Stephen Slevin's long-running legal battle over the case
ends with $15.5 million in compensaion
Stephen can now mix wth the rich guys
'Forgotten' Prisoner Gets $15.5m Compensation
A prisoner who was held in solitary confinement for two years has been awarded $15.5m (£10.3m) in compensation.
A court in southern New Mexico reached the record settlement to end Stephen Slevin's long-running legal battle over the case.
The payout - one of the largest federal civil rights settlements in history - stems from mediation ordered by a federal appeals court.
Dona Ana County had appealed against a lower court decision to uphold the original \$22m (£14.6m) judgement that was awarded last January.
According to the 58-year-old's lawsuit, he spent 22 months in jail after being arrested for drink-driving in 2005.
He was never brought before a judge nor convicted of any crime.
But he was so neglected that his toenails curled around his foot and he developed fungus on his skin because he was deprived of showers.
He eventually took out his own tooth.
His physical and mental health continues to deteriorate under the strain.
He now has lung cancer but is currently beating the doctors' odds for his survival.
"Why they did what they did I'll never know," Mr Slevin told KOB4-TV outside the court.
"Walking by me, watching me deteriorate day after day after day, and they did nothing at all to get me help."
The county's board of commissioners said in a statement that it regretted the harm Mr Slevin suffered while in custody.
Forbes' Billionaire Club Boasts 210 New Super Rich Members
Forbes' 2013 list of billionaires includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion
AP
Mexican telecommunications tycoon Carlos Slim speaks during news conference at the Soumaya museum in Mexico City. Forbes magazine says Monday, March 4, 2013, that Mexico's Carlos Slim remains the world's richest man for the fourth year in a row, while Warren Buffett dropped out of the top three for the first time since 2000.
It was a record-setting year for the billionaire club.
Forbes' 2013 list of billionaires was published on Monday and it includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion, up from $4.6 trillion. There are 210 new people who made the list with fortunes that reached 10 figures in the last 12 months. The United States once again led with 442 billionaires, followed by Asia's 386. Europe (366), the Americas (129) and the Middle East & Africa (103), round out the regions with the most numbers of the super rich.
Microsoft founder Bill Gates came in second to Mexico's telecom mogul Carlos Slim who has held the lead since 2010. And while Spain faces crippling unemployment and a shrinking economy, their richest billionaire Amancio Ortego of retailer Zara made the list at No. 3 for the first time.
Warren Buffett came in at No. 4, which marks the first year since 2000 that the investment tycoon did not make the top three. He is, however, the year's biggest gainer, adding $19.5 billion to his fortune. Buffett's Berkshire Hathaway made headlines last month when it announced that it will buy Heinz Ketchup for $23.3 billion.
For full U.S. news coverage, visit NBCNews.com
New York City's mayor Michael Bloomberg made the list at lucky No. 13. The businessman-turned-politician's fortune increased by $5 billion in 2012 to $27 billion.
Miami Heat owner and CEO of cruise operator Carnival Corp. Micky Arison made a surprise appearance on the list at No. 211. Arison made Forbes Magazine's five biggest money-losers in 2011 as he lost $1.3 billion due to the declining stock price of Carnival Corp. and losses from the NBA lockout.
Carnival also made headlines when the Costa Concordia ran aground in 2012 and more recently when their Triumph cruise ship caught fire and left passengers stranded at sea for five days.
The list also has its share of critics. Saudi billionaire Prince Alwaleed bin Talal, No. 26, wanted to be removed from the list citing a flawed and biased valuation against Middle Eastern businesses, according to Reuters.
Mayor Bloomberg is also not a big fan.
“Look, the numbers in these things are always suspect,” Bloomberg told a New York Post reporter. “And I never liked any of these lists.”
This is the 27th year that Forbes has published the billionaires list. They compile net worths by evaluating individual assets including "stakes in public and private companies, real estate, yachts, art and cash–and account for debt," according to their website.
http://www.nbcwashington.com/news/national-international/Forbes-Billionaire-Club-Boasts-210-New-Super-Rich-Members-195284541.html
Thu, 14 Feb 2013 15:04:51 GMT | By Damian Clarkson, senior editor, MSN Money
Buffett snaps up food giant Heinz for £18bn
Heinz chairman promises deal will provide “tremendous value” for shareholders.
Heinz chairman promises deal will provide “tremendous value” for shareholders.
Image © AP
US billionaire and philanthropist Warren Buffett is part of a consortium set to purchase Heinz for $28 billion (£18bn).
The food and condiment giant described the deal as the largest ever in the food industry, and chief executive William Johnson added:
"The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders.
"We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz."
The takeover has already been approved by the company's board, although it still needs to be voted on by shareholders.
Given Buffet's surname and the fact Heinz is famous for beans and ketchup, expect a raft of pun-heavy headlines in the coming days.
The deal has also attracted a load of wannabe comedians on Twitter. Here's what some had to say:
Sue Beesley @suebeesley
Surely he's got enough beans to count already... bbc.in/15f2vB5#WarrenBuffet #Heinz
Husain/Festaa @Festi_1
Didn't know ketchup was so valuable #heinz
Sarah D @londonette
Beanz Meanz Buffett doesn't quite have the same ring "@highamnews: Warren Buffett buying HJ Heinz for $28bn" #heinz
Benjamin Sesser @bsesser
Let's be real, Warren Buffet bought H.J. Heinz because he likes ketchup. $HNZ#Heinz
Tritonville Capital @TritonvilleCap
Buffett is buying beans!!.... #Heinz
Is Forbes rich list biased against the Middle East?
http://money.uk.msn.com/features/is-forbes-rich-list-biased-against-the-middle-east#image=3
Saudi billionaire claims Forbes valuations seem designed to disadvantage Middle Eastern investors
Saudi billionaire Prince Alwaleed bin Talal has severed ties with the Forbes rich list after he accused the publication of understating his wealth.
Alwaleed is even quoted in the Guardian and FT as claiming that Forbes’ valuations seem “designed to disadvantage Middle Eastern institutions and investors”.
The publication unveiled its rich list yesterday, ranking Alwaleed as the 26th wealthiest person in the world, with a net worth of $20 billion (£13.1bn).
But Alwaleed claims he is actually worth $29.6 billion (£19.5bn), which would place him inside the top 10.
The problem is that valuations can be determined in different ways, so there isn’t really a definitive answer – as illustrated by the fact that Bloomberg ranks Alwaleed as the world's 16th wealthiest person in its own rich list.
As a result of the dispute, Alwaleed has refused to provide Forbes with information about his wealth for future editions of the rich list.
In response, the publication has announced it will publish a more detailed analysis of the Prince’s finances later today.
Clearly, some people care deeply about where they rank among the world’s richest. Scroll on to see who Forbes believes really belongs in the top 10.
related stories on msn
Prince Alwaleed bin Talal says Forbes rich list underestimates his wealth
Billionaires' club has welcomed 210 new members, Forbes rich list reports
Mexican Slim is still richest man
Hip-hop heavyweight Jay-Z NOT Forbes Cash King, so who is?
Bernard Arnault is the CEO of worldwide luxury goods firm LVMH. According to Forbes, his fortune is mostly held in Christian Dior, which has a 41% stake in LVMH. Despite a whopping $19.1bn net worth, he has actually slipped from fourth last year to 10th in 2013
Liliane Bettencourt is the world’s richest woman. Along with her family, Bettencourt owns 30% of L’Oreal (which her father founded). It’s the first time the 90-year-old has featured in the top 10, thanks to a surge in the value of L’Oreal shares.
Li Ka-Shing has enjoyed a phenomenally successful year, adding $5.5 billion (£3.6bn) to his already-significant fortune. The 84-year-old is chairman of property firm Cheung Kong Holdings and investment firm Hutchison Whampoa, overseeing 250,000 employees in 52 countries.
David Koch shares the title of joint sixth richest person in the world with older brother Charles (more on him in the next slide). He is the executive vice president of Koch Industries, which has a hand in many different industries, including refining, chemicals and commodity trading and services. According to Forbes, David had “bet a lot” on ejecting Barack Obama from the White House in the last elections, describing Obama’s subsequent victory as 'bitterly disappointing'. A known philanthropist, he has given away more than $1bn (£660 million) over his lifetime.
Both Charles Koch and his younger brother saw their wealth increase by a whopping $9 billion (£5.9bn) in the last year. That was thanks largely to soaring profits in Koch Industries’ refining and chemicals businesses.
The CEO of Oracle and third-richest American is now worth an estimated $43 billion (£28.3bn), with his shares in the company up more than 20% year-on-year.v In fact, he’s so flush with cash that he recently purchase 98% Hawaiian island of Lanai from David Murdock, according to Forbes, for a reported $500 million (£330m). Oh, and he also snapped up to Los Angeles mansions for a combined cost of $55 million (£36.2m).
Perhaps the biggest piece of business Buffett carried out in the last year was his purchase of food giant Heinz for £18bn. The philanthropist also donated a further $1.5 billion (£990m) to the Gates Foundation last July, meaning he has now donated more than $17 billion (£11.2bn) to good causes in his life.
Armancio Ortega owes his fortune to multinational clothing company Inditex, of which he was chairman until 2011. The Spaniard still owns 60% of the shares in the company, which is a good thing as far as he’s concerned: shares soared nearly 50% year-on-year, earning Ortega an eye-watering $19.5bn (£12.9bn). That mean he is now worth £37.6 billion, putting him third on Forbes rich list. Perhaps the biggest piece of business Buffett carried out in the last year was his purchase of food giant Heinz for £18bn. The philanthropist also donated a further $1.5 billion (£990m) to the Gates Foundation last July, meaning he has now donated more than $17 billion (£11.2bn) to good causes in his life.
Philanthropist and Microsoft co-founder Bill Gates is second on the list. According to Forbes, he increased his fortune from $61 billion to $67 billion (£44.2bn) over the last year, thanks mainly to his private equity, bond, and stock investments, which are spread across a number of industries. Gates has now donated a total of $28 billion (£18.4bn) to good causes through the Bill & Melinda Gates Foundation.
The Mexican telecoms mogul has been ranked the world’s richest person for the fourth year in a row, increasing his fortune by a further $4 billion (£2.6bn) in the last year alone. Interestingly, Slim does not hold an executive position at any of the companies he controls, choosing to merely advise on strategy instead.
http://tech.uk.msn.com/guardian/billionaires-club-has-welcomed-210-new-members-forbes-rich-list-reports
http://www.nbcwashington.com/news/national-international/Forbes-Billionaire-Club-Boasts-210-New-Super-Rich-Members-195284541.html
Forbes' Billionaire Club Boasts 210 New Super Rich Members
Forbes' 2013 list of billionaires includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion
By An Phung Tuesday, Mar 5, 2013
Mexican telecommunications tycoon Carlos Slim speaks during news conference at the Soumaya museum in Mexico City. Forbes magazine says Monday, March 4, 2013, that Mexico's Carlos Slim remains the world's richest man for the fourth year in a row, while Warren Buffett dropped out of the top three for the first time since 2000.
It was a record-setting year for the billionaire club.
Forbes' 2013 list of billionaires was published on Monday and it includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion, up from $4.6 trillion. There are 210 new people who made the list with fortunes that reached 10 figures in the last 12 months.
The United States once again led with 442 billionaires, followed by Asia's 386. Europe (366), the Americas (129) and the Middle East & Africa (103), round out the regions with the most numbers of the super rich.
Microsoft founder Bill Gates came in second to Mexico's telecom mogul Carlos Slim who has held the lead since 2010. And while Spain faces crippling unemployment and a shrinking economy, their richest billionaire Amancio Ortego of retailer Zara made the list at No. 3 for the first time.
Warren Buffett came in at No. 4, which marks the first year since 2000 that the investment tycoon did not make the top three. He is, however, the year's biggest gainer, adding $19.5 billion to his fortune. Buffett's Berkshire Hathaway made headlines last month when it announced that it will buy Heinz Ketchup for $23.3 billion.
For full U.S. news coverage, visit NBCNews.com
New York City's mayor Michael Bloomberg made the list at lucky No. 13. The businessman-turned-politician's fortune increased by $5 billion in 2012 to $27 billion.
Miami Heat owner and CEO of cruise operator Carnival Corp. Micky Arison made a surprise appearance on the list at No. 211. Arison made Forbes Magazine's five biggest money-losers in 2011 as he lost $1.3 billion due to the declining stock price of Carnival Corp. and losses from the NBA lockout.
Carnival also made headlines when the Costa Concordia ran aground in 2012 and more recently when their Triumph cruise ship caught fire and left passengers stranded at sea for five days.
The list also has its share of critics. Saudi billionaire Prince Alwaleed bin Talal, No. 26, wanted to be removed from the list citing a flawed and biased valuation against Middle Eastern businesses, according to Reuters.
Mayor Bloomberg is also not a big fan.
“Look, the numbers in these things are always suspect,” Bloomberg told a New York Post reporter. “And I never liked any of these lists.”
This is the 27th year that Forbes has published the billionaires list. They compile net worths by evaluating individual assets including "stakes in public and private companies, real estate, yachts, art and cash–and account for debt," according to their website.
http://www.forbes.com/fdc/welcome_mjx.shtml
Forbes Thought Of The Day
“ A treasure is to be valued for its own sake and not for what it will buy. ”
— Graham Greene
Why Prince Alwaleed's Wealth Numbers Just Don't Add Up
Prince Alwaleed Bin Talal of Saudi Arabia says he's one of the ten richest people in the world. After a closer look at Alwaleed's numbers--and the true value of his public company, Kingdom Holding--FORBES doesn't buy it.
Billionaire Dropoffs: The 60 Who Couldn't Keep Up
Caleb Melby, Forbes Staff
Dow Hits Record High As Rally Keeps Rolling Above Oct. 2007 Peak
Steve Schaefer, Forbes Staff
As Music Festivals Heat Up, Eventbrite Expands Its Market Share
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Is Forbes rich list biased against the Middle East?
http://money.uk.msn.com/features/is-forbes-rich-list-biased-against-the-middle-east#image=3
Saudi billionaire claims Forbes valuations seem designed to disadvantage Middle Eastern investors
Saudi billionaire Prince Alwaleed bin Talal has severed ties with the Forbes rich list after he accused the publication of understating his wealth.
Alwaleed is even quoted in the Guardian and FT as claiming that Forbes’ valuations seem “designed to disadvantage Middle Eastern institutions and investors”.
The publication unveiled its rich list yesterday, ranking Alwaleed as the 26th wealthiest person in the world, with a net worth of $20 billion (£13.1bn).
But Alwaleed claims he is actually worth $29.6 billion (£19.5bn), which would place him inside the top 10.
The problem is that valuations can be determined in different ways, so there isn’t really a definitive answer – as illustrated by the fact that Bloomberg ranks Alwaleed as the world's 16th wealthiest person in its own rich list.
As a result of the dispute, Alwaleed has refused to provide Forbes with information about his wealth for future editions of the rich list.
In response, the publication has announced it will publish a more detailed analysis of the Prince’s finances later today.
Clearly, some people care deeply about where they rank among the world’s richest. Scroll on to see who Forbes believes really belongs in the top 10.
related stories on msn
Prince Alwaleed bin Talal says Forbes rich list underestimates his wealth
Billionaires' club has welcomed 210 new members, Forbes rich list reports
Mexican Slim is still richest man
Hip-hop heavyweight Jay-Z NOT Forbes Cash King, so who is?
Bernard Arnault is the CEO of worldwide luxury goods firm LVMH. According to Forbes, his fortune is mostly held in Christian Dior, which has a 41% stake in LVMH. Despite a whopping $19.1bn net worth, he has actually slipped from fourth last year to 10th in 2013
Liliane Bettencourt is the world’s richest woman. Along with her family, Bettencourt owns 30% of L’Oreal (which her father founded). It’s the first time the 90-year-old has featured in the top 10, thanks to a surge in the value of L’Oreal shares.
Li Ka-Shing has enjoyed a phenomenally successful year, adding $5.5 billion (£3.6bn) to his already-significant fortune. The 84-year-old is chairman of property firm Cheung Kong Holdings and investment firm Hutchison Whampoa, overseeing 250,000 employees in 52 countries.
David Koch shares the title of joint sixth richest person in the world with older brother Charles (more on him in the next slide). He is the executive vice president of Koch Industries, which has a hand in many different industries, including refining, chemicals and commodity trading and services. According to Forbes, David had “bet a lot” on ejecting Barack Obama from the White House in the last elections, describing Obama’s subsequent victory as 'bitterly disappointing'. A known philanthropist, he has given away more than $1bn (£660 million) over his lifetime.
Both Charles Koch and his younger brother saw their wealth increase by a whopping $9 billion (£5.9bn) in the last year. That was thanks largely to soaring profits in Koch Industries’ refining and chemicals businesses.
The CEO of Oracle and third-richest American is now worth an estimated $43 billion (£28.3bn), with his shares in the company up more than 20% year-on-year.v In fact, he’s so flush with cash that he recently purchase 98% Hawaiian island of Lanai from David Murdock, according to Forbes, for a reported $500 million (£330m). Oh, and he also snapped up to Los Angeles mansions for a combined cost of $55 million (£36.2m).
Perhaps the biggest piece of business Buffett carried out in the last year was his purchase of food giant Heinz for £18bn. The philanthropist also donated a further $1.5 billion (£990m) to the Gates Foundation last July, meaning he has now donated more than $17 billion (£11.2bn) to good causes in his life.
Armancio Ortega owes his fortune to multinational clothing company Inditex, of which he was chairman until 2011. The Spaniard still owns 60% of the shares in the company, which is a good thing as far as he’s concerned: shares soared nearly 50% year-on-year, earning Ortega an eye-watering $19.5bn (£12.9bn). That mean he is now worth £37.6 billion, putting him third on Forbes rich list. Perhaps the biggest piece of business Buffett carried out in the last year was his purchase of food giant Heinz for £18bn. The philanthropist also donated a further $1.5 billion (£990m) to the Gates Foundation last July, meaning he has now donated more than $17 billion (£11.2bn) to good causes in his life.
Philanthropist and Microsoft co-founder Bill Gates is second on the list. According to Forbes, he increased his fortune from $61 billion to $67 billion (£44.2bn) over the last year, thanks mainly to his private equity, bond, and stock investments, which are spread across a number of industries. Gates has now donated a total of $28 billion (£18.4bn) to good causes through the Bill & Melinda Gates Foundation.
The Mexican telecoms mogul has been ranked the world’s richest person for the fourth year in a row, increasing his fortune by a further $4 billion (£2.6bn) in the last year alone. Interestingly, Slim does not hold an executive position at any of the companies he controls, choosing to merely advise on strategy instead.
http://tech.uk.msn.com/guardian/billionaires-club-has-welcomed-210-new-members-forbes-rich-list-reports
http://www.nbcwashington.com/news/national-international/Forbes-Billionaire-Club-Boasts-210-New-Super-Rich-Members-195284541.html
Forbes' Billionaire Club Boasts 210 New Super Rich Members
Forbes' 2013 list of billionaires includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion
By An Phung Tuesday, Mar 5, 2013
Mexican telecommunications tycoon Carlos Slim speaks during news conference at the Soumaya museum in Mexico City. Forbes magazine says Monday, March 4, 2013, that Mexico's Carlos Slim remains the world's richest man for the fourth year in a row, while Warren Buffett dropped out of the top three for the first time since 2000.
It was a record-setting year for the billionaire club.
Forbes' 2013 list of billionaires was published on Monday and it includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion, up from $4.6 trillion. There are 210 new people who made the list with fortunes that reached 10 figures in the last 12 months.
The United States once again led with 442 billionaires, followed by Asia's 386. Europe (366), the Americas (129) and the Middle East & Africa (103), round out the regions with the most numbers of the super rich.
Microsoft founder Bill Gates came in second to Mexico's telecom mogul Carlos Slim who has held the lead since 2010. And while Spain faces crippling unemployment and a shrinking economy, their richest billionaire Amancio Ortego of retailer Zara made the list at No. 3 for the first time.
Warren Buffett came in at No. 4, which marks the first year since 2000 that the investment tycoon did not make the top three. He is, however, the year's biggest gainer, adding $19.5 billion to his fortune. Buffett's Berkshire Hathaway made headlines last month when it announced that it will buy Heinz Ketchup for $23.3 billion.
For full U.S. news coverage, visit NBCNews.com
New York City's mayor Michael Bloomberg made the list at lucky No. 13. The businessman-turned-politician's fortune increased by $5 billion in 2012 to $27 billion.
Miami Heat owner and CEO of cruise operator Carnival Corp. Micky Arison made a surprise appearance on the list at No. 211. Arison made Forbes Magazine's five biggest money-losers in 2011 as he lost $1.3 billion due to the declining stock price of Carnival Corp. and losses from the NBA lockout.
Carnival also made headlines when the Costa Concordia ran aground in 2012 and more recently when their Triumph cruise ship caught fire and left passengers stranded at sea for five days.
The list also has its share of critics. Saudi billionaire Prince Alwaleed bin Talal, No. 26, wanted to be removed from the list citing a flawed and biased valuation against Middle Eastern businesses, according to Reuters.
Mayor Bloomberg is also not a big fan.
“Look, the numbers in these things are always suspect,” Bloomberg told a New York Post reporter. “And I never liked any of these lists.”
This is the 27th year that Forbes has published the billionaires list. They compile net worths by evaluating individual assets including "stakes in public and private companies, real estate, yachts, art and cash–and account for debt," according to their website.
http://www.forbes.com/fdc/welcome_mjx.shtml
Forbes Thought Of The Day
“ A treasure is to be valued for its own sake and not for what it will buy. ”
— Graham Greene
Why Prince Alwaleed's Wealth Numbers Just Don't Add Up
Prince Alwaleed Bin Talal of Saudi Arabia says he's one of the ten richest people in the world. After a closer look at Alwaleed's numbers--and the true value of his public company, Kingdom Holding--FORBES doesn't buy it.
Billionaire Dropoffs: The 60 Who Couldn't Keep Up
Caleb Melby, Forbes Staff
Dow Hits Record High As Rally Keeps Rolling Above Oct. 2007 Peak
Steve Schaefer, Forbes Staff
As Music Festivals Heat Up, Eventbrite Expands Its Market Share
Meghan Casserly, Forbes Staff
What The Combined Wealth Of All 1,426 Billionaires Could Do
Brian Solomon, Forbes Staff
Bazooka Gum Launches A New Look, Web Channel To Make Kids Chew
Alex Konrad, Forbes Staff
Dale Stephens: Ditch College, Create Your Own Educational Experience
Dan Schawbel, Contributor
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Connecting marketers to the Forbes audience. What is this?
Forbes BrandVoice™ allows marketers to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform. Each BrandVoice™ is written, edited and produced by the marketer. More on BrandVoice™ here , or email us directly at brandvoice@forbes.com.
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Is Forbes rich list biased against the Middle East?
http://money.uk.msn.com/features/is-forbes-rich-list-biased-against-the-middle-east#image=3
Saudi billionaire claims Forbes valuations seem designed to disadvantage Middle Eastern investors
Saudi billionaire Prince Alwaleed bin Talal has severed ties with the Forbes rich list after he accused the publication of understating his wealth.
Alwaleed is even quoted in the Guardian and FT as claiming that Forbes’ valuations seem “designed to disadvantage Middle Eastern institutions and investors”.
The publication unveiled its rich list yesterday, ranking Alwaleed as the 26th wealthiest person in the world, with a net worth of $20 billion (£13.1bn).
But Alwaleed claims he is actually worth $29.6 billion (£19.5bn), which would place him inside the top 10.
The problem is that valuations can be determined in different ways, so there isn’t really a definitive answer – as illustrated by the fact that Bloomberg ranks Alwaleed as the world's 16th wealthiest person in its own rich list.
As a result of the dispute, Alwaleed has refused to provide Forbes with information about his wealth for future editions of the rich list.
In response, the publication has announced it will publish a more detailed analysis of the Prince’s finances later today.
Clearly, some people care deeply about where they rank among the world’s richest. Scroll on to see who Forbes believes really belongs in the top 10.
related stories on msn
Prince Alwaleed bin Talal says Forbes rich list underestimates his wealth
Billionaires' club has welcomed 210 new members, Forbes rich list reports
Mexican Slim is still richest man
Hip-hop heavyweight Jay-Z NOT Forbes Cash King, so who is?
Bernard Arnault is the CEO of worldwide luxury goods firm LVMH. According to Forbes, his fortune is mostly held in Christian Dior, which has a 41% stake in LVMH. Despite a whopping $19.1bn net worth, he has actually slipped from fourth last year to 10th in 2013
Liliane Bettencourt is the world’s richest woman. Along with her family, Bettencourt owns 30% of L’Oreal (which her father founded). It’s the first time the 90-year-old has featured in the top 10, thanks to a surge in the value of L’Oreal shares.
Li Ka-Shing has enjoyed a phenomenally successful year, adding $5.5 billion (£3.6bn) to his already-significant fortune. The 84-year-old is chairman of property firm Cheung Kong Holdings and investment firm Hutchison Whampoa, overseeing 250,000 employees in 52 countries.
David Koch shares the title of joint sixth richest person in the world with older brother Charles (more on him in the next slide). He is the executive vice president of Koch Industries, which has a hand in many different industries, including refining, chemicals and commodity trading and services. According to Forbes, David had “bet a lot” on ejecting Barack Obama from the White House in the last elections, describing Obama’s subsequent victory as 'bitterly disappointing'. A known philanthropist, he has given away more than $1bn (£660 million) over his lifetime.
Both Charles and his younger brother saw their wealth increase by a whopping $9 billion (£5.9bn) in the last year. That was thanks largely to soaring profits in Koch Industries’ refining and chemicals businesses.
The CEO of Oracle and third-richest American is now worth an estimated $43 billion (£28.3bn), with his shares in the company up more than 20% year-on-year.v In fact, he’s so flush with cash that he recently purchase 98% Hawaiian island of Lanai from David Murdock, according to Forbes, for a reported $500 million (£330m). Oh, and he also snapped up to Los Angeles mansions for a combined cost of $55 million (£36.2m).
Armancio Ortega owes his fortune to multinational clothing company Inditex, of which he was chairman until 2011. The Spaniard still owns 60% of the shares in the company, which is a good thing as far as he’s concerned: shares soared nearly 50% year-on-year, earning Ortega an eye-watering $19.5bn (£12.9bn). That mean he is now worth £37.6 billion, putting him third on Forbes rich list. Perhaps the biggest piece of business Buffett carried out in the last year was his purchase of food giant Heinz for £18bn. The philanthropist also donated a further $1.5 billion (£990m) to the Gates Foundation last July, meaning he has now donated more than $17 billion (£11.2bn) to good causes in his life.
Philanthropist and Microsoft co-founder Bill Gates is second on the list. According to Forbes, he increased his fortune from $61 billion to $67 billion (£44.2bn) over the last year, thanks mainly to his private equity, bond, and stock investments, which are spread across a number of industries. Gates has now donated a total of $28 billion (£18.4bn) to good causes through the Bill & Melinda Gates Foundation.
The Mexican telecoms mogul has been ranked the world’s richest person for the fourth year in a row, increasing his fortune by a further $4 billion (£2.6bn) in the last year alone. Interestingly, Slim does not hold an executive position at any of the companies he controls, choosing to merely advise on strategy instead.
http://tech.uk.msn.com/guardian/billionaires-club-has-welcomed-210-new-members-forbes-rich-list-reports
http://www.nbcwashington.com/news/national-international/Forbes-Billionaire-Club-Boasts-210-New-Super-Rich-Members-195284541.html
Forbes' Billionaire Club Boasts 210 New Super Rich Members
Forbes' 2013 list of billionaires includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion
By An Phung Tuesday, Mar 5, 2013
Mexican telecommunications tycoon Carlos Slim speaks during news conference at the Soumaya museum in Mexico City. Forbes magazine says Monday, March 4, 2013, that Mexico's Carlos Slim remains the world's richest man for the fourth year in a row, while Warren Buffett dropped out of the top three for the first time since 2000.
It was a record-setting year for the billionaire club.
Forbes' 2013 list of billionaires was published on Monday and it includes a record 1,426 billionaires with an aggregate net worth of $5.4 trillion, up from $4.6 trillion. There are 210 new people who made the list with fortunes that reached 10 figures in the last 12 months.
The United States once again led with 442 billionaires, followed by Asia's 386. Europe (366), the Americas (129) and the Middle East & Africa (103), round out the regions with the most numbers of the super rich.
Microsoft founder Bill Gates came in second to Mexico's telecom mogul Carlos Slim who has held the lead since 2010. And while Spain faces crippling unemployment and a shrinking economy, their richest billionaire Amancio Ortego of retailer Zara made the list at No. 3 for the first time.
Warren Buffett came in at No. 4, which marks the first year since 2000 that the investment tycoon did not make the top three. He is, however, the year's biggest gainer, adding $19.5 billion to his fortune. Buffett's Berkshire Hathaway made headlines last month when it announced that it will buy Heinz Ketchup for $23.3 billion.
For full U.S. news coverage, visit NBCNews.com
New York City's mayor Michael Bloomberg made the list at lucky No. 13. The businessman-turned-politician's fortune increased by $5 billion in 2012 to $27 billion.
Miami Heat owner and CEO of cruise operator Carnival Corp. Micky Arison made a surprise appearance on the list at No. 211. Arison made Forbes Magazine's five biggest money-losers in 2011 as he lost $1.3 billion due to the declining stock price of Carnival Corp. and losses from the NBA lockout.
Carnival also made headlines when the Costa Concordia ran aground in 2012 and more recently when their Triumph cruise ship caught fire and left passengers stranded at sea for five days.
The list also has its share of critics. Saudi billionaire Prince Alwaleed bin Talal, No. 26, wanted to be removed from the list citing a flawed and biased valuation against Middle Eastern businesses, according to Reuters.
Mayor Bloomberg is also not a big fan.
“Look, the numbers in these things are always suspect,” Bloomberg told a New York Post reporter. “And I never liked any of these lists.”
This is the 27th year that Forbes has published the billionaires list. They compile net worths by evaluating individual assets including "stakes in public and private companies, real estate, yachts, art and cash–and account for debt," according to their website.
http://www.forbes.com/fdc/welcome_mjx.shtml
Forbes Thought Of The Day
“ A treasure is to be valued for its own sake and not for what it will buy. ”
— Graham Greene
Why Prince Alwaleed's Wealth Numbers Just Don't Add Up
Prince Alwaleed Bin Talal of Saudi Arabia says he's one of the ten richest people in the world. After a closer look at Alwaleed's numbers--and the true value of his public company, Kingdom Holding--FORBES doesn't buy it.
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http://www.bloomberg.com/apps/news?pid=20601103&sid=a42ncWgYRldM
Michael Jackson Tour Plan Shows Concerts Are Where Money Is
By Kristen Schweizer
July 7 (Bloomberg) -- Michael Jackson would have moonwalked
his way out of some of his millions of dollars of debt next week
with the first of 50 sold-out concerts at London’s 02 Arena.
Although the shows starting July 13 won’t go on after the
self-proclaimed “King of Pop” died of cardiac arrest last
month, the $50 million that Billboard magazine estimates Jackson
would have made from them illustrates how critical the live
music market has become for top artists. From Madonna to U2,
artists earn tens of millions of dollars from performing live.
With record sales plunging 30 percent in the past decade
and illegal downloads accounting for almost all the music
listened to online, live performance has become the industry’s
most lucrative and fastest-growing segment. Fans are paying
twice the price for tickets to top concerts from a decade ago,
so artists who once performed at live shows to promote record
sales are now churning out albums to boost tour attendance.
“A record now is just a ticket to ride,” Steven Van
Zandt, guitarist and founding member of Bruce Springsteen and
the E Street Band, said in an interview in Cannes, France. Live
shows get “you licenses, movie scenes, TV shows, ad revenue.
Bands can sell live shows much more than records.”
Van Zandt, who also played “Silvio” on the long-running
HBO drama series “The Sopranos,” estimates live performances
make up 95 percent of his income from playing with Springsteen,
versus 75 percent almost 20 years ago. Springsteen’s 2003 tour
was the top-selling act that year and took in $116 million,
according to concert-industry publication Pollstar.
‘Changing of the Guard’
The live performance market raked in $21.6 billion in 2008,
an increase of 54 percent in three years, according to the
International Federation of the Phonographic Industry. Recorded
music sales last year were $18.4 billion, the group said.
“The balance between record sales and live following has
tilted the other way,” said concert promoter Harvey Goldsmith,
who has worked with Jackson, The Who, U2, Bob Dylan and Luciano
Pavarotti. “The reason big acts go on the road is either the
bank manager calling or the wife or girlfriend.”
The top 100 touring acts of 2008 grossed a record $2.43
billion, 6.5 percent more than the year before, Pollstar says.
“The remarkable growth of live revenues hints at a
‘changing of the guard,’ which for many emerging bands leaves
behind a model where you would tour at a loss to sell CDs and
towards a situation where live-related revenues are the main
breadwinner,” said Will Page, chief economist at PRS For Music,
the U.K.’s royalty collection agency.
Record Companies
About 90 percent of a show’s proceeds are pocketed by
artists, who cover agent, management and production fees, he
said. The rest goes to promoters, who pay marketing and
operational costs.
Major record companies are scrambling to find ways to get a
piece of the live action. They’re signing artists to so-called
360 deals, where they get a portion of an artist’s rights to
recorded music, tours, merchandise and marketing.
Warner Music Group, which began signing 360 contracts in
2006, has around half its roster to such deals, said John Reid,
the head of Warner Music U.K. & Europe and vice chairman of
Warner Music International. Artists signed to 360 deals include
Paramore, Katherine Jenkins, Little Boots and Alesha Dixon.
“Tickets have increased because there are now bigger
buildings, bigger services, bigger acts touring,” Reid said. CD
sales meanwhile “continue to be challenged across the
industry,” he said.
Ticket prices gained 8.4 percent in 2008, with the average
price a record $67.33, the biggest single-year increase of $5.25
since tickets began rising in the mid-90s, Pollstar says.
Madonna, Police
Warner, the only publicly traded music label, reported a
wider second-quarter loss in May, citing declining CD sales and
losses on Web music investments.
Live Nation Inc., the world’s largest concert promoter that
is trying to merge with Ticketmaster Entertainment Inc., the
world’s largest ticket seller and artists’ management firm, has
360 deals with Madonna and Shakira.
Ticketmaster Chief Executive Officer Irving Azoff said in
June the Eagles have made about $400,000 in royalties from
recorded music sales through Apple Inc.’s iTunes -- about the
same as it can make from two shows.
The biggest tour last year was Madonna, grossing $105.3
million, according to Pollstar. The Police had the biggest tour
in 2007 with $133.2 million and 2006 was The Rolling Stones at
$138.5 million.
“Business is booming for Madonna, Oasis, Coldplay and Take
That,” said John Giddings, a concert promoter for U2, Madonna
and The Rolling Stones.
Growing Unevenly
Tickets to shows by lesser-known artists are a harder sell.
“Live is growing, but it’s growing unevenly,” PRS’s Page
said. “Artists generating these big numbers can be
characterised as heritage acts. Yet there are growing concerns
with demand for the ‘mid-priced’ touring acts.” The credit
crunch has made it difficult to sell tickets to mid-sized venues
of 1,000-2,000 seats, he said.
Big artists are getting bigger live, earning on sales of
tickets, t-shirts and souvenirs. Their shows have also become
increasingly extravagant. Jackson’s comeback “This is It” tour
was being produced by two-time Emmy award winner Kenny Ortega --
who auditioned more than 5,000 dancers.
Madonna kicked off her tour’s summer leg in London last
week, featuring bondage costumes, pole dancing and two
illuminated, 20-foot letter Ms on either side the stage, in
addition to Swarovski crystals.
Emotional Bonding
Albums may eventually be released along with concert
tickets, Giddings said.
“The days of Michael Jackson selling 25 million albums are
gone forever,” he said. “There’s no better experience than
going to a concert. It’s a defining, bonding and emotional
experience.”
Roger Daltrey, the front man of The Who, says live music is
also booming in part because fans feel too disconnected in the
Internet age.
“The only connection now is through the live field,”
Daltrey said in Cannes, France. He recently wrapped tours with
The Who in Australia and New Zealand. “The trouble with the
digital age is the connection between fans and the bands they
love has been broken. There’s not a lot of human feedback in
today’s world.”
To contact the reporter on this story:
Kristen Schweizerkschweizer1@bloomberg.net
Last Updated: July 6, 2009 20:30 EDT
http://www.bloomberg.com/apps/news?pid=20601103&sid=axYw_ykTBokE
Goldman May Lose Millions From Ex-Worker’s Code Theft (Update1)
By David Glovin and Christine Harper
July 7 (Bloomberg) -- Goldman Sachs Group Inc. may lose its
investment in a proprietary trading code and millions of dollars
from increased competition if software allegedly stolen by a
former employee gets into the wrong hands, a prosecutor said.
Sergey Aleynikov, an ex-Goldman Sachs computer programmer,
was arrested July 3 after arriving at Liberty International
Airport in Newark, New Jersey, U.S. officials said. Aleynikov,
39, who has dual American and Russian citizenship, is charged
in a criminal complaint with stealing the trading software.
Teza Technologies LLC, a Chicago-based firm co-founded by a
former Citadel Investment Group LLC trader, said it suspended
Aleynikov, who started there on July 2.
At a court appearance July 4 in Manhattan, Assistant U.S.
Attorney Joseph Facciponti told a federal judge that Aleynikov’s
alleged theft poses a risk to U.S. markets. Aleynikov transferred
the code, which is worth millions of dollars, to a computer
server in Germany, and others may have had access to it,
Facciponti said, adding that New York-based Goldman Sachs may be
harmed if the software is disseminated.
“The bank has raised the possibility that there is a danger
that somebody who knew how to use this program could use it to
manipulate markets in unfair ways,” Facciponti said, according
to a recording of the hearing made public yesterday. “The copy
in Germany is still out there, and we at this time do not know
who else has access to it.”
‘Preposterous’
The prosecutor added, “Once it is out there, anybody will
be able to use this, and their market share will be adversely
affected.”
The proprietary code lets the firm do “sophisticated, high-
speed and high-volume trades on various stock and commodities
markets,” prosecutors said in court papers. The trades generate
“many millions of dollars” each year.
Defense attorney Sabrina Shroff said in court that the
government’s allegations are “preposterous.” The firm was aware
that Aleynikov, who is the father of three young girls, was
downloading programs to his personal computer to do work at home
and that he hasn’t disseminated the code, the lawyer said.
“If Goldman Sachs cannot possibly protect this kind of
proprietary information that the government wants you to think is
worth the entire United States market, one has to question how
they plan to accommodate every other breach,” she said.
Michael DuVally, a spokesman for Goldman Sachs in New York,
declined to comment.
$750,000 Bail
U.S. Magistrate Judge Mark Fox ordered Aleynikov, who earned
$400,000 a year, to be held by on $750,000 bail, after
prosecutors claimed he posed a threat to the community. Aleynikov
planned to earn three times his salary by joining a startup
company and engaging in high-volume automated trading,
prosecutors said. Aleynikov posted bail yesterday and was
released.
Aleynikov didn’t speak at the hearing, except to say that he
understood the conditions of his bail.
Teza, co-founded by former Citadel trader Misha Malyshev,
said in an e-mailed statement that it first learned of the
allegations on July 5 and suspended Aleynikov without pay
following an investigation.
The firm “was not aware of the alleged misconduct” and
offered to cooperate with the government, according to the
statement.
Reverse Engineering
“Someone stealing that code is basically stealing the way
that Goldman Sachs makes money in the equity marketplace,” said
Larry Tabb, founder of TABB Group, a financial-market research
and advisory firm. “The more sophisticated market makers -- and
Goldman is one of them -- spend significant amounts of money
developing software that’s extremely fast and can analyze
different execution strategies so they can be the first one to
make a decision.”
Someone could use the code “to implement the same
strategies and maybe on certain stocks they can be faster and, in
effect, take away money that would normally be Goldman’s,” Tabb
said in a phone interview. “The second thing that they can do is
actually analyze the code so that they know what Goldman’s going
to do before Goldman does it and kind of reverse engineer
Goldman’s strategies and make money basically at the expense of
Goldman.”
‘Wake-Up Call’
Harvey Pitt, former chairman of the U.S. Securities and
Exchange Commission, said proprietary electronic data poses
significant risks for all financial institutions.
“This is a wake-up call to all financial institutions to
review their security systems, not just with respect to trading
codes, but with respect to all proprietary information,” said
Pitt, now chief executive officer of Kalorama Partners LLC in
Washington.
Goldman appeared to have taken some steps to prevent the
theft of its code, Pitt said. “The real question is whether, in
light of this outrageous conduct on the part of one of its
employees, it should have taken more steps,” Pitt said.
Aleynikov spent four hours with a Federal Bureau of
Investigation agent after his July 3 arrest, Shroff said. He told
the agent that he’d done nothing wrong, authorized prosecutors to
seize his personal computers, and said he hadn’t known the server
he was using was in Germany, she said.
32 Megabits
Only 32 of 1,024 megabits of the software code was
transferred, Shroff said.
“It is not disseminated,” she said of the code.
Facciponti said at the hearing that Aleynikov could
disseminate the code “in 10 minutes” using a cell phone. Once
the government obtains access to the German server, prosecutors
will see if Aleynikov transferred other confidential data as well,
he said. It’s logical to conclude that Aleynikov planned to use
the code at his new company, the prosecutor said.
“This is the most substantial theft that the bank can
remember ever happening to it, in the sense the entire platform
has been taken from it,” Facciponti said. “There has been no
breaches anywhere on this magnitude at the bank.”
Aleynikov worked at Goldman from 2007 until June, the
government said in the complaint. He was part of a team of
workers responsible for improving the computer platform. His
alleged transfer of computer codes ran from June 1 to June 5,
according to prosecutors.
Moscow, Rutgers
Aleynikov studied applied mathematics at the Moscow
Institute of Transportation Engineering before transferring to
Rutgers University, where he received a bachelor’s degree in
computer science in 1993 and a master’s of science degree,
specializing in medical image processing and neural networks, in
1996, according to his profile on the social-networking site
LinkedIn.
Before joining Goldman Sachs, he worked for about eight
years at IDT Corp., the U.S. vendor of prepaid calling cards,
where he led the team responsible for developing routing systems,
according to the profile.
His profile on LinkedIn describes him as a vice president in
equity strategy at Goldman Sachs and includes two recommendations
from colleagues at the firm.
Goldman Profit
Goldman was the world’s biggest and most profitable
securities firm until it converted to a bank in September
following the bankruptcy of smaller rival Lehman Brothers
Holdings Inc. Goldman earned $2.3 billion last year, down from a
record $11.6 billion in 2007, as market turmoil caused it to
report a fourth-quarter loss, its first in a decade as a public
company.
Goldman’s equities business generated $2 billion of revenue
in the first three months of 2009, down 20 percent from the first
quarter of 2008, the company reported in April. Second-quarter
results are due to be reported next week.
Goldman rose $2.97, or 2.1 percent, to $146.46 in New York
Stock Exchange composite trading yesterday.
The case is U.S. v. Aleynikov, U.S. District Court, Southern
District of New York (Manhattan).
To contact the reporters on this story:
David Glovin in New York federal court at
dglovin@bloomberg.net;
Christine Harper in New York at
charper@bloomberg.net.
Last Updated: July 7, 2009 00:09 EDT
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GM Creditors Will Let Asset Sale Go Forward While They Appeal
By Christopher Scinta
July 7 (Bloomberg) -- General Motors Corp.’s sale of most
of its assets to a U.S. Treasury-funded buyer won’t be stalled
by the only appeal of a decision approving the transaction, a
lawyer for objecting creditors said.
Steven Jakubowski, a lawyer for creditors appealing a
July 5 ruling, said he won’t seek a stay blocking the sale while
the appeal is being considered. His clients are people with
accident-related claims involving GM vehicles. Jakubowski said
the new company should take responsibility for claims that
predate the sale.
U.S. Bankruptcy Judge Robert Gerber, who approved the sale,
said it was the only option available to the bankrupt Detroit-
based automaker, which filed for court protection June 1. The
appeal should go directly to a federal appeals court, Jakubowski
said.
“This is a matter of public importance,” Jakubowski, an
attorney with the Coleman Law Firm in Chicago, said in a phone
interview on why he appealed yesterday.
Gerber stayed his order through noon New York time July 9
to give opponents a chance to appeal. GM asked that the order to
be made effective immediately.
The Unofficial Committee of Family & Dissident GM
Bondholders said in an e-mailed statement from their lawyer
Michael Richman that it doesn’t plan to appeal the sale due to
the potential cost.
Lack of Resources
“The committee members today simply lack the resources
needed to mount an effective appeals process on the accelerated
basis that would be required here,” chairman Hal John said. The
group of three investors said they were representing as many as
2,000 others who own as much as $500 million of GM debt. Richman
of Patton Boggs LLP had argued Gerber should call the Obama
administration’s bluff that it would let GM liquidate if the
sale weren’t approved. He wanted Gerber to force the automaker
to file a complete reorganization plan on which creditors could
vote.
GM’s lawyer Stephen Karotkin, of Weil, Gotshal & Manges
LLP, said that barring a further stay the sale will “close
promptly,” a comment repeated by GM Chief Executive Officer
Fritz Henderson on a company blog.
The company will have a “leaner and meaner” management
after the sale closes, said Steven Rattner, the Treasury’s chief
auto adviser. The new GM will be a smaller company than it was
and somewhat less global so it will be natural for the
management structure to change, Rattner said yesterday during a
conference call.
Executive Firings
GM has said it will fire about 35 percent of its top 1,300
executives, leaving it with 845.
Gerber’s decision largely followed the ruling of another
Manhattan bankruptcy judge, Arthur Gonzalez, who approved the
sale last month of most of the assets of GM’s smaller rival,
Chrysler LLC, to an entity to be run by Fiat SpA. That decision
was affirmed by the Second Circuit, though the court has yet to
issue a full opinion.
“This is going to be a hard appeal to win, at least in the
initial rounds,” Seton Hall University professor Stephen Lubben
said, noting Jakubowski would need to get the case before the
Second Circuit very quickly without a stay beyond July 9.
Gerber decided the GM sale, like Chrysler’s, could be done
“free and clear of claims,” meaning the reorganized company
needn’t take on product-liability and asbestos claims from
before the transaction is completed.
Liability Costs
GM estimated the cost of future product liability claims at
$921 million and asbestos-related tort claims at $648 million as
of the end of 2008, according to a regulatory filing.
Barry Bressler, a lawyer representing more than 300 tort
claimants with what he estimated as $1.25 billion in claims
against GM, said Gerber’s ruling “was not unexpected.” He
declined to say whether he would appeal.
Bressler, who also represented tort claimants in the
Chrysler case, has asked the U.S. Supreme Court to review the
liability issues. The court, which declined to halt the Chrysler
sale, hasn’t decided whether to hear that petition.
Jakubowski said it was possible the Supreme Court might
consolidate his appeal with Bressler’s and decide both
simultaneously.
It may be difficult to get the Supreme Court to take up the
Chrysler petition now after the sale has closed, because it
could be considered moot, Lubben said.
Bankruptcy Sales
The issue needs to be addressed because so many companies
are selling their assets through quick “363 sales” in
bankruptcy, cutting off existing liability, Jakubowski said. He
argued along with Richman at a three-day hearing before Gerber
that GM should file a traditional Chapter 11 reorganization plan
and seek creditors’ votes, a process that might take months.
GM and the Treasury argued the company wouldn’t survive a
traditional Chapter 11 case. The government said before the
ruling that it would pull its $33 billion in financing if Gerber
didn’t approve the sale by July 10.
Gerber agreed in his ruling.
“As nobody can seriously dispute, the only alternative to
an immediate sale is liquidation -- a disastrous result for GM’s
creditors, its employees, the suppliers who depend on GM for
their own existence, and the communities in which GM operates,”
Gerber said in an 87-page opinion.
Should the sale close in its current form, the U.S.
government would get 60 percent of the new GM for making
$50 billion in bailout loans, a United Auto Worker retiree trust
would get a 17.5 percent stake, and two Canadian government
entities would get an 11.7 percent equity share for their loans.
Old GM’s Equity
Old GM would get 10 percent of the equity, plus warrants,
to distribute to bondholders and unsecured creditors.
“This was a bailout of the UAW, not of GM,” said Peter
Kaufman, president of the Gordian Group LLC and an adviser to
the Family and Dissident Bondholders. “It’s a tragedy. Twenty-
seven billion dollars of bonds, many if not the majority of
which are owned by mom and pop, have been essentially wiped
out.”
The estimated recovery on unsecured claims range from 10
cents to 20 cents on the dollar, Bressler said. His
“economically fragile class” of clients may have to wait years
for that recovery and would be under pressure to liquidate any
stock and warrants they receive to cover medical bills, he said.
The case is In re General Motors Corp., 09-50026, U.S.
Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story:
Christopher Scinta in New York at
csinta@bloomberg.net.
Last Updated: July 7, 2009 00:01 EDT
http://www.bloomberg.com/apps/news?pid=20601103&sid=aXE_NxcOLRXc
Goldman Says Morgan Is All Wrong About Fed’s Quantitative Exit
By Scott Lanman and Steve Matthews
July 7 (Bloomberg) -- Goldman Sachs Group Inc. says when
it comes to inflation, the Federal Reserve can relax. That kind
of talk makes Morgan Stanley nervous.
Joachim Fels, co-chief global economist at Morgan Stanley,
sees a risk that the Fed will keep the easiest credit since the
Great Depression for too long. Ed McKelvey, U.S. economist at
Goldman in New York, says those concerns are overblown, and
that officials have time to deploy as many as 10 options for
ending their $1.1 trillion aid to the banking system and
economy without letting consumer prices climb.
The debate underscores a widening division among
economists over whether the central bank will hold onto the
gains it’s achieved in fighting inflation over the past three
decades. Record liquidity injections and a projected federal
budget deficit of $1.85 trillion threaten to undermine that
legacy.
“The greater risk is they keep accommodation too long
rather than tighten too quickly,” Fels, who’s based in London,
said in an interview. “The price they would then pay is higher
inflation for keeping the economy afloat.”
A measure of inflation expectations watched by Fed
officials rose “closer to the 2 percent level” in recent
months after being “very negative late last year,” St. Louis
Fed President James Bullard said in a June 30 presentation in
Philadelphia. He also said investors “are not expecting a lot
of inflation over the next five years.”
The Fed’s preferred price gauge, which excludes food and
energy prices, rose 1.8 percent in May from a year earlier. Fed
officials expect inflation in a range of 1.7 percent to 2.0
percent over the longer term, according to minutes of April’s
Federal Open Market Committee meeting.
Meltzer’s View
“I agree with Morgan Stanley that the markets are too
sanguine about inflation,” said Allan Meltzer, a Fed historian
and economics professor at Carnegie Mellon University in
Pittsburgh. “The Fed absolutely has the tools and know-how,
but the question is, will they have the guts to use them? I
don’t think there is a snowball’s chance in hell they will be
willing to tighten to slow inflation down.”
Goldman Sachs says the risk is in the other direction,
that the Fed may have a tougher time easing credit further
should the economy deteriorate. Jan Hatzius, the company’s
chief U.S. economist in New York, said in a July 1 research
note that it’s “very unlikely” the Fed will “lose control”
of inflation and that the Fed should err on the “accommodative
side” of monetary policy.
‘Screw-Up’ Scenario
“The market seems to have a bias in its thinking that
somehow the Fed is going to totally screw up,” resulting in
inflation, McKelvey, who used to work at the Fed, said in an
interview. He cited conversations with clients and what he’s
read in the press, as well as the rise in Treasury yields and
trader expectations of Fed interest-rate increases in recent
weeks.
McKelvey, who wrote a June 30 note outlining the Fed’s
options, cautioned there’s no guarantee the Fed will get it
right, and “political constraints” might prevent the central
bank from using its tools.
The Fed lowered its main interest rate almost to zero in
December, switching to asset purchases and credit programs as
the main policy levers. Chairman Ben S. Bernanke is leading
plans to buy as much as $1.25 trillion of mortgage-backed
securities and $200 billion of federal agency debt by year-end,
along with $300 billion of long-term Treasuries by September.
Bernanke’s Options
Bernanke has three sets of tools, about 10 options total,
for unwinding credit, McKelvey said. They include the reduction
or end of non-emergency and emergency lending programs; selling
or ceasing purchases of securities; and reducing bank reserves
using tools such as the issuance of Fed debt.
“This one’s easy: Morgan Stanley is wrong and Goldman is
right,” said Mark Gertler, a New York University economist and
research co-author with Bernanke. “The Fed will be able to
contain inflation pressures through a combination of raising
interest rates and unwinding its balance sheets.”
The expansion of the Bank of Japan’s balance sheet also
had no effect on inflation in that country, Gertler said.
The Fed took a first step last month toward ending its
efforts to revive credit, deciding to let one emergency lending
program expire and trim two others. Bullard said last week that
policy makers need to craft a broader plan for unwinding the
asset purchases to reduce inflation risks and bolster
confidence in an economic recovery.
“The Fed needs to reduce some of the uncertainty in
markets about how the exit strategy looks,” said Fels. “They
can’t tell us when, but there needs to be more transparency on
the how.”
Interest on Deposits
Some top Fed officials have said they plan to rely on
raising the rate paid on banks’ deposits with the Fed as a
major component of the central bank’s strategy to tighten
credit.
Bernanke has a chance to give a more detailed outline of
the Fed’s exit strategy on July 21, when he delivers the Fed’s
semiannual monetary policy report to Congress and testifies
before the House Financial Services Committee.
The Fed has increased total assets on its balance sheet by
$1.1 trillion in the past year to $2.01 trillion as of July 1
to unfreeze credit markets and support banks’ demand for cash.
Short-term lending to commercial banks and bond dealers has
declined in recent weeks, owing in part to falling costs for
private borrowing.
Yellen Warning
Goldman’s views may be shared by some Fed officials. San
Francisco Fed President Janet Yellen said in a June 30 speech
to the Commonwealth Club of California that the “predominant
risk” is that inflation will “be too low, not too high, over
the next several years.”
Inflation excluding food and energy may fall to about 1
percent over the next year and remain below 2 percent, with an
unlikely possibility of turning into deflation if the economy
fails to recover soon, Yellen said.
Another Fed district bank president, Charles Evans of
Chicago, told reporters in London on July 1 that he also sees
inflation falling “a bit from where we are now.”
“I don’t worry about the technical ability of the Fed to
do it,” Martin Feldstein, a professor of economics at Harvard
University, said in a Bloomberg Radio interview July 1. “What
worries me is the political hurdle that they would be facing.”
Congress won’t “easily” digest the Fed’s desire to limit
lending and restrict inflation, Feldstein said.
To contact the reporters on this story:
Scott Lanman in Washington at
slanman@bloomberg.net;
Steve Matthews in Atlanta at
smatthews@bloomberg.net.
Last Updated: July 7, 2009 00:01 EDT 
Mr Wijat's friend Magic Rabbit 
