales to other firms over the next four years, the Amsterdam-based company said today. The measures are part of a restructuring plan filed with the European Commission, the EU executive, to garner approval for state aid, including a 10 billion-euro cash injection and guarantees on 21.6 billion euros of mortgage assets. ING has risen 30 percent this year in Amsterdam, beating an 13 percent advance in the 36-member Dow Jones Stoxx 600 Insurance Index. "ING's settlement with the EU competition commission looks less favorable than we had hoped," Chris Hitchings, a London- based analyst at Keefe, Bruyette & Woods Ltd., said in a note to investors. Hitchings, who rates ING "market perform," said he had estimated a share sale of 5.5 billion euros.
ING, which traces its roots to 1743, fell the most in seven months after saying it planned to sell shares to finance the repurchase of 5 billion euros of core tier 1 securities held by the government. It will shed the insurance units through initial public offerings and sales to other firms over the next four years, the Amsterdam-based company said today.
The measures are part of a restructuring plan filed with the European Commission, the EU executive, to garner approval for state aid, including a 10 billion-euro cash injection and guarantees on 21.6 billion euros of mortgage assets. ING has risen 30 percent this year in Amsterdam, beating an 13 percent advance in the 36-member Dow Jones Stoxx 600 Insurance Index.
"ING's settlement with the EU competition commission looks less favorable than we had hoped," Chris Hitchings, a London- based analyst at Keefe, Bruyette & Woods Ltd., said in a note to investors. Hitchings, who rates ING "market perform," said he had estimated a share sale of 5.5 billion euros.
The European Commission came forward with more legislation on financial regulation on Monday (26 October), as the EU continues its drive towards ensuring that last year's financial meltdown is not repeated. The draft directive is designed to amend already existing sectoral European legislation, thereby making it compatible with last month's commission proposals to set up a European System of Financial Supervisors (ESFS). If agreed by the member states and the European Parliament, the ESFS will consist of three authorities in the areas of banking, insurance and occupation pensions, and securities and markets.
The draft directive is designed to amend already existing sectoral European legislation, thereby making it compatible with last month's commission proposals to set up a European System of Financial Supervisors (ESFS).
If agreed by the member states and the European Parliament, the ESFS will consist of three authorities in the areas of banking, insurance and occupation pensions, and securities and markets.
BMW has become the first major company in Germany to change its compensation practices amid growing concern over excessive banker bonuses. The company cited a fairer work environment as its reason. Other firms are sure to take notice, given BMW's size and weight in the global business market. BMW became the first major blue chip German company to link the bonuses of its top managers to those of its assembly line workers, amid growing global criticism of executive compensation. The move sends a strong message to other firms also examining their compensation practices, as the world's largest banks in particular have come under fire from politicians, shareholders and the public over excessive bonuses during one of the worst economic crises the world has seen. BMW plans to tie executive bonuses to those of its blue-collar workers, in a bid to create a fairer and sustainable compensation environment within the company. Starting in 2010, the company will use a common formula to ascertain and award bonuses to its upper and lower level employees, based on the company's performance as measured by profit, sales and other factors. That means that upper level management could potentially lose more money than their lower level counterparts for bad performance, BMW said.
BMW became the first major blue chip German company to link the bonuses of its top managers to those of its assembly line workers, amid growing global criticism of executive compensation. The move sends a strong message to other firms also examining their compensation practices, as the world's largest banks in particular have come under fire from politicians, shareholders and the public over excessive bonuses during one of the worst economic crises the world has seen.
BMW plans to tie executive bonuses to those of its blue-collar workers, in a bid to create a fairer and sustainable compensation environment within the company. Starting in 2010, the company will use a common formula to ascertain and award bonuses to its upper and lower level employees, based on the company's performance as measured by profit, sales and other factors. That means that upper level management could potentially lose more money than their lower level counterparts for bad performance, BMW said.
Oil has returned to the role it held before last year's price collapse--a sanctuary of choice for investors fleeing the dollar. At least for now, that is. Over the past week, crude surged through the $80-a-barrel barrier for the first time since September 2008. (The benchmark price of a barrel of crude oil ended Friday, Oct. 23, at $80.50.) This follows a breathtaking, yearlong bout of volatility. Since the summer of last year, oil has rocketed to $147, plunged to $32, and just a week ago traded below $70. Yet many analysts say oil-market fundamentals are so weak that prices won't rise much higher, and may in fact retreat. "This is a dollar-led rally and unsustainable," says Phil Flynn, an oil analyst with PFGBest Research, a futures brokerage.
Over the past week, crude surged through the $80-a-barrel barrier for the first time since September 2008. (The benchmark price of a barrel of crude oil ended Friday, Oct. 23, at $80.50.) This follows a breathtaking, yearlong bout of volatility. Since the summer of last year, oil has rocketed to $147, plunged to $32, and just a week ago traded below $70.
Yet many analysts say oil-market fundamentals are so weak that prices won't rise much higher, and may in fact retreat. "This is a dollar-led rally and unsustainable," says Phil Flynn, an oil analyst with PFGBest Research, a futures brokerage.
Three graduates in European studies, language and literature and nursing voice their experiences in the Mediterranean. Part two in a job testimony series of young Europeans based at home
One more in a long series of comparisons between the Crash of 1929 and the GFC of 2008 in which our current GFC is proceeding further and faster than did the one in 1929. Guess I should be glad that the crisis is over. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
[Note: Federal Reserve funds used for speculation - that's crazy talk!] Glass Senate subcommittee to meet about Nov. 15 to investigate financial matters, particularly use of Federal Reserve funds to help finance speculative operations. [Note: Ay Chihuahua! Dept.] J. Raskob, GM finance committee dir. and Democratic Nat'l. Committee Chair., optimistic on auto industry: "There have been indications during the past six to eight weeks showing that the depressed conditions in the automobile industry have reached bottom and are slowly turning into more normal channels. ... Sharp revival in the motor industry may be expected to begin with the automobile shows in early January. It will stimulate all other lines of business activity. ... There can be no doubt that the motor industry will show substantial improvement in 1931. ... Optimism should now be the order of the day."
[Note: Ay Chihuahua! Dept.] J. Raskob, GM finance committee dir. and Democratic Nat'l. Committee Chair., optimistic on auto industry: "There have been indications during the past six to eight weeks showing that the depressed conditions in the automobile industry have reached bottom and are slowly turning into more normal channels. ... Sharp revival in the motor industry may be expected to begin with the automobile shows in early January. It will stimulate all other lines of business activity. ... There can be no doubt that the motor industry will show substantial improvement in 1931. ... Optimism should now be the order of the day."
Socialism Many people call the Bush and Obama administration's approach to the economic crisis "socialism". Are they right? Roubini has...written: We're essentially continuing a system where profits are privatized and...losses socialized. Nassim Nicholas Taleb says the same thing: After finishing The Black Swan, I realized there was a cancer. The cancer was a huge buildup of risk-taking based on the lack of understanding of reality. The second problem is the hidden risk with new financial products. And the third is the interdependence among financial institutions. .... Today we still have the same amount of debt, but it belongs to governments. Normally debt would get destroyed and turn to air. Debt is a mistake between lender and borrower, and both should suffer. But the government is socializing all these losses by transforming them into liabilities for your children and grandchildren and great-grandchildren. What is the effect? The doctor has shown up and relieved the patient's symptoms - and transformed the tumour into a metastatic tumour. We still have the same disease. We still have too much debt, too many big banks, too much state sponsorship of risk-taking. And now we have six million more Americans who are unemployed - a lot more than that if you count hidden unemployment. Nobel prize winning economist Joseph Stiglitz calls it "socialism for the rich". So do many others. Fascism? Some, however, argue that the economy is more like fascism than socialism. For example, leading journalist Robert Scheer writes: What is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as "financial fascism" [than socialism]. After all, even Hitler never nationalized the Mercedes-Benz company but rather entered into a very profitable partnership with the current car company's corporate ancestor, which made out quite well until Hitler's bubble burst. And Italian historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social" (page 416). .... Remember that one of the best definitions of fascism - the one used by Mussolini - is the "merger of state and corporate power".
Many people call the Bush and Obama administration's approach to the economic crisis "socialism". Are they right?
Roubini has...written:
We're essentially continuing a system where profits are privatized and...losses socialized.
Nassim Nicholas Taleb says the same thing:
After finishing The Black Swan, I realized there was a cancer. The cancer was a huge buildup of risk-taking based on the lack of understanding of reality. The second problem is the hidden risk with new financial products. And the third is the interdependence among financial institutions. .... Today we still have the same amount of debt, but it belongs to governments. Normally debt would get destroyed and turn to air. Debt is a mistake between lender and borrower, and both should suffer. But the government is socializing all these losses by transforming them into liabilities for your children and grandchildren and great-grandchildren. What is the effect? The doctor has shown up and relieved the patient's symptoms - and transformed the tumour into a metastatic tumour. We still have the same disease. We still have too much debt, too many big banks, too much state sponsorship of risk-taking. And now we have six million more Americans who are unemployed - a lot more than that if you count hidden unemployment.
....
Today we still have the same amount of debt, but it belongs to governments. Normally debt would get destroyed and turn to air. Debt is a mistake between lender and borrower, and both should suffer. But the government is socializing all these losses by transforming them into liabilities for your children and grandchildren and great-grandchildren. What is the effect? The doctor has shown up and relieved the patient's symptoms - and transformed the tumour into a metastatic tumour. We still have the same disease. We still have too much debt, too many big banks, too much state sponsorship of risk-taking. And now we have six million more Americans who are unemployed - a lot more than that if you count hidden unemployment.
Nobel prize winning economist Joseph Stiglitz calls it "socialism for the rich". So do many others.
Fascism?
Some, however, argue that the economy is more like fascism than socialism. For example, leading journalist Robert Scheer writes:
What is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as "financial fascism" [than socialism]. After all, even Hitler never nationalized the Mercedes-Benz company but rather entered into a very profitable partnership with the current car company's corporate ancestor, which made out quite well until Hitler's bubble burst.
And Italian historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social" (page 416).
Remember that one of the best definitions of fascism - the one used by Mussolini - is the "merger of state and corporate power".
I heard that's apocriphal. Is that right? En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
So, the definition could have been apocryphal, it could have been fleeting, it could have been a sales pitch, it could have been viewed as a good thing or bad, dependent upon what he thought he needed to get and hold power.
I bow to others on this topic, but this sums up my understanding on what I have read. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters. Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.... "Why am I competing against a bank?" [Lt. Ross Wallace] said later. "It would be common sense to have a separate process for people who want to move back to the city or it's going to stay empty." Nearby, a Dutch-born local woman, Riet Schumack, 54, knitted patiently through the auction for a chance to bid on a lot in Brightmoor, one of the most blighted neighborhoods. Schumack, who runs a community garden near her home that employs 14 neighborhood children, said she had been battling through a maze of bureaucracy for years to try to buy an abandoned lot nearby to expand and plant fruit trees. She learned the lot had been taken back from its previous owner -- an absentee investor with more than 100 abandoned lots in Brightmoor -- only because of her constant calls to city and county officials, she said. When officials told her she would have to wait for a fourth day to bid on the property, Schumack broke down into tears. "Anybody with a job is not able to sit here for days. So you are left with the sharks," she said.
Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate....
"Why am I competing against a bank?" [Lt. Ross Wallace] said later. "It would be common sense to have a separate process for people who want to move back to the city or it's going to stay empty."
Nearby, a Dutch-born local woman, Riet Schumack, 54, knitted patiently through the auction for a chance to bid on a lot in Brightmoor, one of the most blighted neighborhoods.
Schumack, who runs a community garden near her home that employs 14 neighborhood children, said she had been battling through a maze of bureaucracy for years to try to buy an abandoned lot nearby to expand and plant fruit trees.
She learned the lot had been taken back from its previous owner -- an absentee investor with more than 100 abandoned lots in Brightmoor -- only because of her constant calls to city and county officials, she said.
When officials told her she would have to wait for a fourth day to bid on the property, Schumack broke down into tears.
"Anybody with a job is not able to sit here for days. So you are left with the sharks," she said.
Royalties on Health Plans | WaPo | 27 Oct 2009
The group and its subsidiaries collected more than $650 million in royalties and other fees last year from the sale of insurance policies, credit cards and other products that carry the AARP name, accounting for the majority of its $1.14 billion in revenue, according to federal tax records. It does not directly sell insurance policies but lends its name to plans in exchange for a tax-exempt cut of the premiums. The organization, formerly known as the American Association of Retired Persons, also heavily markets the policies on its Web site, in mailings to its members and through ubiquitous advertising targeted at seniors. The group's dual role as an insurance reformer and a broker has come under increasing scrutiny in recent weeks from congressional Republicans, who accuse it of having a conflict of interest in taking sides in the fierce debate over health insurance.... GOP lawmakers point to AARP's thriving business in marketing branded Medigap policies, which provide supplemental coverage for standard Medicare plans available to the elderly. Democratic proposals to slash reimbursements for another program, called Medicare Advantage, are widely expected to drive up demand for private Medigap policies like the ones offered by AARP, according to health-care experts, legislative aides and documents.... [T]he group relies more than ever on payments from auto, health and life insurers, according to financial statements. From 2007 to 2008, AARP royalties from insurance plans, credit cards and other branded products shot up 31 percent -- from less than $500 million to $652 million -- making such fees the primary source of revenue for the group last year, the records show. AARP's annual financial report shows that 63 percent of that, or about $400 million, came from the nation's largest health insurance carrier, UnitedHealth Group, which underwrites four major AARP Medigap policies. Other carriers with AARP-branded plans include Aetna Life Insurance, Genworth Life Insurance and Delta Dental. AARP is also a major powerhouse in Washington, spending more than $37 million on lobbying since January 2008. The organization's close ties with insurers have long attracted criticism from politicians of both parties. During the health-care debate of the early 1990s, then-Sen. Alan Simpson (R-Wyo.) held hearings lambasting the group's business operations. Some Democrats criticized the group for supporting the Bush administration's expensive Medicare prescription-drug [Pt. D for "donut hole"] legislation in 2003. Earlier this year, AARP and UnitedHealth said they were halting the sale of "limited benefit" health insurance policies after complaints from Sen. Charles E. Grassley (R-Iowa) that the plans were marketed in a misleading way.
The organization, formerly known as the American Association of Retired Persons, also heavily markets the policies on its Web site, in mailings to its members and through ubiquitous advertising targeted at seniors.
The group's dual role as an insurance reformer and a broker has come under increasing scrutiny in recent weeks from congressional Republicans, who accuse it of having a conflict of interest in taking sides in the fierce debate over health insurance....
GOP lawmakers point to AARP's thriving business in marketing branded Medigap policies, which provide supplemental coverage for standard Medicare plans available to the elderly. Democratic proposals to slash reimbursements for another program, called Medicare Advantage, are widely expected to drive up demand for private Medigap policies like the ones offered by AARP, according to health-care experts, legislative aides and documents....
[T]he group relies more than ever on payments from auto, health and life insurers, according to financial statements. From 2007 to 2008, AARP royalties from insurance plans, credit cards and other branded products shot up 31 percent -- from less than $500 million to $652 million -- making such fees the primary source of revenue for the group last year, the records show. AARP's annual financial report shows that 63 percent of that, or about $400 million, came from the nation's largest health insurance carrier, UnitedHealth Group, which underwrites four major AARP Medigap policies. Other carriers with AARP-branded plans include Aetna Life Insurance, Genworth Life Insurance and Delta Dental.
AARP is also a major powerhouse in Washington, spending more than $37 million on lobbying since January 2008. The organization's close ties with insurers have long attracted criticism from politicians of both parties.
During the health-care debate of the early 1990s, then-Sen. Alan Simpson (R-Wyo.) held hearings lambasting the group's business operations. Some Democrats criticized the group for supporting the Bush administration's expensive Medicare prescription-drug [Pt. D for "donut hole"] legislation in 2003.
Earlier this year, AARP and UnitedHealth said they were halting the sale of "limited benefit" health insurance policies after complaints from Sen. Charles E. Grassley (R-Iowa) that the plans were marketed in a misleading way.
Possibly related news:
Townhall Transcript, New Hampshire, Aug 2009 Obama Electoral Votes Dissassembled Insurance Chassis Diversity is the key to economic and political evolution.
