Category Archives: Економика

экономические новости

Dudley Retirement Reflects Broad Turnover of US Federal Reserve Leadership

A revamping of the Federal Reserve’s leadership is widening with the announcement Monday that William Dudley, president of the New York Fed and the No. 2 official on the Fed’s key interest rate panel, will retire next year.

 

Just last week, President Donald Trump chose Fed board member Jerome Powell to replace Janet Yellen as Fed chair in February. The post of Fed vice chair remains vacant. So do two additional seats on the Fed’s seven-member board. And a fourth seat may open as well next year.

The unusual pace of the turnover has given Trump the rare opportunity for a president to put his personal stamp on the makeup of the Fed, which operates as an independent agency. Investors are awaiting signals of how Trump’s upcoming selections might alter the Fed’s approach to interest rates and regulations.

 

Trump has made it known that he favors low interest rates. He has also called for a loosening of financial regulations. The Fed has played a key role in overseeing the tighter regulations that were enacted after the 2008 financial crisis, which nearly toppled the banking system.

 

The uncertainty surrounding the Fed’s top policymakers has been heightened by the slow pace with which the Trump administration has moved to fill openings.

To date, the administration has placed one new person on the Fed board: Randal Quarles, a veteran of the private equity industry who is thought to favor looser regulations, was confirmed as the first vice chairman for supervision. That still left three vacancies on the Fed’s board: Just as Quarles was joining the board last month, Stanley Fischer was stepping down as Fed vice chairman.

 

And Yellen herself could decide to leave the board when her term as chair ends on Feb. 3, even though her separate term on the board runs until 2024.

 

Dudley’s announcement that he plans to retire by mid-2018 also creates an opening on the committee of board members and bank presidents who set interest rate policies. Dudley’s position is particularly crucial: As head of the New York Fed, he is a permanent voting member of the Fed committee that sets interest rates.

 

The committee is composed of the board members and five of the 12 regional bank presidents. Unlike the New York Fed president, the other regional bank presidents vote on a rotating basis. The New York Fed president also serves as vice chairman of the rate-setting panel.

 

Some economists said that while financial markets have so far registered little concern about the number of key open Fed positions, that could change quickly, especially if investors begin to worry that the central bank will accelerate interest rate hikes.

 

“We need to get rid of this uncertainty, and until these seats are filled, there is going to be uncertainty,” said Diane Swonk, chief economist at DS Economics.

 

Analysts are trying to read the two decisions Trump has made — picking Powell for the top job and Quarles for the key post for banking supervision — as signs for where he might be headed. With Powell, the president opted for continuity on rates by selecting someone who for years was the lone Republican on the board but who remained a reliable vote for the gradual approach to rate hikes Yellen favored.

And in the bank supervision post, analysts say Trump might have been signaling that he wants to reverse, or at least weaken, Yellen’s backing of the reforms instituted by the 2010 Dodd-Frank financial overhaul law. During the campaign, Trump argued that Dodd-Frank was harming the economy by constraining back lending.

 

Quarles has been critical of aspects of that law. To a lesser extent, so, too, has Powell, who will be the first Fed chairman in nearly 40 years to lack a degree in economics. Powell, a lawyer by training, amassed a fortune as an investment banker at the Carlyle Group.

 

“With his background, Powell can be expected to work well with Wall Street and the business community in general,” said Sung Won Sohn, an economics professor at California State University, Channel Islands.

 

A senior administration official indicated that one important attribute for the open positions will be a diversity of backgrounds.

 

“We believe the Fed will function best with a wide range of skill sets,” said the official, who spoke on condition of anonymity to discuss personnel decisions. This official would not give a timetable for when the administration’s next nominations for the Fed might occur.

Though Trump will choose officials to fill the openings on the board, the choice of Dudley’s replacement will fall to the board of the New York Fed. The New York Fed said a search committee had been formed to choose a successor to Dudley, who joined the New York Fed in 2007 after more than two decades at Goldman Sachs.

 

The announcement from the New York Fed said Dudley, 64, intended to step down in mid-2018 to ensure that his successor would be in place well before the mandatory end of Dudley’s term in January 2019.

 

After overseeing the New York Fed’s securities operations for two years, Dudley succeeded Timothy Geithner as its president after Geithner was tapped by President Barack Obama to become Treasury secretary in 2009.

 

Dudley won praise for the work he did with Geithner and Fed Chairman Ben Bernanke to contain the fallout from the 2008 financial crisis. Dudley supported Yellen’s cautious approach to raising the Fed’s benchmark rate and the plan the central bank has begun to gradually shrink its $4.5 trillion balance sheet, which is five times its size before the financial crisis.

 

The balance sheet contains $4.2 trillion in Treasurys and mortgage bonds that the Fed bought since 2008 to try to hold down long-term borrowing rates and help the economy recovery from the worst recession since the 1930s.

 

In a statement, Yellen praised Dudley for his “wise counsel and warm friendship throughout the years of the financial crisis and its aftermath.”

Broadcom Offers $103 Billion for Qualcomm, Sets Up Takeover Battle

Chipmaker Broadcom made an unsolicited $103 billion bid for Qualcomm on Monday, setting the stage for a major takeover battle as it looks to dominate the fast-growing market for semiconductors used in mobile phones.

Qualcomm said it would review the proposal. The San Diego-based company is inclined to reject the bid as too low and fraught with risk that regulators may reject it or take too long to approve it, people familiar with the matter told Reuters.

A Broadcom-Qualcomm deal would create a dominant company in the market for supplying chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. It would raise the stakes for Intel Corp, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple.

Qualcomm shareholders would get $60 in cash and $10 per share in Broadcom shares in a deal, according to Broadcom’s proposal. Including debt, the transaction is worth $130 billion.

GBH Insight analyst Daniel Ives said bullish investors were hoping for $75 to $80 per share.

“Now it’s a game of high-stakes poker for both sides,” he said.

Shares of Qualcomm, whose chips allow phones to connect to wireless data networks, traded above $70 as recently as December 2016 and topped $80 in 2014.

Qualcomm’s shares were up 2 percent at $63.09 at mid-afternoon, suggesting investors were skeptical a deal would happen.

Broadcom shares fell 0.3 after hitting a record high of $281.80.

Regulatory scrutiny

Qualcomm’s largest market is the so-called modem chips that allow phones to use mobile data plans, but it also sells connectivity chips for automobiles that handle “infotainment” systems and wireless electric vehicle charging. Qualcomm provides chips to carrier networks to deliver broadband and mobile data.

Any deal struck between the two companies would face intense regulatory scrutiny. A big hurdle would be getting regulatory approval in China, on which both Qualcomm and Broadcom rely on to make money.

China is set to look at any deal closely after U.S. regulators blocked a flurry of chip deals by Chinese firms due to security concerns, thwarting the Asian country’s attempt to become self-reliant in chip manufacturing.

Broadcom could spin out Qualcomm’s licensing arm, QTL, to get regulatory approval and funding for the deal, raising as much at $25 billion from a sale, Nomura Instinet analyst Romit Shah suggested.

Broadcom had $5.25 billion in cash and cash equivalent as of July 30. Qualcomm had $35.03 billion as of Sept. 24.

Broadcom said BofA Merrill Lynch, Citi, Deutsche Bank, JP Morgan and Morgan Stanley have advised it they are highly confident that they will be able to arrange the necessary debt financing for the proposed transaction.

The company has also got a commitment letter for $5 billion in financing from private equity Silver Lake Partners, an existing Broadcom investor.

Vulnerable Qualcomm

Broadcom approached Qualcomm last year to discuss a potential combination, but did not contact Qualcomm prior to unveiling its $70 per share offer Monday, according to sources.

Qualcomm is more vulnerable to a takeover now because its shares have been held down by a patent dispute with key customer Apple, as well as concerns that it may have to raise a $38 billion bid for NXP Semiconductors NV that it made last year.

Broadcom, Qualcomm and NXP together would have control over modems, Wi-Fi, GPS and near-field communications chips, a strong position that could concern customers such as Apple and Samsung Electronics because of the bargaining power such a combined company could have to raise prices. However, a combined company would also likely have a lower cost base and the flexibility to cut prices.

Broadcom said its proposal stands irrespective of whether Qualcomm’s acquisition of NXP goes through or not.

Qualcomm’s entire 10-member board is up for re-election this spring, and Broadcom could seize on the Dec. 7 nomination deadline to put forward its own slate.

Broadcom Chief Executive Hock Tan, who turned a small, scrappy chipmaker into a $100-billion company based in Singapore and the United States, told Reuters he would not rule out a proxy fight.

“We are well advised and know what our options are, and we have not eliminated any of those options,” said Tan, who has pulled off a string of deals over the past decade. “We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.”

Tan added that if Broadcom acquires Qualcomm which in turn has acquired NXP, the combined company’s net debt could be in the range of $90 billion.

Two Qualcomm directors, Anthony Vinciquerra and Mark McLaughlin, have been aligned with activist hedge fund Jana Partners LLC, which pushed for a shakeup of the company two years ago. Jeffrey Henderson, another Qualcomm board director, was added last year as a compromise candidate.

Apple, as a key customer, could pose a risk to the deal, said Karl Ackerman, an analyst at Cowen.

Tan told Reuters that Broadcom taking over Qualcomm would improve relations with Apple: “We believe we can be very constructive in resolving these issues and resetting relationships.”

Broadcom plans to move its headquarters solely to the United States, which would allow it to avoid review by the Committee on Foreign Investment in the United States, which reviews foreign ownership of U.S. assets.

Broadcom’s offer represents a premium of 27.6 percent to Qualcomm’s closing price of $54.84 on Thursday, a day before media reports of a potential deal pushed up the company’s shares.

Colombian President Says He Left Firm Listed in Leaked Tax Haven Papers

Colombian President Juan Manuel Santos, in response to his name appearing in a trove of leaked documents about offshore investments, said he left a company registered in tax haven Barbados before taking a ministerial post with a previous government.

The so-called Paradise Papers published on Sunday showed the investments of wealthy people and institutions ranging from United States Commerce Secretary Wilbur Ross to Britain’s Queen Elizabeth. Reuters has not independently verified the documents.

Santos was listed in the leaked documents as a board member of insurance company Nova Holding in April and May 2000 and also Global Tuition, an insurance firm focused on education, from April 1999 to May 2001.

Santos said in a statement on Sunday that he left Global Tuition before taking up his duties as Finance Minister in the government of then-President Andres Pastrana in August 2000. He said he was not a partner, did not invest any money and was not paid for serving on the board.

“I imagine they delayed in officially registering the changes,” Santos said in answers given to El Espectador newspaper and released by his office. “I participated until before I became Finance Minister.”

Santos said that after 2000 he was a Global Tuition client “for some of their insurance for the education of my three children.”

Global Tuition’s office was closed in Colombia for a public holiday on Monday and could not be reached for comment. The company’s office in the United States said any comment would come from the Colombia office.

The president’s statement did not mention the other company, Nova Holding.

Nova Holding could not immediately be reached for comment.

The documents were obtained by Germany’s Sueddeutsche Zeitung newspaper and shared with the International Consortium of Investigative Journalists (ICIJ) and some media outlets, including El Espectador and Connectas website in Colombia. The names of three former Colombian defense ministers and two former ambassadors to the United States also appear in the leaked papers.

US Commerce Chief Defends Investment in Russian Shipper Linked to Putin Inner Circle

U.S. Commerce Secretary Wilbur Ross on Monday defended his sizable business links to Russian President Vladimir Putin’s inner circle, saying “there is no impropriety.”

Ross, a 79-year-old billionaire industrialist, has a 31 percent stake worth $2 million to $10 million in a shipping venture, Navigator Holdings, with connections to Putin’s son-in-law and an oligarch who is subject to U.S. sanctions and is Putin’s judo partner, according to newly leaked documents.

But Ross, a member of President Donald Trump’s Cabinet, said on the sidelines of a business conference in London, “I think the media has made a lot more out of it than it deserves.”

Navigator earns millions of dollars a year shipping natural gas for Russian energy giant Sibur, which is partly owned by Kirill Shamalov, the husband of Putin’s daughter, Katerina Tikhonova, and Gennady Timchenko, the oligarch who is Putin’s judo partner, according to the documents. Timchenko is subject to the U.S. sanctions because of Russia’s 2014 annexation of Ukraine’s Crimean Peninsula and its subsequent support for pro-Russian separatists fighting the Kyiv government’s forces in eastern Ukraine.

‘Nothing whatsoever improper’

But in a pair of interviews with the BBC and Bloomberg TV, Ross dismissed concern about his involvement in the operation. He said the Sibur deal was arranged before he joined Navigator’s board.

“There’s no interlocking of board, there’s no interlocking of shareholders, I had nothing to do with the negotiation of the deal,” he said. “But most importantly the company that is our client itself, Sibur, was not then sanctioned, is not now sanctioned, and never was sanctioned in between. There’s nothing whatsoever improper.”

Ross told Bloomberg, “We have no business ties to those Russian individuals who are under sanction.” Ross said he has been selling his stake in Navigator, “but that isn’t because of this.”

Ross sold off numerous holdings when he joined Trump’s Cabinet earlier this year to avoid conflicts of interest while he promotes U.S. commerce throughout the world. But he kept his Navigator stake, which has been held in a chain of partnerships in the Cayman Islands, an offshore tax haven where Ross has placed much of his estimated $2 billion in wealth.

‘Paradise papers’

Ross did not disclose the Russian business link when he was confirmed by the U.S. Senate as commerce secretary, but it surfaced in a trove of more than 13 million documents leaked from Appleby, a Bermuda-based offshore law firm that advises the wealthy elite on global financial transactions as they look to avoid billions of dollars in taxes.  Appleby says it has investigated all the allegations and found “there is no evidence of any wrongdoing, either on the part of ourselves or our clients.”

The cache of documents, called the Paradise Papers, was first leaked to a German newspaper, Sueddeutsche Zeitung, and then shared with the International Consortium of Investigative Journalists and dozens of other media outlets around the world, including The Guardian in Britain, The New York Times and NBC News in the U.S., all of which reported on the Ross investment on Sunday.

The disclosure of Ross’ financial interests in Russia comes as a special prosecutor, Robert Mueller, and three congressional panels are investigating Russian interference in the 2016 U.S. presidential election, an effort the U.S. intelligence community has concluded was led by Putin in an effort to undermine U.S. democracy and help Trump win the White House.

Several Trump campaign associates have come under scrutiny, but until the disclosures about Ross’ holdings, there have been no reports of business links between top Trump officials and any member of Putin’s family and his inner circle.

The disclosures could put pressure on world leaders, including Trump and British Prime Minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes.

“Congress has the power to crack down on offshore tax avoidance,” said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy. “There are copious loopholes in our federal tax code that essentially incentivize companies to cook the books and make U.S. profits appear to be earned offshore. The House tax bill introduced late last week does nothing to close these loopholes.”

Huge Political Stakes in US Tax Reform Fight

While President Donald Trump continues an Asia trip with high geo-strategic stakes, Republicans in Washington are promoting an ambitious tax reform bill that could bring enormous fiscal, and political, consequences. VOA’s Michael Bowman reports, a tax cut is Trump’s last hope for a major legislative victory in his first year in office, something Republicans desperately need and something Democrats are determined to deny them.

Multinationals Grapple with US Republican Excise Tax Surprise

The Republican tax bill unveiled last week in the U.S. Congress could disrupt the global supply chains of large, multinational companies by slapping a 20-percent tax on cross-border transactions they routinely make between related business units.

European multinationals, some of which currently pay little U.S. tax on U.S. profits thanks to tax treaties and diversion of U.S. earnings to their home countries or other low-tax jurisdictions, could be especially hard hit if the proposed tax becomes law, according to some tax experts.

Others said the proposal could run afoul of international tax treaties, the World Trade Organization and other global standards that forbid the double taxation of profits if the new tax did not account for income taxes paid in other countries.

The proposed tax, tucked deep in the 429-page bill backed by President Donald Trump, caught corporate tax strategists by surprise and sent them scrambling to understand its dynamics and goals, as well as whether Congress is likely ever to vote on it.

Reuters contacted seven multinational companies and four industry groups. None would comment directly on the proposal, with most saying they were still studying the entire tax package.

The proposal is part of a broad tax reform bill unveiled by House of Representatives Republicans on Thursday, which promises to lower overall tax burdens and simplify the tax code.

Whether the proposed reforms ever become law is uncertain, with weeks and possibly months of debate and intense lobbying still ahead. The House package overall has drawn criticism for adding too much to the federal budget deficit and too heavily favoring the rich and big business.

However, the corporate tax part, experts said, included some ambitious proposals worthy of further discussion. They said the 20 percent excise tax is one such proposal targeting the abuses of so-called transfer-pricing where multinationals themselves set prices of goods, services and intellectual property rights that constantly move between their national business units.

Under global standards, those prices should resemble those available on the open market. However, if a foreign parent charges U.S. affiliates inflated price, it can reduce its U.S. tax bill and effectively shift profits to a lower-tax country, reducing the entire corporation’s overall tax costs.

Blunt instrument

“Clearly there’s a transfer-pricing issue and something should be done,” said Steven Rosenthal, senior fellow at the Tax Policy Center, a nonpartisan Washington think tank.

“I would view this 20-percent excise tax as a blunt instrument to address the problem. And the problem with blunt instruments is sometimes they hit what you want to hit, and sometimes they hit what you don’t want to hit,” said Rosenthal, former legislation counsel at Congress’s Joint Tax Committee.

Under the proposal, U.S. business units that import products, pay royalties or other tax-deductible, non-interest fees to foreign parents or affiliates in the course of doing business would either pay a 20-percent tax on these or agree to treat the amounts as income connected to their U.S. business and subject to U.S. taxes.

As proposed, the new tax rule would apply only to businesses with payments from U.S. units to foreign affiliates exceeding $100 million. The rule would not take effect until after 2018.

European companies that sell foreign-made products into the U.S. market through local distribution units could be among those most affected, said Michael Mundaca, co-director of the national tax department at the accounting firm Ernst & Young.

Such companies could end up paying tax on the transfers twice — first if they paid the excise tax in the United States and then at home where they are taxed now and where the new U.S. tax would not be accounted for without changes to bilateral tax treaties.

“That would be a structure that would at least initially be hit by the full force” of the excise tax, said Mundaca, a former U.S. Treasury Department assistant secretary for tax policy.

He said European officials would be registering concern. “I am sure they are making calls right now to their counterparts in the U.S. Treasury looking for some explanation… and making the point that this might be contrary to treaty obligations.”

Gavin Ekins, an economist at the Tax Foundation, a conservative think tank, predicted that most multinationals would opt to avoid the excise tax by electing to pay U.S. corporate tax on all the profits related to products sold in the United States. Those include profits on activities conducted overseas, like manufacturing or research, which are also subject to foreign income taxes.

The U.S. corporate tax rate on those profits would drop to 20 percent from 35 percent if the House bill becomes law.

The promise of additional revenue and hopes that the new tax may entice multinationals to locate more production and jobs in the United States, may well outweigh international concerns.

The entire Republican tax package is projected to add $1.5 trillion over 10 years to the $20 trillion federal debt and the planned excise tax is among sources of new revenue needed to avoid an even bigger shortfall. It is expected to bring about $155 billion over 10 years, according to a summary of the Republican proposal distributed last week.

Still, as the tax debate heats up, foreign multinationals are likely to lobby hard against it, with domestic corporations linked to foreign affiliates possibly concerned as well.

There is also uncertainty how the new rules would work in practice.

It was unclear, for example, from the bill’s language how companies should calculate income “effectively connected” to their U.S. business, Tax Foundation’s Ekins said.

“You don’t know what profit is included when you choose ‘effectively connected income’ and don’t know the formula,” he said. “Is it just for that product line? All the income that comes in from every other company or from every other source?”

The House tax committee was scheduled to begin considering amendments to the Republican tax bill on Monday.

Sprint, T-Mobile End Merger Talks

Wireless carriers Sprint and T-Mobile called off a potential merger, saying the companies couldn’t come to an agreement that would benefit customers and shareholders.

The two companies have been dancing around a possible merger for years, and were again in the news in recent weeks with talks of the two companies coming together after all. But in a joint statement Saturday, Sprint and T-Mobile said they are calling off merger negotiations for the foreseeable future.

“The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” said John Legere, president and CEO of T-Mobile US, in a prepared statement.

T-Mobile and Sprint are the U.S.’ third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over U.S. wireless service. The two companies have said they hoped to find a way of merging to make the wireless market more competitive.

Sprint and its owner, the Japanese conglomerate SoftBank, have long been looking for a deal as the company has struggled to compete on its own. But Washington regulators have frowned on a possible merger. D.C. spiked AT&T’s offer to buy T-Mobile in 2011 and signaled in 2014 they would have been against Sprint doing the same thing. But with the new Trump administration, it was thought regulators might be more relaxed about a merger.

Sprint has a lot of debt and has posted a string of annual losses. The company has cut costs and made itself more attractive to customers, BTIG Research analyst Walter Piecyk says, but it hasn’t invested enough in its network and doesn’t have enough airwave rights for quality service in rural areas.

T-Mobile, meanwhile, has been on a yearslong streak adding customers. After the government nixed AT&T’s attempt to buy it in 2011, T-Mobile led the way in many consumer-friendly changes, such as ditching two-year contracts and bringing back unlimited data plans. Consumers are paying less for cellphone service, thanks to T-Mobile’s influence on the industry and the resultant price wars.

“T-Mobile does not need a merger with Sprint to succeed, but Sprint might need one to survive,” Piecyk wrote in an October research note.

Trump Urges Saudi Arabia To List Shares of World’s Largest Oil Producer on NYSE

U.S. President Donald Trump urged Saudi Arabia Saturday to list its state-owned oil company on the New York Stock Exchange when the company goes public in what is expected to be the largest-ever initial public offering in which shares of a company are sold to investors.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!,” Trump tweeted from Hawaii, his first stop ahead of a 13-day trip to Asia.

Saudi officials have reportedly said the government intends to list 5 percent of  the company’s shares on local and global stock exchanges in 2018 but have yet to select an overseas venue. Saudi officials have estimated the IPO will be worth about $100 billion.

The NYSE has had discussions with the Saudis about the upcoming IPO as has the London Stock Exchange. Exchanges in Hong Kong, Singapore, Tokyo, Toronto and the U.S. are also soliciting portions of the public offering.

New York-based NASDAQ, which provides technology to Saudi Arabia’s exchange, has been leveraging that relationship in an attempt to win the listing.

Trump has developed a close relationship with Saudi Arabia. During his visit there last summer, he signed a $110 billion defense agreement with Saudi King Salman.

At a $2 trillion valuation Saudi officials have projected for Aramco, selling five-percent of the company’s shares would reap $100 billion.

The public offering of shares of Aramco, the world’s largest oil producer, is part of Saudi government plans to sell state assets as a recession slows Riyadh’s effort to eliminate a budget deficit caused by low oil prices.