INVESTIGATION AND THE RESULTS. ERIC AND ORLANDO FOR US. A CLERK ATTACKED AT KNIFE POINT INSIDE A LOCAL STORE. SURVEILLANCE CAMERAS WERE ROLLING AS A ROBBER WALKED IN, PULLED UP A KNIFE AND HELD UP THE CLERK AND THAT ROBERT IS STILL OUT THERE. THIS HAPPENED INSIDE CASH ADVANCE IN ORLANDO BETWEEN MILLS AMAKA UBAKA IS LIVE. IS THAT CLERK OKAY TONIGHT? Reporter: LISA, SHE IS DOING OKAY. I SPOKE WITH HER HUSBAND OFF CAMERA AND HE SAID SHE IS GRATEFUL HE WASNT HER. SHE IS ONLY 4-10 AND 96 POUNDS WHAT SHE MANAGED TO STAY CALM WHEN CONFRONTED BY ROBBERS SIDE THIS STORE. A FEMALE CLERK VIOLENTLY ROBBED AS SHE WORKED ALONE INSIDE THIS ADVANCE AMERICA. A CASH ADVANCE STORE. ONLY LOCAL 6 HAS THE VIDEO THAT SHOWS A MAN WALKING IN, PRETENDING TO BE A NEW CUSTOMER. DEPUTIES SAY AS A 26-YEAR-OLD CLERK GOES TO THE BACK ROOM THE ROBBER FOLLOWS COMING BEHIND THE COUNTER WITH A KNIFE. ANOTHER CAMERA SHOWS THEM COMING BACK TO THE FRONT WHERE SHE CALMLY HANDSOME CASH FROM SEVERAL REGISTERS. HE THEN DEMANDS SHE OPEN THE SAFE. AFTER GRABBING THE CASH THE ROBBER JUMPS OVER THE COUNTER AND TAKES OFF. THAT IS PRETTY SCARY. Reporter: GARY WORKS AT GOODFELLAS PIZZA AND SAID THEY WERE ONLINE DOWN. CUSTOMERS WERE TRYING TO COME IN AND PICK UP FOOD AND OUR DELIVERY DRIVERS COULDNT LEAVE. Reporter: WITH A VIOLENT ROBERT STILL OUT THERE DEPUTIES ARE HOPING SOMEONE CAN HELP IDENTIFY HIM BEFORE HE STRIKES AGAIN. LISA, IM TOLD THAT WOMAN NORMALLY DOES NOT WORK AT THE STORE. SHE WAS ALONE BECAUSE SHE WAS COVERING FOR OTHER EMPLOYEES. THE STORE IS SET TO REOPEN AT 9 AM TOMORROW.
On the one hand you could argue the company is being prudent, socking away money while times are good to help it out when times are bad. That kind of thinking usually appeals to folks who were raised on the fable of the grasshopper and the ant.
But its not investor thinking, where money should work. Sure, Apples cash hoard isnt all in cash. Much of it is in short-term and convertible securities. But in todays low-interest environment, thats not bringing in much.
No, from an investor point of view, that money should be doing much more, either through acquisitions or directly for the shareholders.
Read MoreMoment of truth for Apple Pay
So we can expect two arguments to reignite.
The first is Carl Icahns demand that Apple return a good portion of that cash hoard to investors through stock buybacks. The activist investor has been making such demands since buying a position in the company last year. And the company acquiesced to a certain degree last February.
Icahn backed down for a time. But just last week he renewed his push, claiming the company would grow 80 percent over the next three years and that its stock was undervalued. Not everyone on Wall Street agreed with the outlook, but there was some sympathy for the sentiment.
But while pushing for the $100 billion buyback, Icahn said he wouldnt take it to a proxy fight.
The other fight will be over the tax code, since most of Apples cash is parked overseas and out of reach of the IRS. Last year Apple CEO Tim Cook took some flak from Congress over the practice, but pointed out it was up to Congress itself to change the situation. He was just doing what was in the best interest of his shareholders.
But until the tax code is rewritten or a tax holiday granted, that money is likely to stay out of reach.
Nigel Waterson, a former Conservative MP and chairman of the organisation,
said: These figures show equity release is proving invaluable for the
over-55s approaching retirement as pension savings fail to cover rising
Rising house prices also mean that customers have a growing pool of equity at
rates have plunged since the financial crisis, hitting large numbers of
elderly people who relied on the interest to supplement their pensions.
Many savers have also found that money in pension funds has provided a much
lower income than they had anticipated.
In the early Nineties, a man aged 65 could have turned pound;100,000 into a
lifetime income of more than pound;15,000 a year by buying an annuity.
Today, someone of that age would be offered nearer pound;6,000.
Ros Altmann, the Governments older peoples tsar, said for many pensioners, George
Osbornes radical reforms next year allowing unlimited access to
pensions will come too late, as they have already locked into an annuity.
Many people are realising that the only way theyll get the retirement they
want is find a way to unlock the capital in their homes, which is typically
their largest asset, she said.
Almost half of those borrowing against the equity from their homes were doing
so to meet everyday costs, the Equity Release Council found, although most
gave more than one reason.
Other causes included funding home improvements and holidays, with four in ten
citing one of these reasons as the motivation.
The research found 27 per cent of people wanted to give money to family
members, particularly grandchildren who were struggling to get on to the
property ladder themselves.
Others said they needed cash to pay off existing debts or clear a mortgage.
Ms Altmann said some pensioners were borrowing against their homes to pay for
nursing care as they awaited the pound;72,000 cap on fees due in 2016.
The situation will only get worse as more people need care in later life and
are forced to spend hundreds of thousands of pounds before the Government
steps in to cover the costs, she added.
One in five over-55s who were considering equity release told lenders they
needed the money to fund home improvements so they could receive care in
The average amount borrowed between July and September was pound;67,467, the data
showed, itself a record.
In total, 5,565 people took equity release, the largest number for six years,
taking the total to 15,624 for 2014. Customers had borrowed 32 per cent more
than in 2013.
Most pensioners are refused traditional mortgages because they are retired.
Equity release is like a mortgage without the monthly repayments. The
borrower is given a lump sum of money that only has to be repaid on death or
when the house is sold.
Typically, the interest rate is around six or seven per cent, which is added
to the debt and rolls up each year. As a result, the total debt typically
doubles in around 11 years.
Which?, the consumer group, said that made it expensive and should be
considered only if absolutely necessary.
Richard Lloyd, executive director, said: Equity release mortgages can be a
complex and an expensive way to borrow but its likely that more people will
consider this option in future.
Its important people know what they are signing up to and anyone considering
this should seek independent financial advice from an adviser with a
specialist equity release qualification who can explain the risks and
alternatives, he added.
Dean Mirfin, director of equity release advisers Key Retirement Solutions,
said rising house prices, which help offset the costs, had given the
over-55s more confidence to borrow.
This was particularly true in the South East, he said, after data on Monday
showed house prices were rising faster in the commuter belt around London
than in the capital itself.
For many older homeowners their greatest barometer of their financial
well-being is the value in their home, Mr Mirfin added.
Throughout 2014, pensioner property wealth has continued to grow at pace and
it comes as no surprise that, in tandem with property gains, demand for
equity release has been at such high levels.
Those releasing equity are not being frivolous, with the majority using the
money to reinvest in the upkeep and improvement of their homes, repay debt
or support their day to day living, Mr Mirfin said.
– Equity release: how much can you borrow and how
much could it cost?
Equity release calculator
The Cambist investment platforms parent company OneLaw is cutting staff through a rightsizing exercise and is looking at new revenue streams due to a decline in the number of emolument attachment orders (EAOs) in the market.
Arnoud van den Bout, Onelaws COO, confirmed on Friday that retrenchment letters were handed to all staff members as part of a rightsizing exercise. He admitted that this process would lead to job losses, but that the business will carry on as per usual, although in a smaller way than before, based on what the company can afford in terms of current turnover.
Van den Bout said changes to the industry had forced a resize of the business, including the fact that a number of banks were no longer using emolument attachment orders (EAOs). Courts are finding it more difficult to obtain valid judgements, consumers are under stress and less able to afford EAOs, he said.
An EAO is a court order forcing an employees employer to deduct money from the employees salary to settle a debt the employee owes to a third party. OneLaw facilitates the debt collection process through EAOs for debt collection attorneys. It launched the Cambist Online Platform in 2012, allowing members of the public to purchase these debt contracts at a discount, and to receive up to 19.5% return per annum.
Van den Bout said Cambist was discussing stopping the sale of EAOs on its platform but had not yet made a firm decision in this regard. It depends on the availability of the product and the appetite to buy it, he said. The sale of other matters, such as cellphone and sales contracts, now accounted for a much larger share of contracts sold via the platform.
New EAOs currently constitute about 5-10% of the contracts offered for sale on the Cambist online platform, Van den Bout said.
19.5% returns to continue
Without involving buyers in the actual capital recovery process, Cambist promises annual returns of 19.5%, paid monthly over a fixed term. Van den Bout explained that Cambist could offer these returns because of the discounts OneLaw negotiates with the original financial owner of the debt.
You buy something worth far more for far less, which is why you earn that return on an asset, he said. As long as buyers hold their assets, Van den Bout said, the 19.5% returns would continue unabated despite the business restructure. The restructure does not affect Cambist in any way, since it is just a platform where third parties (not OneLaw) participate in the sale and buying of matters, he said.
Cambist plans to maintain its current advertising drive, Van den Bout confirmed. The platform is widely advertised on television and the radio.
Fallout from Bridge?
A number of commentators have flagged potential fallout on Cambist from the business rescue of unsecured lender, Bridge. Last month, Bridge announced it had entered into business rescue proceedings owing to a lack of institutional funding. This was chiefly caused by risk aversion around the unsecured lending sector in South Africa after the failure of African Bank, it said.
Approximately 1 200 individuals who had invested in Bridge and funded its lending activities have seen their returns reduced from as high as 19% to in many cases 12% and as low as 6%. Investors will know in the next month or two what is to become of their capital.
OneLaw and Bridge had the same founder, Cornelius Aldum. Cambist then began by selling Bridge debt. This led to contentions that Bridge was granting loans using investors money, which were later attached by OneLaw and then sold to other investors (buyers) through Cambist at a discount.
However, Van den Bout maintains that the group decided to unbundle about three of four years ago. The three entities that emerged independently from this unbundling were Bridge, OneLaw and an insurance broking firm, he explained.
Things at Bridge do not have an impact on us, he said, responding to a question on whether Bridges business rescue was the reason for Cambists restructuring. Van den Bout said that no new Bridge loans were currently being sold on the Cambist platform, but there could be individuals offering these loans for re-sale via the platform.
According to a recent directors search, Cornelius Aldum remains an active director of both Bridge Credit and OneLaw. He is also listed as a director of OneCorp (Pty) Ltd, registered in 2009. Documents online suggest that OneCor (Pty) Ltd, without the lsquo;p, could be a holding company for Bridge and has also been placed into business rescue.
By Gillian Parker
Johannesburg A consumer credit boom in South Africa has trapped millions in swirling debt. The countrys debt problem came to a head in August when the Central Bank and commercial lenders had to rescue African Bank from a flood of bad debts – mostly racked up on risky unsecured loans. The bailout placed a spotlight on the rapid growth of unsecured lending in South Africa.
Under apartheid, racial inequality left the majority of South Africans without access to banks. The 1994 transition to democracy set off a boom in consumer credit as many banks, most notably African Bank, offered loans to blacks for the first time.
But 20 years later African Bank was overcome by unsecured debt, loans obtained with little or no collateral, taken out by its core market of low-income borrowers, who defaulted due to chronic unemployment and rising fuel and food costs.
Ian Wason, CEO of Debtbusters, a debt management service, said that despite noble intentions the bank ultimately did a large amount of harm.
The premise that African Bank started out with was good. But what it turned into was very, very evil; and exploited unsophisticated, uneducated consumers – and far from socially uplifting the country they have actually caused huge damage, said Wason.
In October 2013, African Bank was fined $2 million by the National Credit Regulator for reckless lending to consumers with inadequate means to repay loans. The bank pressured uneducated customers to take on bigger loans than they asked for and in some cases gave additional debt to defaulters, a regulation source told VOA.
Debt counselors contend that irresponsible lending is rampant in South Africa.
South Africas total personal debt is $135 billion, an average of $6,356 for each of the countrys 20 million credit active people. Almost half struggle to meet repayments, according to South Africas credit regulator.
A glut of poor South Africans looking for a better life after living through oppressive white-minority rule has pushed up demand for credit, said Wason.
When the Montgomery County Legislature adopted its $109 million budget Tuesday night, it came with a vehicle use tax that, if given the green light by the panel, will increase county revenues by an estimated $370,000 a year. That money, to be collected when vehicles are registered or when registrations are renewed, would go toward the upkeep and maintenance of county roads.
When Common Council members in Amsterdam first got wind of the car tax, their pupils turned to dollar signs. OOh, money. Wheres our taste?
The county plan is to charge a $10 user fee for registrations on personal vehicles and a $20 fee for commercial vehicles. The fees would be collected by the Department of Motor Vehicles. Budget and Finance Committee Chairman Martin Kelly said the $370,000 figure was calculated by averaging the number of registrations during the past five years. County Executive Matthew Ossenfort said the vehicle use fee is an alternate source of revenue that will offset costs of repairing roads without increasing property taxes or relying on the fund balance. Smart budgeting, he calls it.
However, the city would rather see the Legislature adopt a fair plan to calculate distributions based on populations of Montgomery County towns, villages and the city, and reduce the offset for any amount a municipality might receive under the county roads maintenance contract. Fourth Ward Alderwoman Diane Hatzenbuhler said since the city is responsible for its own roads and bridges, the city should get the funds received from city residents who register their vehicles.
You cant get there from here — if youre traveling anywhere in the world outside of the city limits — without using the roads were talking about. People who live in the city and the villages who will be forking over the $10 will receive the same return on their investment as all other residents of the rural expanses that connect us.
The tax (surcharge, user fee, car tax, overcharge charge) whatever you want to call it, is intended to help keep county roads in working order. This money is not intended for city or village streets. To think for a second that people who live in the city would be asked for pay for something from which they will never benefit is to forget that city residents travel on county roads. And they count on them being navigable.
The county owes the city nothing.
The company said that cash flow from operations totaled $1.8 billion in the quarter and $3.7 billion for the year to date. Dow has returned to stockholders $1.3 billion in dividends and $3.1 billion in stock buybacks in the first nine months of the year. The company’s dividend yield is 3.2%.
Here’s what the CEO had to say about the company’s outlook:
Delivering shareholder value is ingrained across the enterprise, and as we look ahead, our priorities are clear: Improve return on capital, increase cash flow by managing our portfolio of integrated value chains, and innovate and commercialize technologies that our customers value.
We remain committed to achieving our financial targets and ongoing shareholder remuneration, and are taking targeted steps across our businesses to navigate through persistently slow and volatile global macroeconomic conditions. Looking ahead, we will continue leveraging the power of Dow’s global reach and industry-leading feedstock and operational flexibility to manage our portfolio in the midst of volatile energy markets. Our low-cost positions in key products such as ethylene and our deep integration with downstream, value-added products that create value for ourselves and our customers will uniquely position us to continue driving profitable growth. In these conditions, having global scale and flexibility is the best hedge against volatile markets.
ALSO READ: The 20 Most Profitable Companies in the World
Consensus estimates call for fourth-quarter EPS of $0.72 on revenues of $14.87 billion. For the full year, analysts are expecting $2.96 EPS and $58.58 billion in revenues.
Dow’s share price is up about 17.5% over the past 12 months, and the company raised its dividend to $0.37 per quarter in the first quarter of this year. The company waited two years before granting that dividend increase. Given the company’s focus on “financial targets” and “ongoing shareholder remuneration,” a dividend increase could well be on tap for the first quarter of 2015.
Last week Dow received approval from the US Environmental Protection Agency (EPA) to market its Enlist Duo-brand herbicide containing 2,4-D as a treatment for corn and soybean crops that have been genetically modified to tolerate 2,4-D and glyphosate, the herbicide in Roundup from Monsanto Co. (NYSE: MON).
Dow’s shares were up about 2.8% in premarket trading, at $49.55 in a 52-week range of $38.16 to $54.97. Thomson Reuters had a consensus analyst price target of around $56.70 before the report.
ALSO READ: The 10 Safest High-Yield Dividends
By Paul Ausick
The only Long John Silvers in Sioux Falls closed because it was losing money, the owner said.
Weve got a lot of money invested in it and not making any return on investment, Richard Levitt, the chairman of Nellis Management Co., said Monday. And, on top of that, it was burning cash. It would have been a boneheaded business decision to keep it open.
The restaurant at 712 S. Minnesota Ave. closed Friday. Iowa-based Nellis Management had owned it since 1993.
Nellis Management provided a severance packages to the dozen employees, Levitt said.
I feel terrible for the people that are out of jobs, he said.
Rising bad debt on vehicle finance and credit cards are warning signals to banks that indebted consumers are taking strain as interest rates increase.
The four big banks combined nonperforming loans grew 1.2% in the first half of this year, reversing the downward trend seen since 2011, according to PwCs analysis of major banks results for the reporting period ended June 30.
This increase was driven by two products: credit cards and vehicle and equipment sales and leases, PwC banking and capital markets leader for Southern Africa Johannes Grosskopf said.
Credit card bad debt rose 38.1% to R7.6bn on a rolling six-month basis, while instalment sale and finance leases increased 14.3% to R11bn.
Credit card debt is rising but it is small in comparison to the rest of the bad debt, although it is something that needs to be watched as it is unsecured, Mr Grosskopf said.
EY analyst Graham Thompson said that neither vehicle finance nor credit card bad debt was a bubble in the making.
A bubble is where something has grown year on year at very high rates over a number of years, such as unsecured lending, which grew at 20%-30% each year for three years, he said.
Since 2012, SA has faced growing concerns about unsecured lending, reinforced by the collapse of the countrys largest unsecured lender, African Bank, a subsidiary of African Bank Investments (Abil), in August.
African Bank was placed under curatorship after a trading update shocked investors with the news that it needed to raise R8.5bn, which led to the collapse of Abils share price.
This followed 18 months of troubles as the lender repeatedly underestimated the difficulties its lower-income customers were facing in a near-stagnant economy with official unemployment of about 25%.
Accelerating inflation and rising interest rates, combined with protracted mining strikes, have compounded the situation.
In response, SAs big four banks – FirstRand, Standard Bank, Barclays Africa Group and Nedbank – have all put the brakes on unsecured lending. This is as 9.95-million out of 22.12-million credit-active South Africans had impaired credit records at the end of June, according to the National Credit Regulator.
Instalment and lease financing is backed by a vehicle or equipment that can be repossessed, offering security on the loan, said Mr Grosskopf. Credit card debt is unsecured, but the card holder usually has a relationship with the bank.
The instalment and lease financing portfolio of the four major banks for the first half of the year grew 5% to about R385bn, said Mr Grosskopf. Credit card debt grew at about 13% to R95bn.
Barclays Africa Group, SAs third-largest bank, was the only one of the big four banks to have shown an improvement in vehicle and asset finance bad debt for the first half of the year.
SAs biggest bank by market share, FirstRand, reported a 39% increase in nonperforming vehicle loans for its 2014 financial year.
Standard Bank, the second-largest bank, reported a near doubling of its vehicle impairments to R727m for the first half of the year.
Nedbank, the smallest of the four, said vehicle loan defaults worsened to 3.2% of advances for the first half of the year, compared to 3% in the first half of 2013.
Absa vehicle and asset finance head Wessel Steffens said last week that the majority of new vehicles were now financed over a 72-month period, whereas previously a five-year or 60-month loan period was fairly standard.
Interest-rate-sensitive sectors in the economy, such as the vehicle sector, will be impacted by the strain on affordability resulting from further rate increases. Further interest rate hikes will negatively affect the affordability of, and demand for, vehicle finance, Mr Steffens said.
EZCORP (NASDAQ:EZPW) has just announced an update, and even though the company calls it a back to basics strategy, its basically nothing but (short-term) bad news. As part of the new strategy, the company will immediately discontinue its online lending business in the USA and the United Kingdom and will re-focus on pawn shops and unsecured lending, which it deems to be its core business. A pre-tax charge of $110M will be recorded in the Q4 financial statements, of which $84M will be an impairment of the value of the goodwill on the balance sheet. I think thats a good first step, but even after this charge the total value of intangible assets on the balance sheet will still be in excess of $400M, or roughly $7.75/share.
The company has reshuffled its board and senior management, and Im cautiously optimistic by the appointment of the new executive chairman. As Stuart Grimshaw previously was the CEO of a large Australian bank (with a market capitalization of roughly $3.75B), I think its safe to draw two conclusions. First of all, he wouldnt be interested in ruining his name and fame and destroying his career if he wouldnt think he would be able to turn the semi-sinking ship (with a market cap of just $500M) around. Additionally, by appointing a banker as chairman, its not really that big of a surprise that EZCORP will fall back on secured and unsecured lending. However, should Grimshaw (the new exec chairman) be leaving the company again within the year, all investors will be running to the exits, as this potential turnaround stands or falls with this man.
I hope this was the last setback for EZCORP. I do believe in the pawn shop and unsecured lending model, but this company will have to fight against a very negative perception. After taking the goodwill impairment charge, the tangible value per share will be $9.20, which is the current share price. In my opinion the turnaround will be mainly depending on the companys new executive chairman, who seems to be the right bloke for this job. EZPW will continue to trade at a discount because the company only has one voting shareholder, but at least he seems to be willing to change things and overhaul his team.