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Posted by nicklord in Risk, Cash
Six months ago I wrote a piece for this site saying why Taiwanese economic data is highly predictive of how the global economy is set to perform. The premise was that Taiwan is plugged into global trading patterns to such an extent that significant changes in its economic data tend to foreshadow changes to the global outlook by two to three months.
Six months ago, I wrote that a slow down in domestic industrial production could herald a slow down in the global economy. I was right. The summer months did see a global economic skid, due to worries over a double dip recession and government austerity measures.
The latest numbers from Taiwan, however, now suggest brighter times ahead. On Monday the country released its October export data figures, which make pleasant reading. Overall, exports in October were up 21.9 percent over October 2009. This handily beat consensus forecasts of a growth of 15.8 percent. Moreover, the rate of growth of exports increased rapidly, from 17.5 percent in September.
The two areas that showed the sharpest growth were electronics and exports to the US. The country exported electronics worth some $7.25 billion, a growth of nearly 25 percent over the previous October. That figure is also a record in dollar amounts.
Exports to the US reached $2.89 billion, a 35 percent increase on the previous October. The US continues to be Taiwan's fastest growing export market, even if in terms of volume exports to China are larger.
Much of this growth can be explained by the ongoing demand for Apple products in the US. Many of the components that go into Apple gadgets are manufactured in Taiwan. But it does not explain it all.
Given that October is traditionally the time of year when retailers start stacking the shelves for the holiday season, this sharp increase in exports from Taiwan suggests that US retailers are expecting a very strong winter season. That should bring good cheer to all.
CFOs at large companies are much more pessimistic than they were just three months ago.
According to yet another new survey of chief financial officer sentiment, just 47 percent said they are more optimistic about their company's prospects and 36 percent are less optimistic. Last quarter, nearly two-thirds said they were more optimistic and only 17 percent were less optimistic.
Even as companies begin to show signs of optimism in the state of the economy, and as the Fed announces the investment of a further $600 billion into quantitative easing, it is important for businesses to remember that the US banking markets are still at risk, and to manage that risk accordingly.
Of the more than 7,000 banks that make up the smaller banking market in the US, there have already been 139 failures this year, according to data from the FDIC, highlighting the importance of actively monitoring risk with your banking partners.
Data breaches are costing companies globally and in the US a small fortune. And it looks like October had a few humdingers.
First, for the cost. The average cost of a data breach experienced by companies in 2009 was $3.4 million, or $142 per customer. That's according to a survey by the Ponemon Institute, which studied firms in the US, UK, Germany, Australia and France.
In a survey of public sector CFOs by consultancy Grant Thornton, along with the Association of Government Accountants (AGA), and the National Association of State Auditors, Comptrollers and Treasurers (NASACT), finance executives expressed deep concern over effectively managing changing reporting requirements under the American Recovery and Reinvestment Act of 2009 (ARRA).
This not only affects the public sector finance execs that must report under the ARRA, but also affects all levels of businesses that received funds under ARRA programs by requiring more data and reporting—some of which they may not easily be able to provide.
Companies worldwide are struggling to come to grips with risks and disruptions in their supply chain, according to a survey by the Business Continuity Institute, which found that more than 70 percent of companies had a supply chain breakdown in the past year.
In addition, a significant piece of that disruption arose from outsourced IT and manufacturing processes – and the risk of supply chain disruption related to outsourcing is rising.
Let's face it. This is a difficult economy to get optimistic about, even though a fair amount of data is improving.
For every piece of positive news, there is frequently a discouraging report. Today's news that housing values have declined in most major markets is a good example, coming amid a mini-stock market rally due in part to pretty strong third quarter earnings reports.
Companies are focused on compliance with new proxy disclosure rules, but they may not be providing the whole picture of the company’s risk management strategy, according to a new report out by corporate advisory firm Deloitte.
In analyzing proxy statements by 398 S&P 500 companies, Deloitte found that although companies were meeting basic compliance requirements for risk oversight, they fell short of providing vital information on risk management practices—information which could provide greater comfort to regulators, investors and other stakeholders into risk mitigation efforts at the company.
Posted by nicklord in Risk
Small businesses in the UK have a somber outlook for business prospects in the near future, according to figures released by the Federation of Small Businesses (FSB).
At the end of the third quarter the net balance of businesses that were seeing some improvement in their outlook over those that were seeing deterioration stood at 0.5 percent. This is down from 4.2 percent at the end of the second quarter and from 16.2 percent at the end of the first quarter.
Executives have a number of concerns as they gear up to comply with the Internal Revenue Service's new disclosure requirement regarding their uncertain tax positions (UTPs).
According to a survey conducted by KPMG's Tax Governance Institute (TGI), 44 percent of the respondents said their biggest concern was providing the concise description for a disclosed UTP. The IRS defines a UTP as a federal income tax position for which a taxpayer or related party has recorded a reserve in an audited financial statement or for which no reserve was recorded because of an expectation to litigate.