Are women CEOs less talented than men, or do they only get the very touch jobs now.  Two of three CEOs at the top of a list of “must-gos” are women.

IBM (NYSE: IBM)
CEO: Virginia Rometty
Year started: 2012
One year stock price change: -18.9%
Annual compensation: $19.3 million

105-year old IBM is one of the greatest conglomerates in U.S. history. The company created some of the most important tech products of all time, including the mainframe computer and PC. The company has been battered by falling demand for large computers, a poor showing in the enterprise software and consulting business, and a weak move into the cloud computing market. IBM reported $103.6 billion in revenue in 2008. Revenue last year was $92.2 billion, and has continued to decline in 2015. Ginni Rometty has been CEO for four years. Rometty has repeatedly told shareholders the company will soon become dominant in cloud computing, mobile, and social media. Instead, it appears the company is having more trouble dealing with the changing tech landscape than Rometty is willing to admit.

Carl Icahn has finally managed to achieve what many Xerox investors were hoping would happen for a long time. Following pressure from the billionaire shareholder, the company announced it is breaking in two. This breakup is essentially undoing CEO Ursula Burns’ 2010 purchase of Affiliated Computer Systems for $6.4 billion. At the time, the plan was to transform Xerox from a hardware and copier company to an IT consulting company. Xerox’s performance has been downhill since. The company is in such deep trouble that the Icahn plan did not lift the company’s stock price. It trades near its 52-week low, which puts it down 32% for the period. Revenue of the company Burns created hit $22.6 billion in 2011. Last year, revenue was $18.0 billion, and it continues to drop rapidly. Burns may not have a role in either of the two new companies.

ChristineLagarde, Managing Director of the IMF,  says indirect taxation in the form of VAT in low single digits is the most viable option for GCC states: Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.

Growing anxiety over the UK’s EU referendum has driven sterling down to a new seven year low. The pound fell as low as $1.3879, as cabinet ministers clashed over the legal strength of Britain’s new deal with Europe.

Investors are also scrambling to protect themselves against fresh volatility ahead of the June referendum. The cost of insuring against sterling volatility has hit its highest level since 2011.

IMF chief Christine Lagarde has warned that Britain, and Europe, would bother suffer if the UK quits the EU. She fears that the uncertainty will hurt growth, at a time when the world economy is already fragile.

The Fund also cited June’s referendum as a potential threat to the UK’s recovery.

Several other City bosses have warned against Brexit. Ryanair, the budget airline, has even pledged to campaign actively to keep Britain inside the EU.

HSBC has predicted that the pound would slump by 20% in the event of a Brexit vote. It also warned that growth would fall sharply, with the housing market and the banking sector also vulnerable.

A poll of City economists has also predicted that the pound will tumble further if the Out campaign wins.

Black money saved India

There is no question that India has the most positive economic story on the planet.

Buoyed by increased manufacturing output, India’s economy grew by 7.4% in the third quarter of 2015, the fastest growth of any major country in the world.

But there is a dark side to India’s success, says one of the country’s most eminent economists.

Kaushik Basu, the chief economist of the World Bank and former chief economic adviser to the Indian government, says the nation’s tradition of petty corruption helped India avoid the worst of the banking crisis that has crippled most other large economies in the last few years.

His argument is that the pervasive use of “black money” – illegal cash, hidden from the tax authorities – created a bulwark against a crisis in the banking sector.

India’s economy was looking just as frothy as the rest of the world, growing at an astounding 9% a year for the three years to 2008.

What’s more, India’s growth had been fuelled, at least in part, by a dramatic housing boom.

Between 2002 and 2006 average property prices increased by 16% a year, way ahead of average incomes, and faster even than in the US.

The difference in India is that all this “irrational exuberance” did not end in disaster.

There was no subprime loans crisis to precipitate a wider crisis throughout the banking sector.

So the big question is why not.

There were some shrewd precautionary moves by India’s central bank, but he one important answer is all that dirty money.

In most of the world the price you pay for a property is pretty much the price listed in the window of the local realtor or estate agent. Not in India.

Here a significant part of almost all house purchases are made in cash.

And because the highest denomination note in India is 1,000 rupees, ($15; £10) it isn’t unusual for a buyer to turn up with – literally – a suitcase full of used notes.

Let’s say you like the look of a house that is for sale. You judge it is worth – for argument’s sake – 100 rupees.

The chances are the seller will tell you he will only take, say, 50 rupees as a formal payment and demand the rest in cash.

That cash payment is what Indians refer to as “black money”.

It means the seller can avoid a hefty capital gains tax bill. Buyers benefit too because the lower the declared value of the property, the lower the property tax they will be obliged to pay.

What it also means is that Indians tend to have much smaller mortgages compared to the real value of their properties than elsewhere in the world.

At the peak of the property boom in the US and the UK it was common for lenders to offer mortgages worth 100% of the value of the property.

Some would even offer 110% mortgages, allowing buyers to roll in the cost of finance and furnishing their new home..

In India, by contrast, mortgage loans can only be raised on the formal house price. So when prices fell in India – and they did fall in 2008 and 2009 – most bank loans were still comfortably within the value of the property.

India did experience a slowdown, but it was collateral damage from the global recession rather than the result of any national problem.

To preserve this advantage, it’s been suggested that bribery be legalized.

It means people who give bribes no longer have a shared interest in keeping their nefarious activity secret.

Freed from the risk of prosecution, bribe-givers would have a powerful incentive to reveal corruption.

Press release from Whistleblowers United in the US

Four prominent Wall Street whistleblowers – who have identified high-level wrongdoing by the nation’s largest financial institutions and the federal government – will announce on Thursday a challenge to the 2016 presidential candidates to pledge specific, common-sense actions to curb the financial sector’s corrupting influence on political campaigns and government regulators. They have proposed a detailed plan that requires no new legislation or rulemaking to restore the rule of law to Wall Street, end too-big-to-fail and restore the best features of the Glass-Steagall law that used to govern bank activities.

The four – William K. Black, Gary J. Aguirre, Richard Bowen and Michael Winston – have formed a new initiative called Bank Whistleblowers United. They will appear together at a news conference at 10 a.m. Thursday, February 25 hosted by the Campaign for America’s Future at its headquarters, 1825 K Street NW, Suite 400.

Bank Whistleblowers United has as its goal “to create urgent, fundamental changes to break Wall Street’s power over our economy and our democracy,” says Black, an associate professor of Economics and Law at the University of Missouri and a central player in exposing the “Keating Five” savings-and-loan scandal in 1989.

With the political power of the banking sector, and questions concerning over which candidates are likely to be beholden to that power, emerging as central issues in the 2016 presidential campaign, Bank Whistleblowers United will on Thursday unveil a pledge that it will ask each of the presidential candidates to sign. The pledge will include a vow to not accept campaign contributions from those banking institutions and executives engaged in fraudulent behavior during the runup to the 2008 financial crisis. They will also answer questions about why that pledge is important in the context of what has happened in the five years since the Dodd-Frank financial reforms were signed into law.

Gary J. Aguirre is best known as the Securities and Exchange Commission attorney who, while heading an insider trading investigation of Pequot Capital Management, formerly the world’s largest hedge fund, resisted his supervisor’s demands to give preferential treatment to a Wall Street titan involved in the case. Fired for his so-called “insubordination,” Aguirre would prove to the satisfaction of two Senate committees, a federal court and three federal agencies that the SEC had acted unlawfully. In private practice, Aguirre represents whistleblowers and victims of securities fraud and market abuse. He has law degrees from U.C. Berkeley and Georgetown Law Center (LL.M.) and a master in Fine Arts (Film) from UCLA.

William K. Black is an associate professor of economics and law at the University of Missouri – Kansas City (UMKC) and the Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota Law School. He is a white-collar criminologist. He rose to national prominence as a key figure exposing the “Keating Five” savings-and-loan scandal in 1989, in which five U.S. senators were found to have been involved in negotiating favors for Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, in exchange for campaign contributions. His subsequent book, “The Best Way to Rob a Bank is to Own One,” is considered a classic analysis of corrupting influence of Wall Street on the federal government.

Richard Bowen is the Citigroup whistleblower who repeatedly warned Citi executive management, beginning in 2006, about potential losses related to the purchase and sale of mortgage loans. He provided testimony, along with 1,000 pages of documents, to the Securities and Exchange Commission in July 2008, three months before the bank bailouts. He also gave nationally-televised testimony before the Financial Crisis Inquiry Commission in April 2010. A “60 Minutes” story profiling Bowen, “Prosecuting Wall Street,” has been aired multiple times on CBS and CNBC. He is currently a professor of accounting at the University of Texas at Dallas and a popular speaker in the field of business ethics (www.RichardMBowen.com).

Michael Winston was a high-ranking executive at Countrywide Financial who tried to stop the fraud, corruption and deception he observed at the mortgage lender. His warnings were dismissed or ignored by management, and he was eventually fired. He subsequently took Countrywide and Bank of America to court, winning what the trial judge called an “overwhelming” jury verdict. Though the verdict was later thrown out by an appeals court, Winston’s legal fight was favorably chronicled by New York Times columnist Gretchen Morgenson in the article, “How A Whistleblower Conquered Countrywide.” Winston has served as Distinguished Adjunct Professor at Stichting deBaak (The Netherlands) for 16 years.

Is China on the right path?

China is following the right path and is making progress in its bid to rebalance the nation’s economy, according to a World Bank economist.

Franziska Ohnsorge, a lead economist at the World Bank, said Chinese officials had outlined an economic plan at the Third Plenary Session of the 18th Communist Party of China Central Committee in 2013 and were implementing the reforms to enact that plan.

“They are steadily implementing these reforms and these are exactly the reforms that China needs, but they will yield benefits over the long term,” she said.

According to the economist, despite China’s growth will be slower over the long term, “it will be much more resilient, with fewer vulnerabilities, especially in the financial sector.”

The 2013 meeting set a very ambitious agenda and it looks like much of it was reinforced in the most recent Fifth Plenary Session of the 18th CPC Central Committee, according to Ohnsorge.

“These are difficult reforms, many of them are very difficult. They(Chinese policymakers) touch on more than economics, they touch on the social sphere as well,” she noted.

Ohnsorge was speaking at a press conference in London to mark the launch of the World Bank’s 2016 Global Economic Prospects report.

During the press conference, Ohnsorge also talked about the recent volatility in Chinese stock markets.

The year of 2015 was a difficult year for the world and 2016 appeared to be challenging again, she said, adding “financial markets are clearly very sensitive to news, including out of China.”

“The (Chinese) policymakers are obviously carefully monitoring and taking steps as needed. ”

“We expect that the Chinese authorities will step in as needed, as they seem to have done so far, and the impact on the real economy seems to be limited.” said Ohnsorge.

A wider effect of stock market volatility on the Chinese economy would be less pronounced, because the links from the equity market to the real economy in China are not that strong yet, according to Ohnsorge.

The economist also commented on the structural rebalancing of the Chinese economy, away from industry-led growth towards services-led growth.

“It is clear that the rebalancing in China is clearly underway. You can really see the industrial sector is declining, industrial employment is declining, industrial share of GDP is declining and services is increasing. In that sense there is a lot of rebalancing,” she said.

She forecasted a decline in the rate of growth of the Chinese economy, but characterized it as a minor downward revision.

“As expected there is a slowdown in growth and we have revised our forecast downward for China for 2015 to 6.9 percent and 6.7 percent for 2016. Really, these are minor downward revisions; compared to the rest of the world, China is slowing and rebalancing as expected,” said Ohnsorge.

Chinese Premier Li Keqiang (front R) meets with World Bank’s President Jim Yong Kim

How to get good financial advice?  The US Department of Labor and the Securities and Exchange Commission disagree.

Staffers at the U.S. Securities and Exchange Commission and the U.S. Labor Department clashed over a controversial plan to curb potential conflicts of interest among brokers who give retirement advice, Senate panel Republicans said in a report on Wednesday.

The Labor Department, which regulates retirement plan advice, rejected numerous recommendations from the SEC and other agencies.

The Labor Department’s plan has been in play for more than five years. On Jan. 29, the White House’s Office of Management and Budget said it had received the department’s final proposed rule. The White House does not have an exact time frame for implementing the rule.

Under the plan, brokers would have to act in clients’ best interests, or as “fiduciaries,” when advising about IRAs. Brokers now must recommend investments that are “suitable,” based on factors such as investors’ ages.

Many Republicans and some Democrats oppose the plan, saying it would drive up customers’ costs and curb commissions.

Part of the Senate panel’s report focused on July 31, 2012 emails between Labor Department economist Keith Bergstresser and SEC economist Matthew Kozora. They discussed types of improper broker activity that the rule should measure: conflicts of interest or impact on investment returns.

“I hate to break it to you, but you’re wrong,” Bergstresser wrote to Kozora, according to the report. “People do not respond to fees or any other costs, but they do chase returns.”

“You keep circling back to the same statements, many or which are unsupported conjectures on your part,” Bergstresser later wrote to Kozora. “If you have nothing new to bring up, please stop emailing me about this topic,” Bergstresser wrote.

“I am also now utterly confused as to what the purpose of the proposed DOL rule is then, if not to limit advisor conflicts when providing retirement advice,” Kozora later wrote.

Djurdjja Varinec writes:  Women in Serbia are underrepresented in firm ownership and management The United States assists Serbia in implementing critical reforms necessary for the country to complete its economic and democratic transition into the EU and other international institutions. The United States Agency for International Development’s (USAID)1 programs in Serbia focuses on building prosperity and increasing democratic practices, both fundamental to Serbia’s Euro-Atlantic integration goals. Business Enabling Project (BEP) is one of the USAID’s initiatives aimed at helping the Government of Serbia (GoS) increase the competitiveness of the Serbian economy and its private sector by streamlining the business enabling environment, improving public financial management, and strengthening financial markets. The USAID Project conducts an annual survey of enterprises and entrepreneurs in Serbia to assist the government in implementing and monitoring economic reforms. The survey is distinct from all others conducted in Serbia because of the large sample size (1,008 businesses), five year time series, and the breadth of the questionnaire, all of which make it a powerful tool to inform advocacy that influences policy-making. The 2015 survey reveals that women are underrepresented in firm ownership and management. Employment of women in the surveyed firms is close to the national average of 43% of employees: the firms in the USAID BEP survey have 37% female employees in average. In companies registered as entrepreneurs, women make up 51% of employees. But men continue to dominate in firm ownership, as illustrated in Figure below. Numbers are similar for management: only 29% of managers are women, which is almost on the same level of the 27% women managers in 2014 survey.

The City of Philadelphia is considering a public bank.  Like the State of North Dakota, Philadelphia can create its own bank to hold and invest City funds to fulfill our needs, not the needs of multinational corporations funded by monopoly banks.

City Council will hold hearings on the creation of a Philadelphia Public Bank

Here are just some of the specific things a public bank can do that Wall Street can’t.  a Philadelphia Public Bank that we can’t do when we leave our money with Wall Street.

1.  Invest City dollars in capital-starved small businesses, including those owned and controlled by neighborhood residents through community development corporations, and consumer and worker-owned co-ops

2.  Direct lending at low rates to college students

3.  Finance and refinance mortgage loans at low rates

4.  Partner with community banks now threatened with extinction because they don’t have enough capital to lend

5.  Finance green energy improvements to homes and businesses throughout our City

6.  Issue bonds at low interest rates, save the City and School District millions of dollars, and free up precious resources to serve the needs of our families and residents.