Economic Calendar

Wednesday, April 18, 2012

Romney Talks Tax Law Change, Begins Running Mate Search

By John McCormick and Lisa Lerer - Apr 18, 2012 5:27 AM GMT+0700

Presumptive Republican presidential nominee Mitt Romney said he isn’t too rich to relate to average Americans and President Barack Obama should “start packing” for a White House departure in 2013.

Romney made the remarks in an ABC News interview aired yesterday as Democrats accused him of running a secretive campaign and called on him to release more tax records.

Mitt Romney, center, with Pittsburgh area residents in Bethel Park on April 17, 2012. Photographer: Jae C. Hong/AP Photo

Mitt Romney, accompanied by his wife Ann, at the National Rifle Association convention in St. Louis on April 13, 2012. Photographer: Michael Conroy/AP Photo

Beth Myers, campaign manager for Mitt Romney's 2008 bid for the presidency, jokes with Carl Forti, political director in Boston in this April 27, 2007 file photo. Photographer: Elise Amendola/AP Photo

Asked by ABC’s Diane Sawyer whether his wealth -- a car elevator is part of a $12 million renovation at his beach home in La Jolla, California -- prevents him from relating to most people, Romney said it shouldn’t.

“We don’t divide America based upon success and wealth and other dimensions of that nature,” he said. “We’re one nation under God. This is a time when people of different backgrounds and different experiences need to come together.”

Romney, who helped form the private-equity firm Bain Capital LLC in Boston, has estimated his wealth to be as much as $250 million on financial disclosure statements. He earned $21.6 million in 2010, mostly from investments, according to tax returns he released in late January.

Congressional Endorsements

More Republican leaders closed ranks behind the former Massachusetts governor today, as he gained the backing of House Speaker John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky.

“We’re all behind him,” McConnell told reporters in Washington. “He’s going to be the nominee.”

McConnell made his comments a few hours after Boehner said he will be “proud to support” Romney as his party’s nominee and will “do everything I can to help him win.”

Both congressional leaders had been neutral in the race. Romney emerged as the presumptive Republican nominee after his main challenger in the race, former Senator Rick Santorum of Pennsylvania, announced on April 10 he was ending his candidacy.

Boehner told reporters in Washington he waited to make an endorsement to make sure “all candidates had a fair process and a fair opportunity.”

Tax Issue

Romney today used the deadline for filing income tax returns to argue that another Obama term would result in higher taxes across the board.

“There are some differences in the campaign coming forward, which is the president, our current president, is intent on raising tax rates, particularly for small business,” Romney said in Bethel Park, Pennsylvania, a Pittsburgh suburb.

Sitting at a picnic table with eight voters, Romney said his tax plans would benefit middle-income Americans as he rejected Democratic contentions that he’s pushing policies to benefit the richest.

“I want the top income earners to pay the share they’re paying now,” he said. “But I do want to help middle income families find a way to make it easier to make ends meet.”

Romney’s plan calls for a 20 percent across-the-board cut in individual income tax rates. It would lower the top tax rate to 28 percent for individuals from 35 percent now, cut corporate taxes to 25 percent from 35 percent, eliminate the estate tax and scrap the alternative minimum tax. It also would limit deductions, exemptions and credits now available to higher- income Americans.

Seeking Scapegoats

Speaking in Philadelphia last night, Romney accused Obama of seeking “scapegoats” to distract from a weak economy. “I will not do as this president is doing, dividing us on every occasion, attacking one American after another,” he said to cheers from an audience of anti-tax Tea Party supporters. “Trying to find someone who can by virtue of attacking them divert from his failures economically.”

Periodically while campaigning this year, Romney has made comments drawing attention to his wealth -- and earning scorn from opponents -- including saying he has friends who are NASCAR owners and that his wife, Ann, owns a “couple” of Cadillacs.

Ann Romney joined her husband in the Sawyer interview, saying her message to Obama is that it’s “Mitt’s time” because he can turn the economy around.

Asked about Obama’s suggestion that he release 12 years of his tax returns, Romney said he has no plans to do so.

Diverting Attention

“The president is going to try and do everything possible to divert from the attention being focused upon his record as president and the failure of his economic policies,” he said. “So he’s going to try to make this campaign about the fact that I’ve been successful, that I’ve made a lot of money.”

Romney said he would like to see the U.S. Supreme Court overturn the 1973 decision in Roe v. Wade that legalized abortion nationwide.

“I would love the Supreme Court to say, ‘Let’s send this back to the states,’” he said. “Rather than having a federal mandate through Roe v. Wade, let the states again consider this issue state by state.”

Romney also said he has picked a longtime adviser to oversee the vetting of his running mate. Beth Myers, the adviser, was a chief of staff for Romney when he was Massachusetts governor. She was his presidential campaign manager four years ago and is a senior adviser to his current bid.

Running Mate

Romney, 65, who at a weekend fundraiser in Florida talked about the importance of appealing to Hispanic voters, called Republican Senator Marco Rubio of Florida “one of the terrific leaders” of the party, while declining to say if he is on the list of prospective running mates.

In an interview with CNBC’s Larry Kudlow today, Romney said he’d pick someone who “without question” could lead the country if necessary. “All of the political considerations pale in comparison with the consideration of who has the capacity to lead America at a critical time,” he said.

Romney also reiterated in the CNBC interview his opposition to more stimulus of the economy by the Federal Reserve, saying such “qualitative easing” of the money supply had “very little positive effect.”

At the Florida fundraiser, Romney said he is considering the elimination of mortgage deductions on second homes as part of the tax exemptions he would propose ending, NBC News and the Wall Street Journal reported.

Second Home Mortgages

“I’m going to probably eliminate for high-income people the second home mortgage deduction,” he said at the Palm Beach event, adding that he would also likely eliminate state income and property tax deductions. The remarks, made from the backyard of a private home last night, were overheard by reporters on a sidewalk below, NBC reported.

At the gathering, Romney also floated the idea of eliminating the Department of Housing and Urban Development, the Cabinet-level agency once headed by his father, George.

“I’m going to take a lot of departments in Washington, and agencies, and combine them,” he said, according to NBC News. “Things like Housing and Urban Development, which my dad was head of, that might not be around later. But I’m not going to actually go through these one by one. What I can tell you is, we’ve got far too many bureaucrats. I will send a lot of what happens in Washington back to the states.”

Asked about the Department of Education, Romney said it, too, would face restructuring.

“The Department of Education I will either consolidate with another agency, or perhaps make it a heck of a lot smaller,” he said. “I’m not going to get rid of it entirely.”

The reports from the fundraiser brought a response yesterday from President Barack Obama’s re-election campaign.

Governor Romney previously said he wasn’t going to outline specific cuts during this campaign because they could harm his electoral prospects,” Obama spokesman Ben LaBolt said in a statement. “Last night’s comments make clear he does in fact have very specific cuts in mind: In order to fund his $5 trillion tax cuts for the wealthiest Americans, he would make deep cuts in programs essential to the middle class like education and housing.”

To contact the reporters on this story: John McCormick in Chicago at; Lisa Lerer in Lancaster, Pennsylvania at

To contact the editor responsible for this story: Jeanne Cummings at


Stocks, Commodities Gain on Spanish Debt Auction, IMF

By Claudia Carpenter and Rita Nazareth - Apr 18, 2012 3:43 AM GMT+0700

Stocks surged and Treasuries fell as Spain sold more debt than targeted and the International Monetary Fund raised economic forecasts, overshadowing declines in U.S. housing starts and factory production. Commodities rose.

The Standard & Poor’s 500 Index added 1.6 percent to close at 1,390.78 at 4 p.m. in New York, its biggest gain in a month, and the Stoxx Europe (SXXP) 600 Index rallied 2 percent for its best advance of 2012. Yields on Spanish 10-year bonds fell 18 basis points to 5.89 percent and the Italian yield lost 12 basis points. Ten-year Treasury yields increased two basis points to 2.00 percent. Canada’s currency strengthened against 15 of 16 major peers as policy makers said they may boost interest rates. Oil helped lead gains in commodities.

A Spanish national flag flies above the headquarters of the Madrid Stock Exchange in Madrid. Photographer: Angel Navarrete/Bloomberg

April 17 (Bloomberg) -- David Bloom, global head of currency strategy at HSBC Holdings Plc, talks about the euro, dollar, Norwegian krone, yen and Australian dollar. He speaks with Mark Barton Bloomberg Television's "On the Move." (Source: Bloomberg)

April 18 (Bloomberg) -- Tony Crescenzi, a strategist at Pacific Investment Management Co. in Newport Beach, California, talks about the outlook for global financial markets and the impact of Federal Reserve monetary policy on U.S. stocks. The central bank already bought $2.3 trillion of bonds in two rounds of asset purchases and started a $400 billion program known as Operation Twist to replace short-term debt in its holdings with longer-term securities. Crescenzi speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

April 17 (Bloomberg) -- Dominic Schnider, global head of commodity research at UBS AG's wealth management unit, discusses the outlook for commodity prices and demand. He speaks from Singapore with Owen Thomas on Bloomberg Television's "Countdown." (Source: Bloomberg)

April 16 (Bloomberg) -- Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, discusses the outlook for the Chinese economy and yuan, the European firewall and his forecast for the euro. He speaks with Caroline Hyde on Bloomberg Television's "First Look." (Source: Bloomberg)

April 17 (Bloomberg) -- Bloomberg’s Stephanie Ruhle, Adam Johnson and Matt Miller report on today’s ten most important stocks including Cabot Oil & Gas, Yahoo!, Intel and IBM. (Source: Bloomberg)

April 17 (Bloomberg) -- Matthew McLennan, portfolio manager at First Eagle Funds, talks about his investment strategy. He speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

The IMF increased its outlook for global growth in 2012 to 3.5 percent from 3.3 percent and lifted its forecast for the U.S. expansion to 2.1 percent from 1.8 percent, easing concern that Europe’s debt crisis will stifle the recovery. Spain sold 12-month and 18-month bills a day after yields on its 10-year bonds reached the highest level this year. German’s ZEW survey of investor confidence unexpectedly rose to a two-year high.

“It’s a collection of things that have ignited investors’ animal spirits again,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said in a telephone interview. “We’ve had the IMF upgrade of global activity, good news out of Europe and decent earnings reports so far. That’s boosting confidence.”

Apple Rebounds

The S&P 500 (SPX) climbed for the first time in three days, with energy and technology shares leading gains in all 10 of the main industries. The Dow Jones Industrial Average surged 194.13 points, or 1.5 percent, to 13,115.54. Apple Inc. (AAPL) rebounded 5.1 percent as brokerages including Stern Agee & Leach Inc. and Mizuho Securities USA Inc. advised buying the shares after a five-day, 8.8 percent tumble. Coca-Cola Co. (KO) rallied 2.1 percent after profit topped estimates, helped by demand in North America.

International Business Machines Corp. rallied 2.3 percent before releasing earnings after markets closed. Shares of the world’s biggest computer-services provider erased most of the gain in extended trading as first-quarter sales of $24.7 billion missed the average analyst estimate of $24.8 billion. Earnings of $2.78 a share, excluding some items, beat estimates by 4.9 percent and the company increased its full-year forecast.

Also after the close, Intel Corp. (INTC) predicted higher second- quarter sales than some analysts had estimated as it ships new personal-computer and server chips and shortages of hard drives abate.

Goldman Sachs Group Inc. (GS) retreated 0.7 percent after posting revenue from trading bonds, currencies and commodities that lagged behind Citigroup Inc. and JPMorgan Chase & Co.

Economic Data

Stocks rallied even after Federal Reserve data showed production at factories dropped 0.2 percent in March, the first decline in four months, as the industry cooled following the strongest surge in three decades.

A gauge of homebuilders in S&P indexes increased 1.4 percent as MDC Holdings Inc. and PulteGroup Inc. led gains in the group. Commerce Department data showed building permits increased 4.5 percent in March, defying the median economist estimate for a 0.7 percent decrease and overshadowing an unexpected, 5.8 percent drop in housing starts.

The IMF also increased its forecast for global growth in 2013 to 4.1 percent, up from a previous projection of 4 percent.

It raised its 2013 U.S. growth forecast to 2.4 percent.

“You have an improving outlook across the globe because of more positive sentiment,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “Although some of the economic reports in the U.S. were disappointing, they are in much better shape than they were last year. If you want the glass half full, there’s certainly some potential there.”

European Shares

The Stoxx 600 extended its rebound from four straight weeks of losses. Banco Santander SA, Spain’s biggest lender, and London-based Barclays Plc (BARC) rose more than 3.7 percent to help lead banking shares to the biggest advance among 19 industries. Afren Plc soared 6.3 percent after reporting a “significant” oil discovery in the Kurdistan region of Iraq.

Repsol YPF SA, Spain’s largest oil company, dropped 6.1 percent after the Argentine government took control of one of its units. Argentine President Cristina Fernandez de Kirchner seized control of YPF, replacing Chief Executive Officer Sebastian Eskenazi with Planning Minister Julio De Vido.

Euro, European Bonds

The euro weakened against 12 of 16 major peers, while gaining 0.5 percent against the yen. The shared European currency was little changed versus the dollar at $1.3131. The pound strengthened against 12 of its 16 most-traded peers after U.K. consumer prices rose 3.5 percent in March, the first increase in six months and .

The yield premium investors demand to hold Spanish 10-year government debt instead of benchmark German bunds declined 22 basis points to 414 basis points, or 4.14 percentage points, after yesterday reaching the highest level since November. Spain sold 3.18 billion euros of bills, compared with a maximum target of 3 billion euros.

Germany’s ZEW Center for European Economic Research’s index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to 23.4 from 22.3 in March. Economists forecast a drop to 19, according to the median of 39 estimates in a Bloomberg survey.

Japan said it will provide $60 billion to the International Monetary Fund’s effort to expand its resources and shield the global economy against any deepening of Europe’s debt crisis. Finance Minister Jun Azumi made the commitment while speaking to reporters in Tokyo today before semiannual meetings of the IMF and World Bank in Washington April 20-22.

Canadian Dollar

Canada’s dollar rallied 0.9 percent to $1.0099 after Bank of Canada policy makers said higher borrowing costs “may become appropriate” because economic growth and inflation will be faster than it forecast. The central bank kept its main interest rate at 1 percent, extending the longest pause since the 1950s, as predicted by all 25 economists in a Bloomberg survey.

The S&P GSCI index of raw materials rose 0.5 percent, halting a two-day drop, as cocoa, nickel and oil led an advance in 17 of 24 commodities. Oil climbed 1.2 percent to $104.20 a barrel, a two-week high.

The MSCI Emerging Markets (MXEF) was little changed as rallies of more than 1 percent in benchmark gauges for Brazil, Israel Hungary were tempered by declines in Asia. Taiwan’s TAIEX dropped 1.9 percent. China’s inbound investment fell for a fifth month, the government said. The Shanghai Composite Index fell 0.9 percent.

The Sensex (SENSEX) index of Indian shares rose 1.2 percent on a higher-than-forecast benchmark interest rate cut. The Reserve Bank of India cut the repurchase rate by 0.5 percentage points to 8 percent, as predicted by three of 25 economists in a Bloomberg survey.

To contact the reporters on this story: Claudia Carpenter in London at; Rita Nazareth in New York at

To contact the editor responsible for this story: Michael P. Regan at


Zynga Flashes $1.8 Billion Searching for the New FarmVille: Tech

By Douglas MacMillan - Apr 18, 2012 4:37 AM GMT+0700

Zynga Inc. (ZNGA) merger chief Barry Cottle plans to step up the pace of acquisitions, spending hundreds of millions of dollars in search of a new social-gaming blockbuster on par with hits “FarmVille” and “CityVille.”

The biggest maker of social games paid $180 million last month to acquire OMGPop Inc., after spending a combined $147.2 million for 22 companies in 2010 and 2011. Chief Executive Officer Mark Pincus expects to do “a few” deals the size of OMGPop or larger in the next three to five years, he said in an interview at the company’s San Francisco headquarters.

Zynga Inc. employees through the "time tunnel" at the company's new headquarters in San Francisco on March 15, 2012. Photographer: David Paul Morris/Bloomberg

April 3 (Bloomberg) -- Ian Sigalow, a partner at Greycroft Partners LLC, talks about the outlook for Zynga Inc., Fight My Monster and social gaming. He speaks with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

March 22 (Bloomberg) -- Nicholas Thompson, a senior editor at New Yorker magazine and a Bloomberg contributing editor, talks about Zynga Inc.'s agreement to acquire OMGPOP Inc., adding the application "Draw Something" to its portfolio of games. Thompson speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

March 13 (Bloomberg) -- Carter Mack, president of JMP Group Inc., talks about the potential benefits of an additional share offering for Zynga Inc. and the outlook for the social gaming company. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

March 9 (Bloomberg) -- Bing Gordon, a partner at venture capital firm Kleiner Perkins Caufield & Byers, talks about the outlook for Zynga Inc. Gordon also discusses Apple Inc.'s new iPad and Inc. He speaks with Jon Erlichman at the 2012 South by Southwest event in Austin, Texas, on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Zynga Inc. Executive Vice President of Business and Corporate Development Barry Cottle in London. Photographer: Simon Dawson/Bloomberg

Zynga Inc. Executive Vice President of Business and Corporate Development Barry Cottle in London. Photographer: Simon Dawson/Bloomberg

“We love finding great, accomplished teams that share our mission and vision,” Pincus said. “If we ever see breakout opportunities that massively accelerate social gaming at Zynga, we’ll aggressively pursue those, too.”

In its first year as a publicly traded company, Zynga is turning to M&A to expand into new regions and markets such as mobile games. Led by former Electronic Arts Inc. (EA) executive Cottle, Zynga’s retooled acquisitions team is working to speed up its deal-making process, outbid rivals on price and do a better job of keeping the talent it purchases. Their objective: injecting more high-growth hits like OMGPop’s “Draw Something” into Zynga’s portfolio of games.

“We’re sitting in a very advantageous position,” Cottle said in an interview. “We have a significant amount of cash, we have no debt, and we have access to debt to be as aggressive as we need to be.”

Zynga has $1.81 billion in cash and short-term investments. The stock fell 5.8 percent to $10.31 at the close today in New York.

Bigger Targets

Going after more-established targets that are popular with users and generating revenue is a shift for a company once known for buying small and relatively unknown teams of developers, said Nabeel Hyatt, a former entrepreneur who sold Conduit Labs Inc. to Zynga in 2010 and is now a venture partner at Spark Capital.

“The mandate for Barry is to go acquire not just teams, but products that are having an impact in the market,” Hyatt said. “That’s a whole new ballgame at Zynga. It’s a different skill, and we will see how good Zynga is at it.”

So far, the game maker has failed to keep much of the top talent it has acquired. Founders from at least six startups have already left Zynga. That includes Hyatt, who left earlier this year. Roger Dickey, who founded the popular “Mafia Wars” franchise after Zynga acquired his startup in 2008, left the company last year.

‘High Accountability’

“The culture of Zynga is not for everybody,” Hyatt said. “It is a culture of very high accountability.”

A majority of the founders of acquired startups, including those not publicly disclosed, still work with the company, Pincus said.

Cottle, lured from Electronic Arts in January by a compensation package worth more than $25 million, has a track record in digital gaming. Over the past five years, he helped Electronic Arts become a leader in mobile gaming, and, through the company’s $400 million acquisition of Playfish Inc. in 2009, No. 2 in social games.

Cottle’s poaching is the latest salvo in an escalating face-off between the two game makers. Zynga has hired Electronic Arts veterans, including its chief operating officer and Cottle’s boss, John Schappert. EA has spent heavily marketing social games like “The Sims,” and last year outbid Zynga to acquire “Plants vs. Zombies” developer PopCap Games Inc. for as much as $1.3 billion.

Facebook Reliance

Both Zynga and Electronic Arts make free games played on Facebook Inc. (FB)’s social network. They generate revenue by selling virtual goods within the apps -- say, a gun in “Mafia Wars” or a tractor in “FarmVille.” Zynga, which makes more than 90 percent of its sales through Facebook, is working to decrease that reliance by offering games on social sites, including Google Inc. (GOOG)’s Google+, and on mobile devices.

Since joining Zynga, Cottle has helped refine a deal-making process that once consisted of a handful of business-development managers sharing a single spreadsheet of more than 400 prospective targets. Now the company brings human-resources executives to meet acquisition candidates, asks its technical staff to look for potential snags in technology and deploys Pincus to convince startup founders that Zynga is entrepreneur- friendly.

“We pride ourselves on being able to move fast,” Cottle said. “Not because we’re not thorough, but because we have a pretty strong playbook when it comes to doing acquisitions.”

‘The Fixer’

Zynga’s thoroughness was on display last month in New York, where OMGPop CEO Dan Porter hosted Guru Gowrappan, Zynga’s head of M&A integration, who the company sends in to ease the assimilation process. Nicknamed “The Fixer,” Gowrappan helped Porter find answers to a variety of issues, from how to set up his employees’ COBRA health benefits to getting Android-powered handsets to use for software tests.

“He had this encyclopedic knowledge of every division in Zynga, and just routed us,” Porter said.

After acquiring startups, Zynga says it tries to preserve rituals that were important to individuals and teams -- for example, maintaining a no-meeting policy on Wednesdays at Newtoy Inc., acquired in 2010, and keeping a weekly stand-up comedy show that the team at Conduit Labs started prior to getting bought by Zynga.

“We bring a ton of people in to listen and understand what’s really religious about their organization,” said Cottle. “It’s important that the secret sauce does not change after they become a part of Zynga.”

Offering Stock

To help persuade entrepreneurs to stay, Zynga offers stock units that vest over two or more years. Unlike many Silicon Valley acquirers, the company typically doesn’t structure deals around performance incentives, or so-called earn-outs, which reward founders with extra cash or stock after their product gains a certain number of users, hits a revenue goal or meets some other business objective.

“I do not like earn-outs,” said Colleen McCreary, chief people officer at Zynga. “They encourage people to be individual-first. Using equity that is spread out over a couple years is a much better way” to get entrepreneurs aligned with the rest of the company, she said.

About 17 percent of Zynga’s 2,846 employees were brought on through acquisitions, McCreary said. That number has barely budged in the past three years, she said.

Deal Competition

As Zynga sets its sights on bigger targets, it’s encountering more competition. To buy OMGPop, it fended off competing acquisition overtures from Electronic Arts, Walt Disney Co. (DIS), Gree Inc. (3632) and DeNA Co., according to a person with knowledge of the negotiations, who asked not to be named because the matter is private.

To close the OMGPop deal, which took just two weeks, Cottle relied on one of his best weapons: Pincus. Zynga’s founder and CEO met with Porter in San Francisco and convinced him that his company supports the entrepreneurs it acquires by giving them freedom to make the games they want.

“I felt like, if I had to own stock in all the companies we are talking to, this is the one I would want to own stock in,” Porter said.

Zynga’s fast action was also helped by the fact that Pincus gained added influence over key decisions through a stock structure that gives him 36 percent of voting power.

“We avoid a lot of steps and cycles that other public companies have,” Pincus said. “We’re able to bring the board along with us very quick.”

Representatives of EA, Disney, Gree and DeNA (2432) declined to comment.

Question on Price

OMGPop was also won over by Zynga’s willingness to spend. Though its “Draw Something” app was making about $250,000 per day, according to the person familiar with the company, analysts say its future revenue potential may not merit the takeover price.

“I question the price they are paying,” said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. in Dallas. “If they have to every time go out and acquire the next number-one developer for $200 million, how long can you do that?”

Zynga’s new approach to deals came about after the company lost out on PopCap and at least three other potential acquisitions, according to people familiar with the negotiations. In 2010, “Rolando” creator Ngmoco LLC was bought by Japanese firm DeNA after Zynga’s talks with the startup failed to result in a deal. More recently, Zynga was turned away after attempting to buy HTML5 development startup Game Closure Inc.

‘Angry Birds’ Offer

Rovio Entertainment Oy, the Finnish maker of “Angry Birds” games, spurned Zynga’s offer of more than $2 billion, according to a person familiar with the company.

Representatives of EA, DeNA, Game Closure and Rovio declined to comment.

The company’s next targets are likely to be mobile-game makers, since it increasingly competes for the attention and dollars of gamers who download apps from Apple Inc.’s App Store and Google’s Android marketplace, said Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles.

“They are not really that competent in mobile, and they need to be,” said Pachter, who rates shares of Zynga outperform and doesn’t own the stock. “It’s the way that a big chunk of the world accesses the Internet.”

Dani Dudeck, a spokeswoman for Zynga, declined to comment on potential acquisition targets.

One major mobile developer Zynga might be eyeing is ZeptoLab, because its hit mobile game “Cut the Rope” has consistently landed in Apple’s rankings of top apps, Pachter said.

Whatever companies Cottle tries to buy, he has set a precedent for paying top dollar, Pachter said.

“You are going to have a lot of developers swinging for the fences and trying to hit it fast and hope Zynga will give them a couple hundred million dollars,” he said.

To contact the reporter on this story: Douglas MacMillan in San Francisco at

To contact the editor responsible for this story: Tom Giles at


Dimon Widens Gap With JPMorgan as Wall Street Pay Slides

By Michael J. Moore - Apr 18, 2012 12:44 AM GMT+0700

Jamie Dimon, awarded $23 million for running JPMorgan Chase & Co. (JPM) last year, earned 67 times the average amount set aside for his investment bankers and traders, the widest gap among firms that report divisional pay.

Dimon, 56, chief executive officer of the New York-based lender, was one of the few bank CEOs who avoided a pay cut for 2011. The ratio of his compensation to the average for all employees at JPMorgan’s investment bank increased from 62 times the previous year. At Morgan Stanley, CEO James Gorman’s award was $10.5 million, 25 percent less than for 2010 and 40 times that company’s average of $264,996.

Jamie Dimon, chairman and chief executive officer of JP Morgan Chase & Co., in New York. Photographer: Jin Lee/Bloomberg

April 17 (Bloomberg) -- Christopher Wheeler, an analyst at Mediobanca SpA, talks about U.S. and European banks. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)

April 17 (Bloomberg) -- In today's "Off The Charts" Bloomberg's Scarlet Fu reports on the investment bank pay gap, the difference between what bankers and their CEO make. The list is headed up by JPMorgan's Jamie Dimon who earns 67 times what the banks' average investment banker is paid. She speaks on Bloomberg Television's "Inside Track." (Source: Bloomberg)

James Gorman, chief executive officer of Morgan Stanley. Photographer: Simon Dawson/Bloomberg

Pedestrians walk past JPMorgan Chase & Co. headquarters in New York, U.S. Photographer: Scott Eells/Bloomberg

CEO pay in banking has dropped since peaking before the financial crisis, bringing the ratio at most firms to between 18-to-1 and 50-to-1 from some that topped 100-to-1 in 2006 and 2007. The ratios probably won’t rebound to those levels in the next decade because of lower profits, said Alan Johnson, president of compensation consultant Johnson Associates Inc.

“Thirty to 50 times is probably unsustainably low for the industry, but that’s somewhat consistent with the bummer of a year we had in 2011,” said Johnson, whose firm is based in New York. “If it stays there, that’s probably a really bad sign. It means the firms are still not doing very well.”

SEC Pay Rule

The ratio gives a picture of the rebound in CEO compensation from 2008, when most leaders didn’t take bonuses amid losses and government bailouts. That comes as lawmakers and regulators increase attention on the pay disparity between top executives and workers, and the Occupy Wall Street protests targeted income inequality.

The U.S. Securities and Exchange Commission is drafting a rule, mandated by the Dodd-Frank Act, that would force public companies to disclose the ratio of CEO compensation to median pay, the level at which half the employees are above and half below. The rule was pushed to address concerns about rising executive pay and income inequality.

Goldman Sachs Group Inc. (GS) CEO Lloyd Blankfein, 57, who set a Wall Street pay record in 2007, was awarded $12 million for 2011, a drop of 35 percent from a year earlier. That’s 33 times the average amount of $367,057 set aside for all employees at the New York-based bank, down from 43 in 2010 and 104 in 2007. Gorman’s ratio fell from the 179 times mark that predecessor John Mack set in 2005.

Ackermann, Dougan

Josef Ackermann, 64, who will step down as CEO of Frankfurt-based Deutsche Bank AG (DBK) next month, made 6.3 million euros ($8.3 million) or 48 times the average compensation costs, down from 51 last year and 83 in 2007. Credit Suisse AG CEO Brady Dougan’s 2011 compensation of 5.82 million Swiss francs ($6.4 million) was 18 times the average pay per employee in his firm’s investment bank, down from 33 for 2010.

Barclays Plc (BARC), based in London, and UBS AG (UBSN) got new CEOs in 2011, and the firms paid them more than their predecessors. While Barclays’s Bob Diamond, 60, had his pay cut by almost a third to 6.3 million pounds ($10 million), his compensation was more than that of previous CEO John Varley. That increased the ratio to 31 times the average pay for Barclays Capital employees, from 17 in 2010.

Sergio Ermotti, 51, who took over Zurich-based UBS after a trading scandal prompted Oswald Gruebel to step down, received 6.35 million euros. That was 19 times the average pay set aside for investment-banking employees, up from 8 in 2010.

The average ratio among the seven lenders was 37 times, down from 38 a year earlier.

Dimon’s Payout

“If an organization or an industry sector doesn’t perform well, executive pay is going to suffer most, and we’re starting to see the rubber hit the road on that,” said Frank Glassner, a San Francisco-based partner at executive-pay consulting firm Meridian Compensation Partners LLC. “Both risks and rewards are greater in the C-suite than it’s ever going to be among the workforce.”

Dimon bucked the pay trend. His 2011 compensation, the same as the previous year, was 50 percent higher than that of any other CEO of a global investment bank. He helped steer JPMorgan through the financial crisis without posting a quarterly loss while the firm acquired Bear Stearns Cos. and Washington Mutual Inc. in 2008. The bank has since grown to be the largest lender in the U.S. by assets and the top global firm in investment banking and trading revenue.

“JPMorgan has outperformed its peers, and its executive pay reflected that,” Glassner said. “I don’t think there’s a JPMorgan shareholder out there who would be complaining about Jamie Dimon’s pay.”

‘Comp Arms Race’

Jes Staley, 55, CEO of JPMorgan’s investment bank, said at the firm’s investor day in February that the board and management team decided to pay individual employees a comparable amount to what other firms paid, rather than a similar percentage of revenue. That led to a drop in compensation costs for 2011 even as the division’s revenue climbed. The average pay at the firm’s investment bank last year was $341,552.

“We delivered the lowest comp-to-revenue ratio on the Street for the benefit of you, our shareholders,” Staley said. “It avoided a comp arms race. If we had paid a compensation-to- revenue ratio on average to the rest of the industry, we would have paid our traders, our bankers, our sales people significantly higher than the rest of the industry, and we’d be right back into the race we saw over the last 15 years.”

Jennifer Zuccarelli, a spokeswoman for JPMorgan in New York, declined to comment.

First Quarter

Average pay has continued to decline this year. Goldman Sachs said today that it set aside $4.4 billion to compensate staff in the first quarter, 16 percent less than a year earlier and enough to give each of its 32,400 employees $135,123.

Compensation costs at JPMorgan’s investment bank fell 12 percent to $2.9 billion in the first quarter, according to figures posted on the firm’s website last week. The expense was enough to pay each of the division’s 25,707 workers an average of $112,849 for the first three months of the year.

The average compensation figures don’t represent individual workers’ actual pay and are derived by dividing the compensation pool by the number of employees. Banks including Morgan Stanley (MS) and Goldman Sachs said total compensation costs were higher than actual pay because of deferred payments awarded in previous years and recognized in 2011. The pay figures for CEOs include what they were granted for performance in that year and don’t include gains from previously awarded stock or options.

Citigroup Rejection

The ratio allows for comparisons between banks of different size and business mix. The companies included are among the biggest that focus primarily on Wall Street activities such as underwriting, trading and asset management and that disclose pay and employee figures for their investment-banking divisions.

Citigroup Inc. (C) and Charlotte, North Carolina-based Bank of America Corp. (BAC) don’t break out compensation costs or personnel for their investment-banking divisions and feature large retail banks. Citigroup CEO Vikram Pandit earned 155 times the average pay expense for all workers at the New York-based bank, including tellers, while Bank of America’s Brian T. Moynihan received 54 times the average pay for employees at his company.

Pandit, 55, was awarded $15 million for 2011, up from $1 the previous year. Moynihan, 52, received $7 million, down from $10 million.

Citigroup shareholders today rejected the bank’s executive compensation plan in an advisory vote amid criticism it would let Pandit collect rewards too easily. About 45 percent of the votes were in favor of the plan, according to a preliminary tally at the New York-based firm’s annual meeting in Dallas. In addition to Pandit’s 2011 pay, Citigroup gave him a separate multi-year retention package that may be valued at $40 million.

‘Executive Excess’

Section 953(b) of the Dodd-Frank Act instructs the SEC to require public companies to disclose the ratio between the compensation of their CEOs and employee medians. The late management theorist Peter Drucker said that the ratio should stretch no wider than 25-to-1.

CEO pay in the U.S. in 2010 was 325 times what workers averaged, according to the annual survey “Executive Excess,” published by the Institute for Policy Studies, a Washington- based research group critical of high executive pay.

Compensation for bank CEOs raises “fairness questions” that go beyond spreads within their own companies, said Sarah Anderson, the organization’s global economy project director and one of the authors of the study.

“They were one of the drivers of the crash that left a lot of people in horrible financial straits, and now they’re bouncing back,” Anderson said. “The problems aren’t just how pay is structured, but when the overall levels of pay get so high, they encourage outrageous behavior.”

‘More Complex’

Another 2010 study, using a method similar to the one outlined in Dodd-Frank and conducted by Culpepper and Associates Inc., a compensation-survey firm based in Alpharetta, Georgia, found that the ratio was about 92-to-1 for companies with more than $2.5 billion in revenue.

The SEC has had many meetings with market participants about the requirement, which is “quite prescriptive,” agency Chairman Mary Schapiro said last month during a Congressional hearing. Among other things, companies will have to consider the value of benefits when computing median compensation figures.

“There are a lot of burdens to making the calculation because it’s an average of all employees that firms are really struggling with and we’re trying to work through,” Schapiro said. “It’s not just that we could take the W-2 forms and come up with an average and then compare it to the CEO’s compensation. It’s much more complex than that.”

SEC staff is working on a proposal that it intends to recommend to the commissioners in the first half of this year, according to a proposed timeline on the agency’s website. The provision has no mandated deadline, Schapiro said.

‘Fabulously Wealthy’

Some smaller companies have disclosed the data ahead of the requirement. Bond insurer MBIA Inc. (MBI) disclosed the average and median pay in its proxy filing last month. Excluding the executive officers named in the filing, the median salary and bonus of its 373 employees was $180,000. The average salary and bonus was $247,200.

Jay Brown, CEO of MBIA, declined a bonus for last year’s performance, collecting only his $500,000 salary. That would make his pay twice that of the average employee and 2.8 times the median.

Shareholders and regulators should want the ratio of CEO compensation to average pay to increase, since it serves more as an indicator of economic growth than as a breakdown of corporate governance, Johnson said. Still, Anderson of the Institute for Policy Studies said shareholders shouldn’t be concerned about their executives’ well-being.

“Even taking a year or two off from getting a bonus, in the grand scheme of things, they’re still going to wind up fabulously wealthy at the end of their careers,” Anderson said.

To contact the reporter on this story: Michael J. Moore in New York at

To contact the editor on this story: David Scheer at


Citigroup Investors Reject Management Compensation Plan

By Donal Griffin and Bradley Keoun - Apr 18, 2012 8:13 AM GMT+0700

Citigroup Inc. (C) shareholders rejected its executive pay plan, a first among the six largest U.S. banks, amid criticism it lets Chief Executive Officer Vikram Pandit collect millions of dollars in rewards too easily.

About 45 percent of the votes favored the plan, which Citigroup had said will attract and retain top talent, according to a preliminary tally at the New York-based firm’s annual meeting in Dallas yesterday. While the vote isn’t binding, outgoing Chairman Richard Parsons said changes will be made.

Citigroup Inc. shareholders rejected the bank’s executive compensation plan in an advisory vote amid criticism it would let Chief Executive Officer Vikram Pandit collect rewards too easily. Photographer: Robert Caplin/Bloomberg

Vikram Pandit, chief executive officer of Citigroup Inc. Photographer: Simon Dawson/Bloomberg

“That’s a serious matter,” Parsons said during his final Citigroup shareholders’ meeting as chairman. The board will seek a more quantitative, formula-based method for setting top executives’ pay, he said in a subsequent interview. “We’re going to have some more conversation with our shareholders, make sure we understand their concerns and then fix it,” he said.

The rejection is a rarity for companies in the U.S., which temporarily imposed pay curbs on financial firms as part of the industry’s $700 billion taxpayer bailout in 2008. While new rules require “say-on-pay” votes, only 41 firms in the Russell 3000 Index failed last year to win a majority for executive pay plans, according to Ted Allen, a spokesman for ISS Proxy Advisory Services. Just three have been rejected this year, none of them at banks, Allen said.

Capital Plan Rejected

The vote is another blow for Pandit, following last month’s rejection by U.S. regulators of his capital plan that included rewards for shareholders, possibly including a higher dividend. Directors had awarded Pandit, 55, about $15 million in total compensation for 2011 and also granted him a separate, multi- year retention package that may be worth $40 million. Citigroup shares slumped 44 percent last year.

“Many investors have mentioned to me that they feel the incentive compensation at Citigroup is ludicrous, that there’s an artificially low hurdle,” said Mike Mayo, an analyst at CLSA in New York, who rates the bank’s shares “underperform.” “Are you going to give the manager of the New York Yankees an incentive bonus if he wins one-third of his games?”

Pandit’s proposed payout included a $5.33 million cash bonus, more than the $3 million cash bonus that Goldman Sachs Group Inc. (GS) directors awarded to CEO Lloyd Blankfein for 2011. Morgan Stanley directors didn’t give one to CEO James Gorman.

Parsons was a member of the board’s personnel and compensation committee that decided on awards for Pandit and other executives, according to a filing. The board didn’t award Pandit too much money, he said.

Communication ‘Breakdown’

“No, I don’t think it’s really about that,” he said in an interview as he walked through the Hilton Anatole hotel after the meeting. “We think that there was a breakdown in terms of communication in terms of how our shareholders understood it, looked at it.”

Former Alcoa Inc. CEO Alain Belda led the committee before he and Parsons retired from the board yesterday, an annual filing shows. Other members included new Citigroup Chairman Michael O’Neill, William Thompson Jr. and Diana Taylor. Taylor is the companion of New York City Mayor Michael Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP.

Citigroup accepted $45 billion from U.S. taxpayers to help it survive the financial crisis. The firm has since repaid the entire sum. Banks that took money from the Treasury Department’s Troubled Asset Relief Program in 2008 and 2009 were required to put a say-on-pay vote before shareholders, said Eleanor Bloxham, CEO of the Value Alliance Co., a board advisory firm in Westerville, Ohio. The Dodd-Frank Act, passed in 2010, requires such votes for all companies, she said.

KeyCorp’s CEO

The only large bank to have a compensation plan rejected by shareholders was Cleveland-based KeyCorp in 2010, she said. According to KeyCorp’s 2011 shareholder letter, the company subsequently reduced pay for then-CEO Henry L. Meyer III to $4.5 million from $5 million.

ISS and its competitor, Glass Lewis & Co., faulted Pandit’s payouts and recommended that investors reject the bank’s executive compensation plan for 2011. Pandit got more than Stuart Gulliver, CEO of HSBC Holdings Plc (HSBA), the London-based lender that made more money than Citigroup in 2011 and posted a smaller share drop.

“Pandit’s 2011 incentive pay and multiple retention awards are substantially discretionary in nature or lack rigorous goals to incentivize improvement in shareholder value,” analysts for ISS, a unit of MSCI Inc., wrote in their report.

‘Short Memories’

The vote also may affect payouts for other Citigroup executives. Chief Operating Officer John Havens received about $13 million for 2011, including a $5 million cash bonus. He oversees the securities and banking division, which posted a 24 percent slump in revenue last year.

Manuel Medina-Mora, consumer-banking chief, received about $11.4 million, including a $4.2 million cash bonus. Profit at the consumer-banking unit jumped 33 percent to $6.2 billion in 2011, compared with the prior year.

“Bankers historically have very short memories and we continue to see examples of banks fighting to get back to the more traditional ways of banking pre-crisis, including outsized compensation,” said Todd Hagerman, an analyst at Sterne Agee & Leach Inc. who has a “buy” rating on Citigroup shares. “It’s simply amazing how many bankers fail to recognize the profound structural changes taking place in the industry.”


More than 150 people attended the annual meeting in addition to the board members and senior executives. All other management proposals passed with more than 80 percent of votes cast, including the election of directors, according to Citigroup Secretary Michael Helfer.

Parsons, 64, joined the Citigroup board in 1996 and helped it become the world’s biggest bank, before it almost collapsed in 2008. He became chairman in 2009 and presided over repayment of the company’s U.S. bailout. His replacement, O’Neill, 65, takes over in the wake of the Fed’s rejection of the bank’s capital plan.

The Fed didn’t accept Citigroup’s proposal after finding it would cause the company’s capital levels to fall below minimum standards in a dire economic scenario. Pandit affirmed yesterday that the lender may wait until it submits a 2013 plan to the Fed before seeking approval to boost the 1-cent quarterly payout or repurchase shares.

“Creating shareholder value and also making sure that’s reflected in our book value is our No. 1 goal,” Pandit said yesterday. Returning some of that value is a priority, he said, whether it’s a dividend or a share buyback.

Parsons is leaving a board he described at the meeting as the best of any financial firm. Shareholders should be “pleased and grateful” for the directors they have, he said.

“We leave confident that the place is in pretty good shape and in pretty good hands,” he said, as he left the hotel through a rear exit.

To contact the reporters on this story: Donal Griffin in New York at; Bradley Keoun in New York at

To contact the editor responsible for this story: David Scheer at


U.S. Stocks Post Biggest Rally in 1 Month as Apple Surges

By Rita Nazareth - Apr 18, 2012 3:56 AM GMT+0700

U.S. stocks rose, giving benchmark indexes the biggest rallies in a month, as higher forecasts from the International Monetary Fund and gains in Spanish bonds overshadowed declines in housing starts and factory production.

Apple Inc. (AAPL), the most valuable technology company, surged 5.1 percent after yesterday capping its longest losing streak since October. Bank of America Corp. and Citigroup Inc. (C) added more than 1.4 percent as European lenders jumped after Spain sold more debt than targeted. Coca-Cola Co. (KO), rose 2.1 percent as earnings beat estimates. International Business Machines Corp. and Intel Corp. (INTC), which gained in anticipation of their results, slumped at least 2.4 percent in extended trading.

Traders on the floor of the New York Stock Exchange on April 17, 2012. Photographer: Spencer Platt/Getty Images

April 18 (Bloomberg) -- Tony Crescenzi, a strategist at Pacific Investment Management Co. in Newport Beach, California, talks about the outlook for global financial markets and the impact of Federal Reserve monetary policy on U.S. stocks. The central bank already bought $2.3 trillion of bonds in two rounds of asset purchases and started a $400 billion program known as Operation Twist to replace short-term debt in its holdings with longer-term securities. Crescenzi speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

April 17 (Bloomberg) -- Bloomberg’s Stephanie Ruhle, Adam Johnson and Matt Miller report on today’s ten most important stocks including Cabot Oil & Gas, Yahoo!, Intel and IBM. (Source: Bloomberg)

Traders Luigi Muccitelli, left, and Anthony Riccio on the floor of the New York Stock Exchange on April 17, 2012. Photographer: Richard Drew/AP Photo

The Standard & Poor’s 500 Index rose 1.6 percent to 1,390.78 at 4 p.m. New York time, after falling 1.3 percent in two days. The Dow Jones Industrial Average added 194.13 points, or 1.5 percent, to 13,115.54. The Nasdaq Composite Index climbed 1.8 percent to 3,042.82. About 6 billion shares changed hands on U.S. exchanges, or 11 percent below the three-month average.

“The market was able to shrug off disappointing U.S. economic reports,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management. His firm oversees $160 billion. “We’ve got data showing the German economy is growing strong, positive earnings surprises in the U.S. and some good news out of Spain. There’s a lot of room for positive surprises given how pessimistic things were.”

Stocks rallied as the IMF raised its 2012 global growth estimate to 3.5 percent, German investor confidence rose and Spanish bonds gained. Expectations that Europe’s crisis is stabilizing overshadowed data showing that production at U.S. factories dropped in March for the first time in four months and builders broke ground on fewer houses than forecast.

Earnings Season

Today’s gain extended the 2012 rally for the S&P 500 to 11 percent as investors bought stocks amid better-than-estimated economic and corporate data. While S&P 500 per-share profit growth slowed to 1.7 percent during the first three months of the year, it will accelerate to 8.6 percent during all of 2012, according to analyst estimates compiled by Bloomberg.

All 10 groups in the S&P 500 advanced as technology, energy and industrial shares had the biggest gains. The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 1.4 percent as 28 of its 30 stocks gained.

“It’s a broad-based rally,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said in a telephone interview. “There’s maybe a bit of ‘risk-on’ trade. Nonetheless, it seems like a healthy advance. Maybe what we’ve seen is the end of the pullback in equities.”

Best Since 1998

Since reaching an almost four-year high on April 2, the S&P 500 slumped 3.5 percent through yesterday on concern about global economic growth. The index is still down 1.3 percent in April, after capping the best first-quarter rally since 1998. (SPX)

Apple rose 5.1 percent to $609.70, wiping out yesterday’s drop, amid predictions that quarterly results due next week will underscore buoyant demand for iPhones and iPads, the company’s best-selling products.

The KBW Bank Index added 1.7 percent as all of its 24 stocks gained. Bank of America added 1.5 percent to $8.92. Citigroup increased 3.2 percent to $35.08.

Coca-Cola gained 2.1 percent to $73.95. Chief Executive Officer Muhtar Kent has introduced smaller package sizes to attract price-conscious consumers as part of an effort to spur sales in North America.

Stocks also rose in anticipation of earnings at some of the largest technology companies. IBM (IBM), which jumped 2.3 percent to $207.45 in regular trading, tumbled 2.4 percent to $202.50 at 4:55 p.m. New York time. The biggest computer-services provider reported revenue (GS) that missed projections.

Intel’s Results

Intel slumped 2.9 percent to $27.64 in extended trading, after gaining for a second day ahead of its results. The world’s largest semiconductor maker predicted higher second-quarter sales than some analysts had estimated as it ships new personal- computer and server chips and shortages of hard drives abate.

First Solar Inc. (FSLR) surged 10 percent to $22.96. The largest thin-film panel maker will cut 30 percent of its workforce, about 2,000 jobs, as demand in Europe slows faster than the company can expand in emerging markets in Asia.

Goldman Sachs Group Inc. fell 0.7 percent to $116.86. The fifth-biggest U.S. bank by assets reported a 23 percent decline in first-quarter profit. Revenue from trading bonds, currencies and commodities lagged behind JPMorgan Chase & Co. The company also boosted its dividend 31 percent.

No Harm

Whirlpool Corp. (WHR) slumped 4.3 percent, the most in the S&P 500, to $68. The U.S. International Trade Commission said pricing and subsidies for refrigerators made by LG Electronics Inc. and Samsung Electronics Co. didn’t harm the U.S. industry.

Allocations in U.S. stocks almost doubled in April on renewed concern that the euro-area debt crisis will worsen, prompting investors to sell European equities and hoard cash, a Bank of America survey showed.

A net 27 percent of 191 respondents, who together manage $554 billion, said they were overweight U.S. stocks, meaning they hold more than is represented in benchmarks. That’s up from 14 percent last month. Expectations for an appreciation in the dollar hit the third-highest level in more than 10 years.

The U.S. “is a default for investors,” said Gary Baker, BofA’s head of European equity strategy, at a press briefing in London. “If you’re concerned about growth, and not sure how concerned you should be, ultimately the U.S. is still your safest haven.”

To contact the reporter on this story: Rita Nazareth in New York at

To contact the editor responsible for this story: Nick Baker at