Guest Speaker: The Honorable Sandra Pupatello

The Canadian Business Council is pleased to invite you to attend a luncheon

Monday, October 6th, 2008
12:30 - 3:00 pm
Le Royal Meridien Hotel (Khalifa Street) Abu Dhabi
Cost - 200 AED/Member
250 AED/Non Member
Corporate table of six 1200 AED
Corporate table of eight 1600 AED
Guest Speaker: The Honorable Sandra Pupatello
Minister of International Trade & Investment/Province of Ontario

Prepayment is kindly requested by October 5th, 2008 (information below)

The Province of Ontario continues to promote global trade and help Ontario firms grow and prosper through the International Trade Branch of the province's Ministery of Economic Development and Trade. Ontario's trade professionals bring their expertise to assist Ontario companies develop export strategies in specific geographic and market sectors by facilitating the connection between foreign and Ontario companies and be promoting Ontario goods and services in their geographic sectors, including the Middle East.

Please welcome Minister Pupatello and her distinguished delegation to Abu Dhabi by attending this luncheon. We look forward to seeing you on October 6th!

Please confirm your attendance no later than Thursday, October 2nd, 2008. To register for this event, please go to our website at www.cbcabudhabi.com. For further information, please contact the CBC office @ 02-671-7016 or email: admin@cbcabudhabi.com.

Reserve online hhtp://www.cbcabudhabi.com (News. Prepayment is kindly requested by: October 5th, 2008

FBI investigating major US companies for fraud

FBI investigating major US companies for fraud
Radio Netherlands
Published: Wednesday 24 September 2008 07:41 UTC
Last updated: Wednesday 24 September 2008 07:41 UTC

In the United States, the FBI has launched an investigation into suspected fraud at four major financial institutions. News channel CNN says the recently bankrupted Lehman Brothers company, the mortgage giants Freddie Mac and Fanny Mae and insurance firm AIG are all under scrutiny.

The aims of the FBI investigation include finding out whether the companies made themselves out to be in sounder financial shape than was the case. All four institutions were recently hit by the global credit crisis.

US Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke are pushing Congress to speed up approval of a rescue package for the financial markets. The administration in Washington wants to pump 700 billion dollars into the financial system, but Congress is not convinced the plan is sound.

The credit crisis is also on the agenda of the United Nations General Assembly. At the opening, UN Secretary-General Ban Ki-moon called on members states not only to consider their national interests but also the UN's Millennium Development Goals. These include halving world poverty by 2015.

South Korea is obsessed with qualifications but media reports rank its university education near the bottom of the class

Source - Bangkok Post (Eng)

Monday, June 02, 2008 10:56
South Korea is obsessed with qualifications but media reports rank its university education near the bottom of the class

JONATHAN THATCHER
SEOUL

South Korea's "Wild geese fathers" manage a reunion with their children, and often wives, just once a year after seeing them off for study abroad, invariably to learn in English.

They are, contends a new government zealous to reform, symptomatic of a damaged state education system that forces parents to throw money at private tuition and prevents Asia's fourth-largest economy from leaping to the world's top league.
"The government acknowledges that the lack of English is one of the factors that pulls down the competitiveness this country has," said Education Ministry sopkesman Park Baeg-beom. In the initial enthusiasm after the conservative government won office in December, there were even suggestions of teaching Korean history in English.At least one major south Korean company requires company communication to be in English.

South Koreans, anxious to ensure their offspring are well-schooled, spend around $5 billion a year to educate them abroad-equivalent to nearly 20 per cent of the annual total allocated to education by the government. At more than 100,000, South Koreans outnumber any other foreign student group in the US and the spending at home on private education-mostly to supplement day-time lessons at state school-dwarfs that of most other countries.

It is common to see children, still in school uniform, in the streets and on public transport late at night after a round of private lessons. Often they will be up by dawn for more. The Education Ministry estimates that as a percentage of GDP, South Korean parents spend four times more on average on private education than their counterparts in any other major economy. Everyone seems to agree that the state schooling system, tinkered with for years by successive governments of differing political ideology, falls miserably short of providing the education on which South Korean society places such a high premium.

There is less agreement on what to do about it.

"The collapse of [confidence in the] public education has led to a dependence on private education and that in turn has created more indifference towards the public system," said Park."The fundamental issue is the fact that most people here believe academic achievement determines everything in their lives. There's a cultural perception that academic ranking will make or break their marriage and career."

Such is the obsession with qualifications that at the annual college entrance exams, the military grounds flights for the day and many offices start late so students on their way to the exam hall are not delayed by the normal rush-hour traffic.

But according to a recent study by the Swiss-based international Institute of Management Development which was widely quoted in local media, the value of all this effort is questionable.

According to media reports, it ranked South Korean university education near the bottom of the class in world rankings for meeting the needs of a competitive economy.The new conservative government, which says 10 years of medding by liberal governments has helped dumb down the system wants to introduce school rankings, competition among teacher and to give universities a freer hand in choosing their students.

That, the main teachers union argues, will simply make matters worse and remove any vestiges of a broad education beyond being able to tick the right boxes. "The students might as well be chained to their seats," said Jeong Jin-hwa, who heads the Korean Teachers and Educational Workers Union, the country's biggest, She favours a different approach. "Instead of having them pick one out of five answers, they could be evaluated by plays, presentations and other ways," she said. "We think more creativity needs to be introduced in the classrooms rather than having this emphasis on quantity."

But some educators say teachers themselves must change.

"Many parents leave the Korean school system out of disappointment," said Moon Young-lin, at the Seoul University's education department who seved briefly as an education minister. "The teachers are the key to solving the problem. If the teachers change, things will come back to normal in no time," he said, urging them to accept greater competition.

For the moment, parents are voting with their bank accounts, pumping more and more money to ensuring that their little ones have a chance of rising to the top of the educational ladder and a secure place in society. Kang Ji-hyun sends her five-year-old to an English-speaking kindergarten which costs around $800 (25,700 baht) a month for a three-hour dya, which is fairly average cost for a pre-schooler.
"English is a huge plus for most people who work in Korea. People with better English skills tend to have more opportunities in this society and also have more time to invest their time in other activities.

American Economy: Swimming Naked

paulson bernanke senate banking committee meeting testimony

Canadians have not studied the Daejin University model of overseas branch campus development

"Chapter III, Towards a New Asia-Pacific Policy for Canada" (2003),outlines the Subcommittee's recommendations on steps Canada can take to further develop its economic relationship with the Asia-Pacific region. These are divided into three categories. The first addresses the importance of removing the barriers to trade and investment with the region. The second outlines a number of broad suggestions which, although not directly related to trade and investment, create an enabling environment in which to more effectively pursue closer economic ties. Finally, recognizing that it is the business community that drives trade and investment, the third section examines the role that the federal government can play in helping the Canadian business community succeed in Asia-Pacific."


CHAPTER III — TOWARDS A NEW ASIA-PACIFIC
POLICY FOR CANADA

Education Services

Over the course of the Subcommittee’s travels, by far the most frequent topic of discussion was the opportunities available to Canada in the education services sector. In every country we visited, witnesses spoke unprompted about the potential for Canadian post-secondary institutions to benefit from the large numbers of Asian students seeking western educations.

We repeatedly heard that allowing greater numbers of foreign students from Asia-Pacific to study in Canada would be a good way to promote future trade and investment. Witnesses generally agreed that when those foreign students return to their home country, they take with them knowledge of Canadian institutions, industries, products and expertise, as well as of our culture and the values of Canadian society. Indeed, the Subcommittee met or heard of many high-level government and business leaders — particularly in Singapore and Hong Kong — who were educated in Canada and spoke very highly of their experience.

In some countries, we heard frustration expressed at the small number of students admitted to universities in Canada, while in others, Canada is a major destination for foreign students. Currently, Canada hosts large numbers of foreign students from China and South Korea, but relatively few from India and Southeast Asia. However, most witnesses thought that Canada could do significantly more to attract foreign students from all across the region.

The United States and the United Kingdom (UK) are the long-established destinations for Asian students wishing to pursue a western-style education, while Australia has been very aggressive in promoting itself as a destination for foreign students. The number of such students in Australia has more than tripled since 1990. Australia now has the second-highest proportion of foreign students of any country in the world, behind Switzerland only. By contrast, Canada has not seen any significant growth in the number of foreign students in recent years.

Witnesses were divided as to whether or not Canada should vigorously pursue attracting more foreign students or, alternatively, set up overseas branches of Canadian institutions. Most saw the provision of education services as an industry with tremendous growth potential for Canada. A minority disagreed, however, stating that Australia had already cornered the market for a western-style education in Asia. Many also believed that Australia has a significant advantage in terms of relative proximity to Asia, despite the fact that for countries like Japan and South Korea, Western Canada is no further away. Still other witnesses reminded the Subcommittee of the fact that, as a matter of provincial jurisdiction, it is difficult for the federal government to make policies in matters of post-secondary education.

The Subcommittee is of the opinion that the opportunities for the Canadian education services sector in Asia are significant and should not be overlooked. Not only do post-secondary institutions benefit from the increase in revenues and international profile that foreign students offer, but providing foreign students with a Canadian education forges an indelible link between those students and Canada. These links can help pave the way for future economic and political co-operation.

Recruiters and Employers that I recommend

Recruiters and Employers that I recommend:

Management and Development Institute of Singapore: "The Management Development Institute of Singapore (MDIS), founded in 1956, is Singapore's oldest not-for-profit professional institute for lifelong learning."

The University of North Carolina Greensboro: The University of North Carolina was anticipated by a section of the first state constitution drawn up in 1776 directing the establishing of "one or more universities" in which "all useful learning shall be duly encouraged and promoted."

EF English First: "EF Education is the world's largest private education company that specializes in language training, educational tours and cultural exchange."

Ronnie Boyd and Associates: "Global recruitment firm specializing in energy, technology, and finance sectors."

Singapore Ministry of Education: "The Ministry Of Education directs the formulation and implementation of education policies. It has control of the development and administration of the Government and Government-aided primary schools, secondary schools, junior colleges, and a centralised institute. It also registers private schools."

TELIC Corporation: "Professional, Administrative and Technical Services, Engineering Services, Manufacturing Services"

Globalinkstutors: "Globalinks Tutors is an educational recruitment company that has been providing you with a high level of service for more than 10 years."

Reaction Search: "Executive Search Firm."

MTC Technologies: "BAE Systems."

Talent Asset Group (TAG): "The Talent Asset Group (TAG) LLC. is a minority owned national executive recruitment firm that specializes in delivering best practice recruiting services to client organizations."

More Jobs Updates from Globalinks

More Updates from Globalinks


Company
Verdala International School

Contact Person (position)
Andrew Spinks (Recruitment Manager )

Job Title
Computers + ICT/ Computer Science Teacher

Profession
Computer Studies

Location
Pembroke - Malta

Pay Range
Negotiable

Description
The Verdala International School of Malta is urgently seeking an IGCSE Computers + ICT with IB Computer Science Teacher. Verdala International School is located on the small Island of Malta in the central Mediterranean. It lies half way between Italy and north Africa. The School itself is situated in the district of Pembroke on Malta. This is on the edge of the urban area that extends out to the west of the capital Valletta. The name Verdala comes from the French Grandmaster de Verdale who led the Order of the Knights of St John from 1582 to 1595. Unique amongst educational institutions Verdala International School is housed in an old fort built by the British in the 1880s. The School also has two former barrack blocks that housed British soldiers until Malta became independent in 1964. The School first opened its doors in 1976 as an oil company school. In the 1980s it was reconstituted as Verdala International School. The School has been an accredited US School since 1994 and started offering the prestigious International Baccalaureate Diploma in 1995. The facilities at Verdala International School consist of:
•35 classrooms
•4 science laboratories – 1 general, 1 each for Physics, Chemistry and Biology
•3 computer labs
•2 libraries with 17,000 volumes
•1 small gymnasium and an outside basketball court
•1 music room

If interested in this unique teaching opportunity please emaila sap andrew@globalinkstutors.com


Start Date
20 Sep 2008


Company
Newton International School

Contact Person (position)
Andrew Spinks (Recruitment Manager )

Job Title
1 ICT and Business studies teacher secondary

Profession
IT - Secondary/High School

Location
Doha - Qatar

Pay Range
QR 9,500 to QR 12,500 depending on experience

Description
Due to rapid expansion the Newton International School in Doha is urgently seeking to recruit asap a number of KS2 teachers. Ideally the school is looking to confirm job offers to succesful candidates by the 26th August; with a term start date for pupils of the 30th September.

Newly qualified teachers are welcomed as we have quite a number of experienced teachers who would be able to support them. Our salaries start from QR 9,500(no work experience) and goes up to QR 12,500 depending on experience.

Benefits of working as a teacher at NIS include :

1-A monthly tax-free salary

2-Free fully furnished accommodation

3-Free electricity and water

4-Yearly return ticket to country of origin

5-All holidays fully paid including the summer vacation

6-End of year gratuity which amounts to three weeks salary


7-Free health service at official medical centres and Hamad Medical Corporation
(a modern hospital supervised by Cornell university)


The Newton International School is a private, international, co-educational School founded in 2006 by Mrs Afaf K. Al-Moadhadi and Dr Jabr Al-Noaimi, managed by an international staff.

It is the mission of Newton International School to provide internationally recognized pedagogy and curriculum through the National Curriculum of England and Wales, with Arabic and Islamic Studies, from Pre School through Primary (Years 1 to 6) and Secondary (Years 7-9) education.

Highly experienced teachers and administrators from Britain, Europe, Australia and the Middle East serve the students representing 30 nationalities. The Newton International School educational program prepares students for any further educational endeavors they wish to pursue.

The program, which is offered in English, is based on the National Curriculum of England and Wales. Physical Education, Art, Music and IT are offered from Reception class through Year 9. In addition the school has an extracurricular program.

Subjects taught include:

English
Math
Science
Arabic for native and non native speakers
French
Art
Music
Information Technology
SOSE – Studies of Society and the Environment
Islamic Studies (for Muslim students only)

If interested please email asap andrew@globalinkstutors.com



Start Date
30 Sep 2008



Company
Newton International School

Contact Person (position)
Andrew Spinks (Recruitment Manager )

Job Title
1 ICT teacher for the primary

Profession
Other (please specify in notes)

Location
Doha - Qatar

Pay Range
QR 9,500 to QR 12,500 depending on experience

Description
Due to rapid expansion the Newton International School in Doha is urgently seeking to recruit asap a number of KS2 teachers. Ideally the school is looking to confirm job offers to succesful candidates by the 26th August; with a term start date for pupils of the 30th September.

Newly qualified teachers are welcomed as we have quite a number of experienced teachers who would be able to support them. Our salaries start from QR 9,500(no work experience) and goes up to QR 12,500 depending on experience.

Benefits of working as a teacher at NIS include :

1-A monthly tax-free salary

2-Free fully furnished accommodation

3-Free electricity and water

4-Yearly return ticket to country of origin

5-All holidays fully paid including the summer vacation

6-End of year gratuity which amounts to three weeks salary


7-Free health service at official medical centres and Hamad Medical Corporation
(a modern hospital supervised by Cornell university)


The Newton International School is a private, international, co-educational School founded in 2006 by Mrs Afaf K. Al-Moadhadi and Dr Jabr Al-Noaimi, managed by an international staff.

It is the mission of Newton International School to provide internationally recognized pedagogy and curriculum through the National Curriculum of England and Wales, with Arabic and Islamic Studies, from Pre School through Primary (Years 1 to 6) and Secondary (Years 7-9) education.

Highly experienced teachers and administrators from Britain, Europe, Australia and the Middle East serve the students representing 30 nationalities. The Newton International School educational program prepares students for any further educational endeavors they wish to pursue.

The program, which is offered in English, is based on the National Curriculum of England and Wales. Physical Education, Art, Music and IT are offered from Reception class through Year 9. In addition the school has an extracurricular program.

Subjects taught include:

English
Math
Science
Arabic for native and non native speakers
French
Art
Music
Information Technology
SOSE – Studies of Society and the Environment
Islamic Studies (for Muslim students only)

If interested please email asap andrew@globalinkstutors.com



Start Date
30 Sep 2008



Company
Dubai College

Contact Person (position)
Andrew Spinks (Recruitment Manager )

Job Title
Business Studies Teacher

Profession
Business Studies

Location
Dubai - United Arab Emirates

Pay Range
Negotiable

Description
Dubai College is urgently seeking a Business Studies Teacher; Dubai College is an independent, co-educational secondary school following the English National Curriculum. The student body comprises more than 700 students in the 11 to 18 year age range taught by graduates of British universities to G.C.S.E. and 'A' Level
(EDEXCEL and AQA). Classes are small and facilities, resources and the teaching
environment are of a high quality. Examination results at both G.C.S.E. and 'A' Level are consistently well above national standards. Dubai itself is an agreeable place in which to live and work and is the most cosmopolitan of all the Gulf States. The teaching package includes a generous basic salary (currently tax free), terminal gratuity, fully furnished accommodation, medical insurance, baggage allowance and a return airline ticket for the summer holidays. If interested in this exciting opportunity please email asap andrew@globalinkstutors.com


Start Date
20 Sep 2008



Company
Dubai College

Contact Person (position)
Andrew Spinks (Recruitment Manager )

Job Title
Economics teacher

Profession
Economics

Location
Dubai - United Arab Emirates

Pay Range
Negotiable

Description
Dubai College is urgently seeking an Economics Teacher; Dubai College is an independent, co-educational secondary school following the English National Curriculum. The student body comprises more than 700 students in the 11 to 18 year age range taught by graduates of British universities to G.C.S.E. and 'A' Level
(EDEXCEL and AQA). Classes are small and facilities, resources and the teaching
environment are of a high quality. Examination results at both G.C.S.E. and 'A' Level are consistently well above national standards. Dubai itself is an agreeable place in which to live and work and is the most cosmopolitan of all the Gulf States. The teaching package includes a generous basic salary (currently tax free), terminal gratuity, fully furnished accommodation, medical insurance, baggage allowance and a return airline ticket for the summer holidays. If interested in this exciting opportunity please email asap andrew@globalinkstutors.com


Start Date
20 Sep 2008

Transnational Migration and Canadians Abroad

APF Canada’s Policy Research Grants support independent academic research on policy issues related to Canada's relations with Asia. Applicants are typically, though not exclusively. associated with a university, research institute or NGO. Proposals by industry and/or Asia Practitioners are welcome. Joint sponsorship with another academic or research institution is encouraged, but not required. Applicants need not reside in Canada nor be Canadian citizens or permanent residents. All applications will be evaluated on the basis of their relevance to public policy issues and options in Canada.

Transnational Migration and Canadians Abroad

Research by APF Canada suggests some 9% of Canadian citizens, or approximately 2.7 million passport holders, live abroad. The Foundation believes these global Canadians -- the Canadian Diaspora -- are important but poorly understood elements in Canada’s place in the world. Global Canadians serve as conduits encouraging greater linkages between their new country of residence and Canada. Similarly, immigrants can facilitate two-way trade and investment between Canada and their country of origin. The policy implications of transmigration and the growing number of Canadians abroad were evident in the 2006 large-scale evacuation of Canadians from Lebanon. However, there is very little analysis of the opportunities, challenges and impacts arising from Canada’s overseas citizens.

The Foundation is focusing its research on a series of areas including country profiles of Canadians abroad; the role of the Canadian Diaspora on Canada’s trade, investment, innovation, and international relations; citizenship issues with respect to Canadian identity and attachment to Canada, voting, tax and other civic responsibilities; and health, political discourse and security. It is intended that these efforts will enable the Foundation to help policy-makers better understand and respond to the opportunities and challenges of the Canadian Diaspora.

In support of its research agenda, in 2008/2009, the Foundation is offering Policy Research Grants to support research and analysis in, but not confined to, the following areas:

The impact of recent immigration from Asia on transpacific cultural relations
Economic, political and cultural implications of the Canadian Diaspora in Asia
The implications of transnational migration for citizenship and immigration policy

Canada-EU trade proposal rivals scope of NAFTA

Globe and Mail, Toronto

Canada-EU trade proposal rivals scope of NAFTA

Plan to lift barriers for goods and labour to be discussed at summit after election

By Doug Saunders

18 September 2008

LONDON - Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada’s economy with the 27 nations of the European Union, with preliminary talks to be launched at an Oct. 17 summit in Montreal three days after the federal election.

Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”

If successful, Canada would be the first developed nation to have open trade relations with the EU, which has completely open borders between its members but imposes steep trade and investment barriers on outsiders.

The proposed pact would far exceed the scope of older agreements such as NAFTA by encompassing not only unrestricted trade in goods, services and investment and the removal of tariffs, but also the free movement of skilled people and an open market in government services and procurement - which would require that Canadian governments allow European companies to bid as equals on government contracts for both goods and services and end the favouring of local or national providers of public-sector services.

Previous efforts to reach a trade pact with Europe have failed, most recently in 2005 with the collapse of the proposed Trade and Investment Enhancement Agreement.

But with the breakdown of World Trade Organization talks in July, European officials have become much more interested in opening a bilateral trade and economic integration deal with North America.

A pact with the United States would be politically impossible in Europe, senior European Commission officials said.

A newly completed study of the proposed deal, which European officials said Prime Minister Stephen Harper decided not to release until after the election, concludes that the pact would increase bilateral trade and investment by at least $40-billion a year, mainly in trade in services.

Ottawa officials say they have overcome what they see as their biggest hurdle: the resistance of provincial governments to an agreement that would force them to allow European corporations to provide their government services, if their bids are the lowest.

Although Ottawa’s current list of foreign-policy priorities does not include European issues, European and Canadian officials say Mr. Harper has been heavily engaged with the proposed trade pact.

The two governments have completed a detailed study of the proposed agreement that will be unveiled shortly after the election, should the Conservatives win.

Both Ottawa and Brussels have had staff work on a draft text for a deal they had hoped would be introduced at a Canada-EU summit, to be attended by French President Nicolas Sarkozy, European Commission President Jose Manuel Barroso and Mr. Harper in Montreal on Oct. 17. France currently holds the rotating presidency of the EU, and Mr. Sarkozy has said that he hopes to make economic integration with Canada one of his accomplishments.

Last Wednesday, a top Ottawa trade official wrote to Mr. Mandelson to propose “the launch of comprehensive negotiations toward a closer economic partnership at the Canada-EU Leaders Summit, to be held on October 17,” and stressed that all 13 provincial and territorial governments had agreed to the proposed pact at a July 18 meeting in Quebec City.

Because of the election, Mr. Harper appears to have decided not to unveil a full text of the proposed agreement, but instead to use the summit to inaugurate the trade talks with the launch of a “scoping exercise” that will quickly set the goals of the pact and lead to formal “comprehensive trade and investment negotiations” to begin in “early 2009,” according to communications between senior Canadian and European officials examined by The Globe and Mail.

Proponents, including all of Canada’s major business-lobby organizations, are in favour of the deal because it would open Canadian exporters to a market of 500 million people and allow the world’s largest pool of investment capital into Canadian companies without restrictions.

Because Canada’s fractious provinces have killed attempts at a trade pact in the past, Europe is demanding that Canada accept a more far-reaching agreement than Canada and Europe had attempted before, in an effort to win a stronger commitment, EU officials said.

Major “deal-breaker” conditions, officials said, include full agreement by all 10 provinces, especially on the issue of European companies providing government services, and what are known as “geographic indicators,” which forbid products such as champagne and feta cheese to be produced under those names outside their nations of origin. Controversially for Canada, this may soon be extended so only English producers can use the name cheddar on their cheese.

However, both sides agree that there is far more political will to negotiate a major deal, on both sides than there ever has been.

“I am far more optimistic this time than I’ve ever been in the past. ... I feel very confident that we will be able to launch something on Oct. 17 that will give us a better chance than we’ve ever had before to get a full deal in place,” said Roy MacLaren, head of the Canada-Europe Round Table, a pro-trade business organization that has been heavily involved in the negotiations.

As a trade minister in the Jean Chrétien government and later as a diplomat, Mr. MacLaren was involved in several previous attempts at a Canada-EU pact.

Gulf Bike 09

TECWORLD ABU DHABI 2008

Merrill Lynch takeover is a match for Bank of America's ambitions

Merrill Lynch takeover is a match for Bank of America's ambitions

The groundwork was laid in 1998, when Hugh McColl's NationsBank swallowed up BofA to create the country's largest bank. Whether the marriage will succeed, however, is a big question.

By Michael A. Hiltzik and E. Scott Reckard, Los Angeles Times Staff Writers

September 16, 2008

A.P. Giannini is remembered as the revered founder of Bank of America, but the institution that snagged Merrill Lynch & Co. in a pressure-filled takeover last weekend is very much Hugh McColl's Bank of America.

McColl was the boss of Charlotte, N.C.-based NationsBank Corp. in 1998 when it swallowed up Bank of America, then based in San Francisco. The hard-charging former Marine deftly outflanked BofA's more worldly management team to ensure that the bank would be based in Charlotte, that his directors would control the board and that his successor would be a NationsBank man.

That successor, Kenneth D. Lewis, has gone beyond fulfilling McColl's dream of running the biggest bank in the country by creating what may become a global powerhouse of retail banking, brokerage and money management. Now the question is: Can he make this deal work?

That's far from a sure thing. There are vast differences between the two corporate cultures, and the deal was thrown together so quickly that potential land mines may have been overlooked, said Rob Hegarty, a financial services industry analyst.

"It's far too early to call this a success," said Hegarty, managing director at Tower Group. "I'm calling it 'Heartland Meets Big City' -- and we know how most of those marriages end up."

New York-based Merrill Lynch has been a troubled company, hobbled by holdings of hard-to-value mortgage securities that have been written down by billions of dollars this year already.

Lewis and John Thain, Merrill's chief executive, said Monday that the write-down process had nearly run its course, but widespread suspicion exists on Wall Street that the investment firm's portfolio still harbors lots of overvalued and illiquid securities -- one reason that its very survival had begun to come into doubt.

Merrill Lynch is also known for its insular, paternalistic culture, resistant to dramatic change -- a factor in the ouster of Thain's predecessor, E. Stanley O'Neal, last fall. O'Neal, who instituted draconian staff cuts, was considered aloof and insensitive to the traditions of what many of the firm's old-timers called "Mother Merrill."

Bank of America Corp., meanwhile, has its own challenges. Since taking over from McColl in 2000, Lewis has been following his mentor's path of building BofA by acquisitions, mostly of banks with strong retail franchises in geographic regions where BofA had scant foothold, such as New England and the Midwest.

But the acquisition of Merrill Lynch, which will require shareholder and regulatory approval, caps an extraordinary yearlong surge of deal-making for Lewis, coming after the $21-billion purchase of Chicago-based LaSalle Bank from Netherlands-based ABN Amro and its $4-billion takeover of Countrywide Financial Corp., the hobbled mortgage lender.

Taken together, the three deals represent "the biggest integration challenge we've ever seen in the American banking industry," said D. Anthony Plath, an associate professor of finance at the University of North Carolina and a longtime observer of Bank of America.

But he adds that the task matches the role Lewis played under McColl. "McColl was the strategist," he said. "Lewis was the integrator."

Yet Lewis' latest acquisitions, particularly the Countrywide and Merrill Lynch deals, come with powerful strategic rationales too. Both are based on the calculation that the financial markets are undervaluing strong franchises and overreacting to short- or medium-term conditions.

Many analysts questioned the bank's fire-sale purchase of Calabasas-based Countrywide, which had been driven close to bankruptcy by losses in its portfolio of high-risk residential home loans. But at an investment conference in San Francisco on Monday, Barbara J. DeSoer, president of BofA's mortgage, home equity and insurance unit, said the wisdom of the deal would become clear when the housing market turns around.

"We saw the opportunity," DeSoer said. "Homeownership remains a fundamental goal of most Americans, and we believe the U.S. housing sector will be strong again."

Lewis made a similar point in explaining the price BofA will pay, in its shares, for Merrill Lynch -- 34% over the brokerage giant's closing price Friday, based on BofA's closing price Monday.

"We could have rolled the dice and got it at a lower price," perhaps by waiting a day or two, Lewis told securities analysts in a conference call. Merrill Lynch was vulnerable to the same crisis of confidence among trading partners and stock investors that had brought low the investment banks Bear Stearns and Lehman Bros., lending urgency to a possible rescue deal.

Lewis acknowledged that the acquisition might not add to BofA's bottom line until 2010. "But the long-term benefits are so overwhelming, it's such a strategic opportunity, that we elected not to roll the dice," he said. "I don't know anyone who's perfect at picking the absolute bottom" of an investment downturn.

Stock market investors may not have found that argument persuasive. BofA shares fell more than 21% on Monday, closing at $26.55. That reduced the value of the deal to about $40 billion, from $50 billion at Friday's closing price.

Standard & Poor's Ratings Services lowered its long-term credit rating on Bank of America a notch, saying the purchase of Merrill would "place further pressure" on the bank's capital, which was already strained by the Countrywide acquisition.

The Merrill deal may rank as a climactic chapter in the long history of Bank of America, which Giannini founded as Bank of Italy in 1904 and quickly expanded beyond its initial clientele of Italian shopkeepers and merchants in San Francisco's North Beach neighborhood.

Not long after his death in 1949, his offspring had become the largest and most profitable bank in the world, its growth fueled by postwar boom times in California and its backing of West Coast industries including farming and moviemaking.

In the 1980s and 1990s, however, the bank was stumbling. It was forced to take large write-downs of loans to Brazil in 1987. That decade also ushered in a wrenching era of deregulation and consolidation, as banking executives who had lived their entire careers in patrician, noncompetitive bliss were forced to compete in a new world of roughhousing competitiveness.

That world was tailor-made for Hugh McColl, who began building his Charlotte bank by acquiring regional banks, primarily in the Southeast.

By 1998 McColl had concluded that such a piecemeal approach would never give his institution the national footprint he craved. Acquiring bank after bank with $40 billion to $80 billion in assets "just wouldn't get us there," he told the Wall Street Journal.

The $60-billion takeover of Bank of America, which was itself looking for a way to leap beyond its core market in the West, created a behemoth with $570 billion in assets. (The bank had assets of $1.7 trillion at the end of last year.)

McColl also maneuvered to keep the combined institution firmly under NationsBank control. The acquisition agreement stated that "it is the present intention" for then-BankAmerica Corp. Chief Executive David Coulter to succeed McColl as chief executive of the new Bank of America upon McColl's retirement in 2000 -- a far cry from the ironclad arrangement Coulter favored.

Just over a year later, McColl fired Coulter, blaming him for a $372-million loss on an ill-advised BofA loan to investment firm D.E. Shaw. Lewis took Coulter's place as heir apparent.

Under Lewis' leadership, BofA has managed to avoid some of the deeper trading potholes that have tripped up its banking competitors, such as Citigroup Inc.

"They've taken their share of hits," said Joe Morford, banking analyst at RBC Capital Markets. "But generally speaking, they have emerged with a far better capital position" than rivals. That has positioned Lewis well to time his "longtime interests in expanding in key product areas and capabilities -- specifically mortgages and retail brokerages," Morford said.

That's not to say that BofA's record has been entirely clean. Last fall, Lewis announced that the bank had suffered a $1.5-billion trading loss, contributing to a 32% drop in earnings for the third quarter ended Sept. 30 compared with a year earlier.

The results seemed to have chastened Lewis in his quest for investment banking prominence. "I've had all the fun I can stand in investment banking at the moment," he told securities analysts at the time. "Getting bigger in it is not something I want to do."

michael.hiltzik@latimes.com

scott.reckard@latimes.com

Candidates weigh in on stabilizing Fannie, Freddie

AP
Candidates weigh in on stabilizing Fannie, Freddie
Saturday September 6, 10:15 pm ET
By Alan Zibel, AP Business Writer
Presidential candidates and house lawmaker comment on gov't plans to stabilize Fannie, Freddie

WASHINGTON (AP) -- The historic takeover of Fannie Mae and Freddie Mac, which could come as soon as Sunday, moved to the forefront of the presidential campaign Saturday as candidates and congressional leaders seized on the enormous implications for taxpayers and the economy.

Fannie Mae and Freddie Mac together hold or back half of the nation's mortgage debt, and have played an increasingly important role in the real estate market since the credit crisis started in August 2007. A government bailout could cost taxpayers around $25 billion, according to the Congressional Budget Office.

Treasury Secretary Henry Paulson and two other regulators are working on a plan to put the troubled mortgage finance companies into a conservatorship, and remove Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron, according to Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

The government is expected to control the two companies at least a year as it evaluates and debates whether Fannie and Freddie should remain government-run entities or be restructured in some fashion, Frank said in an interview.

At a rally in Colorado Springs, Col., Republican vice presidential nominee Sarah Palin said, "They've gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."

Democratic nominee Barack Obama, speaking in Terre Haute, Ind., said, "These entities are so big and they're so tied into the housing market that it is probably true that we have to take steps to make sure they don't just collapse, because the housing market, which is already weakened, would be in even worse shape if we didn't take some steps."

News of the likely government takeover Friday followed a report by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June.

That confirmed what investors saw in Fannie and Freddie's recent financial results: trouble in the mortgage market has shifted to homeowners who had solid credit but took out exotic loans with little or no proof of their income and assets.

Fannie Mae and Freddie Mac lost a combined $3.1 billion between April and June. Half of their credit losses came from these types of risky loans with ballooning monthly payments.

While both companies said they had enough resources to withstand the losses, many investors believe their financial cushions could wither away as defaults and foreclosures mount.

Frank said the companies' financial picture was better than Wall Street investors assumed, but "it just plainly became clear that elements of the market wouldn't' accept that."

The epic decision highlights the size of the threats facing the housing market and the economy. On Friday, Nevada regulators shut down Silver State Bank, the 11th failure this year of a federally insured bank. And earlier this year, the government orchestrated the takeover of investment bank Bear Stearns by JP Morgan Chase.

"Any government action must help to strengthen our economy, which is suffering a crisis brought on by the administration's failure to stop predatory lending," said Sen. Chris Dodd, D-Conn., who chairs the Senate Committee on Banking, Housing, and Urban Affairs. "Any intervention also must minimize the cost to American taxpayers, and should not put other financial institutions at risk."

The crisis surrounding Fannie and Freddie promises to be a major challenge for the next president.

The role the two companies play in the U.S. mortgage market has grown dramatically over the past year as other lenders collapsed under the weight of bad subprime loans. The companies guaranteed about three-quarters of all new mortgages in the second quarter of this year, up from under 40 percent in 2006, according to the trade publication Inside Mortgage Finance.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and James Lockhart, the companies' chief regulator, met Friday afternoon with the top executives from the mortgage companies and informed them of the government's plan to put the companies into a conservatorship as early as this weekend.

In July, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the companies if needed. Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses.

Fannie Mae was created by the government in 1938, and was turned into a public company 30 years later. Freddie Mac was established in 1970 to provide competition for Fannie.

Associated Press Writer Charles Babington contributed to this report from Terre Haute, Ind. and AP White House Correspondent Terence Hunt contributed to this report from Colorado Springs, Colo.

U.S. House Price Decline Could Be Worse than Great Depression, Economist Shiller Says

U.S. House Price Decline Could Be Worse than Great Depression, Economist Shiller Says
Posted Sep 04, 2008 01:36pm EDT by Henry Blodget in Newsmakers, Recession
Related: ^gspc, fre, fnm

Eight years ago, Yale superstar professor and MacroMarkets chief economist Robert Shiller famously called the top of the stock market in his book Irrational Exuberance. Then, a year before the housing bubble peaked, he predicted the colossal bust we are now experiencing.

If you recognize Shiller's name, it’s because the Standard & Poor's/Case-Shiller home price indexes, which he developed with Wellesley College economist Karl Case, have become the nation's most authoritative source for home price trends.

In part one of my one-on-one with Shiller, we discuss the grim outlook for U.S. housing, which he tackles in-depth in his new book The Subprime Solution. Highlights of our first discussion include:

Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.

There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).

The current hopeful consensus -- that house prices will bottom soon and then begin to recover -- is most likely a dream. Housing markets don't usually have "V-shaped" recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money.

Canadian Maple Syrup: Musing on Export Market Innovations

Canadian Maple Syrup: Musing on Export Market Innovations

I have noticed no real Canadian maple syrup presence in Korean discount supermarkets. Some sources suggest an available Canadian product at E-mart. However there has been a hotcakes and pancakes instant mix branded, by several different suppliers, in most supermarkets for well over a decade. As well Japan is considered a mature consumption market of maple syrup products and shares several consumer profile similarities with Korea. Overall however the size of Korea's market is much smaller. As my mother's home village of Paquetville, New Brunswick is in one of the heartlands of the sugar shack industry, I have seen the increasing economies of scale possible in local production cabanes.

How would you create an environment that encourages creativity?

I would contact my mother's classmate and enquire about her local distribution and supplier relationships in Japan to seek to identify whether or not it currently represents an export market for her products. I would seek to establish whether Korea is or could be a new or growing market for maple syrup. The concept would be to approach Korean pancake mix distributors and suggest product alliances that perhaps would boost sales. Strengths and weakenesses exist, such as superior quality and purity levels of product preferred as well as identifying medical or known dietary benefits (locally considered "well-being" movement foods and ingredients- often organic) exist for glucose based syrups versus sucrose based man-made concoctions. Sales agents such as Costco market and sell large volume maple syrup products. The prevalance of inferior but cheaper syrups such as kiwi or blueberry compotes exist in the local market and poor product knowledge on the part of consumers might lead to a base rejection of Canadian maple syrups based purely on ignorance of its pride of place at the pancake breakfast table.

Small character bottles, such as those of the 100-150 ml variety in glass blown maples leafs would make an easy visual statement if sold together with an updated and possibly more upscale marketing approach to pancakes locally. Also characters such as those of Disney, teletubby, or other cutesy-types would attract visual effect of customer emotional attachment to the products on the shelf. These methods are often used in product placement locally.

The concept would need to match Korean customer emotional connections to characterization and launch purchase intention. This would require local research of preferred characters and a Canadian supplier able to deliver a premium product in relatively tiny 100ml bottles which would be labour intensive but perhaps provide viable export income in Korea. In addition it would reach population segments such as lower to upper middle income earners rather than perhaps the top 10%. I would encourage producers to investigate through test marketing alliances.

How would you test your ideas?

A few characters could be launched in various key market concentrations, for example, most cities in Korea possess population densities of 1800 people for each square kilometre. Through local volumes of research, especially on active consumer trends available through sales reports of alliance-based pancake mix local suppliers, some four to five market locations could be product tested in evolving a character association which would encourage increased pan-cake product purchase. The small volume batch would represent value-added for local mix suppliers and create a possible packaging update impetus which would more visually attract new consumers. I would try to sell it as a win-win marketing approach.

How would you implement the ideas?

Based on positive market results a larger scale partnership could be launched with the pancake mix manufacturer to implement a national market wide growth plan of small-sized character bottled Canadian maple syrup products which would visually attract young consumers, create Canadian product knowledge for small volumes and easily set up a scenario where larger and larger volume product alliances could be introduced allowing sales to grow in size with progessive increases in product purchase.

MSMW Case Study: Foreign Market Risks

MSMW Case Study: Foreign Market Risks

As Gus stated there is no way to eliminate risks, we face numerous potential crises, as in chess, various weightings of variable risk exist dependent upon the choices our business makes. First on our domestic front, if we do not develop an export platform we face potential loss of market share due to new entrants in our regional market. We might quickly lose our share and thus close down. With a fully developed and successful export market, at least one, we might continue operation under such circumstances. However our currency exchange risks could also fluctuate against us.

If our market is Dubai, where the UAE dirham has been traditionally pegged to the US dollar we might see direct effects in transferring currencies and exchange risks which wildly fluctuated in the post 9/11 slowdown in global trade and the strengthening in the Euro. We might mitigate through partial payments, regular or monthly payments and/or full payments depending upon the trends and stability of our profit margins despite currency swings. While country risk is a factor we may mitigate by limiting foreign assets investment and in the case of the middle east occupy a high profit margin market segment at low sales volumes or regular monthly deliveries if forecast growth is met only a months actual losses would occur. Payment risk is possible and may be limited through L/C or other credit guaranteed transactions. We would seek to avoid project risks and bid bonds as these often represent losses especially in the UAE construction business as partners often default on contracts with projects left unfinanced and terms un-met with foreign partners left holding the bill.

Contingencies and scenarios planning provide some idea of course of action in cases of emergency, danger or doom. Force majeure often implicates losses not easily avoided as insurance companies could not exit with a profit if they were. Sudden labour problems could occur anywhere along the supply chain and turn profits into losses. Forwarding, futures trading, hedging, losses sharing, limiting exposures and managing pricing all provide some level of risk coverage but engage other risks at the same time. Risk management systems are meant to provide monitoring signals in the market or company which provide warnings in areas of capital risk, fixed assets risks, labour disputes, corporate espionage, nefarious partners and out right pilferage or theft. Risks must be outweighed by benefits to make a market attractive.

For example, are foreign investors now flocking to Krabbi or Phuket? http://www.bangkokpost.com/breaking_news/breakingnews.php?id=130199

Do protestors have legitimate concerns? In the last five years these represented some of the largest per capita gains in provincial financial investments in Thailand according to Pocket Thailand in Figures 2008. However the south is often inundated by Bangkok investments sources aka government. Are benefits being distributed equitably to the local populace also overwhelmed by migrants form other parts of Thailand relocating to island locations with scarce resources? As in Koh Samui, regional village level governance is often at the hands of nearest hired guns or police and militia forces. Whereas in 1998 the government was appeasing locals with new schools and services the continued growth in tourism in these regions have compacted and forced many traditional fishing villages populations, often of Muslim or Indonesian descent, away from beachfront locations often through extortion, corruption, expropriation, and governmental meddling and pressure upon regional sustainable traditional living practices. Similar social unrest in difficult to manage coastal and international porous borders may be witnessed in neighbouring Penang, Malaysia where minorities are often removed from waterfront locations in favour of government and private investor profits. Mutual needs are not being met as is not the case in The UAE where a tiny population is well supported by government systems and services.

Growth often is uneven in developmental states and if poorly managed results in social unrest.

MSMW Case Study: Export Market Assets

MSMW Case Study: Export Market Assets

Assets MSMW might consider accessing through some form of partnership, acquiring or building in Canada would be new manufacturing equipment. Based on the depreciation value of the current equipment it really makes no sense to go to the bank with such old equipment that is currently valued less than half of its original purchase price and claim that as assets or collateral on possible loans. This is especially true in tight fiscal finance conditions such as we have today. For example, even brand new equipment would be tough collateral in a banking environment where 4 out of 10 tangible private assets mortgages are essentially in default.

At the same time if MSMW does not choose to renew its products, packaging and equipment on a regular basis it may fall into the trap of being quickly locked out of its own markets due to obsolescence when the latest trend perhaps moves away from PET bottles which seems to be the case in some foreign markets. However I tend to agree with Gus that there is no current need to purchase hard assets overseas while alliances will assist greatly in ensuring supplier and distributor relationships with preferably direct to corporate client/customer or retail options to minimize handling costs. While I agree neighbouring markets may be attractive such as the US, slow or minimal consumer spending is my immediate concern for new export sales to several western nations (accordingly Canada would also appear somewhat stagnant in terms of growth) I prefer to avoid "standing water" and go "straight to the oil throats" in the Middle East where consumer spending remains lavish and growth retains 15-20% annually. This is the kind of growth we need to encourage bankers to help finance it.

Without major assets purchases our fixed costs risks are minimized even in unstable or politically uncertain nations with large scale consumer spending growth where such sales growth outweighs certain risks. The most we would have to lose, for example, in the event of a dirty bomb attack on Dubai by Iran (God forbid however the British are congregating there) would be our locally situated inventory. If we maintain low sales volume, premium high priced product our potential loss would also be quite low and limited to projected sales profits and growth. In such a case we might easily reorient to the next boom-town market.

MSMW Case Study: Competitive Advantages

MSMW Case Study: Competitive Advantages

Quality: This is a perception issue related to the successful product placement dependent upon the market positioning chosen by MSMW. For example, there is much turmoil in the markets concerning the environmental impact and /or consumer safety of bottled water products globally at this time. Concerns range from the possible dangers of oil-based PETs, the possible risks of certain plastics composites like bisphenol A, and the overall costs of delivery from non-local locations. My recommendation leans towards tetra-pak bottling as a quality improvement as its consumer profile is possibly more positive. As well a unique upscale branded simple pottery-bottle concept would also reinforce natural and environmentally friendly packaging of a premium product which at the same time reinforces quality concepts among consumers seeking to associate with environmental sustainability.

Price: For a retail tetra-pak product segmentation we would need to assure pricing which earned a significant cost to benefit improvement in the repacking and remarketing of the water. This would need to account for currrent and historical prices, ideally lowering the cost and at the same time enhancing its sales performance. The comparative strength of tetra-packaging may reduce defects thus reducing overall delivery and retail costs due to product damages or losses.

Timeliness: While tetra-paks would not be first to market for water products developing a clay bottle might be in the luxury market. Consumers often thrive on a sense of novelty which abounds in the global niche water luxury markets. Seasonal design or colour fluctuations easily identifed in soft-drink promotional advertising might encourage seasonal purchase cycles. Competitor intelligence would need to be sharp. New services such as central water tank systems with piped mineral fountains for office complexes might prove innovative and more cost effective in eliminating the 5 gallon water jug but maintaining the stand or purifier.

Responsiveness: After-sales and customer contact should be a means of introducing new systems and services as well as data collection on satisfaction, improvement suggestions and cost saving ideas to enhance, improve and attract customer loyalty.

Service: New business areas, such as retirement complexes, medical/hospitals, universities, colleges, public recreational facilities, transport logisitics centres and large retail complexes should be developed as customer contact and contract grows. Limiting wholesale contracts to businesses is to narrow a market in many cities where other volume customer opportunities exist.

MSMW will fill the needs of consumer awareness of environmentally sustainable premium mineral water retail and wholesale services which are responsive to continuing changes in safety, packaging and locational demands. Technology transfer may be acquired through licensing such as tetrapak, join ventures such as sourcing single use 5 gallon bottles, limited R+D partnerships such as those possible with patented alternatives to plastic 5 gallon jugs, and short-term design specialists for new plant manufacturing systems as well as acquiring pottery/kiln capabilities and contracting of artists and advertising logos, colour schemes and product information.

MSMW should also consider making progressive updates to all of these facets based upon regular refurbishment of production, design, placement and brand image goals. Many companies closing on the East Coast have been a result of long-term investment in obsolete equipment and non-investment in continued updates which match current market demands, such as poultry and piggery abbatoirs and sawmills, pulp and paper products, etc. These plants did not close only due to productivity concerns but also due to lack of imagination for putting current unique niche products at the centre of their development and future orientiation.