Sunday, October 16, 2011

Noam Chomsky

All over the place, from the popular culture to the propaganda system, there is constant pressure to make people feel that they are helpless, that the only role they can have is to ratify decisions and to consume.
Noam Chomsky 

Announced Job Cuts in U.S. More Than Triple From Year Ago

U.S. employers announced the most job cuts in more than two years in September, led by planned reductions at Bank of America Corp. (BAC) and in the military.
Announced firings jumped 212 percent, the largest increase since January 2009, to 115,730 last month from 37,151 in September 2010, according to Chicago-based Challenger, Gray & Christmas Inc. Cuts in government employment, led by the Army’s five-year troop reduction plan, and at Bank of America accounted for almost 70 percent of the announcements.
While the bulk of firings are not “directly related” to economic weakness, they “could definitely be a sign of more cuts to come,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Bank of America is not the only bank still struggling in the wake of the housing collapse, and the military cutbacks are probably just the tip of the iceberg when it comes to federal spending cuts.”
More reductions will add to the pool of job seekers competing for work as policy makers, including President Barack Obama and Federal Reserve officials, strive to spur the labor market. Payrolls probably didn’t rise fast enough last month to lower the jobless rate, according to a Bloomberg News survey of economists before the Labor Department’s monthly jobs figures in two days.
Compared with August, job-cut announcements climbed 126 percent, the Challenger report showed. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
Government agencies announced 54,182 reductions in September. Of those, 50,000 resulted from the troop reductions announced by the Army, Challenger said.
Financial Companies
Financial companies announced 31,167 cuts, the second most layoffs. Bank of America, the biggest U.S. lender by assets, said on Sept. 12 it will eliminate 30,000 jobs in the next few years as part of Chief Executive Officer Brian T. Moynihan’s plan to bolster profit. The reductions, equal to about 10 percent of the staff, are part of an overhaul that aims to remove about $5 billion in annual costs by the end of 2013.
Today’s report also showed that employers announced plans in September to hire 76,551 workers, up from 15,201 the prior month, while down from 123,076 in the same month last year. Retailers led the gains, planning to add 70,912 positions ahead of holiday.
September Employment
Employers probably added 60,000 jobs in September as the unemployment rate held at 9.1 percent, according to the median forecast in a Bloomberg News survey of economists ahead of the Oct. 7 Labor Department figures.
The Fed ‘will continue to closely monitor economic developments and is prepared to take further action as appropriate to promote a stronger economic recovery in a context of price stability,” the central bank’s  said yesterday in testimony to Congress.
“Recent indicators, including new claims for unemployment insurance and surveys of hiring plans, point to the likelihood of more sluggish job growth in the period ahead,” he said.
Challenger’s data do not always correlate with figures on payrolls or first-time jobless claims as reported by the government. Many job cuts are carried out through attrition or early retirement. Some employees whose jobs are eliminated find work elsewhere in their companies and many announced staff reductions never take place because business improves. The totals also include foreign affiliates.

India gold ETF demand likely to explode: World Gold Council

MUMBAI: Demand for gold exchange traded funds(ETF) in India is likely to "explode" as investors get accustomed to "click-and-park" mode of investing, shying away from sagging stock markets and as high inflation eats into bank savings, a trade body head told Reuters on Thursday. 
"Clearly people are seeing convenience in the form of ETF, going through the same broker which he has for equities," said Ajay Mitra, managing director - India and the Middle East, World Gold Council (WGC). In the last four years, volumes in gold ETFs have grown over 164 percent. Mitra said another reason for the attractiveness of paper gold is that unlike in jewellery there are no intermediate costs. Currently, volume in gold ETFs in India, the world's largest consumer of bullion, is more than 15 tonnes-minuscule compared with the country's annual physical gold demand of 900 tonnes. Gold prices in India have gained 29 percent since the start of the year, compared with just 15 percent gains in the stock market. The WGC is working on a number of gold-based investment products, but they are still at the "concept stage". "It is still work in progress. The government is looking at various options to fund the economy," said Mitra. He, however, declined to give details. The council expects gold prices on India Multi Commodity Exchange to stabilise in between 27,000 rupees and 28,000 rupees ($549-$569) per 10 grams in October. This will boost demand during Dhanteras, the biggest gold buying festival, along with Diwali. "There has been marginal build-up (in inventory) but September has also been bad month from volatility point of view," said Mitra. With volatility at 21 percent, retailers had not stocked up, while other consumers were "not sure if tomorrow's price is better than today". OPTIMISTIC Outlook for gold in India is bright for the festival quarter during Oct-Dec due to the latent demand, Mitra said. "The trade is optimistic that we will see a better Diwali this year... but they are still a little sceptical of the volatility in prices and they want volatility to ease off a bit. Demand is there and price is not the factor as consumers are aware of the returns that gold has given," said Mitra. India gold demand rose 37 percent to 284.9 tonnes in the last quarter of 2010. "There is latent demand and the conditions are conducive for cause and case for gold. As inflation rate is high, real interest rates is negative," Mitra added. India's food price index rose 9.32 percent and the fuel price index climbed 15.10 percent in the year to Oct. 1. The stubborn inflation has prompted the RBI to raise interest rates a dozen times in the past 18 months and its key policy rate stands at 8.25 percent. The WGC said the flow of scrap, which is the raw material for gold refiners in India, has dried up. "Indian refineries will have to find some other business or some other way to value add to that business," said Mitra.

'Life insurance is India's pet investment'

New Delhi: Life insurance products are the hot favorite of most urban Indians as an investment option and they are likely to earmark over half of their investable income for these products in future, says a study by market research firm Nielsen.

According to Nielsen's study on the life insurance sector and investment patterns, 'LIFE 2011', a little over 60 per cent of urban Indians hold insurance policies, which are likely to account for a large share of their future investments as well.
A look at the shift in investment habits over the last two years indicates that people are returning to fixed investment products, while investment in risky categories like equity is on the decline.
The study said that Indians, in practice, remain "risk averse" and the main drive behind an urban Indian's investment is returns, followed by unforeseen emergencies and child education.
"Given the recent volatility in equity markets and rise in commodity markets, urban Indians, being traditionally risk averse, are returning to safer, more traditional investment products like life insurance, given the tax benefits and limited risk associated with the product," Nielsen Head - Finance Practice Subhash Chandra said.
As per the study, there is a sizeable opportunity waiting to be tapped. The young investor segment accounts for nearly a fifth of the population and most of them currently do not hold a life insurance policy. This space is the also the most enthusiastic to invest in life insurance in the immediate future.
"With the youth entering the workforce at high salaries these days, the young investor segment is a huge opportunity for most financial service organisations. Coupled with the historical acceptance of life insurance as a safe investment and the added tax benefits that it provides, life insurance seems to have retained favour with even the young investors," Chandra added.
There is also an opportunity to expand coverage by way of additional policies, as around 16 per cent of life insurance holders are open to investing in a new policy within the next six months.
"While in the short-term, marketers can look at ensuring conversions from this segment, the long-term opportunity for life insurance marketers lies in increasing dual policy ownership. Hence, marketers need to promote the benefits of opting for a second policy to current policyholders," Nielsen Finance Practice Head Insurance and Investments Anand Parameswaran said.
Indians are still not open to making insurance purchases over the internet, going by the response of current policyholders, Neilsen said.

External Debt

Monday, October 10, 2011

Delayed settlements only to those who withold info: HDFC Life

Mumbai: Private insurer HDFC Life, which has been penalised by the regulator Irda for delayed settlements, today said it clears all claims on time unless there is a non-disclosure of material facts and that in all such cases it pays penal interest to the affected party.

"HDFC Life has a philosophy of paying all claims (on time) unless and until there is a non-disclosure of material fact or a fraud against the company (claimant). We have a practice of investigating such claims, which involve additional information," the company Chief Executive Officer, Amitabh Chaudhary, said in a statement here.
"However, HDFC Life pays penal interest for compensating policyholders as specified in the regulations, wherever these delays take place," he stated.
The delay in investigation in cases, which were part of the showcause notice by Irda, was due to non-cooperation of the claimants, hospitals or other public authorities to provide the requisite information or evidence, he said.
Earlier in the week, the regulator had imposed a penalty of Rs 5 lakh on HDFC Life for delaying settlement of claims and has asked the insurer to streamline its processes.
The watchgod had also directed the insurer "to put in place (within 15 days) effective claim settlement procedures and take all such measures that deem fit for both pro-active and timely settlement of all types of claims."
The order was issued on a complaint filed with the Insurance Regulatory and Development Authority (Irda) in April 2009 for delay in settlement of death claims by HDFC Life.

Reliance Cap completes stake sale in Reliance Life to Nippon

Mumbai: Seven months after announcing a 26 per cent stake sale in Reliance Life Insurance to Nippon Life for a consideration of Rs 3,062 crore ($680 million), Reliance Capital completed the transaction on Sunday. This makes the deal the largest foreign direct investment (FDI) in the Indian financial services sector.

Reliance Capital said it received the entire transaction proceeds of Rs 3,062 crore from Nippon Life.
The deal had got the go-ahead from insurance regulator Irda and the Reserve Bank of India in September. Reliance Capital completed the stake sale before the completion of ten years of business. In August, the Finance Ministry issued a circular saying that Indian promoters of insurance companies will not have to wait for completion of 10 years in business to be able to divest their holding.
The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore ($2.6 billion).
Commenting on the development, Reliance Capital CEO Sam Ghosh said that Nippon was coming on board as a valued strategic partner in Reliance Life Insurance.
“Nippon’s vast experience of over 122 years will help strengthen Reliance Life Insurance’s position as a leading and world class insurance company in India,” said Sam Ghosh, CEO, Reliance Capital.
Nippon Life, also known as Nissay, is the seventh-largest life insurer in the world and the largest private life insurer in Asia and Japan.
It posted revenues of Rs 3,49,834 crore and a profit of Rs 12,199 crore for the fiscal year ended March 31, 2011.
Reliance Life started operations in 2005 after the acquisition of a life insurance company by Reliance Group.

Thursday, October 6, 2011

Most Ohio union workers affected by insurance rule

Employees of more than 550 school districts, townships and other government units across Ohio will see their share of health care costs rise if voters approve a collective bargaining law this fall, state data show.
Widespread impact of the provision is fueling arguments on both sides.
Supporters say having employees pay a bigger share of their health care costs will bring them in closer alignment with private sector workers and help balance local budgets. Opponents say the data validate that the union-limiting bill will hurt tens of thousands of average workers around the state, who will be required by the law to spend more on benefits.
An Associated Press review of data kept by the State Employment Relations Board finds that state workers and many county and health-district employees already pay more on average than the 15 percent share that will be required under the law. About 77,000 of Ohio's 360,000 unionized government workers are in state and county government.
Unionized township and fire district employees pay the lowest percentages toward health insurance on average, between 2.2 percent for employees of the smallest townships and 5.6 percent, the board's data show. That means those employees would see the biggest jump in costs in their health care premiums if November's Issue 2 passes.
School district employees -- not only teachers, but janitors, bus drivers, cooks and others -- are contributing 9.5 percent toward individual health insurance coverage and 11 percent toward family coverage on average, data show. City employees' contributions average around 8 percent, while college and university employees' contributions average about 13 percent.
Ohio Education Association spokeswoman Michele Prater said the averages mask a trend toward unions agreeing to pay larger shares of their health care and pension costs around the state, often alongside a pay cut or freeze. In other words, half of Ohio's 196,000 school district employees are already paying above the average for their sector, and half less.
Prater pointed to suburban Columbus' Southwestern Schools, where employees contribute between 28 percent to 35 percent toward health care and make $38,000 a year on average. Licking Valley Local Schools employees pay nearly 36 percent toward health insurance and make $31,000 a year on average, she said.
The health care provision of Senate Bill 5, signed by Gov. John Kasich in March, has been characterized in statewide advertising by Building a Better Ohio, the campaign defending the sweeping law, as a nod to basic fairness. The campaign's commercial also includes a reference to the bill's requirement that union workers will have to pay at least 10 percent toward their pensions.
Jason Mauk, a spokesman for the "vote yes" campaign, said private sector employees are already paying more than 15 percent toward their health care on average.
"The disparity between the public and private sectors, particularly in the area of health care, is financially unsustainable," he said. "You have some government employees in Ohio who pay nothing for their health care and you have private sector employees who are paying on average between 25 and 31 percent. That's an issue of fairness, and certainly an issue of affordability."
Melissa Fazekas, a spokeswoman for We Are Ohio, the campaign seeking to repeal Senate Bill 5, said health insurance contributions are just one small part of a voluminous, dangerous bill.
"Issue 2 fundamentally takes away the collective bargaining rights of hard-working Ohioans," she said. "It is a flawed bill that is unfair and unsafe for firefighters, police officers, teachers, nurses and our communities."
Opponents of the bill emphasize that union contracts around the state contain salary and benefits packages that were bargained in good faith and should not be negated by the state legislation.

IRDA slaps Rs 5 lakh fine on HDFC Standard Life

Insurance regulator IRDA on Wednesday imposed a penalty of Rs 5 lakh on HDFC Standard Life for delaying settlement of claim and has asked the insurer to streamline its processes."Considering the nature of the violation, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs 5 lakh on HDFC Standard Life Insurance," the IRDA said in its order      It has also directed the private life insurer "to put in place (within 15 days) effective claim settlement procedures and take all such measures that deem fit for both pro-active and timely settlement of all types of claims."The order was issued on a complaint filed with Insurance Regulatory and Development Authority (IRDA) in April 2009 for delay in settlement of death claims by HDFC Standard Life. Upon investigation the insurance regulator found that HDFC Standard Life did not have the effective mechanism to comply with the IRDA regulation for settlement of claims."On examining the documents and submissions of the Life Insurer it is observed that the Insurer did not have in place effective procedures to comply with the above regulation," IRDA observed.  

RBI OK's Reliance Cap's RL stake sale

Mumbai: The Anil Dhirubhai Ambani Group's (ADAG) financial services arm Reliance Capital today said it has received approval from the Reserve Bank of India (RBI) for its proposed 26 per cent stake sale in Reliance Life Insurance to Japan's Nippon Life.

The company had signed a definitive agreement to sell a 26 per cent stake in Reliance Life Insurance to Nippon Life Insurance for Rs 3,062 crore earlier this year. The deal was subject to regulatory approvals.
The Insurance Regulatory Development Authority (IRDA) has already granted in-principle approval for the proposed stake sale. Following RBI clearance for the deal, IRDA will now grant final approval for completion of the transaction, Reliance Capital said in a filing to the Bombay Stock Exchange.
Commenting on the development, Reliance Capital CEO Sam Ghosh said, "We are delighted to receive the RBI approval, bringing us closer to concluding this transaction very shortly."
"This is great news as we move closer to completing the transaction," Nippon Life Insurance President Yoshinobu Tsutsui said.
This transaction pegs the total valuation of Reliance Life Insurance at around Rs 11,500 crore.
Nippon Life is a 122-year-old Global Fortune 100 company and the seventh largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
R-Cap figures among the country's top-four private sector financial services and banking groups in terms of net worth.