A record number of people have been declared insolvent as the credit crisis marks its second anniversary, new figures showed on Friday.
A total of 33,073 people were declared insolvent during the three months to the end of June, 27.4 per cent more than during the same period a year earlier, according to the Insolvency Service.
It means numbers are now at their highest level since records began in 1960 and experts forecast there is worse to come as unemployment rises and people are unable to pay their bills.
At the same time, the number of companies that collapsed rose by 39.1 per cent year-on-year to 5,055 in the three months to the end of June.
Alan Tomlinson, of insolvency practitioners Tomlinsons, described the combination of rising unemployment and unmanageable debt as “the perfect storm”.
“Many of the people we’re seeing are in serious, serious difficulty,” he said.
“The sharp rise in the number of individual insolvencies is a reflection of the ongoing fallout from irresponsible borrowing in the good years and people living beyond, in many cases way beyond, their means.”
The individual insolvencies consisted of 18,870 bankruptcies – which were up 15.3 per cent on the same period a year ago and 12,225 of its less stringent form, Individual Voluntary Arrangements (IVAs) – which were up 27.4 per cent on the same period in 2008.
An IVA is an arrangement that is entered into with those owed money, while a bankruptcy involves a formal court order where assets are sold to pay creditors.
An alternative to bankruptcy – a debt relief order – was introduced in April, but various restrictions limit those who can apply, such as not owning your own home and having debts of less than £15,000.
Anthony Cork, of accountants Wilkins Kennedy, said: “Pressure from the Government has meant that a lot of banks have been holding off on foreclosing on individuals and restructuring businesses that they have lent to. However, this political pressure is on the wane and intervention led by lenders is expected to accelerate in the autumn.”
Friday, August 07, 2009
Fannie Mae seeks more state aid after massive loss
Fannie Mae, the troubled state-backed mortgage firm, a massive $14.8bn (£8.8bn) loss in the second quarter, and asked the US Treasury for another $10.7bn in aid.
Fannie Mae and its fellow state-backed lender Freddie Mac have already received hundreds of billions of dollars as part of a virtual government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
"Second-quarter results were driven primarily by $18.8bn of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing market, as well as the economic recession and rising unemployment. Credit-related expenses were partially offset by fair value gains," the company said.
"The company also reported a substantial decrease in impairment losses on investment securities, which was due in part to the adoption of new accounting guidance."
The latest decrease for Fannie Mae came on the heels of a $23.2bn loss in the first quarter.
"Taking into account unrealized gains on available-for-sale securities during the second quarter and an adjustment to our deferred tax assets due to the new accounting guidance, the loss resulted in a net worth deficit of $10.6bn as of June 30, 2009," the company said in a statement.
As a result, it said the head of its conservator, the FederaL Housing Finance Agency, submitted a $10.7bn request from the Treasury "in order to eliminate our net worth deficit" on or before September 30.
The Washington Post reported Wednesday that the US government could split Fannie Mae and Freddie Mac and place the firms' toxic assets in a federal corporation.
Such a deal could allow the financial giants, long lynchpins of the US housing market, to move forward unconstrained by troubled assets - easing still constricted credit markets with the hope of driving consumer spending, the report said. Together, the two firms back 40 percent of all US home loans.
White House spokesman Robert Gibbs insisted that the report was "light years ahead of any decision-making process here".
"There's no meeting that's scheduled," he said. "And safe to say that many senior administration economic officials learned of this proposal sometime this morning at the foot of their driveway."
Staff "are aware of the problem and working on it as a part of financial regulatory reform," Mr Gibbs added.
However, he cautioned, assuming "that either this is at a point of even a decision by senior economic officials, let alone anybody that occupies the Oval Office, is way, way, way ahead of itself".
Fannie Mae and its fellow state-backed lender Freddie Mac have already received hundreds of billions of dollars as part of a virtual government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
"Second-quarter results were driven primarily by $18.8bn of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing market, as well as the economic recession and rising unemployment. Credit-related expenses were partially offset by fair value gains," the company said.
"The company also reported a substantial decrease in impairment losses on investment securities, which was due in part to the adoption of new accounting guidance."
The latest decrease for Fannie Mae came on the heels of a $23.2bn loss in the first quarter.
"Taking into account unrealized gains on available-for-sale securities during the second quarter and an adjustment to our deferred tax assets due to the new accounting guidance, the loss resulted in a net worth deficit of $10.6bn as of June 30, 2009," the company said in a statement.
As a result, it said the head of its conservator, the FederaL Housing Finance Agency, submitted a $10.7bn request from the Treasury "in order to eliminate our net worth deficit" on or before September 30.
The Washington Post reported Wednesday that the US government could split Fannie Mae and Freddie Mac and place the firms' toxic assets in a federal corporation.
Such a deal could allow the financial giants, long lynchpins of the US housing market, to move forward unconstrained by troubled assets - easing still constricted credit markets with the hope of driving consumer spending, the report said. Together, the two firms back 40 percent of all US home loans.
White House spokesman Robert Gibbs insisted that the report was "light years ahead of any decision-making process here".
"There's no meeting that's scheduled," he said. "And safe to say that many senior administration economic officials learned of this proposal sometime this morning at the foot of their driveway."
Staff "are aware of the problem and working on it as a part of financial regulatory reform," Mr Gibbs added.
However, he cautioned, assuming "that either this is at a point of even a decision by senior economic officials, let alone anybody that occupies the Oval Office, is way, way, way ahead of itself".
Asian Stocks May Add 23%, India Raised, JPMorgan Says
Aug. 7 (Bloomberg) -- Asian stocks may climb a further 23 percent to 450 by the end of the year amid signs of a stronger- than-expected economic recovery, JPMorgan Chase & Co. said.
JPMorgan also raised India’s equity market to “overweight” from “neutral” amid political stability and stepped-up economic reforms, analysts led by Adrian Mowat said in an Aug. 6 report. Investors should own more shares than indicated by benchmark indexes in Taiwan, South Korea, Indonesia and Thailand, with exporters among the best bets, they added.
The MSCI AC Asia-Pacific excluding Japan Index slipped 1.3 percent to 360.79 as of 3:27 p.m. in Singapore, trimming its gains this year to 46 percent. JPMorgan’s forecast represents an 82 percent advance in the measure for the full year, which would be its best annual gain on record.
“Economic activity in a number of countries is close to or at its peak,” the analysts wrote. “Real GDP for Asia ex-Japan, Indonesia, China, Australia and India is forecast to be higher in the second quarter of 2009 than any of the previous quarters. However, their markets are more than 20 percent below their peaks.”
Mowat, the brokerage’s chief Asian and emerging-market strategist, had predicted in June that the MSCI regional index would climb to 400 this year.
Aberdeen Asset Management Plc is more cautious, saying that global stocks are now fully priced following gains this year. Chinese shares have already entered a bubble, Hugh Young, who helps oversee the equivalent of $220 billion as Aberdeen’s Asian managing director, said in an interview yesterday.
India’s Growth
Indian stocks may benefit as low interest rates and inflation spur economic growth, JPMorgan said. The Reserve Bank of India last week left borrowing costs unchanged at record lows, after slashing interest rates six times since October.
Inflation has slowed from a 16-year high of 12.91 percent in August last year as oil prices fell. India’s benchmark wholesale-price index fell for an eighth week, declining 1.58 percent in the week to July 25 from a year earlier, the government said yesterday.
The benchmark Bombay Stock Exchange Sensitive Index fell as much as 1.7 percent today. It has climbed 58 percent this year, the eighth-best gain among 89 indexes tracked by Bloomberg globally.
“India is a current account deficit economy and needs to import capital to keep growing quickly,” the analysts wrote. “The credit crunch in our view is over. Low external interest rates combined with low levels for the Indian rupee should accelerate capital inflows and growth.”
The brokerage added Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, and Infrastructure Development Finance Co., a financier of roads, ports and utilities, to its list of recommended stocks in India.
Acer Inc., the world’s third-largest maker of personal computers, and Korean Air Lines Co. were also among companies that JPMorgan added to its recommended portfolio, the report said.
JPMorgan also raised India’s equity market to “overweight” from “neutral” amid political stability and stepped-up economic reforms, analysts led by Adrian Mowat said in an Aug. 6 report. Investors should own more shares than indicated by benchmark indexes in Taiwan, South Korea, Indonesia and Thailand, with exporters among the best bets, they added.
The MSCI AC Asia-Pacific excluding Japan Index slipped 1.3 percent to 360.79 as of 3:27 p.m. in Singapore, trimming its gains this year to 46 percent. JPMorgan’s forecast represents an 82 percent advance in the measure for the full year, which would be its best annual gain on record.
“Economic activity in a number of countries is close to or at its peak,” the analysts wrote. “Real GDP for Asia ex-Japan, Indonesia, China, Australia and India is forecast to be higher in the second quarter of 2009 than any of the previous quarters. However, their markets are more than 20 percent below their peaks.”
Mowat, the brokerage’s chief Asian and emerging-market strategist, had predicted in June that the MSCI regional index would climb to 400 this year.
Aberdeen Asset Management Plc is more cautious, saying that global stocks are now fully priced following gains this year. Chinese shares have already entered a bubble, Hugh Young, who helps oversee the equivalent of $220 billion as Aberdeen’s Asian managing director, said in an interview yesterday.
India’s Growth
Indian stocks may benefit as low interest rates and inflation spur economic growth, JPMorgan said. The Reserve Bank of India last week left borrowing costs unchanged at record lows, after slashing interest rates six times since October.
Inflation has slowed from a 16-year high of 12.91 percent in August last year as oil prices fell. India’s benchmark wholesale-price index fell for an eighth week, declining 1.58 percent in the week to July 25 from a year earlier, the government said yesterday.
The benchmark Bombay Stock Exchange Sensitive Index fell as much as 1.7 percent today. It has climbed 58 percent this year, the eighth-best gain among 89 indexes tracked by Bloomberg globally.
“India is a current account deficit economy and needs to import capital to keep growing quickly,” the analysts wrote. “The credit crunch in our view is over. Low external interest rates combined with low levels for the Indian rupee should accelerate capital inflows and growth.”
The brokerage added Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, and Infrastructure Development Finance Co., a financier of roads, ports and utilities, to its list of recommended stocks in India.
Acer Inc., the world’s third-largest maker of personal computers, and Korean Air Lines Co. were also among companies that JPMorgan added to its recommended portfolio, the report said.
CFA Program Details
CFA Program Overview
The CFA Program, administered by CFA Institute, sets the global standard for investment industry knowledge and ethical behavior. CFA Institute determines the curriculum, administers the exam, and awards the charter. Known as the "gold standard" amongst financial industry professionals, the CFA charter is recognized as a significant benchmark within the financial community.
The CFA Program consists of a series of three examinations (Levels 1, 2, and 3) that must be taken in succession, and are offered only once annually in June, with the exception of Level 1 candidates who also have the option of sitting for the exam in December.
A minimum of 250 hours of preparation per CFA exam level is recommended, although some candidates will need more time (or less) depending on their individual backgrounds and experience. There is no limit to the number of times you can take each exam, and you can take as much time as you need to complete the program.
The CFA curriculum is dynamic and changes annually to meet the nature and complexity of the global investment profession.
The CFA Candidate Body of Knowledge™
The Learning Outcomes Statements and core concepts in the CFA Program are built on the Candidate Body of Knowledge™ (CBOK), a practice-based curriculum that is determined by thousands of CFA charterholders from around the world.
Level 1 candidates will concentrate on the tools and concepts related to investment valuation, portfolio management, as well as an overview of how these processes fit within the guidelines of the CFA Institute Code of Ethics and Standards of Professional Conduct.
Level 2 candidates are expected to demonstrate a greater depth of understanding of the tools and techniques that were introduced in the Level 1 curriculum, in addition to applications in asset valuation within the context of the Code of Ethics and Standards of Professional Conduct.
Level 3 candidates are required to demonstrate a higher level of understanding of the materials tested at Levels 1 and 2, as well as display effective knowledge of the entire portfolio management process.
CFA Exam Formats
Level 1
The Level 1 examination is comprised of 240 multiple-choice questions that are equally weighted but divided into two sessions, morning and afternoon (120 multiple-choice questions per session).
Level 2
The Level 2 examination consists of a total of 120 items that are divided into 20 equally weighted item sets (10 item sets per session). Each item set contains a vignette (with an average length of 1.5 pages) as well as six multiple-choice questions.
Level 3
The Level 3 examination contains 12 to 15 essay questions in addition to 10 item sets. Essay questions may have multiple parts, and item sets include six multiple-choice questions.
Candidate Eligibility Requirements
To be eligible to enter the CFA Program, you must:
Hold a U.S. bachelor's (or equivalent) degree, be in the final year of your bachelor's degree program, or have four years of qualified, professional work experience or a combination of work and college experience that totals at least four years
Meet the professional conduct admission criteria (during the application process, you will be asked to sign statements of Professional Conduct and Candidate Responsibility)
Be prepared to take the exams in English
Enroll and Register in the CFA Program
To enter into the CFA Program, candidates must pay a one-time registration fee in addition to the required enrollment fees for each Level. CFA Institute reference material and a partial mock exam are both included with candidate registration and enrollment.
To obtain a printed version of the CFA Program enrollment and registration forms in the mail, call CFA Institute's Information Central Department at: (800) 247-8132 or (434) 951-5499 or email info@cfainstitute.org.
CFA Exam Fees
CFA Exam fees range from $600 to $1,395 depending on your CFA Exam Level and also when you register.
The CFA Program, administered by CFA Institute, sets the global standard for investment industry knowledge and ethical behavior. CFA Institute determines the curriculum, administers the exam, and awards the charter. Known as the "gold standard" amongst financial industry professionals, the CFA charter is recognized as a significant benchmark within the financial community.
The CFA Program consists of a series of three examinations (Levels 1, 2, and 3) that must be taken in succession, and are offered only once annually in June, with the exception of Level 1 candidates who also have the option of sitting for the exam in December.
A minimum of 250 hours of preparation per CFA exam level is recommended, although some candidates will need more time (or less) depending on their individual backgrounds and experience. There is no limit to the number of times you can take each exam, and you can take as much time as you need to complete the program.
The CFA curriculum is dynamic and changes annually to meet the nature and complexity of the global investment profession.
The CFA Candidate Body of Knowledge™
The Learning Outcomes Statements and core concepts in the CFA Program are built on the Candidate Body of Knowledge™ (CBOK), a practice-based curriculum that is determined by thousands of CFA charterholders from around the world.
Level 1 candidates will concentrate on the tools and concepts related to investment valuation, portfolio management, as well as an overview of how these processes fit within the guidelines of the CFA Institute Code of Ethics and Standards of Professional Conduct.
Level 2 candidates are expected to demonstrate a greater depth of understanding of the tools and techniques that were introduced in the Level 1 curriculum, in addition to applications in asset valuation within the context of the Code of Ethics and Standards of Professional Conduct.
Level 3 candidates are required to demonstrate a higher level of understanding of the materials tested at Levels 1 and 2, as well as display effective knowledge of the entire portfolio management process.
CFA Exam Formats
Level 1
The Level 1 examination is comprised of 240 multiple-choice questions that are equally weighted but divided into two sessions, morning and afternoon (120 multiple-choice questions per session).
Level 2
The Level 2 examination consists of a total of 120 items that are divided into 20 equally weighted item sets (10 item sets per session). Each item set contains a vignette (with an average length of 1.5 pages) as well as six multiple-choice questions.
Level 3
The Level 3 examination contains 12 to 15 essay questions in addition to 10 item sets. Essay questions may have multiple parts, and item sets include six multiple-choice questions.
Candidate Eligibility Requirements
To be eligible to enter the CFA Program, you must:
Hold a U.S. bachelor's (or equivalent) degree, be in the final year of your bachelor's degree program, or have four years of qualified, professional work experience or a combination of work and college experience that totals at least four years
Meet the professional conduct admission criteria (during the application process, you will be asked to sign statements of Professional Conduct and Candidate Responsibility)
Be prepared to take the exams in English
Enroll and Register in the CFA Program
To enter into the CFA Program, candidates must pay a one-time registration fee in addition to the required enrollment fees for each Level. CFA Institute reference material and a partial mock exam are both included with candidate registration and enrollment.
To obtain a printed version of the CFA Program enrollment and registration forms in the mail, call CFA Institute's Information Central Department at: (800) 247-8132 or (434) 951-5499 or email info@cfainstitute.org.
CFA Exam Fees
CFA Exam fees range from $600 to $1,395 depending on your CFA Exam Level and also when you register.
Monsoon Rain Deficit Widens in India, Hurting Sugar Cane, Rice
Aug. 6 (Bloomberg) -- India’s monsoon, the main source of irrigation for the nation’s 235 million farmers, was less than average for a second week, threatening harvests of crops such as sugar cane and rice.
The country received 23.5 millimeters of rain, 64 percent below the average 65.9 millimeters in the week ended Aug. 5, the India Meteorological Department said on its Web site. Falls were deficient or scanty in 27 of 36 weather divisions. The deficit in June 1-Aug. 5 period widened to 25 percent from 19 percent a week earlier, the office said.
A normal monsoon is key to Prime Minister Manmohan Singh’s efforts to push economic expansion back to a 9 percent pace and cool prices of essential commodities such as sugar and lentils. Dry weather in July last year hurt sugar cane output this year, turning India into a net importer for the first time since 2006.
“Insufficient rain has hurt cane crop in Uttar Pradesh,” Farm Minister Sharad Pawar told the parliament today. “We need to keep a close eye on the monsoon situation.”
Raw Sugar reached a 28-year high in New York today on speculation a deficient monsoon rainfall in India will limit cane yields and prolong a global deficit. Futures for October delivery rose 2 percent to 19.76 cents a pound at 8:44 a.m. on ICE Futures U.S. in New York. Earlier, the price reached 19.83 cents, the highest for a most-active contract since April 1981.
White sugar traded in London reached the highest since 1983 and prices in Vashi, India’s biggest wholesale market reached a record today.
Uttar Pradesh, India’s second-biggest sugar producer, has declared drought in 47 districts. Maharashtra state, the biggest producer, cut its output forecast for next year to 4.6 million tons from 5 million predicted in June.
Switching Acreage
Output may drop 43 percent to 15 million tons in the season to Sept. 30 from 26.4 million tons a year earlier after farmers switched to more profitable crops such as wheat, Pawar said.
“The overall price situation including pulses and sugar is very serious,” Pawar said. “We have taken several steps to control open market prices by making imports free.”
India has contracted to buy 2.9 million tons of raw sugar, of which 1.84 million tons has arrived into the country or is in transit, Pawar said. Purchases in the year starting Oct. 1 may soar to 8 million tons, Arhant Jain, the executive president of finance at Dhampur Sugar Mills Ltd., India’s No.4 producer, said yesterday. The projection is double the import volume estimated by the country’s biggest producers.
Monsoon in the June-September season will be 93 percent of the long-period average of 89 centimeters (35 inches), with a margin of error of 4 percent, the government forecast June 24, scaling down an April forecast for normal monsoon.
“If the rains in August and September turn out to be normal, then price situation may improve,” Pawar said.
The country received 23.5 millimeters of rain, 64 percent below the average 65.9 millimeters in the week ended Aug. 5, the India Meteorological Department said on its Web site. Falls were deficient or scanty in 27 of 36 weather divisions. The deficit in June 1-Aug. 5 period widened to 25 percent from 19 percent a week earlier, the office said.
A normal monsoon is key to Prime Minister Manmohan Singh’s efforts to push economic expansion back to a 9 percent pace and cool prices of essential commodities such as sugar and lentils. Dry weather in July last year hurt sugar cane output this year, turning India into a net importer for the first time since 2006.
“Insufficient rain has hurt cane crop in Uttar Pradesh,” Farm Minister Sharad Pawar told the parliament today. “We need to keep a close eye on the monsoon situation.”
Raw Sugar reached a 28-year high in New York today on speculation a deficient monsoon rainfall in India will limit cane yields and prolong a global deficit. Futures for October delivery rose 2 percent to 19.76 cents a pound at 8:44 a.m. on ICE Futures U.S. in New York. Earlier, the price reached 19.83 cents, the highest for a most-active contract since April 1981.
White sugar traded in London reached the highest since 1983 and prices in Vashi, India’s biggest wholesale market reached a record today.
Uttar Pradesh, India’s second-biggest sugar producer, has declared drought in 47 districts. Maharashtra state, the biggest producer, cut its output forecast for next year to 4.6 million tons from 5 million predicted in June.
Switching Acreage
Output may drop 43 percent to 15 million tons in the season to Sept. 30 from 26.4 million tons a year earlier after farmers switched to more profitable crops such as wheat, Pawar said.
“The overall price situation including pulses and sugar is very serious,” Pawar said. “We have taken several steps to control open market prices by making imports free.”
India has contracted to buy 2.9 million tons of raw sugar, of which 1.84 million tons has arrived into the country or is in transit, Pawar said. Purchases in the year starting Oct. 1 may soar to 8 million tons, Arhant Jain, the executive president of finance at Dhampur Sugar Mills Ltd., India’s No.4 producer, said yesterday. The projection is double the import volume estimated by the country’s biggest producers.
Monsoon in the June-September season will be 93 percent of the long-period average of 89 centimeters (35 inches), with a margin of error of 4 percent, the government forecast June 24, scaling down an April forecast for normal monsoon.
“If the rains in August and September turn out to be normal, then price situation may improve,” Pawar said.
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