One of Switzerland’s top priorities this year is to restore confidence in the country’s financial industry following a series of setbacks that included the resignation of its central bank chief, the Swiss leader said Thursday.
President Eveline Widmer-Schlumpf said the Cabinet was examining ways of tightening loopholes in its oversight of both the central bank and its directors’ personal business transactions.
Swiss National Bank chairman Philipp Hildebrand stepped down Monday amid a public furor over his family’s private currency deals, which he maintained were legal under the bank’s internal rules against insider trading. Hildebrand was considered a key actor in Switzerland’s efforts to resist being sucked into the European debt crisis.
Widmer-Schlumpf told reporters in Geneva that the government would await a report on personal deals conducted by the remaining five members of the central bank’s enlarged governing board before deciding who should replace Hildebrand. She declined to say whether external candidates would be considered.
The Swiss government also intends to pursue deals with other countries aimed at resolving long-standing disputes over tax evasion, said Widmer-Schlumpf, who is also the country’s finance minister instant credit report.
Switzerland has been gradually softening its banking secrecy rules in recent years amid pressure from cash-strapped governments angry that their taxpayers are hiding money in Swiss banks.
Negotiations with the United States were particularly difficult, she said. “They are not easy partners, we know that, but still they are constructive.
“I hope that we can resolve this issue in a way that respects the Swiss legal situation,” said Widmer-Schlumpf.
Swiss media have reported that U.S. authorities are demanding the names of all Swiss bankers who had contact with American clients in recent years, with a deadline set for Jan. 23. Such a move could greatly increase the pressure on Swiss banks to reach a settlement with U.S. authorities.
Widmer-Schlumpf said the government is also examining the possibility of a tax deal with Italy that could mirror accords already reached with Britain and Germany. The European Union has opposed such bilateral agreements and demanded a universal agreement for all its members.
President Barack Obama, saying he
Prime Minister Manmohan Singh failed to win passage of his anti-corruption bill as an uproar broke out in India
Record drought ravaged parts of Texas and Oklahoma this year, but Missouri was hard hit, too — and now the state’s dairy and cattle industries are scrambling to cope with the aftereffects of the parched summer as they prepare for winter.
“We’ve heard an awful lot about the extreme drought in Texas and Oklahoma, and areas farther west,” said Mike Collins, a professor of plant science at the University of Missouri. “But if you look at the drought map, it projects into Missouri.”
Last month, in fact, the U.S. Department of Agriculture designated 101 Missouri counties natural disaster areas because of the drought, and one estimate puts the loss to the state’s grain farmers at nearly $350 million. University of Missouri researchers say the state would need to get an unlikely 13 feet of snow this winter to compensate for the scorching heat and lack of rain that shrank crop yields last summer.
“In mid-Missouri and particularly as you go southwest, (the soil) was pretty well depleted four to six feet down. There’s not much left there for plant growth,” said Randy Miles, a soil scientist with the university. “We need to recharge the piggy bank, so to speak.”
The drought’s impact is reaching into all areas of agriculture, and could eventually hit consumers. Corn farmers in Missouri lost roughly 24 million bushels of yield because of the drought, and the state’s soybean farmers about 20 million. The drought also scorched pasture and forage lands, and now, hay — a newly precious commodity — has been heading out of state by the truckload.
“We see a lot of hay moving east to west,” Collins said. “A lot of hay heading west on the interstate.”
Missouri is the country’s third-largest producer of hay, but this year hay is in such great demand from cattle and dairy farmers in neighboring states that producers, here and elsewhere, are scrambling to secure enough of it to make it through the winter.
“I had to drive 100 miles north, to get it from a guy in Green Ridge,” said Darrel Franson, a cattle farmer who heads the Missouri Forage and Grassland Council. “In the half an hour I’m talking to him, his phone rings three times, with producers from Texas willing to buy anything he’s got, at any price.”
Cattle ranchers and dairy farmers typically grow much of the hay they feed their animals. But this year, burned-up pasture land forced them to feed hay months before they typically would. At the same time, the weather shrank hay yields by as much as 15 to 30 percent in some places.
Some worry that, by mid-winter, producers will be caught without enough to feed their animals.
“In January or February, the farmer is going to take a walk out into his pasture and see his cows are thin. He’s going to run in and say, ‘Ma, the cows are awful thin.’ Then they’re going to look at the ground and see there’s no grass there,” Franson said. “They’re going to get on the phone to get some hay, and they won’t find any.”
DAIRY FARMER FEARS
The situation is not just a question of scarcity, but of quality. Hay that survives the weather isn’t the most nutritious, which means cows need more of it. Dairy cows, particularly, need better-quality hay to produce better milk, and for the higher-quality hay, producers are paying as much as $300 a ton.
“That’s well above what we normally see,” Collins said.
The state’s dairymen are especially concerned.
“This is going to be one of the toughest challenges I’ve seen in my lifetime, seeing these cows through the winter,” said Larry Purdom, head of the Missouri Dairy Association. “A lot of times in the past when hay prices were up, we could use corn, but that’s been at record highs, and that’s expensive now, too.”
The state’s dairy herd has shrunk to about 90,000 from 100,000 in recent years, Purdom said, and could get even smaller as aging dairy farmers decide to sell their cows and get out of the business rather than face higher feed costs.
“This is serious,” Purdom said. “We have eight or nine processing plants in the state, and if we don’t have milk for them, we’re worried they’ll take their operations somewhere else, and that means jobs.”
Cattle ranchers, too, are being forced to pay higher feed prices, and some are selling off their animals.
“I sold 20 percent of my herd,” Franson said. “I have to match up my cattle with my forage supply.”
Cattle ranchers, however, are still in the black, with high beef prices buoyed by demand overseas and a shrunken American cattle population.
“Given where prices are today, producers are trying to take advantage of that,” said Jeff Windett, of the Missouri Cattlemen’s Association.
So are the state’s hay producers. “Anytime you have a situation like this, it makes it difficult for some,” Collins said. “But for farmers in the business of producing hay, this is an excellent year.”
Researchers at the University of Missouri and the states’ farmers, however, are worried about next year. If soil moisture isn’t adequately replenished over the winter months, farmers could face depleted soils for a second year. That puts farmers in an odd situation: Hoping for a bad winter.
“If we don’t get enough input over the next few months, we could go into the next season without enough moisture,” Miles said. “Even though it might not be that amenable to some, and it may create some slushy driving hazards and so on, from a soil moisture viewpoint, more snow and rain may be more valuable long term.”
With Europe trying to resolve its debt worries and the U.S. attempting to whittle down high unemployment, prudent moves are in order.
Whatever the health of the economy, average investors face the prospects of extremely low interest yields and high market volatility. Everyone’s already had some experience with this queasy scenario, so it should be manageable if not invigorating.
Keeping collective blood pressure high, presidential campaigns will constantly remind us of all the economic problems that are in need of timely solutions.
So, as we bid the past year goodbye, here are New Year’s financial resolutions for 2012:
Will my flight still operate?
Cyber Monday. Green Tuesday. Black Friday. Magenta Saturday.
Chances are you won’t find any of these holidays on your calendar. Yet retailers are coming up with names for just about every day of the week during the holiday shopping season.
During T-Mobile’s “Magenta Saturday,” the event named for the company’s pinkish-purple logo earlier this month offered shoppers the chance to buy cellphones and some tablets on a layaway plan. Mattel lured customers in with discounts of 60 percent off toys for girls and boys on “Pink Friday and “Blue Friday.” And outdoor retailer Gander Mountain is giving customers deals on camouflage and other gear every Thursday through December during “Camo Thursdays.”
“There are hundreds of promotions going on this time of year,” says Steve Uline, head of marketing for Gander. “We needed to do something a little bit different.”
It’s difficult to get Americans to spend money when many are struggling with job losses, underwater mortgages or dwindling retirement savings. But merchants are hoping some creative marketing will generate excitement among shoppers during the last two months of the year, a time when many of them make up to 40 percent of their annual revenue. And they know that a catchy name can make a huge difference.
“The more special you make it sound, the more you might be able to get people,” says Alan Adamson, a managing director at brand consulting firm Landor Associates. “It’s tricky to come up with something simple and sticky.”
Retailers have done it before.
“Black Friday,” the day after Thanksgiving, in the 1960s became known as the point merchants turn a profit or operate “in the black.” Later, retailers began marketing it as the start of the holiday shopping season with earlier store hours and deep discounts of up to 70 percent off.
It’s since become the busiest shopping day of the year. This past weekend, “Black Friday” sales were $11.4 billion, up 7 percent, or nearly $1 billion from the same day last year, according to a report by ShopperTrak, which gathers data from 25,000 outlets across the country. It was the largest amount ever spent on that day.
But “Black Friday” has been a blessing and a curse: In recent years, it’s become so popular that it’s become known for its big crowds, long lines, and even disorder and violence among some shoppers.
“Black Friday has become a victim of its own success,” says Adamson, the branding expert. “It has been successful to the point where it has created the opportunity that if you don’t want to deal with the madness, come out on Tuesday or some other day.”
“Cyber Monday” was coined in 2005 when a retail trade group noticed a spike in online sales on the Monday after Thanksgiving when people returned to their work computers and shopped. While more people now have Internet access at home, retailers still offer discounts and other online promotions for the day. Last year, it was the busiest online shopping day ever, with sales of more than $1 billion, according to research firm ComScore Inc online payday loans.
Marketers are hoping to strike gold again. Many are doing so by appealing to Americans who’ve become disenchanted with big business and commercialism.
Nonprofit Green America is launching “Green Tuesday” this week to encourage people to buy gifts with the environment and local communities in mind. The group is planning to push the event every Tuesday through December.
Green America, which says it aims to support society and the environment through economic programs, plans to showcase deals on its website, including jewelry made from recycled nuclear bomb equipment from online retailer Fromwartopeace.com and a self-watering system for plants by Dri Water.
“Mass culture encourages people to run out of their house, now at midnight, and go shopping,” says Todd Larsen, director of corporate responsibility for Green America, which vetted the businesses it’s highlighting on its website to ensure they meet certain environmental and ethical standards. “Why not wait another day or more and buy something that helps others?”
Last year, American Express named the Saturday after Thanksgiving “Small Business Saturday” to encourage Americans to shop at mom-and-pop shops. This year, it offered a $25 credit to cardholders who register on social media website Facebook and shop at participating stores.
The company says it launched a multibillion-dollar campaign to promote it the day. The campaign included TV ads and marketing materials for small businesses to display in stores.
The effort has worked. Small retailers that except Amex had a 28 percent increase in revenue during the daylong event last year, compared with a 9 percent rise for all retailers, according to card activity measured by American Express. The company did not disclose the dollar amount spent that day.
It’s not clear yet how small businesses fared during the event this past Saturday, but a company survey before “Small Business Saturday” showed that 89 million consumers had planned to “shop small” on the day.
“People get it; they are behind it 100 percent,” says Yabette Alfaro, owner of Swankity Swank, a San Francisco home furnishings and accessories shop that participates in “Small Business Saturday.” “Our customers don’t want to participate in Black Friday. Most of them think anyone making a stand is great.”
Lizbeth Turq, a 26-year old in Deerfield, Ill., this past weekend shopped at several local shops during “Small Business Saturday.” She ended up buying some gifts for the holidays, including one for her mother at a home decor store. Most of the items she found were 20 percent off, she says.
“It’s really not an issue of having a sale or not,” Turq says, “It’s an issue of supporting the community I live in and creating jobs, particularly in the economy we are in.”.
Efforts to clean up areas near Bangkok that were flooded as much as a yard (meter) deep just two weeks ago are gaining pace as the threat of inundation of the Thai capital eases.
Hundreds of volunteers joined monks in gathering flood detritus into garbage bags Tuesday near the massive temple that houses the Dhammakaya Buddhist sect in Pathum Thani province, just north of Bangkok.
Businesses in unaffected parts of central Bangkok are removing their sandbag barriers as it becomes clear that floodwaters have been diverted east and west of the center of the city low fee cash advance.
Since July, more than a fifth of the country’s 64 million people have been affected by the worst flooding in more than 50 years, leaving at least 606 people dead.
Royal Ahold NV, the Dutch owner of U.S. supermarket chains Giant and Stop & Shop, reported a 5 percent rise in operating profit for the third quarter, as growth in the U.S. offset a decline in the Netherlands.
Overall operating profit rose to euro300 million ($405 million), and sales were up 2.5 percent to euro6.86 billion. Net profit was up 15 percent to euro257 million ($346 million), but strongly affected by one-time items.
Margins were about unchanged overall, though the company’s performance differed sharply in the U.S. and the Netherlands.
Chief Executive Dick Boer said the company won market share in both markets. In the U.S., Ahold pursues a strategy of offering relatively low prices and relatively decent quality, which it sums up as “value for money.”
“Customers remain cautious in their spending and focus on value in an inflationary environment,” he said in a statement Thursday.
U.S. sales rose 8.5 percent to $5.8 billion, and operating margins improved to 4.1 percent of sales from 3.7 percent as the company was more than able to pass on price increases to customers. Operating profit rose $41 million to $237 million.
In the Netherlands, where Ahold operates the dominant Albert Heijn chain, the company trimmed prices and sacrificed margins in order to add to its lead as the country’s largest retailer. Sales rose 4.5 percent to euro2.3 billion, but operating margins fell to 6 cash till payday advance.4 percent from 7.1 percent and operating profit actually declined by euro7 million to euro149 million.
Albert Heijn offers top-quality produce at above-average prices.
SNS Securities analyst Richard Withagen said in a note that Ahold’s performance was better than expected, especially in the U.S., but he repeated a Hold recommendation on the shares.
The net profit figure was hit by a Nov. 4 New York Supreme Court ruling that Ahold disclosed in a footnote. Ahold said as a result of the ruling, it had taken a charge of euro94 million to resolve a lease dispute with a former subsidiary that will impact earnings through 2031. Ahold said it would appeal the ruling, though it was not immediately clear what higher court it could appeal to.
Ahold offset the charge with a tax windfall: it released a euro109 million provision it has been holding to resolve a tax issue it says dates from before 2004. The company did not say why it chose to book the gain this quarter, though it made the company’s bottom line appear more or less in line with its operating results, rather than showing a large loss.
Shares were up 1.2 percent to euro9.53 in volatile early trading in Amsterdam.
Tropical Storm Sean continues to strengthen as it moves to the northeast toward Bermuda.
The U.S. National Hurricane Center in Miami said Thursday afternoon that Sean’s maximum sustained winds are 65 mph (100 kph). It is located about 285 miles (459 kilometers) west-southwest of Bermuda and is moving northeast at 13 mph (21 kph). The storm’s center should pass to the northwest of Bermuda on Friday morning.
A tropical storm warning is in effect for Bermuda, where storm conditions are expected to begin Thursday night online payday loan lenders. Sean is expected to produce 1 inch (2.5 centimeters) to 3 inches (8 centimeters) of rainfall there. Swells generated by Sean are affecting the southeastern U.S. coast and Bermuda, with life-threatening surf and rip currents.
The Atlantic hurricane season lasts from June to the end of November.
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