Russia scales up Trust Bank bailout as crisis bites

MOSCOW (Reuters) - Russian authorities significantly scaled up rescue funds for mid-sized lender Trust Bank on Friday, saying they would provide up to $2.4 billion in loans to bail out the first commercial banking victim of the country's currency crisis.

A sharp slide in the rouble (RUB=) has prompted panic buying of foreign currency in Russia and a spike in deposit withdrawals, heaping pressure on a vulnerable domestic banking sector whose access to international capital markets had already been restricted by Western sanctions over Ukraine.
Trust Bank, which hired actor Bruce Willis as the face of a major advertising campaign, fell victim to the rouble's slide on Monday, when the central bank said Russia would provide up to 30 billion roubles (367 million pounds) to shore up its finances.
On Friday, the central bank said that loan would be replaced with another for up to 99 billion roubles over 10 years via the Deposit Insurance Agency, a state corporation, to cover the discrepancy between Trust Bank's assets and liabilities.
As much as 28 billion roubles will also be loaned over six years to Otkritie bank, which will oversee Trust Bank's rescue, making this the second-largest bank bailout in Russia's history.
Last Friday Russia's lower house of parliament hastily approved a draft law to give the banking sector a capital boost of up to 1 trillion roubles, which banks are expected to receive from early next year.
The funds earmarked just for Trust Bank - Russia's 32nd largest lender by assets according to Interfax data - are equivalent to almost 13 percent of that figure.
Analysts said the bailout showed the central bank wanted to shore up confidence in the banking sector and that Otkritie would benefit from overseeing the rescue by receiving a cheap liquidity boost.
The central bank has also launched a drive to clean up the banking sector and has revoked the licenses of over 100 banks since the beginning of last year, bringing the total number of licensed banks in Russia below 1,000.
With Russia's economy taking a nosedive, the pain for its banks seems certain to continue next year as consumer spending and earnings shrink.
The rouble rose on Friday to its strongest levels in more than three weeks after the government ordered exporters to sell some of their hard currency revenues. But the currency remains down 38 percent against the dollar this year.

Trust Bank's bailout is now Russia's largest behind the 2011 rescue of Bank of Moscow, which cost the government almost 400 billion roubles.

(Reporting by Alexander Winning and Vladimir Soldatkin; editing by John Stonestreet)

Culled from Reuters

Brent holds above $60, but heads for fifth weekly drop-By Henning Gloystein

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A worker cycles past a petro-industrial complex in Kawasaki near Tokyo December 18, 2014. REUTERS/Thomas …

SINGAPORE (Reuters) - Brent crude futures held above $60 a barrel on Friday as strong U.S. economic data supported the market, but oil prices were track for their fifth straight weekly decline as a building supply glut capped gains.
On the supply side, data suggested an increasing glut as U.S. data showed crude inventories unexpectedly rose by 7.3 million barrels last week to their highest December level on record. Analysts had expected a seasonal draw. [EIA/S]
Yet on the demand side there was price supporting data as the U.S. Labor Department said weekly jobless claims fell for the fourth straight week and the Commerce Department's final estimate of U.S. third-quarter economic growth indicated the quickest pace in over a decade.
Front-month Brent crude prices were trading at $60.50 at 0319 GMT, up 26 cents, while U.S. WTI's front-month contract was up 32 cents at $56.16 a barrel in thin trading as many countries were still on Christmas holiday.
"Prices seem adamant on staying above support levels, and it seems they will hold for this festive season," Singapore-based Phillip Futures said on Friday in a note.
"Normally, positive stockpile data of this magnitude would surely have broken support levels. However, it seems there is not enough downward pressure to keep prices down," it said.
"We continue to attribute this to the short-covering at the end of the year as oil bears close out positions to celebrate the New Year," Phillip Futures added.

Uncertainty around whether Brent can hold above $60 or not and lower liquidity toward the end of the year meant that price volatility has risen to levels this month last seen in 2012.

Brent is down more than a percent for the week, while U.S. crude was heading for a smaller 0.7 percent drop.

(Editing by Himani Sarkar)

Culled from Reuters

Merry Christmas and a prosperous new year

 

Merry Christmas and a prosperous new year, may the joy of Christmas brings peace, good health, love and prosperity.

REGINALD ODUNZE.COM

Why oil prices could go even lower-Lawrence Lewitinn

Stronger-than-expected economic data may cause some investors to take a more positive stance on oil. But even though crude has recently experienced a few positive sessions, crude’s collapse isn’t necessarily over just yet.
The U.S. Commerce Department bumped up annualized third-quarter growth numbers to 5.0 percent from a previously reported 3.9 percent. That revision led traders to buy oil contracts soon after, on the expectation that a roaring economy will mean more demand for energy to keep engines humming. Though crude oil dropped soon after, the commodity finished Tuesday’s session with a 3 percent gain.
Still, while America’s economy may be ticking up, the same cannot be said for much of the world. And on the supply side of the equation, Saudi Arabia continues to pump out oil in an effort to maintain market share despite rising North American shale oil production.
“Globally, the expectation is that demand is falling, and that demand will continue to fall,” said Gina Sanchez of Chantico Global. “And we still see enormous amounts of supply continuing to come on. As long as you have that situation, it’s going to be really, really tough to sustain a balance in oil.”
Saudi Arabia will continue its policy for the foreseeable future, maintains Sanchez. And as a result, oil “is going to be weak for a while,” she predicted.

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The technicals are pointing to a “relief rally” in oil, according to Craig Johnson, senior technical research strategist at Piper Jaffray. However, he doesn’t see such a rally lasting long. Johnson’s chart of crude shows that after breaking below a four-year consolidation range, oil is now coming up to what he sees as an area of support between $55 and $58 per barrel.
“That’s a good spot where you can find a bit of a relief rally,” said Johnson, who is also the president of the Market Technicians Association. “After that, you’ve got support at about $45 to $55 as a big zone of support.”
If the massive U.S. dollar rally pauses, Johnson expects oil prices to get an extra bounce off its support levels. A stronger dollar tends to bring down the price of oil.
Yet Johnson anticipates that any such bounce will only be temporary. “If you look forward over the next year for oil, it’s going to be lower.”

Culled from CNBC in yahoo Finance

The Facebook for the home improvement community: Porch

That home renovation project just got a little bit easier thanks to Matt Ehrlichman, ceo, of Porch, the online network that matches homeowners with professionals to plan and execute home improvements without the pitfalls that so often sabotage a project. “Porch is really all about the data. We have built this massive home network,” explains Ehrlichman which includes 2.8 million professionals and 120 million finished projects. “We exposed that to homeowners so they can actually see the professionals their neighbors have used.”

While Porch is free for homeowners, the service is hoping to profit from its growing network of contractors which jumped over 86% in 2014. “We give professionals an option to have a free profile or they can upgrade to a premium placement where they not only get more exposure but they get really deep insights to all the data Porch has organized.”

Part of Porch’s success has come from strategic partners including Lowe’s (LOW). “We have rolled out access across all of their 17,000 stores, 250,000 associates in the stores really want to help the customers be able to make sure they get their projects done.”

Ehrlichman’s idea struck a chord with the team at USA Today who recently named him their inaugural Entrepreneur of the Year beating out 10 other finalists. 

Culled from yahoo Finance

Now Romania Sets Its Sights On Becoming Tech Startup Capital Of Europe-Allison Coleman

 

It has the highest number of technology workers per capita, close to 64,000 specialist IT workers, and counts Avangate and UberVu among its most recent exit successes.

These factors, combined with an enviable tax regime; as low as 0% for IT workers, have conspired to help create one of Europe’s hottest start-up scenes; Romania.

Now the country’s tech hub is drawing serious international attention, and according to one Romanian entrepreneur, Florin Cornianu, CEO and co-founder of 123ContactForm, within two years it will be seen as a true rival to London as the hotbed of European talent.

“In Romania, people are used to starting with nothing and growing something from that. We’ve had no government initiatives to help us set up our businesses,” he says. “But now number of elements are coming together, including recently exited entrepreneurs becoming angel investors and VCs to help other founders grow their companies.”

What is emerging is a strong culture of programming, innovation and incubation. A number of highly rated universities in cities such as Bucharest, Timisoara, Cluj, Iasi, and Constanta provide a regular source of talented people and drive tech innovation.

“We have also seen an influx of major corporations which inspire, partner with and buy from start-ups, and also offer a safety net for entrepreneurs with paid employment opportunities,” said Cornianu.

The Romanian start-up ecosystem now boasts numerous incubators, co-working spaces and dedicated events to help emerging entrepreneurs. The largest dedicated tech conference in Eastern Europe, HowToWeb5, is held in Bucharest.

However, Cornianu insists that the Romanian start-up scene has always had a global outlook. It had to, he says, in order to succeed.

“It makes business founders resilient, teaches entrepreneurs not to rely on handouts or support, and encourages greater achievement,” he says. “We are now seeing an increasing number of successful businesses growing out of this environment.”

123ContactForm, which enables people in any location to build any kind of web form with no programming knowledge, is a case in point. Bootstrapped in 2008, it has experienced 100% year-on-year growth since its formation and added close to 200,000 new customers in 2014 alone.

Half of its paying users come from the US, which represents around 40% of its overall users. The UK is home to 5% of its free users and 6.5% of its paying members.

“It is possible to be successful without large investment, but it does take hard work,” he says. “The most important thing is to build and scale the right team – and to keep an international outlook. At first, it might have been a disadvantage for us to be from Romania, but now it is an advantage as we expand our great team.”

Other Romanian tech trailblazers include ThePoleSociety.com which offers a mobile application for finding information and promoting special events, and this year launched in Brazil.

Twotap.com, launched earlier this year, is an automated checkout solution that allows consumers to buy any product from any retailer on any mobile app or website. In August it secured a $2.7 million seed round from some high profile investors, including Khosla Ventures and Green Visor Capital.

Renderstreet.com and Moqups.com are also making progress in overseas markets, while one to watch is VisionBot, a pick and place robotic machine designed by a maker for makers to place surface-mount devices (SMDs) onto printed circuit boards (PCBs), affordably.

It promises to solve one of the biggest challenges for electrical engineers, makers, hackers, and hobbyists; the huge costs of turning their electronic prototype into an industrial product. Visionbot creates a manufacturing line for turning prototypes into industrial products that are in medium-quantity.

London’s Silicon Roundabout may have had the lion’s share of attention as a tech capital, but as it becomes increasingly saturated, other European locations are vying to offer the start-up appeal that even Silicon Roundabout can’t match, the tech capital of Europe could soon be much further east than East London, says Cornianu.

“The future is definitely bright for the Romanian start-up scene,” he said. “The number of people involved in start-ups is growing every year, more and more kids are showing an interest, and of course we’re creating more successes. The more of those we have, the better our chances of taking on London, Berlin, and yes, even Silicon Valley.”

Culled from Forbes

Holiday Returns Scammers to Cost Retailers Billions -Phil Wahba

In a week from now, disappointed Christmas revelers across the United States will start heading back out to stores to return items like the hideous sweater Aunt Martha gave them for something they really want: cash or another item. It’s a timeless tradition that is part and parcel of the way Americans celebrate the holidays.
But countless scammers will insinuate themselves within the hordes, many of them working as part of organized crime rings, and commit fraud that will deprive U.S. retailers of $3.6 billion in sales at a time they are fighting hard for any penny of revenue they can get. That number is up sharply from $2.9 billion just two years ago. In fact, the National Retail Federation’s return fraud survey of executives at 60 leading retailers this fall found that about 5.5%, or almost one in twenty returns, is the work of a con artist.
“Return fraud has become an unfortunate trend in retail thanks to thieves taking advantage of retailers’ return policies to benefit from the cash or store credit they don’t deserve,” said NRF Vice President of Loss Prevention Bob Moraca.
The crooks resort to all sorts of methods, from counterfeit receipts, including electronic receipts, to recruiting store associates to do an inside job. In fact, 78.2% of the surveys respondents have experienced return fraud by organized crime groups, compared to 60.3% last year. And more of the fake returns now stem from fraudulent or stolen payment methods, the survey found.
Retailers in recent years have had to loosen return policies to ease one of the most frustrating parts of shopping and win customers from rivals, by making it easier to get a return without a receipt and easing conditions. But that left an entry point for crooks. But now more stores are asking customers to produce identification when returning merchandise, the survey found.
All told, $3.6 billion is not all that big a chunk of change considering that the NRF is forecasting retail sales will rise 4.1% this holiday season to $616.9 billion. (For the full year, returns fraud is expected to cost the industry $10.9 billion.) But the upward trend is worrisome, and with retailers from Wal-Mart Stores and Target to Macy’s and J.C. Penney forecasting tepid growth this quarter, the profit-sapping rise in fraud deprives them of much needed sales and profits.

Culled from Fortune magazine

Oil price fall not Opec's fault, Gulf ministers say

Saudi Arabia's Oil Minister Ali al-Naimi said falling prices were not good for the country, but would help stimulate global economic growth

Oil-rich Gulf states have vowed not to cut crude production, blaming speculators and producers outside the Opec group for tumbling prices.

Saudi Arabia's Oil Minister Ali al-Naimi said "the spread of misleading information and speculation" had contributed to the 40% price fall.
Speaking in Abu Dhabi, he also dismissed claims of a Saudi plot to push prices down for political goals.
Ministers from Kuwait and the UAE also said there were no plans to cut output.
Mr Naimi said that if producer countries outside Opec wanted to restrict output, "they are welcome".
"We are not going to cut, certainly Saudi Arabia is not going to cut."
Kuwait's Oil Minister Ali al-Omair said Opec did not need to cut production and would not consider an emergency meeting.
"I don't think we need to cut. We gave a chance to others (and) they were not willing to do so," he said during the conference in Abu Dhabi on Sunday.
In November, Opec decided to keep its target output of 30 million barrels per day unchanged, leaving the market to balance itself without the group taking action.
Price rise? In the past Saudi Arabia, the world's largest producer, has acted to rein in output to support prices.

The decision not to intervene this time prompted conspiracy theories, including that Opec wanted to undermine the US shale boom and that there was a political plot to reduce oil revenues earned by Russia and Iran.
Mr Naimi denied that politics played a role in the kingdom's oil policy. He said he was not happy about the falling oil price, but added: "Current prices do not encourage investment in any form of energy, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies."
Meanwhile, Opec's Secretary-General Abdullah al-Badri told Reuters news agency on Sunday he hoped to see a recovery in the price of oil by the end of next year.
"We hope the price would rebound by the end of the second half of 2015," he said. "We can't see the market now, we have to wait until the end of the second half of 2015 to see how the market react to these low prices."
The world is expected to need less Opec oil next year as the US shale gas boom accelerates.

Culled from the BBC

North Korea's Sony hack: 'Effectively an act of war' says Blodget- Joanna Campione

Update: Sony Pictures "made a mistake" in pulling The Interview, President Obama said in his year-end press conference Friday. “We cannot have a society where some dictator someplace can start imposing censorship here in the United States. Because if somebody’s going to intimidate them for releasing a satirical movie, imagine what’s going to happen when there’s a documentary they don’t like?"

Earlier: The Federal Bureau of Investigation has officially named the North Korean government responsible for the major security breach and cyber attack at Sony Pictures. The FBI was able to make the determination in part through technical analysis of the malware used in the attack.

In a statement released Friday afternoon, the FBI said, “We are deeply concerned about the destructive nature of this attack on a private sector entity and the ordinary citizens who worked there.” The release went on to say, “Cyber threats pose one of the gravest national security dangers to the United States.”

The FBI statement echoed Homeland Security Secretary Jeh Johnson who on Thursday called the hack on Sony Entertainment “very serious.” Johnson said the Obama administration is considering “a range of options” in response to the attack.

“Our government has been slow to respond given the magnitude of this,” says Yahoo Finance’s Henry Blodget. “If it was state-sponsored in any way, it was effectively an act of war on a U.S. asset. We have not defined that as an act of war but going forward we probably should.”

Now that North Korea has been identified as the responsible party, corporations can go back to wringing their hands over what the big picture is:  This may be the beginning of a new wave of attacks. Attacks that could take out a company or in more severe cases, cripple the entire financial system or the broader economy.

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Blodget says it’s “open season” now and what comes next could affect far more people and entities. “It’s not just they get some credit card numbers which we’ve been seeing forever. But they actually get into the money” at large corporations and banks. That sort of hack could be devastating.

It would make stealing credit card data and personal email addresses—like in the Target and Home Depot hacks-- seem like child’s play. The Sony breach exposed a new and deeper threat. It wasn’t about stealing credit cards to resell them on the web, it was about taking down a company. Sony cancelled the release of "The Interview." And that's a financial hit for sure. But the hack also left employees scared and exposed, stealing and exposing healthcare information, employee e-mail addresses and e-mails involving private information about clients.

Blodget says what was further unsettling about the Sony attack is that it wasn't a particularly sophisticated hack. “We’re only now beginning to understand how this was done,” he says. “And we don’t really know, but the early indications are it’s not that complicated. It takes focused, intelligent, talented work, but not mysticism or huge internal spies.”

Blodget believes attacks against corporations are going to be more and more common. “I think that Silicon Valley is waking up and saying maybe we should be putting everything in email,” he says.

He says it will also bring into question storing sensitive data in a cloud. “Corporate America for the last several years has been saying 'Ah the cloud is dangerous, we don’t control it.' And now we think about it—who do you want to controlling it?”

Culled from Yahoo Finance