Wednesday December 31, 6:56 am ET
Citi says $512 million sale of Indian business process outsourcing unit to Tata is done
NEW YORK (AP) -- Citigroup Inc. said Wednesday it completed the sale of its India-based business process outsourcing unit Citigroup Global Services Ltd. to Tata Consultancy Services Ltd., India's largest software services provider.
Citigroup said it will receive $512 million in cash. It agreed to sell the business to Tata in October. At that time, the companies also signed a contract that said Tata will provide outsourcing services to Citigroup and its affiliates for the next nine and a half years.
Citigroup will pay $2.5 billion under that contract.
asr: seems Tatas get $250 mil/year , citi might have sold after it meltdown , good call for Tatas
Wednesday, December 31, 2008
Friday, December 26, 2008
12/26 oil rise
Crude Oil Rises More Than 6 Percent as U.A.E. Reduces Output
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By Mark Shenk
Dec. 26 (Bloomberg) -- Crude oil rose more than 6 percent in New York, the biggest increase in two weeks, after the United Arab Emirates said it would reduce output to comply with OPEC’s supply curbs.
1) Abu Dhabi National Oil Co., the biggest producer in the U.A.E., will reduce oil supply to Asia in January and February, according to a statement sent to buyers.
2) Oil also advanced because the dollar dropped against the euro.
“There are signs that the U.A.E. and Saudi Arabia are abiding by their OPEC targets,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “The dollar is weaker, which is probably also giving the market some support.”
Crude oil for February delivery rose $2.36, or 6.7 percent, to settle at $37.71 a barrel at 2:41 p.m. on the New York Mercantile Exchange, the biggest one-day gain for a contract closest to expiration since Dec. 11. Prices declined 11 percent this week and have dropped 74 percent from a record $147.27 on July 11.
Nymex and London’s ICE Futures Europe exchange, where Brent crude oil is traded, were closed yesterday because of the Christmas holiday.
Volume in electronic trading on the exchange was 73,221 contracts, as of 3:07 p.m. in New York. Volume totaled 165,884 contracts on Dec. 24, down 66 percent from the average over the past 3 months. No day so far this year has had volume of less than 100,000 contracts.
“Today will probably end up having the lowest volume of the year because so many people are off,” said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut.
Open interest on Dec. 24 was 1.14 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.
‘In the Cards’
A decline in crude oil to $25 “is in the cards,” Gulf Oil LP Chief Executive Officer Joe Petrowski said today in a CNBC interview. Gulf, a Newton, Massachusetts-based wholesaler, distributes motor fuel to 1,800 branded filling stations in the Northeast. “The downside is well in gear,” he said.
Abu Dhabi National, known as Adnoc, will cut supplies of the Murban grade by 15 percent and the Upper Zakum grade by 3 percent next month, mostly in Asia. Adnoc said earlier this month it would meet all oil obligations for January.
The U.A.E. produced 2.35 million barrels of crude oil a day in November, making it OPEC’s fourth-largest producer, according to Bloomberg News estimates.
The reduction comes after the Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, agreed to trim production targets by 2.46 million barrels a day starting next month.
Oil Market Stability
OPEC is “determined to bring stability to the oil market” after prices tumbled from the July high, Saudi Oil Minister Ali al-Naimi told reporters at a conference in Doha, Qatar, on Dec. 21. Saudi Arabia has cut production by 1.2 million barrels a day from its peak this summer, al-Naimi said on Dec. 16.
The producer group may meet before its next scheduled summit in March, Venezuelan Energy Minister Rafael Ramirez said Dec. 23.
“There’s increased evidence that OPEC is following through with the promised cuts,” Beutel said. “We won’t know until about Feb. 10 whether they have really carried through with the promises. It’s all guess-work now.”
It takes about four to six weeks for tankers to make the trip from the Persian Gulf to the Gulf of Mexico.
Brent crude oil for February settlement increased $1.76, or 4.8 percent, to settle at $38.37 a barrel on the ICE exchange.
Dollar Decline
Oil, gold and corn advanced because the dollar dropped against the euro. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The dollar weakened 0.2 percent to $1.4053 per euro from $1.4025 yesterday.
Japan, the world’s third-largest consumer of oil, said its crude imports fell for a second month in November as the country’s industrial output plunged the most in almost 55 years. Imports declined 12 percent to 18.35 million kiloliters (115 million barrels) last month, the Ministry of Economy, Trade and Industry said in a report today.
Email | Print | A A A
By Mark Shenk
Dec. 26 (Bloomberg) -- Crude oil rose more than 6 percent in New York, the biggest increase in two weeks, after the United Arab Emirates said it would reduce output to comply with OPEC’s supply curbs.
1) Abu Dhabi National Oil Co., the biggest producer in the U.A.E., will reduce oil supply to Asia in January and February, according to a statement sent to buyers.
2) Oil also advanced because the dollar dropped against the euro.
“There are signs that the U.A.E. and Saudi Arabia are abiding by their OPEC targets,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “The dollar is weaker, which is probably also giving the market some support.”
Crude oil for February delivery rose $2.36, or 6.7 percent, to settle at $37.71 a barrel at 2:41 p.m. on the New York Mercantile Exchange, the biggest one-day gain for a contract closest to expiration since Dec. 11. Prices declined 11 percent this week and have dropped 74 percent from a record $147.27 on July 11.
Nymex and London’s ICE Futures Europe exchange, where Brent crude oil is traded, were closed yesterday because of the Christmas holiday.
Volume in electronic trading on the exchange was 73,221 contracts, as of 3:07 p.m. in New York. Volume totaled 165,884 contracts on Dec. 24, down 66 percent from the average over the past 3 months. No day so far this year has had volume of less than 100,000 contracts.
“Today will probably end up having the lowest volume of the year because so many people are off,” said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut.
Open interest on Dec. 24 was 1.14 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.
‘In the Cards’
A decline in crude oil to $25 “is in the cards,” Gulf Oil LP Chief Executive Officer Joe Petrowski said today in a CNBC interview. Gulf, a Newton, Massachusetts-based wholesaler, distributes motor fuel to 1,800 branded filling stations in the Northeast. “The downside is well in gear,” he said.
Abu Dhabi National, known as Adnoc, will cut supplies of the Murban grade by 15 percent and the Upper Zakum grade by 3 percent next month, mostly in Asia. Adnoc said earlier this month it would meet all oil obligations for January.
The U.A.E. produced 2.35 million barrels of crude oil a day in November, making it OPEC’s fourth-largest producer, according to Bloomberg News estimates.
The reduction comes after the Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, agreed to trim production targets by 2.46 million barrels a day starting next month.
Oil Market Stability
OPEC is “determined to bring stability to the oil market” after prices tumbled from the July high, Saudi Oil Minister Ali al-Naimi told reporters at a conference in Doha, Qatar, on Dec. 21. Saudi Arabia has cut production by 1.2 million barrels a day from its peak this summer, al-Naimi said on Dec. 16.
The producer group may meet before its next scheduled summit in March, Venezuelan Energy Minister Rafael Ramirez said Dec. 23.
“There’s increased evidence that OPEC is following through with the promised cuts,” Beutel said. “We won’t know until about Feb. 10 whether they have really carried through with the promises. It’s all guess-work now.”
It takes about four to six weeks for tankers to make the trip from the Persian Gulf to the Gulf of Mexico.
Brent crude oil for February settlement increased $1.76, or 4.8 percent, to settle at $38.37 a barrel on the ICE exchange.
Dollar Decline
Oil, gold and corn advanced because the dollar dropped against the euro. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The dollar weakened 0.2 percent to $1.4053 per euro from $1.4025 yesterday.
Japan, the world’s third-largest consumer of oil, said its crude imports fell for a second month in November as the country’s industrial output plunged the most in almost 55 years. Imports declined 12 percent to 18.35 million kiloliters (115 million barrels) last month, the Ministry of Economy, Trade and Industry said in a report today.
Wednesday, December 24, 2008
Oil Decline Saga
asr: 12/19/09 story of "oil storage shortage" shows, all the possible 'storage' will be used to take advantage of $9 spread Mar09/Feb09 contract.
- it seems gasoline stock piles increase casued today drop of $1.50 , see bloomberg story below, also the Cushing delivary point has no storage available for traders to take physical deliary ( see post below )
- so one can conclude 'US gov. report stock pile increase in the coming weeks, depending on how long it takes to take delivary and store.
- so for 'US govt. stock piles" point of view , it puts pressure on price before 'stock pile data release, so one can expect a crude price drop a day before .. or at best stays same ...
- look at contacting research instute below to find out 'storage costs' , it seems this situation may continue for months to come
- find bank financing with 'crude physical' as collateral to take physical delivary ( needs 33k for each contract since 1000 barrel
- (44.5 - 33.5 ) => $9 that is 20% margin for 1 month. you make loss only Mar09 price at contract expiration drops below (33.5 - profit -cost ) => 33.5 - 9 => 25 , only price below $25 is loss to you
---------
2:07 p.m. EST Dec. 24, 2008
Crude inventories at Cushing, Okla., the delivery point for crude futures contracts traded on the New York Mercantile Exchange, reached 28.7 million barrels in the week ended Dec. 19, the Energy Information Administration reported.
It was the highest since at least April 2004, when the government started collecting Cushing data. This served to overshadow the government's latest weekly reading on petroleum stockpiles.
"The downward pressure in oil prices is from the exceptionally high stocks of oil at Cushing, although total crude inventories fell," said James Williams of WTRG Economics. "People pay more attention to Cushing inventories."
one user comment explained:
If Cushing fills up, the front-month NYMEX oil futures will go down real far, real fast, regardless of what the "actual" fundamentals might be outside of a few hundred mile radius. No traders will be able to take delivery of the oil as they would need to pay an arm and a leg for storage. Long positions will need to be liquidated to avoid delivery. Market participants who have access to transportation to get the oil out of Cushing (possibly out of the U.S.) to a remote storage site will be the only ones buying.
-------------
December 24, 2008 10:50 EST
Dec. 24 (Bloomberg) -- Crude oil futures fell after a U.S. government report showed a bigger-than-expected increase in supplies of gasoline, heating oil and diesel.
Gasoline inventories rose 3.34 million barrels to 207.3 million barrels in the week ended Dec. 19, the Energy Department said today in a weekly report. Stockpiles were forecast to increase by 750,000 barrels, according to the median of analyst estimates in a Bloomberg News survey.
Distillate supplies, which include heating oil and diesel, climbed 1.81 million barrels to 135.3 million barrels. Stockpiles were forecast to increase by 700,000 barrels.
Inventories of crude oil fell 3.1 million barrels to 318.2 million, the department said. Supplies were forecast to rise by 500,000 barrels.
Crude oil for February delivery fell $1.52, or 3.9 percent, to $37.46 a barrel at 10:37 a.m. on the New York Mercantile Exchange.
Updated: December 24, 2008 07:35 EST
---------------------------------
Crude stockpiles probably increased 500,000 barrels in the week ended Dec. 19 from 321.3 million the week before, the 12th gain in 13 weeks, according to a Bloomberg survey before today’s Energy Department report.
Oil for delivery in February 2010 was more than $14 higher than the current month today, a market condition known as contango. The pattern encourages companies to store oil.
“The contango means the inventories are increasing,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “More-than-adequate levels of inventories will push prices down. It’s a very, very bearish sign.”
Friday December 19, 6:21 pm ET
-----------------------------
Glut of oil creates short-term storage problems
Big premium for oil -- that doesn't have to be delivered right away
Traders locking up storage space for crude created a huge rift in prices Friday between oil that must be delivered in several weeks and oil that can be taken in February.
The January contract for crude expired Friday and with stockpiles rising at the key storage facility in Cushing, Okla., the price dropped close to a five-year low as brokers and traders attempted to unload supply for whatever price they could get.
"If you could find storage for it, it's a way to get rich real quickly," said Peter Beutel, an analyst with Cameron Hanover.
With space tight amid a glut in supply, light, sweet crude for January delivery fell $2.35 to settle at $33.87, a level last seen in early 2004.
Most traders focused on the February contract, however, which rose 69 cents to settle at $42.36 a barrel on the New York Mercantile Exchange. Because crude contracts bought for February also bought more time to find storage, it sold at a premium of more than $7 a barrel compared contracts expiring Friday.
Saturday, December 20, 2008
How to spend $350 billion in 77 days
The law granted Treasury up to $700 billion, half of which was made available right away.
Since then, Treasury has:
- sent checks totaling $168 billion in varying amounts to 116 banks;
- committed another $82 billion to capitalize more banks;
- bought $40 billion in preferred shares of American International Group (AIG, Fortune 500) so the troubled insurer could pay off an earlier loan from the Federal Reserve;
- committed $20 billion to back any losses that the Federal Reserve Bank of New York might incur in a new program to lend money to owners of securities backed by credit card debt, student loans, auto loans and small business loans;
- committed to invest $20 billion in Citigroup on top of $25 billion the bank had already received;
- committed $5 billion as a loan loss backstop to Citigroup;
- agreed to loan $13.4 billion to GM and Chrysler to get them through the next few months.
Since then, Treasury has:
- sent checks totaling $168 billion in varying amounts to 116 banks;
- committed another $82 billion to capitalize more banks;
- bought $40 billion in preferred shares of American International Group (AIG, Fortune 500) so the troubled insurer could pay off an earlier loan from the Federal Reserve;
- committed $20 billion to back any losses that the Federal Reserve Bank of New York might incur in a new program to lend money to owners of securities backed by credit card debt, student loans, auto loans and small business loans;
- committed to invest $20 billion in Citigroup on top of $25 billion the bank had already received;
- committed $5 billion as a loan loss backstop to Citigroup;
- agreed to loan $13.4 billion to GM and Chrysler to get them through the next few months.
Friday, December 19, 2008
Jan09 contract end date 12/18/09 3 rd FridaY
here is all oil 2009 forecasts ( see posts for details )
1)
JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.
2) Goldman sachs $32-$40
3) Dutch bank $40
4) Merrilinch $25
Oil prices stabilized Friday as the White House's $17.4 billion auto industry rescue package gave Wall Street a boost and the dollar strengthened against the euro.
Light, sweet crude for February delivery rose 69 cents to settle at $42.36 a barrel on the New York Mercantile Exchange. In London, February Brent crude rose 64 cents to settle at $44 a barrel on the ICE.
The extreme volatility in energy markets this year has seen crude pushed from $100 to nearly $150 between January and July, and back down to the $30 to $40 range this month.
Peter Beutel, an analyst with Cameron Hanover in New Canaan, Conn., said he sees a lot of factors that should be leading to a bullish market, but they're not getting any traction because of the weak economy and falling demand.
"Until people can just take their eyes off of the demand for five seconds, it doesn't seem like this market is going to have an easy time moving higher right away," Beutel said.
The January 09 contract, which expired Friday, fell $2.35 cents to settle at $33.87, the lowest close in nearly five years.
----------------
What we may have to see before oil prices really carve out a bottom is evidence that crude inventories have stopped rising or a sustained rally in equities," Hassall said. "The focus of the market has been almost purely on the demand side."
Hassall predicted prices could fall as low as $25 a barrel next year before rising to as high as $60 if the global economy recovers in the second half.
"Prices could dip into the 20s for a time, and then there will likely be fairly choppy, sideways action in the first quarter," Hassall said.
-----
asr: Feb09 contract closed this same expiration Friday at 42.87 so that is $9 spread , 20 days ago the spread may be $1.5 max.
- what is great strategy "Near Short/Far Long " when OPEC cuts have planned announcements.
---------
Analysts largely discounted the January price, with the volume of the next month contract trading at 3 times the volume. Yet analyst Jim Ritterbusch said pre-expiration lows ( of Jan09) do provide a downside target to the next contract (Feb09).
Ritterbusch, president of energy consultancy Ritterbusch and Associates, said the market is sending strong signals that an oversupplied market will remain in place for some time.
"I think it's going to work its way down to today's lows in the January futures," he said.
The January contracts were at steal at that low price, Beutel said, but the question is where are you going to keep it. Rising stockpiles in Cushing, Okla., have put storage space at a premium.
"If you could find storage for it, it's a way to get rich real quickly," Beutel said.
Oil producers have leased supertankers to store crude at sea while they wait for prices to rise.
At an energy summit Friday on London, British Prime Minister Gordon Brown warned that a failure to stabilize oil prices could cost the global economy trillions.
"Wild fluctuations in market prices harm nations all round the world," Brown said. "They damage consumers and producers alike."
OPEC Secretary-General Abdullah El-Badri acknowledged the problem.
"We all know that extreme oil prices whether too high or too low are as bad for producers as they are for consumers," El-Badri said.
Meanwhile, Zeljko Bogetic, the World Bank's chief economist in Russia, told investors that the oil-rich nation would come under crippling financial pressure and may need to take out loans if crude prices do not rebound.
"If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Bogetic said.
Russia, which has used oil profits during the past eight years to pay down most of its foreign debt, could turn from creditor to borrower if current trends continue.
At $50 a barrel, Russia could drain much of its reserve funds and run budgetary deficits, Bogetic said.
Earlier this week, the 13-nation Organization of Petroleum Exporting Countries slashed its output quota by 2.2 million barrels a day in a bid to bolster prices that have slid about 70 percent since July.
Still, crude prices tumbled this week amid a bevy of dour economic reports suggesting demand for energy will continued to erode.
"The cut had been priced in," said Clarence Chu, a trader with market-maker Hudson Capital Energy in Singapore. "If OPEC hadn't cut that much, the price would have fallen even more."
Stephen Berman, an analyst with Pritchard Capital Partners, said OPEC may meet again in Kuwait on Jan. 19 to discuss further production cuts.
Analysts say disciplined compliance by OPEC members is key to market reaction and the stabilization of oil prices in the near future. Some OPEC members have a history of ignoring quotas, allowing oil power house Saudi Arabia to carry most of the burden of production cuts.
"Perception of progress is key to the movement of the oil price in the next few months," KBC Market Services in Britain said in a report.
JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.
The national retail average price for a gallon of regular gas rose three-tenths of a penny to $1.673 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 37 cents a gallon below what it was a month ago and more than $2.43 below where it was in July when prices peaked at $4.11 per gallon.
In other Nymex trading, gasoline futures rose less than a penny to settle at 96.93 cents a gallon. Heating oil gained nearly 2 cents to settle at $1.392 a gallon while natural gas for January tumbled 21.4 cents to settle at $5.334 per 1,000 cubic feet.
Associated Press writer Alex Kennedy in Singapore, Pablo Gorondi in Budapest, Hungary, Emily Flynn Vencat in London and Catrina Stewart in Moscow contributed to this report.
1)
JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.
2) Goldman sachs $32-$40
3) Dutch bank $40
4) Merrilinch $25
Oil prices stabilized Friday as the White House's $17.4 billion auto industry rescue package gave Wall Street a boost and the dollar strengthened against the euro.
Light, sweet crude for February delivery rose 69 cents to settle at $42.36 a barrel on the New York Mercantile Exchange. In London, February Brent crude rose 64 cents to settle at $44 a barrel on the ICE.
The extreme volatility in energy markets this year has seen crude pushed from $100 to nearly $150 between January and July, and back down to the $30 to $40 range this month.
Peter Beutel, an analyst with Cameron Hanover in New Canaan, Conn., said he sees a lot of factors that should be leading to a bullish market, but they're not getting any traction because of the weak economy and falling demand.
"Until people can just take their eyes off of the demand for five seconds, it doesn't seem like this market is going to have an easy time moving higher right away," Beutel said.
The January 09 contract, which expired Friday, fell $2.35 cents to settle at $33.87, the lowest close in nearly five years.
----------------
What we may have to see before oil prices really carve out a bottom is evidence that crude inventories have stopped rising or a sustained rally in equities," Hassall said. "The focus of the market has been almost purely on the demand side."
Hassall predicted prices could fall as low as $25 a barrel next year before rising to as high as $60 if the global economy recovers in the second half.
"Prices could dip into the 20s for a time, and then there will likely be fairly choppy, sideways action in the first quarter," Hassall said.
-----
asr: Feb09 contract closed this same expiration Friday at 42.87 so that is $9 spread , 20 days ago the spread may be $1.5 max.
- what is great strategy "Near Short/Far Long " when OPEC cuts have planned announcements.
---------
Analysts largely discounted the January price, with the volume of the next month contract trading at 3 times the volume. Yet analyst Jim Ritterbusch said pre-expiration lows ( of Jan09) do provide a downside target to the next contract (Feb09).
Ritterbusch, president of energy consultancy Ritterbusch and Associates, said the market is sending strong signals that an oversupplied market will remain in place for some time.
"I think it's going to work its way down to today's lows in the January futures," he said.
The January contracts were at steal at that low price, Beutel said, but the question is where are you going to keep it. Rising stockpiles in Cushing, Okla., have put storage space at a premium.
"If you could find storage for it, it's a way to get rich real quickly," Beutel said.
Oil producers have leased supertankers to store crude at sea while they wait for prices to rise.
At an energy summit Friday on London, British Prime Minister Gordon Brown warned that a failure to stabilize oil prices could cost the global economy trillions.
"Wild fluctuations in market prices harm nations all round the world," Brown said. "They damage consumers and producers alike."
OPEC Secretary-General Abdullah El-Badri acknowledged the problem.
"We all know that extreme oil prices whether too high or too low are as bad for producers as they are for consumers," El-Badri said.
Meanwhile, Zeljko Bogetic, the World Bank's chief economist in Russia, told investors that the oil-rich nation would come under crippling financial pressure and may need to take out loans if crude prices do not rebound.
"If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Bogetic said.
Russia, which has used oil profits during the past eight years to pay down most of its foreign debt, could turn from creditor to borrower if current trends continue.
At $50 a barrel, Russia could drain much of its reserve funds and run budgetary deficits, Bogetic said.
Earlier this week, the 13-nation Organization of Petroleum Exporting Countries slashed its output quota by 2.2 million barrels a day in a bid to bolster prices that have slid about 70 percent since July.
Still, crude prices tumbled this week amid a bevy of dour economic reports suggesting demand for energy will continued to erode.
"The cut had been priced in," said Clarence Chu, a trader with market-maker Hudson Capital Energy in Singapore. "If OPEC hadn't cut that much, the price would have fallen even more."
Stephen Berman, an analyst with Pritchard Capital Partners, said OPEC may meet again in Kuwait on Jan. 19 to discuss further production cuts.
Analysts say disciplined compliance by OPEC members is key to market reaction and the stabilization of oil prices in the near future. Some OPEC members have a history of ignoring quotas, allowing oil power house Saudi Arabia to carry most of the burden of production cuts.
"Perception of progress is key to the movement of the oil price in the next few months," KBC Market Services in Britain said in a report.
JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.
The national retail average price for a gallon of regular gas rose three-tenths of a penny to $1.673 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 37 cents a gallon below what it was a month ago and more than $2.43 below where it was in July when prices peaked at $4.11 per gallon.
In other Nymex trading, gasoline futures rose less than a penny to settle at 96.93 cents a gallon. Heating oil gained nearly 2 cents to settle at $1.392 a gallon while natural gas for January tumbled 21.4 cents to settle at $5.334 per 1,000 cubic feet.
Associated Press writer Alex Kennedy in Singapore, Pablo Gorondi in Budapest, Hungary, Emily Flynn Vencat in London and Catrina Stewart in Moscow contributed to this report.
Thursday, December 18, 2008
Oil could fall to $40/bbl in 2009: Deutsche Bank
NEW YORK (Reuters) - Oil prices could fall to as low as $40 a barrel next year as more efficient refining capacity comes online and production costs for some regions fall, Deutsche Bank said in a Wednesday research note.
"The most underappreciated issue is the combination of
a) poor demand with
b) major new refining capacity additions and the extent to which that will undermine light sweet crude prices," the bank said in the note outlining the downside risk to its 2009 oil forecast.
"We believe that cash production cost 'floors' for the oil price are shrinking target (lower costs, stronger U.S. dollar), which imply a 'V' shaped downside to $40 a barrel crude around April 2009."
Oil prices have tumbled from a record over $147 a barrel to below $54 a barrel on Wednesday as demand from large consumer nations across the globe wilts due to the economic crisis.
The bank said the new refining capacity additions will use 20 percent less crude to make gasoline and distillate than older capacity, cutting the need for crude and pressuring prices.
In addition, the research note said healthy supply increases from non-OPEC sources should also weigh on oil.
"Given the weak demand we see versus relatively healthy supply levels, we seek the cash break-even cost of marginal production as the floor for oil prices," Deutsche Bank analyst Paul Sankey wrote, adding this floor was a "shrinking target".
"As oil falls, costs fall, the U.S. dollar strengthens, further causing local (Canadian, Russian) break-evens to fall."
OPEC members, feeling the squeeze of falling oil prices, will also face increased pressure not to cut production due to shrinking revenues, the bank said.
(Editing by Christian Wiessner)
"The most underappreciated issue is the combination of
a) poor demand with
b) major new refining capacity additions and the extent to which that will undermine light sweet crude prices," the bank said in the note outlining the downside risk to its 2009 oil forecast.
"We believe that cash production cost 'floors' for the oil price are shrinking target (lower costs, stronger U.S. dollar), which imply a 'V' shaped downside to $40 a barrel crude around April 2009."
Oil prices have tumbled from a record over $147 a barrel to below $54 a barrel on Wednesday as demand from large consumer nations across the globe wilts due to the economic crisis.
The bank said the new refining capacity additions will use 20 percent less crude to make gasoline and distillate than older capacity, cutting the need for crude and pressuring prices.
In addition, the research note said healthy supply increases from non-OPEC sources should also weigh on oil.
"Given the weak demand we see versus relatively healthy supply levels, we seek the cash break-even cost of marginal production as the floor for oil prices," Deutsche Bank analyst Paul Sankey wrote, adding this floor was a "shrinking target".
"As oil falls, costs fall, the U.S. dollar strengthens, further causing local (Canadian, Russian) break-evens to fall."
OPEC members, feeling the squeeze of falling oil prices, will also face increased pressure not to cut production due to shrinking revenues, the bank said.
(Editing by Christian Wiessner)
Oil Jan09/Feb09 diff $5.50 at Jan09 expiration
Oil continued its downward march Thursday as mass layoffs pushed the U.S. economy deeper into recession, signaling a drastic pullback on energy spending.
Light, sweet crude for February delivery, fell $2.94 to settle at $41.67 barrel on the New York Mercantile Exchange. The January contract, which closes on Friday, fell 9 percent, or $3.84, to settle at $36.22 after dropping as low as $35.98, levels last seen in June 2004.
There is no demand for oil right now, said analyst Peter Beutel of Cameron Hanover.
asr: Jan09 contract expired in one day that is expired on Friday-12-19-09 traded at 36.80
where as Feb09 contract ( month to expire) traded at 42.45
- so the contract diff is $5.50 seems huge, the below is explanation, for last one week the diff may by 1.50 some time , that is good trade for SHORT-Jan09/LONG-Feb09 for a profit of $3k atleast. below is explanation
Higher prices for the February contract suggest that oil brokers and traders believe OPEC's unprecedented 2.2 million-barrel daily production cut, announced Wednesday, will tighten supply. The Organization of Petroleum Exporting Countries had already taken 2 million barrels of oil out of production, bringing total cuts to more than 4 million barrels per day.
"The market is saying OPEC cuts will have an impact but just not right away," he said.
Analyst and trader Stephen Schork said, "The only people still holding on to January contracts are those who made the assumption that $40 per barrel would hold. Those people are losing their shirts."
Schork said crude prices have further to fall.
Light, sweet crude for February delivery, fell $2.94 to settle at $41.67 barrel on the New York Mercantile Exchange. The January contract, which closes on Friday, fell 9 percent, or $3.84, to settle at $36.22 after dropping as low as $35.98, levels last seen in June 2004.
There is no demand for oil right now, said analyst Peter Beutel of Cameron Hanover.
asr: Jan09 contract expired in one day that is expired on Friday-12-19-09 traded at 36.80
where as Feb09 contract ( month to expire) traded at 42.45
- so the contract diff is $5.50 seems huge, the below is explanation, for last one week the diff may by 1.50 some time , that is good trade for SHORT-Jan09/LONG-Feb09 for a profit of $3k atleast. below is explanation
Higher prices for the February contract suggest that oil brokers and traders believe OPEC's unprecedented 2.2 million-barrel daily production cut, announced Wednesday, will tighten supply. The Organization of Petroleum Exporting Countries had already taken 2 million barrels of oil out of production, bringing total cuts to more than 4 million barrels per day.
"The market is saying OPEC cuts will have an impact but just not right away," he said.
Analyst and trader Stephen Schork said, "The only people still holding on to January contracts are those who made the assumption that $40 per barrel would hold. Those people are losing their shirts."
Schork said crude prices have further to fall.
Borrowers rushing to refinance loans as rates drop
On Wednesday, some mortgage brokers were quoting mortgage rates of close to 4.5 percent for people with strong credit and hefty down payments.
"This is beautiful, oh my gosh!" said Patti Mazzara, a mortgage broker in the Minneapolis suburb of Edina, who was surprised when she looked up rates and found them well below 5 percent, down at least three-quarters of a percentage point from earlier in the week. "This is a whole new game now. Hopefully it's going to give people some relief."
The national average rate on 30-year, fixed mortgages was 5.06 percent on Wednesday, according to financial publisher HSH Associates -- the lowest since the 1960s and down from 5.3 percent Tuesday.
It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won't be able to take advantage.
"It's a call to action for homeowners looking to get out of adjustable-rate mortgages," said Greg McBride, senior financial analyst at Bankrate.com. "Unfortunately, it's not an equal-opportunity party."
Analysts say the Fed's moves to buy up mortgage debt are designed to reduce the an unusually large difference, or spread, between mortgage rates and yields on government debt.
In recent years, there has been about a 1.8 percentage point difference between the yield on a 10-year Treasury note and 30-year mortgage rates, but gap currently hovers around 3 percentage points.
Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending amid rising unemployment and declining household wealth. But many experts believe that the interest rate cuts alone won't be enough to jump-start the economy.
"This is beautiful, oh my gosh!" said Patti Mazzara, a mortgage broker in the Minneapolis suburb of Edina, who was surprised when she looked up rates and found them well below 5 percent, down at least three-quarters of a percentage point from earlier in the week. "This is a whole new game now. Hopefully it's going to give people some relief."
The national average rate on 30-year, fixed mortgages was 5.06 percent on Wednesday, according to financial publisher HSH Associates -- the lowest since the 1960s and down from 5.3 percent Tuesday.
It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won't be able to take advantage.
"It's a call to action for homeowners looking to get out of adjustable-rate mortgages," said Greg McBride, senior financial analyst at Bankrate.com. "Unfortunately, it's not an equal-opportunity party."
Analysts say the Fed's moves to buy up mortgage debt are designed to reduce the an unusually large difference, or spread, between mortgage rates and yields on government debt.
In recent years, there has been about a 1.8 percentage point difference between the yield on a 10-year Treasury note and 30-year mortgage rates, but gap currently hovers around 3 percentage points.
Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending amid rising unemployment and declining household wealth. But many experts believe that the interest rate cuts alone won't be enough to jump-start the economy.
Wednesday, December 17, 2008
Market Action
CNBC reporter said on TV that Madoff ponzi schme did not hit redemptions at other hedge funds because this is too late to sell for this quarter (may be accounting/ rules etc..)
- The reporter says other hedge-fund redemptions(sell) hit market in January.
- he indicated there are "not many sellers/not many buyers" so markets are quite and volatality is low .
asr: I thought 12/15 monday oil drop from 49 to 45 is due to monday's Madoff news and subsequent hedge fund redumptions, it seems that is not the case based on above .
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cudue: OPEN cut expected Wednesdya 12/17
12/15 asian market curde is $49
12/15 US session 49 -> 45
12/16 US morning started with 45 when got early announcement of 2 mil. cut (11 am EST) , dropped to 42 and recovered to 43
12/17 opened 43.5 , actual news came as 2.2 mil cut, dropped to 40.25 , recovered to 42 then finally dropped to 40.5
- The reporter says other hedge-fund redemptions(sell) hit market in January.
- he indicated there are "not many sellers/not many buyers" so markets are quite and volatality is low .
asr: I thought 12/15 monday oil drop from 49 to 45 is due to monday's Madoff news and subsequent hedge fund redumptions, it seems that is not the case based on above .
----
cudue: OPEN cut expected Wednesdya 12/17
12/15 asian market curde is $49
12/15 US session 49 -> 45
12/16 US morning started with 45 when got early announcement of 2 mil. cut (11 am EST) , dropped to 42 and recovered to 43
12/17 opened 43.5 , actual news came as 2.2 mil cut, dropped to 40.25 , recovered to 42 then finally dropped to 40.5
Oil slides 8 percent as OPEC cut seen too little
By Richard Valdmanis
NEW YORK (Reuters) - Oil prices dropped to their lowest in more than four years on Wednesday after OPEC announced a record supply cut that dealers said may fail to fully offset slumping world energy demand.
U.S. crude oil prices fell $3.54 to settle at $40.06 a barrel after dipping below $40 for first time since July 2004. London Brent fell $1.12 to $45.53.
Oil prices have fallen more than $100 since July as a global financial crisis cuts into consumer and industrial fuel demand, and top forecasters are now predicting the first decline in world energy use since 1983.
The Organization of the Petroleum Exporting Countries, eager to push prices back up, announced on Wednesday an agreement to cut 2.2 million barrels per day of output starting January 1, the biggest single reduction on record.
The agreed cut was slightly bigger than expected and will add to previous OPEC cuts of 2 million bpd since September (ID:nLH679526). But oil dealers focusing on the global economic downturn reacted coolly.
"It seems like, despite the fact that the economies of producer nations are clearly in trouble, they don't have the temerity to actually go ahead and do the kind of cut that would be really interesting to traders to turn this around," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
The White House, which has been fighting to rescue the U.S. economy from a severe slowdown, called OPEC's decision to cut production "short sighted" and said the oil cartel has an obligation to keep the market well supplied.
"It's not clear that OPEC's actions will be effective given the shift in global demand and the ability of OPEC members to meet the cartel's targets," said spokesman Tony Fratto.
"Regardless, OPEC has an obligation to keep the market well supplied and to consider the health of the global economy, so efforts to limit the benefits of lower energy prices are short sighted," he said.
OPEC, however, is desperate to halt the slide in prices with economists predicting 11 of OPEC's 12 members, as well as big producers Russia and Mexico, will face budget deficits with crude oil at $40 a barrel.
The slump in prices has already sent shock waves through oil producer countries and top companies, leading to cutbacks and delays in spending on key projects that had promised to boost future world output.
Energy analysts said that despite the market's initial reaction, OPEC's cuts could bolster prices in the longer run if members comply and demand falls less than expected.
"The biggest question about how effective this agreement will be is just how much demand will contract," said Sarah Emerson, director of Energy Security Analysis Inc in Boston. "I think OPEC is showing that they have strong intentions to support prices."
Oil's losses on Wednesday came amid continued weakness in U.S. stock markets as economic gloom overshadowed government efforts to stimulate growth, including this week's move by the Federal Reserve to slash interest rates.
The soft energy market has also led oil refiners in the United States, the world's biggest energy consumer, to slow down fuel production to match weak demand.
The U.S. Energy Information Administration said the nation's crude and refined fuel stockpiles rose last week as a demand slump led refiners to run less oil.
Auto group AAA said on Wednesday that U.S. travel over the Christmas holidays will fall more than 2 percent this year, the first decline since 2002.
NEW YORK (Reuters) - Oil prices dropped to their lowest in more than four years on Wednesday after OPEC announced a record supply cut that dealers said may fail to fully offset slumping world energy demand.
U.S. crude oil prices fell $3.54 to settle at $40.06 a barrel after dipping below $40 for first time since July 2004. London Brent fell $1.12 to $45.53.
Oil prices have fallen more than $100 since July as a global financial crisis cuts into consumer and industrial fuel demand, and top forecasters are now predicting the first decline in world energy use since 1983.
The Organization of the Petroleum Exporting Countries, eager to push prices back up, announced on Wednesday an agreement to cut 2.2 million barrels per day of output starting January 1, the biggest single reduction on record.
The agreed cut was slightly bigger than expected and will add to previous OPEC cuts of 2 million bpd since September (ID:nLH679526). But oil dealers focusing on the global economic downturn reacted coolly.
"It seems like, despite the fact that the economies of producer nations are clearly in trouble, they don't have the temerity to actually go ahead and do the kind of cut that would be really interesting to traders to turn this around," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
The White House, which has been fighting to rescue the U.S. economy from a severe slowdown, called OPEC's decision to cut production "short sighted" and said the oil cartel has an obligation to keep the market well supplied.
"It's not clear that OPEC's actions will be effective given the shift in global demand and the ability of OPEC members to meet the cartel's targets," said spokesman Tony Fratto.
"Regardless, OPEC has an obligation to keep the market well supplied and to consider the health of the global economy, so efforts to limit the benefits of lower energy prices are short sighted," he said.
OPEC, however, is desperate to halt the slide in prices with economists predicting 11 of OPEC's 12 members, as well as big producers Russia and Mexico, will face budget deficits with crude oil at $40 a barrel.
The slump in prices has already sent shock waves through oil producer countries and top companies, leading to cutbacks and delays in spending on key projects that had promised to boost future world output.
Energy analysts said that despite the market's initial reaction, OPEC's cuts could bolster prices in the longer run if members comply and demand falls less than expected.
"The biggest question about how effective this agreement will be is just how much demand will contract," said Sarah Emerson, director of Energy Security Analysis Inc in Boston. "I think OPEC is showing that they have strong intentions to support prices."
Oil's losses on Wednesday came amid continued weakness in U.S. stock markets as economic gloom overshadowed government efforts to stimulate growth, including this week's move by the Federal Reserve to slash interest rates.
The soft energy market has also led oil refiners in the United States, the world's biggest energy consumer, to slow down fuel production to match weak demand.
The U.S. Energy Information Administration said the nation's crude and refined fuel stockpiles rose last week as a demand slump led refiners to run less oil.
Auto group AAA said on Wednesday that U.S. travel over the Christmas holidays will fall more than 2 percent this year, the first decline since 2002.
Tuesday, December 16, 2008
Goldman Sachs Cuts Jobs, Slashes Average Pay 45% to $363,654
Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc. eliminated 2,500 jobs in the fourth quarter and slashed average pay per worker 45 percent to $363,654 as the firm posted the first quarterly loss since going public almost a decade ago.
Expenses for compensation and benefits fell 46 percent to $10.9 billion from a record $20.2 billion in 2007, the New York- based company said in a statement today. That provides an average $363,654 for each of the firm’s 30,067 employees, down from $661,490 for each of the 30,522 people employed last year.
The firm’s bonus pool, estimated at 60 percent of total compensation, dropped to $6.56 billion or an average $218,193 per employee this year.
Expenses for compensation and benefits fell 46 percent to $10.9 billion from a record $20.2 billion in 2007, the New York- based company said in a statement today. That provides an average $363,654 for each of the firm’s 30,067 employees, down from $661,490 for each of the 30,522 people employed last year.
The firm’s bonus pool, estimated at 60 percent of total compensation, dropped to $6.56 billion or an average $218,193 per employee this year.
Monday, December 15, 2008
Falling crude to dent oil marketers’ margins
While cracks are quoted at Platts Singapore assessed prices, Singapore being the most active market for the Asian region, crude oil is marked to Dubai as India imports most of its requirements from the Arabian Gulf to avail of the freight advantage.
Usually, it takes upwards of 35 to 40 days to process the crude into saleable distillates from the time it is loaded onto a tanker. So, if a refiner has contracted oil at, say, $95.9 a barrel in September when the gasoil spread was at $23.03, it is ready to sell the gasoil in November. However, by November if the gasoil crack has fallen to $69.58 from $118.93 in September, the crack spread has turned a negative $26 ($69.58-$95.90) and the refiner loses heavily.
If, however, the refiner locked in the paper crack spread at $23.03 in September itself, it would get the same amount despite the spread having come down to $19.12 in November on the OTC market. The paper profit works out to $3.9 a barrel which would reduce the refiner’s loss on the gasoil crack spread to around $22 against $26 if it had remained unhedged.
“In November 2007, the jet crack spread soared to a record-high of $26 a barrel. We never though that the spread could exceed that level and sold whenever prices trended there. However, by May 2008 the crack spread shot up to an unexpected $40.08.
Crack spreads in the year to date have been extremely volatile,” said SV Narasimhan, director (finance), IOC. While PSU oil refiners’ boards approve hedging up to 10% of physical exposure, private refiners could hedge up to 40-50% of their portfolio.
“Hedging is more like purchasing insurance against the risk of prices falling and thus protecting margins. Having said that, if there is a hedging gain, it definitely helps stabilising the revenue stream of a company,” said SK Joshi, director, finance, BPCL
Usually, it takes upwards of 35 to 40 days to process the crude into saleable distillates from the time it is loaded onto a tanker. So, if a refiner has contracted oil at, say, $95.9 a barrel in September when the gasoil spread was at $23.03, it is ready to sell the gasoil in November. However, by November if the gasoil crack has fallen to $69.58 from $118.93 in September, the crack spread has turned a negative $26 ($69.58-$95.90) and the refiner loses heavily.
If, however, the refiner locked in the paper crack spread at $23.03 in September itself, it would get the same amount despite the spread having come down to $19.12 in November on the OTC market. The paper profit works out to $3.9 a barrel which would reduce the refiner’s loss on the gasoil crack spread to around $22 against $26 if it had remained unhedged.
“In November 2007, the jet crack spread soared to a record-high of $26 a barrel. We never though that the spread could exceed that level and sold whenever prices trended there. However, by May 2008 the crack spread shot up to an unexpected $40.08.
Crack spreads in the year to date have been extremely volatile,” said SV Narasimhan, director (finance), IOC. While PSU oil refiners’ boards approve hedging up to 10% of physical exposure, private refiners could hedge up to 40-50% of their portfolio.
“Hedging is more like purchasing insurance against the risk of prices falling and thus protecting margins. Having said that, if there is a hedging gain, it definitely helps stabilising the revenue stream of a company,” said SK Joshi, director, finance, BPCL
Heroes and Zeros of 2008
Hero: Nouriel Roubini
Economics professor, New York University
For the next 12 months I would stay away from risky assets. ... I wish I could be more cheerful, but I was right a year ago, and I think I'll be right this year, too." -- Fortune, Dec. 10, 2008
Roubini is on this list for one reason, and it's a big one: He was one of the first people to warn about the impending financial crisis.
Back in 2006, his public predictions that a real estate bust along with a surge in oil prices and a shopped-out consumer would lead to a recession by 2007 were met with deep skepticism. As we know all too well, much of his dire forecast came to pass in 2008.
He's not too rosy about the future, calling for the most severe and protracted economic downturn since World War II. But we can all take comfort that Roubini is forecasting the economy to begin recovery by the end of next year, and for GDP growth to turn positive in 2010. --D.R.
Economics professor, New York University
For the next 12 months I would stay away from risky assets. ... I wish I could be more cheerful, but I was right a year ago, and I think I'll be right this year, too." -- Fortune, Dec. 10, 2008
Roubini is on this list for one reason, and it's a big one: He was one of the first people to warn about the impending financial crisis.
Back in 2006, his public predictions that a real estate bust along with a surge in oil prices and a shopped-out consumer would lead to a recession by 2007 were met with deep skepticism. As we know all too well, much of his dire forecast came to pass in 2008.
He's not too rosy about the future, calling for the most severe and protracted economic downturn since World War II. But we can all take comfort that Roubini is forecasting the economy to begin recovery by the end of next year, and for GDP growth to turn positive in 2010. --D.R.
OPEC Favors Cut to Trim Stocks, Expects Russian Help (Update3)
Kuwait Push
OPEC, which agreed in October to reduce production by 1.5 million barrels a day from Nov. 1, has implemented 75 percent of the cut, said Khelil, who is also Algeria’s oil minister. Algeria has lowered production by 90,000 barrels a day and is producing 1.3 million barrels a day now, he said.
World demand will fall this year for the first time since 1983 as the global recession cuts fuel consumption, the International Energy Agency said last week.
OPEC will probably lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg. Kuwait’s Oil Minister said the country will push for a cut at the meeting.
OPEC is “very pessimistic about demand” next year, Khelil said, adding that current stock levels are five days higher than the five-year average of 52 days.
Oil consumption will fall by 200,000 barrels a day in the first quarter of 2009, and a further 1.2 million barrels a day in the second quarter, before rising again in the second half of the year, he said.
The group will meet again in March and start to gather more frequently, Khelil said.
World oil demand is likely to fall by an average of 500,000 barrels a day next year because of high crude prices and slumping economies, the Centre for Global Energy Studies said in a report today.
OPEC, which agreed in October to reduce production by 1.5 million barrels a day from Nov. 1, has implemented 75 percent of the cut, said Khelil, who is also Algeria’s oil minister. Algeria has lowered production by 90,000 barrels a day and is producing 1.3 million barrels a day now, he said.
World demand will fall this year for the first time since 1983 as the global recession cuts fuel consumption, the International Energy Agency said last week.
OPEC will probably lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg. Kuwait’s Oil Minister said the country will push for a cut at the meeting.
OPEC is “very pessimistic about demand” next year, Khelil said, adding that current stock levels are five days higher than the five-year average of 52 days.
Oil consumption will fall by 200,000 barrels a day in the first quarter of 2009, and a further 1.2 million barrels a day in the second quarter, before rising again in the second half of the year, he said.
The group will meet again in March and start to gather more frequently, Khelil said.
World oil demand is likely to fall by an average of 500,000 barrels a day next year because of high crude prices and slumping economies, the Centre for Global Energy Studies said in a report today.
Friday, December 12, 2008
Goldman's revision : 2009 Oil 42
Goldman's revision
Goldman Sachs has slashed its average price forecast for West Texas Intermediate crude for 2009 to $45 a barrel, down from $80 a barrel previously. This stands in stark contrast to Goldman's prediction earlier this year that oil prices may hit $200 a barrel.
Goldman also lowered its three-month oil price target, to $30 a barrel, as well as its six-month target, to $42, and its 12-month target, to $65.
"The collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified now threatens to push oil prices below $40 a barrel in the near term, as the impact of the global economic recession has swung the oil market from pricing demand destruction in 2008 to pricing supply destruction in 2009," the commodities research team at Goldman Sachs led by Jeffrey Currie said in a report dated Thursday.
The Goldman analysts expect oil demand to decline by 1.7 million barrels a day in 2009.
In addition, they said that an additional 2 million barrels a day of OPEC supply cuts will be required in 2009, along with a reduction of 600,000 barrels a day in non-OPEC production, in order to rebalance supply and demand in the oil market. End of Story
Goldman Sachs has slashed its average price forecast for West Texas Intermediate crude for 2009 to $45 a barrel, down from $80 a barrel previously. This stands in stark contrast to Goldman's prediction earlier this year that oil prices may hit $200 a barrel.
Goldman also lowered its three-month oil price target, to $30 a barrel, as well as its six-month target, to $42, and its 12-month target, to $65.
"The collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified now threatens to push oil prices below $40 a barrel in the near term, as the impact of the global economic recession has swung the oil market from pricing demand destruction in 2008 to pricing supply destruction in 2009," the commodities research team at Goldman Sachs led by Jeffrey Currie said in a report dated Thursday.
The Goldman analysts expect oil demand to decline by 1.7 million barrels a day in 2009.
In addition, they said that an additional 2 million barrels a day of OPEC supply cuts will be required in 2009, along with a reduction of 600,000 barrels a day in non-OPEC production, in order to rebalance supply and demand in the oil market. End of Story
Sunday, December 7, 2008
Commodity pool
In finance a commodity pool is where many individual investors combine their moneys, and trade in futures contracts as a single entity, in order to gain leverage. This is analogous to mutual funds wherein a fund is similarly set up expressly for trading in equity, except that mutual funds are open to public subscription whereas commodity pools and hedge funds are private.
Commodity pools are also called managed futures funds. The name “commodity pool” is a National Futures Association (NFA) legal term. In the United States, the Commodity Futures Trading Commission (CFTC) and the NFA, as opposed to the Securities and Exchange Commission, regulate commodity pools.
Many hedge funds are commodity pools. Funds that trade in commodities, which include many of the largest funds engaged in "macro" strategies, are registered with the Commodity Futures Trading Commission as commodity pools and as Commodity Trading Advisors (CTAs). In an address to the Securities Industry Association in 2004, Sharon Brown-Hruska, acting director of the CFTC, said that 65 of the top 100 funds in 2003 were commodity pools, and 50 out of the 100 largest hedge funds were CTAs in addition to being commodity pools.[1]
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Taxation of private equity and hedge funds
Commodity pools are also called managed futures funds. The name “commodity pool” is a National Futures Association (NFA) legal term. In the United States, the Commodity Futures Trading Commission (CFTC) and the NFA, as opposed to the Securities and Exchange Commission, regulate commodity pools.
Many hedge funds are commodity pools. Funds that trade in commodities, which include many of the largest funds engaged in "macro" strategies, are registered with the Commodity Futures Trading Commission as commodity pools and as Commodity Trading Advisors (CTAs). In an address to the Securities Industry Association in 2004, Sharon Brown-Hruska, acting director of the CFTC, said that 65 of the top 100 funds in 2003 were commodity pools, and 50 out of the 100 largest hedge funds were CTAs in addition to being commodity pools.[1]
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Taxation of private equity and hedge funds
Limited liability partnership
USA
As in a partnership or limited liability company (LLC), the profits of an LLP are allocated among the partners for tax purposes, avoiding the problem of "double taxation" often found in corporations.
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In India, a concept paper on Limited Liability Partnership Law was brought out by the Ministry of Company Affairs in 2005. In the year 2006 the Limited Liability Partnership Bill was introduced in the Parliament. In October 2008, the said Ministry has proposed a new Limited Liability Partnership Bill 2008, which has been submitted to the Parliament for its approval. In November 2008,
As in a partnership or limited liability company (LLC), the profits of an LLP are allocated among the partners for tax purposes, avoiding the problem of "double taxation" often found in corporations.
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In India, a concept paper on Limited Liability Partnership Law was brought out by the Ministry of Company Affairs in 2005. In the year 2006 the Limited Liability Partnership Bill was introduced in the Parliament. In October 2008, the said Ministry has proposed a new Limited Liability Partnership Bill 2008, which has been submitted to the Parliament for its approval. In November 2008,
small biz new equipment expense 100k
New lower income-tax rates will benefit many small-business owners, since most pay taxes on their profits as individual income. Thanks to the new tax law just passed, rates at higher income levels dropped by two percentage points, effective December 31, 2002. Also, small businesses will be allowed to expense as much as $100,000, up from $25,000, of new equipment annually, and receive a 50% bonus write-off for new equipment, up from 30% currently.
asr: wow, it is much economical to buy machines/equipment for business than employee salary ( which adds 15% payroll tax) ..
The Treasury Department has estimated that for 2003, some 23 million self-employed business people will receive tax cuts averaging $2,209, thanks to the package.
The corporate federal tax rates top out at 35%. Yet nearly 70% of small-business owners either paid a federal tax rate of 15% or didn't pay federal income taxes at all in 2001, according to labor-backed Washington, D.C., lobbying group Citizens for Tax Justice. The remainder for the most part are taxed at the highest personal income-tax rate, which will drop to 35% this year from 38.6% in 2002 for married couples filing jointly.
Note, however, that these individual tax rates don't account for other taxes self-employed business owners pay. In addition to federal taxes, sole proprietors and S corp. owners must pay self-employment taxes to the tune of 15.3% (self-employment taxes cover Medicare and Social Security taxes). Employees at corporations, on the other hand, get to split that cost -- the company pays half, and the employee pays half.
asr: wow, it is much economical to buy machines/equipment for business than employee salary ( which adds 15% payroll tax) ..
The Treasury Department has estimated that for 2003, some 23 million self-employed business people will receive tax cuts averaging $2,209, thanks to the package.
The corporate federal tax rates top out at 35%. Yet nearly 70% of small-business owners either paid a federal tax rate of 15% or didn't pay federal income taxes at all in 2001, according to labor-backed Washington, D.C., lobbying group Citizens for Tax Justice. The remainder for the most part are taxed at the highest personal income-tax rate, which will drop to 35% this year from 38.6% in 2002 for married couples filing jointly.
Note, however, that these individual tax rates don't account for other taxes self-employed business owners pay. In addition to federal taxes, sole proprietors and S corp. owners must pay self-employment taxes to the tune of 15.3% (self-employment taxes cover Medicare and Social Security taxes). Employees at corporations, on the other hand, get to split that cost -- the company pays half, and the employee pays half.
The slowdown in growth : India
The slowdown in growth is evident in early indicators such as exports and vehicle sales.
India's merchandise exports declined 12.1% in October from a year earlier to $12.8 billion, the first drop in three years.
Maruti, a unit of Suzuki Motor Corp. (7269.TO) and the country's largest carmaker, has reported a 24% decline on year in November sales.
How Phelps Became the Face of PureSport
As history's greatest Olympian, Michael Phelps earns an estimated $5 million a year by endorsing some of the world's best-known credit-card, hotel and cereal brands.
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asr: see the deal, for 5% stake , the four team make them available at least 7 days/year ( I guess each of them ) for Ads shotting and company can use their images/video as much as they want.
- Since it is pre-olympic event , company was able to do for cheap 5% deal with all 4 of them ( no risk of who gets all gold medals .)
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But his appearance as pitchman for a Texas protein-powder maker might go down in the annals of sports marketing as one of the most unusual deals ever.
Before he earned his eight gold medals and became a global celebrity at the Beijing Olympics, Mr. Phelps and three teammates agreed to endorse PureSport, a protein mix made by a tiny Austin, Texas, company that didn't exist three years ago.
The agreement with Mr. Phelps and three other Olympic swimmers -- Aaron Peirsol, Brendan Hansen and Ian Crocker -- gave the University of Texas spinoff a dizzying start.
The foursome, introduced to the company while training in Austin last year, took a 5% stake in exchange for their endorsements.
But it is Mr. Phelps's new star power that has provided the seven-person Human Performance Labs LLC with financing and access to scarce shelf space at retailers. The drink mix, initially sold through specialty shops, recently won a coveted spot at the Sports Authority, a 400-store sporting-goods chain.
"Phelps was the clincher," says Terry Gilmore, an oil, gas and real estate investor who put up nearly $5 million in January to launch the company.
Mr. Phelps rarely enters the water these days. The up to six-hour daily workouts that included 10,000 meters in the pool, plus weight training, are a memory for the time being.
The strapping Olympian is changing into a spindly couch potato. His once-bulky chest now appears to sink in from his shoulders rather than puff out.
He orders cheeseburgers and fries for lunch. If he has no corporate obligations, he says he tries to make it out of bed at his home in Baltimore for the final morning edition of ESPN's SportsCenter. He often misses it. Then, he watches a couple hours of television, may talk University of Michigan football with his friends, catch a movie, and another day is done.
"Doing nothing is actually pretty easy," he says.
The self-imposed, six-month layoff, the longest since he became serious about swimming at age 11, will end in mid-February, when Mr. Phelps plans to begin training for the 2009 swimming season and starts his long march to the 2012 Olympics in London. He insists PureSport's drinks will be part of that training.
In Beijing, every time Mr. Phelps emerged from the pool at the Water Cube, a coach handed him a plastic bottle filled with PureSport's protein and carbohydrate-filled cocktail. "About halfway through the meet, people started knocking on my door asking me what I was drinking and if they could have some," Mr. Phelps said during a recent interview.
Today, the company puts Mr. Phelps and his crooked smile wherever it can -- on packaging, store displays and in retail store appearances. PureSport can't afford national television commercials or print campaigns, so Mr. Phelps has become the core of its marketing campaign.
Last month, Mr. Phelps traveled to Chicago to celebrate PureSport hitting the shelves at the Sports Authority. Some 200 people slept outside overnight to meet him in Chicago, and 1,500 arrived for the event, which won television coverage on several local stations.
"We get him for at least seven days a year, and we book the hell out of him," says Michael Humphrey, chief executive of Human Performance Labs and a former sales executive with Broadcast.com and CBS Corp.'s Simon & Schuster. "Everything we can do to connect him to our brand, we'll do it."
That puts PureSport among the rarified list of big-name brands. Mr. Phelps has endorsements with VISA Inc., Hilton Hotels Corp., AT&T Inc., Kellogg Co., and Speedo International Ltd, among others, according to his agent, Peter Carlisle of Octagon, the Virginia-based sports-marketing firm.
Ryan Schinman, chief executive of Platinum Rye Entertainment, a celebrity broker for advertising campaigns, said the intense connection with a tiny start-up poses a serious risk.
"If it fails, does he want to be so closely associated with a losing company?" Mr. Schinman said.
PureSport is hardly as well-known as Gatorade, but if the company is to succeed, it will need Mr. Phelps off the couch and doing what he does best: swimming, winning, and publicly drinking that protein cocktail.
---------
asr: see the deal, for 5% stake , the four team make them available at least 7 days/year ( I guess each of them ) for Ads shotting and company can use their images/video as much as they want.
- Since it is pre-olympic event , company was able to do for cheap 5% deal with all 4 of them ( no risk of who gets all gold medals .)
-----
But his appearance as pitchman for a Texas protein-powder maker might go down in the annals of sports marketing as one of the most unusual deals ever.
Before he earned his eight gold medals and became a global celebrity at the Beijing Olympics, Mr. Phelps and three teammates agreed to endorse PureSport, a protein mix made by a tiny Austin, Texas, company that didn't exist three years ago.
The agreement with Mr. Phelps and three other Olympic swimmers -- Aaron Peirsol, Brendan Hansen and Ian Crocker -- gave the University of Texas spinoff a dizzying start.
The foursome, introduced to the company while training in Austin last year, took a 5% stake in exchange for their endorsements.
But it is Mr. Phelps's new star power that has provided the seven-person Human Performance Labs LLC with financing and access to scarce shelf space at retailers. The drink mix, initially sold through specialty shops, recently won a coveted spot at the Sports Authority, a 400-store sporting-goods chain.
"Phelps was the clincher," says Terry Gilmore, an oil, gas and real estate investor who put up nearly $5 million in January to launch the company.
Mr. Phelps rarely enters the water these days. The up to six-hour daily workouts that included 10,000 meters in the pool, plus weight training, are a memory for the time being.
The strapping Olympian is changing into a spindly couch potato. His once-bulky chest now appears to sink in from his shoulders rather than puff out.
He orders cheeseburgers and fries for lunch. If he has no corporate obligations, he says he tries to make it out of bed at his home in Baltimore for the final morning edition of ESPN's SportsCenter. He often misses it. Then, he watches a couple hours of television, may talk University of Michigan football with his friends, catch a movie, and another day is done.
"Doing nothing is actually pretty easy," he says.
The self-imposed, six-month layoff, the longest since he became serious about swimming at age 11, will end in mid-February, when Mr. Phelps plans to begin training for the 2009 swimming season and starts his long march to the 2012 Olympics in London. He insists PureSport's drinks will be part of that training.
In Beijing, every time Mr. Phelps emerged from the pool at the Water Cube, a coach handed him a plastic bottle filled with PureSport's protein and carbohydrate-filled cocktail. "About halfway through the meet, people started knocking on my door asking me what I was drinking and if they could have some," Mr. Phelps said during a recent interview.
Today, the company puts Mr. Phelps and his crooked smile wherever it can -- on packaging, store displays and in retail store appearances. PureSport can't afford national television commercials or print campaigns, so Mr. Phelps has become the core of its marketing campaign.
Last month, Mr. Phelps traveled to Chicago to celebrate PureSport hitting the shelves at the Sports Authority. Some 200 people slept outside overnight to meet him in Chicago, and 1,500 arrived for the event, which won television coverage on several local stations.
"We get him for at least seven days a year, and we book the hell out of him," says Michael Humphrey, chief executive of Human Performance Labs and a former sales executive with Broadcast.com and CBS Corp.'s Simon & Schuster. "Everything we can do to connect him to our brand, we'll do it."
That puts PureSport among the rarified list of big-name brands. Mr. Phelps has endorsements with VISA Inc., Hilton Hotels Corp., AT&T Inc., Kellogg Co., and Speedo International Ltd, among others, according to his agent, Peter Carlisle of Octagon, the Virginia-based sports-marketing firm.
Ryan Schinman, chief executive of Platinum Rye Entertainment, a celebrity broker for advertising campaigns, said the intense connection with a tiny start-up poses a serious risk.
"If it fails, does he want to be so closely associated with a losing company?" Mr. Schinman said.
PureSport is hardly as well-known as Gatorade, but if the company is to succeed, it will need Mr. Phelps off the couch and doing what he does best: swimming, winning, and publicly drinking that protein cocktail.
Saturday, December 6, 2008
The AMEX Gold Bugs Index (HUI)
Interactive chart .HUI - compare this with GLD ( which follows gold physical index ), you see 65%? gain from "Nov 20 - Nov 28 " compared to small gain in GLD .
- Same thing was pointed in traderNarative post below
- asr: explore "LONG HUI/short GLD" which the numbers favour for above kind of 1 week period . Conversly opposite when HUI is high . Need more back testing.
AMEX GOLD BUGS INDEX (^HUI) -- show components
The AMEX Gold BUGS(Basket of Unhedged Gold Stocks)Index represents a portfolio of 13 major gold mining companies.The Index is designed to give investors significant exposure to near term movements in gold prices - by including companies that do not hedge their gold production beyond 1 1/2 years.
-----
AMEX’s Gold BUGS Index (HUI) and the Philadelphia Stock Exchange’s XAU
Overview
Two major gold indices dominate the market - the AMEX’s Gold BUGS Index (HUI) and the Philadelphia Stock Exchange’s XAU
The major difference between the two is that the BUGS index is made up exclusively of mining stocks that do not hedge their gold positions more than a year-and-a-half into the future. This makes the BUGS Index much more profitable than the XAU when gold prices are rising, but can also compound its losses when gold declines. BUGS is an acronym for Basket of Unhedged Gold Stocks. The index was introduced on March 15, 1996 with a starting value of 200.
Positives
When gold prices are on the rise, the Gold BUGS Index provides an excellent way for investors to capitalize on that increase. The index has a high correlation to the spot price (current price) of gold.
Drawbacks
When the price of gold declines, the Gold BUGS Index tends to fall much faster than its hedged cousin, the XAU. In addition, the firm's unusual index weighting system can be difficult to understand.
Composition
The AMEX Gold BUGS Index is comprised of 15 of the nation's largest “unhedged” gold mining stocks. It is a “modified equal-dollar weighted” index. As a result, most of the index's component stocks are equally weighted, yet the largest stocks still carry a greater weight than the smallest.
--------------
Guess Which Index Rallied 65%
- Interestingly enough, within the same time period physical gold rallied only 18%, going from a low of $700 per oz. to a high of $825.
- The previous counter rally in September was a respectable 40% but still a baby compared to this one.
- I guess my point is that gold and gold stocks are like everything else, supposed to be borrowed for a trade, not married for life.
- Same thing was pointed in traderNarative post below
- asr: explore "LONG HUI/short GLD" which the numbers favour for above kind of 1 week period . Conversly opposite when HUI is high . Need more back testing.
AMEX GOLD BUGS INDEX (^HUI) -- show components
The AMEX Gold BUGS(Basket of Unhedged Gold Stocks)Index represents a portfolio of 13 major gold mining companies.The Index is designed to give investors significant exposure to near term movements in gold prices - by including companies that do not hedge their gold production beyond 1 1/2 years.
-----
AMEX’s Gold BUGS Index (HUI) and the Philadelphia Stock Exchange’s XAU
Overview
Two major gold indices dominate the market - the AMEX’s Gold BUGS Index (HUI) and the Philadelphia Stock Exchange’s XAU
The major difference between the two is that the BUGS index is made up exclusively of mining stocks that do not hedge their gold positions more than a year-and-a-half into the future. This makes the BUGS Index much more profitable than the XAU when gold prices are rising, but can also compound its losses when gold declines. BUGS is an acronym for Basket of Unhedged Gold Stocks. The index was introduced on March 15, 1996 with a starting value of 200.
Positives
When gold prices are on the rise, the Gold BUGS Index provides an excellent way for investors to capitalize on that increase. The index has a high correlation to the spot price (current price) of gold.
Drawbacks
When the price of gold declines, the Gold BUGS Index tends to fall much faster than its hedged cousin, the XAU. In addition, the firm's unusual index weighting system can be difficult to understand.
Composition
The AMEX Gold BUGS Index is comprised of 15 of the nation's largest “unhedged” gold mining stocks. It is a “modified equal-dollar weighted” index. As a result, most of the index's component stocks are equally weighted, yet the largest stocks still carry a greater weight than the smallest.
--------------
Guess Which Index Rallied 65%
- Interestingly enough, within the same time period physical gold rallied only 18%, going from a low of $700 per oz. to a high of $825.
- The previous counter rally in September was a respectable 40% but still a baby compared to this one.
- I guess my point is that gold and gold stocks are like everything else, supposed to be borrowed for a trade, not married for life.
Thursday, December 4, 2008
Proprietary Trading
Edit
***********************************************
585 responses -- read and get it
Jacob Oct 5th, 2009 at 1:26 pm -- seems conman
-- jpcorpo@yahoo.com
http://www.darkpooltraders.com/vb/trading/45-any-good-prop-trading-firms-los-angeles-area.html
---
http://www.pearlmancta.com/About.htm -- CA CTA firm big one
www.ma-research.com -- sent mail for CTA professional
dmendiburu@ma-research.com
vtraderpro
Hedge Fund Hotel / CTA & CPO Turn-Key Programs
Desk, data and facility access in San Francisco, Chicago, and New York.
Investor and Capital Introduction offered to traders with proven track records and scalable strategy
Hair-cut margin
----
approach list:
Blue Capital Group is a privately held options market-maker specializing in broad-based equity index options.
http://www.belvederetrading.com/
- Manages their Own capital , has job postings ( so real one), 7 years history
-------------
1/ Commodity Broker, Options Broker and Futures Broker Directory
2/ www.ma-research.com
3 /Here is list URL
above odds guy copied from this maser list
-------------
asr: good firms will pay salary with education as above Mako group, other 90% firms rob people money as mentioned in this blog many times.
SCAMS
Out of 200 traders, there will be about 5 guys that can make decent money. Whatever payout % rate you have because of your contribution makes absolutely no difference at all because you’ll never really get paid…for 95% of the traders, the best scenario is to get draws of 2000 against their accounts…and it is rare that they receive 2000 every month…I would say your lucky if you make $8k the first year. It doesn’t matter if your payout is 80%, or 70% or 50%, because the rates they charge you are so high that you will owe them money even if you made money gross. You can gross 10k per month and they will tell you that you lost them money because of the transaction fees…
---------
List of Proprietary Trading Firms
What a proprietary trading firm looks for
-------------
asr: this seems good firm makoglobal , which was mentioned above , with open commnunicaton
http://www.makoglobal.com/home/index.cfm
http://www.makoglobal.com/home/index.cfm
First and foremost a trading house, we use team based trading and technology to ensure we can be the best at what we do.
By challenging industry norms and positively embracing change we are shaping the future of trading. Mako Group companies play a vital role in the efficient workings of the European and US financial markets. Proponents of electronic trading as well as participants in the 'open-outcry' floors in Chicago, our traders combine their skill and knowledge of options trading to provide huge liquidity into the key equity and fixed income markets.
Mako Group encompasses a number of private companies tied together by a common culture which embraces continuous improvement, relationships, integrity and, above all, a passion for what we do.
--------
***********************************************
585 responses -- read and get it
Jacob Oct 5th, 2009 at 1:26 pm -- seems conman
-- jpcorpo@yahoo.com
http://www.darkpooltraders.com/vb/trading/45-any-good-prop-trading-firms-los-angeles-area.html
---
http://www.pearlmancta.com/About.htm -- CA CTA firm big one
www.ma-research.com -- sent mail for CTA professional
dmendiburu@ma-research.com
vtraderpro
Hedge Fund Hotel / CTA & CPO Turn-Key Programs
Desk, data and facility access in San Francisco, Chicago, and New York.
Investor and Capital Introduction offered to traders with proven track records and scalable strategy
Hair-cut margin
----
approach list:
Blue Capital Group is a privately held options market-maker specializing in broad-based equity index options.
http://www.belvederetrading.com/
- Manages their Own capital , has job postings ( so real one), 7 years history
-------------
1/ Commodity Broker, Options Broker and Futures Broker Directory
2/ www.ma-research.com
3 /Here is list URL
above odds guy copied from this maser list
Proprietary Trading Firms
Posted By: TradersLog
Listing of Proprietary Trading Firms
- Advantage Futures – Advantage is a clearing member of the Chicago Mercantile Exchange, the Chicago Board of Trade, The London Clearing House, The Clearing Corporation as well as a non-clearing member of Eurex and Eurex-US.
- Allston Trading – Allston Trading, LLC, is a premier market maker in worldwide financial exchanges. We trade hundreds of different stocks, bonds, futures, options and other financial instruments in over 30 exchanges.
- Archelon Group – Archelon LLC is an options market maker and proprietary trader of exchange listed options, futures and equities in the US, Europe, and Korea.
- Assent – Assent is a national equities trading firm that currently serves hundreds of traders across the country.
- Avatar Trading – Trading services for individual traders and large trading groups.
- BOSS Trading – A Chicago-based proprietary trading group with a strong background in intermarket relationships and spreads, from both a fundamental and technical standpoint. Primarily focusing on European market hours, BOSS Trading has over 7 years experience in trading electronic debt, equity, and commodity futures.
- Bear Capital Partners – Established in 2004 by a young team of industrious trading professionals, Bear Capital Partners has quickly evolved within the financial world; developing recognition as an incomparable, resilient force among Wall Street’s most elite organizations.
- Belvedere Trading – Belvedere Trading is a proprietary trading firm specializing in equity index options.
- Blue Capital Group – Blue Capital Group is a privately held futures and options trading firm based in Deerfield, Illinois.
- Breakwater Trading – Breakwater is an agile, focused, proactive organization that strives to integrate technology with intelligence and market vision.
- Bright Trading – Bright Trading, LLC is a professional, proprietary stock trading firm. We have hundreds of independent traders who trade from dozens of locations throughout the United States. In addition, our “Bright-At-Home” traders enjoy the benefits of proprietary trading from the comfort of their homes.
- Broad Street Trading – Broad Street Trading is a private equity trading firm formed to manage and trade it’s own funds.
- Capstone – Trades, equities, commodities, fixed income and money markets around the world. Offices in London, New York and Chicago.
- Chicago Trading Company – Chicago Trading Company (CTC) is a proprietary market making firm and is recognized internationally as a leading provider of pricing and liquidity on all U.S. derivatives exchanges.
- DRW Trading Group – The DRW Trading Group is an aggressive, dedicated organization engaged in many different aspects of the trading industry, including market making and proprietary trading. Offices in Chicago, New York and London.
- DV Trading – DV Trading is a proprietary trading firm that executes on all major North American and European futures exchanges in a variety of asset classes.
- Dimension Brokerage – Dimension Brokerage, LLC is a full service trading firm specializing in providing trading services to professional traders.
- EchoTrade – ECHOtrade is a professional trading firm dedicated to the needs of the serious, off-floor trader.
- Eldorado Trading – Eldorado Trading, LLC, is a proprietary trading firm that capitalizes on global fixed income markets— CME Eurodollars, CBOT Treasuries, LIFFE Euribor—by being the leading innovator of the electronic trading world. The founders of Eldorado have been trading electronically since the inception of screen trading in the early 1990s, giving the company an edge as transactions migrate from open outcry in the trading pits to electronic trading on the screens.
- Fusionary Trading – Fusionary uses a synthesis of the wisdom of the ages and time-tested tools to help you make more money in less time.
- Futex Trading – Futex was set up by traders who had been open-outcry trading on the LIFFE floor since 1990. In 1998 when the LIFFE floor was migrating onto computer screens Futex traders were one of the first to establish a professional computer based trading floor.
- GETCO – GETCO is a privately-held, electronic trading firm dedicated to enhancing liquidity and efficiency in the world’s financial markets.
- Gelber Group – Gelber is a unique service provider for the individual professional trader, professional trading group, or institution. We have an unwavering focus on technology management and service, as we seek to expand our access to liquid electronic markets around the world. Gelber Group maintains the philosophy that clear communication and interaction bring successful trading results.
- Genesis Securities – Genesis provides a fully customizable, state of the art DMA platform Laser for the sophisticated trader.
- Geneva Trading – Geneva Trading is a proprietary electronic trading firm located in Chicago, Illinois USA and Dublin, Ireland. Focus is on electronically traded futures and equity markets in the USA and Europe.
- Goldenberg, Hehmeyer & Co. (GHCO) – Futures, Options, Trading, Hedging. Professional Trading and Brokerage at the next level.
- Group One Trading – Group One is one of the largest proprietary options trading firms in the country.
- Hold Brothers – Proprietary Online Stock Trading.
- IMC Financial Markets – The IMC Group is a global financial organization with a presence in Amsterdam, London, New York, Chicago, Hong Kong, Sydney, and Zug.
- Infinium Capital Management – Infinium Capital Management is a proprietary capital management firm with offices in Chicago and New York. Founded in Chicago in 2001, our firm was built by a core team with decades of experience in trading, software development, and financial modeling. The founders share entrepreneurial pasts, having built and sold a variety of companies and technologies both in and out of the financial markets.
- Intelligent Market Trading Company – The Intelligent Market Trading Company is a Chicago-based proprietary trading company with the core focus of applying cutting edge technology, and trading techniques to the problem of floor traded and electronically traded derivative securities.
- International Trading Group / DE Trading Corporation – Privately held proprietary trading firm in the northern suburbs of Chicago.
- Jane Street Capital – Jane Street is a quantitative proprietary trading firm that brings a deep understanding of markets, a scientific approach, and innovative technology together to trade profitably in financial markets. Jane Street doesn’t seek outside investment and doesn’t have customers. Founded in 2000, Jane Street is 190 committed people in New York, Chicago, London, and Tokyo.
- Jump Trading – Jump Trading, LLC is a proprietary trading firm, focused on trading index futures, options, and equities. Because we are not a brokerage firm, we do not have clients. Revenues come solely from trading Jump’s proprietary account.Jump Trading is a member of the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the Chicago Board Options Exchange (CBOE), and the American Stock Exchange (AMEX). Jump is also a non-clearing member of the European Exchange (Eurex).
- Kershner Trading Group – Since 1993, Kershner Trading has been built on the idea of shared success. We are a classic proprietary trading business providing full service, support and capital to our
traders, including state-of-the-art proprietary technology applications with
direct access to US markets. Our traders currently trade in our Austin, Tx office, however we are always interested in hearing from groups of successful traders in other locations. Member NASD, SEC registered. - Kingstree Trading – Chicago prop trading firm that at one time reputedly did one third of the volume in the e-mini S&P.
- Marex Trading – MAREX Financial is an Independent Broker Dealer offering worldwide coverage of Commodities, Financial Futures and Options and FX Markets.
- Marquette Partners – Marquette Partners is a leading liquidity provider to the world’s largest derivatives exchanges. As an early pioneer in electronic futures trading, Marquette has successfully developed individuals to trade on exchanges throughout the globe, including the Chicago Mercantile Exchange, the Chicago Board of Trade, Eurex, Euronext-Paris, Euronext-LIFFE and Borsa Italia.
- Nico Trading – Nico Holdings LLC is a proprietary trading firm. We make markets and take positions 24 hours a day. We are active in exchange-traded and over-the-counter markets, including spot and derivative contracts.
- Optiver – Optiver is an international proprietary trading house dealing mainly in derivatives, shares and bonds. The firm has expanded from a few Amsterdam based market makers to a global arbitrage group with subsidiaries in Chicago and Sydney.
- Peak6 Trading – One of the largest equity options market-making firms in the U.S.
- Refco Trading Services – Based on REFCO’s acquisition of MAC Trading Services, LLC a London based electronic trading company; REFCO Trading Services was established, which has commenced operations in North America. Now part of the Man Financial Refco Division.
- Reverb Capital – Reverb Capital is making itself heard from the epicenter of Chicago’s Financial District. Focused on “high frequency” trading in the equities, futures and options markets, Reverb is a proprietary trading firm that beats to a different drum.
- Ronin Capital – Proprietary trading operations covering a variety of markets including equity securities, government bonds, corporate bonds, and related derivatives on global exchanges and electronically.
- SKTY Trading – SKTY Trading was founded in 2002 as a market making firm in EuroDollar options on the Chicago Mercantile Exchange. Since inception, SKTY has expanded its focus to include multiple products on several exchanges.
- SMB Capital – SMB Capital, LLC is a privately owned investment partnership engaged in day trading NYSE and NASDAQ equities.
- Schonfeld Group – Schonfeld Securities, LLC pioneered the short term trading industry when it began operations in 1988. It is one of the largest U.S. proprietary equity trading firms in terms of number of traders and volume traded on the NYSE and NASDAQ.
- Simplex Investments – Chicago based off-floor proprietary trading firm focused on the active trader.
- Spot Trading – Spot Trading is an off-floor trading firm specializing in equity options.
- Swifttrade – Global Securities Trading.
- The Archelon Group – Archelon LLC is an options market maker and proprietary trader of exchange listed options, futures and equities in the US, Europe, and Korea.
- Tibra Capital – A global prop firm specialising in market making and arbitrage.
- Title Trading – Title Trading is privately owned proprietary trading firm. Title traders trade the firm’s capital on several US stock markets: NYSE, NASDAQ and AMEX.
- Tower Hill Trading – Tower Hill Trading is a leading proprietary trading firm based in downtown Chicago. We offer a superior working environment, the opportunity to learn from the best, state of the art technology, extremely competitive payouts and access to substantial trading capital.
- Trade Vision Capital – Trade Vision Capital provides its customers with the highest end order entry software available. It is the only software to receive the NASD’s platinum certification.
- Tradebot Systems – Tradebot Systems provides liquidity to the stock market.
- Transmarket Group – TransMarket Group LLC is a global private trading and investment company. Provide risk capital and market access to individuals for the purpose of trading the global financial markets. Employees trade all global exchange listed derivatives, equities, commodities and selected cash markets.
- Vankar Trading – Professional management of trading systems. Divisions in North America, Europe, and Australia.
- WH Trading – WH Trading LLC is a proprietary futures, options and equities trading firm headquartered in Chicago, IL. Founded in 1994, WH Trading currently serves as a primary liquidity provider on the floor of the major Chicago futures exchanges and also as an exchange designated Lead Market Maker for electronically traded products in a variety of asset classes.
- Wasserman Capital – At Wasserman Capital our passion is trading and training others how to trade. Wasserman Capital has a proven apprenticeship program that leverages the same historically proven methods that successful traders have been using for over 100 years. Our training program provides the trading expertise and hands-on coaching necessary to help turn your passion for the financial markets into your career.
- Wolverine Trading – Wolverine is headquartered in Chicago and has offices in New York, San Francisco, Philadelphia and London.
- World Trade Securities – WTS Proprietary Trading Group LLC, is a privately owned proprietary trading firm based in NYC, New York and a member of the CBSX and is SEC registered.
- Xerxes Trading – Xerxes Trading represents the Morristown, NJ Office of Hold Brothers Online Investment Services, LLC (member FINRA-SIPC).
- Zmarc Partners – Specializes in electronic futures and commodity trading with all major international trading exchanges.
-------------
asr: good firms will pay salary with education as above Mako group, other 90% firms rob people money as mentioned in this blog many times.
SCAMS
Out of 200 traders, there will be about 5 guys that can make decent money. Whatever payout % rate you have because of your contribution makes absolutely no difference at all because you’ll never really get paid…for 95% of the traders, the best scenario is to get draws of 2000 against their accounts…and it is rare that they receive 2000 every month…I would say your lucky if you make $8k the first year. It doesn’t matter if your payout is 80%, or 70% or 50%, because the rates they charge you are so high that you will owe them money even if you made money gross. You can gross 10k per month and they will tell you that you lost them money because of the transaction fees…
---------
List of Proprietary Trading Firms
What a proprietary trading firm looks for
-------------
asr: this seems good firm makoglobal , which was mentioned above , with open commnunicaton
http://www.makoglobal.com/home/index.cfm
http://www.makoglobal.com/home/index.cfm
First and foremost a trading house, we use team based trading and technology to ensure we can be the best at what we do.
By challenging industry norms and positively embracing change we are shaping the future of trading. Mako Group companies play a vital role in the efficient workings of the European and US financial markets. Proponents of electronic trading as well as participants in the 'open-outcry' floors in Chicago, our traders combine their skill and knowledge of options trading to provide huge liquidity into the key equity and fixed income markets.
Mako Group encompasses a number of private companies tied together by a common culture which embraces continuous improvement, relationships, integrity and, above all, a passion for what we do.
--------
Commodity Pay Falls Faster Than Oil as Goldman Cuts (Update1)
By Lars Paulsson and Chanyaporn Chanjaroen
Dec. 2 (Bloomberg) -- Investment banks may reduce compensation for commodity traders as much as 75 percent as prices of oil and copper fall the most in at least two decades.
The best paid metals and energy traders may earn $1 million to $1.5 million in salary, bonus and related pay this year, down from $5 million to $8 million in 2007, according to estimates by London-based recruitment company Kennedy Associates. Bonuses at Goldman Sachs Group Inc. and Morgan Stanley, the biggest oil- trading banks on Wall Street, may fall 60 percent, according to Armstrong International, another London-based recruiter.
“At the end of the day, the commodity industry is not bullet-proof,” said Jason Kennedy, 38, chief executive officer of Kennedy Associates, whose clients include Merrill Lynch & Co. “It’s following the trend.”
Banks and hedge funds that piled into raw materials as crude, copper and gold rallied for seven straight years, cut jobs during the second half as the Reuters/Jefferies CRB Index tracking prices of grains, fuels and metals declined, heading for its biggest annual drop ever. Goldman Sachs dismissed 10 percent of its employees in November, including in commodities. Zurich- based UBS AG, Switzerland’s biggest bank, said in October it will end over-the-counter trading in industrial metals and energy.
“The manic scramble in commodities in 2007 and early 2008 has calmed down,” said Shaun Springer, 52, chief executive officer of Napier Scott Executive Search Ltd., which has recruited for banks since 1992. “It has moved from a frenzy to nigh on dormant.”
Safer Haven
Banks, brokerages, trading companies and hedge funds have about 5,000 employees in commodities and energy, according to Kennedy Associates.
The firms grew as gold surpassed $1,000 an ounce in March and oil rose to a record $147.27 a barrel on July 11. Crude fell to the lowest in more than three years in New York today.
Until July, raw materials markets were among the only bright spots for the financial industry, where losses and writedowns increased to almost $1 trillion since the start of 2007 in the worst financial crisis since the Great Depression. Financial institutions slashed more than 190,000 jobs since June 2007.
Benchmark copper for three-month delivery lost 48 percent this year on the London Metal Exchange and front-month crude oil slipped 50 percent on the New York Mercantile Exchange. Both are heading for the biggest annual decline since at least 1987, while the CRB Index of 19 commodities has fallen 35 percent this year.
Spokespeople in London for New York-based Goldman Sachs, Morgan Stanley and Merrill Lynch declined to comment on salary and bonuses.
Executive Pay
Barclays Capital spokesman Will Bowen in London said the bank’s pay decisions “have always been determined on a meritocratic basis across the firm, and this continues to be the case.”
Barclays is bucking the trend by expanding its team by a third this year to more than 300 through hiring and its purchase of Lehman Brothers Holdings Inc.’s North American businesses, Benoit de Vitry, 46, head of commodities, said Nov. 13 in a telephone interview from New York.
Some refugees from Wall Street banks are taking safer positions at utilities and companies such as Amsterdam-based Trafigura Beheer BV, the world’s third-largest independent oil trader and E.ON AG, Germany’s biggest power producer.
Energy traders and risk managers at banks are being paid about 7 percent more than their peers at energy companies, according to Brighton, England-based recruiter Global Resource Solutions Group Ltd. A year ago, the gap was 18 percent.
‘Best Career Options’
Oil, gas and power companies pay middle-ranking trading staff average salaries of about 90,000 pounds ($133,000) a year, with senior positions commanding 380,000 pounds, said Global Resource.
Nuon NV, the second-biggest Dutch utility, hired Gregor McDonald from Dresdner Kleinwort Group as its head of natural gas trading. Matthew Nicholas and Erik Hokmark joined Swiss utility Energie Ouest Suisse from Lehman Brothers.
“For the first time in the past five years utilities and producers are seen as the best career options due to their commitment to the markets coupled with the more aggressive compensation structures that they have adopted,” said Elliot Pickering, a consultant at London-based Human Capital Search, which specializes in recruitment for commodities.
“We are certainly attracting high calibre candidates from investment banks and hedge funds,” Pierre Lorinet, the chief financial officer at Trafigura, said in an e-mailed statement.
E.ON earned three times as much from buying and selling energy in the third quarter as it did in the first six months of the year.
Dusseldorf, Abu Dhabi
“We have seen increased interest from individuals in the financial sector looking to come over to us, and it’s possible there could be some correlation with the current situation,” Dusseldorf-based E.ON Energy Trading AG Chief Commercial Officer Gareth Griffiths said in an e-mailed response to questions.
Masdar, the Abu Dhabi state renewable-fuels company, hired Itaru Shiraishi from Fortis in Amsterdam as lead carbon finance specialist in November.
RWE Supply and Trading GmbH, a unit of Essen-based RWE AG, Germany’s second-biggest utility, hired Paul Dawson in July from Citigroup Inc. in London as head of market design and regulatory affairs.
Energy and commodity funds will probably lose 40 percent of their employees in a year as returns slide and investors withdraw record amounts of money, said Zug, Switzerland-based Gardner Finance AG, which tracks the performance of 630 funds that invest in natural resources companies and markets.
According to Gardner Chief Executive Officer Michael Laznicka, “there’s no way that some of these managers can sustain their current performances and survive.”
Dec. 2 (Bloomberg) -- Investment banks may reduce compensation for commodity traders as much as 75 percent as prices of oil and copper fall the most in at least two decades.
The best paid metals and energy traders may earn $1 million to $1.5 million in salary, bonus and related pay this year, down from $5 million to $8 million in 2007, according to estimates by London-based recruitment company Kennedy Associates. Bonuses at Goldman Sachs Group Inc. and Morgan Stanley, the biggest oil- trading banks on Wall Street, may fall 60 percent, according to Armstrong International, another London-based recruiter.
“At the end of the day, the commodity industry is not bullet-proof,” said Jason Kennedy, 38, chief executive officer of Kennedy Associates, whose clients include Merrill Lynch & Co. “It’s following the trend.”
Banks and hedge funds that piled into raw materials as crude, copper and gold rallied for seven straight years, cut jobs during the second half as the Reuters/Jefferies CRB Index tracking prices of grains, fuels and metals declined, heading for its biggest annual drop ever. Goldman Sachs dismissed 10 percent of its employees in November, including in commodities. Zurich- based UBS AG, Switzerland’s biggest bank, said in October it will end over-the-counter trading in industrial metals and energy.
“The manic scramble in commodities in 2007 and early 2008 has calmed down,” said Shaun Springer, 52, chief executive officer of Napier Scott Executive Search Ltd., which has recruited for banks since 1992. “It has moved from a frenzy to nigh on dormant.”
Safer Haven
Banks, brokerages, trading companies and hedge funds have about 5,000 employees in commodities and energy, according to Kennedy Associates.
The firms grew as gold surpassed $1,000 an ounce in March and oil rose to a record $147.27 a barrel on July 11. Crude fell to the lowest in more than three years in New York today.
Until July, raw materials markets were among the only bright spots for the financial industry, where losses and writedowns increased to almost $1 trillion since the start of 2007 in the worst financial crisis since the Great Depression. Financial institutions slashed more than 190,000 jobs since June 2007.
Benchmark copper for three-month delivery lost 48 percent this year on the London Metal Exchange and front-month crude oil slipped 50 percent on the New York Mercantile Exchange. Both are heading for the biggest annual decline since at least 1987, while the CRB Index of 19 commodities has fallen 35 percent this year.
Spokespeople in London for New York-based Goldman Sachs, Morgan Stanley and Merrill Lynch declined to comment on salary and bonuses.
Executive Pay
Barclays Capital spokesman Will Bowen in London said the bank’s pay decisions “have always been determined on a meritocratic basis across the firm, and this continues to be the case.”
Barclays is bucking the trend by expanding its team by a third this year to more than 300 through hiring and its purchase of Lehman Brothers Holdings Inc.’s North American businesses, Benoit de Vitry, 46, head of commodities, said Nov. 13 in a telephone interview from New York.
Some refugees from Wall Street banks are taking safer positions at utilities and companies such as Amsterdam-based Trafigura Beheer BV, the world’s third-largest independent oil trader and E.ON AG, Germany’s biggest power producer.
Energy traders and risk managers at banks are being paid about 7 percent more than their peers at energy companies, according to Brighton, England-based recruiter Global Resource Solutions Group Ltd. A year ago, the gap was 18 percent.
‘Best Career Options’
Oil, gas and power companies pay middle-ranking trading staff average salaries of about 90,000 pounds ($133,000) a year, with senior positions commanding 380,000 pounds, said Global Resource.
Nuon NV, the second-biggest Dutch utility, hired Gregor McDonald from Dresdner Kleinwort Group as its head of natural gas trading. Matthew Nicholas and Erik Hokmark joined Swiss utility Energie Ouest Suisse from Lehman Brothers.
“For the first time in the past five years utilities and producers are seen as the best career options due to their commitment to the markets coupled with the more aggressive compensation structures that they have adopted,” said Elliot Pickering, a consultant at London-based Human Capital Search, which specializes in recruitment for commodities.
“We are certainly attracting high calibre candidates from investment banks and hedge funds,” Pierre Lorinet, the chief financial officer at Trafigura, said in an e-mailed statement.
E.ON earned three times as much from buying and selling energy in the third quarter as it did in the first six months of the year.
Dusseldorf, Abu Dhabi
“We have seen increased interest from individuals in the financial sector looking to come over to us, and it’s possible there could be some correlation with the current situation,” Dusseldorf-based E.ON Energy Trading AG Chief Commercial Officer Gareth Griffiths said in an e-mailed response to questions.
Masdar, the Abu Dhabi state renewable-fuels company, hired Itaru Shiraishi from Fortis in Amsterdam as lead carbon finance specialist in November.
RWE Supply and Trading GmbH, a unit of Essen-based RWE AG, Germany’s second-biggest utility, hired Paul Dawson in July from Citigroup Inc. in London as head of market design and regulatory affairs.
Energy and commodity funds will probably lose 40 percent of their employees in a year as returns slide and investors withdraw record amounts of money, said Zug, Switzerland-based Gardner Finance AG, which tracks the performance of 630 funds that invest in natural resources companies and markets.
According to Gardner Chief Executive Officer Michael Laznicka, “there’s no way that some of these managers can sustain their current performances and survive.”
Wednesday, December 3, 2008
Offshore tax shelters not just for the rich
Offshore tax shelters not just for the rich
Updated 9/14/2006 12:06 AM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this
WHERE THE MONEY GOES
These are among the offshore locations where people have hidden assets or transferred income:
• Belize. Caribbean nation has eight banks, one insurance company, 23 trust companies and 38,741 registered offshore corporations.
• British Virgin Islands. A territory of the United Kingdom, it has more than 500,000 registered offshore corporations.
• Cayman Islands. United Kingdom territory is home to more than 500 banks and trust companies, 7,100 mutual and hedge funds.
• Isle of Man. A crown dependency of the United Kingdom, the Irish Sea island is home to 171 offshore service providers.
• Panama. Central American nation has 34 offshore banks and about 350,000 offshore companies.
• St. Kitts and Nevis. A federation of two Caribbean islands that has one offshore bank, 50 trust and company service providers and 15,000 offshore corporations.
Source: Senate Permanent Subcommittee on Investigations, August 2006 report
By Kevin McCoy, USA TODAY
Type the words "offshore assets" into an Internet search engine and the electronic sales pitches of a growing mini-industry appear on the computer screen.
"At last, the kind of offshore asset protection previously available only to the extremely wealthy! Make one phone call and sleep better tonight," says website Asset Protection Plus (assetprotection.ws).
"I am going to show you how to protect your money and all you own so nobody not even the government can get at it," says U of Money.com (uofmoney.com).
"Once your assets have been transferred to an offshore entity ... they are safe," says website Carib Offshore (carib-offshore.com). "You can't be taxed on them."
A network of brokers, accountants, attorneys and other providers is increasingly promoting offshore trusts and accounts as a way to avoid lawsuits, creditors and, in some cases, federal and local taxes in the USA. Riding the rapid expansion of the Internet, some parts of the mini-industry are making tax-avoidance techniques — once mainly offered to high-net-worth individuals in private conferences — available online to average Americans.
"This growing access to people who aren't wealthy and are willing to pay a $3,000 fee ... to someone to help hide their assets offshore is getting to be a huge problem," says Sen. Carl Levin, D-Mich., ranking minority member of the Senate Permanent Subcommittee on Investigations, which in August released the latest in a series of reports on potential offshore abuses. "Honest taxpayers get socked with the bill" as tax avoiders transfer assets offshore, Levin said.
That cost is high.
Although no precise estimates are possible, as much as $1.6 trillion in North American wealth is likely held in offshore accounts, according to a 2005 report by the Tax Justice Network, an international group opposed to tax avoidance.
Americans with assets offshore probably avoid about $50 billion in taxes annually, according to an estimate by Reuven Avi-Yonah, head of the International Tax Master of Law Program at the University of Michigan Law School.
Hundreds of companies and promoters now use the Internet to guide Americans and others who transfer assets to offshore banks or trusts, according to the Senate subcommittee report. Money moves from domestic accounts to offshore tax havens such as Belize or the Bahamas, at times without any meetings between promoter and client.
Although placing assets in international trusts and banks is not illegal, using such transfers to avoid federal, state and local taxes while retaining control of the assets is considered a possible tax violation, one that the IRS pursues.
"With the increased use of the Internet, these types of tax strategies are more easily spread," said Selva Ozelli, an international tax lawyer and accountant in New York. "It has trickled down to the middle-income level."
A tax examination
Among the Internet guides to offshore companies is Equity Development Group, a Dallas-based firm run by Samuel Congdon. His company has worked for about 900 clients since its founding in 1999, according to a review by the Senate subcommittee. That review, federal court records and interviews with government officials and tax experts provide an inside look at one small cog in the mini-industry.
The IRS recently completed a tax examination of Congdon and his companies and may launch a similar examination of his clients, IRS documents and federal court records in Texas show. Additionally, the Senate subcommittee subpoenaed Congdon's client list and plans to give it to federal investigators.
In a written report released in August, the subcommittee said its review of Congdon showed that he "willfully remained ignorant of his clients' motives for moving money offshore." That stance, the committee concluded, enabled him to operate "in apparent compliance with federal law while facilitating potentially illegal activity."
Congdon's attorney, A. James Lynn, described the conclusion as unfair innuendo about an honest businessman who has had no involvement with tax avoidance.
"There has been no showing that any of his clients have violated the law. And he has not violated the law," said Lynn. "He's being penalized because he's here in the United States, making a living in the United States, paying taxes in the United States, and there are some people who want to run him out of business."
Congdon founded Equity Development Group in 1999 after earning an undergraduate degree at Hillsdale College in Michigan and an MBA at Southern Methodist University. He sought a marketing edge by paying Internet search engine Google "for a top position on certain searches ... to direct greater traffic to his site," the subcommittee said. Google would not comment but said many firms pay for the sponsored links that accompany search results.
"Why go offshore?" the Equity Development Group website asks. "Protection from lawsuits. Financial privacy. Regulatory advantages."
Warning that thousands of lawsuits are filed in the USA each week and citing disclosure laws, the website says, "Placing bank and brokerage accounts offshore will keep them off the asset collector's radar screen. Credit agencies and government agencies don't have access to foreign account records or transactions."
For $2,500, Equity Development Group offers a package that includes an offshore corporation formed in Belize, an offshore trust formed in the Bahamas, two offshore bank or brokerage accounts and mail forwarding for one year. Using several locations "weaves a network of anonymity which translates into rock-solid privacy and protection," the website says.
For additional security, the company also offers previously formed "shelf companies" — firms for those who want to show "that their offshore company has been in existence for several months or years" — for as much as $6,200.
In theory, use of a longstanding firm could avoid challenges that would arise if assets were shifted to a newly created offshore firm after a divorce or lawsuit notice.
U.S. and Canadian clients
Congdon told the subcommittee that most of Equity Development Group's clients come from the USA and Canada. Most contacts come via the website, which stated that the firm "has formed hundreds of offshore companies and trusts and opened hundreds of offshore bank and brokerage accounts worldwide representing millions of dollars."
That clientele enabled Congdon's firm to gross several hundred thousand dollars in 2003 and 2004 from markups on offshore packages and referrals from some international businesses, the subcommittee reported. Separately, a federal court record showed that another Congdon firm reported nearly $75,000 in taxable income for 2002.
Although Equity Development Group's website advertises that "there are no surprises or guesswork," some company details are not immediately apparent.
Although the firm identifies Congdon as its founder, the subcommittee said he is also its sole employee.
Although the firm lists offices in Dallas and the Bahamas, the subcommittee said Congdon conceded the second location is "a mailbox."
A federal court filing states that Congdon's firms neither provide nor advertise tax advice. But the Senate subcommittee found that during Congdon's first years in business, he used a presentation that said: "President Clinton vetoed the tax cut bill. Who cares? Offshore investors don't!"
The subcommittee also reported that an earlier version of the website featured an "offshore calculator" that contrasted the growth of an investment account in the USA with the higher gains that account would earn offshore. The calculator came with a disclaimer that warned, "You may be liable for taxes on foreign investments depending on your country of citizenship and/or residency."
The company's current website tells prospective clients that no matter what name is on offshore accounts formed through Equity Development Group, there's no question who controls the assets. "You do. The client is in complete and total control of all accounts at all times," the website states.
"Control is the key," said Ozelli, the tax lawyer. "If you control the assets, they're subject to taxation."
The Senate subcommittee concluded: "It is clear that Mr. Congdon knew that many of his clients moved their assets offshore to avoid U.S. taxation."
"I have no knowledge, none, that any of those clients were guilty of anything so much as a parking ticket," Lynn said.
Proving ownership and collecting taxes owed from those who have moved assets offshore isn't easy. In August testimony for the Senate subcommittee, IRS Commissioner Mark Everson wrote that the agency investigates alleged offshore tax abuses. But, wrote Everson, this "is an area where we still have a long way to go."
"The accounts are constructed in a way to make it almost impossible to prove who controls them," said James Kindler, chief assistant to Manhattan District Attorney Robert Morgenthau, who has filed numerous offshore-abuse cases.
When the IRS issued summonses for the names and addresses of Congdon's clients, Lynn filed a federal court motion to quash the demand on grounds of harassment.
If the IRS could show any clients were involved "in a tax avoidance scheme or some other violation of law" or "were committing crimes," Congdon "would promptly provide the information," the motion said.
"However, there has been no such showing."
Federal Magistrate Judge Irma Carrillo Ramirez denied the motion in a May 3 ruling that said client data were relevant to the tax examinations of Congdon and his firms. Lynn gave USA TODAY copies of IRS letters that said the exams had been completed with no new taxes levied. The IRS would not comment. A federal court brief filed in April stated that the IRS was not examining Congdon's clients at that time. But the brief said "that if the IRS had the names of the clients participating in offshore trusts it may (or may not) in the future investigate the client's tax liability."
Levin said the Senate subcommittee hopes to facilitate such an investigation by giving the subpoenaed client list to the Justice Department. He added that he and Sen. Norm Coleman, R-Minn., the subcommittee chairman, may introduce a bill to make it easier for the IRS to pursue offshore abuses.
Current law requires the federal government to prove that U.S. citizens control assets in offshore accounts before filing tax charges. Levin said the legislation he plans would reverse the legal burden.
"The presumption is that all the income is yours, and you've got to prove otherwise," Levin said.
Posted 9/13/2006 11:54 PM ET
Updated 9/14/2006 12:06 AM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this
WHERE THE MONEY GOES
These are among the offshore locations where people have hidden assets or transferred income:
• Belize. Caribbean nation has eight banks, one insurance company, 23 trust companies and 38,741 registered offshore corporations.
• British Virgin Islands. A territory of the United Kingdom, it has more than 500,000 registered offshore corporations.
• Cayman Islands. United Kingdom territory is home to more than 500 banks and trust companies, 7,100 mutual and hedge funds.
• Isle of Man. A crown dependency of the United Kingdom, the Irish Sea island is home to 171 offshore service providers.
• Panama. Central American nation has 34 offshore banks and about 350,000 offshore companies.
• St. Kitts and Nevis. A federation of two Caribbean islands that has one offshore bank, 50 trust and company service providers and 15,000 offshore corporations.
Source: Senate Permanent Subcommittee on Investigations, August 2006 report
By Kevin McCoy, USA TODAY
Type the words "offshore assets" into an Internet search engine and the electronic sales pitches of a growing mini-industry appear on the computer screen.
"At last, the kind of offshore asset protection previously available only to the extremely wealthy! Make one phone call and sleep better tonight," says website Asset Protection Plus (assetprotection.ws).
"I am going to show you how to protect your money and all you own so nobody not even the government can get at it," says U of Money.com (uofmoney.com).
"Once your assets have been transferred to an offshore entity ... they are safe," says website Carib Offshore (carib-offshore.com). "You can't be taxed on them."
A network of brokers, accountants, attorneys and other providers is increasingly promoting offshore trusts and accounts as a way to avoid lawsuits, creditors and, in some cases, federal and local taxes in the USA. Riding the rapid expansion of the Internet, some parts of the mini-industry are making tax-avoidance techniques — once mainly offered to high-net-worth individuals in private conferences — available online to average Americans.
"This growing access to people who aren't wealthy and are willing to pay a $3,000 fee ... to someone to help hide their assets offshore is getting to be a huge problem," says Sen. Carl Levin, D-Mich., ranking minority member of the Senate Permanent Subcommittee on Investigations, which in August released the latest in a series of reports on potential offshore abuses. "Honest taxpayers get socked with the bill" as tax avoiders transfer assets offshore, Levin said.
That cost is high.
Although no precise estimates are possible, as much as $1.6 trillion in North American wealth is likely held in offshore accounts, according to a 2005 report by the Tax Justice Network, an international group opposed to tax avoidance.
Americans with assets offshore probably avoid about $50 billion in taxes annually, according to an estimate by Reuven Avi-Yonah, head of the International Tax Master of Law Program at the University of Michigan Law School.
Hundreds of companies and promoters now use the Internet to guide Americans and others who transfer assets to offshore banks or trusts, according to the Senate subcommittee report. Money moves from domestic accounts to offshore tax havens such as Belize or the Bahamas, at times without any meetings between promoter and client.
Although placing assets in international trusts and banks is not illegal, using such transfers to avoid federal, state and local taxes while retaining control of the assets is considered a possible tax violation, one that the IRS pursues.
"With the increased use of the Internet, these types of tax strategies are more easily spread," said Selva Ozelli, an international tax lawyer and accountant in New York. "It has trickled down to the middle-income level."
A tax examination
Among the Internet guides to offshore companies is Equity Development Group, a Dallas-based firm run by Samuel Congdon. His company has worked for about 900 clients since its founding in 1999, according to a review by the Senate subcommittee. That review, federal court records and interviews with government officials and tax experts provide an inside look at one small cog in the mini-industry.
The IRS recently completed a tax examination of Congdon and his companies and may launch a similar examination of his clients, IRS documents and federal court records in Texas show. Additionally, the Senate subcommittee subpoenaed Congdon's client list and plans to give it to federal investigators.
In a written report released in August, the subcommittee said its review of Congdon showed that he "willfully remained ignorant of his clients' motives for moving money offshore." That stance, the committee concluded, enabled him to operate "in apparent compliance with federal law while facilitating potentially illegal activity."
Congdon's attorney, A. James Lynn, described the conclusion as unfair innuendo about an honest businessman who has had no involvement with tax avoidance.
"There has been no showing that any of his clients have violated the law. And he has not violated the law," said Lynn. "He's being penalized because he's here in the United States, making a living in the United States, paying taxes in the United States, and there are some people who want to run him out of business."
Congdon founded Equity Development Group in 1999 after earning an undergraduate degree at Hillsdale College in Michigan and an MBA at Southern Methodist University. He sought a marketing edge by paying Internet search engine Google "for a top position on certain searches ... to direct greater traffic to his site," the subcommittee said. Google would not comment but said many firms pay for the sponsored links that accompany search results.
"Why go offshore?" the Equity Development Group website asks. "Protection from lawsuits. Financial privacy. Regulatory advantages."
Warning that thousands of lawsuits are filed in the USA each week and citing disclosure laws, the website says, "Placing bank and brokerage accounts offshore will keep them off the asset collector's radar screen. Credit agencies and government agencies don't have access to foreign account records or transactions."
For $2,500, Equity Development Group offers a package that includes an offshore corporation formed in Belize, an offshore trust formed in the Bahamas, two offshore bank or brokerage accounts and mail forwarding for one year. Using several locations "weaves a network of anonymity which translates into rock-solid privacy and protection," the website says.
For additional security, the company also offers previously formed "shelf companies" — firms for those who want to show "that their offshore company has been in existence for several months or years" — for as much as $6,200.
In theory, use of a longstanding firm could avoid challenges that would arise if assets were shifted to a newly created offshore firm after a divorce or lawsuit notice.
U.S. and Canadian clients
Congdon told the subcommittee that most of Equity Development Group's clients come from the USA and Canada. Most contacts come via the website, which stated that the firm "has formed hundreds of offshore companies and trusts and opened hundreds of offshore bank and brokerage accounts worldwide representing millions of dollars."
That clientele enabled Congdon's firm to gross several hundred thousand dollars in 2003 and 2004 from markups on offshore packages and referrals from some international businesses, the subcommittee reported. Separately, a federal court record showed that another Congdon firm reported nearly $75,000 in taxable income for 2002.
Although Equity Development Group's website advertises that "there are no surprises or guesswork," some company details are not immediately apparent.
Although the firm identifies Congdon as its founder, the subcommittee said he is also its sole employee.
Although the firm lists offices in Dallas and the Bahamas, the subcommittee said Congdon conceded the second location is "a mailbox."
A federal court filing states that Congdon's firms neither provide nor advertise tax advice. But the Senate subcommittee found that during Congdon's first years in business, he used a presentation that said: "President Clinton vetoed the tax cut bill. Who cares? Offshore investors don't!"
The subcommittee also reported that an earlier version of the website featured an "offshore calculator" that contrasted the growth of an investment account in the USA with the higher gains that account would earn offshore. The calculator came with a disclaimer that warned, "You may be liable for taxes on foreign investments depending on your country of citizenship and/or residency."
The company's current website tells prospective clients that no matter what name is on offshore accounts formed through Equity Development Group, there's no question who controls the assets. "You do. The client is in complete and total control of all accounts at all times," the website states.
"Control is the key," said Ozelli, the tax lawyer. "If you control the assets, they're subject to taxation."
The Senate subcommittee concluded: "It is clear that Mr. Congdon knew that many of his clients moved their assets offshore to avoid U.S. taxation."
"I have no knowledge, none, that any of those clients were guilty of anything so much as a parking ticket," Lynn said.
Proving ownership and collecting taxes owed from those who have moved assets offshore isn't easy. In August testimony for the Senate subcommittee, IRS Commissioner Mark Everson wrote that the agency investigates alleged offshore tax abuses. But, wrote Everson, this "is an area where we still have a long way to go."
"The accounts are constructed in a way to make it almost impossible to prove who controls them," said James Kindler, chief assistant to Manhattan District Attorney Robert Morgenthau, who has filed numerous offshore-abuse cases.
When the IRS issued summonses for the names and addresses of Congdon's clients, Lynn filed a federal court motion to quash the demand on grounds of harassment.
If the IRS could show any clients were involved "in a tax avoidance scheme or some other violation of law" or "were committing crimes," Congdon "would promptly provide the information," the motion said.
"However, there has been no such showing."
Federal Magistrate Judge Irma Carrillo Ramirez denied the motion in a May 3 ruling that said client data were relevant to the tax examinations of Congdon and his firms. Lynn gave USA TODAY copies of IRS letters that said the exams had been completed with no new taxes levied. The IRS would not comment. A federal court brief filed in April stated that the IRS was not examining Congdon's clients at that time. But the brief said "that if the IRS had the names of the clients participating in offshore trusts it may (or may not) in the future investigate the client's tax liability."
Levin said the Senate subcommittee hopes to facilitate such an investigation by giving the subpoenaed client list to the Justice Department. He added that he and Sen. Norm Coleman, R-Minn., the subcommittee chairman, may introduce a bill to make it easier for the IRS to pursue offshore abuses.
Current law requires the federal government to prove that U.S. citizens control assets in offshore accounts before filing tax charges. Levin said the legislation he plans would reverse the legal burden.
"The presumption is that all the income is yours, and you've got to prove otherwise," Levin said.
Posted 9/13/2006 11:54 PM ET
Tuesday, December 2, 2008
Dividend
Dividend stocks can be a comfort to many an investor. For retirees, they provide a steady stream of income, and for regular investors they provide downside protection.
The trouble with dividends however, is that they aren't guaranteed, and companies that pay them could reduce payments or even suspend them in tough times, as investors of Citigroup (NYSE:C) recently found out. (To learn more, read Is Your Dividend At Risk?.)
Harley Davidson(NYSE:HOG) 8.3% ( yield ), this yield is based on 12/3/08 close price.
Data retrieved December 3, 2008 from Zacks.com screen
asr: it seems , when dividend paying stock falls badly, that day yield becomes attractive since HOG is low on 12/3 close price.
Now I had an idea on yield ..
-----------------
Harley-Davidson, Inc. Declares Dividend
Wednesday, 17 Sep 2008 07:00am EDT -- asr: this new reported on SEP 17 ahead of OCT 1 record date
Harley-Davidson, Inc. announced that its Board of Directors approved a cash dividend of $0.33 per share for the third quarter of 2008. The dividend is payable October 10, 2008 to the holders of record of the Company's common stock on October 1, 2008.
Harley-Davidson chart
The trouble with dividends however, is that they aren't guaranteed, and companies that pay them could reduce payments or even suspend them in tough times, as investors of Citigroup (NYSE:C) recently found out. (To learn more, read Is Your Dividend At Risk?.)
Harley Davidson(NYSE:HOG) 8.3% ( yield ), this yield is based on 12/3/08 close price.
Data retrieved December 3, 2008 from Zacks.com screen
asr: it seems , when dividend paying stock falls badly, that day yield becomes attractive since HOG is low on 12/3 close price.
Now I had an idea on yield ..
-----------------
Harley-Davidson, Inc. Declares Dividend
Wednesday, 17 Sep 2008 07:00am EDT -- asr: this new reported on SEP 17 ahead of OCT 1 record date
Harley-Davidson, Inc. announced that its Board of Directors approved a cash dividend of $0.33 per share for the third quarter of 2008. The dividend is payable October 10, 2008 to the holders of record of the Company's common stock on October 1, 2008.
Harley-Davidson chart
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