Archive for May, 2012
May 8 (Bloomberg) — Rodrigo Ratos exit from Bankia signals Spain is heeding part of the International Monetary Funds advice for healing the banking industry as the task of bolstering the lenders balance sheet falls to his successor.
Rato, a former IMF managing director, said yesterday hed quit the banking group with the biggest Spanish asset base and proposed Jose Ignacio Goirigolzarri, a former president and chief operating officer of Banco Bilbao Vizcaya Argentaria SA, as executive chairman.
Spain is struggling to douse speculation it will need an international rescue to shore up lenders such as Bankia, the banking group with the most Spanish real estate on its books, after the economy fell into a recession linked to its property crash. The IMF last month singled out Bankia in a report on Spanish lenders, saying that the largest of the countrys vulnerable banks should especially take swift steps to improve management and strengthen its balance sheet.
In some way this is really all to the good because it means progress is being made, said Javier Diaz-Gimenez, an economics professor at IESE business school in Madrid. Whatever way they choose to take the Bankia situation forward, theres now going to be a technical guy in charge and not a politician.
With about 300 billion euros ($392 billion) in assets, the Bankia group is key to Rajoys efforts to overhaul the industry, said Diaz-Gimenez. Its assets are equivalent to almost a third of the Spanish economy and it held 38 billion euros of real estate at the end of 2011.
The government may inject funds into the lender by buying contingent-capital securities, said an Economy Ministry official yesterday who declined to be named as the plan isnt public.
Goirigolzarri was a very good leader and administrator at BBVA and he is very well regarded, said Inigo Lecubarri, who helps manage about $300 million at London-based Abaco Financials Fund. You couldnt ask for someone better qualified to lead a Spanish bank thats in trouble.
Goirigolzarri, 58, served as president and chief operating officer for eight years at BBVA, Spains second-largest bank. He spent 16 years on the board and stood down in 2009.
Rato, 63, who was economy minister when the ruling Peoples Party was last in power from 1996 to 2004, didnt say what hell do next or if he will leave the bank, stating that it had been an honor to lead it. Luis de Guindos, the current economy minister, served under Rato as deputy economy minister in the former Peoples Party-led government of Jose Maria Aznar.
Fixing Banking Critical
Rato became chairman of Caja Madrid, the savings bank in the Peoples Party-controlled region dominated by Spains capital city, in 2010 and led its merger with six other lenders including Valencia, Spain-based Bancaja to form Bankia. He said the bank, which is closing branches and shedding staff to cut costs, boosted its operating margin by 25 percent in the first quarter from the same period a year ago.
If the Bankia situation is not resolved properly, it is going to put in question the entire financial reform in Spain, said Lorenzo Bernaldo de Quiros, an economist who served on a panel that advised Rato when he was minister.
Shares in Bankia fell 3.3 percent in Madrid to 2.38 euros, bringing to 37 percent the loss since the companys listing on the stock market in July. Spains 10-year bonds fell, increasing the yield 2.7 basis points to 5.71 percent.
In its report on the Spanish banking system on April 25, the IMF said it was critical that vulnerable lenders, especially the largest one, take swift measures to strengthen their balance sheets and also called for improvements to management and governance practices.
The government may inject 7 billion euros into BFA-Bankia, El Confidencial reported, citing Economy Ministry officials it didnt identify. A ministry spokeswoman declined to comment.
Prime Minister Mariano Rajoy, battling to restore confidence in banks, yesterday opened the door to using public funds to shore up the industry. He said it would be a last resort.
The last thing I want to do is lend public money, as has been done in the past, but if it were necessary to get the credit to save the Spanish banking system, I wouldnt renounce that, he said in an interview with radio station Onda Cero.
Bankias parent company took 4.5 billion euros of public support in 2010 in the first phase of Spains efforts to shore up lenders reeling from the property-market collapse.
The group, formed in 2010, last year split off its most problematic real-estate assets into BFA, the unlisted parent, where the governments preference shares were also parked. Freed from the most toxic assets, Bankia sold shares to the public, including local retail investors, in July, in a move the Bank of Spain hailed as very positive.
Rajoy also said that the Cabinet will pass a decree on May 11 aimed at bolstering confidence in the industry. He didnt give details, saying only it was connected to the governments plan to allow lenders to put assets they have already provisioned for into separate asset-management vehicles.
The decree will be the second for the industry since February, when the government gave banks a year to set aside 53.8 billion euros in real-estate provisions and buffers. That Feb. 3 decree also allows for the states bailout fund to buy contingent capital securities, known as CoCos, in struggling lenders, funded by the Treasury.
Rajoy said any use of public funds wouldnt affect the deficit, which is the third largest in the euro region. Rajoy, who said in the election campaign he would avoid using taxpayer funds to bail out lenders, is suffering from a slump in popularity amid budget cuts.
–With assistance from Esteban Duarte in Madrid. Editors: Jeffrey Donovan, Frank Connelly
To contact the reporters on this story: Emma Ross-Thomas in Madrid at firstname.lastname@example.org; Charles Penty in Madrid at email@example.com
To contact the editor responsible for this story: Emma Ross-Thomas at firstname.lastname@example.org
Belarus’s international reserves
dropped in April for the first time in six months as the former
Soviet republic tapped the stockpile to service its liabilities
denominated in foreign currency.
The gold and foreign-currency holdings shrank 1.6 percent
to $7.96 billion last month, the central bank in the capital,
Minsk, said in a statement published on its website today,
citing calculations under International Monetary Fund standards.
“The decline in gold and currency reserves was influenced
by the government and the Natsionalnyi Bank Respubliki Belarus
covering its external and internal liabilities in foreign
currency,” the regulator said in the statement.
Belarus wants to maintain the reserves at between $6.1
billion and $7 billion by the beginning of 2013, according to
monetary policy guidelines approved by President Aleksandr Lukashenko and published on the central bank’s website.
To contact the reporter on this story:
Aliaksandr Kudrytski in Minsk, Belarus at
To contact the editor responsible for this story:
Balazs Penz at
A House subcommittee is scheduled to hold a hearing on proposals to reform or end the Federal Reserve System, Texas Republican Rep. Ron Paul announced last Friday.
The Domestic Monetary Policy and Technology Subcommittee will hear testimony from economists and lawmakers Tuesday morning on Capitol Hill.
“More and more people are beginning to understand just how destructive the Federal Reserve’s monetary policy has been,” Paul, who chairs the subcommittee, said in a press release. The Fed continues to reward Wall Street banks while destroying the dollars purchasing power and driving up the cost of living for average Americans. This reckless behavior must come to an end.
The subcommittee will consider several bills, including Paul’s Federal Reserve Board Abolition Act and measures introduced by Rep. Barney Frank, a Massachusetts Democrat and the outgoing ranking member of the House Financial Services Committee.
Paul’s proposed bill would abolish the Federal Reserve Bank of the United States, the Board of Governors of the Federal Reserve System, and the Federal Reserve Act. It would require a year-long transition period in which all outstanding liabilities of the Federal Reserve Bank would become the responsibility of the secretary of the Treasury.
In a 2009 statement when he first introduced the bill, Paul said that “abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nations founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free market economy.”
Paul’s outcry about the abuses of the Federal Reserve System have gained traction in recent years, culminating in the inclusion of an audit of the Federal Reserve in the Dodd-Frank bill to ramp up financial regulations. The audit revealed over $16 trillion of secret loans to American and foreign banks. Lawmakers were not happy.
As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world, said Sen. Bernie Sanders, a Democrat from Vermont. This is a clear case of socialism for the rich and rugged, youre-on-your-own individualism for everyone else.
The Federal Reserve has been creating money out of thin air for forty years now, Paul explained, And theyve ramped up the printing presses during these five years of crisis all in the name of economic stability. But there are consequences to massive amounts of money creation. Indeed, these Fed actions helped cause the very crisis were suffering from today.
With the Federal Reserve under so much scrutiny, Paul hopes that this hearing will further the public discussion about the policies and actions of the Federal Reserve.
I hope that this hearing will kickstart a serious discussion on the need to rein in the Fed. 100 years is far too long for Congress to have taken a hands-off approach, Paul said.
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NEW BERLIN, Wis., May 7, 2012 /PRNewswire via COMTEX/ –
International Monetary Systems, Ltd.
, a worldwide leader in business-to-business barter services, has recently filed its first quarter report on Form 10-Q.
Don Mardak, IMS’ Chairman of the Board, stated, “Historically, the first quarter is the slowest quarter of our year. In the three months ending March 31, 2012, however, IMS showed a nice year-to-year increase in trading activity and the resulting net revenue. The company also had a small profit from operations. This compares to operating losses for the same period in most recent years. We believe this result is a good indicator for the balance of 2012.”
Revenue increased 9.7% in the first quarter of 2012, compared to the first quarter of 2011.
Cash provided by operations was $149,307 in the first three months of 2012, compared to cash provided by operations of $94,832 for the same period in 2011.
Return to Shareholders
During the first quarter of 2012, 346,804 shares of the Company’s stock have been repurchased under the Company’s stock buyback plan and stock buyback guarantees.
During the quarter ended March 31, 2012, International Monetary Systems (“IMS” or “the Company”) generated revenues of $3,266,779, an increase of $287,934 or 9.7%, compared to the first quarter of 2011. This is the result of a 9.5% increase in transactions processed, attributable in part to our 2011 acquisitions.
Operating expenses in the quarter were $3,254,606 an increase of $53,426 or 1.7% compared to the first quarter of 2011. This increase is primarily due to increased employee costs, including staff costs in offices acquired in 2011, higher variable compensation tied to higher revenue, and expansion of the Company’s tele-selling staff.
The Company generated operating income of $12,173 for the first quarter, compared to an operating loss of $(222,336) in the first quarter of 2011. After adjusting for interest and income taxes, the net loss for the quarter narrowed from $(184,555) in the first quarter of 2011 to $(44,883) in the first quarter of 2012. Interest expense has increased as the Company services the increased debt load taken on strategically to fund the stock buyback program expanded in 2011.
EBITDA for the quarters ended March 31, 2012 and 2011 were as follows:
Adjustments to Reconcile GAAP Net Income to EBITDA
Net (loss) $ (44,883) $ (184,555)
Interest expense 80,701 45,118
Income tax expense (benefit) (23,074) (82,781)
Depreciation and amortization 388,678 408,809
EBITDA $ 401,422 $ 186,591
INTERNATIONAL MONETARY SYSTEMS, LTD.
CONSOLIDATED BALANCE SHEETS
March 31 ,2012 December 31, 2011
Cash $ 746,295 $ 1,018,250
Restricted cash - 206,956
Marketable securities 186,040 162,323
Accounts receivable, net 830,809 1,006,278
Earned trade account 277,097 210,582
Prepaid expenses 186,052 188,715
Total current assets 2,226,293 2,793,104
Property and equipment, net 666,987 651,118
Membership lists and other intangibles, net 5,389,316 5,718,435
Goodwill 3,507,522 3,507,522
Assets held for investment 170,936 169,031
Total non-current assets 9,734,761 10,046,106
Total assets $ 11,961,054 $ 12,839,210
Accounts payable and accrued expenses $ 906,677 $ 1,091,823
Credit lines, short term notes, and current portion of long term debt 1,164,146 1,009,897
Current portion of notes payable to related parties, including short term note 179,345 90,000
Common stock subject to guarantee 104,975 418,495
Total current liabilities 2,355,143 2,610,215
Long term debt, net of current portion 2,271,702 2,159,434
Notes payable related parties, net of current portion 312,465 275,000
Deferred compensation 291,000 290,000
Deferred income taxes 932,629 1,015,325
Total long-term liabilities 3,807,796 3,739,759
Total liabilities 6,162,939 6,349,974
Commitments and Contingencies
Preferred stock, $.0001 par value, 20,000,000 authorized, 0 outstanding - -
Common stock, $.0001 par value 280,000,000 authorized, and 8,097,017
issued and outstanding at both March 31, 2012 and December 31, 2011 810 810
Paid in capital 9,450,506 9,137,003
Treasury stock, 519,507 and 172,703 shares respectively (1,330,388) (351,614)
Accumulated other comprehensive income 37,648 18,615
Accumulated deficit (2,360,461) (2,315,578)
Total stockholders' equity 5,798,115 6,489,236
Total liabilities and stockholders' equity $ 11,961,054 $ 12,839,210
INTERNATIONAL MONETARY SYSTEMS, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
Revenue $ 3,266,779 $ 2,978,842
Employee costs 1,997,080 1,926,708
Selling, general and administrative 868,848 865,661
Depreciation and amortization 388,678 408,809
Total operating expenses 3,254,606 3,201,178
Income (loss) from operations 12,173 (222,336)
Other income (expense)
Interest income 571 118
Interest expense (80,701) (45,118)
Total other income (expense) (80,130) (45,000)
Loss before income taxes (67,957) (267,336)
Income tax benefit 23,074 82,781
Net loss (44,883) (184,555)
Components of comprehensive income (loss):
Foreign currency translation adjustment (2,497) 4,765
Unrealized gain on available for sale securities 21,530 5,966
Comprehensive loss $ (25,850) $ (173,824)
Net loss per common share
-basic $ (.01) $ (.02)
--dilutive $ (.01) $ (.02)
Weighted average common shares outstanding
- basic 8,097,017 10,544,800
--dilutive 8,097,017 10,544,800
About International Monetary Systems Founded in 1985, International Monetary Systems (IMS) serves 21,000 cardholders in 52 North American markets. Based in New Berlin, Wisconsin, and managed by seasoned industry veterans, IMS is one of the largest publicly traded barter companies in the world. The company's proprietary transaction clearing software enables businesses and individuals to trade goods and services online using an electronic currency known as trade dollars. The IMS network allows companies to create cost savings and connect to new customers by incorporating barter opportunities in their business models. Further information can be obtained at the company's Web site at:
This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance as described without limitation in comments about the company's performance within the safe harbor provisions established under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of our future performance. We believe that these potential risks and uncertainties include, without limitation: the continuing development of successful marketing strategies for our concepts; our ability to increase revenues and sustain profitability; the availability of adequate working capital; our dependence both on key personnel, and the effect of changes in the overall economy and in technology. Statements in this release should be evaluated in light of these factors. These risk factors and other important factors that could affect our business and financial results are discussed in our periodic reports and filings with the Securities and Exchange Commission, including our Forms 10-K and Forms 10-Q, which are available at
www.sec.gov . All information set forth in this release is as of May 7, 2012, and International Monetary Systems, Ltd. undertakes no duty to update this information.
Contact:International Monetary Systems, Ltd., New Berlin, WICompany Contact:John Strabley - CEO.(800) 559-8515
SOURCE International Monetary Systems, Ltd.
Copyright (C) 2012 PR Newswire. All rights reserved
Add to portfolio
International Monetary Systems Ltd.
May 18, 2012 1:02p
Market Cap$18.22 million
Rev. per EmployeeN/A
Words used in this article:
WASHINGTON – President Barack Obamas two nominees to the Federal Reserve appear likely to fall victim to a long-running political feud, which would leave the central bank short-handed as it struggles with tough regulatory and monetary policy questions.
Republican Senator David Vitter has demanded that the Senate hold a debate before any vote on the nominees, which would require Democratic leaders to muster a super majority to move forward – a hurdle that may be too high to clear.
As a result, the Senate may end up abandoning the nominees, Harvard economist Jeremy Stein and investment banker Jerome Powell, and leave a decision on filling out the normally seven-member Fed board until after this years presidential election.
I refuse to provide Chairman Bernanke with two more rubber stamps who approve of the Feds activist policies, Vitter said when asked if he planned to lift his hold on the nominations.
Leaving the central bank short-staffed deprives it of top-notch monetary policy and financial market expertise that could prove valuable given the stop-and-go nature of the US recovery and economic threats coming from Europe.
It could also undermine the institutions efforts to get up to speed on regulatory matters now that Congress has vastly expanded its responsibilities for ensuring financial stability.
The demands on the Fed right now are intense, said Nathan Sheets, an economist for Citigroup and the former director of the Feds division of international finance. Leaving talented nominees on the sidelines – when there is so much scope for them to contribute – increases the stresses on the Fed and makes these demands even heavier than they would otherwise be.
More troubling to some is the antipathy toward the Fed that Vitters opposition reflects. His move is merely the latest skirmish in an eye-for-an-eye vendetta in which both parties have blocked Fed nominees in the hope they would soon capture the White House.
There can be no question that this practice brings the Fed squarely into the extraordinarily divisive political environment of our time, said Alfred Broaddus, who was president of the Richmond Federal Reserve Bank from 1993-2004. Its bad for the Fed and bad for the country.
Republicans, including presidential contender Mitt Romney, have deplored the Feds aggressive steps to stimulate the weak economy as a dangerous flirtation with inflation, while left-of-center voices have taken the central bank to task for not being even more aggressive.
Since officials on the Fed board are usually aligned with the chairman on matters of policy, thin staffing could weaken support for Bernanke as he tries to maintain consensus behind an ultra-easy monetary policy in the face of the criticism.
Stein and Powell need to win the Senates approval in order to take office, but Vitters opposition creates a tough barrier.
Democrats control 53 votes in the 100-member chamber, but under Senate rules, they would need to muster 60 votes just to bring the nominees up for a vote, given Vitters opposition.
The various votes and debate could take as long as two weeks. But with highway funding, government spending and cyber security legislation looming, Senate Democratic leaders are not likely to make the Fed nominees a priority.
In addition, Democrats would be loath to spend precious political capital defending an unpopular central bank in an election year. Senate Majority Leader Harry Reid will be thinking long and hard before calling on any Democrat in a tight race to support a controversial cause.
We are still trying to find a way to get Senator Vitter to drop his obstruction, said Reid spokesman Adam Jentleson.
The board has not been at its full seven-member strength since April 2006, and it could soon be depleted even further. The term of Elizabeth Duke, the last remaining George W. Bush appointee, expired in January, and while board members can stay in office until replaced, she has not committed to doing so.
Obamas two nominees seemed like a good bet to win bipartisan approval. Powell served under Republican President George HW Bush and was a partner at the Carlyle Group, a well-connected Washington-based private equity firm. Stein served as an economic adviser under presidents of both political parties.
It would not be the first time an Obama Fed nominee has fallen by the wayside over partisan objections that have made a short-staffed Fed board the norm. Even winning a Nobel prize in economics did not open the door for MIT economist Peter Diamond.
Dr. Diamond is an old-fashioned, big government Keynesian, said Senator Richard Shelby, the top Republican on the Banking Committee, whose objection forced Diamond to withdraw.
While the Senate did go on to approve state banking regulator Sarah Raskin and regional Fed bank president Janet Yellen to roles on the Fed board, many saw Diamonds rejection as a rejoinder to the unwillingness of Democrats to approve two Bush nominees ahead of the 2008 presidential election.
The bad blood dates to a hold then-Senator Phil Gramm, a Texas Republican, placed on the nominations of Carol Parry and Roger Ferguson during the Clinton administration ahead of the 2000 election, observers say.
For many, US Fed Chairman Ben Bernanke has been a skilled central banker who helped the US get through the 2008 global financial crisis and has used a bold array of unconventional policy tools to try to get the recovery going more strongly while maintaining low inflation.
During the raucous early days of selecting the Republican presidential nominee, Bernanke was accused by candidates of being nearly traitorous and reckless, but few took this seriously.
These critics uniformly wanted Bernanke to restrain policy initiatives: to do less. But there was a consistent academic voice, articulated most loudly by Paul Krugman, that called for a more active, bolder, more innovative monetary policy. For much of the time, Krugman urged more quantitative easing. Now he is also urging the Fed to adopt a firm inflation target. It should be set higher than the Feds unofficial target of 2 per cent, Krugman says, and higher than recent inflation experience in the US or in most industrial countries.
Krugmans latest writings have made much of the fact that, as an academic, Bernanke explored and even advocated a range of unconventional monetary policies, specifically, urging Japan to adopt a high inflation target. Is Krugman right in suggesting that the once-bold Bernanke has been absorbed into the conservative group-think of the Fed?
Its worth noting that Bernankes response to such arguments has to be more nuanced than that of a hard-core inflation targeting central banker, because the Fed has a dual mandate to look after both price stability and unemployment. In practice, any difference is small (even inflation-targeting central banks in other countries worry about unemployment, as well as inflation). But he certainly needs to be vocal in his concerns about unemployment.
So, what could Bernanke do that he hasnt already done?
He cant use the conventional instrument interest rates because thats already effectively set at zero. He could do a third round of quantitative easing. QE was supposed to work by lowering longer-term bond yields. When the Fed was buying private-sector sub-prime securitised assets in 2009, there is not much doubt that this helped restore a market which had seized up through extreme risk aversion. Whether the more recent QE activity of buying government bonds did much to lower their yields is much less clear: the biggest falls in yields occurred in periods when the Fed was not doing QE operations.
That said, financial markets believe in QE (many misleadingly think it is printing money and are awaiting a burst of inflation) and as a result QE has probably worked by strengthening the stock market and weakening the US dollar (making exports more competitive). But how often does the magician want to repeat a successful trick? Sooner or later the audience sees through the smoke and mirrors and the magic is gone.
Bernankes second unconventional instrument has been to explicitly tell the market what the Fed intended to do with future policy settings. The Fed has promised to leave interest rates at essentially zero at least through late 2014. This lowers the whole yield curve (which depends to a large degree on what the market thinks future policy settings will be) and assures borrowers that they wont be caught short by an unexpected interest rate increase any time soon, making them more confident to borrow.
But short of making an irrevocable promise never to raise interest rates, the Fed has done about all it can do here.
What of Krugmans higher-inflation strategy? If the public believes the Fed will succeed in raising inflation to, say, 4 per cent, they will realise that the real (inflation-adjusted) rate of interest is substantially negative. This will encourage borrowing and spending.
Bernankes counter-argument is two-fold. Although he advocated this policy for Japan, he argues that Japan was in deflation while the US is not. Second, he argues that although Krugmans inflation strategy might buy a small reduction in unemployment, this would be at the cost of damage to the Feds hard-won anti-inflation reputation. He might also use the same argument that the Bank of Japan used in resisting this suggestion in 1999: that the central bank doesnt have an instrument for promoting this sort of generalised higher inflation other than the interest rate, which is already flat to the floor.
No-one is advocating the unconventional policy that Bernanke himself included in his list of possibilities back in 2002: the helicopter drop of money. Its not that this is impossible or wouldnt work. Australias cash splash in 2009 was exactly that, although the money arrived by mail rather than out of a helicopter. Its just that this kind of give-away is clearly fiscal policy, not monetary policy. Its not an operation on the central banks balance sheet and it needs proper congressional approval. Given the state of the US budget, its not on the agenda.
Whats Bernankes best answer? Perhaps it is to say that he has already pushed the limits of what a central bank can do, and its now up to other elements of economic policy to get the economy moving faster.
Originally published by The Lowy Institute publication The Interpreter. Reproduced with permission.
By Ryann Grochowski
In the latest installment of the “Follow the Money” series, we examined the details behind what candidates can accept in contributions other than cash. These can include donations of items, supplies, property and professional services. Even though these donations don’t involve an exchange of cash, they must be properly reported by the candidate in his or her finance reports.
Q: What are included in non-monetary campaign donations?
A: There are a wide variety of examples, but basically anything that is of value to a campaign must be reported publicly. Refreshments at a campaign event, or the cost of the meeting place for the event itself, are a couple examples.
These donations must be of fair value. For instance, if a restaurant owner allows a candidate to use a banquet room in his restaurant for a campaign event, the cost of the room must be what it would cost for any person to rent it.
Another example would be loan forgiveness. If a candidate receives a campaign loan from a friend, and a friend later forgives or reduces the amount owed, that needs to be reported.
Q: Are there any regulations governing amounts of these contributions?
A: Yes, and they are just like the regulations on monetary contributions. Individuals may not give a candidate anything worth more than five hundred dollars per election, and organizations are not allowed to contribute to candidates.
Q: In a previous installment, we discussed candidates donating money to their own campaigns. Can a candidate do the same for non-monetary donations?
A: Yes, and just like monetary donations, a candidate can donate as many items to his campaign as he wants. It must be reported differently, though. For instance, if a candidate wants to donate office supplies to his campaign, he can’t go out and buy pens and paper from his personal checking account and “donate” the supplies. He must put that money into his campaign account first, and then buy the supplies from there.
Q: Are there any exceptions to these guidelines?
A: Volunteers who donate their time to help a candidate, with no expectation of reimbursement, would not be considered in violation of the limit on service donations.
Breaking News: World Bank Announces Makhtar Diop as its New Vice-President for Africa
World Bank Announces Makhtar Diop as its New Vice-President for Africa
Washington, May 7, 2012 Makhtar Diop, a Senegalese national with more than 25 years of development experience, today becomes the new World Bank Vice-President for Africa.
Diop was previously Country Director for Brazil since 2009 where he managed the World Banks largest country program. Prior to joining the Bank, Diop worked at the International Monetary Fund and served as Minister of Finance of Senegal, and as Chair of the West African Monetary Union (WAEMU) Board of Finance Ministers.
After joining the World Bank in 2001, Makhtar Diop held various senior positions, including Country Director for Kenya, Eritrea and Somalia, as well as Director of Infrastructure and Director of Strategy and Operations in the Banks Latin America and Caribbean region.
It is an honor to return to the Africa region as Vice-President at a time when the continent is on the rise, with strong growth led by private investment, and a new sense of optimism, said Diop. With world-class development knowledge and innovative financing, we can help support Africas momentum and ensure that all Africans, especially the poor, share in the continents economic and social transformation.
The World Bank is a partner of 48 countries in Sub Saharan Africa and finances approximately 500 projects in the region. The Banks portfolio includes projects and programs in areas such as agriculture, trade and transport, energy, education, health, water and sanitation.
In fiscal year 2011, the World Bank committed more than US$ 7.0 billion in new development financing for Africa, and disbursed over US$ 5.5 billion, in addition to producing more than 200 analytical studies.
In Washington: Phil Hay +1 (202) 473-1796 and cell +1 (202) 409-2909, firstname.lastname@example.org
Aby Toure +1 (202) 473-8302 Akonate@worldbank.org
And to read about the World Banks development work in Africa, please visit: www.worldbank.org/afr
Visit us on Facebook: http://www.facebook.com/worldbankafrica updated via Twitter: Behttp://www.twitter.com/worldbankafrica
For our YouTube channel: http://www.youtube.com/worldbank
Its obvious the worlds largest emerging economies are no longer in a position to carry the global economy through tough times, as they did during the recovery years of 2009-11. And that spells trouble for the United States and Europe.
The euro zone economy may have contracted again in the first quarter; its data fits the stagflation model quite well. Inflation grew 2.6 percent in the first quarter, and GDP is expected to grow no more than 0.8 percent this year, rising from a low base due to a contraction in the second half 2011.
Stagflation also seems to be settling over the US economy. A much-hyped recovery delivered a disappointing first quarter, with preliminary estimated GDP growth up 2.2 percent from the previous three months and the consumer price index climbing 0.9 percent, or 3.6 percent on an annual basis.
Policymakers and analysts say inflations not a problem when growth is sluggish. What theyre overlooking, however, is that inflation figures reported in recent months around the world are higher than historical averages. No longer can one predict inflation based on output gaps.
Much of the output gap in the West is fictitious. Its actually outdated capacity. And high unemployment rates will not act as a disinflationary force as long as theres no flexibility in the labor market.
On the other hand, money supplies worldwide, especially in developing countries including China, are growing at a robust pace, fueling higher prices for energy and food. This monetary easing is no longer stimulating growth. Instead, its proving to be an effective means of fueling inflation.
Central banks are pushing on a string. If they insist on more monetary stimulus, the world could head toward an inflation crisis with similarities to what happened in the 1970s.
Thus, central bankers may be making fools of themselves while trying to restore growth to everyones satisfaction. But globalization is making demand manipulation less effective than in the past, as multinational corporations have made production completely movable. Hence, no government can count on a localized, the kind of virtuous cycle that balances supply and demand and is necessary for demand stimulus to work.
The rise of the true multinational corporation has been the most important economic development since 1990. These are independent forces, and many are stronger than most countries. Any policymaker or economist who doesnt understand the work of todays multinationals is not qualified for the job.
Since corporations can now move production and sales effortlessly around the world, China and IT are the most important factors affecting the global economy. And no economic remedy will be effective without taking these factors into consideration.
Multinationals are reporting good earnings and cash flow, which is no coincidence. Through cost arbitrage and technical progress, multinationals can growth profits at 10 percent, even if the global economy is growing at no more than 7 percent in nominal terms, mainly due to inflation.
The rise of multinationals limits government policymakers. For example, an economys labor market must be flexible to compete in the world, or risk watching multinationals move elsewhere to save money. Moreover, its become difficult to tax multinationals, since they can park income anywhere.