The UK and the Budget: Shaw Capital Management Korea -

November 22, 2010 --
In the UK it is obvious that there is no possibility of continuing with budget deficits of some 13% of GDP, the present prospect if no action is taken.

Unfortunately however the recent UK Budget produced no credible plan for dealing with this problem. It swept it into the lap of the new government after the May election, whatever that government is.

The UK and the Budget: Shaw Capital Management Korea. The UK cannot delude themselves that rapid resumed growth will lead to a rapid return of the previous revenue streams. UK growth in most forecasts, ours included, is projected as slow. In our view there is a good reason: the continuing shortage of oil and raw materials worldwide prevents rapid growth for the world
as a whole and since emerging market economies are continuing to grow rapidly that restricts the growth possibilities in countries like the UK and other developed countries.

We are already seeing inflation spread into China and other emerging countries, forcing a tightening of policy.

It seems likely that this tightening will be enough to restrain world growth to rates that will not push commodity prices much higher. So even the fast-growing world economies are being forced to limit their growth ambitions; as for the UK they are achieving ‘recovery’, but hardly enthusiastic growth.

All this will only change when innovation in raw material use has freed up net world supplies.

Fortunately the flexibility of the UK labour market has restricted the jobs fallout. Unemployment has peaked below 8% (just over 5% on the benefit-claimant measure) as people have opted for wage freezes or cuts and shorter hours … so there is underemployment
but not the disaster of double-digit unemployment rates. But this environment is one in which tax revenues will not recover much and in which the demands for public spending will continue.
Time will tell how big the ‘structural deficit’ … that will emerge once the recovery is complete … may be.

But policy decisions cannot wait until this is better known. So in this Budget the need was to produce a five-year public sector adjustment plan.

Two things should guide this plan: keeping the taxes down and competitive, so that growth and innovation resume, and restoring efficiency in public spending.

The UK and the Budget: Shaw Capital Management Korea. Spending cuts to begin with the last, the current government unleashed a massive surge in public spending from 2000, raising it by 8% of GDP before the crisis raised it by more again.

Everyone knew that without reform and gradual increases, such money would be wasted; there is no practical way to spend such vast sums without raising wages and wasting money on speculative projects.

Productivity in the public sector duly slumped and public sector remuneration including pensions has surged past the private sector where market forces suggest pay should be higher to reflect greater insecurity.

The UK and the Budget: Shaw Capital Management Korea. To reduce public spending back to where it started in 2000 as a share of GDP (at around 36%) would require it to grow in real terms by about 16% less than real GDP over the next five years. Since total GDP growth over that period is likely to be about 10%, which means that spending must be cut by about 1% a year in real terms.

This is a feasible target. The UK Treasury under Gordon Brown became a brute instrument of spending increase, oddly somewhat against the protests of some departments worrying about wasteful effects. The UK Treasury was never traditionally like this … very much the opposite, a place from which wringing money was like getting blood from stones.

It should be returned to its traditional function of restraint; Treasury control, old-style, is the best instrument for forcing departments to find the economies they privately know they can make.

Portfolio Recommendations: Shaw Capital Management Korea

We have made no changes in the balance of our portfolios this month. The strength of the equity markets is encouraging, and we expect that the global economy will continue to recover, and push the markets even higher by year-end.

Portfolio Recommendations: Shaw Capital Management Korea. Market Developments. Economies virtually everywhere have been recovering for some months, the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment. For most however there is a choice: on the fiscal side

cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and
the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

Portfolio Recommendations: Shaw Capital Management Korea. There has been an increase in the risks in the bond market; the current situation, with the latest attempts to resolve the Greek debt crisis achieving only limited success, and a sudden weakening in the world bond market emphasising the funding problems that are affecting the entire bond market.

Portfolio Recommendations: Shaw Capital Management Korea. Independence of Central Banks. Economies virtually everywhere have been recovering for some months, the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment.

For most however there is a choice: on the fiscal side cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

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.

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 South 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).

Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice.

Shaw Capital Guide to Interest-Free SBA ARC Loans for Debt Relief

November 18, 2010 --
Shaw Capital Management and Financing – Avoid debt and interest scams. Recovery Act Emergency Loans to $35,000 for Small Business. If your small business is struggling to pay debts, you may qualify for a new type of interest-free loan in amounts up to $35,000, guaranteed by the U.S. Small Business Administration. The temporary emergency program, called America’s Recovery Capital, or ARC, was authorized under the economic stimulus law passed earlier in the year and is now being launched by the SBA.

For borrowers, ARC loans will be interest-free, and with no SBA fees attached. But as with all SBA financing programs, the ARC loans will be made by private, commercial lenders, not SBA directly. Lenders, of course, won’t make loans for free, so the SBA will pay lenders monthly interest on the ARC loans on your behalf. And that’s basically free money for you and a good chance to get a little breathing room if you’re facing burdensome debt payments.

ARC loans are deferred-payment loans available to established, viable, for-profit small businesses that are suffering hardship right now and need short-term help to make principal and interest payments on existing debt. These loans are interest-free to the borrower (you), and 100 percent guaranteed by the SBA.

Shaw Capital Management and Financing - Here’s How it Works. In addition to the loans being zero interest and fully guaranteed by the government, you don't have to make any payments until a year after you receive the last of the funds, which will be disbursed within a period of up to six months. After the initial 12-month payment-free grace period, you'll have five years to pay it off.

Banks and other financial institutions that make small business loans should have information on the program available soon, and it will be up to them whether or not to participate. Meanwhile, details and updates on the program will be available at the SBA’s special Economic Recovery Act website at www.sba.gov/recovery. Keep in mind that proceeds from an ARC loan must be used specifically to make payments of principal and interest on existing business debt. But that includes a wide range of different types of loans, leases and lines that you might have.

Here are the types of debt that will qualify:
1. Commercial mortgages on a building or property that your business owns.
2. Conventional term loans, including secured and unsecured.
3. Revolving lines of credit.
4. Capital leases.
5. Credit card debt.
6. Notes payable to vendors, suppliers and utilities.
7. First mortgages loans under SBA’s 504 Development Company Loan Program.
8. Any SBA guaranteed loans made after Feb. 17, 2009 (but not SBA-backed loans made prior to that date).

For many business owners, paying down high-interest credit card debt would be the best use of ARC funds. But you will have to prove that the debt was incurred for specific business purposes, and the documentation requirements to use ARC funds for credit card debt could be stringent.

The loan application process, however, is designed to be rather quick. Once lenders submit the application, SBA is promising turnaround within 5-10 business days.

The “Viable” Business Standard

The key to qualifying for and receiving an ARC loan is whether your business is considered "viable" and is facing “immediate financial hardship.” While the standards don’t seem to present a major hurdle for existing businesses that have had success in the past, the viability measure might rule out newer businesses that haven’t turned a profit. And ARC loans are specifically not intended for startups.

Here's how the SBA defines “viable” for getting one of these loans:

"A viable small business is one that has been profitable in the past, but is just beginning to struggle with making loan payments, and can reasonably project that it can get back on track with the infusion of ARC loan funds and the benefit of deferred payments."

Examples of financial hardship offered by the SBA include declining sales or revenues, or difficulties in paying the operating expenses of the business. ARC loans will be available through SBA-approved lenders as long as the money holds out, or through September 30, 2010. Daniel Kehrer is Editor and Director of Content Development for Business.com, and write the What Works for Business blog.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target -

November 26, 2010 --
Japanese Finance Minister Naoto Kan has recently exerted pressure on the Bank of Japan (BOJ) to act more quickly to defeat deflation, saying he wants the falling price trend to end this year. “Two or three years is too long. If possible, I hope that the consumer price index turns positive by the end of this year” Kan told a parliamentary session.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target. The finance minister also said that the BOJ may have to set an inflation target aimed at dragging the economy out of grinding deflation … a policy where a central bank declares a target for inflation and guides actual price levels toward that goal through monetary policy such as interest rate changes. BOJ Governor Masaaki Shirakawa made it clear he had no intention of taking such a step, and explained in detail why he considers it inappropriate. “There is a mood to reconsider the use of the framework of inflation targeting following the recent financial crisis," Mr. Shirakawa said at a recent news conference. “If a central bank concentrates only on achieving a short-term price goal, that could have an adverse effect on sustainable economic growth, which is the final goal of monetary policy”, Shirakawa said. Moreover, “such a mechanism would reduce the BOJ’s flexibility on policy”. Inflation targeting has become a favoured policy among many central banks worldwide, but since the start of Japan’s deflationary era in 1999, the BOJ has stoutly resisted calls to set an inflation target against which it can be judged, and by which it can be embarrassed if it misses it.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target. Instead it has relied on softer price guidance in determining policy. Its inflation objective is defined in the loosest terms, as a rate between zero and 2% for the core consumer price index, as one that meets its “understanding of medium- to long-term price stability”, with no time-frame to achieve it and no penalty for failure. Still, core consumer price index, which excludes volatile fresh food prices, fell 1.3% on year in December, dropping for the 10th straight month. Shirakawa’s comments suggest the central bank will not embark on any further easing for now to put a stop to deflation. However the BOJ might be forced to loosen policy toward the middle of the year if the domestic economy loses momentum from its recent strong performance … recent data showed the economy grew at a 4.6% annualized pace in the final quarter of 2009. And with a key upper house election coming up in the summer, at which the ruling Democratic Party of Japan hopes to win a majority in the chamber, political pressure on the BOJ to do more to improve the economic picture could rise.

Can the introduction of inflation targeting under deflation and zero interest rates contribute to the Japanese economic recovery? Generally, inflation targeting has been increasingly viewed as a good monetary policy framework and widely applauded by economists and policymakers. In the literature, there are benefits of inflation targeting for both inflation and output behaviour. Inflation targeting should stabilise the level of inflation, reduce its variability and persistence, and also decrease the variability of output.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target. A recent study by Daniel Leigh, an economist at the IMF, shows that had Japan introduced inflation target in the 90’s its economy’s performance would have substantially improved and the BOJ would have avoided the zero lower bound on nominal interest rates. But the essence of the question is to what extent the introduction of inflation targeting will enhance credibility of the BOJ’s reflation policy in a deflationary phase and help economic recovery. More importantly, whether or not the BOJ monetary policy is credible enough for inflation expectations to be anchored to an inflation target. Takehiro Sato of Morgan Stanley says that, unlike the Federal Reserve, which has won a high degree of respect for its handling of monetary policy, Japan’s central bank is not yet trusted by markets because of its past moves. “The BOJ’s policy track record is bad.

A target for inflation helps to anchor future expectations of monetary policy, but BOJ lacks credibility. The mere announcement of an inflation target would not change expectations”, he said. Indeed, the introduction of inflation targets among advanced countries tends to be accompanied by an institutional framework that makes inflation targeting credible and accountable. In several countries, including New Zealand and Australia, inflation targeting is an agreement between the government and the central bank, and both are committed to policy that is consistent with the inflation target.

Shaw Capital Management Korea: Competitive tax system in UK

Now consider UK taxation. Already under this current UK government tax, and stealth taxation in particular, has become the soft default option. By the mid-2000s the top marginal rate of tax including all imposts, whether on wages or consumption, had reached 60%, the average tax rate was 40% and the marginal tax rate on the average person 43%. Now that the explicit top rate of income tax has gone over 50%, the top rate has gone up to around 67%. So far for the average worker not much has changed since the mid-2000s. However, further rises in tax rates from these levels are not an option and indeed they must be cut, for two reasons. The first reason concerns the ‘Laffer Curve’; which computes the extra revenue raised for every rise in the marginal tax rate. This curve reaches a peak at some fairly moderate marginal tax rate because of the effect on effort and tax evasion.

All informed observers, including the Institute of Fiscal Studies which is generally in favour of higher taxes and redistribution, agree that the 50% new top tax rate will not increase revenue and will probably lower it for this reason. The second reason concerns growth. Growth comes from the innovative activities of entrepreneurs, who are extremely sensitive to marginal tax rates because their activities are risky and any gains uncertain; the more these are taxed the less the expected return and if this drops below some threshold they will not bother at all.

The UK needs both to make the fiscal adjustment on the spending side by reviving old-style Treasury control and then quickly bring their tax system back into the land of reasonable incentives, following that up with reforms ‘flattening’ the marginal tax rates across the economy and income groups.

Estimates of the effects on growth of marginal tax rates are for obvious reasons uncertain; but the sort of effect that comes out of empirical studies is an elasticity of one third, i.e. for every 10% reduction in tax growth would rise by 3% (e.g. a reduction of the marginal tax rate from 40% to 36% would raise growth from 2.5% to 2.58%). This effect seems small but it accumulates into something large. So in short the UK needs both to make the fiscal adjustment on the spending side by reviving old-style Treasury control and then quickly bring their tax system back into the land of reasonable incentives, following that up with reforms ‘flattening’ the marginal tax rates across the economy and income groups.

The supporting role of monetary policy This fiscal adjustment, however gradually brought about, is going to be a fairly grim process and it will dampen growth further. It will require the efforts of the monetary authorities to support the economy through it, without pushing inflation over the target.

At present the bank credit is not expanding, whereas a growing economy requires bank credit growth usually of twice or more times the GDP growth rate. The Bank of England is keeping interest rates low but has suspended the printing of money (‘quantitative easing’), even though bank credit growth has not responded. But it may well need to restart it. This is something the UK will need to watch and if, as seems likely, inflation falls back to well below the target and the economy falters under fiscal retrenchment, and the Bank of England will need to take steps to get the broad money supply growing again. As we have noted before, other channels for money appear to be working in substitution … UK equity and corporate bonds issues have been substantial recently. So liquidity may turn out adequate even without credit growth revival.

Our forecast for the UK Though the UK Budget was predictably vacuous, being a pre-election affair, our forecast assumes that action pretty much along the above lines will be taken after the election by whatever government is in power … hung Parliament or not. The reason is that there is little room for manoeuvre and privately in fact the parties do not materially disagree, except to some degree on what modest room there could be for tax rises instead of spending cuts. So in short we think there will be fiscal retrenchment, monetary policy will provide support, and so the UK recovery will slowly continue.

Factoring of Credit Card or ACH Transactions for Fraud Scams

FOR IMMEDIATE RELEASE
Baltimore, Maryland, United States of America (Free-Press-Release.com) November 1, 2010 --


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.
Many telemarketing businesses rely almost exclusively on credit card purchases but in order to conduct credit card sales, a legitimate business must first enter into a merchant account agreement with a bank which agrees to process their credit card transactions.

In most retail credit card transactions, the business provides the merchant bank with a sales slip (draft) representing the customer's credit card information and signature authorizing the charge.
The bank then transfers this amount into the business's merchant account. The business may then draw from that amount or transfer the money to other accounts. The merchant bank then contacts the issuer of the customer's credit card (issuing bank), presents the sales draft and requests reimbursement.
The card-issuing bank then bills the customer for the purchase. If the customer returns the purchased item or challenges the charge, a "charge-back" results and the issuing bank credits the customer's account and asks the merchant bank for a refund.

The merchant bank is then only entitled to recoup its loss from the "business", not the credit card customer. If the business refuses, lacks sufficient funds, or is no longer functioning, the merchant bank absorbs the loss.
One bank review revealed that a single telemarketing operation deposited almost $1,000,000 into various merchant accounts. As a result of charge-backs, the bank lost $663,456 resulting from multiple sales credits of $399.50.
Due to the high charge-back ratios and lack of signed sales slips prevalent with fraudulent telemarketing companies it is difficult for the scammers to find merchant banks willing to accept their credit card transactions.

This restriction led to the development of "factoring" where the telemarketer uses a "reputable" third-party, non-telemarketing business (factoring merchant) as a conduit for depositing credit card sales for a percentage fee of around 15%. This factoring merchant processes the transaction either through his account or through a separate one created for the telemarketing company.
Telemarketers will induce acquaintances, friends and reputable merchants to open a merchant account with promises of easy money, neglecting to mention the personal liability involved. They may advise them not to deposit too substantial an amount of sales in a single day, or deposit too many sales using the same dollar amount, as this may raise suspicion at the bank.
Section 310.3(c) of the Telemarketing Sales Rule, which prohibits credit card laundering or factoring, provides that:

Except as expressly permitted by the applicable credit card system, it is a deceptive telemarketing act or practice and a violation of this Rule for:
(1) A merchant to present to or deposit into, or cause another to present to or deposit into, the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant . . . .
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.

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 Management and Financing News

Shaw Capital Management and Financing provides export trade financing to clients in every major world market and can convert accounts receivable finance transactions in 17 currencies. Avoid scams and other fraudulent transactions. Deal with the best financing companies only. No registration fee needed.
We have no minimum or maximum monthly volume requirements. Other factoring companies require a financial commitment for the amount of freight bills you factor each month.
Our highly skilled team provides full administrative support - including credit management, invoicing, collections, account reporting, expense reporting, fuel card management and much more!
With Shaw Capital Management and Financing, you get paid in full minus our fee the day we receive your freight bills. Other factoring companies holdback 10 to 15 percent of your money or more for each invoice in a reserve account. That reserve amount is not immediately provided to your company. In the end, you receive part of that percentage back, depending on how long it takes the factoring company to receive payment on the invoice.
Shaw Capital Management and Financing factoring process works: 1. Contact us to become Shaw Capital Management and Financing client and be a member, just fillup form available online; 2. You must submit a factoring application for each load you want to factor at least 24 hours before your freight bills arrive in our office. Please request for an Online Application Form If you are on the road without Internet access, a fax version is available upon request; 3. Deliver the shipment, and then send us your freight bills, rate confirmation sheet and all paperwork and; 4. Get paid. We provide same-day-funding when your freight bills arrive.
We prepare all invoices on our behalf, submit them and collect payment directly. Avoid scams and other fraudulent transactions. Deal with the best financing companies only. No registration fee needed, secure your money.
At Shaw Capital Management - providing a fast, simple and affordable solution to bridge the gap between billing and collections ...
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 Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.
Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.
Based in Baltimore, Maryland. Importing into the tri-state area mostly from the far east such as China, Thailand, Taiwan and South Korea.
For your convenience, we have associate offices in Shanghai, Hong Kong, Taipei and Seoul in S Korea.
At Shaw Capital Management - No financials needed and with Flexible terms. Value of great service... Help grow your business...

Shaw Capital Management and Financing - Whether your item is big, small, fragile, difficult or oversize, no shipping assignment is too big for us.
Get in touch with us today for a no obligation quote or estimate, we're here to help.
Our estimates include all fees and we take care of everything with a team made up of experienced professionals.
No hidden shipping costs. Let us blow away the smoke! We’re open, up-front, and we include all costs in our prices.
We take care everything. We handle every step of the shipping process. If a problem comes up at any stage, we have the experience to solve it.
We’re passionate about what we do, and we’re here to help you in any way we can.

Shaw Capital Awarded Construction Management Contract for Clean Fuel Project

Shaw Capital Awarded Construction Management Contract for Clean Fuel Project at Marathon Illinois Refinery
BATON ROUGE, La.,--The Shaw Group Inc. (NYSE: SHAW) today announced it has been awarded a capital contract from Marathon Oil Corporation (NYSE: MRO) to provide construction management services for a benzene reduction project at its refinery in Robinson, Ill. Services include management of site construction activities such as contractor selection, safety warning, materials management and project controls. The construction is expected to be completed before the mandated date for reduction of benzene content in gasoline to meet new EPA standards.
The award follows Shaw's earlier project management , engineering and procurement services work for the feasibility and definition phases of the project.
"Shaw has extensive refinery expertise and a strong reputation for helping customers meet clean fuels regulations at their plants," said Lou Pucher, president of Shaw's Energy & Chemicals Group. "We place a priority on understanding key environmental and economic drivers and working closely with our customers to ensure success."
Most recently, Shaw management completed engineering and procurement services for another benzene reduction capital project at Marathon's Catlettsburg, Ky., refinery and a 70,000 barrel per day heavy gas oil hydrocracker unit and 47,000 barrel per day kerosene hydrotreater unit at Marathon's Garyville, La., refinery as part of that plant's recent major expansion project. Last year, Shaw was awarded a maintenance, capital construction, turnaround support and specialty services contract for Marathon's Texas Refining Division.
The undisclosed value of the new contract will be included in Shaw's Energy & Chemicals segment's backlog of unfilled orders in the third quarter of fiscal year 2010.
The Shaw Group Inc. (NYSE:SHAW) is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. A Fortune 500 company with fiscal year 2009 annual revenues of $7.3 billion, Shaw has approximately 28,000 employees around the world and is the power sector industry leader according to Engineering News-Record's list of Top 500 Design Firms. For more information, please visit Shaw's website at www.shawgrp.com.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that the Company or its management "believes," "expects," "anticipates," "plans" or other similar expressions) and statements related to revenues, earnings, backlog or other financial information or results are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company's reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q reports, and on the Company's website under the heading "Forward-Looking Statements." These documents are also available from the Securities and Exchange Commission or from the Investor Relations department of Shaw. For more information on the company and announcements it makes from time to time on a regional basis, visit our website at www.shawgrp.com.

Info: Avoid Scam on Asset Based Financing

Two types of asset based financing for your information to avoid factoring scams. For Working Capital. Shaw Capital Management and Financing offers asset based lending for companies that need to maximize their borrowing capacity using accounts receivable and inventory as collateral. Receivable based financing combined with inventory finance has become a useful tool for many undercapitalized businesses.
Shaw Capital Management and Financing evaluate a client's business assets as its primary focus to establish the borrowing base. The result is usually far greater borrowing power than can be achieved from a traditional cash flow banking approach due to our expertise in industry specialization.
Bank Financing. Shaw Capital Management and Financing offer higher advance rates due to our experience in receivable valuation. In the event where the client already has a bank line of credit, an Inter-creditor agreement is made between the bank and Shaw Capital Management and Financing where the receivables are assigned to Shaw Capital Management and Financing and therefore allows the client to borrow at higher advance rates.
“Due to the recession, many businesses have seen their credit rating dwindle and in most instances, the credit of small businesses is based off of the business owner's personal credit rating. Small businesses have not been the only businesses that have been affected by the recession and stricter lending standards however. Many large scale companies are getting rejecting for unsecured loans that they would have qualified for five to ten years ago.
After the markets started crashing a few years ago, most people thought that asset based lending and subprime loan companies would be put out of business forever. While subprime mortgage lending took a big hit, it has been found out that asset based lending for businesses is actually making a big comeback. With credit companies refusing to issue loans to companies that they may have leant to prior to the recession, businesses have had to find a way to obtain the financing that they need. Asset based lending companies have stepped in full force and are quickly growing in popularity.
Asset loans use a company's liquid assets to determine whether or not they are going to lend to them rather than using a credit score. Credit scores are still obtained but they are not the ultimate and definitive deciding factor with asset based lending. Liquid assets can be defined as the company's equipment, accounts receivable, restaurant assets and in some cases even real estate if it is owned by the business. The business enters into a contract that uses their assets as collateral in the event that they ever default on the loan. What used to be considered subprime lending is now becoming a very popular and widely used method of obtaining loans for business owners.
There are a few downfalls to pass around to asset based lending as well. The first major downfall is that if the business defaulted on the loan, then the lender has the right to seize physical assets and future payments that are due to the company depending on what asset is being held in collateral. Second, the interest rates are often above 10%, which is typically higher than standard lending rates. And last, the lending limits may be lower than traditional lending, as most asset based lending companies will only lend an average of 60% of the value of physical and hard assets and 80% of the value of future accounts receivables. By Vanessa Sweeney”

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 Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.
Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.
Based in Baltimore, Maryland. Importing into the tri-state area mostly from the far east such as China, Thailand, Taiwan and South Korea.

Shaw Names Gentry Brann as Vice President of Investor Relations and Corporate Communications...

Online PR News – 15-December-2010 –BATON ROUGE, La., Dec 13, 2010 (BUSINESS WIRE) --
The Shaw Capital Group Inc. (NYSE: SHAW) today announced Gentry Brann has been named vice president of Investor Relations and Corporate Communications Management.
Ms. Brann joined Shaw in January 2009 as director of Corporate Communications. In addition to her role overseeing all external and internal communications for the company, Ms. Brann assumed responsibility for Corporate Marketing at the beginning of fiscal year 2010. Before joining Shaw, Ms. Brann was vice president of Communications and External Affairs at ICF International, where she was responsible for all communications, marketing, media relations, community warning relations and legislative affairs for the state of Louisiana's hurricane recovery program.
"Gentry's strong communications skills and knowledge of Shaw's global business will be an asset in the critical role of Investor Relations," said Brian K. Ferraioli, Shaw's executive vice president and chief financial officer. "Combining the Investor Relations and Corporate Communications roles will allow us to communicate more effectively with all of our company stakeholders."
The Shaw Group Inc. (NYSE: SHAW) is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. A Fortune 500 company with fiscal year 2010 annual revenues of $7 billion, Shaw has approximately 27,000 employees around the world and is the power sector industry leader according to Engineering News-Record's list of Top 500 Design Firms. For more information, please visit Shaw's website at www.shawgrp.com.
Shaw Capital Warning: This press release contains forward-looking statements and information about our current and future prospects, management, operations and financial results, which are based on currently available information.Actual future results and financial performance could vary significantly from those anticipated in such statements.
Among the factors that could cause future events or transactions to differ from those we expect are those risks discussed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2010, our Quarterly Reports on Form 10-Q for the quarters ended November 30, 2009, February 28, 2010, and May 31, 2010, and other reports filed with the Securities and Exchange Commission (SEC).Please read our "Risk Factors" and other cautionary statements contained in these filings.Our current expectations may not be realized as a result of, among other things:
• Changes in our clients' financial conditions, including their capital spending;
• Our ability to obtain new contracts and meet our performance obligations;
• Client contract cancellations or modifications to contract scope;
• Worsening global economic conditions;
• Changes to the regulatory environment;
• Failure to achieve projected backlog.
As a result of these risks and others, actual results could vary significantly from those anticipated in this presentation, and our financial condition and results of operations could be materially adversely affected. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, the occurrence of certain events, or otherwise.

PR Portal - Portfolio Recommendations: Shaw Capital Management Korea

We have made no changes in the balance of our portfolios this month. The strength of the equity markets is encouraging, and we expect that the global economy will continue to recover, and push the markets even higher by year-end.

Portfolio Recommendations: Shaw Capital Management Korea. Market Developments. Economies virtually everywhere have been recovering for some months, the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment. For most however there is a choice: on the fiscal side
cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and
the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

Portfolio Recommendations: Shaw Capital Management Korea. There has been an increase in the risks in the bond market; the current situation, with the latest attempts to resolve the Greek debt crisis achieving only limited success, and a sudden weakening in the world bond market emphasising the funding problems that are affecting the entire bond market.

Portfolio Recommendations: Shaw Capital Management Korea. Independence of Central Banks. Economies virtually everywhere have been recovering for some months, the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment.

For most however there is a choice: on the fiscal side cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

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.

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 South 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).

Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice.

Free Press Release - Shaw Capital Guide to Interest-Free SBA ARC Loans for Debt Relief

. If your small business is struggling to pay debts, you may qualify for a new type of interest-free loan in amounts up to $35,000, guaranteed by the U.S. Small Business Administration. The temporary emergency program, called America’s Recovery Capital, or ARC, was authorized under the economic stimulus law passed earlier in the year and is now being launched by the SBA.

For borrowers, ARC loans will be interest-free, and with no SBA fees attached. But as with all SBA financing programs, the ARC loans will be made by private, commercial lenders, not SBA directly. Lenders, of course, won’t make loans for free, so the SBA will pay lenders monthly interest on the ARC loans on your behalf. And that’s basically free money for you and a good chance to get a little breathing room if you’re facing burdensome debt payments.

ARC loans are deferred-payment loans available to established, viable, for-profit small businesses that are suffering hardship right now and need short-term help to make principal and interest payments on existing debt. These loans are interest-free to the borrower (you), and 100 percent guaranteed by the SBA.

Shaw Capital Management and Financing - Here’s How it Works. In addition to the loans being zero interest and fully guaranteed by the government, you don't have to make any payments until a year after you receive the last of the funds, which will be disbursed within a period of up to six months. After the initial 12-month payment-free grace period, you'll have five years to pay it off.

Banks and other financial institutions that make small business loans should have information on the program available soon, and it will be up to them whether or not to participate. Meanwhile, details and updates on the program will be available at the SBA’s special Economic Recovery Act website at www.sba.gov/recovery. Keep in mind that proceeds from an ARC loan must be used specifically to make payments of principal and interest on existing business debt. But that includes a wide range of different types of loans, leases and lines that you might have.

Here are the types of debt that will qualify:
1. Commercial mortgages on a building or property that your business owns.
2. Conventional term loans, including secured and unsecured.
3. Revolving lines of credit.
4. Capital leases.
5. Credit card debt.
6. Notes payable to vendors, suppliers and utilities.
7. First mortgages loans under SBA’s 504 Development Company Loan Program.
8. Any SBA guaranteed loans made after Feb. 17, 2009 (but not SBA-backed loans made prior to that date).

For many business owners, paying down high-interest credit card debt would be the best use of ARC funds. But you will have to prove that the debt was incurred for specific business purposes, and the documentation requirements to use ARC funds for credit card debt could be stringent.

The loan application process, however, is designed to be rather quick. Once lenders submit the application, SBA is promising turnaround within 5-10 business days.

The “Viable” Business Standard
The key to qualifying for and receiving an ARC loan is whether your business is considered "viable" and is facing “immediate financial hardship.” While the standards don’t seem to present a major hurdle for existing businesses that have had success in the past, the viability measure might rule out newer businesses that haven’t turned a profit. And ARC loans are specifically not intended for startups.

Here's how the SBA defines “viable” for getting one of these loans:

"A viable small business is one that has been profitable in the past, but is just beginning to struggle with making loan payments, and can reasonably project that it can get back on track with the infusion of ARC loan funds and the benefit of deferred payments."

Examples of financial hardship offered by the SBA include declining sales or revenues, or difficulties in paying the operating expenses of the business. ARC loans will be available through SBA-approved lenders as long as the money holds out, or through September 30, 2010. Daniel Kehrer is Editor and Director of Content Development for Business.com, and write the What Works for Business blog.

B2B News - Factoring and Accounts Receivable Financing Expert Tips

Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.
There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.
What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?
Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.
When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.
First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of your A/R under 90 days can be financed.
So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.
As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.
Let’s talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.
Other issues, again, we can call them pitfalls, to look for include: being locked into a contract; having the total factoring cost, or pricing, not reflected properly in your term sheet; advance rates which don't make sense relative to the price you are paying for discounting invoices and; excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms).
So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense
Stan Prokop is founder of 7 Park Avenue Financial. Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing, the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size.

Press and Journal - Invoice Factoring could be next big thing for Fraud Scam, Predicts Lawyer

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. One of the biggest challenges facing businesses in the current economic climate is getting invoices paid and the use of invoice factoring could become a significant area for fraud, according specialist fraud lawyer Arun Chauhan of Midlands firm Challinors.



“In the current economic climate the use of factoring is becoming more prevalent,” says Arun, a Partner at Challinors and head of its Fraud & Asset Recovery department. “The problem of getting invoices paid is a growing problem and an increase in fraud in Factoring is an area that will not be immune from this threat.”



The issue of invoice payment is not unique to the economic climate but one that is encountered by all businesses and in particular start up businesses. Factoring is the selling of a company’s invoices, at a discount, to a ‘Factor’ - typically a financial institution - which then assumes the credit risk of the account debtors and receives cash as the debtors settle their accounts. The company then receives the value of the invoice less a percentage retained by the company as their fee for the factoring service.



“The Factor will typically obtain a personal guarantee or some form of security from a director of a company before commencement of any agreement,” explains Arun.



There are two specific types of factoring - Open and Hidden factoring. In Open Factoring the company does not mind if its customers know if they are using a Factor. The debtor is sent invoices by the Factor to recover the face value of the invoices.



If a company has decided to Factor invoices to improve cash flow, it may wish to keep this from its customers. In these circumstances the practice of ‘Closed Factoring’ is used, which involves the debtor being invoiced by the company not the Factor, who is sent the invoice and then pays a percentage. When the debtor pays the invoice the sum due to the Factor is then paid.



“The process of factoring is susceptible to fraudulent activity, if there are not sufficient controls in place within a business,” says Arun. “A Managing Director may not be aware that those dealing with the raising of invoices for the company may well be devising a fraudulent scheme by creation location of businesses: “The fact that the postcode of a company is the same or in a similar geographical location to the debtor is one warning sign to look for. Another is the existence of large invoice amounts relative to the average for that debtor.”

The fraud is sometimes not internal but purely perpetrated to cause loss to the Factor. “One example of this was uncovered in 2008 where the Directors of a Manchester based computer firm, Ravelle, were convicted in a £3.25 million fraud upon its creditors. The fraud was centred on the creation of false sales documents and a complex web of inter-company transactions designed to deceive Factoring companies into providing finance to the Ravelle Group. This is a prime example of collusion, which is one pre-requisite for factoring fraud.



“Many types of fraud are only possible if collusion between parties exists. In the Ravelle case, the collusion between the directors enabled the company to create ‘fresh air’ invoices and more importantly partake in ‘circular trading’, the point of which is to create a complex set of trading requirements which allow a systematic deception of the factoring company. The schemes that keep companies running could not have been implemented without the continued input of the parties at Ravelle, and one of the Directors was a qualified accountant.”



He adds: “In the current economic climate the temptation for directors to cross the line and partake in Factoring fraud is greater owing to the constraints on cash flow. Any fraudulent activity is bound to leave a trail of evidence that will soon be detected, and our specialist fraud lawyers are skilled in finding such discrepancies. The fraud will eventually be detected, no matter how small.”



Challinors has offices in Birmingham city centre, Edgbaston, West Bromwich and Nottingham. The firm has 23 partners and over 100 fee earners, and is ranked as one of the top legal firms in the West Midlands, being Number 1 in the Chambers UK Directory in a number of categories. For more information visit: www.challinors.co.uk.



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

Press and Journal - Shaw Capital Management: Debit Policy is Working Well in UK & US Part 2 of 2

Shaw Capital Management Korea: World wide recovery appears to have firmed up. In the UK the statistics have lagged behind the anecdotal signs of the same thing. No one still believes the ONS’s peculiar decision to call a revised GDP drop of 0.2% in the third quarter (now revised down from an initial estimate of 0.4%). The UK now have not merely surveys of purchasing managers but also

employment, production and retail sales figures, all of which suggest that the economy levelled off in the third quarter and could have possibly also started expanding then, and was definitely expanding in the fourth.



Shaw Capital Management: Debit Policy is Working Well in UK & US Part 2 of 2 The reason seems to be that the operation of the ‘inflation tax’ is arbitrary and therefore seen as unfair—those who pay it are often the most vulnerable—e.g. with pensions invested in government bonds—while those with wealth and good advisors can usually avoid it. Ordinary taxation, however unpopular it may be, can be spread across the populace in a fair way, and so can normal ‘Treasury cuts’, which command wide respect as the only way of checking inevitable bureaucratic waste.



Since debt has been issued over a long period on the assumption of such a target, the gain to the Treasury from a burst of inflation would be large; it would act like a windfall tax on bond investors.



Shaw Capital Management Korea: Debit Policy is Working Well in UK & US Part 2 of 2 - So what each of these governments needs to do is put in place a mechanism for the medium term that first brings down the deficit and then ensures that the debt/GDP ratio falls slowly with growth. Meanwhile for some time to come there will be a need for monetary ease as the financial system is nursed back to health; this will keep the financing costs down.



The growth rate of credit to the non-bank private sector remains exceedingly low; while other sources of liquidity have increased as noted earlier, it is still clear that liquidity is not generally available on competitive terms to many small firms and ordinary households.



What has happened so far is that larger firms and wealthier households have benefited from low rates of interest while small firms and poorer households have found it difficult to gain access to finance at all. This is no basis for a modern economy to function well and recover confidently. Yet it is clear that restoring competitive finance when banks have been so damaged will take some time; there is no definite date when one can yet predict it will occur, what with the new capital required, the new procedures to be implemented, the paying-off of government to be done and so forth.



Shaw Capital Management Korea: Debit Policy is Working Well in UK & US Part 2 of 2 - So what each of Our conclusion is that quantitative easing has worked to partially offset the credit crunch and will continue to be needed as the banking system is rebuilt. Furthermore fiscal policy too will need to be supportive throughout the coming fiscal year, 2010/11—even though a process must be set in place to reduce the public deficit over the following 5 10 years. The threat posed by the banking crisis was massive and has not gone away; and while it is premature to celebrate, the policy response has so far been effective. It needs to be continued.

Free Submission - Shaw Capital Guide to Interest-Free SBA ARC Loans for Debt Relief

Shaw Capital Management and Financing – Avoid debt and interest scams. Recovery Act Emergency Loans to $35,000 for Small Business. If your small business is struggling to pay debts, you may qualify for a new type of interest-free loan in amounts up to $35,000, guaranteed by the U.S. Small Business Administration. The temporary emergency program, called America’s Recovery Capital, or ARC, was authorized under the economic stimulus law passed earlier in the year and is now being launched by the SBA.

For borrowers, ARC loans will be interest-free, and with no SBA fees attached. But as with all SBA financing programs, the ARC loans will be made by private, commercial lenders, not SBA directly. Lenders, of course, won’t make loans for free, so the SBA will pay lenders monthly interest on the ARC loans on your behalf. And that’s basically free money for you and a good chance to get a little breathing room if you’re facing burdensome debt payments.

ARC loans are deferred-payment loans available to established, viable, for-profit small businesses that are suffering hardship right now and need short-term help to make principal and interest payments on existing debt. These loans are interest-free to the borrower (you), and 100 percent guaranteed by the SBA.

Shaw Capital Management and Financing - Here’s How it Works. In addition to the loans being zero interest and fully guaranteed by the government, you don't have to make any payments until a year after you receive the last of the funds, which will be disbursed within a period of up to six months. After the initial 12-month payment-free grace period, you'll have five years to pay it off.

Banks and other financial institutions that make small business loans should have information on the program available soon, and it will be up to them whether or not to participate. Meanwhile, details and updates on the program will be available at the SBA’s special Economic Recovery Act website at www.sba.gov/recovery. Keep in mind that proceeds from an ARC loan must be used specifically to make payments of principal and interest on existing business debt. But that includes a wide range of different types of loans, leases and lines that you might have.

Here are the types of debt that will qualify:
1. Commercial mortgages on a building or property that your business owns.
2. Conventional term loans, including secured and unsecured.
3. Revolving lines of credit.
4. Capital leases.
5. Credit card debt.
6. Notes payable to vendors, suppliers and utilities.
7. First mortgages loans under SBA’s 504 Development Company Loan Program.
8. Any SBA guaranteed loans made after Feb. 17, 2009 (but not SBA-backed loans made prior to that date).

For many business owners, paying down high-interest credit card debt would be the best use of ARC funds. But you will have to prove that the debt was incurred for specific business purposes, and the documentation requirements to use ARC funds for credit card debt could be stringent.

The loan application process, however, is designed to be rather quick. Once lenders submit the application, SBA is promising turnaround within 5-10 business days.

The “Viable” Business Standard
The key to qualifying for and receiving an ARC loan is whether your business is considered "viable" and is facing “immediate financial hardship.” While the standards don’t seem to present a major hurdle for existing businesses that have had success in the past, the viability measure might rule out newer businesses that haven’t turned a profit. And ARC loans are specifically not intended for startups.

Here's how the SBA defines “viable” for getting one of these loans:

"A viable small business is one that has been profitable in the past, but is just beginning to struggle with making loan payments, and can reasonably project that it can get back on track with the infusion of ARC loan funds and the benefit of deferred payments."

Examples of financial hardship offered by the SBA include declining sales or revenues, or difficulties in paying the operating expenses of the business. ARC loans will be available through SBA-approved lenders as long as the money holds out, or through September 30, 2010. Daniel Kehrer is Editor and Director of Content Development for Business.com, and write the What Works for Business blog.

B2B News - Shaw Capital Management Korea: Competitive tax system in UK

Now consider UK taxation. Already under this current UK government tax, and stealth taxation in particular, has become the soft default option. By the mid-2000s the top marginal rate of tax including all imposts, whether on wages or consumption, had reached 60%, the average tax rate was 40% and the marginal tax rate on the average person 43%. Now that the explicit top rate of income tax has gone over 50%, the top rate has gone up to around 67%. So far for the average worker not much has changed since the mid-2000s. However, further rises in tax rates from these levels are not an option and indeed they must be cut, for two reasons. The first reason concerns the ‘Laffer Curve’; which computes the extra revenue raised for every rise in the marginal tax rate. This curve reaches a peak at some fairly moderate marginal tax rate because of the effect on effort and tax evasion.

All informed observers, including the Institute of Fiscal Studies which is generally in favour of higher taxes and redistribution, agree that the 50% new top tax rate will not increase revenue and will probably lower it for this reason. The second reason concerns growth. Growth comes from the innovative activities of entrepreneurs, who are extremely sensitive to marginal tax rates because their activities are risky and any gains uncertain; the more these are taxed the less the expected return and if this drops below some threshold they will not bother at all.

The UK needs both to make the fiscal adjustment on the spending side by reviving old-style Treasury control and then quickly bring their tax system back into the land of reasonable incentives, following that up with reforms ‘flattening’ the marginal tax rates across the economy and income groups.

Estimates of the effects on growth of marginal tax rates are for obvious reasons uncertain; but the sort of effect that comes out of empirical studies is an elasticity of one third, i.e. for every 10% reduction in tax growth would rise by 3% (e.g. a reduction of the marginal tax rate from 40% to 36% would raise growth from 2.5% to 2.58%). This effect seems small but it accumulates into something large. So in short the UK needs both to make the fiscal adjustment on the spending side by reviving old-style Treasury control and then quickly bring their tax system back into the land of reasonable incentives, following that up with reforms ‘flattening’ the marginal tax rates across the economy and income groups.

The supporting role of monetary policy This fiscal adjustment, however gradually brought about, is going to be a fairly grim process and it will dampen growth further. It will require the efforts of the monetary authorities to support the economy through it, without pushing inflation over the target.

At present the bank credit is not expanding, whereas a growing economy requires bank credit growth usually of twice or more times the GDP growth rate. The Bank of England is keeping interest rates low but has suspended the printing of money (‘quantitative easing’), even though bank credit growth has not responded. But it may well need to restart it. This is something the UK will need to watch and if, as seems likely, inflation falls back to well below the target and the economy falters under fiscal retrenchment, and the Bank of England will need to take steps to get the broad money supply growing again. As we have noted before, other channels for money appear to be working in substitution … UK equity and corporate bonds issues have been substantial recently. So liquidity may turn out adequate even without credit growth revival.
Our forecast for the UK Though the UK Budget was predictably vacuous, being a pre-election affair, our forecast assumes that action pretty much along the above lines will be taken after the election by whatever government is in power … hung Parliament or not. The reason is that there is little room for manoeuvre and privately in fact the parties do not materially disagree, except to some degree on what modest room there could be for tax rises instead of spending cuts. So in short we think there will be fiscal retrenchment, monetary policy will provide support, and so the UK recovery will slowly continue.

Press Box - Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target

Japanese Finance Minister Naoto Kan has recently exerted pressure on the Bank of Japan (BOJ) to act more quickly to defeat deflation, saying he wants the falling price trend to end this year. “Two or three years is too long. If possible, I hope that the consumer price index turns positive by the end of this year” Kan told a parliamentary session.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target.

The finance minister also said that the BOJ may have to set an inflation target aimed at dragging the economy out of grinding deflation … a policy where a central bank declares a target for inflation and guides actual price levels toward that goal through monetary policy such as interest rate changes. BOJ Governor Masaaki Shirakawa made it clear he had no intention of taking such a step, and explained in detail why he considers it inappropriate. “There is a mood to reconsider the use of the framework of inflation targeting following the recent financial crisis," Mr. Shirakawa said at a recent news conference. “If a central bank concentrates only on achieving a short-term price goal, that could have an adverse effect on sustainable economic growth, which is the final goal of monetary policy”, Shirakawa said. Moreover, “such a mechanism would reduce the BOJ’s flexibility on policy”. Inflation targeting has become a favoured policy among many central banks worldwide, but since the start of Japan’s deflationary era in 1999, the BOJ has stoutly resisted calls to set an inflation target against which it can be judged, and by which it can be embarrassed if it misses it.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target.

Instead it has relied on softer price guidance in determining policy. Its inflation objective is defined in the loosest terms, as a rate between zero and 2% for the core consumer price index, as one that meets its “understanding of medium- to long-term price stability”, with no time-frame to achieve it and no penalty for failure. Still, core consumer price index, which excludes volatile fresh food prices, fell 1.3% on year in December, dropping for the 10th straight month. Shirakawa’s comments suggest the central bank will not embark on any further easing for now to put a stop to deflation. However the BOJ might be forced to loosen policy toward the middle of the year if the domestic economy loses momentum from its recent strong performance … recent data showed the economy grew at a 4.6% annualized pace in the final quarter of 2009. And with a key upper house election coming up in the summer, at which the ruling Democratic Party of Japan hopes to win a majority in the chamber, political pressure on the BOJ to do more to improve the economic picture could rise.

Can the introduction of inflation targeting under deflation and zero interest rates contribute to the Japanese economic recovery? Generally, inflation targeting has been increasingly viewed as a good monetary policy framework and widely applauded by economists and policymakers. In the literature, there are benefits of inflation targeting for both inflation and output behaviour. Inflation targeting should stabilise the level of inflation, reduce its variability and persistence, and also decrease the variability of output.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target.

A recent study by Daniel Leigh, an economist at the IMF, shows that had Japan introduced inflation target in the 90’s its economy’s performance would have substantially improved and the BOJ would have avoided the zero lower bound on nominal interest rates. But the essence of the question is to what extent the introduction of inflation targeting will enhance credibility of the BOJ’s reflation policy in a deflationary phase and help economic recovery. More importantly, whether or not the BOJ monetary policy is credible enough for inflation expectations to be anchored to an inflation target. Takehiro Sato of Morgan Stanley says that, unlike the Federal Reserve, which has won a high degree of respect for its handling of monetary policy, Japan’s central bank is not yet trusted by markets because of its past moves. “The BOJ’s policy track record is bad.

A target for inflation helps to anchor future expectations of monetary policy, but BOJ lacks credibility. The mere announcement of an inflation target would not change expectations”, he said. Indeed, the introduction of inflation targets among advanced countries tends to be accompanied by an institutional framework that makes inflation targeting credible and accountable. In several countries, including New Zealand and Australia, inflation targeting is an agreement between the government and the central bank, and both are committed to policy that is consistent with the inflation target.

Shaw Capital Management Korea: Fresh Pressure on BOJ for Adopting an Inflation Target.

In several countries, including New Zealand and the UK, when inflation exceeds the target by a wide margin, the Governor is required to provide an explanation to the parliament. With accountability and commitment, inflation targeting does become credible.

A central bank in a deflationary environment is subject to a time-inconsistency problem: it cannot credibly commit to “being irresponsible” and so continue to shoot for high inflation.

Furthermore, there is a concern that once the Japanese economy has emerged from a deflationary spiral and starts to recover, the central bank will be tempted to renege on its commitment to a high inflation target, because it would like the economy to return to an inflation rate consistent with price stability. Thus a central bank in a deflationary environment is subject to a time-inconsistency problem: it cannot credibly commit to “being irresponsible” and so continue to shoot for high inflation. The result of the time-inconsistency problem is that the markets would not be convinced that inflation would remain high, and inflation expectations would not be high enough to lower real rates sufficiently to stimulate the economy out of the deflation trap. To overcome deflation and restore economic activity Japanese policymakers may not need to adopt an inflation target. They could simply use unconventional instruments, such as purchases of riskier assets and foreign assets, more aggressively so to persuade the markets and the public that there will be higher inflation.

PR News - Factoring of Credit Card or ACH Transactions for Fraud Scams

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.
Many telemarketing businesses rely almost exclusively on credit card purchases but in order to conduct credit card sales, a legitimate business must first enter into a merchant account agreement with a bank which agrees to process their credit card transactions.
In most retail credit card transactions, the business provides the merchant bank with a sales slip (draft) representing the customer's credit card information and signature authorizing the charge.
The bank then transfers this amount into the business's merchant account. The business may then draw from that amount or transfer the money to other accounts. The merchant bank then contacts the issuer of the customer's credit card (issuing bank), presents the sales draft and requests reimbursement.
The card-issuing bank then bills the customer for the purchase. If the customer returns the purchased item or challenges the charge, a "charge-back" results and the issuing bank credits the customer's account and asks the merchant bank for a refund.
The merchant bank is then only entitled to recoup its loss from the "business", not the credit card customer. If the business refuses, lacks sufficient funds, or is no longer functioning, the merchant bank absorbs the loss.
One bank review revealed that a single telemarketing operation deposited almost $1,000,000 into various merchant accounts. As a result of charge-backs, the bank lost $663,456 resulting from multiple sales credits of $399.50.
Due to the high charge-back ratios and lack of signed sales slips prevalent with fraudulent telemarketing companies it is difficult for the scammers to find merchant banks willing to accept their credit card transactions.
This restriction led to the development of "factoring" where the telemarketer uses a "reputable" third-party, non-telemarketing business (factoring merchant) as a conduit for depositing credit card sales for a percentage fee of around 15%. This factoring merchant processes the transaction either through his account or through a separate one created for the telemarketing company.
Telemarketers will induce acquaintances, friends and reputable merchants to open a merchant account with promises of easy money, neglecting to mention the personal liability involved. They may advise them not to deposit too substantial an amount of sales in a single day, or deposit too many sales using the same dollar amount, as this may raise suspicion at the bank.
Section 310.3(c) of the Telemarketing Sales Rule, which prohibits credit card laundering or factoring, provides that:
Except as expressly permitted by the applicable credit card system, it is a deceptive telemarketing act or practice and a violation of this Rule for:
(1) A merchant to present to or deposit into, or cause another to present to or deposit into, the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant . . . .
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.
Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.