Source: http://news.feedzilla.com/en_us/stories/politics/top-stories/267428240?client_source=feed&format=rss
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Saturday, December 1, 2012
How to really stop (some) insider trading - The Term Sheet ...
And this is no secret. There is a whole school of investing devoted to watching the trades of executives -- it's viewed by some investors as legitimate insider trading.
So it's no surprise that the Wall Street Journal was able to round up a number of questionable examples of insider trading by executives. The WSJ's study itself, as others have pointed out, was flawed. It was set up in a way that was the data equivalent of entrapment.
But those who are harping on that are missing the point. The WSJ didn't need to do its own study. In the past two years, the Securities and Exchange Commission has nabbed an alarming number of hedge funders for insider trading, some with the help of top executives. The SEC seems to be building a case against top hedge fund manager Steven Cohen of SAC Capital -- it recently charged one of Cohen's former traders with one of the biggest insider trading schemes in history. What's more, there are plenty of studies out there already that show insiders routinely beat the market, something very few full-time professional investors are able to replicate.
MORE: A who's who of Steven Cohen's web
A decade ago, the SEC came up with a system it thought would limit or eliminate executives from profiting from insider information. The agency encouraged executives, but didn't require them, to lock in dates well in advance for when they would buy or, more often, sell their companies' shares. If stock sales were planned for months, and were routine, then there would be no ability to cheat. Right?
Not exactly. The plans proved to be more flexible than the SEC envisioned. But that's not their biggest weakness. In most instances of apparent insider trading by an executive, a CEO miraculously appears to be able to dump a big chunk of their stock holdings right before the company reports bad news, like the quarter was worse than expected, saving them hundreds of thousands, maybe millions of dollars. Other shareholders, not in the know, take the hit.
But a pre-set stock plan won't stop that. That's because a CEO has the ability within some reason to decide when to let the market know that his business has taken a turn for the worse. Seems natural to release news that will be bad for shares on a day when you are holding less of those said shares.
MORE: Blackrock's new bond plan
Alan Jagolinzer, a business professor at the University of Colorado Boulder who has studied these plans, says there is a lot of variation in the way the plans are set up, but there isn't any evidence to suggest that executives are kept in the dark as to when their pre-set sales will occur. Indeed, a recent study of executive stock option plans found that companies were more likely to announce bad news in the days after a stock grant expired than before.
So given that preventing insiders from acting on private information is very, very hard, what can we do about it? First off, executives who lock in stock sales in advance shouldn't be able to know when the actual sales will occur. Blind trusts aren't perfect, but they are better than the alternative.
MORE: Who needs a blind trust?
Second, executives should only be allowed to sell after earnings releases, not before. The point of stock options is to align executives with shareholders. They should be forced to share the pain when their company fumbles, not be able to sidestep it by selling in advance.
There actually is one silver bullet that would end 90% of all illicit insider trading by executives: Ban stock options, or otherwise paying top executives in stock. Unfortunately, that's probably not going to happen. Not just because of a widely held, but not really proven, belief that executives who are paid in shares are better for shareholders. The reason options and stock grants aren't going away is because of accounting.
By current rules, paying executives in stock appears on the books to be costless. Shareholders, too, share in the benefit of the accounting illusion. But it's not costless. Until the market is willing to give that up, there will always be executives who are able to cash in by knowing before others that they have screwed up, leaving regular shareholders to take the hit.
Source: http://finance.fortune.cnn.com/2012/11/29/executive-insider-trading/
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Congo rebels indefinitely delay exit from Goma
GOMA, Congo (AP) ? Rebels who are believed to be backed by Rwanda once again postponed their departure from Congo's key eastern city of Goma on Friday, defying an international ultimatum for the second time.
The delay raises the possibility that the M23 rebels don't intend to leave the city they seized last week, giving credence to a U.N. expert report that says neighboring Rwanda is using the rebels as a proxy to annex territory in mineral-rich eastern Congo.
An M23 spokesman said Friday morning that for "logistical reasons" the rebels needed 48 more hours to complete their withdrawal, promising that the fighters would leave Goma by Sunday.
Later in the day, the rebels attempted to force their way into Goma's international airport to seize arms belonging to the Congolese military that were being safeguarded there. Although the city fell to the rebels last week, U.N. peacekeepers regained control of the airport and blocked the fighters from entering Friday.
"The (U.N.) is blocking us. They are not letting us organize ourselves logistically, and letting us reach our ammunitions at the airport. This could change everything. We will not leave until this is solved," said M23 Gen. Sultani Makenga.
A regional bloc representing the nations bordering Congo had issued a Friday deadline for the M23 fighters to retreat, after the rebels had thumbed their nose at an earlier ultimatum.
"We are not blocking them from leaving Goma, that is absolutely not true," said Madnodje Mounoubai, spokesman for the U.N. peacekeeping mission. "(They) want access to the arms that belong to the FARDC (the Congolese army) stored at the airport. This is something that we will not allow."
Congo, an enormous, sprawling Central African nation, has twice been at war with its much smaller but more affluent neighbor Rwanda.
The M23 rebels are widely believed to be supported by Rwanda, which according to the U.N. report, has provided them with battalions of soldiers, arms and financing.
The eight-month-old M23 rebellion is led by fighters from a now-defunct rebel group, who agreed to lay down their arms on March 23, 2009, in return for being allowed to join the Congolese army. The rebellion began in April, when hundreds of soldiers defected from the military, saying the accord had not been respected.
In fact, most analysts believe the origin of the rebellion is a fight over Congo's vast mineral wealth, a good chunk of which is found in the North Kivu province where Goma is the capital. Starting in the spring, the rebels began seizing small towns and villages in North Kivu, culminating with the capture Nov. 20 of Goma, a population hub of 1 million and a key mineral trading post.
In a sign of how confused the situation was Friday in Goma, a barge carrying around 280 Congolese policemen arrived at the city's port on the banks of Lake Kivu. The policemen had fled when the rebels took the city, and were returning to resume control on Friday, as had been agreed in the accord signed by the rebels and regional leaders in Kampala, the capital of neighboring Uganda.
The Kampala accord called for M23 to officially hand back the city to local authorities. Because the rebels had not yet left Goma, the officers stayed on the boat.
By evening, the officers were still on the barge, waiting for orders. "We can't spend the night here," said Capt. Bradoc Aoshi.
The one positive sign was the movement of troops in the two areas that M23 captured after they took Goma.
In Sake, some 27 kilometers (18 miles) west of Goma, reporters saw a 2-kilometer (1.2-mile) long column of M23 soldiers moving out. The column of soldiers was at least 1,000-deep. They carried their weapons, including mortar launchers on their heads and rocket-propelled grenades on their backs.
In London on Friday, the British government announced that $33.7 million in general support that the U.K. was due to pay to Rwanda in December is not being disbursed due to Rwanda's role in the Congo conflict.
In Washington, the U.S. Senate unanimously passed an amendment Thursday night imposing sanctions on those providing financial, material, or technological support to M23.
"M23 has demonstrated an unconscionable disregard for human life and Congo's territorial integrity and seems determined to sink Central Africa in another deadly, devastating war that could set the region back a generation," said Sen. Chris Coons, the chairman of the Senate Foreign Relations Subcommittee on African Affairs
"The actions of M23 rebels, as well as those who aid and abet the M23, are deplorable and must be stopped immediately," he said.
___
Callimachi contributed to this report from Dakar, Senegal. Associated Press photographer Jerome Delay contributed from Sake and Goma, Congo.
Source: http://news.yahoo.com/congo-rebels-indefinitely-delay-exit-goma-172318099.html
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Tattered Cover Gift Guide: For Older Kids & Teens, Part One
Tattered Cover Gift Guide: For Older Kids & Teens, Part One
Click on the covers to learn more about the books.Source: http://tatteredcoverbookstore.blogspot.com/2012/11/tattered-cover-gift-guide-for-older.html
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Basis fitness tracker finally goes on sale for $199, mobile apps still MIA
Remember the Basis Band, that fitness-tracking wristband that was supposed to come out earlier this year? Well, the company obviously missed its target for an "early 2012" launch, but it's been busy refining the product and publishing intermittent blog posts to let people know how the device has been shaping up. Well, at last, it's ready for prime time: the band is on sale today, priced at $199, as originally planned.
In case you're just hearing about Basis for the first time, here's a quick recap: unlike Nike Fuelband and other devices aimed at athletes, Basis is attempting to lure in more mainstream users with the ability to set goals and get rewarded for staying on track. (Other devices, including the new Jawbone Up, do this too.) What's interesting, though, is that for a device that claims to target the everyman over the nerd it actually collects an impressive amount of data. For instance, the "Patterns" view in the web console will show not just how many steps you take throughout the day, but which hours of the day you were most active. The band, meanwhile, tracks sweat output, heat dissipation, blood flow and heart rate -- something we can't say about all those other fitness trackers. As for the UI, the site itself is visually pleasing, though some mobile apps would also be nice. (A Basis rep says they're working on it.)
If anything, the product's simplicity comes from the hardware: it uses Bluetooth 4.0 2.1 to transmit all your data to the cloud so that you don't have to sync over USB. Basically, between that and those various sensors, the band should theoretically detect when you're sleeping or exercising so that you don't have to switch modes or enter any information manually. It's worth noting, though, that other fitness trackers mainly stumble when it comes to logging food intake -- something sensors can't detect -- and that's not even something the Basis band covers right now. In other words, it's easy to praise a device for working automatically when it completely bypasses the whole diet piece of the wellness equation. According to Basis, research suggests people don't really use these food-logging tools anyway. We can believe that, actually, though for $199 it would be nice to at least have the option, no? That's another thing: at two hundred bucks this is considerably pricier than competing devices, including the Up band ($129) and the new Fitbit One ($100). Even so, the user experience is everything, isn't it? If you've ever been food-judged by Up, or if the Basis band really is as low-maintenance as it seems, it could still be worth a gander.
Continue reading Basis fitness tracker finally goes on sale for $199, mobile apps still MIA
Filed under: Wearables
Source: Basis
Source: http://www.engadget.com/2012/11/29/basis-band-health-tracker/
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Stocks edge higher as budget talks move ahead
Former White House Chief of Staff Erskine Bowles, co-chair of the National Commission on Fiscal Responsibility and Reform, is pursued by reporters on Capitol Hill in Washington, Wednesday, Nov. 28, 2012, following a closed-door meeting House Speaker John Boehner of Ohio. (AP Photo/J. Scott Applewhite)
Former White House Chief of Staff Erskine Bowles, co-chair of the National Commission on Fiscal Responsibility and Reform, is pursued by reporters on Capitol Hill in Washington, Wednesday, Nov. 28, 2012, following a closed-door meeting House Speaker John Boehner of Ohio. (AP Photo/J. Scott Applewhite)
NEW YORK (AP) ? Optimism that a budget deal will be reached in Washington helped lift the stock market in early Thursday trading. A pair of economic reports also brightened the mood.
A half-hour after the opening bell, the Dow Jones industrial average was up 50 points at 13,034. UnitedHealth Group led the 30 stocks in the Dow, rising 66 cents to $53.43.
Lawmakers are negotiating a deal to avoid the "fiscal cliff," a collection of tax hikes and federal spending cuts set to start Jan. 1. Later Thursday, Treasury Secretary Timothy Geithner will meet with Senate Republican Leader Mitch McConnell and Senate Democratic Leader Harry Reid to push the negotiations forward.
In other trading, the Standard & Poor's 500 index rose seven points to 1,416 while the Nasdaq composite gained 19 points to 3,011.
The Commerce Department raised its estimate for U.S. economic growth to an annual rate of 2.7 percent in the July-through-September period. That's much better than the 2 percent rate estimated a month ago and more than twice the 1.3 percent rate logged in the three previous months.
Growth during the end of the year is likely to take a hit from Superstorm Sandy, along with worries that Congress won't avoid falling over the fiscal cliff. Economists estimate that growth is slowing to a rate below 2 percent in the current October-December period.
The Labor Department also reported that the number of Americans applying for unemployment benefits dropped to 393,000 last week, in line with what economists had expected. It was the second straight drop after Superstorm Sandy drove applications higher earlier this month.
Some retail stores posted poor sales numbers, driving their stocks lower. It's a critical time for retailers, who log a huge chunk of their yearly profits in the weeks running up to the holidays.
Kohl's plunged $5.41, or 10 percent, to $45.74, the most in the S&P 500 index. The company posted a drop in sales and said stores in the Mid-Atlantic and the Northeast, areas hit by Superstorm Sandy, fared the worst. Results at Target, The Gap, and others also fell short of Wall Street expectations.
Kroger Co. rose 82 cents to $25.88 after the supermarket chain reported stronger quarterly profits and raised its earnings outlook for the year. Stronger sales helped the operator of Fred Meyer and Food 4 Less stores post better results than analysts had expected.
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William Burns for Secretary of State? (Atlantic Politics Channel)
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