States fail to measure performance of transportation dollars

The Pew Center on the States and the Rockefeller Foundation released their findings on how well states are measuring transportation development. During Fiscal 2010, states spent an estimated $131 billion on transportation in but most are unable to report on the returns from their investments.

The study was done at a time when members of congress are proposing a new surface transportation authorization act. The law would govern federal funding streams for states transportation systems.

The report found that there were major differences among states and their ability to link their spending to how well projects in those states were doing. There were varying levels of success in meeting six key goals in transportation: safety, jobs and commerce, mobility, access, environmental stewardship and infrastructure preservation.

Nicholas Turner is the Managing Director of the Rockefeller Foundation.  He says, in today’s economic times, it’s important that states have the ability to track returns on their transportation investments.

“In today’s every changing fiscal environment and with states spending billions of dollars on transportation, it’s critically important that every dollar delivers a strong return on tax payers investments and that these programs generate the best results and advance states economic growth,” Turner said.

Thirteen states - California, Connecticut, Florida, Georgia, Maryland, Minnesota, Missouri, Montana, Oregon, Texas, Utah, Virginia and Washington - are leading the way in tracking their transportation advancements. Nineteen states trail behind, lacking systems to account for the return they’re getting from their investment in roads, highways, bridges and bus and rail systems. The other 18 states fall in the middle.

Robert Zahradnik is the Director of research for the Pew Center on the States and says there are a number of things states can do to improve.

”First the most obvious step is to improve the information and focus on results and make sure performance measures link to concrete goals, next states can use cost-benefit analysis and other economic tools to look at the economic impact of potential transportation spending and third states can bring performance measurement information clearly into the appropriations process,” Zahradnik said.

West Virginia falls within the 19 states that are falling behind. Zahradnik says there are reasons the state continues to have trouble tracking investments in its transportation systems.

“In the case of West Virginia where they’re specifically trailing behind in areas like mobility and environmental stewardship, that means they don’t have the essential tools, goals, performance measures and data to understand how their transportation investments are impacting congestion on the highways or how it’s impacting the environment in terms of greenhouse gases and other environmental concerns,” Zahradnik said.

Zahradnik says the fact that West Virginia is largely rural plays a role in why it is falling behind in access and mobility in transportation.

“West Virginia trails behind in mobility and has mixed results in the area of access and it actually doesn’t have performance measures and data to access it’s transportation progress in the area of mobility and in access it has some information, but it doesn’t have the full range of information,” Zahradnik said.

The Pew and Rockefeller study was conducted from September of 2010 to March of 2011. 

Google sets aside half a billion dollars for advertising probe

• Google in $13b legal fight over scanned books

Google says it has set aside $US500 million ($464m) to potentially settle US Justice department's probe into the company's online advertising practices, signaling yet another row with the regulators.

The charge reduced the net income to $US1.8 billion, or $US5.51 per share for the first quarter, Google said in a filing with the US Securities and Exchange Commission (SEC). The company reported net income of $US2.3 billion, or $US7.04 a share for the first quarter.

"In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $US500 million for the three month period ended March 31, 2011," Google said in the filing.

However, Google said the charge will not have a material adverse effect on the company's business, even as it warned that it cannot predict the ultimate outcome of the Department of Justice's investigation.

Google did not provide any further details about the investigation in the filing. The company declined to comment on the investigation when contacted.

The internet search giant has had antitrust setbacks. It walked away from a search deal with Yahoo in 2008 when the Justice Department signaled it was prepared to challenge it.

There have also been a series of complaints made to regulators, many from Google rivals which specialise in vertical searches like price comparison websites, which are widely seen as a threat to Google's position as a key gateway to online information.

Several of these have complained to US and European antitrust authorities that Google is seeking to hurt their business by making them hard to find in Google searches.

FDIC’s Bair Says U.S. Money Funds ‘Highly Unstable in a Crisis’

Federal Deposit Insurance Corp. Chairman Sheila Bair called money-market mutual funds “destabilizing” to the financial system and said investors would be served just as well if share prices floated.

“Money-market funds are maintaining a fiction of a stable” net-asset value, as shown by the September 2008 failure of the $62.5 billion Reserve Primary Fund, Bair said yesterday at a round-table meeting of fund-company executives and regulators arranged by the U.S. Securities and Exchange Commission in Washington. “That is skewing investment dollars into a structure that is highly unstable in a crisis.”

Former Federal Reserve Chairman Paul A. Volcker called a floating share price the “simplest” solution to the risk posed by money funds, which trade at a constant $1 a share.

Their remarks lent support to proposals fund executives have said may ruin the product’s appeal to investors, and its role as the biggest collective provider of short-term financing for U.S. corporations through the commercial-paper market. Calls to make funds safer began after Reserve Primary’s collapse helped freeze global credit markets. The SEC, after passing rules last year that made funds more liquid and more transparent, is considering whether further changes are needed.

Representatives of Fidelity Investments, JPMorgan Chase & Co. (JPM) and Federated Investors Inc. (FII), the three biggest money-fund providers, defended the business as popular among investors and crucial to the financing of U.S. companies and municipalities.

Capital Requirements

The industry has said bank-like regulations, including capital requirements or forcing funds to abandon their stable $1 share price, would destroy their appeal to customers while failing to prevent runs.

Money funds book their holdings based on their value at maturity and round to the nearest cent, allowing customers to buy and sell shares at $1. Returns are distributed monthly in cash or new shares.

Reserve Primary suffered a loss, initially set at 3 percent of assets, on debt issued by bankrupt Lehman Brothers Holdings Inc., causing the fund to close on Sept. 16, 2008, and denying shareholders access to most of their cash for months as it liquidated.

Investors, fearing that other funds might “break the buck,” withdrew $230 billion from the industry by Sept. 19 in a run that threatened to cripple issuers of short-term debt.

Volcker has previously said the stable share price creates an incentive for investors to flee at the first sign of trouble.

Preventing Panic

The government in 2008 “had to run from one extreme action and safeguard to another” to prevent additional money-fund failures amid the panic, Volcker said at yesterday’s meeting.

“What is the public good that makes it worthwhile to run such a big risk?” he said.

The run on money funds that followed Reserve Primary’s collapse abated only after the Treasury Department guaranteed shareholders against losses and the Federal Reserve loaned money to purchase fund holdings at face value.

Robert Brown, head of Boston-based Fidelity’s money-market fund group, said rules already enacted by the SEC had made the industry better prepared to handle a run by investors. The changes forced funds to hold more in securities easily convertible to cash and to reveal more about their holdings.

“There is a great danger in looking at all sorts of mechanisms for reinventing the money-market fund business,” said John D. Hawke, of Washington law firm Arnold & Porter LLC, who represented Pittsburgh’s Federated. “The danger is that people who find money-market funds extremely useful will be denied the usefulness of those funds.”

Government ‘Subsidy’

The regulators at the forum examined two industry proposals for backing money funds with emergency liquidity. A plan put forward by the Investment Company Institute, the mutual-fund industry’s Washington-based trade group, was criticized for its provision that in a crisis funds should enjoy access to the Fed’s discount borrowing window.

“You are in effect asking for some kind of subsidy to be transferred from the federal government to the corporate sector and this is a distorting thing,” said Paul Tucker, deputy governor of the Bank of England.

U.S. Treasury Undersecretary Jeffrey A. Goldstein questioned whether the proposed facility’s size, $24 billion after 10 years, would be “even close to enough.”

Goldstein was one of six present representing the Financial Stability Oversight Council, the regulatory panel charged with addressing companies and activities that can endanger the U.S. economy. The council was created by last year’s Dodd-Frank Act.

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

How to get started with Forex

More and more people want to make money with foreign exchange. Some of them do forex trading for a living - but you have know how.

Foreign Exchange Trading - what is that? In fact the procedure is quite easy to understand: You change one currency against another, and profit from the exchange rate.

Forex Trading is exiting as the market is always in move and the rates are always changing. You trade currency pairs, and a slight difference in the exchange rate can make a profit or loss of several thousand dollars. Each currency pair has their own bid and ask  price. To make a profit you need to buy a currency pair and then sell it for a higher price later on. 

Isn't that a job for financial experts?

No. Everyone can learn forex trading from scratch. There are thousands of tutorials available on the internet and every forex broker provides you with sufficient teaching material - as they want their customers to become successful forex traders. 

How do I get started with Forex?

First of all you should register with a Forex Broker of your choice and open a demo account. Just pay attention to these 5 things:

• How high is the spread? The spread is the difference between bid and ask - this is what you have to pay your broker in order to get access to the forex market.
• How high is the leverage? As a beginner you will want to minimize the use of leverage. But as an experienced trader you can trade more money with a higher leverage. If the broker offers a leverage of 1:500, you can trade 500 times your deposit, which is not less than 500.000 with a deposit of 5.000!
• Is the broker regulated? The broker should be regulated by FSA or another institute.
• Can I trade commodities? If you want the ability to trade commodities in addition to currencies, see whether the . broker offers gold, silver, oil and precious metal  trading.
• How high is the minimum deposit? A private investor  doesn't need to open an institutional account with a minimum deposit of $50.000. There a many brokers available that offer accounts for $25 up to $500 for private investors. Try out these first.

Once you have familiarized with forex trading by trading with virtual money,  you can open a real account and trade with real money . Bear in mind that forex trading can in fact be very profitable but it is highly risky as well, and you only should trade money that you can afford to lose. Don't trade with money that you need to pay your rent.

Frank Eschmann lives and works in Germany. He is a professional daytrader and Introducing Broker. He founded his company in 2007 and shares his trading secrets on http://forexbroker-check.com/

FOREX-Euro dips, but weak US payrolls might sting USD

* Euro seen hemmed in by sovereign bids and offers
* Investors positioning for U.S. jobs data

* Dollar/yen up on Japanese buying after holidays

By Jessica Mortimer

LONDON, May 6 (Reuters) - The euro fell further against the dollar in thin trade on Friday after steep losses the previous day, as markets positioned for a key U.S. jobs report.

The euro EUR= dipped below 1.4500 after falling nearly 2 percent on Thursday to $1.4510, with further falls in oil prices leaving investors wary of buying back riskier assets. [O/R]

But the euro was expected to remain supported by expectations euro zone rates would continue to rise faster than U.S. ones, as the European Central Bank tries to tame high inflation.

"We've had a healthy correction in euro/dollar, but I don't think this is a sea change in sentiment and wouldn't expect it to move much below $1.45," said Paul Robson, currency strategist at RBS.

Market participants saw limited room for euro gains, however, and sovereigns were said to be looking to take profits after buying at lower levels, with offers seen at $1.4580-85.

The euro also faced resistance at its 21-day moving average around $1.4576.

The dollar was supported after jumping on a massive fall in commodities on Thursday. On Friday, Brent crude LCOc1 extended losses after diving 10 percent the previous day, while silver XAG= steadied from Thursday's 12 percent slump.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Graphic on commodity moves: r.reuters.com/nab49r

Dollar/commodity correlations: r.reuters.com/wex39r

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U.S. April non-farm payrolls, due at 1230 GMT, were forecast to rise 186,000, but some analysts said there was a risk of a weaker number given recent worse-than-forecast weekly jobless claims and private payrolls data. ECONUS [ID:nN05211728]

Analysts said a weaker reading would confirm the view that sluggish U.S. economic growth will hold the Federal Reserve back from raising interest rates in 2011 or even beyond as other central banks raise rates.

This would widen the rate differential between the dollar and other currencies, keeping the U.S. currency weak, they said.

The dollar index .DXY was little changed at 74.158, still well above a three-year trough of 72.696 hit this week.

IMPLIED VOLATILITY UP

The euro fell sharply on Thursday after ECB President Jean-Claude Trichet did not signal a June rate hike. Analysts said this showed investors had become overly bullish about the euro zone rates outlook and they were forced to pare back long euro positions. [ID:nLDE7440GG]

The euro gained some support early on Friday after ECB policymaker Ewald Nowotny said the bank's stance should not be interpreted as dovish. [ID:nHEL010146]

But it was slapped back down immediately, suggesting FX moves were getting erratic. Highlighting this was a rise in implied volatility, with one-month euro/dollar vol hovering around 12 percent EUR1MO= after jumping on Thursday.

"New moves could generate volatility, and another driver could come from the other side of the Atlantic with NFP data this afternoon," options analysts at SocGen said in a note.

The yen fell after a big rise the previous day, easing immediate concerns about possible further official intervention to stem its gains. Traders reported demand to sell yen from Japanese accounts as they returned from the Golden Week holiday.

The dollar was up 0.2 percent at 80.31 yen JPY=, bouncing from a seven-week low of 79.57 yen hit on Thursday and tackling resistance from the bottom of the Ichimoku cloud at 80.493.

Market players saw limited chances of intervention from Japanese authorities, let alone joint action by the Group of Seven countries, after Japanese Finance Minister Yoshihiko Noda said on Thursday that current forex moves appeared different from those seen when the G7 intervened in March. [ID:nL3E7G525S]

Major commodity currencies recovered, led by strong gains for the Australian dollar, which was up 0.85 percent at $1.0671 AUD=D4, benefiting after the Reserve Bank of Australia warned a further rate rise would be needed. [ID:nL3E7G607H]

(Additional reporting by Naomi Tajitsu; Editing by John Stonestreet)

* Euro seen hemmed in by sovereign bids and offers