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Things couldn’t have gotten better for Indian Institute of Management-Ahmedabad’s (IIM-A) class of 2008. Way ahead of the end of the term, over 79 job offers have poured into the campus already.

The young aspiring management graduates still about five months of coursework to complete before they can apply for a job, on the campus placement day. But companies are not willing to wait, they want to sign on bright young men and women at the earliest. The class of 2008 has received over 79 job offers including nine students who were given associate offers.

In a bid to extend the benefits of placement, the IIM-A board has decided to make the offers open to international students who are here on various exchange programmes.

Companies which have given pre-placement offers include McKinsey and Co, Bain and Co, Goldman Sachs and Deutsche Bank among others.

International students are obviously happy with the decision. ‘Of course I intend to sit for placement at IIM-A because it offers great professional opportunities worldwide. The companies that come to the campus are among the world’s best and the roles that they offer are as diverse and challenging as they come,’ says Diane Gabriel, an exchange student from France.

But there are others who would rather be employers than employees. According to
Kunal Upadhyay, head, Centre for Innovation, Incubation and Entrepreneurship (CIIE) at IIM-A the trend among students is to incubate their own entrepreneurial ventures. ‘In recent years, the focus of students has risen above PPOs, job offers etc to start their own ventures,’ says Upadhyay.

To encourage entreprise among students, IIM-A is offering them the choice of taking up a job within two years of passing out.

Sales of houses have decreased and are experiencing a 4 year low. As per the National Association of Realtors, the median price has also taken a dive for the tenth month now. Homeowners are experiencing a very bad situation as they would have to further lower the selling price so as to attract the buyers. The log jam of houses is one of the reasons which caused this kind of situation. The second reason which can be accounted is psychology. People are expecting the prices to fall more and so, are taking their time to purchase homes. The median price for an existing home has fallen 2.4% since last year. Also, the mortgaging companies have raised their conditions making it more difficult for a consumer to buy a house. However, the lending standards were only raised after experiencing losses by the respective companies during real estate boom.
The real estate low is also causing shrink in the economy. The new-home sales figures by the commerce department will be out now and field experts are also expecting a decrease.

Source: USAtoday

Image credit: Cahomeinsurance

Finance ministers of G8 have strictly warned not to give easy and cheap loans to the African countries, as they need to struggle a lot for repaying. After a two-day meeting held in Germany, a statement has been issued regarding the financial position of African countries. It has been stated that African countries need to manage their own financial responsibility. Members of this significant meeting include next prime minister of Britain Gordon Brown and US Deputy Treasury Secretary, Robert Kimmitt.

US, Britain, Canada, France, Germany, Italy, Japan and Russia are the G8 countries. Next month, a wider summit will be held in Heiligendamn. Major issue of this G8 summit will be Africa, as stated by the minister.

China has been considered as major risk to Africa. China depends a lot on its raw materials. This raw material mainly caters its developing economy. According to Mr. Kummit, “It is critical that both borrowers and creditors agree on approach to debt sustainability that prevents the re-emergence of debt distress”.

Approximately $50bn (a year) by 2010 would be aided by the eight wealthiest countries of the world. But, their huge promises seem to fall short according to critics.

European director of Debt Aids Trade Africa, Oliver Buston has stated that, “Heiligendamm is the last chance for the G8 leaders to rescue their reputation.”
According to the ministers, one need to vigilant in other business, as a lot of risk factor is associated with hedge funds. But, till now no code of conduct is issued.
Via:bbc

Alan Greenspan, the former chairman of the US Federal Reserve and a well-known specialist on interest rate policy, has been roped in as a consultant by the operator of the world’s biggest bond fund, the Allianz-owned Pacific Investment Management, Pimco. In a major triumph for Pimco, whose bond portfolios are extremely sensitive to interest rate policy, Greenspan will communicate once a quarter with Pimco executives on economic issues, including offering his private outlook about interest rate policy at the US central bank.

This is the first appointment held by Greenspan since retiring as Fed chairman in February last year, when he was succeeded by Ben Bernanke. His consulting firm, Greenspan Associates LLC, is still searching for other private sector clients, even though none that compete with Pimco. On the other hand, he has already agreed to provide periodic advice to the UK Treasury.

Even though his speeches and comments have generally been delivered to private audiences, they have nonetheless made headlines and moved markets. In February this year, he suggested that the US was at risk of slipping into recession, comments which were widely blamed for playing their part in stock market crumbles worldwide. Apparently, public comments he has made in the wake of his departure have rattled markets and irritated US authorities. But for the latest assignment Greenspan has made it clear that his comments to Pimco would not be released into the public domain.

The Wall Street Journal has reported that the former head of interest rates policy at the world’s biggest economic power will correspond with the Pimco executive through conference calls and e-mails and hold quarterly strategy sessions with the executive. According to the deal, the man who steered the Federal Reserve for 18 years and who still has the power to move markets will hold a quarterly meeting with senior executives of Pimco, the $680 billion bond-dominated mutual fund.

Economists are of the view that if Greenspan’s privately expressed views on Fed policy were to leak into the public, they could further undermine Bernanke. They further argued that Greenspan, who was famously enigmatic during his time as Fed chairman, can afford to be more direct in his views about the economy now. Bernanke’s role dictates that he must be guarded to avoid alarming the market.

The financial arrangement of the contract has not been made public yet. Greenspan was approached more than a year back by Pimco, which concluded the agreement this week. The company has not disclosed the length of the agreement, or any details about fees. However, Greenspan’s salary in 2005, his last full year at the Fed, was $180,100. The deal would see Greenspan teaming up with Pimco’s boss, Bill Gross, one of America’s most respected commentators on the bond market.

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The galloping increase in the level of shorting in the shares is taking London Stock Exchange (LSE) towards a record haul. Index Explorer, the stock lending whiz reports that about 5.6 % of the LSE’s shares are in the dispensed by shorters. Since Nasdaq’s £2.7bn bid to acquire it was rejected in mid-February, LSE has witnessed a three-fold rise in the intensity of share shorting.

A buoyant LSE reported through a press release,

The LSE is forecasting an outstanding set of results for the year to March 2007.The shareholder register has remained stable since February and traditional long-only institutions still account for 30pc of the total.

The report came a week before LSE chief executive Clara Furse is due to make public an expected bumper set of economic results, strengthening her pledge to the British bourse’s autonomy. It also appreciates her steering of LSE on the right path in the wake of a number of moves and bids over the preceding three years and the ongoing consolidation in the capital markets all over world.

Its effect saw many major are being swept away in acquisition wars. New York Stock Exchange has got hold of pan-European exchange Euronext, Eurex, the offshoot of Deutsche Börse is going to merge with the International Securities Exchange and a bidding hostility has commenced for the Chicago Board of Trade. The news on level of shorting in the LSE’s shares is sure to keep it away from any stunning alter of its track.

However, analysts look skeptic on the long-term viability of shorting share trading in LSE. One of them points out that the short position has at a maximum count of 13% in the last 12 months. The middling short position in the FTSE250, the index within which the LSE sits is around 4%.

Index Explorer analyst Will Duff Gordon opined that given the LSE’s persistent price support, its shares closed at £12.86 on Thursday which is 43p higher than what Nasdaq had offered. Riding on it a number of longer-term investors are seen disposed to support the price. But in LSE, still Nasdaq remains the chief investor, with a 30% stake following substantial share buy-backs by the exchange.

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Via: Telegraph

As per insolvency firm Thomas Charles, people who have crossed the age of fifty five have a tough time tackling their debts. It is expected that a quarter of debt above £10,000 for people in this age group are expected to go insolvent. A report from the government side is also expected which would state the number of people that have reportedly gone insolvent in the first three months of current year.

It clearly demonstrates that old people are having a tough time tackling debt as compared to the young generation. One of the main reasons behind this is that income resources continue to dry as age progresses and increased dependency on others increases the chances of them getting insolvent. Though analysts claim that figures are slowing down but this highlights the sorry affair of the government which has found itself incompetent in coming to the rescue of elderly.

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Via bbc

Canada has achieved what no other country has been able to achieve till date; produce a million-dollar coin. Can’t believe it, well neither did I in the first instance. The Royal Canadian Mint has engendered a ginormous 100 kg pure gold coin. Well, if that alone wasn’t sufficient, the mint even managed to sell three of these within hours of introduction.

The coin has a face value of $1 million. However, it is sold for about $ 3million based on the current value of the gold. The coin is about 21 inches (50 cm) in diameter and is 1.2 inches (3 cm) thick. Like all other ‘loonies‘- nickname for Canadian one dollar coins, this one also has a likeness of Queen Elizabeth II on one side and three maple leafs on the other.

The coin will not go into circulation (for obvious reasons) and was designed primarily as a promotional product to give the mint a higher international profile.

We wanted to raise the bar so that we could say the government of Canada or the Royal Canadian Mint produced the purest gold coins in the world.

David Madge, Royal Mint’s director of bullion and refinery services said.

The coin has already landed a place in the Guinness Book of World Records for the largest coin in the world. The Austrians earlier held this record. They had a coin that weighed 31 kg and was worth 100,000 Euros. The Austrian coin was a mere 37 cm in diameter.

Not only is the Canadian coin the biggest, but it is also poised to set new standards in purity. It is 99.999 per cent pure gold.

What do you think of all this? Care to pocket one?

Source: Dnaindia

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The second largest bank in India, ICICI bank would be raising 20,000 crores in the month of June. The bank would be raising 15,000 crore through public issue and the rest of the money through ADR issue. In India this is the biggest ever fund raising plan by any Indian bank. It is also opting for a greenshoe option which could double the net worth of the bank to Rs 24,313. As a result its paid up equity would rise by around twenty percent depending upon the share of the bank.

K V Kamath, managing director and CEO, ICICU Bank stated:

We have to look at India in the context of the existing investment pipeline of $500 million over the next three years. We would see doubling of the infrastructure and manufacturing capacity and we have to prepare ourselves for the future.

The money collected would be used for supporting credit growth for the next three years and this is for the third time that bank will be raising money. Lat time it was in October 2005 when the bank had raised 8,000 crores through a combination of domestic and ADR issues.

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Via: business standard

In order to dissipate the heat out of the investment boom in China the country has decided to raise the amount of money which the banks are required to hold in reserves. This decision has been taken for the fourth time in this year in order to avoid any financial crisis in the country. This decision follows increasing interest rate in autos, real estate and other sectors but this step of the government has met repeated success in bringing to a halt the growth in investment in the country.

Over the past year China has shot up its bank reserve ratio seven times and every time there had been an increase by 0.5 percentage point. In order to prevent any financial crisis the government is trying to contain the boom so that the country does not end up in a debt crisis or inflation trap. Even the BOP problem of China is a cause of worry since it had led to increasing liquidity but I feel that the government needs to introduce some tough measures if it doesn’t want a financial turmoil in the country.

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Via: iht

More than 20 years after the world’s leading banks opened outlets in China, a group of foreign banks has started providing local-currency retail services in China after receiving the final approval from the authorities. For the first time, Citigroup Inc., HSBC Holdings PLC, Standard Chartered PLC and Bank of East Asia Ltd. aim to start accepting deposits in yuan from Chinese individuals, and offering loans as well. Before this development, China’s tight controls over foreign banks have made it unfeasible for them to offer those basic and much popular services.

These banks are planning to target fairly well-to-do Chinese citizens. Analysts have argued that access to the more than $2 trillion that China’s high-saving households have deposited in banks had been denied to foreign banks because China’s government tight rules and laws. However, the latest decision to open finance retail sector to foreign banks is certainly a step ahead towards greater liberalization.

The four banks have completed the process of local incorporation in China early this month, as made compulsory by the government before they can offer retail yuan-denominated services to mainland clients. HSBC Bank has said in its official communique that it obtained confirmation from the China Banking Regulatory Commission (CBRC) to begin providing yuan services to Chinese citizens initially in five cities, including Beijing, Shanghai, Shenzhen, Tianjin and Qingdao.

The arrival of foreign banks into the long protected local market has evidently been a slow process. However it gained momentum following the terms of China’s 2001 entry into the World Trade Organization. Earlier, the banks were restricted to handle foreign currency services and in some cases Chinese currency services for corporate customers. Anticipating the role of foreign banks in finance retail sector inevitable, state-owned local banks have been speeding up to restructure and forming alliances with foreign partners as they work on upgrading services, technology and management.

Zhu Min, a vice president of Bank of China has recently said, ‘Competition in the next five years will be very intense ... foreign banks will participate in services like yuan lending, yuan deposits, credit cards and retail lending’.

Foreign banks are very excited to offer loans, mortgages and credit-card services in the local currency to stimulate growth in the $5.1 trillion industry. According to rules that took effect late last year, foreign banks functioning in China must incorporate locally to offer bank cards and mass-market banking services in yuan. Moreover, eight other overseas banks have already received regulatory approval to prepare for local incorporation, according to a statement from China’s banking regulator.

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The chairman of German industrial giant Siemens, who is embroiled in a major corruption scandal, has finally decided to resign. Heinrich von Pierer has announced that he will step down next week after a board meeting. Siemens is currently engulfed in a huge slush-fund scandal, in which prosecutors have alleged that company managers drained off hundreds of millions of euros (dollars) in company money to get hold of foreign contracts. For several days Pierer, chairman of the board at Siemens, had been resisting possibility of stepping down over the seemingly never-ending series of corruption scandals that have been gripping the firm. However, on Thursday he finally succumbed to the growing pressure from within the company itself.

The departure marks an ignominious end to the career of one of Germany’s leading businessmen, who not only rose to the top of the German industrial giant but acted as an adviser to two successive chancellors. The scandals have ruthlessly smashed Siemens’ impression and status as most of the alleged corruption took place during his tenure as chief executive from 1993 to 2005. These involve alleged bribery and the alleged financing of a rival to its main union.

Prosecutors have charged that the employees concerned are suspected of collaborating to open slush fund accounts abroad and of operating a system to misappropriate firm’s money. Though the exact sum lost is fraud can not be ascertain as of now but prosecutors put the sum held in the accounts at €200 million and some of that money may have been used as bribes to acquire contracts abroad. The firm itself stated that it had discovered as much as €420 million in doubtful payments and its current chief executive Klaus Kleinfeld is spear-heading a determined anti-corruption drive within the company.

Von Pierer had been long refused to step down as supervisory board chief, even when the current corruption scandal snowballed. He has refused his involvement in any personal wrongdoing. He conveyed the group’s annual meeting in January of his ‘deep distress’ that his efforts to make certain full compliance with corporate government codes had visibly failed.

Sitting on the number two position on Siemens’ supervisory board, Deutsche Bank chief Josef Ackermann, has insisted that von Pierer’s ‘personal integrity is beyond any doubt. And this integrity is once again being proven by the step he has now taken.’

In the meanwhile, Pierer lashed out at prosecutors’ investigations into twin scandals at the German engineering group, saying he failed to understand the ‘disproportionate’ decision to arrest a senior executive last month. While highlighting that he was not under suspicion or charged of anything, he also criticized some media and unnamed people for damage the presumption of innocence of other people.

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Mortgage finance giant Freddie Mac has decided to buy as much as $20 billion in mortgages to help borrowers with high-priced loans stay on their survival course. Freddie Mac, the US mortgage finance provider, said that it would offer backing for up to $20 billion in mortgages to aid distressed subprime borrowers. Richard Syron, chief executive of the government-chartered group, has further said that the offer was aimed at assisting borrowers who would ­normally qualify for fixed-rate loans.

The offer also substantiates the fact that it would ensure lenders that there will be financing available if they move borrowers from high-risk subprime loans to traditional mortgages. The announcement was made after federal regulators urged lenders to work with anxious borrowers unable to meet payments on high-risk mortgages to help them keep their homes.

The new products to be offered by Freddie Mac are expected to be available by midsummer. The product will include fixed-rate mortgages and adjustable-rate mortgages with longer fixed-rate periods before retuning to higher rates. Syron further added that some particulars of the new mortgage purchase program still must be worked out with the company’s federal regulator.

The announcement has also mounted pressure on banks to offer distressed homeowners substitutes to foreclosure. In recent times, defaults on home loans to subprime borrowers have increased considerably revealing a loosening of lending standards in the past two years and compelling more than 20 small subprime lenders to close their business.

Freddie Mac’s decision came after its core rival Fannie Mae introduced earlier this week a similar campaign, which plans to allow lenders to qualify more subprime borrowers for refinancing. Moreover, the main thrust of the recent announcement is that if more disturbed borrowers could refinance their homes, they would not lose them, and if investors like Freddie Mac are prepared to buy these loans, lenders would be keen to make them.

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The US Education Department announced to suspend lenders’ access to a government database that contains the personal financial information of millions of student aid applicants. The department was acting on concerns that loan companies or other marketers were inappropriately obtaining confidential personal information on potential borrowers. The move can be well translated as strongest reaction to a widening student loan scandal that has already drawn in loan companies and caused several universities to put their financial aid administrators on leave and review their dealings with lenders.

The temporary restriction was imposed when it was reported that some companies were found to have searched the data in ways that violate federal rules and on concerns raised about data mining and abuses of privacy of the 60 million students in the system. In a letter sent to the chairman of the Senate education committee, Education Secretary Margaret Spellings has said that the department and its inspector general will investigate unauthorized access to the database, known as the National Student Loan Data System.

Education Secretary Margaret Spellings also informed the chairman that the agency had blocked 246 users from the student loan industry thought to have engaged in inappropriate searches and thousands more deemed unqualified for access after previous security reviews. However, Department officials were already seeking the possibility to shut down access to the database for months, which contains sensitive personal and financial information.

The temporary shutdown will prevent lenders, loan holders, guaranty agencies and other industry-connected users from the database. But agency officials maintain that it would not affect students or schools. The department will also work to minimize any disruption in service, informed Spellings.

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The US Supreme Court in a path breaking ruling held that units of national banks were largely exempt from state regulation. The decision has infuriated critics who argue that it would further wear away the ability of California and other states to enforce consumer-protection laws. The 5-3 decision concerned a legal dispute between the state of Michigan and Wachovia Corp.’s mortgage loan subsidiary. Although consumer groups have said that banks could use the ruling to run an array of enterprises unconnected to banking, and outside the scrutiny of state regulators.

The latest decision has sustained a controversial regulation issued six years back by the Office of the Comptroller of the Currency, the chief federal bank regulator. The attorneys general and bank regulators of all 50 states had pleaded the justices to consider the regulation out of bounds, either as a misunderstanding of the National Bank Act or as a matter of constitutional federalism.

Consumer groups have told the court that a decision supporting the federal agency’s claimed power of pre-emption would supersede state oversight in circumstances when the mortgage-lending industry immediately needed strict supervision. Even though the ruling did not directly involve subprime lending, but it could have a huge impact on the ability of states to act independently on aggressive lending and throws the spotlight on federal authorities. Various consumer advocates were of the view that individual states would be able to step in more quickly than federal legislators or regulators.

As a matter of fact, tensions between state and federal banking regulators have developed since the big bank merger boom of the 1990s. Many of the largest banks, including JPMorgan Chase, had switched from state to federal charters, to some extent to invoke a pre-emption argument against states that had enforced more restraining consumer privacy and other protections in recent years.

The decision by the Supreme Court came after several years of resentful discussion over the role of state regulation in an industry, which is progressively becoming dominated by multi-state national banks with nationally focused businesses, particularly consumer lending. In addition to it, the ruling arrived amid condemnation in Congress in how both state and federal regulators have handled a brewing crisis in the subprime lending market.

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In a move which could increase FDI in the financial sector in Japan the prime minister of the country has asked the financial regulators to come up with measures for relaxing rules with regards to separation of banking and broking businesses. As of now banks in Japan can only own securities business as independent subsidiaries and also have a limit with regards to their operation. If this goes through then it could help in increasing the competitiveness of Japan’s global financial centre.

It is going to offer further flexibility to financial institutions and rather than adopting EU style banking regulations Japan is looking forward to undertake regulation exceeding US standards. Though there are fears that domestic banks might abuse power but the existing policy was hampering the development of financial markets of Japan up till now. The details still have to be crafted out but this move is expected to being Japan at par with other major countries.

Via ft