Treasury Calls for Financial Institutions and Congress to Boost Cybersecurity

Urging financial institutions and companies to do what is needed to protect consumers; US Treasury Secretary Jacob J. Lew spoke at the Institutional Investor’s 4th Annual Delivering Alpha Conference and CNBC. Lew said that US financial institutions must protect their customers against cybersecurity thefts, disruptions and attacks.  He said that our institutions of finance should utilize the Administration’s new cybersecurity framework not only with their own systems but also as a means to evaluate outside vendors.

“The consequences of cyber incidents are serious,” Secretary Lew said. “When credit card data is stolen, it disturbs lives and damages consumer confidence. When trade secrets are robbed, it undercuts America’s businesses and undermines U.S. competitiveness. And successful attacks on our financial system would compromise market confidence, jeopardize the integrity of data, and pose a threat to financial stability.”

While the new framework, which is called “Improving Critical Infrastructure and Cybersecurity” as 2013 Executive Order 13636, is being implemented, more needs to be done to improve our ability to fight cyber threats. Secretary Lew has been calling on Congress to pass all-encompassing laws which will improve the state of information sharing by making provisions for targeted liability protections while at the same time protecting privacy.

“As it stands, our laws do not do enough to foster information sharing and defend the public from digital threats. We need legislation with clear rules to encourage collaboration and provide important liability protection. It must be safe for companies to collaborate responsibly, without providing immunity for reckless, negligent or harmful behavior. And we need legislation that protects individual privacy and civil liberties, which are so essential to making the United States a free and open society. We appreciate the bipartisan interest in addressing this important issue, and the Administration will continue to work with key stakeholders on the various bills that are developing in Congress,” added Secretary Lew.

Toys ‘R’ Us Fires CFO Creasey

Taking Out the Old and Bringing in the New (CFO)
Taking Out the Old and Bringing in the New (CFO)

No reason was given as yet for the summary firing of Chief Financial Officer F. Clay Creasey Jr after serving in the role since 2006. Replacing him will be Michael J. Short, former executive at AutoNation.

Toys ‘R’Us will pay Mr. Short $700,000 as his annual base salary. He will also be able to receive up to the same amount in yearly bonuses. In addition the company will offer Mr. Short stock options.

Mr. Short was the CFO for seven years at AutoNation. He also had financial roles at Universal Orlando, Seagram & Sons, and IBM Corp previous to his stint at AutoNation.

“We are delighted to have Mike join the organization during this transformational time for our company and look forward to the benefit of his strong financial and strategic experience, as well as his unique insights and fresh perspective on the business,” said Toys ‘R’ Us Chairman and Chief Executive Antonio Urcelay.

Spotlight on India for General Motors

General Motors India has announced that it will start exporting its cars out of the country. It will sell left-hand-drive versions of its Chevrolet Beat hatchback to Chile in 2015.

Up until now, the production in India hasn’t been at capacity. Their two factories can build 282,000 cars each year, but until now they have used less than a third of their total capacity. During the fiscal year that ended in March, they sold approximately 81,000 cars in India.

Many global automakers are looking to India now to become a regional export hub, especially for small cars. They hope to take advantage of the low-cost manufacturing base there.

Getting to the Bottom of Hidden Expenses

When people have money issues and sit down to make a concrete budget, they are often surprised to see just how much money they spend – and on what they spend it. Most of us budget for life’s basics which include food, housing and transportation. We forget, however, how much money is needed for other items and for odds and ends. In a recent blog post on their site, Primerica helps those in debt to think about what they spend. Here are a few of the areas they touch upon:

  1. Gifts: While we want to be generous, and we think spending $20 for a birthday gift here or there isn’t a big deal – it all adds up. It’s important to write down every time that you spend money for weddings, showers, birthdays and other events.
  2. Medicines and other items: Do you go to the pharmacy each week to buy toiletries, new brushes and some medicine? These items add up, even though they feel like necessities.
  3. Child care: How much are you spending for the care of your children? This could include babysitters in the afternoon or evening, full day care and more.

These are just a few of the hidden life expenses presented by Primerica that people need to consider and budget for. When you start to look at all of your expenses and to see where your money goes, you start to get a better handle on your debt and your future needs.

Luxury Hotel Group Acquired by Vladislav Doronin

Amanapuri amanresorts purchased by Vladislav Doronin
Amanapuri amanresorts purchased by Vladislav Doronin

Russian businessman and real estate investor Vladislav Doronin was recently involved in the purchase of the high-end hotel group Amanresorts. The deal included Peak Hotels & Resorts Group partnering with the management of Amanresorts International in order to effect the acquisition of Amanresorts from the hotel subsidiary of India-based DLF for $338 million.

The new business will be known as Aman Resorts Group Ltd. The partnership between Doronin and Peak Hotels is reportedly planning to upgrade already owned properties as well purchase new ones with money set aside for those purposes.

The luxury hotel group Amanresorts includes the upscale Amanyara in Turks & Caicos and Thailand’s famed Amanpuri.

GoPro Files for IPO: Hopes to Raise at Least $100 Million

GoPro, maker of wearable cameras designed to be used by extreme sports enthusiast and

GoPro GoPublic
GoPro GoPublic

others, has filed documents with regulators of its intention to sell shares of their company. The numbers of shares they intend to sell, and their price, have not yet been disclosed.

The company did say that they hope to pay off a $111 million debt with proceeds from their IPO, and with any additional money they raise, “it may use a portion of the net proceeds to acquire or invest in complementary businesses, technologies or assets.”

Net income in 2013 was $60.6 million, almost twice what it brought in in 2012.  GoPro has sold over 8.5 million HD cameras since they first launched that product in 2009.

The company intends to list on the NASDAQ using the symbol “GPRO.” JP Morgan, Citigroup and British Barclays Bank will be working on the IPO. Nicholas Woodman, founder and CEO, and his family, are the largest shareholders, with 49 percent. The company stated that Woodman was a crucial player in the future success of the company.

“The loss of Mr. Woodman could adversely affect our business, financial condition and operating results,” the company said in a statement

FoxConn, a Taiwan-based manufacturer, has a minority share in GoPro. In 2012 they purchased the company for $200 million. That deal values the camera maker at about $2.25 billion.

Sterling’s Remarks Leading to Loss of Income for Clippers

LA Clippers Owner Donald Sterling
LA Clippers Owner Donald Sterling

In the wake of Clipper’s owner Donald Sterling’s alleged racist remarks several companies have taken action to either cut-off sponsorship funds completely, or to just temporarily withhold support until more clarity is established.

The first company to react to Sterling’s hate speech, which was first brought to light on the celebrity gossip/news site TMZ, was State Farm insurance. At first it seemed they were going to completely cut their ties with the Los Angeles Basketball team, but have since recanted, saying in an official statement that the brand would only be “taking a pause” from lending its support for the team.

Next came CarMax, which took a more extreme position, completely ending their relationship with the Clippers. After CarMax’s hardline stand Virgin America took a similar position and withdrew their sponsorship as well. Joining the avalanche of brands ending support for the LA Clippers was Mercede-Benz, cutting all ties completely. A presenting sponsor, the Chumash Indians has also decided to end ties with the beleaguered Los Angeles team.

“I would advise any of my clients to distance themselves completely from the situation,” said David Spencer, a sports marketing expert for Talent Resources.  “I don’t see a negative of jumping ship at all.  The only negative would be to stay on the sinking ship.”

Ed Sayres: Fiscal Developments

financesDespite the fact that America encountered a recession in the early part of the 21st century, Ed Sayres managed to turn things around for an organization in the non-profit world.  The American Society for the Prevention of Cruelty to Animals (ASPCA) encountered a serious financial boom when Sayres took over as CEO and President.  In fact, with him at the helm, the ASPCA jumped from a net revenue of $43 to $116million.

Over the years, Sayres has developed a reputation for growing high-performing organizations positioned for growth.  As well as growing non-profit organizations, Sayres has counseled CEOs, directors, and other top executives on fiscal management, strategic planning, Board development, fundraising etc.  Sayres’ approach focuses on “innovation, collaboration, transparency and accountability.”  His philosophy has over the years – through both non-profit and for-profit companies – been proven effective.  As well, Sayres has combined his work in both sectors, having been at the forefront of developing strategic partnerships between the ASPCA and large business corporations including Walmart, Target and CVS.

Uber Rush Hits New York

In addition to their app-oriented car service called Uber, the company has recently announced its Uber Rush. They promise to let “your packages travel like a VIP.”

Starting in Manhattan, their plan is to be like a typical courier service. The user uses an app to call up the vehicle and to get a price quote. The courier then arrives and takes the item from one point to another. The service isn’t for the purchase of items, such as a lunch. Rather, it is to take items that have already been purchased from one location to the next.

The plan with Uber is to take 20% of the price that the drivers charge. And prices appear to be in the $20-$25 range. Drivers for Uber have to be at least 23, to be properly licensed and insured and to have had a background check. Uber says that Rush will expand to other areas of New York after confirming their success with the initial testing phase.

There are a few other companies that have had success in this realm such as Ebay Now that promises to deliver products from local stores in less than 2 hours for $5 and the Postmates app that offers food and goods that will be delivered starting at $5.

Time will tell how Uber Rush will do, but it’s worth keeping in eye on as it is rolled out in New York.

2014 Bond Market Strategies

stocks-bondsTrading firms develop different strategies when making investments. Some promote high yield in low risk situations as the most likely route to success.  Yet even with a developed strategy, as bond expert Thomas Kenny notes, a lot for the 2014 bond market is dependent on what happens with the Quantitative Easing Policy, a program created to “depress long-term bond yields in order to stimulate the economy.”  This program has actually benefited those firms that seek out low yields as it has kept yields under levels that they would be trading without QE.

According to Head of US Fixed Income, Wes Sparks, when investment firms were still trying to figure out what kind of strategies they would employ in 2014, it made sense to reflect on 2013 scenarios.  Last year, a total return of over 8 percent was produced by the global high yield index (which was an improvement on what most investors had predicted at the start of the year).

Experts at Rainer Investment Management believe that “the addition of high yield fixed income to an overall portfolio may provide a number of significant benefits, the most obvious being the possibility for increased income.”  As well, high yields can offer three main benefits:  lower sensitivity to interest rates, attractive risk-return profile and diversification.

The White Bay Group uses the high yield in low risk scenarios.  Founder Uriel Cohen, White Bay Group does not always repeat the same strategy over and over, just based on history.  The firm believes “just because a strategy has historically performed does not mean that success will continue in the future. [The firm] only invests with a full understanding of why a strategy should make money.”

At the end of the day, while investment firms may offer well-established strategies, the fiscal environment – that is constantly in flux – needs to be considered.