Equipment Leasing And Finance Industry

Bernanke emphasizes Fed's vigilance on inflation

Federal Reserve Chairman Ben Bernanke told a House committee that the central bank will act to ensure that inflation does not take off. "I do want to repeat that we are extremely vigilant. We will be very careful to make sure that we don't wait too long," Bernanke said. However, he did not offer any indication that the Fed is about to tighten monetary policy. The Wall Street Journal (2/10), National Public Radio/The Associated Press (2/9) For additional information Visit http://mazumacapital.com

Read entire Bernanke speech to House committee

Chairman Ben S. Bernanke The Economic Outlook and Monetary and Fiscal Policy Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C.   February 9, 2011

Lease accounting: boards now take stock of responses

In two meetings over recent weeks, the accounting standard setters have started to consider how to finalize the new leasing standard. The Boards, (International Accounting Standards Board (IASB) and the US Financial  Accounting Standards Board (FASB), received reports from their staffs on the pattern of response to the exposure draft (ED) in the recent consultation, and subsequent meetings with stakeholders. 

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Paper Asks for Input on Hedge Accounting -FASB Discussion

The Financial Accounting Standards Board issued a Discussion Paper to solicit input on how to improve, simplify, and converge the financial reporting requirements for hedging activities.

In May 2010, the FASB proposed its revisions to improve and simplify standards for financial reporting of financial instruments, including hedge accounting guidance, in its proposed Accounting Standards Update, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities—Financial Instruments (Topic 825) and Derivatives and Hedging (Topic 815). In December 2010, as part of its project to improve the accounting for financial instruments, the IASB issued its Exposure Draft, Hedge Accounting, which seeks to align hedge accounting more closely with risk management while addressing inconsistencies and weaknesses in the existing hedge accounting model.

Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information.

Read article (2/10) The Discussion Paper is available at www.fasb.org. Written comments on the documents should be submitted by April 25. For additional information Visit http://mazumacapital.com

U.S. manufacturers see emerging market boost

(Reuters) - Strong demand from big emerging markets, particularly China and India, is boosting U.S. manufacturers' prospects for 2011, a pair of top executives said on Tuesday.

Finance industry laments new curbs on securitization

(Washington Post)- For nearly two decades before the financial crisis erupted in 2007, the securitization market allowed Wall Street to manufacture all manner of financial products. The most basic of these were bundles of home, auto and credit card loans that were turned into single investments that firms and countries worldwide could buy.

But then things got more complicated. Wall Street found ways to allow investors to speculate on Hollywood films, patents, lawsuits, airplane sales, and fast food revenues. The most infamous financial engineering, of course, involved the creation of seemingly high-quality investments that in fact backed by high-risk home loans, extended to people with weak finances.

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http://www.washingtonpost.com/wp-dyn/content/article/2011/02/08/AR2011020804827.htmlwere

Fed Moves to Label 'Systemically Important' Nonbank Firms

(New York Times) - WASHINGTON—The Federal Reserve unveiled a rule defining two crucial terms that U.S. regulators will use to determine which financial firms, other than banks, are so risky they warrant tougher scrutiny and regulation.
The Dodd-Frank financial-overhaul law granted top regulators the power to designate financial firms as "systemically important," a label that would place the firm under Fed supervision and subject it to additional capital and liquidity requirements.
The provision is a central part of policy makers' effort to address the problems laid bare by the financial crisis. A number of firms at the epicenter of the crisis—such as American International Group Inc.—were subject to uneven or absent regulation, particularly large financial companies that didn't fit the traditional definition of a bank.

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http://online.wsj.com/article/SB10001424052748704364004576132142508846126.html?mod=dist_smartbrief

A Warming Trend In Credit

A key indicator of credit availability makes a big jump.

Trust is returning to business partnerships. Suppliers are increasingly granting credit to their customers, according to the latest monthly report by the National Association of Credit Management (NACM).

For the manufacturing industry in particular, the NACM says credit access for trade customers has returned to prerecession levels. Indeed, the association, which surveys about 1,000 trade credit managers in the second half of each month, believes that credit availability has recently made a “startling improvement.” The NACM’s indicator for the amount of credit extended in the combined manufacturing and services sectors jumped from 61.7 in December to 64.8 in January. That’s the highest level for this indicator — one of 10 factors making up the association’s monthly credit managers’ index — since January 2007.

Part of the reason for suppliers’ loosening up is that their bankers are extending them more credit as well, notes Chris Kuehl, the NACM’s economic analyst. Manufacturers tend to receive more leeway from their lenders during the beginning of an economic recovery since they can post collateral against their loans, he adds, unlike some of the other businesses the NACM categorizes as services, such as transportation.
Moreover, suppliers don’t want to risk losing sales to more-trusting competitors. Unlike the all-too-recent past when credit was shut down from all sides, suppliers are now more willing to give credit because they fear that another company will get the business if they don’t offer a financing option. “Everyone has been waiting and looking at each other to see who will go first,” says Kuehl.

Still, as with other positive economic indictors, small businesses may be the last to feel this change. Only 5% of small-business owners saw their suppliers’ trade-credit policies eased last year, according to a report by the National Federation of Independent Business released on Wednesday.

Other measurements in the NACM’s report further show that companies are poised for growth. The overall credit managers’ index score of 56.4 for January is at a level that signals “more rapid expansion in the near future,” the trade association says. An index reading above 50 indicates the economy is in growth mode. The nine-year-old index hit its lowest point, 39.7, in January 2009.

Also for January, the NACM found that creditors are rejecting fewer applications and have had to move fewer of their accounts to collections. Sales and new credit applications have recently slid, but the NACM says the numbers are still decent and reflect a normal slowdown during this time of year.

Source:  CFO.com
http://www.cfo.com/article.cfm/14553695/