Monthly Archives: June 2011
History lovers may find some humor in the fact that the skies over a city named New Britain were supposed to be dark this Fourth of July.
Unfortunately, there’s nothing funny about the $10 million budget shortfall that forced the city to abandon a national tradition.
Local governments are strapped for cash and many of them — even biggies like Chicago and Cincinnati — have resorted to canceling their July 4 fireworks programs in an effort to control their spiraling deficits.
Strauss-Kahn Case Seen as in Jeopardy
The sexual assault case against Dominique Strauss-Kahn is on the verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper who charged that he attacked her in his Manhattan hotel suite in May, according to two well-placed law enforcement officials.
Although forensic tests found unambiguous evidence of a sexual encounter between Mr. Strauss Kahn, a French politician, and the woman, prosecutors do not believe much of what the accuser has told them about the circumstances or about herself.
Since her initial allegation on May 14, the accuser has repeatedly lied, one of the law enforcement officials said.
Senior prosecutors met with lawyers for Mr. Strauss-Kahn on Thursday and provided details about their findings, and the parties are discussing whether to dismiss the felony charges. Among the discoveries, one of the officials said, are issues involving the asylum application of the 32-year-old housekeeper, who is Guinean, and possible links to criminal activities, including drug dealing and money laundering.
Prosecutors and defense lawyers will return to State Supreme Court in Manhattan on Friday morning, when Justice Michael J. Obus is expected to consider easing the extraordinary bail conditions that he imposed on Mr. Strauss-Kahn in the days after he was charged.
Indeed, Mr. Strauss-Kahn could be released on his own recognizance, and freed from house arrest, reflecting the likelihood that the serious criminal charges against him will not be sustained. The district attorney’s office may try to require Mr. Strauss-Kahn to plead guilty to a misdemeanor, but his lawyers are likely to contest such a move.
The revelations mark a stunning change of fortune for Mr. Strauss-Kahn, who was a leading candidate for the French presidency before being accused of sexually assaulting the woman who went to clean his luxury suite at the Sofitel New York.
Prosecutors from the office of District Attorney Cyrus R. Vance Jr., who initially were emphatic about the strength of the case and the account of the victim, plan to tell the court on Friday that they “have problems with the case” based on what their investigators have discovered, and will disclose more details of their findings to the defense.
“It is a mess, a mess on both sides,” the official said.
Currently China owns 26% of our debt. Treasury wants to keep close tabs on all purchases so as to monitor who might have power over dumping paper.
The treasury had changed rules to help monitor this scenario. They also tried to keep things hush hush so as not to upset the Chinese.Comments »
“Gov. Jerry Brown has signed into law California’s tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.
The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.
Amazon has already emailed its termination of its affiliate advertising program with 25,000 websites. The letter says, in part:
(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.
We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.
Read the rest here.
This is obvious, so I’m chalking the release up as a friendly reminder to check your securities and understand how a U.S. credit rating adjustment can directly affect you, even if you aren’t holding U.S. debt directly.
New York, June 29, 2011 — Ratings that are directly linked to the U.S. government’s rating would move in lock-step with any U.S. sovereign rating action, says Moody’s Investors Service in a new report. Some Aaa ratings of state and local governments could be vulnerable to credit pressure where sovereign credit linkages are potentially strong. However, the creditworthiness of U.S. corporates and financial institutions with Aaa stand-alone credit ratings and Aaa (sf)-rated structured finance transactions that lack any direct credit linkage to the sovereign would generally be resilient to a one- or a two-notch downgrade of the U.S. government.
On June 2, Moody’s said it expected to place the U.S. government’s Aaa rating on review for possible downgrade, if there were no progress on increasing the statutory debt limit by mid-July. If a debt-ceiling related default were to occur, Moody’s would likely downgrade the U.S. sovereign rating. A rating in the Aa range would be the most likely outcome.
“There is a large amount of debt issued with strong credit linkages to the credit quality of the U.S. government,” says Moody’s. “Therefore, we are detailing the potential rating implications of a U.S. downgrade for other Aaa-rated U.S. credits, without commenting on the likelihood of a rating action on the U.S. sovereign.”
Ratings directly linked to the U.S. government would move in lock-step with the any sovereign rating action. These ratings include those on Aaa-rated bonds issued by banks and others guaranteed by the U.S. government. It also includes Fannie Mae, Freddie Mac, the Federal Home Loan Banks and Federal Farm Credit Banks whose own Aaa ratings are based on support from the U.S. government. The ratings on municipal supported transactions, pre-refunded municipal bonds, and structured securities that hold government linked debt as their primary collateral would also move in lock-step with the sovereign rating.
The Aaa ratings on U.S. companies, financial institutions, and the Aaa (sf) ratings on structured finance transactions not directly linked to the U.S. sovereign rating would generally be resilient to a one- or a two-notch sovereign downgrade because the credit linkages to the U.S. government are sufficiently weak. Some Aaa-rated states and local governments, however, may be more vulnerable to credit pressure under the circumstances that would lead to a sovereign downgrade and in turn more vulnerable to rating actions, says Moody’s. Moody’s will issue additional research providing more detail on the impact of a U.S. sovereign rating action on issuers in the U.S. municipal bond sector in the coming weeks.
Certainly not what you want when they hinder business activity. Rules and regulations are not necessarily bad as some would point out. After all the breakdown of rules and regulation created a boom which is now followed by a hurtful debacle.
Intervention is exactly what you want when innovation and spending in the right places are needed.Comments »
EBAY – eBay upgraded to Buy from Hold at Citigroup
DELL – Dell ests raised at Collins Stewart following annual analyst meeting yesterday
ARW – Arrow Elec upgraded to Buy from Hold at Deutsche Bank
PLXS – Plexus upgraded to Buy from Hold at Deutsche Bank
MELI – MercadoLibre upgraded to Buy from Hold at ThinkEquity
VOD – Vodafone PLC upgraded to Buy from Hold at RBS
SVBL – Silver Bull Resources initiated with a Accumulate at Global Hunter Securities
BYI – Bally Technologies target raised to $51 at Brean Murray on strong pipeline
BID – Sotheby’s initiated with Buy at Merriman
SKT – Tanger Factory initiated with Outperform at Credit Suisse
AOS – A.O. Smith initiated with Buy at Davenport
CLS – Celestica upgraded to Buy from Hold at Deutsche Bank
SLAB – Silicon Labs initiated with Buy at UBS
CPX – Complete Production Services initiated with an Overweight at JP Morgan
END – Endeavour Intl initiated with a Buy at Wunderlich
ALU – Alcatel-Lucent upgraded to Buy from Neutral at UBS
TJX – TJX upgraded to Buy from Neutral at Nomura
LULU- Lulu lemon athletica downgraded to Neutral from Buy at Sterne AgeeComments »
USNA +16.5%, FSLR +8.2%, RBS +3.9%, YHOO+0.9%, LYG +8.5%, NBG +3.0%, RBS +3.9%, CJJD +3.5%, CBOU +2.2%, V +1.0%, BP +0.9%, SNY +0.9%, JKS +2.1%, STP +2.0%, HAFC +15.4%, CBAK +3.3%, TSL +1.6%, CBOU +2.2%, DNDN +2.5%, PLXS +1.4%, ALAN +14.3%, CLS +3.4%, HNSN +11%, SNY +0.9%, LDK +1.3%,
LULU -1.5%, CTIC -12.2%, ENDP -3.9%, ELY -5.2%, HLS -2%, AEZS -4.5%