<p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>AP</span></p></div><p></p></div></div></p>
<p>Yesterday, Max Baucus (D-MT) and Dave Camp (R-MI) introduced a tax reform bill that would force a new asset tax on big Wall Street banks, and naturally Wall Street isn't having it.</p>
<p>The summary of the bill alone is about 200 pages, but for the Street, it all boils down to one simple, nasty debate that's been raging since the financial crisis.</p>
<p>Either Wall Street banks are still too big to fail or they're not.</p>
<p>And, as a result, either Wall Street banks are getting help from the government in order to survive, or not.</p>
<p>The help is the form of a subsidy that lets Systemically Important Financial Institutions [SIFI] borrow at a lower rates than other financial institutions.</p>
<p>Here's how the Camp-Baucus bill talks about the issue:</p>
<p style="padding-left: 30px;">"While tax reform cannot undo Dodd-Frank, it can and should ensure that Wall Street reimburses the American taxpayer for a portion of the subsidy it receives. The Tax Reform Act of 2014 requires that SIFIs reimburse American taxpayers for a portion of this subsidy by:</p>
<p style="padding-left: 30px;">• Imposing a new excise tax on certain SIFIs, as defined by Dodd-Frank.</p>
<p style="padding-left: 30px;">• Requiring these institutions to pay a quarterly 0.035-percent tax on their worldwide consolidated assets in excess of $500 billion."</p>
<p>The way Camp and Baucus see it, their policy is essentially returning a portion of the subsidy banks get from the government back to the American people.</p>
<p>The way Wall Street's men on on The Hill see it, there is no subsidy. Period. And so the tax policy is arbitrary, and will hurt Wall Street's business.</p>
<p>"Chairman Camp's proposal for a new tax on banks violates every principle of his stated goals for tax reform," says Tony Fratto, Managing Partner at Hamilton Place Strategies. "Instead, it will restrict growth, add complexity, and create new distortions. And rather than being broad-based, it's a bill of attainder for a handful of private businesses. It is bad policy towards financial institutions and would be equally bad policy for oil companies, pharmaceutical companies, or whichever firm happens to be the populist target du jour in this way."</p>
<p>Those in the 'there is no subsidy and there is no too big to fail' camp cite S&amp;P reports that have said the "Likelihood Of A Bailout Is Increasingly Less Likely" - of course, in the same breath the <a href="http://www.ft.com/cms/s/0/fb63e7ce-d2a6-11e2-88ed-00144feab7de.html#axzz2uXi6oowA">S&amp;P has said that Wall Street banks are still too big to fail.</a>'</p>
<p>Go figure.</p>
<p>This subsidy debate is not new. Two researchers - Kenichi Ueda of the International Monetary Fundand Beatrice Weder di Mauro of the University of Mainz - <a href="http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html">wrote that the subsidy lowers bank borrowing costs by 0.8%,</a> ultimately giving banks an additional $83 billion a year.</p>
<p>The Government Accountability Office is on the case as well. And as Senator Sherrod Brown (D-OH) pointed out in a Senate Banking Committee meeting in January, the GAO came to the conclusion that the banks get a subsidy as well.</p>
<p>""[I]t should come as no surprise that the Congressional Oversight Panel for TARP found that the six biggest Wall Street banks received a total of $1.27 trillion in government support," said Brown, "including accounting for 63 percent of the Fed's average daily lending. There are important lessons in this first [GAO] report … <strong>First, megabanks borrowed at a discounted rate against assets that the market was not accepting. And the result is a subsidy for the megabanks.</strong>"</p>
<p>The GAO is continuing its study of this matter, so that is something that both sides on this debate will be watching closely.</p>
<p>At this time last year, Senator Elizabeth Warren (D-MA) was grilling former Federal Reserve Chair Ben Bernanke about the subsidy during a Senate hearing.</p>
<p>And while he said that the subsidy was created by market forces - specifically the market's expectation that banks will be bailed out (so yes, too big to fail) - he came to the conclusion that it had to go.</p>
<p><a href="http://www.businessinsider.com/elizabeth-warren-on-bank-subsidy-2013-2#ixzz2uXgvjGYt">"I think we should get rid of it,</a>" he told Warren.</p>
<p>There is something of a compromise, though, according to Professor Cornelius Hurley, the Director of Boston University Center for Finance, Law &amp; Policy. It's a bill introduced my Congressman Mike Capuano (D-MA) called the 'Subsidy Reserve Act.'</p>
<p>It's an addition to Dodd-Frank that would require banks to hold even more capital to account for the subsidy they receive - a 'Subsidy Reserve.'</p>
<p>"Although it is highly unlikely that this new tax will be enacted, one can easily see H.R. 2266, the Subsidy Reserve Plan being a compromise result," Hurley said in an e-mail, "especially if the GAO subsidy study produces subsidy estimates in the ballpark of Chairman Camp's."</p>
<p>But banks already have to hold more capital then ever due to national and international post-crisis regulation. In that sense, both these policies are distasteful to Wall Street.</p>
<p>So its best if the idea of subsidies goes away all together.</p>
<p>But that is just as unlikely as the passage of this tax reform bill.</p>

The New Plan To Impose An Extra Tax On Wall Street Hinges One One Big Question

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Brendan McDermid/Reuters</span></p><p class="caption">Carl Icahn.</p></div><p></p></div></div>Carl Icahn and John Paulson scored a big win on Thursday.</p><p>The billionaire investors got seats on the board of insurance giant AIG.</p><p>Icahn won't be on the board, but he'll have one of his firm's analysts take the seat. Paulson will have a seat.</p><p>Here's Icahn's <a href="http://carlicahn.com/agreement-with-aig/">announcement:</a> </p><p style="padding-left: 30px;"><span>Today we reached an agreement with AIG whereby one of our analysts will join the board of directors at the upcoming annual meeting in May. I myself declined to go on the board because of my involvement in so many other companies at this time. AIG also entered into a separate agreement with Paulson &amp; Co. Inc. pursuant to which President John Paulson will join the board at the same time. We welcome John Paulson's addition to the board and believe his involvement will be additive, especially in that we both have stated the same goals for AIG. We commend the board for adopting a number of our recommendations over the last few months. We continue to believe that smaller and simpler is better and look forward to working collaboratively with the board and management to help catalyze a turnaround in core P&amp;C operations, a more transparent operating structure, and the ultimate shedding of the SIFI designation. We believe that AIG stockholders will benefit from our agreement, which permits our representative to share information with our principals and consultants, subject to customary confidentiality restrictions. I hope and believe that we will work with AIG's board to enhance value as we have done with so many other boards and companies in the past.</span></p><p>In October, Icahn sent a public letter to<span> the company's CEO, Peter Hancock, saying that the company continued "to severely underperform" and was "too big to succeed."</span></p><p><span><span>AIG nearly failed during the financial crisis and had to be bailed out by the US government. Icahn said the company had not done enough to make itself smaller since then.</span></span></p><p><span></span><span>In the <a href="http://www.businessinsider.com/carl-icahn-letter-to-aig-ceo-2015-10">letter</a>, Icahn said that it was a "no brainer" that splitting up the company would unlock shareholder value. </span><span>AIG recently rejected Icahn's call to split itself into separate businesses.</span></p><p><span>Icahn owns 42.2 million shares and Paulson 14.6 million. </span><span>The stock fell $1.87, or -3.57%, on Friday to end at $<span class="pr"><span id="ref_1093_l">50.58 per share.</span></span><span></span></span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/carl-icahn-video-danger-ahead-taxes-rates-trump-2015-9">This is what Carl Icahn would do first if he ruled America</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="B5cWF0dzrm80_Ke7p6i1txaAjVgvRQyy" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Carl Icahn and John Paulson just scored a big win

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Here is what you need to know.</p><p><strong>The global bond rout continues. </strong>Early selling dropped bonds around the world to their lowest levels in eight months. The selling was paced by weakness in Germany, which caused the 10-year yield to hit a high of 0.995% before easing (bond yields go up when bond prices go down). Currently, the German 10-year yield is up 4.8 basis points at 0.93%. Selling in other parts of the world has run yields up a handful of basis points with the US and UK 10-year yields at 2.39% and 2.12%, respectively.</p><p><strong>The Bank of England kept policy on hold. </strong>The central bank held its benchmark interest rate at a record low 0.50% while keeping its asset purchase program at 375 billion pounds. Both were expected. The British pound is higher by 0.6% at 1.5428.</p><p><strong>Greece's debt negotiations are at a stalemate. </strong>The <a href="http://www.businessinsider.com/afp-clock-ticking-on-greece-to-repay-imf-2015-6">first of four debt payments due in a two-week period is scheduled to be made on Friday</a>. That is when the government is supposed to pay 1.6 billion euros ($1.8 billion) to the International Monetary Fund. However, the IMF has previously stated all four of the debt payments could be made on June 19, buying the troubled country some precious time. Greece's 2-year yield is up 17 basis points at 22.14%.</p><p><strong>Australia's trade deficit ballooned. </strong>April trade data showed a deficit of 3.89 billion Australian dollars ($3.02 billion), the <a href="http://www.businessinsider.com/australia-just-posted-a-horrible-trade-deficit-the-worst-since-the-gfc-2015-6">highest since February 2008</a>. The disappointing reading comes as exports slumped 6% and imports climbed 4%. According to the Australian Bureau of Statistics the weak data was "driven by coal, coke and briquettes, down $859m (22%) as a result of the temporary closure of ports due to severe weather conditions." The Australian dollar is lower by 0.5% at .7751.</p><p><strong>The ex-head of research for OPEC says oil prices will fall into year end. </strong>Hasan Qabazard, who was research head from 2006 to 2013, thinks brent crude oil prices will fall to between $40 and $50 per barrel by year end. Such a move would make for <a href="http://www.bloomberg.com/news/articles/2015-06-03/oil-seen-by-opec-s-former-research-head-falling-on-slower-demand">a drop of as much as 37%</a> from Wednesday's closing price of $63.80 per barrel. A Bloomberg survey in May showed analysts are expecting "OPEC will keep its production target unchanged when the ministers gather" at Friday's meeting.</p><p><strong>Dish Network and T-Mobile US are talking merger. </strong>Discussions of a marriage between the two companies are still in the early stages. <a href="http://www.wsj.com/articles/dish-network-in-merger-talks-with-t-mobile-us-1433383285">The Wall Street Journal reports</a>, "The two sides are in close agreement about what the combined company would look like, with Dish Chief Executive Charlie Ergen becoming the company's chairman and his T-Mobile counterpart, John Legere, serving as the combined company's CEO." However, the price and make up of a deal remains unresolved.</p><p><strong>Prudential is considering fighting its SIFI tag.</strong> The insurance giant is closely monitoring Met Life's lawsuit against the US that would prevent it from being named a <a href="http://www.wsj.com/articles/prudential-ties-escape-from-risk-tag-to-outcome-of-metlife-suit-1433375054">"systemically important" financial institution</a>. Prudential considered a lawsuit back in 2013 when it was slapped with the SIFI tag, but ultimately the board of directors decided against it, according to a person familiar with the situation. "The systemically important designation originated with the 2010 Dodd-Frank financial-overhaul legislation that put new clamps on big firms in the wake of the 2008 crisis."</p><p><strong>Joy Global beat on the top and bottom lines. </strong>The mining equipment manufacturer announced <a href="http://www.cnbc.com/id/102732482">adjusted earnings of $0.59 per share</a>, topping the $0.55 that was expected. Revenue slumped 12.8% to $810.5 million, but that outpaced the $803.05 million that analysts were anticipating. The company guided full-year EPS of $2.50 to $3.00 and revenue of $3.3 billion to $3.6 billion.</p><p><strong>An activist investor wants Samsung to raise its offer for Samsung C&amp;T. </strong>Elliott Associates LP announced a 7.12% stake in Samsung C&amp;T, and says the offer by Cheil Industries, Samsung Group's owning family, <a href="http://www.wsj.com/articles/elliott-associates-buys-samsung-c-t-stake-1433378442">"significantly undervalues" the company</a>. The Wall Street Journal reports, "Shareholders of both companies are slated to vote on the deal July 17, and a two-thirds majority is required for passage, with at least one-third of shareholders showing up to vote."</p><p><strong><strong>Stock markets around the world are mostly lower. </strong></strong>France's CAC (-1.9%) leads the way lower in Europe after Australia's ASX (-1.4%) lagged in overnight trade. China's Shanghai Composite (+0.8%) was a notable outperformer. S&amp;P 500 futures are down 13.50 points at 2102.50.</p><p><strong style="line-height: 1.5em;">US economic data is heavy.</strong> Data begins to flow with the 7:30 a.m. ET with the release of Challenger Job Cuts, and continues with initial and continuing claims, productivity and unit labor costs at 8:30 a.m. ET. Natural gas inventories are scheduled for 10:30 a.m. ET.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/roar-filmed-with-100-untamed-lions-movie-injured-2015-4">70 people were injured while filming this movie with 100 untamed lions</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="Nzc3hmdDr4a5heo3T-j-WFkV1wYM_fEN" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

10 things you need to know before the opening bell

<p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div></p><p>Stocks rallied to close higher for the week as the Dow moved back above 18,000 and General Electric had its best one-day performance in five years. </p><p><span style="line-height: 1.5em;">First, the scoreboard: </span></p><ul><li><strong>Dow:</strong> 18,054, +96, (+0.5%)</li><li><span style="color: #222222; line-height: 1.5em;"><strong>S&amp;P 500:</strong> </span><span style="color: #222222; line-height: 1.5em;">2,101.4, +10, (+0.5%)</span></li><li><span style="color: #222222; line-height: 1.5em;"><strong>Nasdaq:</strong> </span><span style="color: #222222; line-height: 1.5em;">4,993.5, +19, (+0.4%)</span></li></ul><p><span style="color: #222222; line-height: 1.5em;">And now, the top stories on Monday:</span></p><ol><li><a href="http://www.businessinsider.com/r-ge-close-to-selling-part-or-all-of-its-real-estate-holdings-wsj-2015-4">General Electric is selling a huge chunk of its GE Capital assets</a>. The company announced it will sell nearly all its real estate portfolio worth $26.5 billion to investors including Blackstone and Wells Fargo. It will also repatriate about $36 billion in foreign cash, and has authorized a share repurchase program of up to $50 billion. Shares rallied by over 10% in trading.</li><li>"This is a major step in our strategy to focus GE around its competitive advantages," Jeff Immelt, GE's chairman and CEO, said in a statement. Barclays analysts said the sale of GE Capital assets is "<a href="http://www.businessinsider.com/barclays-on-general-electric-asset-sales-2015-4">good riddance</a>," and investors now have a clearer sense of the GE's business mix. Business Insider's Myles Udland pointed out, the company announced it is working to <a href="http://www.businessinsider.com/ge-seeks-to-shed-systemically-important-designation-2015-4">get rid of its designation</a> as a systemically important financial institution (SIFI), which regulators created after the recession, and use to flag companies that could trigger a financial crisis if they are distressed.</li><li><a href="http://www.businessinsider.com/blackstone-excel-trust-deal-2015-4">Blackstone also made another huge real estate deal Friday</a>. Excel Trust has<span style="color: #222222; line-height: 1.5em;"> agreed to be acquired by Blackstone Property Partners for about $2 billion in cash. Excel Trust is a real-estate investment trust that focuses on retail properties. Blackstone will buy all of Excel Trust's outstanding shares for $15.85 per share, representing a 15% premium over Thursday's closing price. Shares rallied by over 14% Friday.</span></li><li><span style="color: #222222; line-height: 1.5em;"><span style="color: #222222; line-height: 1.5em;"><a href="http://www.businessinsider.com/baker-hughes-rig-count-april-10-2015-4">US oil rig counts fell to the lowest level since December 2010 this week</a>. The latest data from Baker Hughes showed the number of active rigs fell by 42 to 760. </span></span><span style="color: #222222; line-height: 1.5em;">Combined oil and gas rigs were down 40 to 988 as 2 natural gas rigs came on-line this week. This is the lowest combined total for oil and gas rigs since August 21, 2009.</span></li><li><span style="color: #222222; line-height: 1.5em;">In other data, <a href="http://www.businessinsider.com/import-prices-april-10-2015-4">import prices fell 0.3% in March</a>, better than the expectation for a 0.4% decline. The strong dollar and the oil crash have dampened import prices in recent months.</span></li><li><span style="color: #222222; line-height: 1.5em;">True to brand, Etsy is carrying out a handcrafted, 'artisanal' IPO roadshow by <a href="http://www.businessinsider.com/etsy-artisanal-ipo-process-2015-4">seeking out small investors that share its commitment to "socially responsible business practices</a>." The Wall Street Journal reported that the company is also targeting brokers whose clients buy or sell products on Easy.</span></li></ol><p><strong><span style="color: #222222; line-height: 1.5em;">DON'T MISS: <a href="http://www.businessinsider.com/timing-of-ge-capital-real-estate-deal-2015-4">This was the perfect time for GE to do a mega-deal »</a></span></strong></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o2OGM3czpWcydnvhjbkDBd6feXPuExiD" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

STOCKS RALLY: Here's what you need to know

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div></p><p>In the wake of the financial crisis, some of Wall Street's biggest banks were forced to start chopping off valuable assets to satisfy regulators intent on stamping out another "Too Big to Fail" crisis. </p><p>Now firms including Deutsche Bank and HSBC are facing calls to streamline their businesses. <span>Even </span><a href="http://www.businessinsider.com/r-breaking-up-jpmorgan-could-lift-its-stock-price-goldman-analyst-says-2015-1">JP Morgan</a><span> and </span><a href="http://www.businessinsider.com/michael-lewis-break-up-goldman-sachs-2013-2">Goldman Sachs</a><span> have heard calls for breakups. </span></p><p>In some cases calls to reduce exposure to ancillary businesses stems from regulators' demands. But big banks also continue to face pressure from investors looking to get a better return on equity from the biggest banks in the country. In part due to the new regulations banks face, their return on equity is about one-third lower on average than it was in the years leading up to the financial crisis.</p><p>That has translated into an opportunity for less-regulated subprime lenders, private equity firms and other investors. Companies that are not regulated as the big banks are have enjoyed a disproportionate chance to build their businesses. Here are a few examples:</p><ul><li><span style="line-height: 1.5em;"><strong>General Electric</strong> is carefully dismantling its <strong>GE Capital</strong> business in accordance with its plans to satisfy regulators and remove itself from their list of "systemically important financial institutions," or SIFIs. That includes cleaving off more than $26 billion in real estate assets and also selling its private equity lending business. <strong>The Blackstone Group</strong> bought GE's real estate portfolio and the <strong>Canada Public Pension Investment Board</strong> bought the lending business. In the wake of the financial crisis, Blackstone's real estate portfolio has expanded significantly. </span></li><li><span style="line-height: 1.5em;">Blackstone isn't the only US private equity firm to make big deals from unbundling banks. <strong>Apollo Global Management</strong> twice snapped up European assets from <strong>Bank of America</strong>. This includes a 2011 purchase of the bank's Spanish consumer credit card assets and Apollo's 2012 acquisition of BofA's Irish consumer credit card portfolio. </span></li><li><span style="line-height: 1.5em;">When <strong>Springleaf Holdings</strong> bought <strong>OneMain Financial</strong> from <strong>Citigroup</strong> for more than $4 billion earlier this year, it created the <a href="http://www.reuters.com/article/2015/03/03/us-onemainfinancial-m-a-springleaf-hldgs-idUSKBN0LZ14920150303">largest subprime lender in the United States</a>. </span></li><li><span style="line-height: 1.5em;"><strong>JP Morgan</strong> last year sold off its large-market 401(k) recordkeeping business to <strong>Great-West Financial</strong>, part of Canadian financial services conglomerate Great-West Lifeco. </span></li><li><span style="line-height: 1.5em;"><strong>JP Morgan</strong> also sold its physical commodities trading business to <strong>Mercuria</strong>, a Swiss energy investor formed by ex-Goldman traders. The transaction also represented <a href="http://www.wsj.com/articles/mercuria-announces-close-of-j-p-morgan-commodities-deal-1412356075">a steep discount</a> to JP's initial asking price.  </span></li><li><span style="line-height: 1.5em;">Also last year, <strong>JP Morgan</strong> dealt a stake in its <strong>One Equity</strong> <a href="http://fortune.com/2014/05/02/exclusive-j-p-morgan-nears-sale-of-private-equity-assets/">in-house PE firm </a>to <strong>Lexington Partners</strong>, a multi-billion dollar secondary market investor. </span></li></ul><p><span style="line-height: 1.5em;">But there are plenty more spin-offs from banks - and likely, more to come. What remains to be seen is whether other bidders will play coy like Mercuria in order to squeeze sellers on price. </span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/new-omega-globemaster-watch-unboxing-2015-5">Forget the Apple Watch - here's the new watch everyone on Wall Street wants</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5iaDNwdDrYYMm2yipFb14ndbRkPnemqO" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

The government is forcing Wall Street banks to break apart - and these are the companies profiting

<p><div class="image-container float_right" style="width:286px"><div class="image"></div><p class="source">Getty Images/ Mark Wilson</p></div>Citi financial services analyst Keith Horowitz took a trip to JPMorgan to sit down with <keyword id="153519" type="PERSON" weightage="60" keywordseo="Jamie-Dimon">Jamie Dimon</keyword>, and pick his brain about the state of his company, the world of financial services, and the broader, global economy.</p>
<p>In their conversation, Dimon revealed a few of the things that are on his mind these days.</p>
<p>Horowitz writes:</p>
<p style="padding-left: 30px;"><strong>Dimon noted four main risks that he worries about... 1) Geopolitical fat-tail risks such as Middle East unrest, 2) Europe – which has made progress, but still could surprise as politicians have reduced, but not removed risks, 3) Uncertainty regarding the end to QE3 stimulus, and 4) US policy, long-term fiscal imbalances and entitlement programs</strong>.</p>
<p>What's interesting is what he's not worried about:</p>
<p style="padding-left: 30px;">... And not citing regulatory risk was interesting. He even pointed out that while margins may come down, market share may increase due to a “bigger moat” - We were surprised that regulatory risk was not mentioned as one of the key risks. In Dimon’s eyes, higher capital rules, Volcker, and OTC derivative reforms longer-term make it more expensive and tend to make it tougher for smaller players to enter the market, effectively widening JPM’s “moat.” While there will be some drags on profitability – as prices and margins narrow, efficient scale players like JPM should eventually be able to gain market share.</p>
<p>This last part is really interesting, and will be used by people who think that ultimately regulation serves to benefit, not encumber, existing players.</p>
<p>And even if large, systemically important financial institutions (SIFIs) face a surcharge/capital fee, Dimon believes that the "synergies" of a large organization will help overcome these financial burdens.</p>

The 4 Things That Worry Jamie Dimon...

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div><em><strong>FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.</strong></em> </p><p><strong><a href="http://www.thinkadvisor.com/2015/06/15/government-vs-private-loans-for-college-what-borro?t=rias?ref=channel-more-news">Important differences between government and private student loans</a> (Think Advisor)</strong></p><p>The student debt load in America is now north of $1.2 trillion. The good news for borrowers is that interest rates are down versus last year. According to Think Advisor, "Among government loans, subsidized and unsubsidized loans for undergraduates are 4.29%, down from 4.66% last year, and for graduate students they're 5.84%, down from 6.21%. PLUS loans for parents and graduate students, which, unlike other government loans don't have loan limits beyond the cost of education minus financial aid, are 6.84%, down from 7.21%." Borrowers who use private loans are also seeing a drop in borrowing costs, and some have even fallen below the rate offered on government loans. The key differences between the two are government loans begin to accrue interest after graduation, whereas private loans begin accruing interest immediately. Also, government loans are more lenient when it comes to the inability to pay. </p><p><strong><a href="http://www.bloomberg.com/news/articles/2015-06-16/how-an-exclusive-hedge-fund-turbocharged-retirement-plan">A big win for a hedge fund's retirement plan</a> (Bloomberg)</strong></p><p>Renaissance Technologies ended its employee 401(k) plan, and has replaced it with a a tax-advantaged, fee-free opportunity to invest in Medallion, a fund that has averaged a 71.8% return over the past 20 years. The fund won approval after four years of battling the government. Bloomberg reports, "The loser will be the U.S. Treasury, which stands to miss out on many millions of tax dollars."</p><p><strong><a href="http://www.fa-mag.com/news/advisors-need-deeper-discussions-on-charity-22143.html">Advisors can help clients with charitable donations</a> (Financial Advisor)</strong></p><p>The 2015 Fidelity Charitable Giving Report found only 30% of Fidelity Charitable clients have discussed charitable donations with their advisors. Chris Carnal, head of fundraising for Fidelity Charitable, suggests, "There is an opportunity for advisors to more deeply engage with their clients by expanding their conversations to include clients' motivations for giving, their long-term giving goals, and how they would like to involve family in their philanthropy." Advisors should discuss charitable donations with their clients as they are a way to lower taxable income.</p><p><strong><a href="https://blog.abglobal.com/post/en/2015/06/need-income-lets-talk">Communication is key</a> (AllianceBernstein)</strong></p><p>Generating income in today's low-interest-rate world is difficult, and the lack of communication between advisors and their clients is part of the problem. According to AllianceBernstein, "Sixty-nine percent of the advisors we surveyed said they were confident they could generate income for their clients. But fewer than half of investors and home-office gatekeepers-financial professionals at large brokerage firms who help evaluate and select asset managers-felt the same way." AllianceBernstein believes communication and confidence go hand in hand. </p><p><strong><a href="http://www.foxbusiness.com/industries/2015/06/16/bartiromo-exclusive-metlife-files-to-challenge-too-big-to-fail-status/?intcmp=bigtopmarketfeatures">Met Life is fighting back against its 'SIFI' designation</a> (Fox Business)</strong></p><p>Met Life continues to push back against its designation as a systemically important financial institution. The insurer filed a lawsuit against the Financial Stability Oversight Council (FSOC), arguing it was unable to obtain a fair hearing on the issue. According to Fox Business' Maria Bartiromo, "The filing comes on the heels of a federal judge's ruling that the government went beyond its authority in demanding an equity stake while bailing out Maurice "Hank" Greenberg's American International Group."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/wwe-brock-lesnar-facts-wrestling-2015-4">12 awesome facts about WWE superstar Brock Lesnar</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="c0ZDRwdDrYMxli2qszqO2efFg-yz9MeG" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Here are some differences between government and private student loans that every borrower should know

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span>SEC</span></p></div><p></p></div></div>The unstated rule among most government regulators is to provide as much information as possible using the most formal, colorless language as possible. </p>
<p>Bloomberg's Matt Levine <a href="https://twitter.com/matt_levine/status/489111457125367809">points us to</a> a new speech from SEC governor Michael S. Piwowar that blows this dictum out of the water.</p>
<p>In remarks at the conservative AEI Institute, <span style="line-height: 1.5em;">blasts the Financial Stability Oversight Council, a body created in the wake of the financial crisis to serve as an additional sentry over financial markets, for a lack of transparency and for overstepping its bounds. </span></p>
<p><span style="line-height: 1.5em;">This is despite the fact that SEC Chair Mary Jo White is one of FSOC's voting members, along with Fed Chair Janet Yellen, Treasury Secretary Jack Lew and Timothy Massad, the head of the CFTC. </span></p>
<p><span style="line-height: 1.5em;">Piwowar nevertheless says the FSOC, thanks to the influence of the Fed, has gained a reputation for lack of transparency and unaccountability since its inception in 2011, and ridicules it as a breeding ground for government overreach. </span></p>
<p style="padding-left: 30px;"><span><span>In preparing for this speech, I thought a lot about what moniker I could use to best describe the FSOC.  The </span><strong>F</strong><span>iring </span><strong>S</strong><span>quad </span><strong>O</strong><span>n </span><strong>C</strong><span>apitalism [emphasis his].  The Vast Left Wing Conspiracy to Hinder Capital Formation.  The Bully Pulpit of Failed Prudential Regulators.  The Dodd-Frank Politburo.  The Modern-Day Star Chamber.  You get the point.  There are countless terms I could use that are appropriately pejorative and at the same time entirely accurate.  For the sake of clarity, I will stick with references to the two official nicknames of the FSOC - the "Council" or the "Unaccountable Capital Markets Death Panel."</span></span></p>
<p><span><span>Among other things, the FSOC is in charge of designating non-financial institutions as systemically important, and therefore bringing them under the Fed's regulatory control. The Fed's lack of legal oversight over AIG helped exacerbate the financial crisis because it could not immediately gain access to its books, as it was able to do for Bear Stearns and Lehman. The reforms that have since come in under the Dodd-Frank, often referred to as "macroprudential regulation," aim to combat that vacuum. </span></span></p>
<p><span><span>But Piwowar slams FSOC, and the Fed, for stealing this authority from the SEC.</span></span></p>
<p style="padding-left: 30px;">Lest there be any confusion over the broad scope of "macroprudential regulation," [Fed] Governor [Daniel] Tarullo reiterated in a speech last month that "any firm whose failure could pose systemic risk is subject to prudential regulation, quite apart from its relationship with [insured depository institutions]." Governor Tarullo is clearly asserting the Fed's "alpha-dog" role and issuing a call to action for the Council, which is the body that was formed to look at cross-sector threats to financial stability.  Ultimately, though, through a "macroprudential" approach the Fed would expand its reach by immediately pulling under its regulatory umbrella any firms designated as "systemically important financial institutions" ("SIFIs").<a name="_ftnref15" href="http://wcm.sec.gov/servlet/ContentServer?pagename=fatwire%2Fui%2Fcontroller%2Fcontroller&amp;elementName=UI%2FActions%2FAdvancedUI&amp;cs_environment=ucform&amp;cs_formmode=WCM&amp;viewId=view-3&amp;docId=0&amp;ThisPage=NewContentFront&amp;PostPage=NewContentPost&amp;contentfunctions=true&amp;AssetType=SECSpeech&amp;StartItem=1356125657003#_ftn15" title=""><br /></a></p>
<p style="padding-left: 30px;">In its attempt to gain authority over capital market actors, the Fed, through the Council, has been ignoring the talent and skills of the hundreds of subject matter experts in each of the SEC's rulemaking divisions...<span>The prudential regulators on the Council have been proceeding as if they themselves are the ones who know securities markets and investment products best.  </span> </p>
<p><span><span>An Obama appointee, Piwowar joined the SEC about a year ago. He previously served as <span>the Republican chief economist for the U.S. Senate Committee on Banking, Housing, and Urban Affairs under Senators Mike Crapo (R-ID) and Richard Shelby (R-AL).</span></span></span></p>
<p><span><span><span>His views don't seem to have changed much.</span></span></span></p>
<p><a href="http://www.sec.gov/News/Speech/Detail/Speech/1370542309109#.U8V6EGS9Kc3"><span><span><span>Click here to read the full speech »</span></span></span></a></p>

An SEC Governor Delivered A Bizarre Speech Tuesday Announcing His Beef With The Fed

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"></div><p></p></div></div>When people talk about politicians that aren't friendly to Wall Street, they always bring up Senator Elizabeth Warren (D-MA).</p>
<p>They rarely remember a man who's quietly proposed more bipartisan Wall Street regulation than Warren - Ohio Senator Sherrod Brown (D).</p>
<p>Now is the time to remember him though, because if the Democrats keep control of the Senate Brown could end up heading the powerful Senate Banking Committee according to Guggenheim Securities analyst Jaret Seiberg</p>
<p>"If Democrats keep the Senate, Sen. Sherrod Brown may be the next chairman," Seiberg wrote in a recent note. "This is the senator who wants the biggest banks to maintain a 15% equity to assets ratio. Despite this, he also would help the regional banks, small banks and insurers and could favor raising the SIFI [Systemically Important Financial Institutions] threshold to $100 billion or more."</p>
<p>That 15% ratio is part of a bill Brown proposed along with Senator David Vitter (R-LA). It's called the "Terminating Bailouts for Taxpayer Fairness" Act and is meant to end 'Too Big To Fail.'</p>
<p>TBTF- See what they did there?</p>
<p>The bill's very existence is a testament to Brown's ability to build coalition while avoiding negative attention. He's made it clear that he believes Wall Street banks "<span style="font-size: 15px; line-height: 1.5em;">continue to jeopardize our financial system because of their size, their complexity, their interconnectedness." But </span>despite that frank manner of speaking, and the fact that he's been in the Senate since 2006, his name doesn't illicit the same knee-jerk reaction on Wall Street as Warren's does.</p>
<p>"I'm just building the coalition here fairly quietly," Brown said in an <a href="http://www.businessinsider.com/sherrod-brown-wall-street-big-banks-2013-3#ixzz3CqkVfcnz">interview with Business Insider last year. </a>"It's not an issue that people rally around so much - breaking up the banks, limiting their liabilities, that's not something that excites people particularly. But I think it will. We're seeing intellectual and political support growing, and I think we'll continue to see that."</p>
<p>Brown has also been one of the main politicians driving the federal investigation into whether or not big Wall Street banks get a funding advantage from the government. The Government Accountability Office recently released a report on this matter at Brown and Vitter's request, and it found that the advantage was inconsistent, and sometimes quite small.</p>
<p>But that doesn't mean Brown and Vitter are done.</p>
<p>"Well first of all the megabank seems to be arguing there was never a subsidy, no subsidy. Now they're having to admit, yes, there was or is a subsidy, and they're arguing about the amount of it," Vitter said in an interview <a href="http://www.businessinsider.com/too-big-to-fail-is-still-a-problem-according-to-senators-2014-7#ixzz3CqoF6rgR">with Bloomberg TV back in July.</a> "The report says it may have gone down some with economic conditions and getting much better. The report also says if we go back to the same crisis conditions of 2008 the subsidy goes up. So I think clearly there is a too big to fail subsidy or cost of funding advantage. And I don't think it's been reduced significantly if you factor in the general economy."</p>
<p>Of course, for Wall Street there is a bright side. If Republicans take control of the Senate, Richard Shelby (R-AL) would take over Senate Banking. And while Shelby is a critic of Too Big To Fail, he's also a gotten more<a href="https://www.opensecrets.org/politicians/summary.php?cid=N00009920"> support (read: money) from the securities industry</a> over the last five years than any other industry.</p>
<p>Guggenheim also points out that if Brown were to take over the committee he might go easier on banks to show that he's not just an anti-Wall Street firebrand.</p>
<p> Or he could just let it all hang out.</p>

An Enemy Far More Threatening Than Elizabeth Warren Could Soon Have Major Power Over Wall Street

<p><span style="font-weight: 400;"><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Warner Brothers</span></p><p class="caption">The enemy.</p></div><p></p></div></div>I worked on Wall Street for 30 years and have been studying markets even longer.</span></p><p><span style="font-weight: 400;">Wall Street has come under fire in recent years, mostly from people who never worked there, and know little about how and why markets work.  </span><span style="font-weight: 400;">The popular view of Wall Street reflects Hollywood stereotypes, not primary knowledge.  </span></p><p><span style="font-weight: 400;">Here I will attempt to clear up three popular misconceptions.</span></p><p>The first is that markets are casinos that provide little value to society.  In fact, free capital markets are essential for economic development, which is itself essential for human progress.  All developed economies have free capital markets.  There are no exceptions.  None.  </p><p>Why are free capital markets required for economic development?  The ability to attract and retain capital is what allows businesses to design products, hire employees, buy materials and equipment, build products and grow the economy.  Capital allocation fundamentally shapes the economic landscape, and free markets are the best way to allocate capital.</p><p><span style="font-weight: 400;">Why?  Because free markets reflect "the wisdom of (informed) crowds" - i.e., the aggregate intelligence of investors worldwide.  This doesn't mean that markets are always right, just that they're really hard to beat.  Free capital markets financed the modern world and all its wonders.  </span></p><p><span style="font-weight: 400;">Conversely, when governments allocate capital, we get Versailles, Venezuela, bridges to nowhere and the ghost cities of China.  When governments try to </span><em><span style="font-weight: 400;">direct</span></em><span style="font-weight: 400;"> capital using subsidies, tax preferences, and mandates, we get Solyndra, the housing bubble, and higher food prices (as crops get converted to ethanol). Markets simply know more and forecast better than even the most talented government officials; our aggregate knowledge exceeds that of any individual.  The wisdom of crowds beats the hubris of experts.</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.flickr.com/photos/houseofhall/8427366371/sizes/l">Flickr</a></span></p><p class="caption">Versailles</p></div><p></p></div></div>Market "speculation" also serves a critical economic function. By constantly chasing even the smallest opportunities, speculators improve price discovery and market efficiency, driving market prices ever closer to fair values.  </p><p>Why is this important?  When prices are fair, long-term investors can buy or sell with confidence, knowing their returns will reflect long-term trends, not short-term mispricing.  Ultimately, by enhancing market efficiency, speculators improve capital allocation and growth.</p><p>The second popular misconception concerns regulation and the financial crisis.  The crisis didn't happen because deregulation unchained Wall Street greed.  Glass-Steagall wouldn't have prevented the housing bubble; it had nothing to do with housing or mortgage finance.  Prop trading didn't contribute to the crisis either.  </p><p>I am certainly not claiming that there is no greed on Wall Street - greed, or wanting more, is human nature. My point is simply that you can't have a bubble without widespread greed and miscalculation, from homebuyers and lenders to MBS packagers, rating agencies and investors.  But greed and miscalculation weren't the only causes of the housing bubble; they were aided and abetted by federal policies designed to promote housing - easy money (an essential component of any bubble); tax preferences for mortgage interest; the Community Reinvestment Act; GSEs; moral suasion, etc.</p><p><span style="font-weight: 400;"><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><p class="source"><span>Business Insider</span></p><p class="caption">Robert C. Jones</p></div><p></p></div></div>In any case, the solution to too-big-to-fail banks is not more regulation; overregulation caused the problem in the first place.  In both the time series (a single industry through time) and the cross section (comparing different industries at a point in time), more regulation leads to greater industry concentration.  </span></p><p><span style="font-weight: 400;">Regulations create barriers to entry that reward scale and punish smaller competitors with disruptive business models. Not surprisingly, the biggest banks now control a larger share of capital than before Dodd-Frank.  Overregulation also drives away bright, creative people, who feel stifled by extensive regulations.  </span></p><p>Overregulation threatens to leave banks as lumbering zombies that are protected from competition, managed by soulless bureaucrats, and micro regulated by government technocrats. These are hardly the types of vibrant, dynamic companies that should drive the critical capital allocation function.  </p><p>Fortunately, only the SIFIs are grossly overregulated today; most other investment sectors, from venture capital to hedge funds to financial services, - remain highly diverse and competitive (but watch your wallets).</p><p>Finally, regulations rarely achieve their stated goals.  Markets are complex adaptive systems that are resistant to centralized control. They constantly adapt to achieve the goals of their participants.  When the rules change, agents adapt their methods, but not their goals.  The result is that command-and-control approaches often lead to unintended and undesirable consequences, like housing bubbles, rising food prices, and extensive lobbying (which wouldn't exist without burdensome, constantly-changing regulations).</p><p>The third and final misconception concerns the culture of Wall Street.  Contrary to popular belief, it's not infested with Madoffs and Geckos.  The vast majority of the people I've met in finance are hard-working, smart, creative, thoughtful, and ambitious. Not greedy, ambitious.  Ambition is far nobler than greed. Ambitious people want success to come from their accomplishments, not cheating.  Talent and ambition produced most of humanity's greatest achievements.  </p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Shannon Stapleton/Reuters</span></p><p class="caption">Bernie Madoff.</p></div><p></p></div></div>Are there some slackers and crooks on Wall Street?  Of course, and they get a lot of press, but they are also rare, as they must be in any functioning market system.</p><p>Wall Street is not the enemy; it has shaped and financed the modern world. We should all be extremely grateful for free capital markets and all they've done to lift the developed world out of poverty.  To work its magic, however, Wall Street needs to retain its dynamic, innovative culture so it can continue to attract our most talented, ambitious and creative people.  </p><p>Finance also offers a perfect cure for what ails America's middle class: clean, safe, well-paying, challenging and engaging jobs. Instead of trying to regulate Wall Street into zombie-like submission, our political leaders should be doing all they can to assure our capital markets are the most vibrant, open, and free markets in the world.</p><p><em>Robert C. Jones is the chairman and CIO of System Two Advisors in Summit, NJ.</em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/blind-taste-test-popular-chicken-wings-papa-johns-dominos-pizza-hut-buffalo-wild-2016-5">We did a blind taste test of wings from Pizza Hut, Domino's, Papa John's, and Buffalo Wild Wings - the winner was clear</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="1tZGNwMDE6v5lk_FPlkbK3wi35BVyb9l" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Wall Street isn't the enemy

<br /> After a spate of <keyword id="2075817" type="UNKNOWN" weightage="100" keywordseo="Bollywood-masala-movies">Bollywood masala movies</keyword> which were mindlessly ‘filmy’ in spite of the potential, <keyword id="205961" type="POSITION" weightage="100" keywordseo="writer-director">writer-director</keyword> <keyword id="15574" type="PERSON" weightage="100" keywordseo="Imtiaz-Ali">Imtiaz Ali</keyword>’s romance-drama strikes a different chord and once again, takes us on a unique <keyword id="6374782" type="UNKNOWN" weightage="100" keywordseo="journey">journey</keyword>. But that is expected from the director of <em>Jab We Met</em> – he seems to revel in the idea of a journey, especially the kind that makes you stand face to face with your inner self. The <keyword id="2075818" type="UNKNOWN" weightage="100" keywordseo="Randeep-Hooda-Alia-Bhatt-starrer">Randeep Hooda-Alia Bhatt starrer</keyword> shows the courage to explore the shadow zones that often rule our life, but still weaves a gossamer core that doesn’t lack beauty – within or without. Yet, it does feel somewhat contrived – as if the pieces of an intricate jigsaw puzzle are falling in place all too soon, even before the protagonists could undergo their destined metamorphosis in a convincing manner.<br />
 <br /> When <keyword id="2075819" type="UNKNOWN" weightage="100" keywordseo="Veera-Tripathi">Veera Tripathi</keyword> (<keyword id="6354526" type="UNKNOWN" weightage="100" keywordseo="Alia-Bhatt">Alia Bhatt</keyword>), an affluent Delhiite with a well-connected business tycoon for a father, feels a bit tired of the ‘big fat Indian wedding’ she is about to undergo, sneaks out with her fiancé and gets conveniently kidnapped by <keyword id="2075824" type="UNKNOWN" weightage="100" keywordseo="Mahabir-Bhatti">Mahabir Bhatti</keyword>, a rough <keyword id="2075820" type="UNKNOWN" weightage="100" keywordseo="Gujjar-criminal">Gujjar criminal</keyword> played by <keyword id="16675" type="PERSON" weightage="100" keywordseo="Randeep-Hooda">Randeep Hooda</keyword>, the writing is already on the wall – <keyword id="1347859" type="ORGANIZATION" weightage="100" keywordseo="Stockholm-Syndrome">Stockholm Syndrome</keyword> or no. That’s <keyword id="2075821" type="UNKNOWN" weightage="100" keywordseo="Hollywood-masala">Hollywood masala</keyword> anyway, the victim falling in love with the abuser, but it’s not too rare a theme even here in India.<br />
 <br />
What we sorely miss is the touch of freshness, the dramatic twists and turns, which could have made <em><keyword id="6354768" type="ORGANIZATION" weightage="100" keywordseo="Highway">Highway</keyword></em> more of a turbulent journey, unwillingly undertaken by two troubled souls. Instead, the lead characters find solace in each other, seek each other out for some candid confession and finally, true to the <keyword id="1282628" type="UNKNOWN" weightage="100" keywordseo="Bollywood-tradition">Bollywood tradition</keyword>, the ‘baddie’ has to atone for his misdeeds while Alia rises from the ashes to craft a new existence for herself. Incidentally, it is Alia’s second outing after her dazzling debut in <keyword id="3778" type="PERSON" weightage="100" keywordseo="Karan-Johar">Karan Johar</keyword>’s <em><keyword id="549195" type="ENTERTAINMENT" weightage="100" keywordseo="Student-of-the-Year">Student Of The Year</keyword></em>. But in both movies, she has lived the characters she played.     <br />
 <br /> But before we get to the finer points, a look at the <keyword id="25892" type="ORGANIZATION" weightage="100" keywordseo="box-office">box office</keyword> may tell us more about the mass response. <keyword id="143" type="CITY" weightage="100" keywordseo="Bollywood">Bollywood</keyword> is infamous for rejecting <em>hatke</em> movies and <em>Highway</em> is definitely one of them. It was released on February 21, exactly a week after the Valentine’s Day, and hit around 800 screens in India. But business faltered on Day 1 and collections amounted to just Rs 3.42 crore in the <keyword id="6382118" type="UNKNOWN" weightage="100" keywordseo="Domestic-Market">domestic market</keyword>, with 20–25% occupancy at theatres. The flick later gained some momentum and earned around Rs 13.97 crore in India after the opening weekend (Feb 21-23). Interestingly, Parineeti Chopra-starrer <strong><em><a href="http://www.businessinsider.in/Box-Office-Hasee-TohPhasee-Wins-Hearts-Heartless-Fails-To-Retain-The-Thrill/articleshow/30228138.cms">Hasee Toh Phasee</a></em></strong> collected around Rs 18 crore in the first weekend while <keyword id="1655" type="PERSON" weightage="60" keywordseo="Priyanka-Chopra">Priyanka Chopra</keyword>’s <strong><em><a href="http://www.businessinsider.in/Box-Office-Gunday-LeavesYou-Clueless-But-Cash-Register-is-Ringing/articleshow/30626422.cms">Gunday</a></em></strong> amassed Rs 43.93 crore after the first three days. Highway’s Day 4 collection at home stood at a little over Rs 3 crore, according to industry estimates – again a dismal performance.<br />
 <br />
Although <em>Highway</em> has initially failed to blaze the box office, the lead duo has certainly done a commendable job. Alia is quite a transformation – no longer a moody, fashion crazy, campus hottie, but a quiet yet strong character grappling with her destiny. Randeep, too, is a realistic presentation of Mahabir – a man who has endured brutality and consequently turned brutal. And the underlying chemistry between the two – a queer concoction of fear, hatred and camaraderie – puts life into the entire show. Other pluses include <keyword id="119758" type="PERSON" weightage="100" keywordseo="Anil-Mehta">Anil Mehta</keyword>’s unforgettable <keyword id="42054" type="PERSON" weightage="100" keywordseo="Cinematography">cinematography</keyword> across a vast and colourful rural India (the movie was shot across six states) and <keyword id="11851" type="ORGANIZATION" weightage="100" keywordseo="AR-Rahman">AR Rahman</keyword>’s divine music that never fails to win one’s heart.<br />
 <br />
Overall, <em>Highway</em> is a unique creation, which could have gone miles ahead but suffered due to clichés and predictability. Still, we agree with what Sify critic Sonia Chopra says, “Maybe there’s no need to intellectualise this beautiful bond and just savour it as it is. Just like the film.” Let’s go by that advice… let’s take the road.<br />
 <br />
<strong>Image:</strong> Indiatimes

Highway Explores
Shadow Zones, But Fails To Impress At Box Office

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Drew Angerer/Getty Images</span></p><p class="caption">Steve Mnuchin.</p></div><p></p></div></div>President-elect Donald Trump appointed three of his top economic cabinet members this week, selecting individuals who hold traditional Republican economic values which don't exactly embody the disruptive nature the real-estate mogul championed for months on the campaign trail.</p><p>Trump selected Steven Mnuchin for treasury secretary, Wilbur Ross as commerce secretary, and Todd Ricketts as Ross' deputy.</p><p>"He's been running this [transition] somewhat like 'The Apprentice,' but in the end he chooses people much like himself," Robert Shapiro, an adviser to the International Monetary Fund and former under secretary of commerce for economic affairs under President Bill Clinton, told Business Insider. "It's becoming kind of a billionaire's club."</p><p>Shapiro said it was "interesting" that Trump selected individuals who were more entrepreneurial than corporate risers. He explained it showed "this is not a roster that says 'the economy is rigged and we're going to un-rig it for working people.'"</p><h2>Who they are</h2><p>Each of Trump's nominees have long histories in business and have amassed a great deal of wealth.</p><p>Mnuchin is the son of a Goldman Sachs banker and worked at the financial institute himself for 17 years, leading the mortgage lending department during his time at the bank. Since leaving Goldman, Mnuchin worked for Eddie Lampert - a hedge fun manager and now the CEO of Sears- and George Soros, a liberal mega-donor often the target of conservative ire - before starting his own private equity fund, Dune Capital Management.</p><p>The investor also led the purchase of mortgage lender IndyMac in 2009 during the depths of the financial crisis. The firm, which changed its name to OneWest after the acquisition, was charged with discriminatory lending practices and <a href="http://www.businessinsider.com/ap-trump-voter-lost-her-home-to-new-treasury-secretary-2016-12" target="_blank">overly aggressive foreclosure tactics</a> during Mnuchin's time as its owner.</p><p>Ross has been an investor for most of his life working with distressed debt and bankruptcy restructuring, known for prominently restructuring failed steel and coal companies. He worked for 25 years at Rothschild before founding his own investment firm in 2000, and he's long been a supporter of deregulation.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Drew Angerer/Getty Images</span></p><p class="caption">Donald Trump and Todd Ricketts.</p></div><p></p></div></div></p><p>Ricketts is the son of TD Ameritrade founder Joe Ricketts and his family has owned the Chicago Cubs since 2009. During the Republican primary campaign, when the Ricketts family was providing millions to anti-Trump efforts, <a href="http://www.businessinsider.com/trump-todd-ricketts-deputy-commerce-secretary-2016-11" target="_blank">the president-elect attacked them</a>, claiming they had "a lot to hide," before the two sides eventually settled their differences.</p><p>Both Mnuchin and Ross were early supporters of Trump during the campaign. All three must be confirmed for their cabinet posts by the Senate.</p><p>"These are people who have profited enormously from the distortions in the financial sector in recent years," Shapiro said. "This is very friendly to those on Wall Street who tend to strike out on their own. And those who succeed."</p><p>"So this is very friendly to kind of freelance financiers," he continued. "And in that sense, one would expect it to be hostile to financial regulation. Now, that's a traditional position of part of the Republican Party. What it is not is populist in any sense. "</p><p>Anthony Scaramucci, co-managing partner of SkyBridge Capital and a member of Trump's transition team, told reporters Friday it was "unfair" to say Trump was simply picking the ultra-wealthy to fill these slots.</p><p>"I'll say something to all of you guys that I think the American people need to hear is that he's really evaluating talent and so if people in the United States have lived the American dream and have been able to amass that kind of wealth, well certainly they're super talented or in what the president-elect says they're actually killers," he said during a gaggle at Trump Tower, according to a pool report.</p><p>"What you'll find about some of the nation's billionaires, it's not like they have their money located in a swimming pool in $100 bills. Their money is actually in their businesses, they're in the capital accounts, the capital equipment structure of their businesses and they're putting people to work in those businesses."</p><p><span>Scaramucci</span> said the "demonization of success" needs to "sort of end."</p><p>"And so if you're putting people in trade and treasury or commerce as an example that are super successful, I think the American people should get the assurance that they picked a leader whose judgment they can trust and respect," he said. "So I really want to push back very strongly on this whole billionaire criticism. Why is it so bad to be a billionaire, OK?"</p><h2>What they want to do</h2><p>With the selection of Mnuchin, Ross, and Ricketts it appears that much of Republican orthodoxy on economic issues will be brought to bear.</p><p>In an interview with CNBC on Wednesday, Mnuchin said that the top priority for the team is cutting taxes, especially for companies.</p><p>"And to get there our number one priority is tax reform," Mnuchin said. "This will be the largest tax change since Reagan."</p><p>The goal of the administration is to bring the corporate tax rate down to 15% from its current rate of 35%. Mnuchin said that would inspire companies to bring more cash back from overseas and spur economic growth with domestic spending.</p><p>Additionally, individual taxes would come down as well, according to Mnuchin. For wealthier Americans, however, the possible new head of the Treasury Department said total tax payouts would not change due to the administration closing various tax loopholes, though he did not cite what loopholes it would go after. </p><p>Austan Goolsbee, a professor of economics at the University of Chicago's Booth School of Business and formerly a top economic adviser to President Barack Obama who served on the Council of Economic Advisers, told Business Insider in an email "such a heavy corporate background likely means a high importance shifts to Congress in determining policy details," particularly regarding Mnuchin.</p><p>Goolsbee added he thought Mnuchin might be in the mold of Paul O'Neill or John Snow, two men who served as treasury secretaries under President George W. Bush.</p><p>"I would think [Mnuchin] would be likely in the bully pulpit/public approach similar to pre-crisis business types in the job like [O'Neill] or [Snow]," he wrote. "If he wanted to get into details of something, probably the easiest would be executive order/regulatory enforcement things like inversion rules, SIFI (systemically important financial institution) designations, that sort of thing." </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Mike Segar</span></p><p class="caption">Wilbur Ross and Donald Trump.</p></div><p></p></div></div></p><p><a href="http://www.businessinsider.com/donald-trump-trade-agenda-2016-11" target="_blank">On trade</a>, Ross lines up closely with Trump regarding his opposition to the landmark Trans-Pacific Partnership multi-national trade agreement between 12 Pacific Rim nations, calling the deal "horrible" and adding the administration will be skeptical of larger regional trade deals, instead preferring deals with individual nations.</p><p>Mnuchin said the Trump White House will "look at" labeling China a currency manipulator, as <a href="http://www.businessinsider.com/donald-trump-trade-agenda-2016-11" target="_blank">Trump has promised to do from the onset of his presidency</a>.</p><p>But in 2015, Ross signed a letter with fellow notable businessmen in support of TPP, <a href="http://money.cnn.com/2016/12/02/news/economy/kfile-wilbur-ross-tpp/index.html" target="_blank">as CNN reported</a>, and also said in 2012 that China "bashing" is "widely overdone in this country.</p><p>Regardless of his agreement or disagreement with Trump on trade, however, Shapiro said dealing with a Commerce Department that doesn't support his trade policies won't be an issue for Trump.</p><p>"Well, the fact is that the Commerce Department has significant role in promoting US exports ... it does not have a significant role in imports," he said. "There is an international trade commission that sits inside the Commerce Department, but the president has the authority to impose tariffs, and he doesn't need Congress and he frankly doesn't need the Commerce Department."</p><h3>The economic impact</h3><p>During the campaign, Trump promised that GDP growth would hit 4%. Mnuchin appeared to agree, telling CNBC he expected "sustained" 3% to 4% growth.</p><p>According to economists, the plan laid out by Mnuchin, Ross, and Ricketts could be a boon for the corporate sector in particular.</p><p>The current outlook for corporate earnings in 2017 is $131 per share, according to analysts at S&amp;P Global Market intelligence. Even if the Trump administration doesn't deliver on the 20 percentage pint reduction in the tax rate, companies could see a massive positive, according to the analysts report.</p><p>It read:</p><p style="padding-left: 30px;">"Accordingly, every one percent reduction in the corporate income tax rate could add back about $1.31 to anticipated 2017 S&amp;P 500 earnings. A five percent reduction in the effective tax rate could hypothetically increase next year's S&amp;P 500 earnings by $6.55 to $137.54 per share, while a 10% reduction could boost 2017 earnings-per-share to $144.09. The improved calendar year 2017 S&amp;P 500 earnings growth rates would now be 17.4% and 23.0%, respectively, as opposed to the current 11.8% consensus expectations growth rate."</p><p>Given the current price-to-earnings ratio of the S&amp;P 500, a 10 percentage point reduction would imply a 11% gain for the S&amp;P 500 to 2,450.</p><p><span>Additionally, the roll back of Dodd-Frank should be a boost for the financial industry, as evidenced by the fact the sector is among the best performing in the stock market since the election.</span></p><p>On the negative side, the push for infrastructure spending and barriers to trade could result in a serious uptick in inflation. With <a href="http://www.businessinsider.com/inflation-pressures-under-president-trump-2016-11" target="_blank">inflationary pressures already building</a>, the price increases could cause the economy to overheat and the Federal Reserve to hike rates at a fast pace. That scenario, according to JPMorgan Asset Management Chief Global Strategist David Kelly, is <a href="http://www.businessinsider.com/trumps-economic-plan-is-well-done-steak-and-putting-it-on-broil-2016-11">"<span>the biggest possible red flag" in the economy.</span></a></p><p>The combination of lower corporate taxes and lower personal taxes, plus the plan to spend a significantly larger amount on infrastructure, could cause a blow out in the nation's debt.</p><p>Additionally, any imposition of trade barriers or labeling China a currency manipulator may lead to a trade war or, at the least, be a drag on economic growth, as noted by Jan Hatzius, chief economist at Goldman Sachs.</p><p>All of those outcomes, however, hinge on what the new Trump economic team chooses to prioritize and if it can get the necessary legislation passed in the new Congress.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/donald-trump-election-supporters-protests-racial-discrimination-2016-11">'Stop it!': Trump tells his supporters to end racial discrimination after the election</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="txajNsNzE6Fl7AFEypX9wUDZNXS3GyM7" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

'This is not' a group that says 'we're going to un-rig' the economy: Meet the economic leadership team Trump is building

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div></p><p>General Electric Co said it would sell nearly all of its real estate portfolio to investors including Blackstone Group and Wells Fargo &amp; Co for $26.5 billion.</p><p>The company also said its board had authorized a share repurchase program of up to $50 billion.</p><p><span style="font-size: 15px; line-height: 1.5em;">GE shares are up </span><a href="http://data.cnbc.com/quotes/GE">more than 4%</a><span style="font-size: 15px; line-height: 1.5em;"> pre-market.</span></p><p>This is the biggest commercial real estate deal since Blackstone's acquisition of office landlord Equity Office Properties Trust in 2007 for $39 billion, including debt. It comes as the Federal Reserve is widely expected to raise interest rates later in the year, pushing up financing costs.</p><p>"We're in that sweet spot of 2007 when there's a lot of money, commercial real estate looks really attractive, and you could do some mega deals," said Ken Riggs, president of Situs RERC, a firm does commercial real estate valuations.</p><p><span>The latest transactions are valued at approximately $26.5 billion.</span></p><p>GE has been retreating from its property investments globally as it focuses on improving profits from sales of industrial products such as jet engines, generators, electric grid gear and oil field equipment. GE's industrial operations are expected to post a rise of at least 10 percent in profit this year.</p><p>"Under the plan, the GE Capital businesses that will remain with GE will account for about $90 billion in ending net investments (ENI) excluding liquidity - about $40 billion in the U.S. - with expected returns in excess of their cost of capital," the company said in a statement (below).</p><p>Revenue from the company's real estate business fell 24% in 2014, partly due to a decrease in net gains on property sales.</p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Chief Executive Jeff Immelt has said he expects profits from the company's aviation, power &amp; water and other industrial businesses to rise to 75 percent of the company's total by 2016 from 55 percent in 2013.</p><p>To achieve that goal, he has been remaking GE's portfolio of businesses, spinning off a retail finance operation, selling GE's appliance business to Sweden's Electrolux AB and agreeing to buy Alstom SA's power generation and electric grid business for $14 billion.</p><p>Blackstone said in November it would buy GE's property unit in Japan in a deal worth more than $1.6 billion. The private equity firm also bought warehouses and development land in the United States from GE's real estate unit.</p><p>GE shares ended 2.9 percent higher at $25.73.</p><p>Real estate accounted for about 7 percent of GE Capital's total $499 billion in assets related to continuing operations as of Dec. 31.</p><p>In his letter to shareholders last month, Immelt said his plan is to reposition GE Capital "as a smaller, safer specialty finance leader with less leverage and more liquidity."</p><p><strong>Here's the full release:</strong></p><p>FAIRFIELD, Conn.--(<span><span>BUSINESS WIRE</span></span>)--GE today announced that it will create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its world-class industrial businesses.</p><p><span style="font-size: 15px; line-height: 1.5em;">"GE Capital's businesses are excellent, and this is a great market for selling financial assets. Our people are world-class. We are confident these businesses will thrive elsewhere."</span></p><p>GE and its Board of Directors have determined that market conditions are favorable to pursue disposition of most GE Capital assets over the next 24 months except the financing "verticals" that relate to GE's industrial businesses. Under the plan, the GE Capital businesses that will remain with GE will account for about $90 billion in ending net investments (ENI) excluding liquidity - about $40 billion in the U.S. - with expected returns in excess of their cost of capital.</p><p>"This is a major step in our strategy to focus GE around its competitive advantages," GE Chairman and CEO Jeff Immelt said. "GE today is a premier industrial and technology company with businesses in essential infrastructure industries. These businesses are leaders in technology, the Industrial Internet and advanced manufacturing. They are well-positioned in growth markets and are delivering superior customer outcomes, while achieving higher margins. They will be paired with a smaller GE Capital, whose businesses are aligned with GE's industrial growth."</p><p>"The successful IPO of GE's retail finance business, Synchrony Financial, and other recent business exits have demonstrated that our financial services assets can be more valuable to others," said GE Capital Chairman and CEO Keith Sherin. "GE Capital's businesses are excellent, and this is a great market for selling financial assets. Our people are world-class. We are confident these businesses will thrive elsewhere."</p><p>As part of the execution of this new plan, GE announced today an agreement to sell the bulk of the assets of GE Capital Real Estate to funds managed by Blackstone. Wells Fargo will acquire a portion of the performing loans at closing. The Company also has letters of intent with other buyers for an additional $4 billion of commercial real estate assets. In total, these transactions are valued at approximately $26.5 billion.</p><p>Under the plan, GE expects that by 2018 more than 90 percent of its earnings will be generated by its high-return industrial businesses, up from 58% in 2014.</p><p>In 2015, GE's industrial businesses remain on track for operating earnings per share of $1.10-$1.20, up solid double digits, in line with expectations. "With sustainable growth, investments in competitive advantage, productivity programs and the addition of Alstom, we expect this performance to continue in the future," Immelt said. "We will focus our efforts on these businesses."</p><p>Immelt added, "We are completing another definitive and important move to reshape GE for the future. GE is a fast-growth, high-tech industrial company, built on the capabilities of the GE Store. The team is executing a detailed plan to boost margins and returns. We are allocating capital to grow the Company and benefit investors. Our best days are ahead."</p><p><strong>Creating Value in GE Capital</strong></p><p>GE Capital has been an important part of the history of GE. However, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.</p><p>GE will retain its "vertical" financing businesses - GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance - that directly relate to its core industrial businesses. The assets targeted for disposition, in addition to Real Estate, are most of the Commercial Lending and Leasing segment, and all Consumer platforms, including all U.S. and international banking assets.</p><p>These businesses represent roughly $200 billion in ENI. Since 2008, GE has reduced GE Capital's ENI from $538 billion to $363 billion at the end of 2014. The separation of Synchrony Financial, which is targeted by the end of 2015, and other recently announced dispositions, account for another $75 billion in ENI reduction (the Synchrony separation is subject to regulatory approval).</p><p>There is potential to return more than $90 billion to investors in dividends, buyback and the Synchrony exchange through 2018. The exits of the targeted GE Capital businesses should release approximately $35 billion in dividends to GE (subject to regulatory approval), which, under GE's base plan, are expected to be allocated to buyback; this is in addition to the impact of the Synchrony exchange and ongoing dividends. The GE Board has authorized a new repurchase program of up to $50 billion in common stock, excluding the Synchrony exchange. GE expects to reduce its share count to 8-8.5 billion by 2018. These actions would still allow room for opportunistic "bolt on" acquisitions in GE's core markets. GE also said it plans to maintain its dividend at the current level in 2016 and grow it thereafter.</p><p><strong>Working with Regulators</strong></p><p>GE has discussed this plan, aspects of which are subject to regulatory review and approval, with its regulators and staff of the Financial Stability Oversight Council (FSOC). GE will work closely with these bodies to take the actions necessary to de-designate GE Capital as a Systemically Important Financial Institution (SIFI). "We have a constructive relationship with our regulators and will continue to work with them as we go through this process," Immelt said.</p><p><strong>Financial Details</strong></p><p>Approximately $16 billion of after-tax charges are expected to be recorded in the first quarter of 2015 in connection with the plan - of which about $12 billion are non-cash. The charges include taxes on repatriated earnings, asset impairments due to shortened hold periods, and charges on businesses held for sale, including goodwill allocation.</p><p>GE expects that the earnings impact of the GE Capital exits will be offset by the buyback over the exit period.</p><p>GE will execute this strategy using an efficient approach for exiting non-vertical assets that works for GE and for GE Capital Corporation (GECC) debtholders and GE shareholders. An element of this approach involves a merger of GECC into GE and the creation of a new intermediate holding company for GECC businesses.</p><p>GE has amended its income maintenance agreement to guarantee all tradable senior and subordinated debt securities and all commercial paper issued or guaranteed by GECC. The guarantee will replace the current income maintenance covenant. GE will maintain substantial liquidity and capital through the transition and does not expect to issue incremental GE Capital long-term debt for at least five years. Commercial paper will be further reduced to approximately $5 billion by the end of 2015.</p><p>"We are proud of the GE Capital team, the outstanding businesses that GE Capital employees have built, and how they have delivered for customers and shareholders over many years," said Immelt. "The GE Capital team has displayed great resiliency, facing tough cycles and driving strong results."</p><p>J.P. Morgan and Centerview Partners have provided financial advice to GE, and Bank of America provided advisory services. Weil, Gotshal &amp; Manges, Davis Polk, and Sullivan &amp; Cromwell provided legal advice. For the Real Estate deal, Bank of America and Kimberlite Advisors provided financial advice and Hogan Lovells provided legal advice.</p><p>GE will discuss this announcement on a webcast at 8:30 a.m. ET today, available at <a href="http://cts.businesswire.com/ct/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.ge.com%2Finvestor&amp;esheet=51076661&amp;newsitemid=20150410005182&amp;lan=en-US&amp;anchor=www.ge.com%2Finvestor&amp;index=1&amp;md5=baa8bcd87aa37cbf2bc065487d8d50d4" target="_blank">www.ge.com/investor</a>. Related charts will be posted on our website for your review prior to the call.</p><p>(Additional reporting by Sagarika Jaisinghani and Sagarika Jaisinghani in Bengaluru; Editing by Savio D'Souza, Don Sebastian, Andrew Hay and Richard Chang)</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o2OGM3czpWcydnvhjbkDBd6feXPuExiD" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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