Christopher Brassard, executive vice-president and director of Albany-based Ten Eyck Group, has been named chair-elect of the Independent Insurance Agents & Brokers of New York.
Brassard has served on the IIABNY board of directors since 2004, most recently as secretary-treasurer. He has also served on the Public Policy, Industry Practices & Producer Compensation, and Audit committees.
Brassard started his career with the Aetna Life & Casualty Insurance Co. and joined the Ten Eyck Group in 1988. He is a 1982 graduate of the state University at Albany School of Business and holds the Certified Insurance Counselor (CIC) designation.
IIABNY, which is based in DeWitt, N.Y., represented more than 1,900 insurance agencies in the state.
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Goldman Sachs brought its campaign to improve its image directly to investors Friday as Chairman and CEO Lloyd Blankfein said the investment bank will do better at "listening to the concerns of our shareholders."
Blankfein also told the company’s annual meeting that Goldman is creating a business standards committee to study its practices as it fights civil fraud charges brought by the Securities and Exchange Commission.
"We need a rigorous self-examination," Blankfein told investors at the meeting, which attracted about 300 people. "Our firm must review our core principles."
The committee, which will report to the Goldman board of directors, will review both services and products Goldman offers, Blankfein said.
Blankfein, who has responded to the SEC charges by saying Goldman has done nothing wrong, offered a softer side Friday. He pledged that the company will be more introspective and listen to issues raised by shareholders quick pay day loan.
Blankfein noted there is a "disconnect" between how the company views itself and how outsiders see Goldman Sachs Group Inc. Blankfein noted that in the last few weeks, questions have been raised about how "we treat our clients."
Regaining the confidence of clients and shareholders is essential, he said.
In the past, Goldman has focused on its big institutional clients and not enough on the public, he said. The company has come under sharp criticism before and after the SEC charges were filed April 16, partly because of the high pay its executives and traders received during the financial crisis and recession.
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Apache Corp. is in final discussions to buy Devon Energy Corp.'s assets in the shallow waters of the Gulf of Mexico for some $750 million, Dow Jones is reporting, citing people familiar with the deal.
According to the report, another Houston company, privately held Dynamic Offshore Resources LLC was also interested in the assets and could still try to bid on them at the last minute.
Last fall, Oklahoma City-based Devon (NYSE: DVN) announced an assets sale program, saying it would sell its international and Gulf of Mexico assets to focus on its onshore oil and gas fields in North America.
In March, Houston-based Apache (NYSE: APA) Chief Executive Officer Steven Farris said that the exploration and production firm has $2 billion to spend on projects and acquisitions and was seeking to buy assets internationally and in North America.
Attorney General Eric Holder announced Thursday in downtown Phoenix that Arizona will receive $1.7 million this spring to combat mortgage fraud – a prolific problem during the real estate boom that grew following the crash and ensuing recession.
The sum is more than 20 percent of the federal funds allocated by President Barack Obama to investigate and prosecute white collar criminals who continue to rip off uneducated consumers, costing the state millions in losses in the private sector, while fueling the foreclosure crises in one of the hardest hit cities in the country.
“I’m confident that these new investments will allow us to build on the recent success we’ve seen across the country and the progress that’s been made here in Arizona,” said Holder, who was among the many high profile representatives of the Financial Fraud Enforcement Task Force, which met in Phoenix for the second of a series of Mortgage Fraud Summits.
The task force, established by Obama in November, is comprised of a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.
Holder, addressing the public and reporters at the Sandra Day O’Connor U.S. Courthouse, said in Phoenix, mortgage fraud crimes have reached crisis proportions.
“But we are fighting back,” Holder said. “Through this broad federal, state, and local coalition, we’re using every tool at our disposal – including advanced technologies, new communication platforms, and the very best talent we have – to prevent, to prosecute, and to punish mortgage fraud crimes. And we’re making meaningful progress in our work to protect families and communities, to combat discrimination in our lending markets, to recover proceeds for fraud victims, and to restore confidence in our housing and financial markets.”
Phoenix has been at the epicenter of the mortgage mess and housing bust, which obliterated entire industries, spurred thousands of job losses, sank home prices and drove banks to collapse under heavy portfolios of soured loans. A study from the Department of the Treasury’s Financial Crimes Enforcement Network ranked the Phoenix metro area fourth in the nation in Suspicious Activity Reports filed by depository institutions concerning suspected mortgage fraud. According to the U.S. Department of Housing and Urban Development, Arizona has the most homes funded by the Federal Housing Administration loans in foreclosure and consistently ranks in the top 10 in loan fraud.
Arizona ended 2009 with the nation’s second-highest home foreclosure rate, according to RealtyTrac faxless cash advances. More than 163,000 Arizona properties received foreclosure notices in 2009, about 6.12 percent of homes.
Nevada, with a 10.2 percent foreclosure rate, was the only state with a higher rate.
Task force members met with community leaders, legal services providers, law enforcement officials and banking, mortgage and real estate experts to discuss the mortgage fraud problem from a national, state and local perspective. In the morning, attendees participated in panels on mortgage fraud trends in Phoenix and the community impact. In the afternoon, task force representatives are meeting privately with law enforcement officials investigating mortgage fraud.
“We will use information gained here in Phoenix – and in other epicenters of mortgage fraud – to focus and strengthen our law enforcement activities,” Holder said. “Mortgage fraud schemes must be stopped in their tracks. And those willing to exploit our national financial crisis for personal gain will be brought to justice.
The FBI is investigating more than 2,800 mortgage fraud cases, up almost 400 percent from five years ago, Holder said. The agency estimated that mortgage fraud schemes inflict approximately $4 to $6 billion dollars in losses every year.
Last week, Attorney General Terry Goddard announced a $120,000 settlement with several defendants for their roles in a real estate scheme in Pima County. Two days earlier, Mario Bernadel, the leader of a massive fraud scheme in Phoenix, was sentenced to 17 years in federal prison.
He and his co-conspirators used fraudulent documents to buy nearly 40 properties, resulting in more than $9 million in losses to local banks.
In June 2008, the first 36 defendants were charged following a multi-agency investigation, dubbed Operation Cash Back, of mortgage fraud schemes in Arizona. The defendants included mortgage loan officers, straw buyers, real estate investors, real estate agents, and escrow officers.
The operation utilized the efforts of the U.S. Attorney’s Office, FBI, Internal Revenue Service’s Criminal Investigation Division, U.S. Immigration and Customs Enforcement, Department of Housing and Urban Development Office of the Inspector General, U.S. Marshals Service, U.S. Postal Inspection Service, U.S. Secret Service, the FDIC-OIG, Arizona Department of Financial Institutions, Arizona Attorney General’s Office, county attorneys and local police departments.
Less than half of voters in the Austin Business Journal's latest online survey said the city lives up to its self-proclaimed "live music capital" name.
Of the 635 that voted in the unscientific poll, 36 percent said the city doesn't live up to its reputation, while 15 percent said they weren't sure. The poll generated many comments, both agreeing and refuting the title. About 49 percent voted "yes" the city is the nation's live music capital.
"In the late 90's it may have been for a minute. Nowadays the new Austin doesn't care about live music bad credit personal loan lenders. They prefer DJ Dance Clubs," one commenter said.
Another responded to one commenter saying the city only has cover bands.
"Obviously written by someone not familiar with the music scene in Austin that ventures only as far out to see cover bands at frat bars. Suggest you go see (and support) some of the real music that is being created in this town," the commenter said.
To view the full results, click here.
Hawaii lawmakers are considering renaming the soon-to-open Kapolei Court Complex after Chief Justice Ronald Moon.
Senate Concurrent Resolution No. 38 was introduced by Senate President Colleen Hanabusa and Sen. Brian Taniguchi, chairman of the Senate Judiciary and Government Operations Committee. Both are Democrats.
It proposes renaming the new $124.5 million Kapolei Court Complex the “Ronald T.Y. Moon Judicial Complex.”
Moon spearheaded development of the West Oahu court complex, which will open March 29 after more than 20 years of planning and nearly three years under construction. It will serve as the new home of family court for the 1st Judicial Circuit.
Under state law, Moon must retire as chief justice of the Hawaii Supreme Court when he turns 70 this September, capping a more than 40-year legal career in Hawaii. He was named to the state’s highest court in 1993.
The resolution is nonbinding but serves as a recommendation, in this case, to the governor, the state comptroller and the administrative director of the state’s courts.
The Senate Judiciary Committee will have a public hearing on the resolution at 9:30 a.m. on Tuesday at the State Capitol.
Dubai is reportedly preparing to sell a host of assets, including one of the world’s best known cruise ships, as the emirate’s investment arm looks to restructure a mountain of debt.
The Queen Elizabeth II, or QE2, is rumored to be one of the assets that Dubai’s state-run private equity firm, Istithmar World, is planning to sell. An Istithmar spokesman did not respond to requests for comment on Tuesday.
However, a company spokesman told Arabian Business that "there are a number of options being considered for QE2. IW is considering which option will best maximise value of the vessel."
Istithmar bought the QE2, once the largest passenger ship in existence, in 2007 for an estimated $100 million. The firm had planned to turn the ship into a floating hotel attached to a man-made, palm-shaped island in the Persian Gulf.
Also in the firm’s portfolio is a 20% stake in Canadian circus group Cirque du Soleil. But a Cirque du Soleil spokeswoman said the group has had no indication from Istithmar that a sale is pending.
Any proceeds from the asset sales would probably be used to pay down the $22 billion in debts that Dubai World, the parent company of Istithmar, took on during a multiyear, global property binge.
Dubai was one of the first sovereign nations to run into serious debt problems as a result of the global economic downturn payday loan lenders. The fallout has now spread to Europe, where Greece and other countries are struggling to slash budget deficits and repay mountains of debt.
Dubai World, the investment arm of Dubai, rattled financial markets late last year when it signaled that it couldn’t make payments on its debts. The company received a $10 billion bailout in November from fellow emirate Abu Dhabi and is working with creditors to restructure its debt load.
As a result, Istithmar has already been forced to sell some assets at a loss. In December, the firm sold the W Hotel in New York for only $2 million in a foreclosure auction. It reportedly paid more than $200 million for the boutique hotel in 2006.
Last week, Istithmar sold its stake in Indian budget airline SpiceJet for $37 million. It also recently announced plans to sell port and shipping agent Inchcape Shipping Services for $700 million.
Despite the recent asset sales, Istithmar still has a large portfolio of investments and properties, including a large stake in book publishing giants Houghton Mifflin and Harcourt Education. It also has interests in U.K.-based Pension Insurance Corporation Holdings and Perella Weinberg Partners, a New York-based investment firm.
The Obama White House likes to say that the theories of John Maynard Keynes form the foundation for its fiscal policies. Most notably, it draws upon the legendary British economist’s idea of spending big to pull out of a recession.
But one economist says the administration has gotten Keynes only half right. Allan Meltzer of Carnegie Mellon is one of the most influential monetarists of the past 50 years. He has served in the Department of the Treasury under President Kennedy and on the Council of Economic Advisors during the Reagan Administration. He also authored the book, Keynes’s Monetary Theory: A Different Interpretation.
While the Obama team is laying out huge sums of money, Meltzer says it’s neglecting a key part of Keynes’ plan: You can’t run up a debt without a way to cover it.
Meltzer recently sat down with Fortune editor-at-large Shawn Tully. Below are edited excerpts from their conversation.
If Keynes were alive today, what would he think of President Obama’s fiscal policies?
He would roll over in his grave if he could see the things being done in his name. Keynes was opposed to large structural deficits. He thought that they chilled rather than stimulated the economy. It’s true that we’re stuck with large deficits now. The goal should be to reduce them, not to take on new spending that makes them worse.
Today, deficits are getting bigger and bigger with no plan to significantly lower them. Keynes understood what the current administration doesn’t understand that the proper policy in a democracy recognizes that today’s increase in debt must be paid in the future.
We paid down wartime deficits. Now we have continuous deficits. We used to have a rule people believed in, balanced budgets. And now that’s gone.
Didn’t Keynes advocate temporary deficit spending in a recession?
Keynes wanted deficits to be cyclical and temporary. He wouldn’t have been in favor of efforts to raise tax rates in a recession to eliminate deficits. He viewed that as suicidal. He was opposed to the idea that governments should balance the budget during a downturn, and advocated running short-term deficits to spur the economy.
The type of stimulus he advocated was very specific. He said it should be geared towards increasing private investment. He viewed private investment, as opposed to big government spending, as the source of durable job creation. He also said that the deficits should be self-liquidating, so that the increased economic activity caused by the stimulus inevitably generated a combination of extra tax revenues and lower unemployment payments. With higher revenues and lower outlays, the deficit would disappear.
The Obama administration’s main objective, in the name of Keynes, is boosting consumption. That sounds very different from the focus on investment that you say Keynes advocated.
Keynes didn’t favor at any time that I know spending to increase consumption. He didn’t want that, and in fact he believed that was taken care of by the marketplace.
Keynes wanted to increase employment by smoothing the amount of investment through the up and down parts of the business cycle. He knew that recessions cause a decline in investment, and that the fall in investment caused unemployment to rise. So he wanted the government to stabilize investment through a recession.
What specific policies did Keynes advocate for smoothing investment?
Keynes is very vague on the subject. He believed that the government should plan and direct investment, but not nationalize it. He talked about how well utilities were run under state regulation in Britain. Keynes wanted to apply that model to more of the economy. He thought government planning of investment was the best way to reduce risk for private companies and lower interest rates to spur investment.
Did Keynes champion tax cuts or government spending increases in a recession?
Again, he was extremely vague. On spending, he did say that deficits should be temporary and self-liquidating. He clearly did not advocate long-term spending in excess of revenues, since that causes structural deficits. Nor did he specifically recommend tax reductions for individuals or companies. Those types of cuts, however, are an obvious way to achieve his goal of boosting investment in a recession. And it’s been used with great success by his Keynesian disciples. For example, the Kennedy Administration tax cuts were championed by Keynesian economists, and proved very successful at raising investment.
And one of the leading Keynesians, Franco Modigliani, developed a theory of consumption stating that temporary tax cuts are mainly saved or used to reduce debt. Milton Friedman, the ultimate champion of free markets, independently developed an alternative model that came to the same conclusion. The temporary reductions under Carter, George W. Bush and Obama were all failures, since people spend more only when they’re confident their take home pay will rise permanently.
This is standard economic theory that the current administration ignores.
What would Keynes think of Obama’s stimulus plan?
It’s unbelievable that a man whose main theme was to smooth investment comes to be the proponent of redistributing income away from the people and companies who do the investing.
My advice on the stimulus plan was, don’t do it. Let’s look at the plan. First, a lot of the money was used to reduce the deficits of state and local governments by increasing the federal debt. It was simply money transferred from the federal government. The economic multiplier effect was zero. Second, the temporary tax cuts went to paying off credit cards and other debts, not spending that would have increased economic growth.
Nike Inc. built its $648 million golf business on the back of Tiger Woods.
Now it appears the Washington County athletic footwear and apparel giant (NYSE: NKE) will try to sell some golf clubs without him.
The Wall Street Journal on Monday reported that Nike will launch the Victory Red STR8-FIT Tour fairway woods on Jan. 28 that were designed with the help of 13 U.S. golf stars that promote the Nike Golf brand. The new line’s promotional materials, however, make no mention of Woods, the newspaper reported.
The new clubs were tested during a tournament by Lucas Glover, who won the U.S. Open championship last year, according to the report.
General Motors, AT&T Corp., Accenture, Gillette and Swiss watch maker Tag Heuer have all ended their relationships with Woods since a Thanksgiving weekend car crash and later admission to marital infidelity.
Nike, however, has stood by his side.
In an interview last month with the Sports Business Journal, Chairman Phil Knight referred to the Woods scandal as a “minor blip.”
It’s unclear whether the latest product release is an indication that the company’s support for Woods — who has since taken a leave of absence from golf — is wavering.
A Nike spokeswoman couldn’t immediately be reached for comment.
More than 30 leading budget experts on Monday prescribed a course for deficit reduction that the nation needs to take if it wants to "buy some breathing room" to avoid a debt crisis.
In its report "Red Ink Rising," the Peterson-Pew Commission on Budget Reform called on Congress and the White House to commit to stabilizing the public debt to 60% of gross domestic product by 2018. Left unchecked, it’s on track to hit 85% by 2018, and then grow to 100% four years after that. By 2038, it could reach 200%.
To put those numbers in context, just before the economic crisis, public debt stood at 41% of GDP. The public debt — $7.72 trillion as of Dec. 11 - represents the money the United States owes its creditors. It does not include the $4.36 trillion the federal government owes itself because of all the revenue the Treasury has borrowed from federal programs such as Social Security and Medicare over the years.
The concern is that well before the public debt reaches 200% of GDP, fear of inflation — and its twin nemesis, a decline in the dollar — could cause investors to demand a higher return in exchange for buying U.S. Treasurys. And higher rates would make the U.S. debt load that much more onerous because the government is constantly refinancing the debt it already has on the books at whatever the going interest rates are.
To stabilize the debt at 60% of GDP, the commission recommends policymakers negotiate a package of measures in 2010 that would begin to phase in by 2012, assuming the economy has recovered.
"To buy some breathing room, the United States must show its creditors that it is serious about stabilizing the federal debt over a reasonable timeframe. Both spending cuts and tax increases will be necessary," the commission wrote.
The mere act of signaling to creditors that a deficit-reduction plan is in place may have a positive economic effect, the group asserted.
"Improving [creditors’] expectations can lower investor perceptions of risk and thus the premiums that creditors demand for interest rates paid on U.S. assets," the report said.
In order for the plan to be perceived as credible, however, the commission believes there should be an automatic trigger to set in motion spending cuts and tax increases if a debt target set by lawmakers is missed in any given year instant payday loans.
"The goal of an enforcement mechanism is to be punitive enough to cause lawmakers to act but realistic enough that it can be enacted if necessary as a last resort," the commission wrote.
The commission’s members are a bipartisan collection of former directors of the Congressional Budget Office, the White House Office of Management and Budget, as well as former chairmen of the Senate and House Budget Committees and former U.S. Comptrollers General, among others.
Their estimates and suggestions are based on the assumptions that a number of current policies will remain in place. Among the assumptions are that the majority of the Bush-era tax cuts will be extended, that the reach of the alternative minimum tax will be reduced so as not to ensnare middle-income families, and that normal discretionary government spending will grow at the same rate as the economy, rather than inflation.
Easier said than done
The commission acknowledges that reducing U.S. debt levels will be neither quick or easy.
And their suggestions are certain to meet resistance from any number of quarters, including from those who fear Social Security and Medicare benefits will be cut drastically.
The growth in the spending for both of those entitlement programs and for Medicaid are growing faster than the GDP. Deficit hawks say permanent changes need to be made to ensure long-term solvency for the programs and fiscal stability for the federal budget.
"That does not mean, however, that the entire solution has to come from changes to [programs such as Medicare and Social Security] — or spending in general," the commission said. "To the contrary, government health and retirement programs will almost certainly have to grow as a share of the economy because of demographic and technological factors."
The bottom line is the commission believes changes to the entitlement programs are necessary but not sufficient. "We believe the problem is so large that nearly all areas of the budget will be affected," the report said.
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