On football and investments-chick steps first!

Monday 16th April Today was not too bad nor too good a workday. Came out tops in my department with regard to quality but still have to improve and catch up considering the last 2 weeks' results. Glad to have my article on Yahoo Voices just before Easter Sunday- considering its relevance. Its getting good traffic if I may add. Next article should be about football, then I'll start writing my memoirs (sic). Tuesday 17th April Returned my Airtel modem for a 3rd time- I'm sure whoever is concerned doesn't know the damage caused but it's nearly causing my PC to crash since I don't care much about using anti virus software. Good news about my school project-turns out there was a technical problem with the submission and some parts went missing in the process. And that's not my fault. Wednesday 18th April The all-Espagne Champions' League Final seems a long way off after Bayern Munich beat Real Madrid 2-1. Courtesy of another last minute winner from a lesson that they picked in May 1999. Thursday 19th April Surprising news of Chelsea beating Barcelona 1-0 at the Bridge. Messi and Guardiola conspicuously subdued. Friday 20th April Spent the day repairing a chicken shed-yes a chicken shed. Why? Because I think that's my next investment strategy-away from Wall Street and City. I think I'm getting more attached to watching actual living things grow as opposed to virtual stuff. Saturday 21st April Having to watch football and writing some articles relating to it is a welcome break from the norm. The problem is that I have to go to work tomorrow while everybody else is resting. Sunday 22nd April Now, when Man.Utd blow a lead they really know how to go about it. Exciting match as they go about drawing 4-4 against Everton after leadind 4-2 at 80 minutes. That sets up an interesting match at the Etihad on 30th April.

Sarkozy courts French far right after Hollande win

By Daniel Flynn and Brian Love

Mon Apr 23, 2012 12:31pm EDT

( Reuters) - French President Nicolas Sarkozy appealed directly to far right voters on Monday with pledges to get tough on immigration and security, after a record showing in a first round election by the National Front made them potential kingmakers.Polls show center-right leader Sarkozy on course to become the first French president to lose a bid for re-election in more than 30 years, trailing Socialist challenger Francois Hollande ahead of a May 6 run-off.

 

Hollande piped Sarkozy in Sunday's 10-candidate first round by 28.6 percent to 27.2 percent, but National Front leader Marine Le Pen stole the show, surging to 17.9 percent, the biggest tally a far-right candidate has ever managed.
Her performance mirrored advances across the continent by anti-establishment Eurosceptical populists from Amsterdam and Vienna to Helsinki and Athens as the euro zone's grinding debt crisis deepens anger over government spending cuts and unemployment.
"National Front voters must be respected," Sarkozy told reporters as he left his campaign headquarters in Paris. "They voiced their view. It was a vote of suffering, a crisis vote. Why insult them? I have heard Mr. Hollande criticizing them."
The unpopular Sarkozy, the first sitting president to be forced into second place in the first round of a re-election bid, now faces a difficult balancing act to attract both the far-right and centrist voters he needs to stay in office.
The weak showing by Sarkozy spooked investors already nervous about European governments' ability to service their debts, helping to send French stocks and bonds lower.
Returning to the campaign trail on Monday, Sarkozy hammered home promises to toughen border controls, tighten security on the streets and keep industrial jobs in France - signature issues for Le Pen at a time of anger over immigration, violent crime and unemployment running at a 12-year high.
After five turbulent years leading the world's fifth economy, Sarkozy could go the way of 10 other euro zone leaders swept from office since the start of the crisis in late 2009.
Hollande has vowed to change the direction of Europe by tempering austerity measures with higher taxes on the rich and more social spending. Polls published on Sunday predicted he would win the run-off with between 53 and 56 percent of votes.
But the strong showing of Le Pen, gravel-voiced 43-year-old daughter of National Front founder Jean-Marie Le Pen, offered Sarkozy a glimmer of hope by suggesting there are more votes up for grabs on the right than had been thought.
"Marine Le Pen's breakthrough throws the second round wide open," read the front page of right-leaning Le Figaro, while left-wing Liberation read: "Hollande leads. Le Pen the killjoy".

HIGH TURNOUT
Hollande blamed Sarkozy for fuelling the rise in the far right and said he would make no attempt to seek National Front votes. "Since some voters supported them out of anger, I will listen to them...but I will not court the far right," he said.
On a strong turnout of 80.2 percent, more than a third of voters cast ballots for protest candidates outside the mainstream, foreshadowing a possible reshaping of France's political balance of power at parliamentary elections in June.
Le Pen's focus is now on securing a strong National Front showing in the parliamentary vote, and she is keeping her distance from Sarkozy, describing him as doomed.
"Faced with an outgoing president who will leave a much weakened party, we are the only true opposition to the neo-liberal left," she told cheering supporters on Sunday.
She said she would give her view on the runoff at a May Day rally in Paris next week. Leading National Front figures, including Le Pen's partner and party vice-president Louis Aliot, suggested that she would not formally endorse either candidate.
It is hardly the first time Sarkozy has appealed to National Front voters before a runoff - the tactic him win his first mandate in 2007. Le Pen's strategy director Florian Philippot said it would not work twice: "The French no longer fall for this electioneering game Sarkozy plays."
Financial market analysts say whoever wins in two weeks' time will have to impose tougher austerity measures than either candidate has admitted during the campaign, cutting public spending as well as raising taxes to cut the budget deficit.

INVESTOR JITTERS
European markets were sour after the French results and the Dutch government's failure to push through an austerity budget made elections there almost unavoidable. The euro retreated from two-week highs, European stocks opened lower, and safe-haven German bonds opened higher, increasing the premium investors demand to hold French and Dutch bonds.
"It's beginning to look like the perfect storm," said Stewart Richardson, chief investment officer at RMG. "It looks like the French vote was more against Sarkozy than we would have thought last week, and so there is a leftward lurch in France."
Sarkozy challenged Hollande to three television debates over the next two weeks instead of the customary one. But Socialist aides said Hollande, who has no ministerial experience and is a less accomplished television performer than Sarkozy, had made clear he would accept only one prime-time live debate, on May 2.
Communist-backed hard leftist Jean-Luc Melenchon, who polls showed at one stage challenging Le Pen for third place, finished a distant fourth on 11.1 percent, ahead of centrist Francois Bayrou with 9.1 percent.
Political pundits said Hollande still appears to have larger reserves of second-round votes than Sarkozy, who would need to pick up at least three quarters of Le Pen's supporters and two thirds of Bayrou's to squeak a wafer-thin victory.
Polls taken on Sunday by three institutes suggested that between 48 and 60 percent of Le Pen voters planned to switch to the president, while Bayrou's backers split almost evenly between the two finalists, with one third undecided.
"The game is getting very difficult for Nicolas Sarkozy," Jerome Saint-Marie of CSA polling agency told i>TELE. "There's a genuine demand for social justice, precisely because times are hard and voters see sacrifices will have to be made ... What they want is that this pain is fairly shared."
Melenchon, whose fiery calls for a "citizens' revolution" drew tens of thousands to open-air rallies, urged his followers to turn out massively on May 6 to defeat Sarkozy, but he could not bring himself to mention Hollande by name.
Clementine Autain, spokeswoman for his Left Front coalition said his supporters would do all they could to get Sarkozy out and Hollande into power.
Greens candidate Eva Joly endorsed Hollande, who can also count on the modest votes of two Trotskyist also-rans.
"Sarkozy is going to be torn between campaigning in the middle ground and campaigning on the right. He'll have to reach out to the right between the rounds, so he'll lose the centre," said political scientist Stephane Rozes of the CAP think-tank.
If Hollande wins, joining a small minority of left-wing governments in Europe, he has promised to renegotiate a European budget discipline treaty signed by Sarkozy. That could presage tension with German Chancellor Angela Merkel, who made the pact a condition for further assistance to troubled euro zone states.
A spokesman for Merkel said on Monday she continued to support Sarkozy but had no plans to campaign on his behalf.

(Additional reporting by Catherine Bremer, John Irish, Nicholas Vinocur, Vicky Buffery, Alexandria Sage, Brian Love, Matthias Blamont and Daniel Flynn in Paris, Anirban Nag in London; Editing by Peter Graff)

Regulators to Ease a Rule on Derivatives Dealers

Mary L. Schapiro, the chairwoman of the Securities and Exchange Commission, testified before Congress on Tuesday.

By BEN PROTESS
April 17, 2012, 8:40 pm

As federal regulators put the finishing touches on an overhaul of the $700 trillion derivatives market, a major provision has been tempered in the face of industry pressure.

On Wednesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission are expected to approve a rule that would exempt broad swaths of energy companies, hedge funds and banks from oversight. Firms would not face scrutiny if they annually arrange less than $8 billion worth of swaps, the derivative contracts tied to interest rates and commodities like oil and gas.

The threshold is a not-insignificant sum. By one limited set of regulatory data, 85 percent of companies would not be subject to oversight. After five years, the threshold would reset to $3 billion; it is the same amount suggested by a group of energy companies in a February 2011 letter, according to regulatory records.

When regulators first proposed the rules in late 2010, they set the exemption at $100 million. At that level, only 30 percent of the players would have been excused from the oversight, which was mandated by the Dodd-Frank financial overhaul law.

It is unclear whether that data tells the full story. Other numbers produced by the S.E.C. suggest that the initial $100 million plan would have ensnared some companies that the law did not intend to affect.

The agencies that wrote the rule covering so-called swap dealers note that their policy would oversee the largest derivatives players that pose a systemic risk to the broader economy. And despite exempting many companies from oversight, the rule still would capture the vast majority of swaps contracts because it applies to several big banks like Goldman Sachs that arrange most of the deals. Under the rule, the agencies also must study whether the $8 billion figure is appropriate. The agencies could change the figure if it proved too high or low.
Some watchdog groups, however, fear that regulators are carving out a significant loophole that will open the door to problems. The exemption, the culmination of wrangling among the regulators and a yearlong lobbying blitz, would excuse firms from having to post additional capital and file reports.

“That’s bad for the markets, customers and the system as a whole,” said Dennis Kelleher, president and chief executive of Better Markets, a nonprofit advocacy group.

The new rule comes as financial regulation takes center stage in Washington. President Obama called on Tuesday for more “cops on the beat” to monitor speculative commodities trading, which some experts blame for rising gas prices. In a speech in the White House Rose Garden, Mr. Obama invoked the Enron scandal, in which the energy firm amassed a major derivatives trading operation and skirted the law amid lax rules.

In the new rule set to be completed on Wednesday, the controversy lies in the so-called de minimis exemption, a sort of regulatory hall pass for firms that have insignificant derivatives holdings. At $8 billion, Mr. Kelleher said it amounts to a de maximum exemption.

The initial $100 million limit met harsh criticism from most derivatives players, who argued that a single swaps trade can carry a notional value of billions of dollars. The notional amount reflects the value of the underlying assets rather than the amount of money that changes hands. So, on the face of it, even the $8 billion level would be a blip for a market that is valued at $700 trillion.

But the regulatory fine print could allow many firms to whittle down the size of their activity to under $8 billion.

Under the rule, companies can exclude the swaps they use to hedge their business against risk like, say, interest rate fluctuations. And the rule would apply only to a company’s swaps transactions, so firms would not need to count their other varieties of derivatives, like forwards and options. The Commodity Futures Trading Commission also scrapped a strict provision that would have prevented companies that are exempt from the rules from arranging more than 20 swap contracts in one year, regardless of the dollar amount.

As federal regulators put the finishing touches on an overhaul of the $700 trillion derivatives market, a major provision has been tempered in the face of industry pressure.
On Wednesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission are expected to approve a rule that would exempt broad swaths of energy companies, hedge funds and banks from oversight. Firms would not face scrutiny if they annually arrange less than $8 billion worth of swaps, the derivative contracts tied to interest rates and commodities like oil and gas.

The threshold is a not-insignificant sum. By one limited set of regulatory data, 85 percent of companies would not be subject to oversight. After five years, the threshold would reset to $3 billion; it is the same amount suggested by a group of energy companies in a February 2011 letter, according to regulatory records.

When regulators first proposed the rules in late 2010, they set the exemption at $100 million. At that level, only 30 percent of the players would have been excused from the oversight, which was mandated by the Dodd-Frank financial overhaul law.

It is unclear whether that data tells the full story. Other numbers produced by the S.E.C. suggest that the initial $100 million plan would have ensnared some companies that the law did not intend to affect.

The agencies that wrote the rule covering so-called swap dealers note that their policy would oversee the largest derivatives players that pose a systemic risk to the broader economy. And despite exempting many companies from oversight, the rule still would capture the vast majority of swaps contracts because it applies to several big banks like Goldman Sachs that arrange most of the deals. Under the rule, the agencies also must study whether the $8 billion figure is appropriate. The agencies could change the figure if it proved too high or low.
Some watchdog groups, however, fear that regulators are carving out a significant loophole that will open the door to problems. The exemption, the culmination of wrangling among the regulators and a yearlong lobbying blitz, would excuse firms from having to post additional capital and file reports.

“That’s bad for the markets, customers and the system as a whole,” said Dennis Kelleher, president and chief executive of Better Markets, a nonprofit advocacy group.

The new rule comes as financial regulation takes center stage in Washington. President Obama called on Tuesday for more “cops on the beat” to monitor speculative commodities trading, which some experts blame for rising gas prices. In a speech in the White House Rose Garden, Mr. Obama invoked the Enron scandal, in which the energy firm amassed a major derivatives trading operation and skirted the law amid lax rules.

In the new rule set to be completed on Wednesday, the controversy lies in the so-called de minimis exemption, a sort of regulatory hall pass for firms that have insignificant derivatives holdings. At $8 billion, Mr. Kelleher said it amounts to a de maximum exemption.

The initial $100 million limit met harsh criticism from most derivatives players, who argued that a single swaps trade can carry a notional value of billions of dollars. The notional amount reflects the value of the underlying assets rather than the amount of money that changes hands. So, on the face of it, even the $8 billion level would be a blip for a market that is valued at $700 trillion.

But the regulatory fine print could allow many firms to whittle down the size of their activity to under $8 billion.

Under the rule, companies can exclude the swaps they use to hedge their business against risk like, say, interest rate fluctuations. And the rule would apply only to a company’s swaps transactions, so firms would not need to count their other varieties of derivatives, like forwards and options. The Commodity Futures Trading Commission also scrapped a strict provision that would have prevented companies that are exempt from the rules from arranging more than 20 swap contracts in one year, regardless of the dollar amount.

As a result, some large banks and other players are expected to avoid regulatory scrutiny in swaps, based on data from the Office of the Comptroller of the Currency. Both Northern Trust and BOK Financial, the parent company of Bank of Oklahoma, which are listed among the top 25 banks in the derivatives business, could be exempt. Major energy firms like Constellation Energy are also expected to get a pass.

Such companies pushed regulators to relax the rules. A coalition of energy firms, including BP, Constellation Energy and Shell, sent regulators a letter that pitched a $3.5 billion threshold and even suggested specific wording changes to the rule. Another group, known as the Coalition of Physical Energy Companies, proposed a $3 billion figure, the threshold that regulators are set to adopt after five years.

The energy groups dominated the frenetic lobbying effort surrounding the rule and its exemption. Firms dispatched executives to testify before Congress, hired an army of lobbyists and lawyers to draft comment letters and held more than 100 meetings with regulators to discuss the rule, records show. The Coalition of Physical Energy Companies hired the law firm of the former New York City mayor, Rudolph W. Giuliani, to plead its case in Washington. The other group that included Shell and BP had more than 10 meetings with regulators.

That coalition, led by law firm Hunton & Williams, also hired a consulting firm and a former prominent regulator, Sharon Brown-Hruska, to study the rule. Ms. Brown-Hruska, who was acting chairwoman of the C.F.T.C. under President George W. Bush, concluded that “the proposed expansive definition of ‘swap dealer’ is contrary to the public interest.” The study said the rule would reduce liquidity in markets and cause energy companies to cede their business to riskier too-big-to-fail banks.

That concern was echoed by a trade group representing midsize banks, which urged regulators in a letter “to closely examine and understand the low-risk nature of small dealers’ businesses in connection with establishing the criteria for the de minimis exemption.”

Inundated with pressure and complaints from industry groups, regulators debated the proper size of the exemption for months. The trading commission scheduled several meetings to vote on the rule, only to delay the vote each time as both agencies reviewed the final draft.

Ultimately, regulators found only imperfect numbers to support their oversight effort surrounding swaps. The data, which showed that an $8 billion figure would exclude about 85 percent of the companies, is limited to one type of derivatives contract known as a credit-default swap. But the data also encompassed a broader group than necessary, most likely including pension funds and municipalities that are not subject to the federal regulatory crackdown. The S.E.C. relied on separate information that showed the exemption would affect a significantly smaller percentage of companies.

Regulators said they tried to strike a balance using the limited data as a guide. At the least, they argued, the new rules add transparency to a market that went unpoliced during the financial crisis.

pic: Benjamin Myers/ Reuters

Italian banks are the most exposed to their national debt

Mon, Apr 16 2012, 14:38 GMT | FXstreet.com Trader Talk

Source: BNP Paribas

Figures from the European Banking Authority revealed that Italy is the eurozone's country that is the most exposed to its own national debt. The exposure to domestic public debt (% of assets)
is at 7.6%. At the same time, since the euro debt crisis erupted, Italian banks (main ones and small ones) have increased their bond buying and loans to sovereigns. The share of the balance sheets' exposure to sovereign risk has continued to rise and is now at 14%.

Game on for the title: Preview for Man City v Man. Utd: April 30th 2012

Monday 9th April
Dealing with new schedules & superiors is a headache and refreshing at the same time. One thing though, I feel sorry for Shawn Derry, QPR skipper for being wrongly sent off against Man Utd. My opinion is that the decision should be withdrawn to allow QPR to resume the battle against relegation. Utd remain on top of the league but referees should get their decisions right and have the play have the right of spotlight.

Tuesday 10th April
Going through the drudgery that's work and absorbing more pressure like a sponge from the quality department.

Wednesday 11th April
The DW Stadium used to be happy hunting grounds for the Mancunian Reds but not today. Game on for the top spot as Man City win 4-0 against West Brom.

Thursday 12th April
Feeling whooped as to energy-result of sleep-depravation. Some headway on internet access -after reporting to communications authorities- equivalent of FMCC.

Friday 13th April
The dreaded Friday the 13th passes by without raising eyebrows. Despite requesting a review with regards to the assessment criteria, I have to do more research for my degree project-so I went about collecting data at the 2 major banks I'm researching. THen to the laundry in a rain-drenched afternoon.

Saturday 14th April
I wonder what the difference is between 3.75G and 3G in a modem- I still can't have internet access.

Sunday 15th April
Man City winning 6-1 at Norwich & chanting 06161 is one thing, Man Utd beating Villa 4-0 is another.Ashley Young is running against one Juergen Klinsmann for the Goalmouth Theatrics Crown.

Millions From Diamonds Go to Mugabe, Observers Say

By JOHN ELIGON

Published: December 16, 2011

Alexander Joe/Agence France-Presse — Getty Images

President Robert Mugabe of Zimbabwe, center, at a meeting of Southern African leaders in Johannesburg in June.

JOHANNESBURG — Tens of millions of dollars in diamond profits — perhaps more — are being secretly extracted from state-owned mines in eastern Zimbabwe, bypassing the nation’s treasury and raising fears that President Robert Mugabe is amassing wealth to help extend his 31-year reign, according to monitoring groups, diplomats, lawmakers and analysts.

Even if Mr. Mugabe’s allies in the mining ministry are telling the truth about the number of diamonds produced, the treasury was still shortchanged by at least $60 million last year, according to a budget report by the finance minister, one of the president’s chief opponents.

But the amount of money being withheld from the nation’s coffers may be much larger than that. Experts, and even some members of Mr. Mugabe’s own party, say the president’s allies are lowballing the nation’s diamond figures by millions of dollars, hoping to hide the fact that profits are being diverted for personal and political ends.

“The benefits of the diamond sales go primarily to allies of the president,” said Mike Davis, a specialist at Global Witness, a group that has extensively researched the contested mines in eastern Zimbabwe, known as the Marange fields. The strategy, Mr. Davis added, was “part of a wider attempt by people around Mugabe to seize the diamond wealth for their own political purposes, which in the short term means beating and cheating their way to another election.”

Now that Mr. Mugabe no longer controls the Finance Ministry — the result of a tenuous power-sharing arrangement to end the rampant state-sponsored violence during the 2008 presidential election — analysts say he needs outside income to finance his political operations. Diamonds offer him a rare opportunity to do that, especially now that international monitors have agreed to let Zimbabwe sell vast quantities of them, despite repeated warnings that it would enable Mr. Mugabe to tighten his grip on the nation.

Recent expenditures by Mr. Mugabe and his security forces have worried observers that unaccounted money from Marange, estimated to be one of the world’s richest troves because of its volume of diamonds, is financing his party’s groundwork for the early elections he is seeking next year.

The country’s defense forces, which answer to Mr. Mugabe and helped secure his victory in the last election by force, recently bought a large shipment of weapons and equipment from China, local news media reported. The mining ministry has paid millions of dollars in salary increases for civil servants outside its ranks, a form of patronage intended to win votes, according to some lawmakers and watchdog groups. And Anjin — a Chinese mining company in Marange that local and Western officials say the Zimbabwean military has a direct ownership stake in — is financing a new military academy.

“It’s quite clear that there’s much more money floating around than is justified by the level of economic activity,” said Eddie Cross, a Mugabe opponent in Parliament. He told the legislature in October that, based on information from geologists and production records, one company alone mined $1.4 billion in diamonds in Marange last year, far more than the $300 million the mining ministry had reported for all its operations there.

Questions about the diamonds have even caused some splintering within Mr. Mugabe’s party, ZANU-PF, as some benefit personally while others get cut out.

“I personally don’t think the numbers tally at all,” said a former senior ZANU-PF official, speaking anonymously to maintain relationships within the party. “When you look at the fields they are mining and how rich they are and what they later declare, you see that there must be a huge difference.”

“People are asking, ‘Where is the diamond money?’ ” the official added, “and the answers don’t seem to be coming out.”

While Mugabe officials deny any sleight of hand, other members of his party acknowledge that the nation’s mineral wealth does not always make it into the public treasury.

Edward T. Chindori-Chininga, a ZANU-PF member who is chairman of the Parliament’s committee on mines and energy, said that while 60 percent of the country’s exports came from mining, the sector accounted for only 10 to 15 percent of the government’s revenue. All of Zimbabwean mining, including platinum and gold, needs to make sure “that the money truly does come” to the treasury, he says, though he argues that there is no evidence of his party using any money improperly.

The diamonds have become a vivid symbol of Zimbabwe’s conflicts. International monitors and human rights groups say the army seized the Marange fields in 2008, using “horrific violence against civilians.” The Kimberley Process, an international coalition trying to prevent the trade of diamonds that fuel conflict, initially suspended trading from Marange. But in 2010, under pressure from some of Zimbabwe’s neighbors, it authorized two sales over objections from Western powers like the United States.

Zimbabwe sold an additional four million carats of diamonds in November 2010, and last month it was given official approval to export diamonds from Marange, drawing harsh criticism from human rights groups and some Western nations. Global Witness, which helped to establish the Kimberley Process, quit the coalition in protest last week.

Officials within Mr. Mugabe’s party insist that they have accurately reported all Marange revenue. “It is not possible in Zimbabwe to stash away anything by anybody,” said the mining minister, Obert Mpofu. “The systems are so tight. Everything that has been mined in this country, sold in this country, is accounted for.”

Critics, monitors and diplomats strongly disagree. “We hear very detailed reports of how sales are made through suitcases full of cash and antisanctions units in local banks,” said a Western official. “By those sales and revenue details not being conveyed in treasury figures, it leads many to believe that real sales are higher, possibly much higher.”

The political consequences could be stark. A military operation known as Operation Zhunde Ra Mambo, or “blessings of the chief,” financed by the ZANU-PF member who oversees the state’s interests at Marange, has deployed troops to rural areas to intimidate political opponents, according to one former opposition intelligence operative.

Mr. Mugabe has said the power-sharing deal is not working and has called for elections next year, a year ahead of schedule. Some analysts argue that Mr. Mugabe is pushing for elections because of his poor health — ZANU-PF would crumble or fracture without its leader — and to capitalize on the diamond wealth while he has it.

How much of the profits the nation’s coffers deserve is a matter of fierce debate. In his budget report, Finance Minister Tendai Biti said the government was entitled to at least 75 percent of gross proceeds, but received only 56 percent of reported earnings last year. Mining officials say the treasury got all it was owed.

But whether all the profits are being reported is another matter. One of the mining companies, Mbada, is owned by the state’s Zimbabwe Mining Development Corporation and The New Reclamation Group, a company based in the wealthy Johannesburg suburb of Sandton. The chairman of Mbada is Robert Mhlanga, Mr. Mugabe’s former pilot and a former member of the Zimbabwean defense forces.

A diamond production expert provided what he said were Mbada’s records for November 2010. They indicate that it produced between $100 million and $121 million worth of diamonds in that month, or possibly more than $1 billion that year. If accurate, that means a single company produced more than three times the amount claimed by the mining ministry for all of Marange.

Mr. Mhlanga and David Kassal, an owner of the New Reclamation Group, declined to comment. But skeptics abound.

“The people who are mining are ZANU-PF faithfuls,” said Moses Mare, another Mugabe opponent in Parliament. “They are not mining for the government. They are mining for their leaders.”

A Zimbabwean journalist contributed reporting.

Sony sees record $6.4 billion loss on tax hit

By Tim Kelly

                      Sony Corp Chief Financial Officer Masaru Kato attends a news conference in Tokyo April 10, 2012. Sony Corp forecast a record $6.4 billion net loss for the business year just ended, double earlier forecasts and a fourth straight year of losses, inflated by writing off deferred tax assets in the United States.
REUTERS/Issei Kato

TOKYO | Tue Apr 10, 2012 9:51am EDT

(Reuters) - Japan's Sony Corp flagged a record $6.4 billion annual net loss, double an earlier forecast and a fourth straight year of red ink, as it writes off deferred tax credits, heaping more pressure on its new CEO to turn around the electronics giant.



Sony, which plans to axe 10,000 jobs - around 6 percent of its global workforce - according to media reports this week, has been hammered by weak demand for its televisions and overtaken by more innovative gadget rivals such as Apple Inc and Samsung Electronics.

Yet, in a bid to ease investor concerns over its deteriorating bottom line, Sony forecast it would bounce back in the current year to end-March 2013 with an operating profit of 180 billion yen ($2.2 billion).

In a sign that Sony's woes are industry-wide among Japan's consumer electronics firms, LCD TV maker Sharp Corp on Tuesday also raised its full-year net loss forecast - to 380 billion yen ($4.67 billion) from 290 billion yen.

Kazuo Hirai, who took over as Sony's CEO this month, has said he is prepared to take "painful steps" to revive the company, insisting he would not hesitate to scale back or withdraw from businesses he deemed uncompetitive. He will lay out his revival strategy in more detail at a briefing scheduled for Thursday.

The Sony veteran, known for reviving the PlayStation gaming operations through aggressive cost-cutting, has promised to get the struggling TV business - which has lost $10 billion alone in 10 years - back on its feet within two years.

"There have been several reasons for our poor results," Chief Financial Officer Masaru Kato said at a news briefing in Tokyo on Tuesday, noting a strong yen and poor demand.

Asked whether the ballooning losses would cause heads to roll among Sony executives, Kato said: "We are aiming for a rebound and for this we have made management changes."

Sony securities traded in Germany slumped almost 10 on Tuesday. In Tokyo, Sony shares closed down 3.5 percent ahead of the announcement, the biggest one-day drop in three weeks in a flat market.

Sony stock has almost halved in little more than a year, and has dropped 11 percent in the past 10 trading sessions.

In a fourth revision to its annual estimates, Sony forecast a 520 billion yen ($6.4 billion) net loss for the year to end-March 2012. In February it had forecast an annual net loss of 220 billion yen. The annual results are due on May 21.

The additional loss is from writing off 300 billion yen of deferred tax assets primarily in the United States - credits built up to use against future taxable profits, but which have been written off due to the company's consistent losses.

The company maintained its February forecast for a 95 billion yen annual operating loss.

A logo of Sony Corp is pictured at an electronic store in Tokyo April 9, 2012.
REUTERS/Yuriko Nakao

"To bring Sony back, Hirai needs to develop personnel and platforms that create competitive and innovative products, but a lot of talent left under early retirement plans," said Tetsuru Ii, president of Commons Asset Management, who oversees about 2.7 billion yen worth of assets and does not hold Sony stock.

"The old Sony culture would only allow it to make things that were the best globally. Under that logic, does it make sense to continue its TV business, when it's not even the market leader in Japan?"

Kato, who would not confirm the reports of job losses other than to note there would be cuts in a chemical business and small LCD unit that are being hived off, said Sony had no plans to raise money through a share offering or other equity finance.

"We can improve shareholder equity in several ways, including bolstering cash flow or selling assets," he told reporters. "Equity finance is also an option, but at this moment we have no concrete plan to do so."

Assuming Sony's assets are still valued at 12.9 trillion yen, the revised loss will push shareholder equity to 1.9 trillion yen, or a ratio of 15 percent, down from 17.2 percent at the end of 2011.

REKINDLING THE FLAME?

Some analysts believe Hirai, a fluent English speaker, can rekindle the Sony flame, saying he will know how to break down its silos and integrate its divisions.

"They could certainly become profitable through downsizing and shrinking some of their loss-making businesses this year, but we'll have to wait and see if they can continuously be profitable," said Yuuki Sakurai, head of fund manager Fukoku Capital, who oversees about 1.5 trillion yen worth of assets. Fukoku has a small holding in Sony, according to Reuters data.

"I think Sony is fighting with its old image. People think Sony can succeed (by doing what it did in the past), when there is a limit to what they can really do (in the current competitive landscape)."

A key concept in Hirai's strategy hinges on merging Sony's robust roster of entertainment properties - including singers Kelly Clarkson and Michael Jackson, and the "Spider-Man" and "Men in Black" film franchises - with its Vaio, Bravia and other electronics brands, in an effort to boost sales.

The new chief plans to widen the content network connecting its PlayStation games consoles to other Sony devices. He has also said the TV business would be crucial to this "convergence" strategy, brushing aside any suggestions of exiting the market.

Recently, Sony pulled out of an LCD panel venture with Samsung, enabling it to obtain screens for its TVs more cheaply. It also agreed to buy out Ericsson's half of their smartphone venture for $1.5 billion to shore up its position in a market where Apple and Samsung have become leaders. Sony has since launched its first smartphones, the Xperia series, under the Sony brand.

Hirai, promoted from head of Sony's consumer products and services businesses that produce the bulk of the group's $85 billion in annual sales, has also singled out medical as a potential core business for the future.

(Additional reporting by Mayumi Negishi, James Topham and Nathan Layne; Editing by Edwina Gibbs and Ian Geoghegan)

An April Fool's Resolutions and Successes

Sunday April 1st
No April pranks for/against me today- that I can count as a success. Watched a nerve-wrecker match- Man City against Sunderland yesterday. It's pleasing to see a brilliant manager's strategy coming together a la Martin O'Neill, Marcelo 'el loco' Bielsa etc.

Monday 2nd April
I have just realised I need to be more positive despite the recent run of results- to pick a popular quote from the football world. Negativity won't help my overall outlook at work and in school. Pleased to see one of my pals working at a financial investment firm- my finances are just a step away from being sorted out. Fat chance!

Tuesday 3rd April
Woke up to the news of Man Utd's victory over Blackburn- a late 2-0 win. Have to go for refresher training at work tomorrow.

Wednesday 4th April
The good thing about training is that it's a break from normal work. Watched Messi score 2 penalties against Milan- well on his way to becoming the greatest ever.

Thursday 5th April
Final day of my work week- found out too late that school was closed for the Easter weekend. That also happened to me a year ago- don't know where I misplaced my memory. The whole school looks like a ghost town and I'm not even allowed in.

Friday 6th April
Had to relax by watching TV series- I admit I can't make better use of my free time. First, Merlin- about King Arthur's supposed magician which is nothing more than a BBC adaptation of the old Celtic story then a Tv adaptation of John Grisham's the Firm- just for intellectual engagement.

Saturday 7th April
Now Liverpool are Matt Lawrenson's favourite, but they're surely off their perch- can't even get ruuning against the rawhide outfit that is the Villans.

Sunday 8th April
End of my 2 day sleepover. Traffic in the city is marvellous. With most people off to the country for the Easter holidays the roads are deserted.

Goldman Sachs now treats shareholders like muppets

corporate governance | goldman sachs

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Say what you like about Goldman Sachs, but it sure is a clever negotiator. The Wall Street firm, which was publicly criticized a few weeks ago by one of its own for running roughshod over the interests of clients – dubbed “muppets” in internal speak – in the pursuit of profit, has now pulled off what looks like the trade of the year. But this one comes at the expense of its own shareholders.

The bank managed to persuade the American Federation of State, County and Municipal Employees (AFSCME) labor union to withdraw a motion that shareholders vote at the annual meeting in May to separate the chairman and chief executive roles. Similar motions failed to gain majority support in the past. But after the publication of executive director Greg Smith’s resignation letter in the New York Times, this year could have been different.

To win AFSCME over, Goldman agreed to appoint a so-called lead director to take on some of the duties a non-executive chairman might be expected to assume. These include presiding over board gatherings when the chairman is absent; facilitating communication between independent directors, the chairman and chief executive; overseeing the board’s governance processes; evaluating the chief and reviewing and approving the agenda.

That all may sound like a nice sop to shareholders. But Goldman has in the past argued that one reason it was opposed to splitting the chairman and chief executive roles was that it had a presiding director, John Bryan, who effectively performed these duties already. The former Sara Lee boss has been on Goldman’s board since 1999.

So, effectively Goldman appears to be doing little beyond changing the name of the role to appease AFSCME and perhaps embellishing it with a few extra duties. True, it will hand the position to a new director. But Bryan was on his way out anyway, as he bumps up against Goldman’s retirement age of 75 for directors.

Of course, replacing Bryan with a more independent, less pliant director could change the balance on Goldman’s board. But compared to the other possible outcome – a shareholder vote in favor of splitting the chairman and chief executive roles – this is a poor trade for Goldman’s owners. Now they know what it feels like being green.

On how to handle bad results- or how not to

Sunday 25th March
Pity myself having to work on Sundays but one has got to do what one's got to do. Slow internet hampering my good mood.
Monday 26th March
Drub beginning of the week racing to achieve targets- need a miracle to achieve them. I let my account manager have a piece of my mind- I don't regret it. Rooney scored a winner against Fulham. By the time he was celebrating I was in my midsummer night's dream.
Tuesday 27th March
D-day nearing on degree award. My performance was according to plan and that's a good pointer.
Wednesday 28th March
Keeping awake is a struggle. Can't read my emails- feeling frantic until I check my degree status. Can't wait.
Thursday 29th March
Well, the results are out- NEGATIVE- can't explain why but I'm thoroughly disappointed. How bad can things get
Friday 30th March
Feels good to be off-duty- time to freshen up and dust off the bad results. One of my pals had positive results on his degree status so that's a good reason to keep my head up.
Saturday 31st March
Can't wait to get internet access. I really need free flow of information- it's easy to take it foregranted in other parts but here it can mean the difference between success and failure- in their full meanings.