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Friday, February 28, 2014
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Thursday, February 20, 2014
Rieder: Not Oscars, but journalism prizes matter
Let's start with movies. The Oscar Hall of Shame is a crowded place.
Take 1976. The nominees for best picture included such standouts as Taxi Driver, Network and All the President's Men. The winner? Rocky!!??! Enjoyable hokum, sure, but (and I say this as a Philly guy), really?
And Dances with Wolves over Goodfellas? Forrest Gump over Pulp Fiction. Are you kidding me?
The Grammys have had their share of lowlights as well. Take 1979, when disco's A Taste of Honey edged out some guy named Elvis Costello for best new artist. And two words: Milli Vanilli.
Journalism awards, of course, don't quite attract the attention of the pop culture prizes. No red carpets. No endless speculating on who will win. But while not nearly as sexy, they play an important role in the field. And they also trigger their share of debates. Among them: Do news outlets pay too much attention and devote too much firepower to pursuing awards at the expense of day-in, day-out reporting that is essential to their communities? Are some of those multipart extravaganzas with their endless, intimidating seas of gray type aimed more at fellow journalists than readers?
We're now in the midst of journalism awards season. On Sunday, Long Island University announced the winners of its George Polk Awards. And while much outstanding work was honored, two particular awards jumped out at me.
In the national security category, the Oscar went to Glenn Greenwald, Ewen MacAskill and Laura Poitras, writing for Britain's Guardian newspaper, and Bart Gellman, writing for The Washington Post, for their articles on rampant National Security Agency surveillance. Their articles were based on classified documents leaked by former NSA contractor Edward Snowden.
Snowden's actions, and the work of the journalists reporting on his revelations, have been hig! hly controversial. While there's no denying that the disclosures have triggered a national debate over government snooping that even President Obama said he welcomed, Snowden has no shortage of detractors who think he's a traitor. And the messengers have come under fire, too. Meet the Press host David Gregory — a fellow journalist, no less — asked Greenwald, the poet laureate of the Snowden saga, "Why shouldn't you be charged with a crime?"
And that's why awards matter. Being honored by a prestigious jury of their peers ratifies the value of the important work these journalists have done. And that work is valuable to society at large, not just insiders. In this case, the award says these reporters are heroes, not outlaws.
Similarly, the Polk judges honored Shawn Boburg of The Record in Bergen County, N.J., for his work in September on the much-ballyhooed lane closings at the George Washington Bridge in Fort Lee. Boburg's shoe-leather reporting set the table for the stories on the involvement of top aides to Gov. Chris Christie.
Much of the important, yet decidedly unglamorous work of journalism is carried out by local reporters monitoring the nitty-gritty of daily life. Buffeted by the challenges of the digital age, many traditional news outlets have cut back on their reporting rosters. Recognizing such work is an excellent way of underscoring its immense value.
While the Polk is a prestigious award, the big kahuna of journalism accolades is, of course, the mighty Pulitzer. This year's Pulitzers will be announced on April 14.
The number of Pulitzers won does not necessarily correlate with the overall excellence of a news outlet. But it's a hint. It also is a source of prestige and a valuable weapon for building the brand of news organizations and journalists alike.
The fact that The Philadelphia Inquirer under Gene Roberts won 17 Pulitzers in 18 years symbolized vividly the fact that the paper had been transformed from a subpar daily into a journalistic jewel.
The f! act that The New York Times won 18 Pulitzers under Bill Keller reflects the fact that Keller not only calmed the waters after the Times' turbulent Howell Raines era, but the paper was at the same time doing some excellent work.
One of the more improbable Pulitzers was the one racked up in 2010 for investigative reporting by Barbara Laker and Wendy Ruderman of the Philadelphia Daily News, a small, understaffed, indomitable tabloid perpetually threatened with extinction. Laker and Ruderman won for their courageous reporting on rampant corruption in the Philadelphia police department.
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I asked Laker what winning the Pulitzer had meant to her.
"As much as we, as reporters, say we don't write stories to win awards, deep down, they do matter to us," she replied via e-mail. "They validate our work and say that it's important — a cut above the rest. In some cases, the award says your work shed light on wrongdoing and forced change. That's a sentiment every journalist wants to feel. You never forget it."
Wednesday, February 19, 2014
Fed Issues Minutes from Jan. 28-29th, 2014 FOMC Meeting
A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, January 28, 2014, at 2:00 p.m. and continued on Wednesday, January 29, 2014, at 9:00 a.m.
PRESENT:
Ben Bernanke, Chairman William C. Dudley, Vice Chairman Richard W. Fisher Narayana Kocherlakota Sandra Pianalto Charles I. Plosser Jerome H. Powell Jeremy C. Stein Daniel K. Tarullo Janet L. Yellen
Christine Cumming, Charles L. Evans, Jeffrey M. Lacker, Dennis P. Lockhart, and John C. Williams, Alternate Members of the Federal Open Market Committee
James Bullard, Esther L. George, and Eric Rosengren, Presidents of the Federal Reserve Banks of St. Louis, Kansas City, and Boston, respectively
William B. English, Secretary and Economist Matthew M. Luecke, Deputy Secretary Michelle A. Smith, Assistant Secretary Scott G. Alvarez, General Counsel Thomas C. Baxter, Deputy General Counsel Steven B. Kamin, Economist David W. Wilcox, Economist
James A. Clouse, Thomas A. Connors, Evan F. Koenig, Thomas Laubach, Michael P. Leahy, Loretta J. Mester, Paolo A. Pesenti, Samuel Schulhofer-Wohl, Mark E. Schweitzer, and William Wascher, Associate Economists
Simon Potter, Manager, System Open Market Account
Lorie K. Logan, Deputy Manager, System Open Market Account
Michael S. Gibson, Director, Division of Banking Supervision and Regulation, Board of Governors
Nellie Liang, Director, Office of Financial Stability Policy and Research, Board of Governors
Stephen A. Meyer and William Nelson, Deputy Directors, Division of Monetary Affairs, Board of Governors
Jon W. Faust, Special Adviser to the Board, Office of Board Members, Board of Governors
Linda Robertson and David W. Skidmore, Assistants to the Board, Office of Board Members, Board of Governors
Trevor A. Reeve, Senior Associate Director, Division of International Finance, Board of Governors
Joyce K. Zickler, Senior Adviser, Division of Monetary Affairs, Board of Governors
Daniel M. Covitz and Michael T. Kiley, Associate Directors, Division of Research and Statistics, Board of Governors
Jane E. Ihrig, Deputy Associate Director, Division of Monetary Affairs, Board of Governors
Edward Nelson, Assistant Director, Division of Monetary Affairs, Board of Governors; John J. Stevens, Assistant Director, Division of Research and Statistics, Board of Governors
Jeremy B. Rudd, Adviser, Division of Research and Statistics, Board of Governors
Dana L. Burnett, Section Chief, Division of Monetary Affairs, Board of Governors
Burcu Duygan-Bump, Senior Project Manager, Division of Monetary Affairs, Board of Governors
David H. Small, Project Manager, Division of Monetary Affairs, Board of Governors
Andrew Figura, Group Manager, Division of Research and Statistics, Board of Governors
Michele Cavallo, Senior Economist, Division of International Finance, Board of Governors
Yuriy Kitsul, Economist, Division of Monetary Affairs, Board of Governors
Randall A. Williams, Records Project Manager, Division of Monetary Affairs, Board of Governors
Kenneth C. Montgomery, First Vice President, Federal Reserve Bank of Boston
David Altig, Glenn D. Rudebusch, and Daniel G. Sullivan, Executive Vice Presidents, Federal Reserve Banks of Atlanta, San Francisco, and Chicago, respectively
Troy Davig, Geoffrey Tootell, and Christopher J. Waller, Senior Vice Presidents, Federal Reserve Banks of Kansas City, Boston, and St. Louis, respectively
Robert L. Hetzel, Senior Economist, Federal Reserve Bank of Richmond
Annual Organizational Matters1 In the agenda for this meeting, it was reported that advices of the election of the following members and alternate members of the Federal Open Market Committee (the "Committee") for a term beginning January 28, 2014, had been received and that these individuals had executed their oaths of office.
The elected members and alternate members were as follows:
William C. Dudley, President of the Federal Reserve Bank of New York, with Christine Cumming, First Vice President of the Federal Reserve Bank of New York, as alternate
Charles I. Plosser, President of the Federal Reserve Bank of Philadelphia, with Jeffrey M. Lacker, President of the Federal Reserve Bank of Richmond, as alternate
Sandra Pianalto, President of the Federal Reserve Bank of Cleveland, with Charles L. Evans, President of the Federal Reserve Bank of Chicago, as alternate
Richard W. Fisher, President of the Federal Reserve Bank of Dallas, with Dennis P. Lockhart, President of the Federal Reserve Bank of Atlanta, as alternate
Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, with John C. Williams, President of the Federal Reserve Bank of San Francisco, as alternate
By unanimous vote, the Committee selected Ben Bernanke to serve as Chairman through January 31, 2014, and Janet L. Yellen to serve as Chairman, effective February 1, 2014, until the selection of her successor at the first regularly scheduled meeting of the Committee in 2015.
By unanimous vote, the following officers of the Committee were selected to serve until the selection of their successors at the first regularly scheduled meeting of the Committee in 2015:
William C. Dudley Vice Chairman William B. English Secretary and Economist Matthew M. Luecke Deputy Secretary Michelle A. Smith Assistant Secretary Scott G. Alvarez General Counsel Thomas C. Baxter Deputy General Counsel Richard M. Ashton Assistant General Counsel Steven B. Kamin Economist David W. Wilcox Economist James A. Clouse Thomas A. Connors Evan F. Koenig Thomas Laubach Michael P. Leahy Loretta J. Mester Paolo A. Pesenti Samuel Schulhofer-Wohl Mark E. Schweitzer William Wascher Associate Economists
By unanimous vote, the Federal Reserve Bank of New York was selected to execute transactions for the System Open Market Account.
By unanimous vote, the Authorization for Domestic Open Market Operations was approved with an amendment that makes the structure of paragraphs 1.A and 1.B more similar. The Guidelines for the Conduct of System Open Market Operations in Federal-Agency Issues remained suspended.
AUTHORIZATION FOR DOMESTIC OPEN MARKET OPERATIONS (As amended effective January 28, 2014)
1. The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, to the extent necessary to carry out the most recent domestic policy directive adopted at a meeting of the Committee:
A. To buy or sell in the open market U.S. government securities, including securities of the Federal Financing Bank, and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, from or to securities dealers and foreign and international accounts maintained at the Federal Reserve Bank of New York, on a cash, regular, or deferred delivery basis, for the System Open Market Account at market prices, and, for such Account, to exchange maturing U.S. government and federal agency securities with the Treasury or the individual agencies or to allow them to mature without replacement; and
B. To buy or sell in the open market U.S. government securities, and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, for the System Open Market Account under agreements to resell or repurchase such securities or obligations (including such transactions as are commonly referred to as repo and reverse repo transactions) in 65 business days or less, at rates that, unless otherwise expressly authorized by the Committee, shall be determined by competitive bidding, after applying reasonable limitations on the volume of agreements with individual counterparties.
2. The Federal Open Market Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1.A and 1.B from time to time for the purpose of testing operational readiness. The aggregate par value of such transactions of the type described in paragraph 1.A shall not exceed $5 billion per calendar year. The outstanding amount of such transactions of the type described in paragraph 1.B shall not exceed $5 billion at any given time. These transactions shall be conducted with prior notice to the Committee.
3. In order to ensure the effective conduct of open market operations, the Federal Open Market Committee authorizes the Federal Reserve Bank of New York to use agents in agency MBS-related transactions.
4. In order to ensure the effective conduct of open market operations, the Federal Open Market Committee authorizes the Federal Reserve Bank of New York to lend on an overnight basis U.S. government securities and securities that are direct obligations of any agency of the United States, held in the System Open Market Account, to dealers at rates that shall be determined by competitive bidding. The Federal Reserve Bank of New York shall set a minimum lending fee consistent with the objectives of the program and apply reasonable limitations on the total amount of a specific issue that may be auctioned and on the amount of securities that each dealer may borrow. The Federal Reserve Bank of New York may reject bids that could facilitate a dealer's ability to control a single issue as determined solely by the Federal Reserve Bank of New York. The Federal Reserve Bank of New York may lend securities on longer than an overnight basis to accommodate weekend, holiday, and similar trading conventions.
5. In order to ensure the effective conduct of open market operations, while assisting in the provision of short-term investments or other authorized services for foreign and international accounts maintained at the Federal Reserve Bank of New York and accounts maintained at the Federal Reserve Bank of New York as fiscal agent of the United States pursuant to section 15 of the Federal Reserve Act, the Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York:
A. For the System Open Market Account, to sell U.S. government securities and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States to such accounts on the bases set forth in paragraph 1.A under agreements providing for the resale by such accounts of those securities in 65 business days or less on terms comparable to those available on such transactions in the market;
B. For the New York Bank account, when appropriate, to undertake with dealers, subject to the conditions imposed on purchases and sales of securities in paragraph l.B, repurchase agreements in U.S. government securities and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, and to arrange corresponding sale and repurchase agreements between its own account and such foreign, international, and fiscal agency accounts maintained at the Federal Reserve Bank; and
C. For the New York Bank account, when appropriate, to buy U.S. government securities and obligations that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States from such foreign and international accounts maintained at the Federal Reserve Bank under agreements providing for the repurchase by such accounts of those securities on the same business day.
Transactions undertaken with such accounts under the provisions of this paragraph may provide for a service fee when appropriate.
6. In the execution of the Committee's decision regarding policy during any intermeeting period, the Committee authorizes and directs the Federal Reserve Bank of New York, upon the instruction of the Chairman of the Committee, to (i) adjust somewhat in exceptional circumstances the degree of pressure on reserve positions and hence the intended federal funds rate and to take actions that result in material changes in the composition and size of the assets in the System Open Market Account other than those anticipated by the Committee at its most recent meeting or (ii) undertake transactions of the type described in paragraphs 1.A and 1.B in order to appropriately address temporary disruptions of an operational or highly unusual nature in U.S. dollar funding markets. Any such adjustment as described in clause (i) shall be made in the context of the Committee's discussion and decision at its most recent meeting and the Committee's long-run objectives to foster maximum employment and price stability, and shall be based on economic, financial, and monetary developments during the intermeeting period. Consistent with Committee practice, the Chairman, if feasible, will consult with the Committee before making any instruction under this paragraph.
The Committee voted unanimously to amend the Authorization for Foreign Currency Operations, the Foreign Currency Directive, and the Procedural Instructions with Respect to Foreign Currency Operations in the form shown below. The approval of these documents included approval of the System's warehousing agreement with the U.S. Treasury. These documents were modified to incorporate the dollar and foreign currency liquidity swap arrangements authorized by a resolution on October 29, 2013. Changes were made to the Authorization for Foreign Currency Operations and the Procedural Instructions with Respect to Foreign Currency Operations to align the treatment of the liquidity swap arrangements and that of the reciprocal currency arrangements that have been in place with the central banks of Mexico and Canada since 1994 as part of the North American Framework Agreement. The Authorization for Foreign Currency Operations was amended to remove language regarding the transmission of pertinent information on System foreign currency operations to appropriate officials of the Treasury Department because this language duplicated language in the Program for Security of FOMC Information.
AUTHORIZATION FOR FOREIGN CURRENCY OPERATIONS (As amended effective January 28, 2014)
1. The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, for the System Open Market Account, to the extent necessary to carry out the Committee's foreign currency directive and express authorizations by the Committee pursuant thereto, and in conformity with such procedural instructions as the Committee may issue from time to time:
A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward transactions on the open market at home and abroad, including transactions with the U.S. Treasury, with the U.S. Exchange Stabilization Fund established by section 10 of the Gold Reserve Act of 1934, with foreign monetary authorities, with the Bank for International Settlements, and with other international financial institutions:
Australian dollars Brazilian reais Canadian dollars Danish kroner euro Japanese yen Korean won Mexican pesos New Zealand dollars Norwegian kroner Pounds sterling Singapore dollars Swedish kronor Swiss francs B. To hold balances of, and to have outstanding forward contracts to receive or to deliver, the foreign currencies listed in paragraph A above.
C. To draw foreign currencies and to permit foreign banks to draw dollars under the arrangements listed in paragraph 2 below, in accordance with the Procedural Instructions with Respect to Foreign Currency Operations.
D. To maintain an overall open position in all foreign currencies not exceeding $25.0 billion. For this purpose, the overall open position in all foreign currencies is defined as the sum (disregarding signs) of net positions in individual currencies, excluding changes in dollar value due to foreign exchange rate movements and interest accruals. The net position in a single foreign currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus outstanding contracts for future delivery of that currency, i.e., as the sum of these elements with due regard to sign.
2. The Federal Open Market Committee directs the Federal Reserve Bank of New York to maintain for the System Open Market Account (subject to the requirements of section 214.5 of Regulation N, Relations with Foreign Banks and Bankers):
A. Reciprocal currency arrangements with the following foreign banks: Foreign bank Amount of arrangement (millions of dollars equivalent) Bank of Canada 2,000 Bank of Mexico 3,000 B. Standing dollar liquidity swap arrangements with the following foreign banks:
Bank of Canada Bank of England Bank of Japan European Central Bank Swiss National Bank C. Standing foreign currency liquidity swap arrangements with the following foreign banks:
Bank of Canada Bank of England Bank of Japan European Central Bank Swiss National Bank Dollar and foreign currency liquidity swap arrangements have no pre-set size limits. Any new swap arrangements shall be referred for review and approval to the Committee. All swap arrangements are subject to annual review and approval by the Committee.
3. All transactions in foreign currencies undertaken under paragraph 1.A above shall, unless otherwise expressly authorized by the Committee, be at prevailing market rates. For the purpose of providing an investment return on System holdings of foreign currencies or for the purpose of adjusting interest rates paid or received in connection with swap drawings, transactions with foreign central banks may be undertaken at non-market exchange rates.
4. It shall be the normal practice to arrange with foreign central banks for the coordination of foreign currency transactions. In making operating arrangements with foreign central banks on System holdings of foreign currencies, the Federal Reserve Bank of New York shall not commit itself to maintain any specific balance, unless authorized by the Federal Open Market Committee. Any agreements or understandings concerning the administration of the accounts maintained by the Federal Reserve Bank of New York with the foreign banks designated by the Board of Governors under section 214.5 of Regulation N shall be referred for review and approval to the Committee.
5. Foreign currency holdings shall be invested to ensure that adequate liquidity is maintained to meet anticipated needs and so that each currency portfolio shall generally have an average duration of no more than 18 months (calculated as Macaulay duration). Such investments may include buying or selling outright obligations of, or fully guaranteed as to principal and interest by, a foreign government or agency thereof; buying such securities under agreements for repurchase of such securities; selling such securities under agreements for the resale of such securities; and holding various time and other deposit accounts at foreign institutions. In addition, when appropriate in connection with arrangements to provide investment facilities for foreign currency holdings, U.S. government securities may be purchased from foreign central banks under agreements for repurchase of such securities within 30 calendar days.
6. All operations undertaken pursuant to the preceding paragraphs shall be reported promptly to the Foreign Currency Subcommittee and the Committee. The Foreign Currency Subcommittee consists of the Chairman and Vice Chairman of the Committee, the Vice Chairman of the Board of Governors, and such other member of the Board as the Chairman may designate (or in the absence of members of the Board serving on the Subcommittee, other Board members designated by the Chairman as alternates, and in the absence of the Vice Chairman of the Committee, the Vice Chairman's alternate). Meetings of the Subcommittee shall be called at the request of any member, or at the request of the manager, System Open Market Account ("manager"), for the purposes of reviewing recent or contemplated operations and of consulting with the manager on other matters relating to the manager's responsibilities. At the request of any member of the Subcommittee, questions arising from such reviews and consultations shall be referred for determination to the Federal Open Market Committee.
7. The Chairman is authorized:
A. With the approval of the Committee, to enter into any needed agreement or understanding with the Secretary of the Treasury about the division of responsibility for foreign currency operations between the System and the Treasury;
B. To keep the Secretary of the Treasury fully advised concerning System foreign currency operations, and to consult with the Secretary on policy matters relating to foreign currency operations;
C. From time to time, to transmit appropriate reports and information to the National Advisory Council on International Monetary and Financial Policies.
8. All Federal Reserve Banks shall participate in the foreign currency operations for System Account in accordance with paragraph 3G(1) of the Board of Governors' Statement of Procedure with Respect to Foreign Relationships of Federal Reserve Banks dated January 1, 1944.
9. The Federal Open Market Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1, 2, and 5, and foreign exchange and investment transactions that it may be otherwise authorized to undertake from time to time for the purpose of testing operational readiness. The aggregate amount of such transactions shall not exceed $2.5 billion per calendar year. These transactions shall be conducted with prior notice to the Committee.
FOREIGN CURRENCY DIRECTIVE (As amended effective January 28, 2014)
1. System operations in foreign currencies shall generally be directed at countering disorderly market conditions, provided that market exchange rates for the U.S. dollar reflect actions and behavior consistent with IMF Article IV, Section 1.
2. To achieve this end the System shall:
A. Undertake spot and forward purchases and sales of foreign exchange.
B. Maintain reciprocal currency arrangements with foreign central banks in accordance with the Authorization for Foreign Currency Operations.
C. Maintain standing dollar liquidity swap arrangements with foreign banks in accordance with the Authorization for Foreign Currency Operations.
D. Maintain standing foreign currency liquidity swap arrangements with foreign banks in accordance with the Authorization for Foreign Currency Operations.
E. Cooperate in other respects with central banks of other countries and with international monetary institutions.
3. Transactions may also be undertaken:
A. To adjust System balances in light of probable future needs for currencies.
B. To provide means for meeting System and Treasury commitments in particular currencies, and to facilitate operations of the Exchange Stabilization Fund.
C. For such other purposes as may be expressly authorized by the Committee.
4. System foreign currency operations shall be conducted:
A. In close and continuous consultation and cooperation with the United States Treasury;
B. In cooperation, as appropriate, with foreign monetary authorities; and
C. In a manner consistent with the obligations of the United States in the International Monetary Fund regarding exchange arrangements under IMF Article IV.
PROCEDURAL INSTRUCTIONS WITH RESPECT TO FOREIGN CURRENCY OPERATIONS (As amended effective January 28, 2014)
In conducting operations pursuant to the authorization and direction of the Federal Open Market Committee (the "Committee") as set forth in the Authorization for Foreign Currency Operations and the Foreign Currency Directive, the Federal Reserve Bank of New York, through the manager, System Open Market Account ("manager"), shall be guided by the following procedural understandings with respect to consultations and clearances with the Committee, the Foreign Currency Subcommittee (the "Subcommittee"), and the Chairman of the Committee, unless otherwise directed by the Committee. All operations undertaken pursuant to such clearances shall be reported promptly to the Committee.
1. For the reciprocal currency arrangements authorized in paragraphs 2.A of the Authorization for Foreign Currency Operations:
A. Drawings must be approved by the Subcommittee (or by the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available) if the swap drawing proposed by a foreign bank does not exceed the larger of (i) $200 million or (ii) 15 percent of the size of the swap arrangement.
B. Drawings must be approved by the Committee (or by the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time available, or by the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available) if the swap drawing proposed by a foreign bank exceeds the larger of (i) $200 million or (ii) 15 percent of the size of the swap arrangement.
C. The manager shall also consult with the Subcommittee or the Chairman about proposed swap drawings by the System.
D. Any changes in the terms of existing swap arrangements shall be referred for review and approval to the Chairman. The Chairman shall keep the Committee informed of any changes in terms, and the terms shall be consistent with principles discussed with and guidance provided by the Committee.
2. For the dollar and foreign currency liquidity swap arrangements authorized in paragraphs 2.B and 2.C of the Authorization for Foreign Currency Operations:
A. Drawings must be approved by the Chairman in consultation with the Subcommittee. The Chairman or the Subcommittee will consult with the Committee prior to the initial drawing on the dollar or foreign currency liquidity swap lines if possible under the circumstances then prevailing; authority to approve subsequent drawings for either the dollar or foreign currency liquidity swap lines may be delegated to the manager by the Chairman.
B. Any changes in the terms of existing swap arrangements shall be referred for review and approval to the Chairman. The Chairman shall keep the Committee informed of any changes in terms, and the terms shall be consistent with principles discussed with and guidance provided by the Committee.
3. Any operation must be approved by:
A. The Subcommittee (or by the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available) if it:
i. Would result in a change in the System's overall open position in foreign currencies exceeding $300 million on any day or $600 million since the most recent regular meeting of the Committee.
ii. Would result in a change on any day in the System's net position in a single foreign currency exceeding $150 million, or $300 million when the operation is associated with repayment of swap drawings.
iii. Might generate a substantial volume of trading in a particular currency by the System, even though the change in the System's net position in that currency (as defined in paragraph 1.D of the Authorization for Foreign Currency Operations) might be less than the limits specified in 3.A.ii.
B. The Committee (or by the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time available, or by the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available) if it would result in a change in the System's overall open position in foreign currencies exceeding $1.5 billion since the most recent regular meeting of the Committee.
4. The Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1, 2, and 5 of the Authorization for Foreign Currency Operations and foreign exchange and investment transactions that it may be otherwise authorized to undertake from time to time for the purpose of testing operational readiness. The aggregate amount of such transactions shall not exceed $2.5 billion per calendar year. These transactions shall be conducted with prior notice to the Committee.
In its annual reconsideration of the Statement on Longer-Run Goals and Monetary Policy Strategy, participants generally agreed that only minor updates were required at this meeting. It was noted, however, that because this was the third year in which the statement was being issued, the coming year would be an appropriate time to consider whether the statement could be enhanced in any way. For example, some participants advocated an explicit indication that inflation persistently below the Committee's 2 percent longer-run objective and inflation persistently above that objective would be equally undesirable. Some others suggested that the statement could more clearly describe how the mandated goals of maximum employment and price stability are linked with the objective of financial stability. Following the discussion, the Committee voted to approve minor wording changes to the statement and to update the statement's reference to participants' estimates of the longer-run normal unemployment rate. Mr. Tarullo abstained from the vote because he continued to think that the statement had not advanced the cause of communicating or achieving greater consensus in the policy views of the Committee.
STATEMENT ON LONGER-RUN GOALS AND MONETARY POLICY STRATEGY (As amended effective January 28, 2014)
"The Federal Open Market Committee (FOMC) is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates. The Committee seeks to explain its monetary policy decisions to the public as clearly as possible. Such clarity facilitates well-informed decisionmaking by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.
Inflation, employment, and long-term interest rates fluctuate over time in response to economic and financial disturbances. Moreover, monetary policy actions tend to influence economic activity and prices with a lag. Therefore, the Committee's policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee's goals.
The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee reaffirms its judgment that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the Committee's ability to promote maximum employment in the face of significant economic disturbances.
The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market. These factors may change over time and may not be directly measurable. Consequently, it would not be appropriate to specify a fixed goal for employment; rather, the Committee's policy decisions must be informed by assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision. The Committee considers a wide range of indicators in making these assessments. Information about Committee participants' estimates of the longer-run normal rates of output growth and unemployment is published four times per year in the FOMC's Summary of Economic Projections. For example, in the most recent projections, FOMC participants' estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 5.8 percent.
In setting monetary policy, the Committee seeks to mitigate deviations of inflation from its longer-run goal and deviations of employment from the Committee's assessments of its maximum level. These objectives are generally complementary. However, under circumstances in which the Committee judges that the objectives are not complementary, it follows a balanced approach in promoting them, taking into account the magnitude of the deviations and the potentially different time horizons over which employment and inflation are projected to return to levels judged consistent with its mandate.
The Committee intends to reaffirm these principles and to make adjustments as appropriate at its annual organizational meeting each January."
By unanimous vote, the Committee amended its Rules of Organization to add the position of deputy manager of the System Open Market Account.
By unanimous vote, the Committee amended its Program for Security of FOMC Information with minor changes to the review and reporting process for breaches in the information security rules and with several other minor updates and clarifications. By unanimous vote, the Committee selected Simon Potter and Lorie K. Logan to serve at the pleasure of the Committee as manager and deputy manager of the System Open Market Account, respectively, on the understanding that their selection was subject to their being satisfactory to the Federal Reserve Bank of New York.
Secretary's note: Advice subsequently was received that the manager and deputy manager selections indicated above were satisfactory to the Federal Reserve Bank of New York.
Developments in Financial Markets and the Federal Reserve's Balance Sheet The manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets as well as System open market operations during the period since the Federal Open Market Committee met on December 17-18, 2013. The manager also presented an update on the ongoing overnight reverse repurchase agreement (ON RRP) exercise. All operations to date had proceeded smoothly. The number of participating counterparties and total allotment in the daily operations increased in late December, in part reflecting the fact that overnight secured rates were low compared with the fixed rate offered in the operations as well as the increase in the cap on individual counterparty bids to $3 billion from $1 billion that was implemented on December 23, 2013. Counterparties' year-end balance sheet adjustments also boosted participation for a time; the ON RRP operations reportedly helped limit downward pressure on money market rates around year-end.
Following the manager's report, meeting participants discussed a proposal to extend the Desk's authority to conduct the ON RRP exercise for 12 months and to lift the per-counterparty bid limit. Under the terms of the proposal, the interest rate on ON RRPs would remain between 0 and 5 basis points. The Chair of the FOMC would authorize any changes in the offered rate or per-counterparty bid limit. Adjustments to the bid limit would be made in gradual steps, and the Committee would be consulted before the exercise would move to full allotment. The proposed changes were intended to allow the Committee to obtain additional information about the potential usefulness of ON RRP operations for affecting market interest rates when that step becomes appropriate. Most meeting participants supported the proposal, with a couple emphasizing that the period for which the exercise would be extended was likely sufficiently long that counterparties would be willing to adjust their current money market practices, thereby providing better information on the possible market effects of such operations. It was remarked that the additional insights obtained from the exercise could be useful in the context of the Committee's future discussions about monetary policy implementation over the medium and longer term. A number of participants, however, indicated a preference for retaining a cap on the per-counterparty bid limit until the Committee has discussed possible approaches to medium-term policy implementation, and a few of these participants preferred to extend the exercise for a shorter period.
Following the discussion, the Committee approved the following resolution:
"The Federal Open Market Committee (FOMC) authorizes the Federal Reserve Bank of New York to conduct a series of fixed-rate, overnight reverse repurchase operations involving U.S. Government securities, and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, for the purpose of further assessing the potential role for such operations in supporting the implementation of monetary policy. The reverse repurchase operations authorized by this resolution shall be offered at a fixed rate that may vary from zero to five basis points, and for an overnight term, or such longer term as is warranted to accommodate weekend, holiday, and similar trading conventions. Any change to the offered rate within the range specified above or the per-counterparty bid limits will require approval of the Chairman. The System Open Market Account manager will notify the FOMC in advance about any changes to the terms of operations. These operations shall be authorized through January 30, 2015."
Messrs. Fisher and Plosser dissented because of their preference for retaining a cap on the maximum size of counterparties' offers during the extension; Mr. Plosser also preferred a shorter extension of the exercise.
By unanimous vote, the Committee ratified the Open Market Desk's domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System's account over the intermeeting period.
Staff Review of the Economic Situation The information reviewed for the January 28-29 meeting indicated that the rate of economic growth picked up in the second half of 2013. Total payroll employment increased in December, but at a slower pace than in previous months, and the unemployment rate declined but was still elevated. Consumer price inflation continued to run below the Committee's longer-run objective, while measures of longer-term inflation expectations remained stable.
Overall, labor market indicators appeared consistent with a gradual ongoing improvement in labor market conditions. Total nonfarm payroll employment expanded by less in December than in the previous two months, perhaps partly because of unusually bad weather. The unemployment rate declined to 6.7 percent in December. The labor force participation rate also decreased, and the employment-to-population ratio was little changed. The rate of long-duration unemployment declined, but the share of workers employed part time for economic reasons was little changed, and both measures remained elevated. Among other indicators of labor market conditions, the rate of job openings edged up in recent months, and the share of small businesses reporting that they had hard-to-fill positions trended up. Measures of firms' hiring plans were higher than a year earlier, but the rate of gross private-sector hiring was still low. Initial claims for unemployment insurance moved down, on balance, over the intermeeting period, and household expectations of the labor market situation improved, on net, in December and early January.
Manufacturing production increased at a robust pace in the fourth quarter, with broad-based gains across industries. Indicators of manufacturing production, such as the readings on new orders from national and regional manufacturing surveys, were consistent with a further expansion in factory output early this year, but automakers' production schedules indicated that the pace of light motor vehicle assemblies would decline in the first quarter.
Real personal consumption expenditures (PCE) rose at a faster pace in October and November than in the third quarter. In December, the components of the nominal retail sales data used by the Bureau of Economic Analysis to construct its estimate of PCE increased strongly, although sales of light motor vehicles declined after posting a large gain in November. Recent information on several important factors that influence household spending was somewhat mixed. Households' real disposable income was little changed in October and November, and the expiration of the emergency unemployment compensation program at the end of 2013 was expected to reduce aggregate income growth early this year. However, households' net worth likely continued to expand in recent months as a result of rising equity prices and home values. Consumer sentiment in the Thomson Reuters/University of Michigan Surveys of Consumers improved, on balance, in December and early January after a decline in the fall of 2013.
The pace of activity in the housing sector showed some tentative signs of stabilizing, as the effects of the past year's rise in mortgage rates appeared to wane. Single-family housing starts increased in November and only partly reversed that gain in December, while permits for new construction rose a little, on balance, in the fourth quarter. New home sales declined in November and December but were nonetheless higher than in the third quarter, and existing home sales flattened out in December after decreasing for several months.
Real private expenditures for business equipment and intellectual property products appeared to strengthen in the fourth quarter, as nominal shipments of nondefense capital goods rose at a solid pace. Although nominal new orders for these capital goods declined in December and November's increase was revised down, the level of orders remained above that of shipments, pointing to further increases in shipments in subsequent months. Other forward-looking indicators, such as surveys of business conditions and capital spending plans, were also generally consistent with near-term gains in business equipment spending. Nominal expenditures for nonresidential construction, which had been flat in October, moved higher in November. Data on book-value inventories suggested little change in the pace of nonfarm inventory investment in the fourth quarter, and the available information did not point to significant inventory imbalances in most industries.
Real federal government purchases likely fell sharply in the fourth quarter because of continued declines in defense spending and the temporary partial shutdown of the federal government in October. Increases in real state and local government purchases appeared to have moderated in the fourth quarter. The payrolls of these governments were about unchanged during the fourth quarter, and nominal state and local construction expenditures for October and November increased at a slower pace, on net, than in the third quarter.
The U.S. international trade deficit narrowed substantially in November, as exports increased and imports fell. The higher value of exports stemmed in large part from an increase in sales of petroleum products, while the fall in imports was primarily due to a decline in purchases of crude oil.
Total U.S. consumer price inflation, as measured by the PCE price index, was a little under 1 percent over the 12 months ending in November, well below the Committee's 2 percent longer-term objective. Over that period, consumer energy prices declined, consumer food prices rose modestly, and core PCE prices--which exclude consumer food and energy prices--increased slightly more than 1 percent. In December, the consumer price index (CPI) rose somewhat faster than in recent months, primarily reflecting an upturn in consumer energy prices; core CPI inflation remained low. Both near-term and longer-term inflation expectations from the Michigan survey were little changed, on net, in December and early January. Over the 12 months ending in December, nominal average hourly earnings for all employees increased slightly faster than consumer price inflation.
Foreign economic activity continued to improve, with economic growth in the third quarter of 2013 higher than in the first half of the year and more recent indicators suggesting further gains. The pickup was widespread, as the euro area registered a second consecutive quarter of positive economic growth, the Mexican economy bounced back from a second-quarter contraction, and stronger external demand boosted growth in emerging market economies more generally. At the same time, inflation continued to run below central bank targets in several advanced economies, and monetary policy remained expansionary in these economies. Inflation in emerging market economies remained moderate on average, although Brazil, India, and Turkey again tightened monetary policy during the intermeeting period in response to concerns about inflation and currency depreciation. The policy tightening in Turkey was particularly sharp and followed several days of heightened financial market pressures toward the end of the intermeeting period. Similar pressures were evident in some other emerging market economies as well.
Staff Review of the Financial Situation Financial market conditions over the intermeeting period were importantly influenced by Federal Reserve communications, somewhat better-than-expected economic data releases, and developments in emerging market economies. On net, financial conditions in the United States remained supportive of growth in economic activity and employment: Equity prices increased a bit, longer-term interest rates declined, and the dollar appreciated against most other currencies.
While investors were somewhat surprised by the FOMC's decision at its December meeting to reduce the pace of its asset purchases, the policy action and associated communications appeared to have only a limited effect on market participants' outlook for the Federal Reserve's balance sheet. Indeed, the Committee's decision to cut the pace of purchases and its rationale for doing so seemed to increase investors' confidence in the economic outlook, a shift that was further supported by subsequent U.S. economic data releases. However, those effects were reversed late in the period when investors appeared to pull back from riskier assets in reaction to rising concern about developments in some emerging market economies and their possible implications for global economic growth.
Results from the Desk's survey of primary dealers conducted prior to the January meeting indicated that dealers anticipated only minor changes to the Committee's postmeeting statement. In addition, the median dealer expected a $10 billion reduction in the monthly pace of asset purchases to be announced at each meeting in the first three quarters of 2014, with the purchase program ending with a final $15 billion reduction at the October 2014 meeting.
On balance, 10-and 30-year nominal Treasury yields declined about 10 basis points and 20 basis points, respectively, over the intermeeting period, in part because of an increase in safe-haven demands toward the end of the period. The December policy action and subsequent muted market reaction led to decreased uncertainty about future longer-term interest rates, perhaps contributing to the decline in longer-term rates. The measure of 5-year inflation compensation based on Treasury inflation-protected securities increased a little, while inflation compensation 5 to 10 years ahead decreased somewhat.
Conditions in short-term dollar funding markets generally remained stable. Year-end funding pressures were modest, and overnight money market rates declined about in line with their typical behavior in past years. Repo rates were quite low at the end of the year and remained low through most of January, leading to increased participation in the Federal Reserve's ON RRP operations, with a substantial temporary increase in take-up at year-end. Primarily reflecting the increased participation in the exercise, reserve balances expanded more slowly and the rate of increase in the monetary base slowed in December. M2 continued to expand moderately.
Reflecting the improved outlook for economic activity and despite mixed fourth-quarter earnings results, the stock prices of bank holding companies rose notably and spreads on credit default swaps for the largest bank holding companies narrowed somewhat. According to the January Senior Loan Officer Opinion Survey on Bank Lending Practices, domestic banks continued to ease their lending standards and some loan terms on balance; they also experienced an increase in demand, on net, in most major loan categories in the fourth quarter.
Broad U.S. equity price indexes edged higher, on net, over the intermeeting period, and equity issuance by nonfinancial corporations increased. Credit remained widely available to large nonfinancial corporations. Corporate bond spreads continued to narrow over the intermeeting period, with investment-grade bond spreads reaching their lowest levels in several years and those on speculative-grade corporate bonds approaching pre-crisis levels. Bond issuance by domestic corporations generally stayed strong, commercial and industrial loans on banks' books increased by a notable amount late in the fourth quarter, and issuance of leveraged loans and collateralized loan obligations generally continued apace.
Conditions in the commercial real estate sector recovered further in the fourth quarter, with rising property prices and fewer distressed sales. In the market for commercial mortgage-backed securities, investor demand remained strong and spreads continued to be tight despite high issuance near year-end. Commercial real estate loans on banks' books expanded moderately.
Credit conditions in municipal bond markets generally remained stable, although a few issuers continued to experience substantial strain. Available data suggest that, for the first time in several years, the ratings agency Moody's Investors Service made more upgrades than downgrades to municipal debt in the fourth quarter. However, Moody's put Puerto Rico on watch for a downgrade.
Households continued to face mixed credit conditions in the fourth quarter. Consumer credit expanded again in November, boosted by further gains in auto and student loans, and bank credit data indicate that this expansion likely continued through December. In contrast, credit card balances were little changed, on net, through November, as underwriting appeared to remain quite tight. The volume of mortgage applications for home purchases held about steady since the previous FOMC meeting while refinance applications remained at very low levels. Mortgage rates declined slightly, in line with modestly lower yields on agency mortgage-backed securities. Despite tight mortgage availability and subdued borrowing, house prices continued to increase in November, although not as quickly as earlier in 2013.
Financial market conditions in the advanced foreign economies over the intermeeting period generally became more supportive of growth. Long-term government bond yields declined and headline equity indexes increased, on net, in most of these countries, with bank stock prices in the euro area rising more than broader indexes. In addition, debt issuance by both governments and banks in the European periphery picked up, and sovereign yield spreads in those countries were flat to down, on balance, over the period. In contrast, amid a ratcheting-up of financial market strains in some emerging market economies, headline stock price indexes in most emerging market economies declined, outflows from emerging market mutual funds continued, and yield spreads on dollar-denominated emerging market bonds increased. Local-currency yields rose in some emerging market economies, such as Brazil, South Africa, and Turkey, and short-term interbank rates in China were volatile and trended higher over the period. The foreign exchange value of the dollar appreciated against most other currencies over the period, with particularly large increases against the Argentine peso and the Turkish lira.
Staff Economic Outlook In the economic projection prepared by the staff for the January FOMC meeting, growth of real gross domestic product (GDP) in the second half of 2013 was estimated to have been stronger than the staff had expected, though some of the strength in inventory investment and net exports was possibly transitory. The staff's medium-term forecast for real GDP growth was little revised, on balance, as the momentum implied by faster GDP growth in the second half of 2013 was largely offset by a higher projected path for the foreign exchange value of the dollar. In addition, the staff revised downward its view of the pace at which potential output had increased over recent years and would increase this year and next. The staff continued to project that real GDP would expand more quickly over the next few years than in 2013 and that real GDP would rise faster than potential output. This acceleration in economic activity was expected to be supported by still-accommodative monetary policy and an easing in the effects of fiscal policy restraint on economic growth, as well as by increases in consumer and business confidence, further improvements in credit availability and financial conditions, and continued gains in foreign economic growth. The expansion in economic activity was anticipated to lead to a slow reduction in resource slack over the projection period, and the unemployment rate was expected to decline gradually, reaching the staff's estimate of its longer-run natural rate in 2016.
The staff's forecast for inflation was little changed from the projection prepared for the previous FOMC meeting, although the near-term forecast was revised down a little to reflect recent declines in energy prices. The staff continued to forecast that inflation would run well below the Committee's 2 percent objective early this year but above the low level observed over much of 2013. Over the medium term, with longer-run inflation expectations assumed to remain stable, changes in commodity and import prices expected to be muted, and slack in labor and product markets receding gradually, inflation was projected to move back slowly toward the Committee's objective.
In considering recent events in emerging market economies, the staff judged that the effects of recent financial market volatility had not been large enough to have a material effect on the overall outlook for those economies and, similarly, that the spillover effects on the United States of developments to date were likely to be modest. Because conditions were in flux, however, these markets would require careful monitoring.
The staff continued to see a number of risks around its outlook. The downside risks to the forecast for real GDP growth were thought to have diminished, but the risks were still seen as tilted a little to the downside because, with the target federal funds rate at its effective lower bound, the economy was not well positioned to withstand future adverse shocks. At the same time, the staff viewed the risks around its outlook for the unemployment rate and for inflation as roughly balanced.
Participants' Views on Current Conditions and the Economic Outlook In their discussion of the economic situation and the outlook, participants generally noted that economic activity had strengthened more in the second half of 2013 than they had expected at the time of the December meeting. In particular, consumer spending had strengthened, and business investment appeared to be on a more solid uptrend. Although the government shutdown likely damped economic growth somewhat, the extent of restraint on growth from fiscal policy diminished late in the year. However, several participants observed that temporary factors had helped boost real GDP during the second half, pointing specifically to the substantial contributions from net exports and increased inventory investment. As a result, participants generally did not expect the recent pace of economic growth to be sustained, but they nonetheless anticipated that the economy would expand at a moderate pace in coming quarters. That expansion was expected to be supported by highly accommodative monetary policy, a further easing of fiscal restraint, and a modest additional pickup in global economic growth, as well as continued improvement in credit conditions and the ongoing strengthening in household balance sheets. A number of participants noted that recent economic news had reinforced their confidence in their projection of moderate economic growth over the medium run. It was also noted that recent developments in several emerging market economies, if they continued, could pose downside risks to the outlook. Overall, most participants still viewed the risks to the outlook for the economy and the labor market as having become more nearly balanced in recent months.
Consumer spending had advanced strongly in late 2013, contributing importantly to the pickup in growth of economic activity. This picture was reinforced by survey data that suggested that consumers had become more optimistic about future income gains. While noting that households remained cautious, participants cited a number of factors that were likely to continue to underpin gains in household spending, including rising house prices, growing confidence in the sustainability of the economic expansion, increasing payrolls, and the high ratio of household wealth to disposable income.
Although the recovery in the housing sector had slowed somewhat in recent months, a number of participants reported solid activity in their Districts. Moreover, various factors were seen as likely to support stronger growth in the sector going forward, including favorable housing affordability, which was in turn partly due to still-low mortgage rates, and demographic trends. However, there were also reasons for being cautious about the prospects for housing construction, such as recent disappointing news on permits for new construction and the possibility that investors' interest in purchasing properties for the rental market would recede.
Business contacts in many parts of the country reported that they were guardedly optimistic about prospects for 2014. While inventory investment would likely come down from its recent unusually high level, participants heard more reports that the business sector was willing to increase spending on capital projects. A number of factors were cited as likely to support such an increase, including the high level of profits, the low level of interest rates, a reduction in policy uncertainty, the easing of lending standards, and large holdings of liquid assets by corporations.
In discussing financial developments over the intermeeting period, several participants noted that the Committee's December decision to make a modest reduction in the monthly pace of asset purchases had not resulted in an adverse market reaction. Several participants observed that current market expectations for asset purchases and the future course of the federal funds rate were reasonably well aligned with participants' own expectations of the path for policy. However, one participant expressed concern that longer-term interest rates could rise sharply if market participants' expectations of future monetary policy came to deviate from those of policymakers, as appeared to have happened last summer, while a couple of others argued that the current highly accommodative stance of monetary policy could lead investors to take on excessive risk and so undermine longer-term financial stability. Recent volatility in emerging markets appeared to have had only a limited effect to date on U.S. financial markets. Nevertheless, participants agreed that a number of developments in financial markets needed to be watched carefully, including the financing situation of the Puerto Rican government and particularly the unfolding events in emerging markets.
In their discussion of recent labor market developments, many participants commented on the relatively small increase in payrolls in December and the further decline in the unemployment rate. A number of participants indicated that the December payrolls figure may have been an anomaly, perhaps importantly reflecting bad weather, and it was noted that the initial readings on payrolls in recent years had subsequently tended to be revised up. In addition, some participants reported that their business contacts had become more positive about hiring in the year ahead. Participants continued to debate the reliability of the unemployment rate as an indicator of overall labor market conditions, taking into account the further decline in labor force participation in recent quarters, still-elevated levels of underemployment and long-term unemployment, and the apparent absence of wage pressures. Much of the downward trend in the labor force participation rate since the start of the recession was seen as the result of shifts in the demographic composition of the workforce and the retirement of older workers; the extent of the cyclical portion of the decline was viewed by some as difficult to gauge at present. A few participants judged that the decline in participation for younger and prime-age workers likely reflected the slow recovery in jobs and wages and so might be reversed as labor market conditions strengthened. In addition, several others pointed out that broader concepts of the unemployment rate, such as those that include nonparticipants who report that they want a job and those working part time who want full-time work, remained well above the official unemployment rate, suggesting that considerable labor market slack remained despite the reduction in the unemployment rate. A few participants noted worker shortages in specific regions and occupations, with one District reporting widespread shortages of skilled labor leading to emerging labor cost pressures. However, a number of participants saw the low ! rates of increase in most measures of wages as consistent with continued labor market slack.
Inflation remained below the Committee's longer-run objective over the intermeeting period. Participants still anticipated that, with longer-run inflation expectations stable, transitory factors that had been damping inflation likely to recede, and economic activity picking up, inflation would move back toward the Committee's 2 percent objective over the medium run. However, several factors that cast doubt on this outcome were also mentioned, including slow growth in labor costs, the lack of pricing power reported by business contacts in various parts of the country, the low level of inflation in other advanced economies, and the danger that inflation expectations at short and medium horizons might not be as well anchored as longer-run inflation expectations. Participants noted that inflation persistently below the Committee's objective would pose risks to economic performance and that inflation developments would need to be monitored carefully.
In their discussion of the path for monetary policy, most participants judged that the incoming information about the economy was broadly in line with their expectations and that a further modest step down in the pace of purchases was appropriate. A couple of participants observed that continued low readings on inflation and considerable slack in the labor market raised questions about the desirability of reducing the pace of purchases; these participants judged, however, that a pause in the reduction of purchases was not justified at this stage, especially in light of the strength of the economy in the second half of 2013. Several participants argued that, in the absence of an appreciable change in the economic outlook, there should be a clear presumption in favor of continuing to reduce the pace of purchases by a total of $10 billion at each FOMC meeting. That said, a number of participants noted that if the economy deviated substantially from its expected path, the Committee should be prepared to respond with an appropriate adjustment to the trajectory of its purchases.
Participants agreed that, with the unemployment rate approaching 6-1/2 percent, it would soon be appropriate for the Committee to change its forward guidance in order to provide information about its decisions regarding the federal funds rate after that threshold was crossed. A range of views was expressed about the form that such forward guidance might take. Some participants favored quantitative guidance along the lines of the existing thresholds, while others preferred a qualitative approach that would provide additional information regarding the factors that would guide the Committee's policy decisions. Several participants suggested that risks to financial stability should appear more explicitly in the list of factors that would guide decisions about the federal funds rate once the unemployment rate threshold is crossed, and several participants argued that the forward guidance should give greater emphasis to the Committee's willingness to keep rates low if inflation were to remain persistently below the Committee's 2 percent longer-run objective. Additional proposals included relying to a greater extent on the Summary of Economic Projections as a communications device and including in the guidance an indication of the Committee's willingness to adjust policy to lean against undesired changes in financial conditions.
A few participants raised the possibility that it might be appropriate to increase the federal funds rate relatively soon. One participant cited evidence that the equilibrium real interest rate had moved higher, and a couple of them noted that some standard policy rules tended to suggest that the federal funds rate should be raised above its effective lower bound before the middle of this year. Other participants, however, suggested that prescriptions from standard policy rules were not appropriate in current circumstances, either because the target federal funds rate had been constrained by the lower bound for some time or because the equilibrium real rate of interest was likely still being held down by various factors, including the lingering effects of the financial crisis, and was significantly below the value of the longer-run rate built into standard policy rules.
Committee Policy Action Committee members saw the information received over the intermeeting period as indicating that growth in economic activity had picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate had declined but remained elevated when judged against members' estimates of the longer-run normal rate of unemployment. Household spending and business fixed investment had advanced more quickly in recent months than earlier in 2013, while the recovery in the housing sector had slowed somewhat. Fiscal policy was restraining economic growth, although the extent of the restraint had diminished. The Committee expected that, with appropriate policy accommodation, the economy would expand at a moderate pace and the unemployment rate would gradually decline toward levels consistent with the dual mandate. Moreover, members continued to judge that the risks to the outlook for the economy and the labor market had become more nearly balanced. Inflation was running below the Committee's longer-run objective, and this was seen as posing possible risks to economic performance, but members anticipated that stable inflation expectations and strengthening economic activity would, over time, return inflation to the Committee's 2 percent objective. However, in light of their concerns about the persistence of low inflation, many members saw a need for the Committee to monitor inflation developments carefully for evidence that inflation was moving back toward its longer-run objective.
In their discussion of monetary policy in the period ahead, all members agreed that the cumulative improvement in labor market conditions and the likelihood of continuing improvement indicated that it would be appropriate to make a further measured reduction in the pace of its asset purchases at this meeting. Members again judged that, if the economy continued to develop as anticipated, further reductions would be undertaken in measured steps. Members also underscored that the pace of asset purchases was not on a preset course and would remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the efficacy and costs of purchases. Accordingly, the Committee agreed that, beginning in February, it would add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and would add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month. While making a further measured reduction in its pace of purchases, the Committee emphasized that its holdings of longer-term securities were sizable and would still be increasing, which would promote a stronger economic recovery by maintaining downward pressure on longer-term interest rates, supporting mortgage markets, and helping to make broader financial conditions more accommodative. The Committee also reiterated that it would continue its asset purchases, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability.
In considering forward guidance about the target federal funds rate, all members agreed to retain the thresholds-based language employed in recent statements. In addition, the Committee decided to repeat the qualitative guidance, introduced in December, clarifying that a range of labor market indicators would be used when assessing the appropriate stance of policy once the unemployment rate threshold had been crossed. Members also agreed to reiterate language indicating the Committee's anticipation, based on its current assessment of additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments, that it would be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's longer-run objective.
Members also discussed other elements of the policy statement to be issued following the meeting. Members agreed on updating the description of the state of the economy to reflect the recent strength of household and business spending and to note that, although the labor market showed further improvement on balance, the recent indicators were mixed. Members did not see an appreciable change in the balance of risks and so left the statement's description of risks unchanged.
At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until it was instructed otherwise, to execute transactions in the SOMA in accordance with the following domestic policy directive:
"Consistent with its statutory mandate, the Federal Open Market Committee seeks monetary and financial conditions that will foster maximum employment and price stability. In particular, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to undertake open market operations as necessary to maintain such conditions. Beginning in February, the Desk is directed to purchase longer-term Treasury securities at a pace of about $35 billion per month and to purchase agency mortgage-backed securities at a pace of about $30 billion per month. The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency mortgage-backed securities transactions. The Committee directs the Desk to maintain its policy of rolling over maturing Treasury securities into new issues and its policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System's balance sheet that could affect the attainment over time of the Committee's objectives of maximum employment and price stability." The vote encompassed approval of the statement below to be released at 2:00 p.m.:
"Information received since the Federal Open Market Committee met in December indicates that growth in economic activity picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate declined but remains elevated. Household spending and business fixed investment advanced more quickly in recent months, while the recovery in the housing sector slowed somewhat. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.
Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee continues to see the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in February, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee's sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.
The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to ¼ percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent."
Voting for this action: Ben Bernanke, William C. Dudley, Richard W. Fisher, Narayana Kocherlakota, Sandra Pianalto, Charles I. Plosser, Jerome H. Powell, Jeremy C. Stein, Daniel K. Tarullo, and Janet L. Yellen.
Voting against this action: None.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, March 18-19, 2014. The meeting adjourned at 10:55 a.m. on January 29, 2014.
Notation Vote By notation vote completed on January 7, 2014, the Committee unanimously approved the minutes of the Committee meeting held on December 17-18, 2013.
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William B. English Secretary
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ServiceNow: Profits in the Cloud
Large companies need help handling their IT infrastructure, and this featured stock is emerging as a trusted partner in that area, suggests Mike Cintolo, editor of Cabot Top Ten Trader.
ServiceNow (NOW) makes Cloud-based software that keeps work flowing, consolidates data, automates the administration of new computers, and lets the IT department monitor activities.
ServiceNow's software is sold on a subscription basis and its number of subscribers topped 2,000 for the first time in Q4. It also boasts a subscription renewal rate of 96%, making for excellent recurring revenue.
The company has been featured in our newsletter five times since it came public in June 2012, and its latest appearance comes courtesy of a Q4 earnings report that featured a 67% jump in revenue.
The two cent loss in EPS was above the forecasted one cent, but investors don't seem to mind. The quarterly report prompted positive notes from four different analysts, who noted that the company's estimates for Q1 and full-year 2014 revenue were well above analysts' projections.
The company's expansion of its product offerings to include human resource automation also came in for positive comments.
ServiceNow is taking market share away from big companies like CA Technologies, HP, IBM, and BMC Software, and investors are taking note. Not even recent patent infringement accusations from HP have made a dent in investors' opinion of ServiceNow.
NOW spent 12 weeks trading under resistance at $58 from October through December, but got moving quickly in January. The stock corrected from $62 to $58 just ahead of earnings, but popped to $70 briefly on the good news.
The stock has since found support at $62. With a little patience, you should be able to sharpshoot some NOW on a dip to $64. A dip all the way to its 50-day moving average, now at $57, would be abnormal.
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Monday, February 17, 2014
Best Rising Companies To Invest In 2015
NEW YORK (TheStreet) -- Hewlett-Packard Co. (HPQ) was rising 2.85% to $28.49 on Monday afternoon after the company revealed its plans to expand its retail solutions portfolio.
At Monday's National Retail Federation Convention & Expo, HP unveiled its new enhanced line of touch and non-touch digital signage displays, its new line of value-priced displays and more upgrades to its mobile and fixed point of sale solutions. The company announced six new DSDs that would help retailers boost engagement with customers via interactive digital platforms, along with additions to the HP RP7 Retail System that would help retailers better serve customers in stores.
HP also intends to show off the HP MX10 Retail Solution, a system that allows retailers to improve customer service by permitting transitions between mobile and FOS solutions.
Best Rising Companies To Invest In 2015: Zingmobile Group Ltd(ZMG.AX)
Zingmobile Group Limited, an investment holding company, publishes value-added mobile content, services, and applications for the mobile market primarily in Singapore. It provides ecommerce and mobile content services, technology related services, and mobile marketing solutions. The company also involves in the sale and licensing of multimedia applications. It offers Alchemy Platform that provides the tools to package, deliver, store, publish, analyze, review, and bill products and services, as well as manages and supports the delivery processes, including testing and quality control, pricing and packaging, catalogue management, and mobile device profiling. In addition, the company also offers Mobile 2.0, which provides various ways of payment and enables customers to download mobile contents on to their mobiles; and Mobiletainment that delivers mobile media contents to approximately 500 million mobile subscribers in the Asia Pacific region. It delivers its content, servic es, and applications through various advertising mediums, which include print media, television, and radio. Zingmobile Group Limited was founded in 2002 and is headquartered in Singapore.
Best Rising Companies To Invest In 2015: Rockville Financial Inc.(RCKB)
Rockville Financial, Inc. operates as the holding company for Rockville Bank that provides a range of banking services to consumer and commercial customers. The company accepts deposit instruments, which include checking, savings, money market savings accounts, negotiable order of withdrawal accounts, and fixed-rate time deposits. Its loan portfolio comprises commercial and industrial loans; residential mortgage loans; commercial real estate loans; consumer loans; commercial and residential construction loans; commercial business loans; and installment, collateral, and other loans. As of July 14, 2011, the company operated 21 branches in Tolland, Hartford, and New London counties in Connecticut. It operates 41 automated teller machines (ATM), including 9 stand-alone ATM facilities. The company was founded in 1858 and is based in Rockville, Connecticut. Rockville Financial, Inc. is a subsidiary of Rockville Financial MHC, Inc.
Hot Services Stocks To Invest In Right Now: Ibio Inc (IBIO)
iBio, Inc. (iBio), incorporated on April 17, 2008, is a biotechnology company focused on commercializing its technologies, the iBioLaunch platform for vaccines and therapeutic proteins, as well as the iBioModulator platform for vaccine enhancement. Vaccine candidates on its platform are applicable to newly emerging strains of hemagglutinin type 1 and neuraminidase type 1 (H1N1), swine-like influenza, hemagglutinin type 5 and neuraminidase type 1 (H5N1) avian influenza, yellow fever, and anthrax. The Company licenses or otherwise grants use rights to government and non-governmental organization (NGO) entities for not-for-profit applications of the intellectual property for the development or application for which they granted or were granted funding, and to Fraunhofer USA, Inc. (FhCMB) for research purposes and applications in other fields.
The Company�� platform technology is referred to as iBioLaunch technology or the iBioLaunch platform, and the category of this technology is referred to as plant-based technology or as a plant-based platform. The Company has exclusive control over, and the rights to ownership of, the intellectual property related to all human health and veterinary influenza applications of the plant-based technology developed by FhCMB. Its property consists of the technology platform pursuant, to which hydroponically grown green plants can be used for the accelerated development and manufacture of high-value proteins of interest as candidate therapeutic products and vaccines applicable to a range of disease agents, such as influenza, sleeping sickness, anthrax, plague, human papillomavirus (HPV), and veterinary influenza applications.
Through FhCMB and their funding from the Bill & Melinda Gates Foundation, it is developing vaccine candidates targeting pathogenic avian influenza (H5N1) viruses based upon the iBioLaunch platform. These candidates have demonstrated immunogenicity and have been successfully tested in mice and ferrets for protective efficacy.! Like its candidate vaccines for seasonal influenza, its candidate vaccines for avian influenza are subunit vaccines. iBio has commercial rights to vaccine candidates developed pursuant to its business structure based on fusing a protein component of HPV called the E7 antigen, to the LicKM protein of the bacterium Clostridium thermocellum. It has commercial rights to an oral anthrax booster vaccine candidate developed by FhCMB in collaboration with the Naval Medical Research Center (NMRC).
Advisors' Opinion:- [By Bryan Murphy]
If the name Ibio Inc. (NYSEMKT:IBIO) rings a bell, it may be because I put some bullish thoughts into print regarding the stock back on June 21st. I reiterated my optimism on July 12th. What can I say? It's fun to be right. IBIO shares have advanced 17% since my first look in late June. Then again, most of that big jump has unfurled in the last couple of days, meaning Ibio Inc. is overbought. Do we trust the breakout move, or do we fear a pullback? Answer: That depends.
Best Rising Companies To Invest In 2015: Genuine Parts Company (GPC)
Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, Canada, and Mexico. The company operates in four segments: Automotive Parts Group, Industrial Parts Group, Office Products Group, and Electrical/Electronic Materials Group. The Automotive Parts Group segment distributes automotive replacement parts for imported vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, and heavy duty equipment. This segment also distributes accessory items used in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial concerns, and individuals. It owns and operates automotive parts distribution centers and automotive parts stores under the NAPA name. The Industrial Parts G roup segment distributes industrial replacement parts and related supplies, such as bearings, mechanical power transmission, industrial automation, hose, hydraulic and pneumatic components, industrial supplies, and material handling products. This segment serves various industries, including the food, forest products, primary metal, paper, mining, automotive, petrochemical, and pharmaceutical industries. The Office Products Group segment involves in the wholesale distribution of a line of office and other business related products that are used in the daily operation of businesses, schools, offices, and institutions. The Electrical/Electronic Materials Group segment distributes insulating and conductive materials, assembly tools, test equipment, and custom fabricated parts. This segment provides distribution services to original equipment manufacturers, motor repair shops, and assembly markets. The company was founded in 1928 and is headquartered in Atlanta, Georgia.
Advisors' Opinion:- [By Chuck Saletta]
Speaking of those goals...
Last week, two companies paid their dividends to the iPIG portfolio: railroad giant Union Pacific (NYSE: UNP ) and car parts magnate Genuine Parts (NYSE: GPC ) . Union Pacific's dividend added $4.14 to the iPIG portfolio's coffers, while Genuine Parts' added $12.36. Union Pacific has held its dividend steady for three quarters, while Genuine Parts has paid two dividends at its current level. Both companies have track records of annual increases, and the iPIG portfolio looks forward to seeing if that trend continues. - [By Rich Duprey]
Aftermarket auto parts supplier Genuine Parts (NYSE: GPC ) �reported first-quarter earnings that came up short of the Capital IQ consensus estimates, while also missing top-line�expectations, as well.
Best Rising Companies To Invest In 2015: Cisco Systems Inc (CSCO)
Cisco Systems, Inc., incorporated on December 10, 1984, designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use. The Company provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Its products are designed to transform how people connect, communicate, and collaborate. Its products are installed at enterprise businesses, public institutions, telecommunications companies, commercial businesses, and personal residences. The Company has five segments: United States and Canada, European Markets, Emerging Markets, Asia Pacific, and Japan. The Emerging Markets theater consists of Eastern Europe, Latin America, the Middle East and Africa, and Russia and the Commonwealth of Independent States. In July 30, 2012, it acquired NDS Group Ltd. In October 2012, it acquired virtual networking company, vCider. In August 2011, the Company acquired Versly. In November 2011, it acquired BNI Video. In March 2012, the Company acquired Lightwire, Inc. In May 2012, the Company acquired ClearAccess. In December 2012, the Company acquired Cloupia. In December 2012, the Company acquired Cariden Technologies Inc. In December 2012, the Company acquired Meraki, Inc.
The Company�� product offerings fall into three categories: its core technologies, routing and switching; advanced technologies, and other products. In addition to its product offerings, the Company provides a range of service offerings, technical support services and advanced services. The advanced services program supports networking devices, applications, solutions, and complete infrastructures.
Routing
The Company offers a range of routers, from core network infrastructure for service providers and enterprises to access routers for branch offices and for telecommuters and consumers at ho! me. Key products within its routing category are the Cisco ASR 901/903, Cisco 1000, 5000, and 9000 Cisco Aggregation Services Routers (ASR), as well as the Cisco ASR 800, 1900, 2900 and 3900 Cisco Integrated Services Routers (ISR):; Cisco CRS-1, 7600 and Cisco CRS-3 Cisco Carrier Routing Systems (CRS). During the fiscal year ended July 31, 2010 (fiscal 2010), Cisco introduced the Cisco CRS-3 Carrier Routing System (CRS-3) and Cisco 7600 Series Routers.
Service Provider Video
The Company�� end-to-end, digital video distribution systems and digital interactive set-top boxes enable service providers and content originators to deliver entertainment, information, and communication services to consumers and businesses around the world. Key product areas within its Service Provider Video category are: Set-Top Boxes, IP set-top boxes (both High-Definition (HD) and Standard Definition (SD)); Digital cable set-top boxes (both HD and SD); Cable Modem CPE (Data, EMTA, and Gateways); Videoscape Software Products and Headend Equipment (Encoders, Decoders, and Transcoders).
Switching
The Company�� switching products offer many forms of connectivity to end users, workstations, IP phones, access points, and servers, and also function as aggregators on local-area networks (LANs), metropolitan-area networks (MANs), and wide-area networks (WANs). Its switching systems employ several widely used technologies, including Ethernet, Power over Ethernet, Fibre Channel over Ethernet, Packet over Synchronous Optical Network, and Multiprotocol Label Switching. Many of its switches are designed to support an integrated set of advanced services, allowing organizations to be more efficient by using one switch for multiple networking functions rather than multiple switches to accomplish the same functions.
Cisco offers a family of Ethernet switching solutions from fixed-configuration switches for small and medium-sized businesses to modular switches for enterprise! s and ser! vice providers. Its fixed-configuration switches are designed to provide a foundation for converged data, voice, and video services. Key products within its switching category are the Cisco Catalyst 2960, 3560, 3750, 4500 and 6500 Series; the Cisco Nexus 2000, 3000, 5000 and 7000 Series switches; and MDS Series: MDS 9000.
Fixed-configuration switches are designed to cover a range of deployments in small and medium-sized businesses. It fixed-configuration switches are designed to provide a foundation for converged data, voice, and video services. They range from small, standalone switches to stackable models that function as a single, scalable switching unit. Modular switches are typically utilized by enterprise and service provider customers. Fixed-configuration and modular switches also include products such as optics modules which are shared across multiple product platforms.
NGN Routing
Routing technology is fundamental to the Internet, and this technology interconnects public and private IP networks for mobile, data, voice, and video applications. The Company's NGN Routing products are designed to enhance the intelligence, security, reliability, scalability, and level of performance in the transmission of information and media-rich applications. It offers a broad range of routers, from core network infrastructure and mobile Internet network for service providers and enterprises to access routers for branch offices and for telecommuters and consumers at home. Key product areas within its NGN Routing category are, Cisco Aggregation Services Routers: Cisco ASR 901/903, Cisco ASR 1000, Cisco ASR 5000 and Cisco ASR 9000. Cisco Integrated Services Routers: Cisco ISR 800, Cisco ISR 1900, Cisco ISR 2900 and Cisco ISR 3900. Cisco Carrier Routing Systems: Cisco CRS-1, Cisco CRS-3 and Cisco 7600 Series Routers.
Security
Cisco security solutions deliver identity, network and content security solutions designed to enable customers to reduce the ! impact of! threats and realize the benefits of a mobile, collaborative, and cloud-enabled business. The products in this category span firewall, intrusion prevention, remote access, virtual private networks (VPNs), unified clients, network admission control, Web gateways, and email gateways. Its AnyConnect Secure Mobility Client solution enables users to access networks with their mobile device of choice, including laptops and smartphone-based mobile devices, while allowing organizations to manage the security risks of networks. Its cloud-based Web security service is designed to provide real-time threat protection and to prevent malware from reaching corporate networks, including roaming or mobile users. It focuses on a proactive, layered approach to counter both existing and emerging security threats. During the fiscal year ended July 28, 2012, it introduced the Cisco ASA 5500-X Series Midrange Security Appliance, Cisco Security Manager 4.3, the IPS 4500 Series, and Prime Security Manager.
Wireless
The Cisco Unified Wireless Network aims to harness the network to solve business problems, uniting high-performance wireless access across campus, branch, remote and outdoor environments. Its offerings include wireless access points (including the Cisco Aironet product family), controllers, antennas, and integrated management. The Company�� offerings provide users with simplified management and mobile device troubleshooting features which are designed to reduce operational cost and maximize flexibility and reliability. It is also investing in custom chipsets to deliver functions such as CleanAir proactive spectrum intelligence, ClientLink acceleration for mobile devices and VideoStream multicast optimization technology.
Data Center
The Company�� data center product category has been its major product category for the past two fiscal years. Cisco Unified Computing System (UCS) and Server Access Virtualization form the core of the Data Center product category.! Key prod! uct areas within its Data Center product category are: Cisco UCS B-Series Blade Servers, Cisco UCS C-Series Rack Servers and Cisco UCS Fabric Interconnects.
Other Products
The Company�� other products category primarily consists of Linksys home networking products, certain emerging technologies, and other networking products. In addition to its product offerings, it provide a range of service offerings, including technical support services and advanced services.
The Company competes with Alcatel-Lucent; ARRIS Group, Inc.; Aruba Networks, Inc.; Avaya Inc.; Belden Inc.; Brocade Communications Systems, Inc.; Check Point Software Technologies Ltd.; Citrix Systems, Inc.; D-Link Corporation; LM Ericsson Telephone Company; Extreme Networks, Inc.; F5 Networks, Inc.; Force10 Networks, Inc.; Fortinet, Inc.; Hewlett-Packard Company; Huawei Technologies Co., Ltd.; International Business Machines Corporation; Juniper Networks, Inc.; LogMeIn, Inc.; Meru Networks, Inc.; Microsoft Corporation; Motorola, Inc.; NETGEAR, Inc.; Polycom, Inc.; Riverbed Technology, Inc.; and Symantec Corporation.
Advisors' Opinion:- [By Dan Burrows]
The long-term growth forecast stands at less than 3% a year for the next five years or so. Ordinarily, that would make the forward P/E of 14 look like a bit of a stretch, but between the dividend and $10 billion share repurchase program, new money looks to get its money’s worth.
#7: Cisco (CSCO)Dividend Yield: 3.2%
YTD Performance: +9% - [By Geoff Gannon]
I was looking at the fundamental of 18 stocks; I own 5 of them: Apple (AAPL), Abbott Laboratories (ABT), Autodesk (ADSK), Cisco (CSCO) and Exelon (EXC). Others were ideas collected from places like news, etc.
- [By Douglas A. McIntyre]
John Chambers, the longtime CEO of Cisco Systems Inc. (NASDAQ: CSCO) made a presentation to investment analysts. It contained dozens of PowerPoint slides, but the audience only cared about one. It showed that over the past two quarters, sales in China, Russia and Brazil wrecked Cisco’s short-term, and perhaps longer term, fortunes. The business press hammered the downturn in Cisco’s prospects, as dozens of media outlets predicted that Cisco’s major opportunities had died.
- [By Dan Carroll]
Keeping an eye on companies and stocks is what will benefit in the long run, and several big names are making moves today. Cisco's (NASDAQ: CSCO ) 2.3% gain is leading the Dow's run higher today. The company announced new core router technology last week as it plans to keep up with Internet traffic. The CRS-X, as Cisco dubbed the system, boasts up to 400 Gigabits of speed for every slot on the router's rack and it part of the foundation for what Cisco believes is the future -- a tomorrow where everything from cars to clothing is connected. It's an ambitious vision, but the CRS-X has already impressed some, and Cisco plans to release the technology for shipping at the end of this year.
Best Rising Companies To Invest In 2015: United Protection Security Grou (UZZ.V)
United Protection Security Group Inc., together with its subsidiaries, provides physical and electronic security services in Canada and the United States. It offers physical security services for a range of security needs, such as building security in offices, industrial parks, malls, oil projects, investigation services, risk analysis and training, and maintaining order during labor conflicts and lockouts, as well as tactical and special services, including K-9 backup mobile patrol and rapid alarm response fleets in western Canada. The company also offers various electronic security products and services, such as access control card systems, closed circuit television, home and commercial alarm and distance surveillance products, 24 hour video monitoring, and surveillance and protection products. It serves construction and industrial sites, commercial offices, municipalities and government facilities, shopping centers, educational institutions and campuses, heavy industry and pipeline projects, airports and transportation hubs, remote construction camp projects, and special events and trade shows. The company was founded in 1985 and is headquartered in Edmonton, Canada.
Best Rising Companies To Invest In 2015: Smart Technologies Inc. (SMA.TO)
SMART Technologies Inc. designs, develops, and sells interactive technology products and integrated solutions that enhance learning and enable people to collaborate worldwide. The company offers SMART Board interactive whiteboards, SMART interactive flat panels, LightRaise interactive projectors, SMART Table interactive learning center, SMART Response interactive response systems, SMART Podium, SMART Notebook collaborative learning software, SMART Notebook Web, SMART Notebook App for iPad, SMART Exchange, SMART Sync classroom management software, SMART Response Virtual Edition, and SMART Document Camera for the education market. It also provides SMART Meeting Pro software, SMART Meeting Pro connector for Microsoft Lync, and Bridgit conferencing software for the enterprise market. The company sells its products through a network of distributors and to end users in the United States and internationally. SMART Technologies Inc. was founded in 1987 and is headquartered in Calg ary, Canada.
Best Rising Companies To Invest In 2015: Dolby Laboratories Inc (DLB)
Dolby Laboratories, Inc., incorporated in 1967, develops and delivers products and technologies that are used in the entertainment industry. Its audio technologies are used throughout the global entertainment industry. It is developing and marketing video technologies to improve the quality of video presentation. Its offerings include video products aimed at the cinema market, such as its digital cinema server, its Dolby three-dimensional (3D) Digital Cinema products, and its Dolby PRM-4200 Professional Reference Monitor. It offers products and services to content creators, such as studios, broadcasters, and downloadable content service providers to encode content using Dolby�� technologies. As of September 24, 2010, the Company sold its products and provide services in over 85 countries. In addition, it has licensed its technologies to CE manufacturers and to software vendors in 40 countries, which in turn distribute their products incorporating its technologies throughout the world.
The Company designs and manufactures video and audio products for the film production, cinema, and television broadcast industries. Distributed in over 60 countries, these products are used in content creation, distribution and playback to improve image and sound quality, provide surround sound, and increase the efficiency of sound storage and distribution. Its product sales are derived from sales of its digital 3D products, which provide 3D capabilities, as well as sales of digital cinema servers that load, store, decrypt, and decode encrypted digital film files for presentation on digital projectors in theaters. Revenue is also derived from sales of its traditional cinema processors, which movie theaters use to process film soundtracks, and from sales of broadcast products used to encode and distribute content to viewers. It also offers related digital cinema processors and media adapters to decode digital cinema soundtracks, and digital cinema accessories that allow exhibitors to integrate its digital ! cinema servers with their existing automation systems.
The Company offers a variety of services to support film production, television broadcast and music production. The Company enters into service agreements with motion picture studios or filmmakers to provide them with production services related to the preparation of a Dolby soundtrack, such as equipment calibration, mixing room alignment and equalization. Dolby provides other services, such as print quality control, professional film mastering services to prepare movies for digital release, and theatre system calibration for important screenings, such as premieres, film festivals, and press screenings. Its engineers also provide training, system design consultation and onsite technical expertise to cinema operators throughout the world to help them configure their screening rooms and equipment to ensure that movies are replayed with consistent high quality.
The Company�� technologies include dolby digital, dolby digital plus, dolby digital surround EX, dolby digital EX, advanced audio coding (AAC), HE AAC, dolby pulse, dolby trueHD, dolby E, dolby digital live, dolby pro logic II, dolby pro logic II(x), dolby pro logic IIz, dolby virtual speaker, dolby headphone, dolby mobile, dolby axon, PC entertainment experience (PCEE), dolby digital stereo creator, dolby digital 5.1 creator, dolby volume, dolby contrast, dolby vision and analog signal processing technologies. Its products include traditional cinema processors, digital cinema products, digital 3D products, digital media adapters, broadcast products and professional reference monitor.
Traditional cinema processors are used to read, decode and play back a film�� soundtrack and calibrate the sound system in a movie theater. Digital cinema products are used for digital cinema encoding, distribution and playback. Our digital cinema server is used to load, store, decrypt, decode and re-encrypt digital film files for presentation on a digital cinema project! or. We al! so provide products that encrypt, encode and package digital films, and digital cinema processors to decode digital cinema soundtracks. Digital 3D products deliver a 3D image with an existing digital cinema server and white screen, providing exhibitors a flexible 3D solution. Its Dolby 3D glasses feature high-quality multicoated lenses with a special curvature that delivers 3D images.
Digital media adapters are used to adapt existing analog cinema audio systems to the latest digital audio technologies. Broadcast products are used to encode, transmit and decode multiple channels of high-quality audio for Digital Television (DTV) and high-definition television (HDTV) program production and broadcast distribution and to measure the subjective loudness of audio content within broadcast programming. Professional reference monitor is a video monitor used during the production and post-production of cinematic and video content in situations, where grade one reference performance is required.
The Company competes with Audyssey Laboratories, DTS, Fraunhofer Institute for Integrated Circuits, Microsoft, Philips, RealNetworks, Sonic Solutions, Sony, SRS Labs, Thomson, Barco, Doremi, GDC, IMAX, MasterImage 3D, NEC, Panavision, QSC Audio Products, Qube Cinema, REAL D, Technicolor, Texas Instruments, USL, XpanD and DTS.
Advisors' Opinion:- [By Rich Smith]
This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, we're focusing on tech stocks, as analysts pull back on Facebook (NASDAQ: FB ) and Dolby Labs (NYSE: DLB ) , but become more bullish on LogMeIn (NASDAQ: LOGM ) . Let's start with that last one.
Best Rising Companies To Invest In 2015: SABMiller PLC (SBMRY.PK)
SABMiller plc, incorporated on March 17, 1998, is a holding company, which has brewing and beverage interests across six continents. The Company together with its subsidiaries is engaged in the manufacture, distribution and sale of beverages. The Company is a brewer with more than 200 beer brands. The Company�� portfolio of brands includes international beers, such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as local brands, such as Aguila, Castle, Miller Lite, Snow, Tyskie and Victoria Bitter. It is a bottler for the Coca-Cola Company in Africa and Central America. It operates in Latin America, Europe, North America, Africa, Asia Pacific, and South Africa.
Latin America
The Company�� primary brewing and beverage operations cover six countries across South and Central America (Colombia, Ecuador, El Salvador, Honduras, Panama and Peru). The Company is brewer in Argentina, and it exports to Bolivia, Ch ile and Paraguay. It bottles soft drinks for The Coca-Cola Company in El Salvador and Honduras, and for Pepsico International in Panama.
Europe
The Company�� primary brewing operations cover eight countries: the Czech Republic, Hungary, Italy, Poland, Romania, Slovakia, Spain (Canary Islands) and the Netherlands. A further 16 countries, including Russia, Turkey and the Ukraine are covered in a strategic alliance with Anadolu Efes through brewing, soft drinks or export operations. The Company exports volumes to a further seven European markets, of which the largest are the United Kingdom and Germany.
North America
The Company�� North America segment includes its 58% owned MillerCoors and 100% of Miller Brewing International and the its North American holding companies. The Company�� wholly owned Miller Brewing International business is based in Milwaukee, the United States and exports its brands to Canada and Mexico and throu ghout the Americas.
Africa
The ! Co! mpany�� brewing and beverage operations in Africa cover 15 countries. A further 21 are covered through a strategic alliance with the Castel group and it also has an associated undertaking in Zimbabwe. The Company bottles soft drinks for The Coca-Cola Company in 20 of its African markets (in alliance with Castel in 14 of these markets).
Asia Pacific
The Company�� partners with China Resources Enterprise, Limited in China. The Company is engaged in brewing business in India. The Company has operation in Vietnam and it exports to various markets, including South Korea and Singapore.
South Africa
The Company�� South African Breweries (Pty) Ltd (SAB) is South Africa�� producer and distributor of lager and soft drinks. It also exports brands for distribution across Namibia. Its soft drinks division is bottler of products for The Coca-Cola Company. The Company has hotel and gaming interests through its associate, Tsogo S un Holdings Ltd, a hotel and gaming group in South Africa.