Audit Analytics has prepared a research brief tracking director departures, including reason for departure, over five years. The research examined the entire filing population while focusing on accelerated filers and includes an industry specific breakdown of banking entities. We are pleased to offer a complimentary download.
Some points of interest in the briefing include:
- In 2007 the percentage of accelerated filers with a director departure was 37.5% as opposed to 33.8% for all filers.
- The percentage of departures among directors of banking entities increased by 7% between 2005 and 2008.
Banking entities experienced a sustained increasing trend in director departures starting in 2006 whereas director departures for all filers peaked in 2007.
The full report Director Departures – Five-Year Overview is available free of charge to Research Recap users for 30 days by special arrangement with Audit Analytics, an Alacra content partner. After 30 days, the report will revert to its regular AlacraStore price of $49.00).
Audit Analytics also has released Financial Restatements – A Nine-Year Comparison ($149.00), which indicates that the impact of the Sarbanes-Oxley Act on Internal Controls over Financial Reporting (ICFRs) has been beneficial. Some highlights of the report are:
- For the third year in a row, the total number of restatements in 2009 declined, falling by 27% from 2008.
- For the third year in a row Audit Analytics found an equivalence or reduction in the severity of the restatements:
- The restatements with the largest negative impact on net income dropped from $605 million in 2008 to $357 million in 2009.
- The average cumulative impact on net income per restatement dropped from $7.1 million in 2008 to $4.6 million in 2009.
- The average number of days restated dropped from 510 in 2008 to 476 in 2009.
- The average number of issues per restatement dropped from 1.67 in 2008 to 1.48 in 2009
For additional free research reports from the Alacra Store click here
Technorati Tags: complimentary research, corporate directors, corporate-governance, restatements, SOX, U.S. banks
European governments’ commercial medium- to long-term (MLT) borrowing will likely reach a historical peak at €1,446 billion in 2010, according to Standard & Poor’s Ratings Services seventh pan-European sovereign issuance survey. This is up €52 billion from the previous peak of €1,394 billion in 2009, according to the survey, which consolidates estimates of borrowing activity of all 46 rated European sovereigns in 2010.
Excerpts from S&P European Sovereign Issuance Survey Predicts Record Borrowing Of €1,446 Billion In 2010 On Large Budget Deficits (Premium)
Among the five largest European sovereign borrowers, we expect the U.K. to borrow an estimated €38 billion less than in 2009, after very high gross MLT borrowing of €257 billion in 2009. Our estimates of gross borrowing are higher by €41 billion in Germany, and by €26 billion in France, reflecting our expectation that there will be a deterioration in their public finances in 2010. We also estimate large absolute increases in MLT borrowing in Spain (€21 billion), Russia (€20
billion), Turkey (€19 billion), and The Netherlands (€13 billion).
We also believe it is likely that net MLT commercial borrowing (that is, gross debt net of maturing debt) will reach another peak in 2010 at €762 billion, up €82 billion from its 2009 level, and almost six times the level of 2007. We believe falling amortizations are the main reason for the even stronger increase in net borrowing. Short-term debt levels also remain high at 10.9%, well above their share of about 7% before the economic and financial downturn, but slightly down from 11.7% in 2009.
In our view, debt-related sovereign vulnerabilities have increased, particularly in the Eurozone, where we expect deficits and government borrowing will likely rise further to new peaks.
Changes in sovereign risk characteristics, as well as in risk perception by investors can lead to significant changes in financing costs, as experienced by a number of sovereigns over the past 18 months, Greece being the most recent example. Furthermore, because central banks are set to phase out liquidity support to the financial sector, as well as quantitative easing measures over 2010, the ensuing drop in demand for government debt could lead to rising benchmark yields. The resulting fiscal pressure from a sustained increase in financing cost could be significant in our view. We estimate that a sustained 300 basis points (bps) shift in the yield curve would by 2015 amount to extra annual interest payments of 3.9% of 2010 GDP for Greece, 2.6% for Portugal, and 2.5% for Italy and the U.K.
Technorati Tags: Europe, France, Germany, Italy, Netherlands, Portugal, Russia, sovereign-debt, Spain, turkey, UK
Big banks, except those in emerging markets, will probably destroy value over the next four years (McKinsey)
MGI: New sectors such as cleantech are too small to make a difference to economy-wide job growth.
Excellent microcosm in 7 minutes of how American homeowners got overleveraged (podcast by NPR’s Tamara Keith)
Audit Integrity Updates Investor Watchlist for Western Europe
Credit Suisse scorecard of OECD countries most likely to face government debt funding problems (via @FTAlphaville)
Social spending is up to 24% of GDP in OECD countries, driven by healthcare and elderly costs (OECD)
Technorati Tags: big banks, home-equity-loans, social spending, sovereign-debt, unemployment, western europe
Petroleum price subsidies are on the rise, adding to greenhouse gas emissions, according to a new “staff position note” from the International Monetary Fund (not official policy).
The paper notes that in 2003, global consumer subsidies for petroleum products totaled nearly $60 billion. They are projected to reach almost $250 billion in 2010. Tax-inclusive subsidies, reflecting suboptimal taxation, are estimated to be much larger—$740 billion in 2010, or 1 percent of global GDP. G-20 countries account for over 70 percent of tax-inclusive subsidies, with emerging G-20 countries accounting for a sizable share.
Halving tax-inclusive subsidies could reduce projected fiscal deficits by one-sixth in subsidizing countries and could reduce greenhouse emissions by around 15 percent over the long run.
The paper urges reform of subsidies, but recommends including measures to mitigate the impact of higher prices on the poorest groups.
Fore details, see Petroleum Product Subsidies: Costly, Inequitable, and Rising
Technorati Tags: emissions, energy-prices, greenhouse-gases, petroleum, subsidies
Intelligent home energy management systems should be able to reduce energy bills by up to 28%. (The Economist)
Kauffman Foundation launches Energy Innovation Network so entrepreneurs can accelerate the clean energy revolution
SWFs’ investments rose from $10bn in first half of 2009 to $50bn in second half, but still down 3% for year (IFSL)
It’s Time for Swaps to Lose Their Swagger (NY Times Gretchen Morgenson)
Very poor people in emerging economies surprisingly interested in mobile financial services (McKinsey)
Book Excerpt from ‘The Responsibility Revolution’ – Don’t Ignore the Transparency Imperative (via strategy+business)
Credit Suisse Annual Survey Finds Hedge Fund Managers Moderately Optimistic About Inflow Growth, Fees
Technorati Tags: credit-default-swaps, energy-efficiency, Hedge-Funds, mobile, Sovereign-Wealth-Funds, SWF, transparency, Twitter
Fitch Downgrades Greece’s Four Largest Banks to ‘BBB’; Outlook Negative
Economic conditions are much improved for both companies and countries, executives say (McKinsey Survey)
Hedge funds to invest more in distressed banking, energy, healthcare companies (Reuters Dykema survey)
Secret recording casts more doubt on claims about Avandia’s safety (NYTimes)
“Strategic defaults” may be accelerating as more people shrug aside societal pressure to meet debts if they can (FT)
Harvard’s Rogoff Sees ‘Bunch’ of Sovereign Defaults (via Bloomberg)
Alternatives to BPA containers not easy for U.S. foodmakers to find (Wash Post)
In past week, large corporations made 32 moves in cleantech (Cleantech Group)
Technorati Tags: (GSK), BPA, cleantech, GlaxoSmithKline, Greece, mortgage defaults, sovereign-debt
Reports spark new debate over safety of GlaxoSmithKline’s Avandia diabetes drug (Fierce Pharma)
New IMF paper suggests restricting foreign investments in developing countries can be helpful (Planet Money)
CMBS delinquency rate to reach 7 to 8 % in 2010, up from 5.15% at end 2009 (S&P via FT Alphaville)
Global pension assets grew by 14% from to $29.5 trillion at end-2009 after an 18% drop in 2008 (IFSL)
The Long Road to an Alternative-Energy Future (WSJ)
US credit card delinquency rate increased 10% to 1.21% for Q4 2009, flat YOY (TransUnion)
Washington DC facing commercial real estate foreclosure crisis (WashPost)
Global market share of ten largest consumer products companies declined further in 2008 (Deloitte Global Powers report)
Technorati Tags: (GSK), alternative-energy, CMBS, consumer-products, credit card ABS, GlaxoSmithKline, IMF, pension-funds
There was a $1 trillion gap at the end of fiscal year 2008 between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises, according to a new report released by the Pew Center on the States. The shortfall, which will have to be paid over the next 30 years by state and local governments, amounts to more than $8,800 for every household in the United States.
The figures detailed in Pew’s report, “The Trillion Dollar Gap,” include pension, health care and other non-pension benefits promised to both current and future retirees in states’ and participating localities’ public sector retirement systems.
In eight states—Connecticut, Illinois, Kansas, Kentucky, Massachusetts, Oklahoma, Rhode Island and West Virginia—more than one-third of the total liability was unfunded.
California needs to improve how it manages its long-term liabilities for both pensions and retiree health care and other non-pension benefits for public workers, according to the Report. The state has set aside only $3 million toward its $62 billion long-term liability for public retiree health care and other benefits.
Pew’s numbers likely underestimate the bill coming due because the most recent available data do not account for the second half of 2008, when states’ pension fund investments were particularly affected by the financial crisis. Additionally, most states’ accounting methods spread the investment declines over a period of time–meaning states will be dealing with their losses for several years.
Technorati Tags: California credit, pension funding, public-finance, states
Guest Post by Oxford Analytica
During the past decade, blogging has simplified the process of publishing and distributing words, enabling anyone with an internet connection to share thoughts with the world at virtually zero cost. However, with the development of broadband internet, it has evolved into a richer, more immersive platform that draws on a wider range of media — spanning text, images, audio, video and software applications.
The net result is a very different kind of media system. With millions of blogs engaged in production of news, comment and analysis around every conceivable topic, the media is becoming more open, collaborative and participatory in content and operation. The blogosphere’s impact can be seen most vividly in the speed of information distribution. It is a crucial link in a wider chain of technologies (such as camera phones, wireless connectivity and cheap computing), which is reducing lag time between incidence and reporting of news to minutes, even seconds. Recognising the shift from static to ‘realtime web’, Google recently updated its search algorithm to include latest results from the blogosphere.
Traditional media implications. The development of the blogosphere into an extensive and rapidly updated information repository poses a challenge to established parts of the media, such as newspapers, television and radio, which have traditionally functioned as gatekeepers between large audiences and global news. Under financial pressure, traditional newsrooms are cutting investment in original journalism, notably in specialist areas. This is due to the cyclical shock of recession and longer-term structural changes brought about by the web (and associated migration away from traditional formats of audiences, with advertisers).
Individually, bloggers can devote more time and energy to topics the traditional news media otherwise would struggle to cover. Reflecting this shift, many newsrooms license digital media monitoring services to trawl the blogosphere for stories and leads.
Transparency concerns. The growing influence of the blogosphere has led regulators to impose new forms of accountability on bloggers. For example, in the United States, the Federal Trade Commission in October 2009 issued new guidelines that require bloggers to disclose vested interests — such as free merchandise or payment from companies they write about.
Reputation management. The blogosphere also challenges the public profile of individuals and organisations. For example, the web makes every employee a potential point of contact with the media — or a leak. Information is harder to contain, whatever the topic or source:
- Local problems and secrets quickly can be transformed into digital liabilities that can affect an individual or organisation on a global scale.
- Conventional protections, such as libel or defamation law, struggle to have leverage due to distributed server location and the frequently anonymous attribution of blogs.
A growing number of companies are being hurried into unscheduled announcements or regulatory disclosures due to the blogosphere. There is growing realisation that digital news flow cannot be controlled, and the best course of action is to engage with the blogosphere as quickly and fully as possible. The best way to achieve this is by monitoring, in real time, what people are saying on the web.
For many, this points towards a new politics of communication that will force industries and governments to accept a higher degree of accountability.
Outlook. The dual shock of the recession and digital revolution is sparking a process of retrenchment and consolidation, but over the longer term traditional media will probably find themselves at the heart of a more diverse media landscape, in which blogs play an important, but not dominant, role. Traditional media still function as the main anchor of the news — their brands serve as trusted filters, flashpoints for debate, and incubators for media talent. The blogosphere will supplement these, notably filling gaps and extending coverage.
Technorati Tags: accountability, blogs, corporate-governance, government-affairs, Media, newspapers, online-media, traditional media
As it raises its forecast for global energy demand, the International Energy Agency has issued a timely study of the prospects for second-generation biofuels, with a special focus on forestry and agricultural residues.
Key Findings:
- There is a considerable potential for the production of second-generation biofuels. Even if only 10% of the global agricultural and forestry residues were available in 2030, about half of the forecasted biofuel demand in the World Energy Outlook 2009 450 Scenario could be covered – equal to around 5% of the projected total transport fuel demand by that time.
- To ensure a successful deployment of second-generation biofuels technologies requires intensive RD&D efforts over the next 10-15 years.
- The technical development will mainly take place in OECD countries and emerging economies with sufficient RD&D capacities like Brazil, China and India.
- In many developing countries, the framework conditions needed to set up a second-generation biofuel industry are not currently sufficient. The main obstacles that need to be overcome include poor infrastructure, lack of skilled labour and limited financing possibilities.
Agricultural and forestry residues should be the feedstock of choice in the initial stage of the production, since they are readily available and do not require additional land cultivation.
- Investments in agricultural production and infrastructure improvements would promote rural development and can significantly improve the framework for a second-generation biofuel industry. This will allow developing countries to enter second-generation biofuel production once technical and costs barriers have been reduced or eliminated.
- The suitability of second-generation biofuels for countries’ respective needs has to be evaluated against other bioenergy options. This should be part of an integrated land use and rural development strategy, to achieve the best possible social and economic benefits.
- Capacities should then be built slowly but continuously in order to avoid bottlenecks when the new technologies become technically available and economically feasible. To ensure technology access and transfer, co-operation on RD&D between industrialised and developing countries as well as among developing countries should be enhanced.
- More detailed research is still needed to ensure that second-generation biofuels will provide economic benefits for developing countries. This research includes a global road map for technology development, an impact assessment of commercial second-generation biofuel production, and improved data on available land. Additionally, more case studies could enable further analyses of local agricultural markets, material flows, and specific social, economical and environmental benefits and risks in developing countries.
Technorati Tags: Biofuels, energy, residues
