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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Warren Buffett and board ‘agree’ on next CEO – but name no names

Category : Business

Buffett , 82, says he is ‘solidly in agreement’ with Berkshire Hathaway board members as to who should take over from him

Warren Buffett and the board of his conglomerate Berkshire Hathaway are “solidly in agreement” on who should be the company’s next chief executive, he said at Berkshire’s annual shareholder meeting on Saturday.

But Buffett, as with past practice, did not actually name his successor as CEO.

Speculation usually focuses on a small group of top Berkshire executives, among them insurance boss Ajit Jain and railroad leader Matt Rose.

The 82-year-old Buffett, in response to a shareholder question, said he thinks all the time about what could go wrong at Berkshire after he is gone.

“The key is preserving a culture and having a successor, a CEO that will have more brains, more energy, more passion for it than even I have … We’re solidly in agreement as to who that individual should be,” Buffett said.

Whoever ultimately takes over Berkshire will run a conglomerate that employs more than a quarter-million people in dozens of businesses worldwide, covering everything from ice cream to insurance and retail to railroads.

Its breadth means that its performance is often seen as a barometer for the broader economy. Earlier Saturday, one of Buffett’s top lieutenants said things were picking up but could improve further.

“It feels like a 2% economy. If we want to see GDP click up to 3.5%, 4%, you need to see more construction,” said Rose, CEO of the railroad Burlington Northern, in an interview.

Rose said BNSF was seeing “across the board” increases in demand to ship things like concrete, roofing tiles and cars.

But as much as investors want to hear about Berkshire’s growth potential and the state of the economy, some also attend the meeting just for a good laugh.

The meeting opened, as it does every year, with a video montage. This year’s included a duet between Buffett and singer Jon Bon Jovi and a take-off on the TV series Breaking Bad.

Some of the best comedy, though, usually comes in the verbal sparring between Buffett and Vice Chairman Charlie Munger over the course of the day. The two are close – they usually share an oversize box of peanut brittle during the meeting – but Munger’s acerbic tongue pops out from time to time.

“I come to see Charlie Munger needle Warren Buffett. Only he can,” said Sherman Silber, a doctor and shareholder.

The Herbalife saga is practically a made-for-Hollywood script | Heidi Moore

Category : Business

Herbalife is a diet company that excels at drama. It has Wall Street titans sparring, KPMG resigning and investors confused

There is something about diet company Herbalife that makes very rich men act very strangely. The weight-loss company should be relatively unremarkable. Instead it’s been in the center of a dramatic story that should have Hollywood calling.

It has everything – intense, dashing hedge-fund titans embroiled in a public war, allegations of pyramid schemes, billions of dollars riding on on the outcome and now, as of today, a rogue auditor who risked his entire career by allegedly squirreling away inside information to make himself a profit. The Herbalife scandal even features Carl Icahn, one of the 1980s corporate raiders who reportedly inspired the timeless capitalist character of Gordon Gekko. If Wall Street wars got Oscars, Herbalife would be a top contender.

With so much heady money and power surrounding Herbalife, it’s no surprise that the wafting scent of greed would envelop one of the people whose virtue should have been above reproach: the company’s auditor, the prestigious accounting firm KPMG.

Auditors are not glamorous people. If investment bankers are the popular, fratty jocks of the financial world, and traders are the kids who love to hang out with their Camaros, auditors are more like the bespectacled stars of the math team. They are accountants – precise and cautious by nature – and, as a result, they have all the usual attendant social insecurities that nerds do: they’re so happy just to be invited to the party that they may not judge too carefully the underage drinking and drugs that are going on. When auditors get into trouble – as they did with companies like Enron and WorldCom – it’s usually because they were too eager to please their clients that they kept quiet when they saw something wrong. They didn’t want to lose their place at the party.

So the “rogue auditor” is a rare character to cast. Auditors are often guilty of neglect, or looking the other way; rarely do they do something really bold and reckless like trade on inside information. Yet, apparently prompted by the drama around Herbalife, this is what a partner with the company’s auditor, KPMG, did, according to Herbalife.

KPMG fired the rogue auditor on 5 April and told Herbalife about the whole debacle yesterday. This morning, Herbalife’s stock was halted for an unusually long time – two hours – as the company tried to decide how to tell investors.

During that time, traders and journalists took to Twitter to speculate on what could possibly be so horrible that it would require the company to completely stop trading its stock for most of the morning.

The answer, it turns out, was pretty bad.

The partner at KPMG was entrusted with combing Herbalife’s financial statements for errors. Unfortunately, according to Herbalife’s version of the story, he also shared the company’s confidential information with someone else, presumably so they could make a profit of their own. That would give him an incentive to mess with the company’s results to help his own financial interests. As a result, KPMG’s entire opinion on the company is reduced to worthless chaos; the auditor said it had to withdraw its reports on Herbalife for the last three fiscal years.

Herbalife, already embroiled in months of wars between its investors, hastened to assure everyone that the company was still sound. It stressed that KPMG had resigned as its auditor purely because of the possible insider trading and “not for any reason related to Herbalife’s financial statements, its accounting practices, the integrity of Herbalife’s management or for any other reason”.

Herbalife managed to contain the damage: by halting the stock for two hours, it had raised expectations that the news would be far worse. The stock fell only 1% on the news when it finally came out. However, there was still evidence of chaos. In the same statement, Herbalife said that KPMG had said the three years of financial statements could both be “continued to be relied upon” and “should no longer be relied upon”.

So that clears things up.

This only adds another twist for the Herbalife saga that’s been playing out on the larger Wall Street stage. It was only three months ago that the distinguished Carl Icahn was publicly trading insults on television with Bill Ackman, the silver-haired, baby-faced boy wonder of investing. Ackman has argued that Herbalife is a pyramid scheme and has bet against the company; Icahn took the other side of the bet. Daniel Loeb, who was previously a friend of Ackman’s, shocked the investing world by switching allegiances and taking Icahn’s side.

There’s a lot more information that has yet to come out about the problem with KPMG and Herbalife. That’s good if you’re in Hollywood. It means there’s enough time to run through the casting. What do you think of Alan Alda, Elliott Gould, or Frank Langella to play Carl Icahn? John Slattery to play Bill Ackman? Michael Sheen as Dan Loeb? Philip Seymour Hoffman as the rogue auditor?

Now who’s going to call John Grisham and tell him about all this?

Obama to use Miami speech to press for public works jobs – live blog

Category : Business

President in Florida to give speech on economy and to push for tax incentives for public investment. Follow it live here

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Money markets sheltered by bank stimulus

Category : Business

The problems in Cyprus and Italy haven’t dented investors’ confidence largely thanks to the actions of central banks

The near collapse of Cyprus, avoided only by draconian and unprecedented measures including a raid on savers’ bank accounts, and political turmoil in Italy after February’s inconclusive elections should have sent ructions through global stock markets last week.

In fact, with the exception of continuing jitters on European exchanges, investors showed remarkable calm through the latest instalment of the neverending eurozone crisis. In America, the S&P 500 even soared to a record close on Thursday, surpassing levels last seen in 2007 and following in the footsteps of the Dow Jones Industrial Average, which had reached its own peak on 5 March. The FTSE 100, currently less than 10% shy of its own record, ended the week virtually unchanged.

Markets have partly been buoyed by signs of recovery in the global economy, particularly in the US. But the main support for shares has been the continuing actions by central banks to provide a lift to the economy through stimulus measures such as quantitative easing and bond buying. Investors, who are struggling to find decent returns in a low-interest-rate environment, have decided to stick with equities for the moment, betting that the money tap will not be turned off in the immediate future. But with Cyprus coming close to the precipice, in danger of default and leaving the eurozone, that optimism was severely tested during the week. The danger of contagion spreading elsewhere, to Slovenia, Spain, Italy and even France, was enough to make Cyprus the No 1 economic worry. So while a last-minute deal to bail out the Mediterranean island provided some relief, the imposition of capital controls and the losses forced on depositors with more than €100,000 in the bank meant the situation remained volatile.

Eurogroup head Jeroen Dijsselbloem hardly helped matters with remarks that were interpreted as suggesting that the Cyprus bank raid could be a template for other bailouts, although there was later some half-hearted backtracking from the idea.

And as Cyprus reopened its banks on Thursday after 12 days shut, there was no sign of the feared scramble by investors to withdraw their cash. The capital controls and limits on how much could be taken out of accounts meant there was little point in savers swarming into the banks in a panic.

So markets – mostly – kept their cool. The FTSE 100 finished up 24.18 points at 6411.74 on Thursday (its last day of trading before Easter), up from 6392 on Monday. Since the start of the month the index has gained 1% and since the turn of the year the rise is an impressive 8.7%.

The S&P 500, which had been hovering at record levels for more than two weeks, finally achieved the target on Thursday, a 6.34 point rise to 1569.19 being enough to do the job. Asian shares also closed in positive territory with the Nikkei 225 up 0.5% yesterday, up marginally on the week.

In Europe, perhaps unsurprisingly, the picture was more downbeat, although it was hardly a panic. Germany’s Dax dipped around 1.5% on the week to 7795 while France’s Cac slipped 1% to 3731. In two countries where there is most uncertainty and the risk of contagion is real, Italy’s FTSE MIB fell 4% to 15,338 and Spain’s Ibex lost nearly 5% to 7920. And with the situation in Cyprus keeping the spotlight on Greece, the Athens market was down more than 6%.

Clearly European markets are being more influenced by the continuing crisis in the region than by central bank intervention, while the reverse is true for the UK, US and Asian exchanges. Overall, analysts said the Federal Reserve was likely to continue giving support for the moment. Chris Beauchamp, market analyst at IG said: “This may be a Fed-inspired rally, but it is a rally nonetheless; over the course of the last three months markets have taken almost everything in their stride, be it US budget crises, inconclusive Italian elections or a bailout of yet another eurozone member. Having had such a good start to the year, the question is now whether the run can be sustained. Cynics will point to the abundance of problems, but the underlying theme today remains the same as at the end of 2012; a supportive Federal Reserve is not to be trifled with.”Meanwhile Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, told Reuters the new peak on the S&P reflected the fact that many of last year’s anxieties had receded. But he added: “However, this could be the start to a more realistic look at the problems that still haven’t gone away. Some degree of caution is probably still merited, with the problems in Cyprus probably only the beginning to what we could see in coming months.”

Michigan governor nominates Kevyn Orr as Detroit emergency manager

Category : Business

Orr is top partner at Washington law firm Jones Day and will begin managing Detroit’s financial woes once confirmed

Michigan governor Rick Snyder on Thursday handed Detroit’s financial future to a Washington lawyer who helped car giant Chrysler through its bankruptcy proceedings.

Snyder rejected local politicians objections to appointing an emergency manager for the city, which is struggling with $14bn in long-term liabilities and falling tax revenues as residents complain about declining services. “In many respects it’s a sad day,” Snyder said during a news conference in Detroit. “But again I like to say it’s an opportunity.”

The governor put forward Kevyn Orr for the position. Orr is a partner at top Washington law firm Jones Day to be Detroit’s first emergency manager. Snyder’s recommendation all but ensures that Orr will be chosen but the official appointment is made by several state departments. When the appointment is confirmed Detroit will become the largest city in US history to have been taken over by its home state.

Orr, 54, a graduate of the University of Michigan and the University of Michigan Law School, has experience working in government as well as the private sector. He brought in over $1m in fees while advising Chrysler on its bankruptcy proceedings. Chrysler has since emerged from bankruptcy to post its strongest sales since before the auto industry meltdown that has had such a devastating impact on Detroit.

Orr is also African-American, a potential selling point in a majority black city where he will have to take some tough decisions in the coming months. Orr said he will resign from Jones Day. “Let’s get at it and work together,” Orr said.

“I don’t view this as an act of isolation. This is not about asking one individual to come in and turn around the city of Detroit. This is a problem that has now reached a true crisis point,” said Snyder. “This is an opportunity for us to work together, to bring people together as Detroit, Michigan,” he said.

Members of Detroit’s City Council have contested the notion that the city requires an intervention and had considered legal action to stop any appointment. They now appear to have dropped plans for a legal challenge.

The Detroit Free Press first reported that Orr was the top candidate for the job after Detroit mayor Dave Bing announced on Monday that the city had chosen Jones Day as the restructuring legal counsel for the city.

Anger remains among city officials, who will lose power to Orr. “In the minds of Detroiters, they feel like an emergency manager is going to come in and fix their quality of life and nothing could be further from the truth. An emergency manager’s job is to fix the spreadsheets. And that doesn’t deal with crime or emergency response times, abandoned homes and blight or that my trash is getting picked up at 11:30 last night. How is an emergency manager going to fix those issues,” state representative Harvey Santana told the Detroit Free Press.

How long will voters let Republicans put the rich before everyone else? | Sadhbh Walshe

Category : Business

Wall Street may be having a banner week, but the poor, thanks to the GOP, are not

We are nearly a week into the dreaded sequester and already there is reason to believe that the spending cuts that were designed to be so
draconian and unpalatable that even the Republican party could not
stomach them are here to stay.

Despite there being widespread consensus that these cuts will be extremely damaging to the economy and that they may ultimately even increase our debt load rather than lower it, the party that pushed us over this particular fiscal cliff is refusing to budge an inch. The only question that now remains is why, and for how long more, ordinary Americans will let them get away with it.

Balancing the budget and reducing the deficit are noble goals, but when a party who claims to be all about balanced budgets, shifts the entire burden of achieving one onto the poorest and neediest in our society, while doing everything in their power to protect the pocket books of the wealthy, I would be inclined to distrust their motives. All the evidence points to the fact that our most vulnerable citizens are the ones who will be hit the hardest by the sequester cuts (more on that in a moment). Yet the GOP are already making moves to reduce the impact of the cuts on the military, while they look for even more ways to cut welfare spending that will hurt the poor.

On Monday, congressional Republicans put forth a bill ostensibly designed to prevent a government shut down at the end of the month. This is welcome news in so far as I don’t think any of us could stomach another round of the kind of school yard bullying that now passes for governance in the house of representatives.

But the Republican bill, which was authored by House Appropriations Committee Chairman Hal Rogers, has come under criticism for incorporating several measures that would ease the pain of the sequester cuts on military spending, while doing nothing whatsoever to counteract the damage the cuts will inflict on domestic programs that our poorest citizens rely on. Meanwhile, both senate minority leader Mitch McConnell and house majority leader John Boehner have made it clear that any talk of revenue increases, even closing tax loopholes that only benefit the super rich, are out of the question.

So it seems that the poor are on track to take the hit for the Republican party’s apparent zeal to reign in government spending, at least on programs they don’t care for. The Center on Budget and Policy Priorities outlined what this will mean for low income families and children. They estimated that up to 775,000 mothers and children will be turned away from the WIC Nutrition program by the end of the fiscal year; over 100,000 low income families will lose their housing assistance; 3.8 million long term unemployed people will see an 11% reduction in their weekly benefits and over 70,000 poor children will no longer benefit from the vital preschool program known as Head Start. War veterans, children with disabilities and elderly people living alone will also be made to feel the pain.

In addition to the various cuts in services, the Congressional Budget Office estimates that 750,000 jobs will be lost by the end of the year and the GDP will slow down by 0.6%. But, hey, Wall Street had a bumper day on Tuesday, so who really cares about a few hundred thousand job losses or if the poor get poorer?

Actually, we should all be deeply concerned about the long-term implications of the trickle down poverty policies that the Republican party has grown so fond of. It’s no secret that inequality has been steadily rising in America for the past few decades, but I don’t think most Americans are aware of the full extent of it. Mother Jones has put together a very illuminating video, based on income inequality charts that is worth a look to understand just how big the wealth gap has grown. The top 1% in this country now own 40% of the wealth while the bottom 80% only own 7% between us.

In the past 30 years the wealth of the top 1% has more than tripled, meanwhile 15% of the country are now living in abject poverty, up from 13.8% in 2008 and real median household incomes declined 1.5% in 2011, the second consecutive annual drop.

So the old cliche about the rich getting richer while the poor (and middle class) get poorer is alive and kicking. If anyone fails to see the link between this reality and the policies promoted by the Republican party that protect the rich and punish the poor, then I guess you should just keep voting republican and you will keep getting more of the same.

Certainly the Democrats have made mistakes along the way in the various debt ceiling and budgetary showdowns, and President Obama may have ceded too much ground here and there. But it’s not easy to negotiate effectively when you have a congress that is run by a party who are so irresponsible they are willing to shut down the government and let children go hungry unless they get their way. It’s hard to imagine that they will change their ways before 2014 when many of them are up for reelection. I just hope that between now and then the president and senate democrats manage to keep their worst excesses in check.

Come election time, I hope those who have been forced to shoulder the burden for the Republican party’s fiscal recklessness make their pain felt at the ballot box.

US economic activity picked up in January and February, report says

Category : Business

National Employment report showed private employers added 198,000 jobs with orders for goods slowly increasing

Private employers in the US hired more workers than expected in February and demand for a range of factory goods was solid in January.

The reports on Wednesday suggested economic activity picked up after it stalled in the final three months of 2012.

Private employers added 198,000 jobs to their payrolls last month, the ADP National Employment Report showed, handily beating economists’ expectations for an increase of 170,000. There were solid gains in construction, where payrolls rose by 21,000 jobs.

Adding to the report’s firm tone, January’s count was revised to show 23,000 more jobs added than previously reported. The report is jointly developed with Moody’s Analytics.

“It feels like underlying job growth continues to improve, and at the current pace, this should be enough to start bringing down unemployment,” said Mark Zandi, chief economist at Moody’s Analytics. The jobless rate is currently at 7.9%.

“In a really rip-roaring economy, we’d be creating closer to 300,000 jobs a month or a bit north of that. So we’re not there yet, but we’re moving in the right direction,” he said.

A separate report from the Commerce Department showed orders for manufactured goods dropped 2%, weighed down by a plunge in demand for transportation equipment.

But orders excluding the volatile transportation category increased a healthy 1.3%, pointing to underlying strength in a sector that carried the economy out of the 2007-09 recession.

The department also said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased by a more robust 7.2% in January instead of 6.3%, as it reported last week.

That optimism was also captured in the Federal Reserve’s Beige Book, which showed growth improving gradually in January and early February, largely thanks to a broad-based housing market recovery.

Dow closes at record high as markets shrug off slow US growth

Category : Business

Dow breaks previous record set in October 2007 as investors absorb signs of recovery in US and better figures in Europe

The Dow Jones Industrial Average on Tuesday surged to its highest closing level ever, erasing the index’s loses during the financial crisis even as Washington fights over its debts and Main Street seems far from mended.

The Dow closed at 14,254, passing its previous high of 14,164.52 in
October 2007.

Better-than-expected news from the service sector bolstered the rally that had begun even before the market opened. Dow futures, a somewhat unreliable indication of the direction the market is likely to take, pushed the index higher before the opening bell as investors absorbed better-than-expected retail figures from Europe.

On Monday, the Dow closed at 14,127.82, up 38.16 points, or 0.27%, a 52-week high. The index has risen for four of the past five trading days.

The Dow has not touched these levels since before Barack Obama’s first election victory. Global stock markets went into freefall shortly after, as the implosion of housing market and Europe’s woes dragged the world into the worst financial crisis in living memory.

Massive issues remain, however. Unemployment, especially among the young, remains high, and in Washington politicians are still at loggerhead over America’s $16tn debt. Last Friday the government started making $85bn of cuts – known as the sequester – in a move Obama and others predicted would cause widespread chaos and financial hardship. In Europe, major US companies including GM and Ford are being hit by the region’s continuing economic crisis.

But these are old debates now – and Wall Street doesn’t seem to be worried.

The latest figures from the Institute of Supply Management (ISM), released Tuesday morning, showed positive growth in the service sector. The ISM index stood at 56 in February. Anything above 50 indicates growth, and the number was ahead of analysts’ forecasts. US markets were also buoyed by rallies in Europe and Asia. In London the FTSE closed up 86.32 points.

The Dow Jones index has now more than doubled since a low point in March 2009, stunning many market watchers and coming against a still lacklustre economic recovery. Corporate profits hit record highs last year, fuelled largely by cost cuts. Economists and market watchers said the Federal Reserve’s massive bond-buying programme has fueled the market but that beneath that there were concrete signs of improvement.

Gus Faucher, a senior economist for PNC Financial Services Group, said Washington still mattered and warned that if the sequester drags on, the Dow’s gains could be at risk. “That said, the fundamentals are better. Profits are at an all-time high, business balance sheets have improved, interest rates are low. The markets are expecting more growth through 2013.”

Jack Ablin, chief investment officer at BMO Bank, said investors fed up with low yields from the bond markets were looking for better returns in equities. Bonds were also being issued in order to buy shares, he said. He said the wider economy looked like it was steadily improving, but warned there could be problems ahead.

“Investors are embracing progress. They weren’t shaken by the tax hikes at the end of the year and not by the sequester either,” he said. “The Dow looks fairly priced now.”

But he warned that the Federal Reserve’s massive bond-buying policy could drive more people into equities. “If you want to see a swift end to monetary easing, another 10-20% hike in the Dow will probably do that,” he said.

Minutes of the Fed’s last meeting revealed a split in the central bank’s rate setting committee. While the Federal Open Markets Committee’s members were still worried about unemployment, “many participants also expressed some concerns about potential costs and risks arising from further asset purchases”, according to the minutes.

Friday may prove the next test for the markets, and the Fed, when the latest nonfarm payroll figures are released. The US added 157,000 new jobs in January. Average job creation for 2012 was around 181,000, a number just above the benchmark economists calculate is enough for the unemployment rate to stabilise, but not fall.

US defence secretary: ‘abrupt and arbitrary cuts’ will damage military – video

Category : Business

Chuck Hagel speaks at the Pentagon on Friday to outline concerns over the effects massive budget cuts will have on US military operations

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Barack Obama: ‘These cuts are not smart’ – video

Category : Business

The US president makes clear his disappointment that the sequester will go ahead

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