Blue-chips raise recession fears
Estimates of revenue growth for the largest US companies are being scaled back sharply by Wall Street analysts, signalling a mounting risk that the world's largest economy may enter recession later this year.
The reduction in growth expectations for leading blue-chips to their lowest level since late 2008 and early 2009 comes as investors have been piling into stocks in dividend-paying large companies that are seen as havens against the backdrop of the eurozone crisis and a weakening US outlook.
Analysts expect average revenue growth will rise at an annual rate of 1 to 1.5 per cent during the third quarter for the 30 large companies in the Dow Jones Industrial Average. That's below the current inflation rate and down from a forecast of 4 to 6 per cent at the start of the year.
"We are fast approaching levels where these estimates are unambiguously pointing to the risk of a US, global recession later in 2012 and into 2013," said Nicholas Colas, chief market strategist at ConvergEx Group.
The slide in revenue forecasts has accelerated in recent weeks as companies have released their second-quarter earnings. Lower revenues will increase the pressure on companies to cut costs by laying off workers, which in turn threatens to weaken the broad economy and corporate profits in the coming months.
For now, analysts are still forecasting revenues will rise 3.9 per cent year on year during the fourth quarter. Mr Colas said such a forecast relies on a weaker dollar boosting the companies reliant on large foreign sales.
Expectations that the Federal Reserve will launch a third round of quantitative easing by September has helped propel stocks higher since they bottomed in June, with the rally being led by large companies that have cash-laden balance sheets and pay dividends.
Last week, seven Dow blue-chips hit 52-week highs while the S&P 500 Aristocrats index, consisting of 30 companies that have consistently raised dividends for at least 25 years, sits at a record high and has risen more than 7 per cent since the start of June.
"In the current environment of ultra-low fixed-income yields and increased volatility in equity markets, dividend paying companies look very attractive," said Linda Bakhshian, portfolio manager at Federated Investors.
With revenues sliding, it leaves investors vulnerable to sharp price declines for such companies. But some argue that companies holding large amounts of cash will retain favour with investors.
"Even as the pace of revenue growth slows, many of these companies still have tremendously good balance sheets and a lot of cash at hand," said Oliver Pursche, a portfolio manager at Gary Goldberg Financial Services. "Revenues have not been as strong as we would like to see them. But they haven't been horrible."
Financial Times
Penn State fined $60m over Jerry Sandusky sex abuse
US college sport authorities have fined Penn State University $60m (£39m) in the wake of child sex abuse perpetrated by a long-serving football coach.
The university - a famous US football school - will be banned from competing for honours for four years, and lose all wins from 1998-2011.
The National Collegiate Athletic Association (NCAA) said the punishments were "corrective and punitive".
Assistant coach Jerry Sandusky was found guilty of 45 counts of sex abuse.
He abused 10 boys over a period of 15 years, a court found, judging him to have preyed on boys he met through a charity, Second Mile, that he founded himself.
Sandusky has not been sentenced but could spend the rest of his life in prison.
Paterno record hit
The NCAA said the fines were equivalent to the annual gross revenue of the Penn State football programme.
The money is to be given to an endowment funding external programmes to prevent child abuse and help victims.
"Football will never again be placed ahead of educating, nurturing and protecting young people," NCAA President Mark Emmert said. "The sanctions needed to reflect our goals of providing cultural change."
Other NCAA sanctions against Penn State include:
- A ban on participating in post-season games - or playoffs - for four years, including the 2012-2013 season
- Number of football scholarships limited to 65 per year for the next four years, a reduction of 10 places per year
- Football wins revoked between 1998-2011
- A five-year probation on all sports at Penn State
- Adoption of all recommendations for reform in Section 10 of an FBI investigation into abuse at Penn State
- Appointment of an NCAA-selected Athletics Integrity Monitor for five years
- Further penalties against individuals could come after criminal proceedings end.
Correspondents say the sanctions are unprecedented in their severity, although the NCAA did not impose the "death penalty" and close the entire football programme.
The fallout from the scandal has sullied the reputation of Penn State's former head football coach Joe Paterno.
Paterno, who died earlier this year, months before the resolution of the case, won more college football games in his long career at Penn State than any other head coach in university sport.
He was heavily criticised in a report by former FBI Director Louis Freeh, issued after the guilty verdict, which said the highest-ranking officials at Penn State failed utterly to protect victims and potential victims from Sandsuky.
Many of his wins will now be expunged from the record books.
On Sunday a statue of Paterno was removed from outside the university, after it was deemed to have become a "lightning rod of controversy".
Colorado shooting suspect to make first court appearance
The man accused of opening fire in a crowded movie theater in Aurora, Colorado, is set to make his first court appearance Monday, giving the public its first look at the suspect since his arrest in an attack that authorities say was planned months in advance.
James E. Holmes, 24, is likely to face charges of first-degree murder -- an offense that carries a possible death penalty, if he is convicted -- in the shooting deaths, given allegations over the weekend by police that there is evidence to suggest "calculation and deliberation" in the rampage.
Holmes is being held in connection with the early Friday morning shootings that left 12 dead and 58 wounded, and the subsequent discovery of his booby-trapped apartment, which authorities believe he rigged before leaving for the Century Aurora 16 multiplex.
Authorities have been tight-lipped about a possible motive in the case, and police spokesman Frank Fania told CNN late Sunday that Holmes has been uncooperative with investigators and requested an attorney.
Arapahoe County public defender James O'Connor has been assigned to the case. The Colorado Judicial Department declined to say whether Holmes requested a public defender. A telephone call by CNN to O'Connor's office was not immediately returned.
Holmes' court appearance will come a few hours before his family is expected to break their silence with a statement.
The family, which lives in San Diego, has not spoken publicly since the allegations against Holmes. They issued a short statement Friday saying they did not wish to be disturbed "at the time of this tragic event."
Lisa Damiani, an attorney representing the family, told CNN the statement would be made at her San Diego office.
Over the weekend, Aurora Police Chief Daniel Oates told reporters that there was "evidence of, I think, some calculation and deliberation."
Holmes received many deliveries over the past four months to his home and work addresses, which police believe begins to explain how he got his hands on some of the materials used in the attack and those found at his apartment, Oates said.
Meanwhile, the University of Colorado School of Medicine, where Holmes enrolled in 2011 as a doctoral candidate in its neuroscience program, was investigating whether Holmes received any of the alleged shipments while working as a research assistant at the Anschutz Medical Campus in Aurora.
University spokeswoman Jacque Montgomery would not comment on reports that authorities were looking into whether Holmes allegedly used his position to obtain materials used to booby-trap his apartment.
As of late Sunday, at least 17 people remained hospitalized -- eight in critical condition -- in five area hospitals.
During a visit to Aurora on Sunday, President Barack Obama met with survivors and the families of those killed, and thousands of residents gathered in the city for a prayer vigil that drew state and local officials.
"I confessed to them that words are always inadequate in these kinds of situations, but that my main task was to serve as a representative of the entire country and let them know that we are thinking about them at this moment, and will continue to think about them each and every day," Obama told reporters after the meeting at the University of Colorado Hospital.
"It reminds you that even in the darkest of days, life continues and people are strong and people bounce back and people are resilient," the president said, after describing the recovery of some victims. "Out of this darkness, a brighter day is going to come."
Though much attention has been paid the past couple of days to the "perpetrator of this evil act," that spotlight will fade, leaving behind just the good memories of those affected by the tragedy, he said.
Aurora is bracing for another emotional week as families begin making funeral arrangements.
It was not immediately known when the coroner would release the bodies, though it was expected to occur early this week.
It also became clear that more people may have been killed if the gunman's semiautomatic rifle had not jammed.
One survivor, Josh Nowlan, suffered gunshot wounds, but said he is happy just to be alive. He wouldn't be, he said, if the gunman had continued to fire the weapon.
"I know I wouldn't be here. If that gun did not jam, I am full certain that I probably would not be here," he said from his hospital bed Saturday.
A law enforcement source, who spoke Sunday with CNN on condition of anonymity, said the rifle jammed because of a problem with the 100-shot magazine feeding it.
The military-style AR-15 had a separately purchased drum magazine, which can have trouble feeding bullets into the firing chamber if the gun is fired rapidly, the source said.
Investigators say the rifle was one of three guns used by the suspect, along with a shotgun and a .40-caliber pistol.
SOURCE:CNN
South Sudan Makes New Peace Offer to Sudan
South Sudan has unveiled proposals to advance peace talks with Sudan, including billions of dollars in financial concessions.
The two countries went to the brink of war in April, after failing to resolve issues on borders, oil and citizenship stemming from the South's independence last year.
South Sudan says it would pay more than previously offered to use Sudan's oil pipelines, needed to export southern oil. It also offered greater debt forgiveness and a cash transfer of more than $3 billion.
South Sudan also proposed the United Nations and African Union organize a referendum by the end of this year to determine the status of the contested Abyei region.
Disputes over who was eligible to vote led to cancellation of a planned Abyei referendum in early 2011.
South Sudanese negotiators say they presented their offer to Sudan and African Union mediators late Sunday in Addis Ababa. There was no immediate response from Sudan.
South Sudan said Monday that its proposal aims to achieve “permanent and lasting peace, security and prosperity for both nations.”
Multiple rounds of AU-hosted talks between the two Sudans have produced almost no progress.
Attacks Kill 103 Across Iraq
Iraqi officials say a wave of bombings and shootings has killed at least 103 people and wounded nearly 200 others in one of the deadliest attacks in Iraq this year.
The worst attack was in Taji, 20 kilometers north of Baghdad, where nearly 40 people were killed and scores more wounded. A series of explosions at a housing complex was followed by a later blast that killed and wounded a number of police who had arrived at the scene.
Authorities said the attacks Monday included gunmen killing at least 15 Iraqi soldiers at a military base in northeastern Iraq, a series of explosions in the northern city of Kirkuk, as well as a car bombing in Baghdad.
There was no immediate claim of responsibility.
The violence comes after jihadist websites posted a message Saturday, purportedly from the leader of al-Qaida's affiliate in Iraq, saying the group is starting a “new phase.” The audio message from a speaker identified as Abu Bakr al-Baghdadi says the Islamic State of Iraq is planning to attack court officials, and to free prisoners.
In June, the group claimed responsibility for a wave of car bombings that killed 72 people and wounded nearly 260 others.
Tens of Thousands Flee Clashes in Northeast India
More than 30,000 people have fled their homes in northeast India to escape fighting between indigenous tribes and Muslim settlers.
Officials in Assam state said Monday at least 18 people have been killed in recent days in clashes over land rights.
The New Delhi government has sent in troops to quell the fighting and opened shelters for those displaced.
Animosity and accusations of land-stealing have long simmered in the region between members of the ethnic Bodo community and the thousands of mostly Bengali Muslim settlers, many of whom came from the former East Pakistan before it became Bangladesh in 1971.
SUPPORT TO INDEPENDENT CANDIDATES KEY AIM OF NEXT WFD VISIT
Providing support to independent candidates standing at the Turks and Caicos elections on 9 November is one of the key aims of the third visit by the Westminster Foundation for Democracy on 23-27 July 2012.
The WFD party will again meet with the leaders of both the PDM and PNP to continue their ongoing ‘politician to politician’ dialogue about how to run effective election campaigns that comply with the election-related ordinances.
During this visit they are extremely keen to meet with those persons considering standing as an independent candidate on 9 November, whether as a constituency or at large candidate. Indeed, Scott Martin, a lawyer for the Scottish National Party, has direct experience of the similar Scottish system whereby there is both constituency and regional representation.
Specific time slots have been set aside for prospective independent candidates to meet with members of the WFD delegation on Thu, 26 July: from 10.00am-12.00pm on Grand Turk and 10.00-11.30am on Providenciales.
Anyone wishing to take advantage of this opportunity should reply in confidence to Philip Rushbrook at the Governor’s Office on GovernorGT@fco.gsi.gov.uk marking their email ‘Private Meeting’ in the subject line. Their email should include their full contact details (name, telephone and email) in their message. The Governor’s Office will provide precise time and venue details subsequently.
During the course of the week the WFD group will:
1. Jointly meet the PDM and PNP parties on Mon, 23 July, to discuss sources and uses of political finance and implementation of the new Elections and Political Activities ordinance.
2. Hold separate workshops will be run with workers from both parties on both 24&25 July 2012 further examining campaigning and its associated legal issues. Later they will meet with the Governor and members of the Advisory Council.
3. Split itself between Grand Turk and Providenciales on 26 July: meeting the team at the Elections Office, Integrity Commission and TCIG staff at the House of Assembly Building on Grand Turk; the Provo team will meet with the Chamber of Commerce and separately with members of the anti-VAT campaign
4. Meet with members of the Consultative Forum on Fri, 27 July before departing later in the day.
In addition to David Thirlby of the WFD, the following politicians and political representatives will travel with the party: Andrew Percy, Conservative, and Stephen Gauge, Liberal Democrat, will lead on campaigning; Scott Martin and James Swindlehurst, Labour Party, will lead on the legal aspects of campaigning.
The WFD is one of the worlds’ leading supporters of democratic institutions. It has previously visited TCI and met with its politicians and civil society figures in both October 2011 and March 2012.
EDITORIAL:VAT, THE OPIATE OF OUR WOES
In listening to the Consultative Forum yesterday, I was never more disappointed by the presentations and voting by some members. It was clear that some of the members read from scripts prepared for them by others. Some of them had no clue as to what was going on. For the Chairman of the Forum to say that the political parties were “ducking” from presenting at the Forum is just mischievous on her part, given that the parties’ views that they would not be subservient to that body as it did not represent a mandate from the people of this country.
What was very curious though, was that the vote on the bill was 5 for and 5 abstentions. That did not sound like a ringing endorsement to the bill, but indicated a lack of support from serious quarters. We know that the government officials would support a government presented bill, but it gets it “legitimacy” from the other members of the body and that was not present.
The Chair certainly danced on the head of a pin from beginning to end. She started by stating the obvious in that as far as the Interim Administration was concerned, it was a done deal and why have a hearing. However, she found a way to toe the line by buying into the fake presentations of the Administration in that this system would stop the “rich businessmen” from having an affluent life style as they made money from their business venture. The other fallacy is that you would be able to comply with the VAT programme by a “back of the envelope” calculation, when everyone knows that it is a complex system that requires specialist training in order to comply.
To say that the Political Parties did not participate in the process is absolutely not true. A number of my colleagues attended the meeting in Grand Turk that I participated in. A number of our National Executive Committee attended the meeting in Providenciales. I saw the exchanges on WIV 4, so I know that it happened. So it is just tongue and cheek to say otherwise. Furthermore, the PNP put out a position paper and held a press conference recently and one of the topics dealt with why VAT should not be implemented at this time. Added to this, the Chair of the Forum acknowledged that she had received a joint communiqué from PNP and PDM stating their opposition to VAT. It might not have been in the form that the Chair preferred, but nonetheless, it was in the public domain.
I can agree that the business community might have come late to the party, but they are here now, front and centre. They have been making a very impressive case in opposition to the imposition of VAT on TCI at this time. They clearly do not want to act as tax collectors for government and having to invest significant sums in putting in place the necessary infrastructure and human resources that would be necessary to comply. As far as big businesses are concerned, once they are geared up to operate, they will only act as a conduit. It will be a clear pass through to the end user.
Stanbrook quoted IMF correctly, in that if there is nothing being manufactured in country to which value can be added, then it make a nonsense to change the system of charging duties on imported items for a VAT system. To date, the VAT team headed by Groves has not been able to show any empirical data to support their assertions that VAT would guarantee a steady stream of revenue or that it implementation would not cause inflation or that in the immediate future that they would not have to raise the rate because the projected income is not being generated.
It is very clear from the presentation at the Forum yesterday, that the team does not have its talking points “down pat”. The CFO say one thing, the PS/Finance another and other members of the team yet another. That does not give the type of confidence that people need to have when they are telling us “trust us, we will get it right”.
It was not self-serving on the part of Stanbrook when he said that he was ashamed of the way the Interim Administration was going about this particular imposition. There is scant regard for the rule of law and due process on the part of these people. Now Stanbrook is English, a lawyer, and a QC at that, so he should know a thing or two about the legal system. For it to have been said that bills coming before the House of Assembly were not made public before it passage was a bold faced lie. To say that some bills went through the first, second and third reading at a particular sitting would be true. Many of us might not have liked that, but the rules allowed that to happen, by the suspension of the rules provision in the Standing Orders, which is the document that guides the House. I have not had sight of any such rules as they relate to the Forum, so the Chair makes them as as the sessions go on.
When the CFO said that he could not release the documents on which he based the VAT system for TCI, I could not believe my ears. Here is a man that has consistently tried to mislead us in the face of data and information that we can see and read is saying to us, “I have the information, it is confidential, but trust me” and I say to him that “pigs can fly”! the opposition to VAT has taken root. Those 3,000 + signatures of ordinary citizens coupled with those of th e businessmen must count for something. No matter how they try to side step the issue, it comes right back in their faces. The first sign of a shift is when they have decided not to sign the bill into law today as was previously contemplated. They have to take into consideration the representations made.
VAT in its present form would not shield us from the vagaries that currently beset us. Let us go back to the drawing board and come up with proper options to raise our necessary revenue. The throw away with Bermuda and Cayman is that their financial services sector is booming. We have been saying, invest in the restructuring of the products on offer here and the manpower necessary to police the sector and we will get that level of revenue. Additionally, put more manpower in Revenue Control that would give them the ability to stop the leakage of the uncollected revenue that is out there. That would certainly be far cheaper that putting in 25 persons initially to implement VAT from TCIG’s stand point.
Just remember that over time, we have not had a real revenue problem. Our problem has been in runaway spending in some areas. Once we have tied to policy-based initiatives, then we will be alright. There is no reason at this time to “change black dog for monkey”! so I say, step away from the precipice that we are being pushed to by the British to comply with the EU just for us to benefit by $5M in the next financial year and a further $15M in the years to come. We will realize more than that when SIPT is completed. So do not be fooled. This is not of our making. The smoke and mirror is to satisfy external forces. Just remember that the British did not tie themselves to the Euro and from the state of things over there, it seems to have been a good decision for them. Do not let them hamstring us to VAT to satisfy their European colleagues to our demise!
Royal S. Robinson, MBE
Prestigious Insurance Agency hires New Managing Director
In an effort to increase its competitive edge and its overall market share in the Turks and Caicos Islands Insurance Industry, the Prestigious Insurance Agency (P.I.A) has hired Mr. Jamell Robinson as their new Managing Director. Mr. Robinson brings a wealth of knowledge and skills in Risk Profiling, Business Continuity, Disaster Mitigation and Recovery Solutions, which is intricate in Insurance Coverage.
“I am very excited about the opportunity to work at P.I.A. It is a new challenge that I look forward to as it allows me to continue to help persons in the TCI to prepare for any Hazardous Event or Emergency with the variety of insurance coverage provided by P.I.A through Turks & Caicos First Insurance Company Ltd. We look to gain an edge on the competition through better service delivery and reduced turnaround times for claims by having all decisions made locally.” Mr. Robinson said.
At The Prestigious Insurance Agency, agents for Turks & Caicos First Insurance Company Ltd., we understand that owning a home is likely the largest single investment you will make. As such, we are dedicated to providing you with a number of insurance options to protect your home, business & possessions. Remember, just because you have insurance, doesn’t mean that you are covered. Turks & Caicos First Insurance Company uses a proportional reinsurance treaty to mitigate risk to its own account ceding to reinsurers with excellent security. This allows us to give you the most complete coverage in the Turks & Caicos Islands.
E. JAY SAUNDERS ENCOURAGED TELECOMMUNICATIONS PROFESSIONALS TO LEVERAGE CLOUD COMPUTING TO ENHANCE THEIR VALUE ADDED SERVICES.
E. Jay Saunders who recently was in Barcelona, Spain presenting to European Telecommunications companies at the LTE World Summit on how they can become more profitable by embracing Cloud Computing, was last month in Miami, Florida at the Mobile VAS 2012 Conference, presenting to Latin America and Caribbean Telecommunications companies how Cloud Computing can be used as a service delivery platform to enhance and extend mobile Value Added Services (VAS).
Bill Reyes, Director of Global Business Development of the Intertek Group, a company which has been providing testing, inspecting, and certifying of products for the likes of Bose, ChevronTexaco, Ericsson, and Samsung for more than 127 years; stated that E. Jay’s presentation “…provided a solid insight on the effectiveness of Cloud Computing for delivering high quality streaming video to mobile devices as well as other value added services such as Location Based Service (LBS) with low latency and high data transfer speed. This is the very first time in my past three years at this forum that a speaker shared a proven model which validates the reliability of Cloud Computing when delivering dynamic, static, and streaming content to wireless subscribers.”
Speaking on the topic “How Will Cloud Services Affect Value Added Services Delivery in the Caribbean And Latin America (CALA)”, E. Jay gave a number of examples of mobile Value Added Services (VAS) that Cloud Computing is best suited, while pointing out those technical challenges that must be avoided to ensure a high customer experience level. E. Jay’s presentation touched on such areas as: a) mobile video/audio, where Cloud Computing have made it possible to enjoy such services as YouTube, Netflix, and Spotify on mobile devices; b) M-Health, where Cloud Computing and mobile smartphones are being used as tools to diagnose diseases; and c) Real Time Translation, where Cloud Computing is making it possible for 2 persons who speak different languages to have a phone conversation, with the smartphone translating between the languages in real-time.
According to E. Jay, “It is amazing the things that you can do with Cloud Computing. For example, the magic behind Apple’s digital personal assistant Siri is the way it utilizes artificial intelligence and Cloud Computing to communicate with and help out users of the new iPhone. Augmented reality is another cutting edge technology made possible by Cloud Computing. It allows a person to hold their mobile smartphones in front of an object and have the smartphone automatically recognize the object and pull additional information from the Cloud and overlay the data on top of the object.” Although a fan of Cloud Computing, E. Jay cautioned that service providers who want to utilize Cloud Computing to enhance their value added services must keep in mind that until smartphone users can get affordable and seamless data anytime and everywhere – including when roaming abroad – it is best to keep critical phone functions and applications localized to the handset.
Some of the other speakers at the conference were:
Jorge Palacio, President – AVANTEL COLOMBIA;
Celio Rosa, Communications VAS Business Development, Latin America – ORACLE;
Rodrigo Rivera, Marketing and Innovation Submanager – TELEFONICA MOVILES CHILE;
Inesa Klainman, Director of Marketing – COMVERSE;
Marcelo Castelo, Partner and Co-founder - F.BIZ AGENCY;