The Bank of England will raise its target for asset purchases next week as the debt crisis in Europe may have already pushed Britain
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During her four years at Missouri State University, Rachel Kuenzler gravitated steadily toward the transition from college student to the full-time job that would signal her official entry into adulthood.
Her diligence paid off when, a week following graduation, Kuenzler found work.
And in a corporate environment - where colleagues the age of her parents outnumber twenty-somethings - Kuenzler was confronted with a dilemma that was left unaddressed by her college professors.
“I thought they wouldn’t take me seriously,” said Kuenzler, 25, an associate software engineer at MasterCard International operations center in O’Fallon, Mo.
The gap between neophytes and experienced employees has been around as long as people have been reporting to places of work.
Last year, MasterCard addressed with a “reverse mentoring” program that asks younger employees to, in effect, take older workers under their wings.
Peer-to-peer coaching is not unusual in corporate or even small business settings. But in most cases the programs call on seasoned employees to impart the wisdom of experience to younger colleagues.
MasterCard, in a concerted effort to retain and promote its younger workers, provided them with an opportunity to share their thoughts and observations on the workplace environment.
The coaching program at MasterCard may be reversed, but the strategy remains the same, said Rik Nemanick, an adjunct instructor at Washington University and a principal with The Leadership Effect, a St. Louis business consultancy. He has developed and facilitated coaching programs at Anheuser-Busch, Monsanto and other area corporations.
Mentoring programs help firms identify and develop existing talent, accelerate professional growth, nurture company loyalty and retain valuable employees, Nemanick said in a recent presentation to the St. Louis chapter of the Human Resource Management Association.
“When talented individuals reach the juncture when they might leave, it’s good that they have someone they can go to - someone they trust to discuss the situation,” he said.
At Monsanto, experienced technology division employees have tutored younger workers since 2003. The program began with 30 matches. This year, there are 70 selected from a pool of 150 applications.
“It has become part of the developmental culture within the organization,” Monsanto executive Maggie Morris told the human resources organization.
The reverse mentoring at MasterCard matched Kuenzler with Keith Martin, a 46-year-old team leader who joined MasterCard 20 years ago. The program placed 18 younger mentors with 11 supervisors.
Kuenzler saw the two-way conversation as an avenue to help Martin, and by extension other MasterCard supervisors, understand the conditions young employees seek in order to advance themselves along with the interests of the company.
“Younger employees like more openness, they are tech savvy and they don’t necessarily want to always be in meetings,” said senior human resources business partner Wanda Davega.
For example, Kuenzler and Generation Y prefer open work spaces that encourage collaboration.
Whereas Martin is admittedly more inclined to hole up in a cubicle.
Martin wasn’t exactly venturing into foreign territory when his monthly lunch meetings with Kuenzler began about a year ago - he has a daughter slightly older than his mentor.
But their meetings highlighted to him the difference between being a parent and being a colleague or supervisor.
He learned that the young people now moving into the workforce have little interest in easing into the corporate whirlwind.
“They like to move at a quick pace and effect change,” Martin said. “They basically want to jump right into the fire. They don’t want to hold back or want to hear, ‘Why don’t you wait three months to find your way around.’”
Nemanick traces the roots of the mentoring movement to a commitment to furthering the careers of minority employees at large and small businesses alike.
As the success of the programs became evident, many companies made the initiatives available to all workers.
In light of a Millennial Branding survey that this month revealed that young, recent hires comprise only 7 percent of the workforce at Fortune 500 companies, the opportunity to learn from a mentor is especially attractive to young people.
“It shrinks the big organizations,” Nemanick pointed out. “It crosses boundaries that (employees) wouldn’t normally cross.”
Its success in O’Fallon prompted MasterCard to offer reverse mentoring to employees at its global headquarters in Purchase, N.Y.
Eighteen months into her first job, Kuenzler already has a sense that her monthly meetings with Martin are making a difference.
She recently learned of plans to open her workspace by removing the wall of the over-sized cubicle she shares with several other young employees.
More important, to Kuenzler, are the chats with Martin that have brought about the removal of a more symbolic wall.
“Being able to share our thoughts with supervisors, getting their take and seeing that they are taking notes and listening, I’m already seeing a difference,” she said.
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It’s been three months since MF Global became the eighth-largest bankruptcy in U.S. history. Did anyone see this coming?
Well, a few people had some idea, and a congressional subcommittee heard from them on Capitol Hill Thursday.
Michael Roseman, MF Global’s former chief risk officer, warned early of the dangers in the firm’s massive bets on troubled European debt. He clashed with ex-CEO Jon Corzine over the strategy before being replaced early last year by Michael Stockman, who also appeared at the hearing.
"I discussed my concerns about the positions and the risk scenarios with Mr. Corzine and others," Roseman told the subcommittee. "However, the risk scenarios I presented were challenged as being implausible."
Under questioning, Roseman said he believed his views on risk "certainly played a factor" in the firm’s decision to dismiss him.
MF Global () filed for bankruptcy on Halloween following a frantic week in which executives including Corzine, the former CEO and an ex-governor and senator from New Jersey, attempted to offload assets and sell the business.
The firm had come under intense pressure in the previous days after its $6.3 billion investment in European debt came to public notice. Trading partners called for increased margin payments and clients took their business elsewhere, leaving the firm scrambling for cash to meet its obligations.
"It almost looks like that they took Mr. Roseman out and replaced Mr. Roseman with a ‘yes man,’" Rep. Stephen Fincher said.
Stockman responded that he had initially signed off on the European bets, but later raised concerns and recommended bringing the firm’s risk down in July of last year.
Corzine, for his part, has acknowledged pushing the aggressive European strategy after arriving at MF Global in 2010, anxious to take it to the ranks of Wall Street’s elite.
The investments themselves didn’t actually lose money, as Corzine noted in Congressional testimony in December. None of the bonds MF Global held came from countries that have defaulted and all were set to mature before 2013. But Europe’s precarious finances and the massive leverage MF Global took on spooked investors and ultimately helped doom the firm need a personal loan with bad credit.
While an examination of MF Global’s risk management may have been the main focus of Thursday’s hearing, for the firm’s former customers, the bigger question is what happened to their money.
Customer funds at futures brokers like MF Global are supposed to be protected even in the event of a bankruptcy. In MF Global’s case, however, staffers were unable to account for roughly $1.2 billion in customer money that is now suspected to have been unlawfully appropriated for the firm’s own purposes.
Ratings agencies under fire: Others facing scrutiny Thursday were rating agencies Moody’s and Standard & Poor’s, which waited until just days before MF Global’s bankruptcy to flag its European exposure even though the firm had disclosed it back in May.
By the time the rating agencies acted, the bets were already sparking concern among MF Global’s trading partners. The downgrades then sharply acclerated the firm’s downward spiral.
"[T]he abruptness of the downgrades and the suddenness of MF Global’s collapse raise questions about why the credit rating agencies did not consider MF Global’s exposure to European sovereign debt until late October," the House committee said in a memo last week.
Also appearing Thursday was James Gellert, head of the smaller ratings agency Rapid Ratings International, which maintained a grim outlook on MF Global long before its larger counterparts did. Gellert noted in his testimony that MF Global’s business model had been deteriorating for several years prior to its failure, and that the new risks in the European strategy only made its situation more precarious.
"Had MF Global offered a lower risk foundation, MF Global might have been able to withstand the failure of the new business strategy," Gellert said. "As it was, Mr. Corzine inherited an unhealthy company and made it worse by some high-stakes gambles."
European Central Bank President Mario Draghi
Funds that give everyone from retirees to money managers easier access to junk bonds are fueling the biggest price swings in more than two years after their buying power surged tenfold.
Exchange-traded funds that track high-yield bond indexes exceed $22 billion, up from about $2 billion three years ago.
While that’s just 2 percent of the $1 trillion in U.S. corporate speculative-grade debt outstanding, ETFs are among the biggest holders of benchmark securities, including those of casino owner Caesars Entertainment Corp. and HCA Inc.
ETFs, which drew scrutiny last year as riskier versions emerged, are adding to volatility because of rules that promote trading. A measure of price swings for junk bonds was seven times higher in November than May, making it harder for the neediest borrowers to raise capital guaranteed high risk personal loans.
Their influence in the market for high-yield, high-risk debt is becoming similar to what ETFs, which have grown to $1.5 trillion from $109 billion in 10 years, have done in other assets.
While cash has poured into ETFs, they haven’t outperformed. Speculative-grade bonds on average returned 40 percent since April 2007, compared with 36.3 percent for investment-grade debt and 37.3 percent for U.S. Treasuries, according to Bank of America Merrill Lynch index data.
How might winter weather expose roof deficiencies?
Winter is the time of several holidays. What many people don’t understand is that even a minor roof leak can rob an entire holiday of fun and family time. Winter’s low temperatures can also cost homeowners much money in unnecessary heating expenses as a result of inadequate attic insulation.
Even homeowners with a lot of discretionary income don’t like to spend money on high heating bills. For a fraction of the cost of heating a home for five years, installation of fiberglass attic insulation can save thousands of dollars.
Getting a proper roof and attic inspection is a smart step to take now. Major repairs and large utility bills are not necessary when a simple 30-minute inspection is all that is required to determine what is needed to make a roof weathertight and energy efficient.
Homeowners who suspect their roofs might have suffered damage in this year’s storms should get the free inspections offered by most roofing professionals no fax payday loan. Inspections may reveal damage that is not readily visible to homeowners. These are often the same people whose roofs end up being replaced as a result of storm damage they didn’t even know they had.
The point to all of this is that trying to get a roof to last through the winter might be among the costliest of mistakes a homeowner can make. In addition, wasting money as a result of a poorly insulated attic just doesn’t make “cents.” These two items can save a homeowner thousands of dollars by having a trusted contractor inspect the roof and, at the very least, provide peace of mind during the holiday season. After all, worry-free holidays with more cash in hand always make for a happier season.
Courting disaffected conservatives, House Republican leaders offered Friday to overturn a pair of Obama administration environmental policies and avert a deep cut in payments to doctors treating Medicare patients as part of legislation renewing a Social Security payroll tax cut through 2012.
The tax cut, due to expire on Dec. 31, “hasn’t stimulated the economy at all,” said Rep. Louie Gohmert of Texas, one of several Republicans who emerged from a closed-door meeting and spoke unfavorably about the proposed extension at the heart of President Barack Obama’s jobs program.
“But over the long term, it does add to our deficit,” he added.
A one-year extension would cost an estimated $120 billion. The expense would be offset by cuts elsewhere in the budget, but Republican critics noted the savings would take a decade to materialize fully, while the cut itself would last for only one year.
Despite the misgivings, Speaker John Boehner of Ohio and other Republican leaders are committed to passing the legislation, fearing political fallout if payroll taxes rise on Jan. 1 on 160 million wage-earners.
The situation is similar in the Senate, where 26 of 46 Republicans voted Thursday night against a leadership-backed plan to renew the payroll tax cuts.
Officials said that to sweeten the measure for conservatives, House Republican leaders informed lawmakers they are prepared to add a provision averting a 27 percent cut in payments to doctors who treat Medicare patients, effective Jan. 1. The cost is about $38 billion over two years.
In addition, officials said Boehner and the leadership suggested including a provision that delays and eases a proposed Environmental Protection Agency requirement for new pollution regulations on industrial boilers and incinerators. The House approved legislation along the same lines in October, with the backing of 41 Democrats.
The EPA announced during the day it had agreed to ease the rules, although the change seemed unlikely to satisfy critics.
Another provision that would be added to the payroll tax bill is designed to speed construction of a proposed Keystone XL pipeline that pits environmentalists on one side, and industry and some labor unions on the other. The 1,700-mile structure would carry as much as 700,000 barrels of oil a day from tar sands in Alberta, Canada, to refineries in Texas, passing through Montana, South Dakota, Kansas, Nebraska and Oklahoma.
Despite a three-year review by federal agencies, Obama announced recently he would not decide whether to grant a construction permit until after the election in November 2012.
Democrats and Obama want to pay for the additional year of payroll tax cuts by imposing a 3.25 percent surcharge on individuals and couples with $1 million in income or more, and are hoping to use the issue to depict Republicans as benefactors of the wealthy at the expense of the middle class.
House Republicans are opposed to raising taxes, and the leadership reviewed a list of alternative proposals with the rank and file that officials said had originated with Obama or been embraced by the administration earlier in the year.
Among the options are a pay freeze for federal workers through 2015 and a requirement for them to pay a higher share of their pension costs. Raising the cost of Medicare premiums for the well-to-do is also on the list, as are proposals to charge a fee for mortgages backed by Fannie Mae and Freddie Mac, the sale of spectrum rights now held by the government, and a denial of unemployment benefits or food stamps to million-dollar earners.
“Now is not the time to slam the brakes on the recovery. Right now, it’s time to step on the gas,” Obama said in an appearance at a construction site at which he noted that unemployment last month fell to a 2 1/2-year low of 8.6 percent.
If Congress fails to deliver the legislation to his desk before its scheduled adjournment for the year, “we can all spend Christmas here together,” said the president.
Obama is scheduled to leave on Dec. 17 for a Christmas vacation in Hawaii with his family and friends, spokesman Josh Earnest said. Those plans may be delayed by unfinished business with Congress, as it has been in the past.
Phone hacking by the media cost me my job advising Elle Macpherson, a business adviser told a U.K. inquiry Tuesday, describing how the Australian supermodel wrongly blamed her for leaking intimate secrets to the press.
Mary-Ellen Field told an inquiry into British media ethics that the leaks cast a shadow of suspicion over her, with Macpherson becoming convinced that Field was an alcoholic and ordering her to an American rehabilitation clinic. Field said she was shocked by the allegations that she was a drunk who’d been blabbing about her employer, but went along with Macpherson’s recommendation because she needed her job.
“I have a severely disabled child who can never look after himself so walking away from a high-paying position is not a good idea,” Field said.
The rehab was grueling _ she described it as being “like one of those CIA renditions, except they don’t put you in chains” _ but it didn’t do her much good.
Even though staff at the clinic said she was not an alcoholic, Macpherson fired her anyway, and Field lost her job at her firm shortly afterward. She told the inquiry there was no doubt the sacking was the result of what happened with Macpherson.
Field said her employer told her that “I’d been indiscreet, that the clients didn’t trust me.”
Although it has since emerged that the media leaks were the result of phone hacking not indiscretion, Field said she has not heard from fellow Australian Macpherson in years.
Field was one of several victims of press intrusion testifying Tuesday at Britain’s Royal Courts of Justice. The inquiry was set up after the scandal over phone hacking and other underhanded tactics used at the News of the World, which was closed in July amid allegations of widespread criminality no credit check payday loans.
Among those due to testify Tuesday were British comedian Steve Coogan, soccer player Garry Flitcroft, and Margaret Watson, whose daughter Diane was stabbed to death at her Scottish school two decades ago.
The parents of murdered British schoolgirl Milly Dowler and film star Hugh Grant were the first victims to testify on Monday, with Grant being particularly scathing.
He described mysterious break-ins, leaked medical details and hacked voice mails. Grant attacked the Mail on Sunday tabloid, accusing it of spying on his conversations. The paper denies the charge, but lawyers at the inquiry said Tuesday the tabloid’s response smacked of an attempt to intimidate witnesses.
David Sherborne and Neil Garnham pointed to an article on the Mail’s website describing Grant’s allegations as “mendacious smears driven by his hatred of the media.”
“(Is) everyone who has the temerity to give evidence critical of the press is going to face this the following morning?” Garnham asked.
Sherborne also invoked the Mail article when he said many witnesses were worried about “the sort of intimidatory tactics that we’ve seen in the press this morning.”
The Mail’s lead counsel was not at the hearing but was expected to reply later Tuesday.
Workers at Chrysler’s largest United Auto Workers local have voted in favor of a new four-year contract, a sign that the deal will be approved when voting ends next week.
If Chrysler’s 26,000 union workers ratify their contract, they will join workers at Ford and General Motors in approving deals that give up annual pay raises for most workers but replace them with profit sharing and signing bonuses. The deals also promise at least 13,000 new union jobs at all three companies.
Wednesday’s announcement of the vote by union workers at three Chrysler facilities in Indiana comes on the same day that the United Auto Workers said union members had approved a new contract at Ford Motor Co., with 63 percent of those casting ballots in favor. General Motors Co. workers ratified their deal last month.
The contracts set the wages and benefits for 112,000 auto workers nationwide, and also influence the pay at auto plants owned by foreign companies, auto parts supply companies and other industries.
United Auto Workers Local 685, which represents about 3,500 workers at three Chrysler transmission factories in Kokomo, Ind., approved the contract in voting on Tuesday, said Jerry Price, vice president of the local.
He said that 58 percent of production workers voted in favor of the contract, while skilled trades workers such as electricians and pipe fitters split 50-50. Since most of the local’s 3,500 members are production workers, Price said the vote is a good sign that the contract will be ratified by the time voting ends next week.
He conceded that the contract isn’t the best of the Detroit Three automakers and said those who opposed it were unhappy that GM and Ford workers got better signing bonuses.
“Chrysler’s still not financially as good as Ford or General Motors,” Price said. “We live to fight another day.”
The Kokomo local was among the first in the company to count ballots. Voting is expected to end next Tuesday.
The Chrysler deal includes a $3,500 signing bonus and profit-sharing, but it’s not as rich as the contracts at Ford and GM. Ford’s signing bonus, for instance, is $6,000, while GM’s is $5,000. Chrysler Group LLC has yet to make a full-year profit since it emerged from bankruptcy protection in 2009, while GM and Ford have each made billions.
Chrysler CEO Sergio Marchionne, who also runs Italy’s Fiat SpA, said Wednesday in Turin, Italy, that he is confident the deal will be approved by the UAW even though it doesn’t give workers as much as the company’s Detroit competitors.
“I think the UAW and ourselves hammered out the best possible deal that we could. We know the limitations,” Marchionne told reporters.
If the deal is rejected, it would go to an arbitrator, who would hold a hearing and decide what the workers will get. Workers at Chrysler cannot strike over wages under the terms of the company’s 2009 government bailout.
Chrysler hasn’t made an annual profit since 2005. The company earned $116 million in the first quarter, its first quarterly net profit in five years. But it lost $370 million in the second quarter, mostly because of charges for refinancing debt.
Chrysler expects to earn $200 million to $500 million this year, excluding the debt charges. But the profit is tiny compared with its Detroit rivals. Ford reported a profit of $6.6 billion last year, while GM earned $4.7 billion.
The Chrysler deal promises up to 2,100 new jobs and investment of $4.5 billion in U.S. factories.
At Ford, workers overcame early opposition and overwhelmingly approved their contract in voting that lasted two weeks.
More than 22,000 workers, or 63 percent of those who cast ballots, voted in favor of the pact, while almost 13,000, or 37 percent, opposed it, the union said in a statement Wednesday.
Ford promised $4.8 billion in new investments in its U.S. plants and 5,750 new jobs. Both sides reached agreement on Oct. 4, but like the other two companies, workers had to ratify it with a majority vote.
Most workers won’t get annual raises, but they will get profit-sharing checks, inflation adjustment payments and other bonuses worth at least $16,700 through 2015. The deal at GM was similar.
The vote ends the threat of a strike at Ford, the only company where the union could stage a walkout. Strikes over wages also were banned at GM as part of its government bailout. Ford borrowed billions from private sources and didn’t take government money.
UAW Vice President Jimmy Settles, the union’s top Ford negotiator, said in a statement that workers at Ford were frustrated with the economy, a lack of pay increases and what he called “outrageous” executive pay packages, yet they still approved the pact. Eighty-five percent of the union’s 41,000 members at Ford voted, he said.
“As the nation’s economy remains stalled and uncertain and its employment rate stagnates, we were able to win an agreement with Ford that will bring auto manufacturing jobs back to the United States from China, Mexico and Japan,” union President Bob King said.
The company said the deal means it will add shifts at four U.S. factories: Michigan Assembly in Wayne, Mich., near Detroit, where the Focus compact is made; the Chicago Assembly Plant, where Ford makes the Taurus sedan and Explorer SUV; Louisville Assembly in Kentucky, where Ford will make the new Escape small SUV; and the Auto Alliance plant in Flat Rock, Mich., which will get additional production of the Fusion midsize car.
The company also will move production of medium-duty trucks from a joint venture with Navistar International Corp. in General Escobedo, Mexico, to an assembly plant in Avon Lake, Ohio, near Cleveland. That plant now makes E-Series large van.
The fate of the Ford contract was in doubt early when workers in Wayne, Mich., and Chicago voted to reject it. The deal was losing by a narrow margin until Friday, but several factories voted overwhelmingly in favor to tip it toward passage.
“Our agreement is fair to our employees and it improves our competitiveness in the U.S.,” Mark Fields, Ford’s president of The Americas, said in a statement.
Despite the signing bonuses and profit-sharing, analysts expect a minimal impact to Ford’s labor costs, in part because most of the new workers will be hired at lower wage rates than the company’s longtime workers. Brian Johnson, an auto analyst with Barclays Capital, estimates the contract will add around $70 million to Ford’s costs each year. If large numbers of older workers leave under buyout and early retirement offers, Ford will spend less, he said.
Johnson said Ford could see immediate benefits from the union approval with a ratings upgrade, which would help lower its borrowing costs.
Shares of Ford rose 6 cents to $11.84 in afternoon trading Wednesday.
Missouri plans to broaden its business reach overseas by opening three new foreign trade offices, economic development director David Kerr said Tuesday.
The state recently won a federal grant that will fund three new offices for a year, Kerr said. They’ll be placed in Brazil, India and China and Kerr said. The state has already solicited contractors to staff and run the offices, is due to receive applications today and hopes to have them up and running within a month, said Kerr.
Missouri currently has six foreign trade offices, which help small and mid-sized businesses find export clients and develop trade relationships in overseas markets. Four are in Asia, one in western Europe and one in Mexico.
Like President Barack Obama, Mo. Gov Jay Nixon has made boosting exports a cornerstone of his economic development policy. Last year, the value of all goods exported from Missouri grew 35 percent to $12.9 billion. So far this year, exports are running 14 percent ahead of last year’s pace.