Financial thoughts

Oswald Gruebel, the chief executive of UBS, has dismissed calls for his resignation as politically motivated, even as the Swiss banking giant raised its estimated loss by a rogue trader to $2.3 billion.

UBS AG had previously put the loss at $2 billion when news of the scandal first broke Thursday.

In a bid to reassure investors, the Zurich-based bank said Sunday it has “now covered the risk resulting from the unauthorized trading” and its equities business “is again operating normally within its previously defined risk limits.”

UBS also confirmed for the first time that the trader, 31-year-old Kweku Adoboli, was already under investigation by the bank when he revealed his actions to authorities Wednesday.

“The loss resulted from unauthorized speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months,” UBS said, adding that the magnitude of the bank’s risk exposure was hidden by fake trades.

Adoboli remains in custody in London, charged Friday with acts of fraud and false accounting dating back to 2008. His next court appearance is Thursday.

The fact that the fraud took place over three years raises serious questions about the bank’s ability to manage its risk. UBS said it has set up a special committee chaired by David Sidwell, the bank’s senior independent director, to investigate the incident.

But speaking for the first time since UBS revealed the loss Thursday, Gruebel told the Swiss weekly Der Sonntag that the loss couldn’t have been prevented.

“If someone acts with criminal energy, then you can’t do anything. That will always be the case in our business,” he said in the interview published Sunday.

But some Swiss politicians and commentators have called for Gruebel’s head to roll over the loss, which is likely to put UBS’s third-quarter results deep in the red. Such a move would signal defeat for the gravel-voiced German, who was brought in more than two years ago to revive the bank’s fortunes after a series of missteps that included vast losses in the U.S. subprime mortgage market and an embarrassing U.S. tax evasion case cash advance loans.

Gruebel told Der Sonntag that he has no intentions of resigning.

“I’m responsible for everything that happens at the bank,” Gruebel told the paper. “But if you ask me whether I feel guilty, then I would say no.”

Gruebel pledged to stamp out risky business practices at UBS when he came out of retirement in early 2009 to take the helm of Switzerland’s biggest bank. UBS had just suffered its biggest losses ever due to mistakes by the very investment unit that is now making headlines again, and had to take a $60 billion bailout from the Swiss government to stay afloat.

Swiss media on Sunday cited unnamed UBS board members saying the 67-year-old Gruebel retains the confidence of major shareholders, including the Government of Singapore Investment Corp. The sovereign wealth fund holds more than 6.4 percent of UBS’s stock, whose value dropped almost 10 percent following the announcement about the fraud.

Gruebel is expected to survive until at least Nov. 17, when he is presents investors with an update on the bank’s activities. Banking experts in Switzerland have suggested the investors day may be used to announce a downsizing or even a spin-off of the investment unit.

In a previous case of rogue trading causing massive losses, the chairman of French bank Societe Generale, Daniel Bouton, stepped down more than a year after the bank revealed that a single trader lost euro4.9 billion ($6.7 billion). Bouton said that repeated attacks on him were becoming a threat to the bank’s health.

So far, it is unclear who could even replace Gruebel.

The only name that has been mentioned is that of Sergio P. Ermotti, chief executive of the bank’s Europe, Middle East and Africa business. Promoting Ermotti would satisfy those who want to see a Swiss at the head of the country’s most important financial institution, to counterbalance incoming chairman Axel Weber, another German and a former president of Deutsche Bank.

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With NATO’s bombing of Libya now in its sixth month, a new sense of urgency is gripping the alliance before two critical deadlines next month.

After months of combat stalemate, the insurgents have made dramatic gains in recent weeks. An offensive from their beleaguered enclave in the Nafuz Mountains resulted in the capture of the strategic Mediterranean town of Zawiya and put them within striking distance of Moammar Gadhafi’s capital of Tripoli.

The rapid advance offers NATO the chance to bring to a conclusion a campaign that has drawn increasing international criticism and caused serious rifts within the alliance.

NATO officials deny there has been a fundamental shift in tactics in recent days to provide close air support to the advancing rebels, saying they continue to be focused on the protection of civilian populations as mandated by a U.N. Security Council resolution.

But they acknowledge that in a new development, alliance bombers are pummeling Gadhafi’s troops holding defensive positions around government-held towns and villages under attack from the advancing rebel forces.

“The persistent and cumulative action of NATO is creating an obvious effect,” NATO spokesman Col. Roland Lavoie said Sunday. “Pro-Gadhafi forces are gradually losing their capabilities to command, to conduct and to sustain” their actions.”

A NATO official said that early in the campaign NATO airstrikes focused on preventing Gadhafi’s troops from reoccupying rebel-held towns. These rebel attacks on regime forces destroyed hundreds of tanks, armored vehicles and guns.

But within a few weeks, Gadhafi’s soldiers switched tactics, abandoning their vulnerable heavy weaponry in favor of civilian trucks armed with machine guns or recoilless rifles, which proved difficult to identify and destroy from the air.

“Now the rebel offensive has put them on the defensive, and they are again bringing out their tanks and heavy artillery,” said the official who could not be named under standing rules.

“This is why we’ve been attacking them even when they are trying to beat back rebel advances,” he said. “We’re still protecting civilians because as soon as the rebels push pro-Gadhafi forces from a town, his troops will turn around and shell the place.”

But analysts note that NATO’s continued claims of simply protecting civilians strains credulity, saying the direct tactical air support to the ragtag rebel forces is enabling their battlefield victories.

“It was inevitable that the mission would spiral and the interpretation of U.N. resolutions would widen,” said Barak Seener, a Middle East expert at the Royal United Services Institute, a British military think tank. “Thus, NATO has bombed government targets, paving the way for rebels to reach Zawiya.”

“Protecting civilian populations now means getting rid of Gadhafi,” Seener said.

Alliance military planners are racing against a deadline next month, when member states must vote on a second three-month extension of the mission. This extension may prove problematic, since support for the bombing campaign has eroded among allies who say it detracts resources from NATO’s main mission, the 10-year war in Afghanistan.

Also in September, the U.N. General Assembly is due to take up the airstrikes, with many members blaming NATO for overstepping the original U.N. mandate in March which only authorized a no-fly zone and the protection of civilians caught up in the civil unrest.

Source

HSBC said Sunday it will sell 195 retail bank branches, most located in upstate New York, to First Niagara Bank in a deal worth about $1 billion.

The sale is part of HSBC’s strategy, presented to investors in May, to shift focus away from retail banking to commercial and corporate banking, and to target investment in high-growth economies.

HSBC, which is still dealing with the legacy of bad loans in the U.S. from the 2002 acquisition of consumer lender Household International Inc., said in May that it intended to trim its costs by up to $3.5 billion within three years.

The companies expect the all-cash transaction to be completed early next year. First Niagara, a unit of First Niagara Financial Group Inc. of Buffalo, N.Y., said in a statement that it expects to retain most of the 1,900 workers currently employed by the affected banks.

HSBC Bank USA, a subsidiary of British banking company HSBC Holdings PLC, operates more than 470 bank branches in the U.S., including about 370 in New York. It has total assets of $197 billion through its retail, commercial, global and private banking segments and its wealth management divisions.

The 195 banks being sold represent about $15 billion in deposits, and HSBC will receive a premium of 6.67 percent of the deposits transferred when the deal closes, the company said in a statement. Based on May 31 figures, that would be about $1 billion.

When the deal is completed, First Niagara expects to have $38 billion in assets, $30 billion in deposits and 450 branches in Pennsylvania, upstate New York and New England.

The sale involves 183 branches in upstate New York, four in Westchester County, N.Y, two in Putnam County, N.Y., and six in southern Connecticut. The retail banks will remain open during the transition. HSBC will continue to provide commercial banking services in the region.

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Federal health regulators asked the country’s leading medical experts two years ago to recommend ways to improve the government’s system for approving most medical devices, ranging from pacemakers to X-ray scanners. On Friday the experts came back with a surprise answer: Scrap it because it fails to protect patients. Even more surprising, the FDA dismissed the idea.

The Institute of Medicine’s panel said in a report that the U.S. government should abandon the 35-year-old system used to clear medical devices because it provides little assurance that the implants are actually safe.

The 12-member group’s advice, commissioned by the Food and Drug Administration, is not binding. And experts questioned its real-world impact after the FDA immediately distanced itself from the advice it had requested.

The FDA has been working for more than a year to improve the so-called 510(k) process, efforts that would go to waste if the system is abandoned.

“FDA believes that the 510(k) process should not be eliminated, but we are open to additional proposals and approaches,” said the agency’s device director Jeffrey Shuren.

The agency requires that most new prescription drugs go through clinical trials to prove that patients fare better after receiving medication. But through the 510(k) system, medical devices just have to show that they are similar to devices already on the market. Only a handful of truly new devices undergo extensive testing to prove they are safe and effective.

The device industry’s chief lobbying group also dismissed the proposal, saying its conclusions “do not deserve serious consideration from the Congress or the administration,” in a statement.

The IOM panel’s chairman took the reception in stride Friday, saying it would take time to develop a new system to replace the one that has been in place for over three decades.

“This is a public discussion, and it’s going to take time,” said panel chair David Challoner, former vice president of health affairs at University of Florida. “The 510(k) process needs to be modified to make it as good as possible in the interim, but there is logic there that is fundamentally flawed and must to be fixed.”

The report arrives as the FDA fends off criticism from manufacturers who say the agency has become too slow in clearing new devices, driving up costs for companies and forcing some out of business. Despite the relative speed of the 510(k) process, they point out that some devices still get tied up in red tape, ultimately reaching the U.S. market two years after launching overseas.

Latham & Watkins attorney John Manthei, who represents device manufacturers, said even if the FDA doesn’t adopt the recommendations, they could help lawmakers and critics who favor tougher regulation of devices.

“For those who feel like the 510(k) process is inadequate, this report definitely gives those folks ammunition,” said Manthei.

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How do you prepare for a financial cataclysm that may not happen?

That’s the question facing investors as an Aug. 2 deadline approaches for Washington to raise the government’s borrowing limit or risk a U.S. default on its debt.

Economists say a default could create a credit crisis similar to what happened after Lehman Brothers went bankrupt in 2008, causing interest rates to rise and harming the economy. But the reaction in the stock and bond markets has been muted.

The Dow Jones industrial average closed at 12,479 last week, about where it stood at the start of the month.

In the bond market, the yield on the 10-year Treasury note stood at 2.89 percent Monday. It was 3.74 percent in Feburary, when almost no one was talking about the debt limit.

In theory, Treasury bonds should have a higher yield when investors think there’s a greater risk they won’t get their money back, such as in the event of a U.S. government default.

So Wall Street appears to think a deal will be struck in time. But the alarming headlines are causing investors anxiety.

“We’re seeing clients growing nervous as they keep hearing about the deadline,” says Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, N.Y. He says investors are asking him whether they need to change to their portfolios.

So what should you do if you’re worried about a default? Here are five things to keep in mind.

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1. Don’t abandon your long-term plan.

Most investors who had diversified portfolios in 2008 and stuck with them have made up their losses, despite a 57 percent drop in the Standard & Poor’s 500 from its peak in October 2007 to the market bottom in March 2009.

Investors who panicked and withdrew their money from the stock market have found it tougher to recover.

“Don’t get waffled around emotionally by all of this short-term noise,” says Michael Farr, chief investment officer of Farr, Miller & Washington, an investment firm in Washington, D.C.

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2. Be wary of bonds.

Conservative investors who sought to avoid the volatility of the stock market and flocked into bonds could get burned.

A default could drive up the cost of government borrowing for years to come and lead to higher interest rates for everyone else. If that happens, bonds would lose value because their prices move in the opposite direction of interest rates.

Even a brief default could be enough to hurt the credit rating of U.S. debt and usher in an era of higher interest rates, cautions Greg McBride, senior financial analyst for Bankrate.com.

If you want to position yourself for an impasse on the debt ceiling, consider Treasury bills with a maturity of six months or less. Look for those maturing sometime after August. Their short-term nature means their prices are less affected by an increase in interest rates. That’s because investors will receive their principal investment before there are larger changes in the economy. Investors should also steer clear of Treasury notes with a maturity of 10 years or longer because their prices may face steep price declines as interest rates climb. Bank CDs are another option, although the yields are minuscule.

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3. Remember that rebalancing can be risky.

Adjusting your 401(k) retirement plan to shift money out of the stock market and into cash is always an option for a nervous investors. But you should weigh the repercussions first.

If you pull money out of stocks now, you could miss a “relief rally” if the market climbs after a last-minute debt deal. Even if you’re correct, and move your money before a decline in the market, you’ll need to get the timing right a second time when you shift back into stocks. Otherwise, there’s a good chance you’ll find yourself on the sidelines when market momentum shifts.

If you have only a year until retirement or you find yourself fretting over your potential losses, playing it cautious may make sense.

“Pull back a little for peace of mind if you’re really worried,” says Tom Root, associate professor of finance and business at Drake University. “But if you have a long-term plan, stay with it.”

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4. Check your emergency preparedness.

In a period of uncertainty, it’s important to make sure you have access to cash in case of an emergency. Investors should set aside money for emergencies in an easily accessible account, like a money-market savings account. It’s important not to have this money in an investment account because market volatility could leave you unprotected.

Ideally, a single-earner family should have enough cash set aside to cover six months or more of living expenses. A two-income family should have at least three to six months’ worth, says Justin Sinnott, a financial consultant for Charles Schwab Corp. in Seattle.

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5. Watch for buying and selling opportunities.

This is a good time to remember Warren Buffett’s famous advice: “Be fearful when others are greedy, and be greedy when others are fearful.” As more fear creeps into the market with the deadline approaching, it may be a prime time to snap up bargain stocks.

And if steep cuts to government spending are part of an agreement on the debt ceiling, keep in mind the specific industries that could be hurt the most.

Goldman Sachs issued a note to investors last week listing companies that generate at least 20 percent of their revenue from government. Many are in the health care sector, both providers and equipment suppliers, plus defense contractors.

The turbulent market in the last three years has caused many investors to be overly cautious, says Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank.

During the debt standoff, he says, investors should look for higher yields. In particular, the stocks of large companies are paying investors an average of 2 percent annually, and high-yield corporate bonds, which are paying an average of 7.26 percent.

Source

Saint John is in the grips of the most sensational crime to come along in decades, a senior source in New Brunswick legal circles said Wednesday.

The grisly murder of high profile businessman Richard (Dick) Oland — a one-time beer executive with Moosehead — is the talk of the Maritime city with many wondering when an arrest is going to be made.

“The Olands are a big deal with Saint John. The only ones that would trump them are the Irvings,” the source said, referring to the legendary Irving oil family.

Oland’s body was discovered nearly a week ago in his Saint John office and as of Tuesday still no warrant had been issued for the arrest of the person or persons involved in the axe murder, the Toronto Star has learned.

“There have been no applications for any kind of warrant for anything,” said the source, adding on Wednesday that that was not a particularly good sign.

“They may get it solved but we are a long ways into it now and there doesn’t seem to be a whole lot going on,” the source said. “The case could break wide tomorrow but as each day lapses the trail goes colder and colder and the person who is the perpetrator will be so much more difficult to be interviewed successfully.”

Saint John Police Chief Bill Reid issued a brief statement Wednesday in which he refused once again to comment on how Oland was murdered. The Star reported Tuesday he was bludgeoned to death with an axe.

“The Saint John Police Force will not be commenting on any media reports; only those which we have released or authorized,” Reid stated. “Information respecting the manner of death and any apparent motive, suspects or persons of interest must remain with the investigational team at this time faxless cash advance.”

Reid said the department’s first obligation was to the family of Richard Oland, and the integrity of the investigation, a statement that was seen by some as being in deference to the family.

“That’s in deference to a very high profile New Brunswick family,” the source said.

Norm McFarlane, former mayor of Saint John, said people there are “devastated” by Oland’s death and patiently waiting for someone to be arrested “and get what they deserve.”

Oland was a member of the family that owns Moosehead Breweries Ltd., but left the company in the 1980s.

In a strange twist, Joel Levesque, a spokesperson for Moosehead Breweries in Saint John, contacted the Star to complain that Oland’s connection with Moosehead should not be a focus of the story and even suggested that people were confusing Richard with his brother Derek, Moosehead’s owner and executive chairman.

“While there is certainly a family connection between the late Mr. Oland and the brewery that deserves mention and cannot be denied, it definitely should not be the focus of headlines and stories,” said Levesque, who described himself as a senior public affairs counsel.

“I would like to point out that Richard Oland left Moosehead in 1981 and put his association with the brewery behind him,” Levesque said. “Most of his accomplishments as a business and community leader have taken place since that time. People are confused about the connection, with some even thinking it is Richard’s brother Derek, Moosehead’s owner and executive chairman, who is dead.”

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World stock markets mostly rose Monday on the heels of a report showing a rebound in U.S. manufacturing, reinforcing the view that the slowdown in the world’s No. 1 economy was only temporary.

In early European trading, Britain’s FTSE 100 was up 0.1 percent to 5,995.47 and Germany’s DAX advanced less than 0.1 percent to 7,419.91. France’s CAC 40 was fractionally lower at 4,006.23.

U.S. stock markets are closed Monday for Independence Day.

In Asia, Japan’s Nikkei 225 index added 1 percent to 9,965.09, having breached the psychologically important 10,000 mark earlier in the day for the first time since May 5. Sentiment was lifted by optimism about the U.S. economy after manufacturing data for June from the Institute for Supply Management beat expectations.

Exporters were among the index’s major gainers. Honda Motor Corp. jumped 3.5 percent. Toyota Motor Corp. rose 1.5 percent. Consumer electronics giant Panasonic Corp. gained 1 percent.

South Korea’s Kospi added 0.9 percent to 2,145.30 and Hong Kong’s Hang Seng climbed 1.7 percent to 22,770.47.

Mainland Chinese shares extended gains as investors interpreted comments by vice premier Wang Qishan on the slowing economy, and news of stalling growth in non-manufacturing industries, as a sign Beijing may relax monetary policy, analysts said.

The Shanghai Composite Index jumped 1.9 percent to 2,812.82 and the Shenzhen Composite Index surged 2.3 percent to 1,188.91. Shares in lithium battery makers, gold miners and autos led the gains.

Benchmarks in Australia, Singapore, Taiwan and Indonesia also rose.

Thailand’s SET index soared 4.8 percent to 1,091.27 after the party backed by the country’s deposed Prime Minister Thaksin Shinawatra won a landslide election victory. The poll came a year after the government crushed protests by Thaksin supporters with a bloody crackdown that culminated in some of the worst violence in Thailand in 20 years.

Shares of Singapore-based Tiger Airways Holdings Ltd business card. plummeted 16 percent after Australian regulators grounded all Australian domestic flights of a Tiger subsidiary over safety concerns. Australia’s Qantas Airways, one of Tiger’s main competitors, soared 6.1 percent.

On Friday, the surprising rebound in the Institute of Supply Management’s U.S. manufacturing capped a weeklong rally that left the Dow up 5.4 percent for the week, its best week in two years. The Dow rose 1.4 percent to 12,582.77. The Standard and Poor’s 500 index gained 1.4 percent to 1,339.67. The Nasdaq composite added 1.5 percent to 2,816.03.

Also last week, Japan released data showing its industrial production posted the sharpest rise in nearly six decades in May. The improvement adds to signs that the world’s No. 3 economy is rebuilding after a March 11 earthquake and tsunami damaged factories and caused parts shortages for manufacturers.

Those developments came after many economists had began lowering their estimates for U.S. growth in May after a string of negative reports on U.S. manufacturing and hiring. Some analysts continued to caution against too much optimism, given a host of other lingering threats: galloping inflation in China, the European debt crisis and high oil prices.

“I think the environment that we are in _ there are still a lot of headwinds as far as equities go. I suspect this relief rally is going to be short-lived,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. “If growth slows any further, stocks are not going to be doing well.”

Benchmark crude for August delivery was up 16 cents to $95.10 in electronic trading on the New York Mercantile Exchange. The contract declined 48 cents to settle at $94.94 per barrel on the Nymex on Friday.

In currencies, the euro rose to $1.4526 from $1.4511 in late trading in New York on Friday. The dollar weakened to 80.59 yen from 80.84 yen.

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Stocks are headed for a correction. No, stocks are rallying. Wait, stocks are down again. Or up _ a lot.

For investors, June was one long seesaw ride that began with a deep plunge on the first day of the month. Six days of declines were followed by a week of give and take and then four days of gains. The month ended with strong earnings from a consumer bellwether and signs that a European debt crisis could be averted. That led to a 4-day advance in the three major stock indexes.

The Dow Jones industrial average rose 480 points, or 4 percent, the last four days of the month and the Standard & Poor’s 500 index is on track for its best weekly return for since July 2010.

That strong ending didn’t make June a winner. Stocks were down about 2 percent for the month, the second straight month that the market finished lower. Only the Dow Jones industrial average eked out a gain, of 0.8 percent, for the quarter.

All three indexes are still up for the year. The Dow is up the most, 7.2 percent. The S&P 500 and Nasdaq are up 5 percent and 4.6 percent respectively. The Dow was down 6.3 percent at this time last year.

Concerns about the strength of the U.S. economy and a possible debt default by Greece spooked investors much of the month. One the first day of June investors were greeted with reports that American manufacturing output had expanded at the slowest pace in 20 months, that auto sales had tumbled in May, and that private companies added the fewest number of employees since September. By June 15, the S&P had lost nearly all of its gains for the year, before dividends.

Market declines mean different things to different people. Rather than retreat further, some investors came to believe that stocks were relatively cheap. Stocks began to reverse course.

The upward climb continued this week when Nike Inc.’s earnings came in much higher than analysts had been expecting. That indicated that higher gas prices haven’t stopped consumers from splurging on things like pricey sneakers and sportswear. In the last four days of the month, the S&P rose 4.1 percent.

Even so, the S&P 500 lost 1.8 percent for the month, the Dow finished down 1.2 percent for the month. The Nasdaq composite fell 2.2 percent. For the second quarter, the Dow gained 0.7 percent between April and June. The S&P 500 and Nasdaq, however, lost 0.4 percent and 0.3 percent, respectively.

Most economists, analysts and investors agree that, at the very least, the U.S. economy has struggled through a soft patch. The weakness was brought on by gas prices that hit $4 a gallon, problems getting computer chips and auto parts from Japan and severe weather in the South. These factors weighed on consumer spending and confidence and made recession-weary companies reluctant to hire employees or expand domestically.

Whether the late June rally continues into July depends partly on results from upcoming earnings reports and lingering effects of that soft patch.

Most stock analysts think the economy’s troubles are temporary. Few have lowered their estimates over the last month despite a dip in consumer spending and continued high unemployment. One reason: even if U.S. consumers spend less, American companies continue to make a significant portion of their profits overseas. As of 2010, 40 percent of the profits for U.S. companies in the S&P 500 came from overseas.

Alcoa Inc. is the first major U.S. company to report earnings every quarter. Many investors look to those results for indications of how the results of other major corporations might turn out. The aluminum maker, which tends to do well when the global economy is growing, reports its quarterly results on July 11.

Mark Schultz, portfolio manager for the $240 million MTB Mid-Cap Growth fund, believes that the impact of higher gas prices on U.S. corporate profits will be balanced out by growing revenue coming from sales in countries like China and Brazil, where companies are still expanding.

Some market strategists say the stock market is in for another up and down ride in July as earnings reports come out.

“We’re worried that the earnings season will capture the soft patch in the second quarter,” says Ron Florance, the managing director of investing strategy at Wells Fargo Private Bank. “If analysts haven’t factored that into their estimates then we could be set up for disappointments.”

Earnings season also gives investors a glimpse of what’s to come. When companies report for the quarter, their executives often lay out their expectations for revenue and earnings for the next quarter. Gloomy predictions from key companies like JPMorgan Chase & Co, IBM and Caterpillar could make a second-half stock rally difficult.

On the other hand, if those forecasts are more bullish, that will bolster the belief that effects from the Japanese earthquake and tsunami and high oil prices will be short-lived.

“The misses will probably not be repeatable because they could come from weather and commodity price spikes,” says Phil Orlando, the chief market strategist at Federated Investors. “We all know that the third quarter will be better.”

Of course, there’s one unknown looming: Politics. The federal government will reach its debt limit on Aug. 2. If Republicans and Democrats in Congress can’t reach a deal to prevent that from happening, the U.S. could find itself unable to borrow more money to meet all of its financial obligations.

The government would be forced to choose which payments it won’t make. Those could include Social Security checks to more than 52 million recipients or military salaries for the 1.4 million currently in the armed forces. Alarming, yes. But skipping bond interest payments could be even worse. A default would lead to a sharp rise in interest rates and possibly trigger a recession.

As of now, many investors are betting that a deal will be reached. But look for big swings in the market if a deal isn’t reached by mid-July, says Kevin Shacknofsky, co-manager of the $635 million Alpine Dynamic Dividend fund. “If we don’t have signs that there’s a deal by (then), you have to start positioning your portfolio for the worst.”

Source

Aircraft leasing company Air Lease Corporation says it has signed a commitment to order 50 of Airbus’ new A320neo aircraft, including options for another 14.

The A320neo is Airbus’ single-aisle mid-range jet engineered for fuel savings.

The Los Angeles-based company also made a firm order Monday for 11 Airbus 330s and one A321.

Excluding the options, the deal is valued at $6 billion at list prices, Airbus said.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LE BOURGET, France (AP) _ GE Capital Aviation Services has ordered 60 A320neo jets, a version of the workhorse jet revamped to be more fuel efficient, Airbus said Monday.

The European planemaker announced the deal at the Paris Air Show, where the search for a cheaper and cleaner way to fly is emerging as a major theme.

The deal would be worth about $5.5 billion at list prices, though buyers often strike discounts.

With airlines squeezed by skyrocketing fuel prices, Airbus has booked 390 orders and commitments for the A320neo since its commercial launch last December, even though the plane won’t be available until 2015 cheap credit report.

Airbus also announced an order for four of its A330-300 aircraft from Saudi Arabian airlines. The wide-bodied, twin-engined medium to long range A330-300 has a list price of euro223 million ($318 million). The Saudi airline already has 8 of the 330-300s in service.

Swedish airline group SAS ordered another 30 of Airbus’ A320neo aircraft for around 18 billion kronor ($2.8 billion) at list prices as part of an effort to renew its fleet.

SAS’s order includes an option to buy an additional 11 airplanes.

Delivery of the aircraft will start in the second half of 2016 and should be completed during 2019.

The acquisition is part of SAS’s move to concentrate its short-and medium distance fleet into two types of aircraft: Airbus A320 and Boeing’s 737NG.

Source

Mariko and Razmik Der Avanesian bought a $3,000 vanity that showed water damage just after it was installed.

They were willing to settle for two new side panels, which cost about $60. Yet the dispute dragged on for a year until they contacted me.

It’s hard to believe a high-end bathroom fixture couldn’t withstand moisture. But Decotec Paris Inc. (Canada) wouldn’t accept responsibility.

The couple shopped online before ordering a green vanity with six drawers at Tubs, a specialty chain. It was made to accommodate two sinks.

Within two months of installation in March 2010, the side panels started cracking from water leakage.

“We went back to the store right away, but our salesperson told us to talk to the manufacturer directly,” Mariko told me.

Delayed by renovations and guests, they contacted Decotec last November.

“It seems clear that the problem comes from the water fixtures installed on the vanity — that is, the faucets or water lines — and not the vanity itself,” said Michel Cloutier, head of customer service.

The Der Avanesians said the manufacturer hadn’t supplied a gasket or seal to protect the vanity from water. (The unit came already assembled.)

Decotec then changed its story. The customers were to blame.

“The warranty clearly states that ‘the cabinets and/or furniture must be protected for water spray/splash.’ Unfortunately, it does not seem to have been the case with your vanity,” Cloutier said last December.

“Furthermore, we feel that the damage could have been appreciably lessened had proper attention been given to it early on.”

Earlier this year, the sinks’ two back drain pipes had broken and water had leaked into the cabinet drawers and onto the floor.

Frustrated with Decotec, the couple asked Tubs to deal with the manufacturer. They thought that new panels and drain pipes were coming soon.

However, Tubs was getting nowhere with Decotec and decided to stop selling its products Payday Loan for Bad Credit.

“The manufacturer wouldn’t step up to the plate. There’s no point in having a warranty if the customer is left hanging,” said Pierre Moreau, the general manager.

The couple, however, felt let down by Tubs.

They had spent $9,000 in total and felt the store should have stood up for them.

How could it sell a product with no built-in protection against water damage and not warn them to seal it?

After discovering the water damage in the upstairs bathroom, they had installed a single-sink Decotec vanity in a downstairs powder room and sealed it with silicone. No damage had resulted.

Aline Baron, Decotec’s general manager in Montreal, was happy to tell me that the model was one of her bestsellers.

“After six years in business in Canada, we never got a claim for that model until this one,” she said.

“We don’t sell the faucets and drains fixed on that vanity and we’re not responsible for plumbing installation.

“You will understand there is a kind of negligence where our warranty cannot be applied.”

One day later, Baron wrote to the couple with her response.

“Decotec Paris will, as a good will gesture, provide you with two replacement side panels for your vanity. This, of course, does not constitute any admission of responsibility on our part.

“Our factory in France will actually make a special effort to manufacture parts in a colour that has been discontinued for some time.”

The new panels and drain pipes will arrive in August, so the couple won’t be able to use their bathroom vanity for a few more months.

“If our story can encourage someone crying about a similar situation or help someone not take the path we did, our hassle will be rewarded big time,” Mariko said.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.

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