Rio Tinto employees Stern Hu, an Australian citizen, and three Chinese citizens, remain in jail – yet their case supposedly moved forward Monday. What we actually know is scant, and it’s not from Chinese authorities, who have been happy to remain silent since imprisoning the four last July. What little information reporters have comes from the Australian government, which has tried to keep an eye on Hu’s case, and it’s this: Chinese police handed the Rio Tinto employees’ cases to prosecutors. Colleagues James T. Areddy and Alex Wilson write: “While Chinese officials issued no announcement of Monday’s move, Australia’s government said it was informed that evidence supporting accusations of criminal behavior … had been handed to prosecutors by the Shanghai Public Security Bureau.” And so the murky case “proceeds” either to a quick trial or further delays – we don’t know, because China’s legal system lacks transparency. As my colleagues write, “The case has fueled a political storm in Australia and debates in corporate boardrooms whether it is a normal criminal matter, as Beijing has contended, or a sign of how China may use economic might to challenge multinationals.” Here’s my previous blog on the matter.
Archive for January 11th, 2010
Australia, China, Law, Mining Industry, Natural Resources / Comments Off
Consumer Finance, Financial Markets, mutual funds, Pensions, Stock Market, United States, Wall Street, Washington / 1 Comment
My first reaction to news that most Americans polled by a mutual-fund trade group continue to have a favorable view of 401(k) retirement plans was to marvel at the apparent near amnesiac state of those queried.
My second thought was that even if 90% of the households surveyed for the Investment Company Institute had a favorable opinion of retirement plans, it didn’t mean self-directed 401(k)s are an appropriate retirement savings device for all Americans.
“The 401(k) system has a long and productive future ahead in providing retirement security for millions and millions of Americans,” said Paul Schott Stevens, who heads the ICI mutual fund trade group.
Has everyone forgotten the gallows humor of relabeling the ubiquitous retirement plans, typically based on mutual fund investments, 201(k)s to symbolize the bear market’s rough treatment of their value?
If you were going to retire somewhere in 2008, even if you had a balanced 401(k) investment plan, odds are the bear market ripped through that plan, prompting you to work longer or live more modestly.
This bear market, and maybe that marks its rarity, was not respectful of asset allocation. Stocks and bonds went down and there were precious few places to hide.
Some structural alternatives ought to be considered. I suggested that creative minds on Wall Street would come up with structures that took more and more risk out of accumulated savings as retirement approached.
Maybe they will. Or maybe the bull market in stocks from the bottoms in March 2009 has done enough repair work to 401(k) portfolios to cause a pleasant amnesia and dull the desire for change.
Perhaps it’s as simple as allowing people to keep safe increasing percentages of their retirement funds from the vagaries of markets as they age.
Commercial Mortgages, Credit Crisis, Financial Markets / Comments Off
The conventional wisdom has been that the problems in the commercial real estate market might peak at the end of this year or certainly by early 2011. Now, one of the major ratings agencies is out with a report that suggests the peak in problems won’t happen until 2012. That not-so-rosy scenario was part of a monthly delinquency report from Fitch, which says are up five times from a year ago. The big loser? Hotels. About 9.13% of those loans are delinquent ($4.6 billion versus $363.7 million a year ago. - a 1,175% increase. It’s no wonder companies like Hyatt are on the prowl for acquisitions. See WSJ interview with Hyatt CEO.
Banks, Commercial Mortgages, Construction Loans, Credit Crisis / Comments Off
Associated Banc-Corp invites customers to learn how to put a safety net around their hard-earned money. The company is aggressively trying to do the same thing to its own financials.
The Green Bay bank reported a big loss today for hte fourth quarter ($161 million) and put all of the blame on its commercial loan portfolio. A huge chunk of the problems are in its construction loan portfolio – it charged off $124 million of those loans (which is more than half of its total charge offs). That $124 million was an 871% increase from just the third quarter of last year. Commercial real estate charge offs of $40 million were an 811% increase from the third quarter.