Shaw Capital Management Investment: Shaw Capital Management Newsletter: Japan Submits Budget for 2010

The Democratic Party of Japan (DPJ) government submitted to the Diet the fiscal 2010 budget amounting to ¥92.3 trillion, its first budget since its inauguration in mid-September. The budget was even larger than its counterpart for the current fiscal year — which was already a record if one includes the second supplementary stimulus package, approved last December. This was because of additional spending on child allowances, free senior high school education, cash subsidies to farmers, and higher payments to medical institutions to alleviate the shortage of medical doctors. Particularly noteworthy is the large amount devoted to social security, up to ¥27.3 trillion, which account for 51% of general public spending … the first time that the social security share has exceeded 50%. In marked contrast, public works investment, which has been cut back by almost 20%, amounts to ¥5.8 trillion, a record drop that symbolizes the DPJ’s philosophy of shifting money to people from public works... eightynine dam projects are likely to be frozen.

At a news conference, Prime Minister Yukio Hatoyama described it as “a budget meant to safeguard the life of the people.” He also claimed that three reforms were incorporated in the architecture of the budget: first, the principle of a shift of priority “from concrete to people”; second, initiatives taken by politicians instead of bureaucrats; and third, securing transparency in the budget formulation process. Some creditable aspects notwithstanding, the budget bill appears to be overshadowed, as media reports made clear, by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent as recently pointed out by credit rating agency Standard & Poor’s which raised the prospect of a downgrade in Japan’s sovereign debt rating.

“The budget bill appears to be overshadowed by concern over a severe revenue shortage and its implications for the future of Japan’spublic finances, which are already debt-laden to a perilous extent.”

“Japan’s economic policy flexibility has diminished as a result of increased fiscal deficits and government debt, persistent deflation and a prospect of continued sluggish economic growth”, analysts at the firm said in a note. “It’s impossible to keep tolerating this massive spending,” said Takeshi Minami , chief economist at Norinchukin Research Institute in Tokyo. “Japan’s fiscal health will continue to be exceedingly severe given revenue won’t grow and a stagnant recovery may require additional economic measures.” A major reason for the squeeze is a plunge in prospective tax revenues due to the economic downturn and the drop in corporate profits. Tax revenues for fiscal 2010 are estimated to fall to ¥37.4 trillion, the same level as 26 years ago, in the mid-1980s — while corporate tax revenues are expected to be half the amount in normal years. As a result, the government has to raise ¥44.3 billion in new government bonds, compared to ¥53.5 trillion in FY2009. This leaves the treasury dependent on debt for 48% of the total budget, up 10 percentage points. At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.

“At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.”

According to the new government, the economic policies adopted by the previous ruling party, the Liberal Democratic Party (LDP), failed on two fronts: initially boosting demand by increasing public investment, which was effective in the short term but not sustainable until the end of the 1990s. And later enhancing the supply side of the economy by deregulating the labour market and privatizing public entities, which simply widened the income gap within the economy, in the 2000s. However, the new budget was not well received by most observers. The announcement was rather sudden and lacked a comprehensive path to achieve the stated goals, they claim. Also, no reliable, specific incentives were offered, such as tax changes or deregulation that affect private sector behaviour.

More importantly, given its enormous debt, the government has limited room to offer any incentives without jeopardizing other parts of the economy. However, there was no mention of these painful trade-offs. In addition, while the budget contains some signs of change, there is concern that it may not adequately stimulate the economy. Most private sector economists believe that spending measures in the fiscal 2010 budget (and in the second fiscal 2009 supplementary budget) are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April. “Most private sector economists believe that spending measures in the fiscal 2010 budget are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April.”

Overall, the budget appears to be the result of a compromise between an attempt to impose some fiscal discipline and the promises made in last year’s summer election of new direct supports to households, such as child allowance, as well as concern over a double-dip recession. “Harsh financial conditions have prevented the administration from keeping all the promises that the DPJ made during its campaign last summer (for instance it has eliminated highway tolls and the gasoline tax). But the administration has succeeded, to some extent, in realizing the party’s slogan of “shifting weight to people from concrete” and its aim of providing more funds for households, rather than for industry-linked organizations and large-scale public works projects”, asserted in its editorial the Japan Times, one of the main national newspapers.

“Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats.”

The budget must now be approved by Japan’s parliament before taking effect. Hatoyama’s popularity has dropped to 48% this month from 71% after he took the office in September. Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats. So in the end the budget and its goals may be more dream than reality.

Shaw Capital Management Investment: Foreign Exchange Markets 2010: Shaw Capital Management

The main feature of the foreign exchange markets over the past month has

been the further sharp fall in the euro. There has been no real change in

the background economic situation in the euro-zone; but there has been

a serious deterioration in the financial background as doubts have increased

about the ability of Greece and some other periphery countries to cope

with their massive fiscal deficits and service their sovereign debts.

This is clearly leading to a withdrawal of international funds from the

European capital markets, and is dramatically illustrated in the widening

of yield spreads in the bond markets of member countries.

There is still a general assumption that the stronger members will provide

support for the weaker members if this proves to be necessary to prevent

a default on sovereign debts.

But the uncertainties have been increased by conflicting statements from

the European Central Bank and some politicians about the willingness to

undertake such operations, and so investors and speculators have taken

evasive action, and the euro has fallen by around 10% from its peak in early-

December.

This fall has provided support for the other major world currencies, including

the dollar; but the background situations in Japan, and in the UK, also

provide reasons for concern, and so the currency markets remain in a very

uncertain state.

It is likely that the uncertainty will continue. The US economy is clearly

recovering from recession; economic conditions in Japan are very weak,

and Japan appears to face the possibility of a credit downgrade if it does

not take steps to reduce its massive fiscal deficit; and there have already

been warnings from Standard and Poor’s that the UK also faces the possibility

of a credit downgrade if there are no convincing measures to reduce its

huge fiscal deficit after the forthcoming general election.

Prospects are therefore very difficult to assess; but our tentative conclusion

is that the dollar will continue to “improve”, helped to a considerable extent

by weaknesses elsewhere; and that this will allow market pressures to

gradually subside as the global economic recovery continues through the

year.

But the possibility of a major currency crisis cannot

be ignored, especially if the debt problems in Greece

and other periphery countries threaten to lead to the

break-up of the single currency system in Europe.

It is fortunate therefore that the available evidence

on the performance of the US economy is more

encouraging. Non-farm payrolls fell again in December

by 85,000, but are expected to have increased in

January; retail sales held up well in the pre-Christmas

period; manufacturing output is improving, according

to the latest report from the Institute of Supply

Management; and even the housing market appears

to be recovering.

This general situation is reflected in the first

preliminary estimate from the Commerce Department

of growth at a seasonally adjusted annualised rate of

5.7% in the final quarter of last year, a higher figure

than the market had been expecting.

Most economists therefore appear to be forecasting

overall growth this year in the 2.5% to 3% range, after

the estimated fall of 2.4% last year.

The Fed is clearly in no hurry to tighten its present

monetary stance. The statement after the latest

meeting of its Open Market Committee was more

upbeat about the prospects for the economy; but shortterm

interest rates were left unchanged and close to

zero, and there was a clear indication that they would

remain at very low levels “for an extended period”.

The bank did state that it will discontinue most of its

emergency lending programmes, and that it would

end its purchases of mortgage securities in March; but

there was no indication that it would be prepared to

implement an “exit strategy” until there was

convincing evidence of a sustainable economic

recovery. It is also unlikely that there will be any early

changes in fiscal policy.

The recent State of the Union message to Congress by

President Obama included a request for the approval

of a further fiscal stimulus package this year amounting

to around $100 billion to help to tackle the

unemployment problem, and he has also presented a

$3.8 trillion budget for fiscal 2011 that is likely to

maintain the overall deficit around the $1.35 trillion

level expected this year.

Much will depend on the attitude of overseas holders,

and especially on the attitude of the Chinese and

Japanese authorities.

For the present they seem to be prepared to maintain

and even increase their dollar exposure; and if this

continues, and the problems of other major currencies

remain unresolved, it should be enough to allow the

dollar to “improve”.

The euro struggled to recover in the early part of

January from the big fall that occurred in December;

but the recovery did not last very long, and it has

subsequently fallen sharply again, to leave it value

against the dollar around 10% below the level in early-

December.

There has been no significant change in the underlying

economic background, although there is some evidence

that the fragile recovery that was developing is losing

some momentum.

But there has been a serious deterioration in the

financial background as the fears have increased that

Greece and some other periphery countries in the

euro-zone may be unable to fund their massive fiscal

deficits, and service their sovereign debts.

There is also considerable uncertainty about the

intentions of the European Central Bank and the

stronger countries if conditions continue to worsen,

and so overseas holders have started to withdraw

funds from the European capital markets to await

developments.

The present lack of urgency at the central bank and

amongst the key politicians suggests that this trend

will continue, and that the euro will fall still further;

but there is still some hope that the seriousness of the

situation will finally produce a support operation that

will ease the situation.

All the available evidence continues to point to a slow,

two-speed recovery in the euro-zone economy.

Germany and France appear to be performing

reasonably well, although there are some signs of

slowdown in Germany; but Greece, Portugal, Spain,

Ireland, and even Italy are struggling to escape from

recession, and are expected to keep overall output in

the euro-zone this year around the 1% level.

There is also considerable uncertainty about the intentions

of the European Central Bank and the stronger countries

if conditions continue to worsen, and so overseas holders

have started to withdraw funds from the European capital

markets to await developments.

Retail sales remain depressed, and fell by 1.2% between October and

November to reflect the continuing caution of consumers; and industrial

orders in Germany rose by much less than expected in November, after a

very disappointing result in October, to indicate some weakness in export

prospects that had been expected to provide significant momentum to the

economy.

Prospects therefore remain disappointing, and are being made worse by

the differences that exist between member countries.

The European Central Bank therefore faces a difficult situation. It continues

to forecast “moderate” growth and “moderate” inflation; but it is being

severely criticised for failing to address the problems of a two-speed

economy, and for its unwillingness so far to face the threat that the

deteriorating situation in Greece could quickly begin to destabilise other

member countries and have serious consequences for the financial stability

and growth prospects of the entire area.

It is not surprising therefore that investors and speculators have started

to reduce their exposure to the euro.

The critical question therefore is whether the fall of the euro is now over.

Since the currency is unlikely to receive any real support from the general

background situation in the euro-zone, everything depends on the

developing debt situation, and particularly on the situation in Greece; and

also on the possibility of support operations from stronger member countries

and from the European Central Bank, and the European Commission.

The situation remains uncertain. The central bank appears to be reluctant

to offer help, and the German government, which might have been expected

to become involved, has also made no response so far.

But the European Commission has endorsed the latest plans by the Greek

government to introduce an across-the-board freeze on public sector wages

and cuts in allowances that are expected to reduce the overall public sector

wage bill by around 4%.

This may encourage support from elsewhere; however the Commission has

warned that it will not tolerate any slippage from the target and will if

necessary demand tougher action from the government to ensure that it

stays on course.

But it is far from clear that the Greek government can obtain the necessary

support in parliament even for the present proposed measures, and so the

uncertainty will continue.

It is therefore likely that there will be further falls in the euro over the

coming weeks.

Sterling has improved slightly over the past month, helped by the weakness

of the euro.

The background situation in the UK remains unattractive, and there have

already been threats that its AAA credit rating is at risk unless there are

credible measures to reduce the massive fiscal deficit after the forthcoming

general election is over.

The European Central Bank therefore faces a

difficult situation. It continues to forecast

“moderate” growth and “moderate” inflation;

but it is being severely criticised for failing

to address the problems of a two-speed

economy, and for its unwillingness so far to

face the threat that the deteriorating situation

in Greece could quickly begin to destabilise

other member countries and have serious

consequences for the financial stability and

growth prospects of the entire area.

But the UK is not constrained by membership of the European single

currency system, and so there is no immediate risk of a default on its

sovereign debts.

It has therefore been able to benefit from the problems affecting some

other European countries.

The latest figures from the Office of National Statistics indicate that the UK

just managed to move out of recession in the final quarter of last year. The

estimate of growth of only 0.1% in the quarter was a considerable

disappointment, and it is expected that it will be revised higher; but clearly

the economy is not performing very well.

Government spending remains strong, and there was a surge in retail sales

in the run-up to Christmas; but the anecdotal evidence suggests that

consumers became much more cautious again in January.

The latest meeting of the Monetary Policy Committee of the Bank of England

was concerned by the poor reaction so far to the dramatic measures that

have been introduced to counter the recession, and reacted to this situation

by leaving UK base rates unchanged once again at 0.5%.

It clearly has no intention of moving to an “exit strategy” until there is

convincing evidence that a sustainable recovery in the economy is underway.

It did announce that purchases of market securities under the quantitative

easing programme would now be discontinued after the £200 billion target

has been reached; but its main priority is to continue to provide support

for the fragile economic recovery.

Fiscal policy is also likely to remain unchanged until after the election,

because the necessary measures to reduce the huge deficit will be unpopular,

and might influence the outcome of that election.

Sterling is therefore receiving no real support from the domestic background

situation, and in other circumstances might have been expected to move

lower.

But the problems affecting the other major global currencies, and particularly

the problems affecting the euro, have at least delayed any further falls.

The yen has improved over the past month, despite a generally unfavourable

domestic background situation, and some attempts by the Japanese

authorities to prevent its appreciation against other currencies.

It has achieved an enhanced “safe haven” status in the current storm in

the currency markets, and on the back of the relative success of its exports.

But conditions in the Japanese economy remain very weak, and there has

even been the threat of a downgrade of its credit rating unless measures

are introduced to reduce its massive fiscal deficit.

However it does not appear that this threat will prevent the new Japanese

government from introducing further measures to stimulate the economy,

and urging the Bank of Japan to intervene in the markets to weaken the

yen, and so its prospects remain very uncertain.

Shaw Capital Management Investment: Shaw Capital Management March Newsletter: Japanese Government Submits Budget for Next Fiscal Year

Shaw Capital Management: Japanese Government Submits Budget for Next Fiscal Year

Japanese Government Submits Budget for Next Fiscal Year: Shaw Capital Management News

The Democratic Party of Japan (DPJ) government submitted to the Diet the fiscal 2010 budget amounting to ¥92.3 trillion, its first budget since its inauguration in mid-September. The budget was even larger than its counterpart for the current fiscal year — which was already a record if one includes the second supplementary stimulus package, approved last December. This was because of additional spending on child allowances, free senior high school education, cash subsidies to farmers, and higher payments to medical institutions to alleviate the shortage of medical doctors. Particularly noteworthy is the large amount devoted to social security, up to ¥27.3 trillion, which account for 51% of general public spending … the first time that the social security share has exceeded 50%. In marked contrast, public works investment, which has been cut back by almost 20%, amounts to ¥5.8 trillion, a record drop that symbolizes the DPJ’s philosophy of shifting money to people from public works... eightynine dam projects are likely to be frozen.

At a news conference, Prime Minister Yukio Hatoyama described it as “a budget meant to safeguard the life of the people.” He also claimed that three reforms were incorporated in the architecture of the budget: first, the principle of a shift of priority “from concrete to people”; second, initiatives taken by politicians instead of bureaucrats; and third, securing transparency in the budget formulation process. Some creditable aspects notwithstanding, the budget bill appears to be overshadowed, as media reports made clear, by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent as recently pointed out by credit rating agency Standard & Poor’s which raised the prospect of a downgrade in Japan’s sovereign debt rating. “The budget bill appears to be overshadowed by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent.” “Japan’s economic policy flexibility has diminished as a result of increased fiscal deficits and government debt, persistent deflation and a prospect of continued sluggish economic growth”, analysts at the firm said in a note.

“It’s impossible to keep tolerating this massive spending,” said Takeshi Minami , chief economist at Norinchukin Research Institute in Tokyo. “Japan’s fiscal health will continue to be exceedingly severe given revenue won’t grow and a stagnant recovery may require additional economic measures.” A major reason for the squeeze is a plunge in prospective tax revenues due to the economic downturn and the drop in corporate profits. Tax revenues for fiscal 2010 are estimated to fall to ¥37.4 trillion, the same level as 26 years ago, in the mid-1980s — while corporate tax revenues are expected to be half the amount in normal years. As a result, the government has to raise ¥44.3 billion in new government bonds, compared to ¥53.5 trillion in FY2009. This leaves the treasury dependent on debt for 48% of the total budget, up 10 percentage points.

 At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP. “At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.”

According to the new government, the economic policies adopted by the previous ruling party, the Liberal Democratic Party (LDP), failed on two fronts: initially boosting demand by increasing public investment, which was effective in the short term but not sustainable until the end of the 1990s. And later enhancing the supply side of the economy by deregulating the labour market and privatizing public entities, which simply widened the income gap within the economy, in the 2000s. However, the new budget was not well received by most observers. The announcement was rather sudden and lacked a comprehensive path to achieve the stated goals, they claim. Also, no reliable, specific incentives were offered, such as tax changes or deregulation that affect private sector behaviour. More importantly, given its enormous debt, the government has limited room to offer any incentives without jeopardizing other parts of the economy. However, there was no mention of these painful trade-offs. In addition, while the budget contains some signs of change, there is concern that it may not adequately stimulate the economy. Most private sector economists believe that spending measures in the fiscal 2010 budget (and in the second fiscal 2009 supplementary budget) are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April. “Most private sector economists believe that spending measures in the fiscal 2010 budget are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April.”

Overall, the budget appears to be the result of a compromise between an attempt to impose some fiscal discipline and the promises made in last year’s summer election of new direct supports to households, such as child allowance, as well as concern over a double-dip recession. “Harsh financial conditions have prevented the administration from keeping all the promises that the DPJ made during its campaign last summer (for instance it has eliminated highway tolls and the gasoline tax). But the administration has succeeded, to some extent, in realizing the party’s slogan of “shifting weight to people from concrete” and its aim of providing more funds for households, rather than for industry-linked organizations and large-scale public works projects”, asserted in its editorial the Japan Times, one of the main national newspapers. “Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats.”

The budget must now be approved by Japan’s parliament before takingeffect. Hatoyama’s popularity has dropped to 48% this month from 71% after he took the office in September. Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats. So in the end the budget and its goals may be more dream than reality.

Shaw Capital Management News: Washington Waxes Brazilian

 Brazil provides us with an example of a rapidly developing, energy-hungry economy in the Western Hemisphere, where biofuel is a fact of life. Biofuel is also an investment imperative for energy investors and companies that want to make money in Brazil. As an important part of the #3 economy in the Americas, ethanol can't be ignored by the United States.

(Sugar) Ethanol as a Global Commodity; Focus on Cosan Ltd. (NYSE: CZZ) Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and its happy beginning to 2010 signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels. Cosan, a Brazilian company that processes more sugar than anyone else in the world, is now joining with Royal Dutch Shell (NYSE: RDS), the #2 oil producer in Europe.

Shell is paying Cosan $1.625 billion for half of its core assets. As part of the joint venture that will emerge, Shell is also taking on Cosan's debt and opening up 2,740 Shell service stations to Cosan's sweet, green fuel. Shell will also give Cosan two small Brazilian companies … Codexis and Iogen … where Shell has been investing in ethanol. Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and...signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels.

Shaw Capital Management Korea News:  Cosan stands to gain big from an efficient system of turning agricultural leftovers into fuel in its own right. Of all the money and knowledge changing hands, one part is most important: By gaining access to Shell's distribution system, Cosan will have the luxury of ramping up production without

worrying if there will be buyers.

Shell wants to fertilize Cosan's cane-based business. Cosan output now has to grow from 2 billion liters per year up to the 3 billion that will be needed to satisfy a total 4,500 fuel stations in Brazil. From there, it's up to 4 and 5 billion liters annually and on to making ethanol a global commodity. You'd be hard pressed to tell the difference between Shell and Cosan's statements on this joint venture if you removed a couple of words. Very simply, each company wants access to the other's expertise. "Cosan represents the best entry to sustainable biofuels in the market... the best entry of scale," Shell's Mark Williams said in London. In Sao Paulo, Cosan Chairman Rubens Ometto said the tie-up is intended to be "the step forward that was lacking, in spite of all our efforts, to make ethanol a global commodity." Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two.

Shaw Capital Management Korea News:  Low prices also help, as evidenced in Brazil where flex-fuel vehicles now account for 90% of new cars and truck sales. Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two (Brazil mandates that all gasoline have at least a 20% ethanol component). As it stands, Brazilians are the end users of the vast majority of the ethanol that their country produces (about 25 billion liters annually). And you wouldn't know it from most of the media, but ethanol is more than just an automotive matter...

Shaw Capital Management, Korea - Investment Innovation & Excellence.  We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.

Focus on Plutonic Power Corporation (TSX:PCC) Shaw Capital Management News

 Plutonic Power Corporation develops environmentally friendly run-of river hydro projects in British Columbia.

Now before we get into the specifics on this one, let's first answer the question: What is run-of-river hydro?

Plutonic defines it quite well, stating that run-of-river projects do not actually require any damming of water. Instead, some of the water in a river is diverted and sent into a pipe called a penstock.

This penstock feeds the water downhill to a generating station. The natural force of gravity creates the energy required to spin the turbines that in turn generate electricity. The water leaves the generating station and is returned to the river without altering the existing flow or water levels.

All of Plutonic's component specifications and construction methods are consistent with providing the least amount of environmental and visual impacts. In fact, in a comparison of environmental impacts, the Ontario Power Authority shows run-of-river hydro to have less of an impact than solar and wind. And of course it rates much better than oil and coal. “In a comparison of environmental impacts, the Ontario Power Authority shows run-ofriver hydro to have less of an impact than solar and wind. And of course it rates much better than oil and coal.”

Shaw Capital Management Korea News:  Operations. Plutonic Power is in the process of building out a number of run-of-river hydro projects in Canada. The first to go online will be the East Toba and Montrose project, which is expected to begin operations later in 2010.

The combined installed capacity of this one will be 196 megawatts. All the electricity to be generated from this project will be sold to BC Hydro under a 35-year sales contract.

In the third quarter 2009, 74 percent of the project's plant construction was completed, and 73 percent of the penstock was completed. 79 percent of the construction of the transmission line was completed.

Shaw Capital Management Korea News: Other projects include: Upper Toba Valley Project (3 facilities). Estimated installed capacity of 166.3 megawatts when completed. Bute Inlet Project (17 facilities). Estimated installed capacity of 1,030 megawatts when completed. Freda Creek Project (1 facility). Estimated installed capacity of 35 megawatts when completed.

The BC Hydro Connection. In June, 2008, BC Hydro launched a Clean Power Call to develop new energy operations. A Request for Proposals followed for projects using proven technologies, such as hydro, wind, solar and geothermal.

This Clean Power Call aligned BC Hydro with the BC Energy Plan which calls for 90 percent of electricity in the province to come from clean or renewable sources and for all new electricity generation projects to have zero net greenhouse gas emissions.

The intent here for BC Hydro is to successfully negotiate power purchase agreements with those chosen from a long list of proposals. … Plutonic is on this list.

And on November 19, 2009, Plutonic Power received notification from By Hydro that the Bute Inlet and Upper Toba Valley Projects will be approved. These projects were proposed jointly with GE Energy Financial Services.

The GE Connection.  In August of 2006, Plutonic Power granted GE Energy Financial Services the exclusive right to make a $100 million equity investment and provide $400 million in debt financing for its East Toba River and Montrose project. In return for the equity investment, GE gets a 49 percent equity stake and 60 percent economic interest in the project. Now by the time BC Hydro issued its request for proposals, GE had given an equity contribution of about $79.3 million and extended about another $71.3 million credit for the East Toba River and Montrose project.

GE also formed a join venture with Plutonic last June 2009 to purchase an uncompleted 144-megawatt wind project in northeast BC. This is the largest wind power project under construction in British Columbia. Given British Columbia's recent announcement that it's going to establish a ‘Green Energy Advisory Task Force’ to help advance the Province's climate, Plutonic Power is in a good position. While Plutonic is knows for run-of-river hydro, this deal allows the company to further develop green assets in Canada. The purchase of this wind project was completed on December 11, 2009. Given British Columbia's recent announcement (November 2, 2009) that it's going to establish a ‘Green Energy Advisory Task Force’ to help advance the Province's climate, to reduce greenhouse gas emissions and build a greener economy, Plutonic Power is in a good position.

Shaw Capital Management Korea - Investment Innovation & Excellence.  We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.

Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.

Shaw Capital Management News: Flex-Fuel Power Plants

Now Opening in Brazil

On January 19th 2010, the first ethanol-fired power plant whirred into action in Brazil. National oil company Petrobras (NYSE: PBR) and American systems giant General Electric (NYSE: GE) pitched in resources to turn an existing 87 MW plant into a flex-fuel power station that can alternate between natural gas and ethanol (which are both considered alternative fuels, even though only one is renewable).

GE wants to see how its turbines can be adapted to work in flex-fuel plants in Brazil and in developed countries like Japan, where clean-burning power plants are gaining momentum.

Brazil's water-dependent hydroelectric infrastructure teeters during the dry season in places where natural gas isn't easily accessible. It just so happen that wind power peaks at the opposite time of the year as the water in running rivers that drives dam-based generation.

Ethanol and wind could supplant natural gas as the primary alternative source of electricity generation during the dry season in Brazil and President Luiz Inacio Lula da Silva said in the Brazilian press that Brazil could be selfsufficient in natural gas after several pre-salt (read: incredibly deep) offshore fossil fuel pockets are tapped.

That capacity is at least five years away. Ethanol is there now, and after wind power auctions started last December, 773 wind turbines will be turning across Brazil by 2012.

Shaw Capital Management Korea News: Shell, Petrobras, GE, and Cosan will surely push hard to get the government in Brasilia to initiate a nationwide "ethanol electricity" campaign to ensure that oil and automotive fuel aren't the key determinants of sugar ethanol's success.

As in so many other areas of the world, those communities that are now underserved by fossil fuels can benefit most from such clean energy advances.

The US Administration completed its revised Renewable Fuels Standard (RFS2). RFS2 will move towards a national goal of 26 billion gallons of biofuel production by 2022.

At Shaw Capital Management we give you the information and insight you need to make the right investment choices. We look forward to working with you and being the open architects of your financial well being.

Shaw Capital Management Korea - Investment Innovation & Excellence.  We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.

Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.

Our philosophy is simple: almost every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.

Before Shaw Capital Management Korea  launched the open architecture revolution, investors had to make the unhappy choice between selecting an advisor who was independent, but unsophisticated (the traditional pension and endowment consulting firms), or selecting an advisor who was sophisticated but had conflicting interests (global banks, trust companies, money management firms).

Shaw Capital Management Headlines:shaw capital management scam info:Timmins Police warning of internet property scam

By Timmins Police Service News Release / The Timmins Times
Police advise caution when selling real-estate online

The Timmins Police Service (TPS) Criminal Investigation Division is investigating a report of a scam where the victim was selling property online, said a news release from TPS Friday morning.

According to the police report, the victim had posted some property for sale on a website and after a few exchanges of emails with a potential buyer; they received a certified cheque from the Laurentian Bank of Canada worth more than they had asked for. They then received an email stating to keep an additional $80 for their trouble and to send the remainder of the money to an address in Paris, France. The bank then advised the victim that the cheque was fraudulent.

The Timmins Police Service would like to remind citizens to be careful when selling property online, said the news release. Please protect yourself by insisting on cash payments for all sales online. Try and sell property to buyers in your area and when possible meet them in person. As an added safety precaution, please bring someone with you when you are meeting with the buyer, said the release.

Shaw Capital Management Headlines: Korean Firms Come Out Winners from Global Crisis | World Headlines: Shaw Capital Management

Publication: SERI Quarterly
Author: Jong-Nyun, Kim
Date published: July 1, 2010
Korean Firms’ Strong Performance

The global financial crisis that began in September 2008 rocked the global corporate landscape and sorted out those that performed strongly and those that did not. While corporations in the United States and other advanced economies struggled during the recession, Korean companies managed surprisingly strong performances. For example, Korea’s listed companies posted record sales in the first quarter of 2010, with Samsung Electronics, LG Electronics, Hyundai Motor, POSCO, and Hyundai Heavy Industries – often referred to as the “Big Five” in Korea – establishing their positions as global leaders. It is claimed that the strong performance Korean companies racked up in 2009 was largely due to weak won (KRW) and only partially due to their inherent competiveness. Indeed, the won’s value depreciated by more than 30 percent against the dollar in early 2009. However, the won had returned to pre-crisis levels by early 2010 and the continued strong performance despite this currency recovery indicates that Korean companies have become much more competitive and that this is a major reason for their strong performance in spite of the global crisis.

Korean and Japanese Companies in Opposite Directions

The performance of Japanese companies following the financial crisis starkly contrasted with that of their Korean counterparts. Korean companies experienced growth in business and profits in 2009 while Japanese companies suffered sales declines and deteriorating profits. Japanese companies in the past served as benchmarks for Korean rivals but in 2009 the situations have reversed.

From Local to Global after One Decade

The recent successes of Korean companies can be partially attributed to the painful lessons learned during the 1997 Asian currency crisis. Having witnessed nearly half of the country’s top fifty companies collapse, the remaining companies have since developed a keen sense of how to handle crises.

That said, it is remarkable that many of the surviving companies have come to perform so well after only a decade. Ten years ago, not even Korea’s flagship companies were comparable to their global rivals. Their sales revenues lagged far behind. In fact, so much so that a comparison chart between Korean companies and their global counterparts would contain an expethent such as the log scale. Now, these Korean firms are leading other global leaders in terms of size and profits.

Searching for Second Renaissance

How did Korean companies achieve such astounding growth within a short period of time? To answer this question, we need to look at the growth of Korean companies during the past twenty years. Korean manufacturers maintained rapid growth averaging 15 percent in the ten years leading up to the 1997 crisis. This rapid growth was possible due to large investments in Korea’s major industries of steel, automobiles, and electronics. However, the rapid growth was accompanied by the deteriorating financial health of Korean companies.

The Asian currency crisis fundamentally changed the management paradigm in Korea’s corporate community. Companies shifted focus to profitable growth and management efficiency and adopted a management mode that enabled continuous corporate restructuring. As a result, the restructuring led to a marked improvement of internal core competencies, while at the same time the rate of company growth slowed significantly.

Figure 3 clearly shows that growth in both investment – particularly in tangible assets – and sales rose sharply in 2008, when the global financial crisis hit. This may be an important clue to explaining how the global corporate landscape has changed during the recent crisis. For example, it can be assumed that Korean companies have entered a second growth phase on the back of their improved competitiveness. If so, an examination of what lies behind this strength is necessary.

COMPETITIVENESS OF KOREAN COMPANIES

There is a long-standing debate over the factors that determine corporate performance, and the two camps are the industry effect and the Resource-Based View (RBV). Those of the former argue that the industry in which a company belongs is the critical factor behind company performance. Those of the latter state that core competency (i.e., competitiveness) is the determining factor. The fundamental difference lies in whether corporate performance is dependent on the external or internal environment.

Since the 1990s, however, companies within the same industry have sometimes shown relatively large deviations in corporate earnings compared to some other industries. Thus, these widening gaps in company earnings within the same industry provide more ammunition for the RBV explanation of corporate performance. Subsequently, studies on corporate competitiveness were actively conducted. Competitiveness factors have since changed from being tangible to intangible in nature, while assessments of competitiveness have moved from being individualbased to comprehensive-based.

SERI Corporate Competitiveness Model

The limitations of current corporate competitiveness models are that they are skewed toward making ex post facto and partial assessments, and they are geared toward evaluating levels of competitiveness specifically for European and US companies. Thus, the models are not suitable for companies in emerging countries. To address these problems, Samsung Economic Research Institute developed an ex ante and comprehensive competitiveness index in 2009.

The SERI Competitiveness Index (SERI CI) shown in Figure 4 consists of two axes: internal resources (physical structure) and differentiation (strengths). Derived from the three factors of traditional corporate management (human resources, materials, and financial capital), internal resources are defined as human capital, investment capabilities, and soundness of capital structure. Based on Michael Treacy’s competitiveness theory,2 differentiation consists of operational excellence, product leadership, and customer intimacy. To measure the Key Success Factor (KSF), SERI selected corporate earnings, universality of data, and measurability as components of the Key Performance Indicator (KPI).

Competitiveness of Korea’s Top 100

By using the SERI CI, the competitiveness level of Korea’s top 100 companies was measured for the 2000-2009 period. The index used 81 companies listed in the KRX 100 (excluding financial companies) as a sample, and the median value of S&P 100 companies (excluding financial companies) in 2007 as the index benchmark of 100. The results indicated a large improvement in the competitiveness of Korean companies. The SERI CI of Korea’s top 100 companies stood at 46 in 2000, then soared to 83 in 2007 and declined slightly to 78 in 2009.4

Competitiveness of Internal Resources

The internal resources of Korean companies have improved significantly thanks to efforts in achieving profitable growth. In particular, an enhancement in the competitiveness of Korean workers is clearly seen in the ratio of Economic Value-Added (EVA) per person employed, which stood at 0 in 2000 and then jumped above the global level to 111 in 2004 and continued upward thereafter. Also, investment capabilities and capital structure have been strengthened. Even if considered on the basis of internal resources alone, Korean companies seemed well positioned to take on almost any task.

Narrowing the scope to the big three, Samsung Electronics, Hyundai Motor, and POSCO averaged 86 in the internal resource index for 2000. The three reached 73 in 2001 and then rose sharply to 255 in 2004 when the companies began to stand out on the global stage. This development can be interpreted as an indication that restructuring and innovation at major companies ended up paying off.

Looking at the sub-indices, the human capital index, measured in terms of EVA per capita, soared to 436 in 2004 from 47 in 2001. The investment capability index continued to rise from 76 in 2000 to 144 in 2004 and 210 in 2009. A substantial increase in investment capability may have been the result of efforts made by large companies to improve their capital structure rather than pursue quantitative growth as had been done in the past.

Rapid Rise in Differentiation Index

In 2000, the differentiation index for Korea’s top 100 companies stood at just half that of the top 100 global companies. From the mid2000s, however, it rose sharply, approaching two thirds of the global index in 2007. This implies that Korean companies entered a virtuous cycle wherein greater competitiveness in internal resources led to more investment in strengthening differentiation power, which in turn boosted sales revenues and further reinforced internal resources. For example, the differentiation index of Korea’s big three – Samsung Electronics, Hyundai Motor, and POSCO- averaged 100 in 2008 from around 80 in 2000. The rise was mainly due to the massive efforts companies made in enhancing their differentiation capabilities. For this very purpose, Korean companies invested their internal resources to levels twice the average of the top 100 global companies, In particular, the product differentiation index for Korean companies, measured by the R&D-to-sales ratio, stood high at 178 in 2008. This indicated that Korean companies tried to reach global markets via their advanced technological capabilities.

However, brand power for the big three turned out to be weaker. Their levels of customer intimacy (proxied by advertising spending/sales revenue) were just a third of the global level. Generally, a company with weak brand power finds it difficult to raise prices, and this is why Korean companies remain behind foreign competitors (as measured by the gross profit ratio, Korean companies have reached only about two-thirds of the level of global leaders in terms of cost competitiveness). With a synergy effect created by improvements in both the internal resource index and differentiation index, the composite competitiveness index of the big three rose to 1 10 in 2002, exceeding the global level. In 2004, they posted a record high of 1 58. Considering that corporate competitiveness rises ahead of earnings improvements, the recent remarkable performance of Korea’s flagship companies may be seen as the result of large improvements in their competitiveness during themid-2000s.

Korea’s Flagship Companies Leading Way

Korea’s corporate ecosystem is led by a handful of globalized companies that have improved their competitiveness significantly over the years. This can be easily ascertained by taking a look at the wide difference between the median and average values of their competitiveness factors. First, the median value of EVA per capita for the top 100 Korean companies was minus … 370,000 in 2000. The figure jumped to … 30.62 million in 2009. For the average value of EVA per capita, the difference was more pronounced: from minus … 14.26 million in 2000 to … 380 million in 2009. As for the R&D-to-sales ratio, the median values in 2000 and 2009 were virtually unchanged (1.5 percent in 2000 and 1 .6 percent in 2009). In terms of the average ratio, however, there was a significant increase: from 2.4 percent in 2000 to 3.1 percent in 2009. This implies that, while the improvement in competitiveness was experienced by the largest 100 companies as a group, the larger leading companies improved much more significantly.

KOREAN COMPANIES READY FOR GLOBAL STAGE

Korean companies strived to shift their focus to profitable growth and pursue restructuring and innovation. As a result, their competitiveness improved rapidly by the mid-2000s, reaching levels comparable to global leaders. Thus, the global financial crisis served as a prime opportunity for Korean companies to push forward. Korea’s flagship companies are leading the charge in changing the global corporate landscape with their increased competitiveness, and they will likely continue in this fashion for some time.

On top of competitiveness, two additional factors will play a positive role in the advancement of Korea’s global companies. The first factor is that the center of economic activity is shifting from the advanced economies to China and other emerging economies, where Korean companies are performing well. Second, Korean companies have traditionally been active in responding to change, via innovative investment and speedy action, meaning that they have plenty dynamic capabilities which is closely related to corporate growth during transition phases. If Korean companies could strengthen their networking capabilities and brand power, they could emerge in an even more dominant position on the global stage.

Translation: LEE Hae-Won

1 Jung Ku-Hyun, et al., Korea’s Corporate Management: 1987 to 2007 [in Korean] (Seoul: Samsung Economic Research Institute, 2008).

2 Michael Treacy and Fred Wiersema, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (Cambridge: Perseus Books, 1995).

3 The KRX 100 index includes 100 blue chip companies listed in the Korea Exchange.

4 SERI CI is based on the global level of competitiveness in 2007. Considering that global companies’ level of competitiveness was greatly damaged from 2008 to 2009, the relative competitiveness of Korean companies was estimated to have improved.

Author affiliation:

KIM Jong-Nyun is research fellow at SERI. His research interests include corporate finance, corporate competitiveness and risk management. He holds a PhD in International Economics from Sung Kyun Kwan University. Contact: kjn@seri.org.

Shaw Capital Management Headlines:Shaw Capital Management Headlines: Financial Stability Board’s strong outreach in Global Financial resilience is expected

2010/10/18 by Lee, Ki Yeon (kiyeon.m.lee@gmail.com)

Korea will be the first emerging economy to host the Financial Stability Board meeting on the 20th of October, 2010. In its third plenary meeting in Basel, Switzerland, the board decided to have the fourth event in Seoul before the G20 summit. Since Korea is also the chair country of upcoming G20 forum, a Financial Services Commission official said that Korea will be able to take the lead in reforming the financial framework.
The Financial Stability Board (FSB) was established in April 2009 as the successor to the Financial Stability Forum (FSF). The FSF was founded in 1999 by the G7 Finance Ministers and Central Bank Governors to promote stability in the international financial system. Yet, among the leaders of G20 countries, there had been a broad consensus on stronger institutional ground with an expanded membership. And this movement resulted in the creation of FSB, an extended form of FSF. In an attempt to strengthen its effectiveness, financial authorities from the G20 nations, international financial institutions and several global standard setting bodies joined the FSB as the new members. The FSB performs the initiative role to develop and implement strong regulatory, supervisory and other policies in pursuit of financial stability.
As a member of FSB, Korea, especially the Bank of Korea and Financial Services Commission came to have an even more crucial role. FSC is involved in FSB Steering Committee which provides operational guidance and sets the agenda in general. So FSC has been trying to boost regular meetings among the FSB leaders and to continue active discussions. One of them was the financial reform conference called “Envisioning a New Financial System: An Emerging Market Perspective” which Dong-Soo Chin, the chairman of FSC held on Sep.2 in Seoul. The conference called attention to the increasing impact of emerging markets to the world economy, paving the way for more balanced participation of emerging countries in the global finance sector.
(Sep.2th Korea-FSB Financial Reform Conference, taken from Herald Media)
In fact, a decade ago, Korea felt the tremendous pain due to 1997 Asian Financial Crisis. In the wake of 1997 crisis, Korea had no choice but to strongly restructure corporate and financial field, dealing with long-neglected structural problems hidden behind rapid growth. Passing a time of economic revitalization and renewal, Korea learned valuable lessons and now, it is positioned as one of the competitive global economies. This unique experience enables Korea to serve as a potential broker that can bridge the gap between the emerging and the advanced markets.
Sharing Korea’s pre-experience and know-how, particularly on financial regulation reform, perspectives of emerging economies can be brought into the global reform process. Many experts admit that Asia will be the engine of future global economic growth. In order to make the emerging markets less vulnerable to external shocks, global financial safety net is strongly required and in this sense, international standards will help them free from poor financial infrastructure.
Currently, a lot of critical financial agenda are on the FSB table. For instance, to enhance transparency among market participants, prudent oversight of capital, liquidity, leverage and risk management is necessary. Along with Basel III, which delineates the rate of bank capital buffer, Bank Levy is considered a possible measure to increase banks’ crisis management capability, although the feasibility of the proposal still remains to be seen. Furthermore, efforts to reduce systemic risk generated by interconnectedness among financial institutions worldwide led to global coordination to devise measures that cover broader range of financial markets and instruments. Systemically important financial institutions will be strictly monitored and the size of “shadow banking” such as hedge funds and off-balance sheet entities will be shrunk. New international controlling standards on hedge funds will emerge and Central Counter Parties will be installed for over-the-counter (OTC) derivatives. In addition, more standardized forms of OTC products will be used and regulation on credit rating agencies will be intensified.

Shaw Capital Management Headlines:Shaw Capital Management Scam Info: Internet sales scams lead list of complaints to IC3: Plain Dealing » shawcapitalmanagementscaminfo.com -

By Sheryl Harris, The Plain Dealer

There were some strange online scams in 2010.
Like this one: Consumers complained their cell and landline phones were bombarded with nuisance calls (dead air, recorded messages) to the point changed their phone number. The scam was tracked to con artists who accessed victims’ financial and brokerage accounts and then used the calls to victims’ phones to block financial institutions from checking with victims to verify online requests to change phone numbers or addresses on the accounts.
That peek at emerging scams was included in the Internet Computer Crime Center’s latest report of internet crimes. IC3 collects consumer complaints about internet scams, analyzes them and alerts local, state and federal agencies.
The crimes that drained consumers’ wallets in 2010 often involved failure to pay for or deliver merchandise sold or bought online, identity theft, auction fraud and credit card fraud.
Consumers ran into fake rentals online. They got collection calls for payday loans taken out with their Social Security numbers — by someone else.
And, of course, there were plenty of fake check scams, online rental scams and phony pleas for help from friends allegedly trapped overseas.
Online fraud is an equal opportunity crime.
IC3 said victims of online scams are as likely to be men as they are women. And victims also are split fairly evenly across generations.
As for the country where scams against Americans are most likely to originate: the U.S.A is number one.

Shaw Capital Management Headlines:Shaw Capital Management Scam Info:Postman loses £130,000 savings to Nigerian internet scam after being duped by a friend he met on MySpace

By DAILY MAIL REPORTER
Last updated at 2:09 PM on 16th January 2009

A postman told today how he sank into depression and debt after losing £130,000 in an internet scam involving Nigerian fraudsters.

Shane Symington described how an apparently innocent friendship that he formed with an American woman through the MySpace website turned into a ‘nightmare’ as he started handing over money.

The 32-year-old said he was friends with ‘Angela Gates’ for several weeks in the spring of 2007 before she suddenly started asking for money to pay for her mother’s funeral and medical expenses.

He said the requests then carried on for money to pay for legal fees so that the woman, who called herself Angela Gates, could free up land that she had inherited apparently worth $2million.

The requests continued throughout the year and, by last year, Mr Symington had handed over his bank details and more than £100,000.

He said that he became suspicious when the woman stopped communicating with him and contacted what he thought was a website run by the FBI in America but which turned out to be another scam.

Mr Symington, of Portsmouth, Hampshire, said he then got a text message from his ‘friend’ Angela who revealed that it was all a fraud.

It said that it was all false and that Angela was actually a man from Nigeria’, Mr Symington said.

‘I guess he came clean because he thought he had taken all the money he could.’

But his problems did not end there as he was then contacted by another woman, again from America, claiming she had also been caught in the scam.

He said that he then helped pay her legal expenses and the cost of hiring two ex-FBI agents in an attempt to regain the lost money for both of them.

Mr Symington said that he now believes that these people are also involved in the scam. He said that he had paid out more than £30,000 to them, bringing his total losses to more than £130,000.

He said: ‘I feel sick from it all, I feel disillusioned, they have just played on my good nature. I’ve lost my life-savings, I have two loans and credit card debts, I’m in huge debts because of all of this.

‘Before this happened, I used to go out every night, now I just stay in because I’ve lost all the self-confidence in my life and I don’t have the money to go out any more. I’ve also had five weeks off with depression from work.’

Warning others to be extremely careful before handing any money over to people they have met through the internet, he said: ‘It’s just wicked people getting everything they can get out of people.

‘You just can’t trust anyone on the internet. I want to warn people but I know I won’t be the last to fall for something like this.’

Detective Constable Jon Knox, of Hampshire Police, added: ‘This is a very sad situation, and this man has now parted with a huge sums of money through his own good nature – in trying to help others and then to recover some of what he had lost.

‘We do not want anyone else to fall foul of this kind of shocking activity and I would warn anyone who is asked for money over the internet by people they do not know to refuse and not put yourself at risk.’

A police spokeswoman added that there was little police could do to help Mr Symington get his money back.

She said: ‘The money cannot be recovered due to the current political situation in Nigeria, resulting in a lack of co-operation from the police in the country.’

Shaw Capital Management Headlines:shaw capital management scam info:AG Warns of Internet Tax Scam

With the tax season upon us, it’s a time many scammers look to take advantage of tax payers by getting their hands on personal information. Attorney General Mike DeWine is warning Ohioans of a new electronic scam.

The Ohio Attorney General wants people to watch out for emails and letters that claim to be from the IRS, but are actually scams created to capture personal information. Jennifer Stocker, owner of the Ohio Tax Lady tax preparation company, says the IRS will never email you directly unless you have contacted them via email.

“If you ever receive an email from any government agency that you did not contact and give them your email address, don’t respond to it.  Contact your tax professional,” Stocker said.

According to a release issued by DeWine, one Franklin County resident received an email that appeared to be from the IRS indicating the consumer was late submitting his W-2 form.  The email instructed him to click on a link to send the updated form.  Luckily, the consumer recognized that the email was a scam. Another man from Cuyahoga County reported receiving a phony 1099 form, stating he had won $61,000.

“There are some people out there that like to take advantage of people, like to steal from people, and unfortunately with modern technology, it makes it easier,” Stocker explained.  “You definitely want to keep your information in a locked filing cabinet.  You want to make sure you do not give out your social security number to anyone.  When picking up your tax return from a tax place, you should always have your driver’s license.  And if your tax preparer is not asking for that driver’s license, there should be concern there.”

Shaw Capital Management and Financing - Freight Bill Factoring to Fund Your Need

Using Freight Bill Factoring to Fund Your Transportation Company by Marco Terry.

Most transportation company owners have to constantly juggle responsibilities. They have to handle vehicle repairs, driver payments, insurance payments, office expenses and more importantly - collecting invoices. Collections can be source of problems for many transportation companies (or freight brokerages) since most clients pay their invoices in 30 to 60 days . Few can afford to wait that long.

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.

One way to handle slow payment is to try and negotiate a quick pay - basically asking your clients to pay quickly. Some will do it. Others won't, or at least will only offer it if you give them a discount. Although they are not always reliable, negotiating a quick pay can be beneficial in most cases.

Shaw Capital Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.

If quick pays won't work, your best alternative is to secure business financing to ensure you always have funds on hand to cover business expenses. This can be difficult for most owners since institutions require that all applications have stellar credit, assets that can be held as collateral and many years of experience. This will rule out business loans as an alternative for most small and midsized trucking companies. However, this is not necessarily a big problem since a business loan is not always the solution to this problem.

For many, freight bill factoring will be the better alternative. Freight factoring, as it is commonly known, can provide the equivalent of a quick pay by using an intermediary. The intermediary, called a factoring company, advances you funds against your freight bill. The transaction is settled once your client pays the invoice in full.

One of the advantages of freight factoring is that it provides predictable cash flow, enabling you to comfortably handle your business expenses. It eliminates having to worry about when your clients will pay.

To qualify for freight factoring you need to work with credit worthy clients. Also, your company needs to be free of liens, judgments and other encumbrances. Because of this, freight bill factoring is an ideal solution for small and growing trucking companies and freight brokers.

Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.

Shaw Capital Factoring VS Bank Loan

Factoring is Different From a Bank Loan in Raising Cash By Eve Garcia. Companies can sell their invoices to raise cash rather than go down the bank loan route.

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.

More organizations and companies are selling invoices to a third party as a means of raising funds.

The financial process known as factoring is where a business sells its accounts receivable - its invoices - to a third party for immediate payment but receives less in return than the value of those invoices.

This system is usually used by a company when its available cash balance is not sufficient to meet its existing commitments or other cash needs such as fresh orders or contracts. It allows the business to maintain a smaller ongoing cash balance, though by selling the invoices for a lower amount than they are actually for.

The invoice is sold to a third party called a factor, and this is where the approach is different from a bank loan when it comes to a business looking to raise funds.

Shaw Capital Management and Financing - Factors make money available even in circumstances where a bank may be less willing to do so.

This is primarily because they are more concerned with the creditworthiness of the debtor - the business or organisation that is required to pay the invoices for the goods or the services delivered by the invoice seller.

In contrast, banks tend to focus more on the creditworthiness of the borrower when looking to lend.

Factoring is seen as a calculated risk by many firms and one they enter into for a specific reason.

The down side is that they are offloading their invoices for less than their face value, but the return is that they are getting the money owed to them much more quickly than they would have done if they had simply pursued the buyer of their goods direct.

A number of companies operate specifically in the factoring and invoice discounting business and actively contact companies and organizations that they believe will benefit from such services.

These firms look to promote a number of benefits of the services they offer to the invoice seller. They suggest that the process is a way to get access to money quickly and safely and that it also avoids the difficulties and inconveniences that can be involved in collecting bad debt.

It is also promoted to potential customer firms as helping to facilitate and smooth out cash flow and as a way of borrowing money that is secured by their debt.

Once the factoring business takes on the invoice and the debt, it has the responsibility of collecting payment. It makes its profit by paying the invoice seller less cash than the face value of the invoice.

It is worth "shopping around" when looking to engage the services of a such a firm, since the market is competitive, with estimates suggesting that in the UK alone it is worth in the region of £200 billion a year, and fees vary.

There are a variety of reasons for this, with a significant fact being the risk associated with the invoices that are purchased.

Before taking on the invoice, the factor will conduct various levels of research. This will include looking into the track record of the debtor firm to assess whether it is creditworthy or has a history of bad payment. Once taken on, the factor will then seek payment from the debtor.

Factoring is used across a wide spectrum of business organisations and more recently the practice - which has a history stretching back to the 14th century in England - has been adopted by government bodies.

Today in the UK, factoring is used in some form by around 50,000 companies as a means of releasing finance.