Submitted at 7/17/2012 8:34:48 AM
By Christopher Condon - 2012-07-17T13:05:33Z State Street Corp. (STT), thethird- largest custody bank,agreed to buy the hedge-fundadministration unit of GoldmanSachs Group Inc. to boost growthas second-quarter revenue fellamid declining global markets andrecord low interest rates.State Street agreed to pay $550million in cash for GoldmanSachs’ unit to become the world’slargest servicer of alternativeassets such as hedge funds, theBoston-based company said todayin a statement. State Street’srevenue on an operating basisdecreased 1.9 percent to $2.43billion from $2.47 billion a yearearlier as assets fell and feesdeclined.“The industry is plagued by somepretty significant macroheadwinds,” James Shanahan, anequity analyst at Edward Jones &Co. inSt. Louis, said in aninterview before results wereannounced.Custody banks have struggled toincrease profits as theFederalReservehas held interest ratesnear zero since December 2008and falling stock marketsworldwide have cut the assets thatthe firms oversee for clients. StateStreet Chief Executive OfficerJoseph Hooley has cut more than2,200 jobs in the past two years tocontain expenses, raised thecompany’s dividend in April toboost shareholder returns andsearched for acquisitions such asthe Goldman Sachs unit toincrease assets.‘ContinuedCaution’“We are approaching the secondhalf of 2012 with continuedcaution,” Hooley said in thestatement. “The global economicenvironment remains challengingand so we are focused oncontrolling what we can.”Assets under custody fell 2.4percent to $16.4 trillion and themoney State Street invests forclients fell 9 percent to $1.9trillion.The acquisition of the GoldmanSachs’ hedge fund servicing unitadds $200 billion in assets, andgives State Street $877 billion inalternative funds underadministration.Second-quarter profit rose 2.3percent after the firm soldinvestment securities for anoperating-basis gain of $19million. Net income on anoperating basis increased to $494million, or $1.01 a share, from$483 million, or 96 cents, a yearearlier.TheMSCI ACWI Index(MXWD)of global stocksdeclined 8.7 percent in the yearended June 30. State Street’scustody fees in the second quarterfell 3.4 percent from a year earlierto $1.09 billion and investmentmanagement fees dropped 1.6percent to $246 million.Operating basis expensesdecreased 1.7 percent to $1.73billion as employee compensationcosts fell 6.6 percent. Low RatesLow interest rates hurt custodybanks by trimming the return ontheir investments and lending.State Street has also waived somefees on money-market funds tokeep client returns above zero.The Federal Reserve has held itsbenchmark interest rateat zero to0.25 percent for more than threeyears in an attempt to stimulatelending and economic growth.State Street’s operating profitexcludes money earned from thesale or maturing of bonds whosevalue was written down in May2009, which the company recordsas “discount accretion” within netinterest income.Custody banks keep records,track performance and lendsecurities for institutionalinvestors including mutual funds,pension funds andhedge funds.State Street also managesinvestments for individuals andinstitutions.Results were announced beforethe start of regular U.S. trading.State Streetrose9.5 percent thisyear through yesterday, comparedwith the 9.7 percent increase bythe Standard & Poor’s 20-company index of asset managersand custody banks.(State Street is scheduled to hold aconference call for investors at9:30 a.m.New York time. Thecall can be accessed athttp:// www.statestreet.com/stockholderand by telephone at +1-888-391-4233 inside the U.S. and +1-706-679-5594 (Conference ID #92602998).)To contact the reporter on thisstory: Christopher Condon inBoston atccondon4@bloomberg.netTo contact the editor responsiblefor this story: ChristianBaumgaertel atcbaumgaertel@bloomberg.netThis entry passed through theFull-Text RSSservice — if this isyour content and you're reading iton someone else's site, please readthe FAQ atfivefilters.org/content-only/faq.php#publishers.FiveFiltersrecommends:IncineratingAssange - The Liberal Media GoTo Work .
2Curated News Edition
Submitted at 7/17/2012 8:31:26 AM
Gasoline drips off a nozzleduring refueling at a gas station inAltadena, California March 24,2012.Credit: Reuters/Mario AnzuoniByLucia MutikaniWASHINGTON| Tue Jul 17,2012 9:31am EDT(Reuters) - Consumer prices wereflat in June as the cost of gasolinedropped, offering some relief forcash-strapped Americans andscope for the Federal Reserve toease monetary policy further tohelp the faltering recovery.Other data on Tuesday showedindustrial output rebounded inJune, but not enough to counterthe trend of a slowdown in growthat the country's factories.The inflation data was the latestsign of weakness in domesticdemand, which has been markedby declines in retail sales over thepast three months.June's CPI reading was in linewith economists' expectations andfollowed a 0.3 percent drop inMay. Stripping out food andenergy, inflation pressures werealso benign. Core CPI rose 0.2percent for a fourth straightmonth.The data provides the Fed -- theU.S. central bank -- with someroom to maneuver as it weighsoptions to aid the economicrecovery, which has slowedsignificantly in recent months.In a separate report, the Fed saidindustrial production grew 0.4percent in June, boosted by outputat factories, especiallyautomakers. However, growth inmanufacturing still slowedsharply in the second quarter.Manufacturing output rose at anannual rate of 1.4 percent duringthe second quarter, compared witha 9.8 percent rate in the previousthree months, the Fed said.Minutes of the Fed's Junemeeting released last week showed it was open to buyingmore Treasury bonds to spur theeconomy, but the recovery wouldprobably need to weaken furtherfor broad consensus amongpolicymakers.The economy grew at a 1.9percent annual rate in the firstquarter and estimates for the April-June period are convergingaround a 1.5 percent pace.Fed Chairman Ben Bernankecould shed more light on theoutlook for monetary policy whenhe testifies before lawmakers at10 a.m.Last month, overall inflation washeld back by a 2.0 percent drop ingasoline prices, offsetting a 0.2percent rise in food prices.Gasoline prices at the pump havedeclined about 53 cents from theirpeak around $4 a gallon in April,easing some of the strain onhousehold budgets.With inflation subdued lastmonth, workers saw more moneyin their pockets.Average weekly earnings,adjusted for inflation, rose 0.5percent last month after gaining0.2 percent in May, the LaborDepartment said. Compared withJune last year, weekly earningswere up 0.6 percent.Overall consumer prices rose 1.7percent year on year in June afterincreasing by the same margin inMay.Core consumer prices were lastmonth lifted by apparel prices,which rose 0.5 percent, advancingfor a fourth consecutive month.New motor vehicle prices gained0.2 percent after increasing by thesame margin in May.Prices for used cars and truckswere flat after three straightmonths of strong gains.The cost of medical care rose atits fastest pace since September2010, reflecting big increases forhospital and doctors' services.There were also gains in the costof tobacco and recreation.However, the price of airlinetickets fell 2.5 percent.Housing costs were muted, with ameasure of the amounthomeowners would pay to rent orwould earn from renting theirproperty advancing 0.1 percent inJune after gaining by the samemargin in May.In the 12 months to June, coreCPI increased 2.2 percent afterrising 2.3 percent in May.This measure has reboundedfrom a record low of 0.6 percentin October and the Fed, which lastmonth expanded its efforts tostimulate the economy, aims forinflation of 2 percent.(Editing byJames Dalgleish)This entry passed through theFull-Text RSSservice — if this isyour content and you're reading iton someone else's site, please readthe FAQ atfivefilters.org/content-only/faq.php#publishers.FiveFiltersrecommends:IncineratingAssange - The Liberal Media GoTo Work .
Submitted at 7/17/2012 8:28:24 AM
Wall Street Journal China Echoes 2009 Stimulus
With Railway Spending BoostBusinessweek China's railway infrastructureinvestment may double in thesecond half of this year from thefirst six months, aiding efforts toreverse a slowdown in the world'ssecond-biggest economy. China needs investment to lift
economy: XinhuaReuters China's Expanding Outbound
Investment AppetiteWall StreetJournal China's Second Half Looks Up
Forbes Voice of America (blog)-MarketWatch all 106 news articles »[unable to retrieve full-textcontent][unable to retrieve full-textcontent][unable to retrieve full-textcontent]
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3Curated News Edition
Submitted at 7/17/2012 8:48:10 AM
(CBS News) As Mitt Romneytravels to Pittsburgh today, theObama campaign is aiming to sewnew doubt into the minds of Pennsylvania's swing voters as towhether the Republicanpresidential candidate is payinghis fair share in taxes.In a new ad airing in thebattleground state, PresidentObama's team takes its latestswing at Romney forrefusing torelease more than two years'worth of his tax returns."Romney admits that over the lasttwo years he's paid less than 15percent in taxes on $43 million inincome," a narrator says in the ad.Then, as the years 2009, 2008,2007, 2006 and 2005 flash on thescreen, the narrator continues,"Makes you wonder if some yearshe paid any taxes at all."The ad charges Romney withusing "every trick in the book,"such as tax havens and offshoreaccounts, to avoid paying taxesand ends by asking, "What is MittRomney hiding?"Romney today is attending afundraiser in Pittsburgh, as well asa rally in Irwin, a borough justoutside of Pittsburgh. He's alsotaping a series of interviews withlocal Pittsburgh news outlets. Thesouthwestern region of Pennsylvania could prove to be acritical area in this year'spresidential election.Mr. Obama won Pennsylvania bymore than 620,000 votes in the2008 election, but his success wasbased on a strong showing in andaround Philadelphia. But asCBSNews.com's Brian Montopolireports, the president this year isfacing a drop in enthusiasm inPhiladelphia. If he wants to winthe battleground state again, hewill have to perform well in areasaround Pittsburgh - includingplaces he lost in 2008 like BeaverCounty. To win Pennsylvania, Obamaneeds more than just Philly Romney stands his ground on taxreturns Outrage over tax returns a replayof past campaignsThe region is largely comprisedof working class, union-friendlywhite voters who may beamenable to the Obamacampaign's argument thatRomney isn't paying his fair sharein taxes.And alook back at presidentialcampaigns in recent historyshowsthat the issue of releasing taxreturns has been a potent one fordecades. Multiple candidates havebeen dogged by the issue,including one eventual president -Ronald Reagan - who, it turns out,avoided paying state taxes oneyear.While Romney is inPennsylvania today, Mr. Obamaflies down to Texas for a series of fundraisers from which he'sexpected to raise a total of at least$5.9 million. The president inJune raised $71 million, comparedto Romney's $106 million in thesame month, making June thesecond month in which Romneyoutraised him.This entry passed through theFull-Text RSSservice — if this isyour content and you're reading iton someone else's site, please readthe FAQ atfivefilters.org/content-only/faq.php#publishers.FiveFiltersrecommends:IncineratingAssange - The Liberal Media GoTo Work .
Submitted at 7/17/2012 7:41:43 AM
Bottles of Coca-Cola sit on asupermarket shelf in Gilbert,Arizona October 20, 2009.Credit: Reuters/Joshua LottTue Jul 17, 2012 8:41am EDT(Reuters) - Coca-Cola Co reporteda higher-than-expected quarterlyprofit on Tuesday, as risingconsumption of its beverages inemerging markets offset declinesin Europe, sending its shares upmore than 1 percent in premarkettrading.The world's largest soft drink company, maker of Sprite, MinuteMaid orange juice andvitaminwater, said second-quartersales volume rose 4 percent, withNorth America growing 1 percentand international up 5 percent.Volume jumped 12 percent inEurasia and Africa, 8 percent inthe Pacific region and 3 percent inLatin America. It fell 4 percent inEurope, hurt by the economicslowdown.Net income was $2.79 billion,down from $2.80 billion a yearearlier. Net earnings per sharerose to $1.21 from $1.20 becauseof fewer shares outstanding.Excluding items, earnings were$1.22 per share, topping theanalysts' average estimate of $1.19, according to ThomsonReuters I/B/E/S.Revenue rose about 3 percent to$13.09 billion. Analysts hadexpected $12.98 billion.The company, which doesbusiness in more than 200countries, said foreign exchangerates shaved 4 percentage pointsfrom net revenue.Price increases helped to boostsales.Costs rose 5 percent in thequarter, due to "moderately"higher commodity costs.Coke shares rose 1.3 percent to$77.45 in trading before themarket opened.(Reporting byMartinne GellerinNew York; Editing by Lisa VonAhn andAlden Bentley)This entry passed through theFull-Text RSSservice — if this isyour content and you're reading iton someone else's site, please readthe FAQ atfivefilters.org/content-only/faq.php#publishers.FiveFiltersrecommends:IncineratingAssange - The Liberal Media GoTo Work .
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