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The financial power of the Dodgers' new ownership group could really be seen on next winter's free-agent market, where the team is expected to go all-out in an effort to sign Cole Hamels.
"They love him, and they're saying they'll do whatever it takes to get him," said one rival club official, who speaks regularly to Dodgers people.
But the Dodgers will likely try to flex their financial muscle on the July trade market, too.
With their team sitting in first place in the NL West, Dodgers officials have sent out word that they will try hard to acquire both a starting pitcher and a hitter before the July 31 non-waiver deadline.
"The one thing that won't be an obstacle for them is money," the rival official said.
The Dodger farm system hasn't had nearly as good a start as the parent club, so the team is limited in terms of prospects who would be coveted trade chips. The solution for the Dodgers could be to go after players with bigger contracts, and offer to take on more of the money.
One position player the Dodgers have scouted is third baseman Kevin Youkilis, who the Red Sox intend to trade. Youkilis is pricey, with a $12 million contract this year and a $13 million option (with a $1 million buyout) for 2013.
As colleague Jon Heyman wrote this week, the trade market looks to be strong in starting pitching. As of now, it's believed that the Dodgers are looking at multiple pitchers who could be available.
One pitcher the Dodgers could have strong interest in: Ryan Dempster of the Cubs. Before the Dodgers got Ted Lilly from the Cubs two summers ago, they initially tried for Dempster.
The Dodgers rotation has been one of the game's best for the first two months of the season, with a 3.07 ERA that ranks just behind the Nationals' MLB-leading 2.95. But Ted Lilly just went on the disabled list, and the Dodgers seem to have some concerns that the rest of their starters won't maintain their early season success.
Offensively, the Dodgers could use immediate help, with star center fielder Matt Kemp back on the disabled list and expected to miss a month. Youkilis would be a fit, because the Dodgers have been getting almost no offense out of third base.
Forex: EUR/USD pushes back above 1.24 - FXStreet.com
Money flies out of Spain, regions pressured - Yahoo Finance
By Nigel Davies and Sonya Dowsett
MADRID (Reuters) - Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.
Spain is the next country in the firing line of the euro zone's debt crisis, with spendthrift regions and shaky banks threatening to blow a hole in state finances and pushing funding costs towards levels that signal the need for a bailout.
The European Commission gave new help on Wednesday, offering direct aid from a euro zone rescue fund to recapitalize Spanish banks and more time for Madrid to reduce its budget deficit.
That helped lower the risk premium investors demand to hold Spanish 10-year debt rather than the German benchmark on Thursday, but it remained close to the euro-era record, at 520 basis points.
Bank of Spain data showed a net 66.2 billion euros ($82.0 billion) was sent abroad last month, the most since records began in 1990. The figure compares to a 5.4 billion net entry of funds during the same month one year ago.
Spaniards are worried about the health of their banks, hit by their exposure to a 2008 property crash, and have been sending money to deposit accounts in stronger economies of northern Europe.
Spain's Economy Minister Luis de Guindos however said the data was more a reflection of the troubles of the banking sector to fund itself externally than deposits flying abroad.
The capital flight data predates the nationalization of Spain's fourth biggest lender Bankia (MCE:BKIA.MC - News) in May when it became clear the bank could not handle losses from bad real estate investments, compounded by a recession.
Spain's centre-right government has contracted independent auditors to assess the health of its financial system in an effort to restore faith in its banks.
Spain must lay out its restructuring plans for Bankia to the European Commission (EC), a spokesman for the EU executive arm said on Thursday. He added that a domestic solution to the country's bank crisis would be better than a European rescue.
The government said on Wednesday it would finance a 23.5 billion euro rescue of the bank through the bank fund, FROB but senior debt bankers said that the syndicated bond market is currently closed for Spanish agencies.
REMOVING UNCERTAINTIES
The prospect that Spain might not be able to handle losses at its banks has pummeled shares and the euro, although both regained some stability on Thursday.
De Guindos said that the future of the euro would be at stake in the next few weeks in Spain and Italy, adding that the rumors that Spain was negotiating financial assistance with the International Monetary Fund were "complete nonsense."
"The battle of the euro is being fought right now in Spain and Italy," he said at an event in Sitges, in the north-eastern region of Catalonia.
He also said Germany should help correct imbalances in the euro zone created by a loose monetary policy over the last decade and by the non-respect by Berlin of the stability and growth pact in 2003.
"We need to correct decisions which favored Germany... Germany has to assume its part," he said, adding that decisions in this respect would be taken in the next few days.
The Spanish government also hopes to clear doubts on Friday about how it plans to ease financing problems among its 17 autonomous regions.
Treasury ministry sources said a mechanism to back the regions' debt would be agreed at the weekly cabinet meeting and figures showing they were on track to meet their spending cuts targets would be released.
Fitch Ratings downgraded eight regions on Thursday, warning that a failure from the government to adopt new measures would result in further ratings cuts.
Spain's Deputy Prime Minister Soraya Saenz de Santamaria was meeting U.S. Treasury Secretary Timothy Geithner and International Monetary Fund Director General Christine Lagarde in Washington on Thursday.
The deputy PM will outline Spain's measures to tackle its crisis during the meetings, which were scheduled before Spain's situation reached boiling point, a government spokesman said. ($1 = 0.8069 euros)
(Writing by Julien Toyer; Editing by Diana Abdallah)
FOREX-Dollar falls versus yen, euro after jobs data - Reuters UK
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Money Insider: The end of free banking could be costly for all - The Independent
So what's different with the latest "free banking – the end is nigh" story?
Rather than the issue being raised by a consumer body or an industry commentator, on this occasion the free banking hornets' nest has been poked by Andrew Bailey, the soon-to-be-boss of the new Prudential Regulatory Authority.
Mr Bailey feels that free banking is a myth and encourages the mis-selling of products, singling out the PPI debacle as such an example.
He also wants to increase competition in the banking sector and believes that were the true cost of banking services visible, we'd see more customers switching accounts.
If you look at the issue from the banks' perspective, they provide us with branch networks, instant payment services, statements, cheque books, debit cards, internet banking and cash withdrawals from ATMs across the UK – and as long as you keep your account in the black it doesn't cost you a penny.
However, the main gripe over the years has been that the long list of banking services that many people get for nothing (and take for granted) is subsidised by stealth charges and high levels of commission from the cross sales of pension, life insurance and mortgage products.
Another bugbear is unauthorised banking charges, and even though these have reduced, in some cases the penalties are still excessive and it's quite easy for someone to accumulate £50 or more of charges in a single month.
There's also the matter of the hundreds of millions of pounds of credit balances held in current accounts on which the banks don't pay us a single penny. Will that change under the new regime? I think not.
I'm not sure what level of detail Andrew Bailey has gone into, but there are so many things to be considered if he wants to achieve his ambitious plan.
The questions that immediately spring to mind include: will the charging be on a fixed-fee tariff or a pay-as-you-go deal dependent on the number of transactions on your account each month?
Will the regulator put a cap on the amount customers are charged for unpaid cheques and unauthorised borrowing?
Does he expect all "in credit" and borrowing tariffs to be in the same format? This is not the case at present and makes it nigh on impossible for the man on the street to work out which bank offers the most cost-effective deal.
Will he insist that customers receive interest on current account credit balances, and what measures will he put in place to end the culture where bank staff are under pressure to meet sales targets in order to receive commission payments or bonuses?
Will the introduction of a new revenue stream mean we'll be rewarded with better levels of customer service, meaning fewer complaints to the ombudsman?
Although I can appreciate what Mr Bailey wants to achieve, I'm far from convinced that the vision will come to fruition any time soon.
If we end up paying for our bank accounts, I'm pretty certain we won't see a reduction in the cost of other financial products or services, and that by disturbing the hornets, many more of us will end up getting stung than the new regulator actually envisaged.
New best buy Isa from Virgin Money
With the cost of money market funds increasing due to continuing uncertainty in the eurozone, we're seeing more banks turning their attention to retail savings balances.
Among the best new savings rates over the past week is a one-year fixed-rate ISA from Virgin Money paying 3.3 per cent AER.
The account sits in the top three best buys, is available from just £1 and, unlike some competitors, it allows you to transfer balances from previous ISAs.
We may be heading out of the main ISA season, but this is an excellent deal and well worth a look if you haven't yet decided on a home for your 2012-13 tax-free savings allowance.
Locking away the maximum cash balance of £5,640 for a full 12 months will earn you £186.12 in interest – tax free.
Andrew Hagger – Moneynet.co.uk
Wiring Money, Feeling Squeezed - New York Times
Both resent having to pay Western Union a $10 fee to send money abroad and an additional cut to convert dollars to pesos. But these charges have fueled the company’s record profits and made it a relative outlier in the financial services industry.
As billions of dollars in fee income has evaporated at the nation’s largest banks because of regulations passed in the wake of the financial crisis, the money-transfer industry has escaped the crackdown.
Soon, however, the companies, which are largely regulated by states, will be subject to new federal rules. Starting in February, they will have to disclose more to customers about transfer fees and currency exchange rates. The rules, part of the Dodd-Frank financial regulation law, will also require companies to give customers up to 30 minutes after a transaction to get a full refund.
But consumer advocates are raising alarms that money-transfer companies face fewer restrictions because the rules do not touch the pricing of services.
“You still have a situation where customers are subjected to these predatory products with no cap on fees or exchange rates,” said Oscar Chacon, the executive director of the National Alliance of Latin American and Caribbean Communities in Chicago.
Money-transfer companies say that they offer an invaluable service for customers who might not have access to traditional banks and who would otherwise have no way of transmitting money to their families.
“The money-transfer industry is very competitive, and consumers have a range of choices for sending money,” said Tom Fitzgerald, a Western Union spokesman.
Western Union, which dominates the money-transfer market, notes that it already discloses the amount of money being submitted, the exchange rate and the amount that the recipient will receive. It also tells customers that “in addition to the transfer fee, Western Union also makes money when it changes your dollars into foreign currency.”
MoneyGram, among the largest companies, said, “We believe the new rules essentially standardize across the industry our existing high level of disclosure, which should benefit anyone wishing to send funds.”
Mr. Esparza, who sends money to his children in Mexico City, said that the $10 fee would not be onerous if he were sending a larger amount, but that it seemed exorbitant for $50. “Western Union’s fees are just too high,” he said.
Ms. Gonzalez said that even though $10 might not seem like a lot, “In Mexico, that money goes farther.”
Aside from the transfer fees, Western Union and other similar services profit as they buy batches of currencies at a wholesale rate. The money-transfer companies do not disclose the spreads they benefit from when they set exchange rates.
“It’s a big profit center for these companies, borne on the backs of the people who can least afford it,” said Matthew Piers, a lawyer in Chicago, who successfully brought a lawsuit on behalf of Mexican immigrants against Western Union in 2000 that accused the company of misrepresenting exchange spreads.
Western Union did not admit or deny wrongdoing, but agreed to pay more than $400 million to settle the claims.
Referring to the money it makes off the spread, Western Union said in its 2012 annual filing, “we generate revenues based on the difference between the exchange rate set by us to the customer and the rate at which we or our agents are able to acquire currency.”
Western Union received $1.15 billion in so-called foreign-exchange revenue in 2011, up from $910.3 million in 2009.
For Javaid Tariq, a taxi driver in New York City who sends money monthly to his family in Pakistan, the exchange rate is particularly infuriating because of how much money he loses. When he sent $300 to his family in April, he received 89.2 rupees for every dollar, less than the 91.2 exchange rate that he checks each morning, he said. For his family, that means 599 fewer rupees, or more than a week’s salary in Lahore.
Frustrated, Mr. Tariq said, “They are taking this money from the people who can least afford it.”
Analysts expect the market for money transfers to grow. The value of cross-border transfers is expected to reach $437 billion in 2012, up from $387 billion in 2009, according to the Aite Group, a research and advisory firm. In the United States, this is led partly by a growth in transfers to China and India and an influx of immigrants from western and eastern Africa, said Larry Berlin, an analyst with First Analysis in Chicago.
Western Union and rival companies are poised to profit. Western Union, with the largest share of the market at nearly 18 percent, recorded $4.2 billion in transaction fees last year, up 4 percent from 2010. The fees accounted for more than 75 percent of the company’s total revenue last year. In the first quarter, profits totaled $247.3 million, up 18 percent from the year-ago period, and for all of 2011, net income was $1.16 billion, up 28 percent from the year before.
Western Union and MoneyGram, which has nearly 4 percent of the money-transfer market, according to the Aite Group, are primarily regulated by the states in which they operate. The new rules, however, fall under the oversight of the new federal Consumer Financial Protection Bureau.
In the buildup to the Dodd-Frank rules, Elizabeth Warren, in her former role as a special adviser to President Obama charged with forming the consumer bureau, warned that with money-transfer companies, “you put your money in and take your chances.”
The central idea behind the new regulations was that having more transparency would promote greater competition and allow immigrants to shop for better rates, said Betsy Cavendish, the executive director of Appleseed, a nonprofit organization focused on policy reform that provided public comment during the rule-making process.
In a February speech to the League of United Latin American Citizens, Richard Cordray, the director of the consumer bureau, emphasized that “with our rule, we hope to increase competition.”
But competitors have made little progress in penetrating the money-transfer market largely because Western Union has half a million locations in 200 countries and territories, making it more difficult for others to edge in, industry consultants said. Although there was some hand-wringing in the industry during the rule-making, analysts said that disclosure requirements would not significantly dampen the revenue at Western Union.
“There will be some one-time costs, but not anything significant,” Mr. Berlin said. Western Union, he added, already works to make fees clear to customers.
Already there are signs that competition might be slow to materialize, banking analysts said. They pointed to a growing number of partnerships between Western Union and banks that might have competed for a slice of the business.
Regions Financial, for example, just finished introducing Western Union’s money-transfer services through its 1,800 branches. U.S. Bancorp gives customers access to Western Union services through its online banking site.
Immigrant advocates argue that many people do not have time to shop for better rates.
“These are people working who are often working minimum wage jobs with very little savvy or time about where to price-shop,” said Francis Calpotura, the founder and director of the Transnational Institute for Grassroots Research and Action in Oakland, Calif.
Some immigrants complain that while there might be multiple options to send money from the United States, there are not as many in the countries where their families live.
Mr. Tariq, the taxi driver with family in Lahore, says he must use Western Union to send $300 a month because “they have a monopoly on stores and are in every post office.”
That makes him feel “like a hostage,” he said.
Forex focus: let's not kid ourselves about the pound - Daily Telegraph
With the the Olympics following hot on the heels of the Queen's Diamond Jubilee, he thinks UK consumers will start spending again. "Ticket sales alone for the Olympics are going to add 0.2pc to the GDP in the third quarter of the year. Things are set to get a lot better in the UK."
Simon Smith of FxPro is cautiously optimistic, pointing to the low yield on UK gilts and saying: "There's little doubt that the pound has benefitted from events in the eurozone. I would expect the pound to continue to appreciate vs. the euro as this effect continues, pushing EUR/GBP to new lows for the year."
However, many consider it is just a race for the bottom between the two currencies with the single currency definitely winning.
"We should be clear that this is not due to any inherent strength in the pound – just the euro's abject weakness," believes David Kerns of Moneycorp.
The pound is also being talked down. Christine Lagarde, head of the International Monetary Fund, has suggested the UK base rate should be cut further below its current record low of 0.5pc while the Bank of England is yet again considering pumping more money into the economy.
Jeremy Cook of World First thinks the Bank could bring in more quantitative easing as early as this month but he doesn't believe it will have much of an impact.
"We would prefer to see the Bank take on some form of 'credit easing' – the purchase of corporate debt as opposed to that of the government. The fact is that the liquidity that the banks are receiving is not making it through to businesses and consumers."
The UK certainly can't afford to be complacent and imagine we can get away with sitting on the sidelines.
Charles Purdy of Smart Currency Exchange says: "There is a great possibility that the UK could run into trouble. The UK has been masterful in its management of international investment sentiment as it convinces the international market to finance our debt at a fraction of the cost of that of Spain or Italy. If this changes then we are in the same position as the southern states of the eurozone."
And Smith adds: "The eurozone crisis is ultimately a banking crisis. We remain a nation still very much reliant on banking and financial services. Therefore, it can't be dismissed."
The situation in the eurozone is creating a vortex threatening to suck everyone into it. It is hoped that the drawn out debacle in Athens has bought sufficient time to work out how to limit the damage.
"Hopefully the time spent will have allowed the authorities to build up an adequate firewall to protect the other 16 members of the euro," says Alistair Cook of Currencies Direct. "If not, then we're in real trouble."
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