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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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McBoring: Dividend stocks rule, but for how long?

Category : Stocks

Boring companies in the consumer durables, health care and utility sectors are surging. Investors are still nervous and looking for safety.

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Hyundai and Kia in US car recalls

Category : World News

Hyundai Motor and its Kia Motors affiliate are recalling more than 1.8 million cars and sports utility vehicles in the US.

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REPEAT: Earth Hour-BMO Survey Shows 51% of Canadians Surprised by Costs of Utilities

Category : Stocks, World News

Turn the lights down low – Earth Hour takes place today between 8:30 and 9:30 p.m. local time

- BMO provides tips for homeowners on how to reduce their environmental footprint and overall utility bills

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Lenders getting more personal data

Category : World News

Growing amounts of individuals’ financial data are being used to assess loans applications, and credit agencies are seeking more deals with utility firms to access customer information.

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Dr. John Roberts CBE Appointed as Non-Executive Chairman at First Utility

Category : Stocks, World News

LONDON, UNITED KINGDOM–(Marketwire – Feb. 16, 2013) - The UK’s largest independent energy supplier, First Utility, is delighted to announce the appointment of Dr. John Roberts CBE as Non-Executive Chairman.

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Swinerton Renewable Energy Awarded Contract to Construct and Operate 250MWac K Road Moapa Solar Plant

Category : World News

Amongst the Largest Solar Plants to Be Constructed, Swinerton Was Selected to Build and Manage the First Major Utility-Scale Solar Project on Tribal Land

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Riverside fears higher bills with bonds the villain in fiscal cliff stalemate

Category : Business

Costs could be passed on to residents if Congress decides to curb tax breaks on municipal bond interest in bid to agree deal

It isn’t easy for Juan Venegas to support his wife and three children with the money he earns installing fiberglass at a construction company in Riverside, California. He’s lucky to have a job at all; the industry here is still reeling from the housing crisis.

But supporting his family would become even harder if the local utility company were to raise electric and water rates.

“Electric service is already expensive in Riverside,” Venegas, 30, said after buying ice cream for his three sons at a local market. “We would have to sacrifice other expenses, like some school supplies for the kids.”

Higher utility bills could become a reality for Venegas and his fellow residents if Washington decides to curb tax exemptions on municipal bond interest as part of a bid to avert the fiscal cliff, a move that House speaker John Boehner has said he’s willing to consider. Eliminating, or even just curbing, the tax break could chase investors away from the bonds, raising borrowing costs for municipalities across the nation. To pay for that, cities would have to pass off the cost to residents in the form of higher rates, or by putting off needed improvements to infrastructure.

“You would have higher borrowing costs for issuers, which would ultimately be passed on to taxpayers,” said Peter Hayes, who heads BlackRock’s municipal bonds group. “In some cases, the increased costs would be very detrimental to municipalities’ budgets.”

Riverside would be one of those cases. Unlike the majority of California municipalities, the city, located about 60 miles east of Los Angeles, runs its own electric and water companies. It is an expensive undertaking that swallows about half its $1bn budget. The city regularly issues debt to help pay for that, and plans to go to the market several times next year.

Should borrowing costs rise, the city, which is known for its famous Mission Inn hotel and as the birthplace of California’s citrus industry, would raise utility rates on residents and might also postpone plans to improve electric and water infrastructure.

Local officials say they don’t think Washington understands how much its possible approach to solving the country’s fiscal woes will end up hurting its own local governments.

“This is going to make life more difficult for us on Main Street,” Riverside mayor Rusty Bailey said in an interview. “They think it’s another revenue source but I don’t think they realize it’ll increase the interest cost for every city.”

It’s not a good time to make it harder for California’s cities to get funds. Many of them are still reeling from heavy unemployment and the rash of foreclosures caused by the financial crisis. Some have been firing city workers and a handful – such as Riverside’s neighbor San Bernardino – even filed for bankruptcy. As a result, many cities have already been putting off projects to improve their infrastructure.

What’s notable about the federal proposal is that it wouldn’t only affect the municipalities already in trouble. Those most impacted would be the ones that plan to issue bonds in coming months and years, said William Holder, dean of the USC Leventhal School of Accounting. Many of those cities are fiscally healthy.

“They’ll pay more for debt service,” Holder said. “They may forgo an attractive capital project: building a new fire station or a civil center.”

Riverside, for example, has maintained solid finances throughout the economic crisis, even with an unemployment rate currently at 12%. The city earned an AA- rating on its general obligation bonds from Standard & Poor’s, which said it showed “strong financial management practices.”

Right now, the city can get financing through a 30-year bond at around 4.5% interest. That rate could rise to 6.5 or 7% under current market conditions if the tax exemption were removed, said Brent Mason, the city’s finance director.

“We’re a regular issuer in the bond market, so the cost of capital is of endless importance to us and to our citizens, who are the rate payers,” Mason said. “You can see why they’d be interested in removing the tax exempt rate, but it’s a huge cost to us.”

The changes wouldn’t only affect utilities. “I look at the calendar of stuff to do six months from now, and there are always things to do,” Mason said. “The economy is starting to recover and people will start flooding in again to the region. They’ll be a demand for this or that.”

One such project that city officials are considering is a $20m upgrade to Riverside’s downtown public library. That plan would likely be put on hold amid higher borrowing costs, as would the jobs the remodel could create.

The library was built in 1965 and hasn’t been upgraded to cater to modern technology or to provide more space for community programs. The second-floor area that gets the best wireless internet reception doesn’t have any access to outlets for laptop computers, and users aren’t allowed to access certain websites because the server could overload. Indeed, on a recent afternoon, no visitors were using the area to work on their own computer.

“The building needs updating to meet the needs of our customers,” library director Tonya Kennon said.

To be sure, some analysts and investors consider it more likely that federal officials would cap the tax break rather than eliminate it.

Laura Milner, senior investment manager on the fixed income strategies team at Wells Fargo Private Bank, said a cap wouldn’t stop her group from continuing to buy municipal bonds for their high net-worth clients because they would remain safe investments compared with other fixed-income products and because their yields would still be more attractive than other taxable debt such as corporate bonds.

“There might not be as much as an adjustment as you’d think,” Milner said.

But Riverside believes the cost of borrowing would still rise even if the interest is only capped, Mason said. “It’s the same effect but not as dramatic. In either case, it makes it substantially more expensive to borrow funds. We’re certainly opposed to that.”

If he’s right, local attitudes towards Washington might deteriorate.

“I have no confidence in the federal congress,” said Susan Heath, 69, a retired clinical lab scientist who was shopping at the Home Depot. “At a local level, we’re going to be hard pressed to get things done.”

Thames Water – a private equity plaything that takes us for fools | Will Hutton

Category : Business

When the water company was privatised we were promised a utopia of private sector efficiency

London remains the effluent capital of Europe. The Victorian network of sewers is overwhelmed, and untreated or semi-treated sewage is leaking into the Thames, leaving the tide to do the rest, just as it did when the great engineer Joseph Bazalgette built the system. It is no longer acceptable – for consumers or in terms of international water standards. For more than a decade Thames Water has known that it needs to build a huge 20-mile tunnel 70 metres under the river to conduct the sewage out to sea, a £4bn investment that would last more than a century.

The chancellor, George Osborne, has identified the scheme, now gone through interminable planning inquiries, as part of the national infrastructure plan. And it is reliably tipped to be included in December’s autumn statement as eligible for the new infrastructure guarantee. British taxpayers will essentially guarantee the £4bn of Thames Water borrowing, so that whatever happens investors will get their money back. This will allow Britain’s biggest water company to borrow hugely, as a government body in effect, at the keenest rates of interest.

Which is why even if you don’t live in London you should pay attention: you will be offering the guarantee. Enough of such guarantees and Mr Osborne will be able to pronounce the tideway tunnel one of 40 priority projects to spearhead a multibillion-pound infrastructure boost – without increasing public borrowing at all. Magic!

However, those with long memories will recall that one of the principal arguments for privatisation was that no such guarantees would ever be needed again. When Thames Water was privatised back in 1989, raising a paltry £922m for the government, we were promised a utopia of private sector efficiency in which the water industry’s new private sector owners would create a first-class water system at much lower prices than the government ever could. The industry could escape Treasury constraints and borrow freely. Regulation would be light touch. The “dead hand” of government should be got out of this industry as out of every other.

Thames is certainly a different company, proudly boasting that 99.98% of its sampled water meets quality standards and of a rolling investment programme to meet its regulatory obligations. And, God, has it borrowed freely! It is crippled with debt, which has jumped from £1.8bn to £8bn over the past decade under its foreign owners – first the German utility RWE and, since 2006, a group of private equity funds domiciled in Luxembourg, marshalled by the Australian bank Macquarie. Taking account of the debt means that its net worth has hardly risen at all.

Macquarie is the bank that makes Mitt Romney’s Bain Capital look saintly. Its every effort is organised to outflank regulators and tax authorities, and so make extra for itself – thus its nickname as the millionaire factory. But the game cannot start unless it owns a monopoly business, such as Thames Water, that reliably generates profits and cash. In a country such as Britain, whose politicians like to claim is “open for business” and where tough questions about corporate behaviour are rarely asked, it is an invitation to be looted, and so we have been. Responsible owners would steward their company with more care.

Thames Water has done what the regulator has asked but no more. It has not been concerned to make the water system more resilient, with, say, back-up reservoirs to guard against climate change – earlier this year, we witnessed restrictions on water use because of drought. Nor has it managed its affairs so that it has spare capacity for the unexpected or for a big project like the tideway tunnel.

Instead it is a vehicle whose over-riding priority is incredible shareholder enrichment. By maxing out on debt, all the astonishingly high interest payments can be offset against tax, so that in 2012 it paid no tax whatsoever even while paying £279.5m of dividends – subject, of course, to minimal Luxembourg taxation. T Martin Blaiklock, an infrastructure consultant whose work the Observer reports today, calculates that if Thames had made no dividend payments over the past 10 years and instead used the cash to build up reserves, it would have accumulated £4bn to build the tunnel with no extra borrowing, and thus no extra water charges. The private equity groups behind Thames, he reckons, would have merely seen their investment grow by about two-thirds since 2006 rather than enjoyed a tenfold increase – a much fairer deal all round.

As it is, the Treasury is going to endorse the way Thames has been managed by offering it the get-out-of-jail free card of an infrastructure guarantee. I favour using such guarantees to deliver infrastructure investment that would not otherwise take place, but it throws into sharp relief the co-dependence that exists between the public realm and the private sector – and one that is wholly unacknowledged either in law or culturally.

Thames Water is a utility providing 14 million Londoners with water. In law, and culturally, it is no more than a private equity plaything whose obligations to London are secondary to whatever wheeze will enrich its shareholders, who now include both Abu Dhabi’s and China’s sovereign wealth funds.

Most of England’s water companies are run the same way. As Blaiklock comments, sooner or later one of our overindebted water companies will collapse, requiring a more formal bailout than an infrastructure guarantee. (State-owned Scottish Water, by contrast, faces no such risk.) But it will have contributed precious little tax to the state that is bailing it out.

Four crucial reforms are required before the guarantee scheme is launched.

First, Ofwat, the regulator, should have much greater powers with regard to water companies’ balance sheet strategies: borrowing plans should only go forward with its prior approval and it should be able to launch periodic stress tests.

Second, as public service companies, all British water companies should pay corporation tax as a percentage of turnover, with proper deductions for investment and depreciation, but no allowances for any financial transaction with a tax haven.

Third, non-executive directors of utilities should be made legally responsible for ensuring that the utility’s first obligation is to discharge its purpose as a utility rather than to be financially engineered to induce high shareholder returns.

Fourth, the government should take a golden share in each company that accepts a guarantee.

What has happened to the English water industry over the past 20 years is as disgraceful as what happened to our banks. Britain badly needs new infrastructure investment; but it also needs a more responsible capitalism. Mr Osborne has the opportunity next month to ensure both. He cannot – and must not – offer indiscriminate guarantees for no wider economic and social return

Profits triple at Germany’s E.On

Category : World News

Germany’s biggest utility company, E.On, reports a tripling of six month profits to 3.13bn euros ($3.84bn; £2.45bn).

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Tepco sets date to start accepting victims’ claims

Category : World News

Tokyo Electric Power Co. will begin accepting claims in September for lump-sum compensation for psychological distress, unemployment and damage to nonfarm businesses caused by the meltdowns at its power plant in Fukushima Prefecture, the utility said.
The announcement made Tuesday follows the government’s release last week of detailed compensation standards.

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