Berny Dohrmann | The CEO Space Blog

NEW CZAR OF GLOBAL REGULATION

Berny — Sat, 19 May 2012 05:00:51 +0000

THERE IS HOPE….

Washington, D.C., May 17, 2012 – The Securities and Exchange Commission today announced that Erica Williams will become the agency’s Deputy Chief of Staff.

Ms. Williams has been a member of Chairman Schapiro’s staff since February 2011, primarily focusing on enforcement and regulatory issues. Prior to that, Ms. Williams served as assistant chief litigation counsel in the Enforcement Division’s trial unit for seven years, leading trial teams in a host of successful prosecutions.

“Erica is well-steeped in the securities laws and has a true grasp of the intricacies of the agency,” said Chairman Schapiro. “She also fully embraces the agency’s mission and I am thrilled that she is willing to take on this new responsibility.”

Ms. Williams said, “This is an incredible opportunity that allows me to continue protecting investors and ensuring our markets operate fairly and efficiently.”

Ms. Williams replaces James R. Burns, who will become the Deputy Director of the Division of Trading and Markets.

In 2009, Ms. Williams was selected by U.S. Senator Ted Kaufman as Federal Employee of the Week. Before coming to the SEC, Ms. Williams was a commercial litigator in private practice.

Ms. Williams received her law degree from the University of Virginia School of Law. She holds a bachelor’s degree from the University of Virginia. Washington, D.C., May 17, 2012 – The Securities and Exchange Commission today announced that James R. Burns will become a Deputy Director in the Division of Trading and Markets.

Mr. Burns will oversee several of the Division’s core regulatory functions, including market oversight and operations, derivatives policy and trading practices, and chief counsel and enforcement liaison functions. He also will contribute to the Division’s ongoing implementation of key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, Mr. Burns will assist with the overall management of the Division, working closely with the Division’s Director Robert Cook and other Deputy Director John Ramsay.

Mr. Burns has been a member of Chairman Mary Schapiro’s staff since March 2010, most recently serving as the agency’s Deputy Chief of Staff. Mr. Burns advised the Chairman on the development and execution of the agency’s rulemaking and policy agenda as well as other key agency initiatives. He also served as counsel to Chairman Schapiro on issues involving the Division of Trading and Markets, including the agency’s analysis and response to the Flash Crash on May 6, 2010, and numerous other market structure and Dodd-Frank related rulemakings, studies, and programs.

“Jim has played an instrumental role in the implementation of the financial reform legislation and navigating through complex market structure issues,” said Chairman Schapiro. “In his new position, he will continue to help put in place the new regulatory regime governing complex derivatives as well as critical market structure improvements.”

Mr. Cook said, “At a time when the Division is taking on unprecedented challenges and new responsibilities, I am delighted that we will have the benefit of Jim’s leadership, initiative, and experience. Investors will be well-served by Jim’s dedication to the Commission’s mission and his wide-ranging knowledge of the diverse markets and intermediaries we regulate.”

Mr. Burns said, “I am honored to take on this new role. I have deep respect for Robert and the Division’s staff, who are carrying out tremendous responsibilities on behalf of our markets and investors, and I look forward to working with them to help advance the agency’s mission.”

Mr. Burns is expected to begin his new role in the Division in late May. He fills the Deputy Director position that was vacated by James Brigagliano when he left the agency for the private sector.

Prior to joining the Chairman’s staff, Mr. Burns was a counsel to Commissioner Kathleen Casey, advising her chiefly on investment management and enforcement matters. Before joining the SEC in 2008, Mr. Burns was a securities lawyer in private practice who focused on investment management and broker-dealer regulatory and enforcement matters. He previously served as a law clerk to now-chief Judge William B. Traxler on the U.S. Court of Appeals for the Fourth Circuit, and also worked at Oriel College, Oxford University.

Mr. Burns received his JD, cum laude, from Georgetown University Law Center. He holds masters and doctoral degrees from Oxford University, and graduated with an AB, magna cum laude, from Harvard College.

We see this step as a critical decision at a maximum time of opportunity for the world regulatory sanity.

Berny Dohrmann – Chairman www.ceospaceinc.com

PS: My Daughter graduated from Georgetown and went to work at State – her step father served on the Board of Georgetown – we applaud the family….

DETECT & DEFLECT – OUR PRIORITY

Berny — Sat, 19 May 2012 04:53:25 +0000

This montage of images of the planets visited by Voyager 2 was prepared from an assemblage of images taken by the Voyager 2 spacecraft. The Voyager Project is managed for NASA by the Jet Propulsion Laboratory, Pasadena, California. (Photo credit: Wikipedia)

LETS STOP COMPETITING AS WE SURVIVE AS A “RACE”….

The Earth is at risk from more asteroids than previously thought, according to a new survey. New data from the asteroid-tracking NEOWISE mission reveals that twice as many asteroids as previously thought are on low-inclination orbits that could bring them into contact with our home planet.

“We were very surprised to find that,” says Amy Mainzer of the Jet Propulsion Laboratory in Pasadena, California. “We were not expecting to find [that result] at all.”

NEOWISE, which took data with NASA’s infrared WISE space telescope from 2010 to 2011, has completed the most accurate census yet of potentially hazardous asteroids: those that come within 8 million kilometres of Earth, and are large enough to survive the trip through the atmosphere.

Because WISE searched in infrared wavelengths, it was equally as sensitive to large dark asteroids as to small bright ones. Previous surveys that looked only at visible light couldn’t tell those two populations apart, Mainzer says.

Mainzer and colleagues sampled 107 potentially hazardous asteroids (a representative sample of the entire population) and extrapolated to predict the total number. They found that about 4700 of them – give or take 1500 – are 100 metres or larger in diameter. Only 20 to 30 per cent of these have actually been observed.

Twice as many of those as previously thought are on so-called low-inclination orbits, which means they are closely aligned with Earth’s orbit and therefore have a higher chance of hitting us.

“It’s easier for them to make close approaches to the Earth more often,” Mainzer says. “It’s a hazard and a risk.”

Our best recourse is to make sure we know where they are, where they’re going and what they’re made of. “If you find things 20 to 30 years before a potential impact would take place, then you have time to deflect them,” she says. “If we find them days before impact, then it’s much worse.”

But there’s a silver lining: the new population of easy-access asteroids is also an opportunity for scientific exploration or the proposed asteroid mining industry. “If the asteroid is naturally carried near the Earth, it’s easier to reach with a spacecraft, either robotic or with astronauts,” Mainzer says.

In my New July Release of REDEMPTION THE COOPERATION REVOLUTION – I profer the notion of my speeches and lectures – that humanity MUST come together in cooperation and protect our planet – or we will see all our progress disappear in one extinction event that is absolute in nature – we have the technology – we have the means – we need only remove the one virus on the human conscious gnome – COMPETTITION the great insanity. By celebrating all divesity of humanity – we come together to protect the HUMAN Race. Redemption discusses this mandate priority.

On another note – one must ask of Jamie Diamond at JP Morgan – when do 21 players review a risk trade – at 100 million – at 250 million – at 500 million – how does one person loose 2 billion with 100 Billion MORE in “risk assets” such that the specualtion we have reported here – is so out of control only – RE REGULATION can resolve the issue. We trust Mary Shapiro and the SEC will not loose ground on this issue now. You can’t regulate the current off shore casino capitalism without NEW LAWS. It is time. Given the EU is having RUNS on its banks which are now out of control.

Why? Confidence is why. We who vote with our wallets KNOW that the regulations have put our financial system at risk due to specualtion that was once a felony and needs to be a felony once again. Lets go back to the future…when we had world good times.

We are banking on the IMF to come up with a central solution to the EU problem within a cooperative co op of EU leadership that reforms the EU once and for all in concentric systemic reform – we can do this – in cooperation – we can not do this in competition. We trust the teams working on this – though it is not instant – have solutions – that will repair the tear in the EU fabric gown of the present. Do not over sell the EU short yet….

Stay tuned.
Next CEO SPACE – central to over compliance in Crowd Funding – www.ceospaceinc.com May 22nd – Wheels up Tuesday – register and join the world of business…CEO to CEO …professional to professional….

PS: California is leading in CRIMINAL CRACK downs on fraud and abuse in the Crowd Funding field which remains wholly illegal as we have reported on this web site – including our prediction of the regulatory crack down being led by California. Leading Fraud states – Arizona – Texas, Colorado, Utah, Georgia and Florida for Crowd Funding Abuse. We are monitoring rising fraudsters in NEW YORK. Investors stay OUT of Crowd FUNDING until the SEC and States adopt legal guidelines …is our over compliance continued suggestion – ask your security counsel. Buyer beware.

…WHAT IS MORE IMPORTANT FOR HUMAN KIND THAN A SYSTEM TO PROTECT OUR PLANET FROM INCOMING….?

SEC – YOUR TAX DOLLARS AT WORK

Berny — Fri, 18 May 2012 01:24:22 +0000

WASHINGTON, DC - SEPTEMBER 19: SEC Chairman Mary Schapiro listens during a meeting at the U.S. Securities and Exchange Commission September 19, 2011 in Washington, DC. The commission voted unanimous during the meeting on whether to propose a new rule under Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to implement the prohibition under Section 621 regarding material conflicts of interest. (Image credit: Getty Images via @daylife)

IT IS ALWAYS MUCH MORE COMPEX THAN YOU SUSPECT…OUR TEAM REMAINS THE BEST TEAM IN THE WORLD

Chairman Mary L. Schapiro

U.S. Securities and Exchange Commission

Before the Capital Markets and Government Sponsored Enterprises Subcommittee and Financial Institution and Consumer Credit Subcommittee of the U.S. House of Representatives Committee on Financial Services

Chairman Garrett, Ranking Member Waters and members of the Subcommittee: I appreciate the opportunity to testify regarding the recent activities of U.S. Securities and Exchange Commission (SEC).1

The past three years have been a period of enormous change and challenge for the SEC. The aftermath of the financial crisis, the passage of legislation that imposes extensive new responsibilities on the agency, and the growth in the size and complexity of the financial markets have demanded that the SEC become more efficient, creative and productive to achieve its mission. While we have made significant progress in many areas, much work remains to be done. My testimony today will highlight a number of the actions we have taken over the past three years to reform and improve SEC operations. In addition, I will describe our progress on implementation of financial reform legislation, upcoming challenges, and the agency’s FY13 appropriations request.

Operational Improvements and Recent Accomplishments

As you know, the SEC has responsibility for approximately 35,000 entities, including direct oversight of about 12,600 investment advisers, 9,900 mutual funds and exchange traded funds (ETFs), and over 4,500 broker-dealers with more than 160,000 branch offices. We have responsibility for reviewing the disclosures and financial statements of more than 9,100 reporting companies and also oversee approximately 450 transfer agents, 15 national securities exchanges, eight active clearing agencies, and nine nationally recognized statistical rating organizations (NRSROs), as well as the Public Company Accounting Oversight Board (PCAOB), Financial Industry Regulatory Authority (FINRA), Municipal Securities Rulemaking Board (MSRB), and the Securities Investor Protection Corporation (SIPC). Due to recent changes in the law, smaller investment advisers will transition from SEC to state oversight during 2012, but with the corresponding addition of advisers to private funds, we estimate that the agency will still oversee approximately 10,000 investment advisers with about $48 trillion in assets under management. During FY 2012 and FY 2013, we also expect to fully implement our new oversight responsibilities with respect to municipal advisors and entities registering with us in connection with the security-based swap regulatory regime.

The SEC continues to make significant progress in improving core operations. Over the past three years, we have focused on revitalizing and restructuring the enforcement and examination functions. We also have taken steps to enhance safeguards for investor assets, improve internal collaboration within the agency, and improve our risk assessment capacity. These efforts are producing demonstrable results. For example, during FY 2011, the SEC:

Filed 735 enforcement actions – more than the SEC has ever filed in a single year – with more than $2.8 billion in penalties and disgorgement ordered. Among the cases filed in FY 2011 were 15 separate actions related to the financial crisis, naming 17 individuals, including 16 CEOs, CFOs, and other senior corporate officers. To date, the SEC has filed financial crisis-related actions against 101 individuals and entities, naming 55 CEOs, CFOs, and other senior corporate officers. In FY 2011, the number of enforcement actions related to investment advisers and broker-dealers also grew, with a total of 146 enforcement actions related to investment advisers and investment companies, a single-year record and 30 percent increase over FY 2010. The SEC also brought 112 enforcement actions related to broker-dealers, a 60 percent increase over the prior fiscal year.

Implemented a more risk-focused examinations program and completed over 1,600 oversight exams designed to detect and prevent fraud, strengthen industry compliance, monitor new and emerging risks, and inform policy. This risk-focused examination strategy resulted in improved guidance to the financial industry about risky practices and actionable information for enforcement investigations.

In light of concerns about the risks of exposures to holdings of European sovereign debt by a number of large financial institutions, issued staff disclosure guidance in January 2012 for the purpose of providing investors with enhanced information about the potential impact on financial condition or results of operations as a result of these holdings. Following the issuance of the guidance, the staff has noted clearer and more transparent disclosures made by the various financial institutions about the risks and consequences of these holdings to investors.

Created the Cross-Border Working Group, an inter-divisional, proactive, risk-based initiative formed by the Division of Enforcement focusing on U.S. issuers with operations primarily overseas. The efforts of this group have resulted in a wide array of actions to protect U.S. investors, including suspending trading in at least twenty foreign-based entities because of deficiencies in information about the companies, instituting stop orders against foreign-based entities to prevent further stock sales under materially misleading and deficient offering documents, revoking the securities registration of at least a dozen foreign-based issuers, and instituting administrative proceedings to determine whether to suspend or revoke the registrations of approximately thirty more. Importantly, once we have revoked the registration, no broker-dealer or national securities exchange can execute a trade in the stock unless the company files to re-register the stock. Most of these actions have involved companies based in China, as the majority of issuers whose securities are registered in the United States whose operations are primarily overseas are located in the PRC region.

Developed detailed staff guidance for rulewriting to further improve the economic analysis the SEC employs in rulemaking.

Implemented a completely revamped system for handling the huge volume of tips, complaints, and referrals (TCR) that the SEC receives each year. The new TCR system is fully operational, and includes search capabilities, robust tracking and audit trails, as well as a comprehensive workflow system with the ability to annotate records and upload additional documents and materials. The TCR system can be accessed by authorized personnel across the Commission and acts as the central repository for the agency.

Improved our internal financial controls, which resulted in a GAO audit opinion for FY 2011 with no material weaknesses.

Developed and began deployment of TRENDS, a web-based tool that combines workflow, document and data management to help make our national exam program more uniform, focused, efficient and effective.

Established the Office of Minority and Women Inclusion as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). In FY 2012, we are also establishing three other offices required by the Dodd-Frank Act, specifically the Office of Credit Ratings, Office of Investor Advocate, and Office of Municipal Securities.

Implemented, with the assistance of targeted contracted expertise, a number of internal reforms designed to improve the agency’s organizational structure, strengthen capabilities, improve controls and efficiencies, and enhance workforce competencies and talent.

Focused external hiring opportunities on filling strategic vacancies and obtaining specialized industry expertise in areas as diverse as quantitative algorithms, computerized trading, securitization, structured products transactions, risk management, derivatives valuation, financial forensics, value-at-risk analysis and stress testing, building predictive models of equity return and risk, underwriting municipal transactions, and exchange-traded funds.

Implemented a new rule establishing large trader reporting requirements to enhance the agency’s ability to identify large market participants, collect information on their trading, and analyze their trading activity.

Implemented a new rule to require broker-dealers to have risk controls in place before providing a customer with access to the market and to prohibit broker-dealers from providing “unfiltered” or “naked” access.

Financial Reform Implementation

In addition to improving our core operations, the SEC has worked to implement significant new responsibilities assigned to the agency under the Dodd-Frank Act. The SEC was tasked with writing a large number of new rules and issuing over twenty studies and reports. Over the past 21 months since passage of the Act, we have made significant progress towards completing those tasks. Of the more than 90 provisions that require SEC rulemaking, the SEC already has proposed or adopted rules for over three-fourths of them. Additionally, the SEC has finalized fourteenof the more than twenty studies and reports that the Dodd-Frank Act directs us to complete.

While we have had much success, we are continuing our work to implement all provisions of the Dodd-Frank Act for which we have responsibility – even as we also perform our longstanding core responsibilities of pursuing securities violations, reviewing public company disclosures and financial statements, inspecting the activities of investment advisers, investment companies, broker-dealers and other registered entities, and maintaining fair and efficient markets. In particular, I would highlight the following rulemakings:

Hedge Fund and Other Private Fund Adviser Reporting

The Dodd-Frank Act mandated that the Commission require private fund advisers (including hedge and private equity fund advisers) to confidentially report information about the private funds they manage for the purpose of the Financial Stability Oversight Council (FSOC) assessing systemic risk. On October 31, 2011, in a joint release with the Commodity Futures Trading Commission (CFTC) and based on SEC staff consultation with staff representing members of FSOC, the Commission adopted a new rule that requires hedge fund advisers and other private fund advisers registered with the Commission to report systemic risk information on a new form (Form PF).2 Under the rule, Commission registered investment advisers managing at least $150 million in private fund assets will be required to periodically file Form PF.

The Form PF reporting requirements are scaled to the size of the adviser. Advisers with less than specified amounts of hedge fund, liquidity fund or private equity fund assets under management will report only very basic information on an annual basis. Advisers with assets under management over specified thresholds will report more information, and large hedge fund and liquidity fund advisers also will report on a quarterly basis. Private equity advisers will only report annually. This approach is intended to provide FSOC with a broad picture of the industry while relieving smaller advisers from much of the reporting requirements. In addition, the reporting requirements are tailored to the types of funds that an adviser manages and the potential risks those funds may present, meaning that an adviser will respond only to questions that are relevant to a particular investment strategy. The Dodd-Frank Act provides special confidentiality protections for this data.

Whistleblower Program

Pursuant to the Dodd-Frank Act, the SEC has established a whistleblower program to pay awards to eligible whistleblowers who voluntarily provide the agency with original information about a violation of the federal securities laws that leads to a successful enforcement action. In May 2011, the Commission adopted final rules to implement the whistleblower program. Since the rules went into effect in August 2011, the Commission has received hundreds of tips through the program from individuals all over the country and in many parts of the world. That, of course, is in addition to the tens of thousands of tips, complaints, and referrals the agency receives every year. Our new Office of the Whistleblower is reviewing these submissions and working with whistleblowers. The office has filed two annual reports to Congress detailing its activities since its creation.3 These include, among other things, the establishment of an outreach program, internal training programs, development of policies and procedures, meeting with whistleblowers and their counsel, and coordination on investigations with Commission staff.

We already are reaping the early benefits of the whistleblower program through active and promising investigations utilizing crucial whistleblower information, some of which we expect to lead to rewards in the near future. In addition, the quality of the information we are receiving has, in many instances, enabled our investigative staff to work more efficiently, thereby allowing us to better utilize our resources.

OTC Derivatives

The SEC also is engaged in rulemaking to establish a new oversight regime for the OTC derivatives marketplace. To date, the Commission has proposed rules in thirteen areas required by Title VII of the Dodd-Frank Act. In addition, earlier this month, we adopted joint rules with the CFTC to define key terms under this new regime, including “security-based swap dealer” and “major security-based swap participant”, a foundational step in the implementation of Title VII. The Commission also has taken a number of steps to provide legal certainty and avoid unnecessary market disruption that might otherwise have arisen as a result of final rules not having been enacted by the statutory effective date of Title VII. Specifically, we have:

Provided guidance regarding which provisions in Title VII governing security-based swaps became operable as of the effective date and provided temporary relief from several of these provisions;4

Provided guidance regarding – and where appropriate, interim exemptions from – the various pre-Dodd-Frank provisions that would otherwise have applied to security-based swaps;5 and

Taken other actions to address the effective date, including extending certain existing temporary rules and relief to continue to facilitate the clearing of certain credit default swaps by clearing agencies functioning as central counterparties and adopting exemptions for security-based swaps that are issued by registered or exempt clearing agencies functioning as central counterparties. 6

While the Commission has made significant progress to date, much remains to be done to fully implement Title VII. In particular, we need to complete the core elements of our proposal phase, notably rules related to the financial responsibility of security-based swap dealers and major security-based swap participants. Concurrent with that process, we intend to seek public comment on an implementation plan that will facilitate a roll-out of the new securities-based swap requirements in a logical, progressive, and efficient manner that minimizes unnecessary disruption and costs to the markets. Many market participants have advocated that the Commission adopt a phased-in approach, whereby compliance with Title VII’s requirements would be sequenced in some manner. Commission staff is actively engaged in developing an implementation plan that takes into consideration market participants’ recommendations with regard to such sequencing.

Additionally, the Commission intends to address the international implications of the security-based swap rules arising under Title VII in a single proposal in order to give interested parties, including investors, market participants, and foreign regulators, an opportunity to consider as an integrated whole our approach to the registration and regulation of foreign entities engaged in cross-border security-based swap transactions involving U.S. parties. We understand that our approach to the cross-border application of Title VII must strike a balance between sufficient domestic regulatory oversight and the global nature of the derivatives market. As a result, the development of our cross-border approach is informed by our discussions with counterparts in other jurisdictions. For example, Commission staff, along with the staff of the CFTC, has been working closely with counterparts from Canada, the European Union, Hong Kong, Japan, Singapore, and other jurisdictions to coordinate technical issues that arise as each jurisdiction develops derivatives regulation that have cross-border impact. These efforts not only aid the development of our approach to the cross-border application of Title VII, but also help promote consistency among approaches to derivatives regulation globally.

Credit Rating Agencies

The Commission is required to undertake approximately a dozen rulemakings related to nationally recognized statistical rating organizations (NRSROs). The Commission adopted the first of these required rulemakings in January 2011,7 and we are continuing to work to finalize a
series of proposed rules intended to strengthen the integrity of credit ratings.

The SEC also is required to conduct three studies relating to credit rating agencies, including a study about alternative compensation models for rating structured finance products. With respect to alternative compensation models, the Dodd-Frank Act directs the Commission to study the credit rating process for structured finance products and the conflicts associated with the “issuer-pay” and the “subscriber-pay” models. The Commission also must study the feasibility of establishing a system in which a public or private utility or a self-regulatory organization would assign NRSROs to determine the credit ratings for structured finance products. Accordingly, the Commission requested public comment on the feasibility of such a system, asking interested parties to provide comments, proposals, data, and analysis.8

Volcker Rule

In October 2011, the Commission proposed a rule jointly with the Federal banking agencies to implement Section 619 of the Dodd-Frank Act, commonly referred to as the “Volcker Rule.”9 This proposal reflects an extensive, collaborative effort by the Federal banking agencies, the SEC, the CFTC, and their respective staffs to design a rule to implement the Volcker Rule’s prohibitions and restrictions in a manner consistent with the language and purpose of this complex statute.

As required by the statute, the joint proposal generally prohibits banking entities from engaging in proprietary trading and having certain interests in, and relationships with, hedge funds and private equity funds. The proposed rule also provides certain exceptions to these general prohibitions, consistent with the statute. For example, the proposal permits a banking entity to engage in underwriting, market making-related activity, risk-mitigating hedging, and organizing and offering a private equity fund or hedge fund, among other permitted activities, provided that specific requirements set forth in the proposed rule are met. Further, as established by Section 619, an otherwise-permitted activity would be prohibited under the proposed rule if it involved a material conflict of interest, high-risk assets or trading strategies, or a threat to the safety and soundness of the banking entity or to the financial stability of the United States. The proposal defines “material conflict of interest,” “high-risk asset,” and “high-risk trading strategy” for these purposes. As set forth in the Dodd-Frank Act, the Commission’s rule would apply to banking entities for which the Commission is the primary financial regulatory agency. These banking entities include, among others, certain registered broker-dealers, investment advisers, and security-based swap dealers.

The joint proposal requested comment on a wide range of issues due, in part, to the complexity of the issues presented by the statute and the proposal. The comment period for this proposal ended on February 13, 2012. We received thousands of comment letters on the joint proposal and we are reviewing them carefully. We are continuing to work with the other regulators through the rulemaking process.

In addition to the rules highlighted above, the SEC has adopted or proposed rules on a wide variety of topics including municipal advisors, asset-backed securities, payments to governments by resource extraction issuers, sourcing of conflict minerals, mine safety information, disqualifying “bad actors”, accredited investor status, and corporate governance and compensation. We also are considering the recommendations in the staff’s Study on Investment Advisers and Broker-Dealers10 and preparing a request for data and economic analysis related to standards of conduct and enhanced regulatory harmonization to help inform any follow-on rulemaking.

JOBS Act Implementation

The Jumpstart Our Business Startups Act (JOBS Act), enacted on April 5, 2012, makes significant changes to the federal securities laws, including:

altering the initial public offering process for securities of a new category of issuer – called an “emerging growth company” – and providing exemptions for such companies from various disclosure and other requirements generally for up to five years following their initial public offerings.

requiring the Commission to modify the prohibition against general solicitation and general advertising in Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933 (Securities Act).

requiring the Commission to provide exemptions under the Securities Act for “crowdfunding” offerings and unregistered public offerings up to $50 million.

increasing the number of shareholders a company can have before it must register under the Securities Exchange Act of 1934 (Exchange Act), and changing the Exchange Act thresholds for registration and deregistration for banks and bank holding companies.

The JOBS Act also requires several SEC studies and reports to Congress.

Some of the JOBS Act’s provisions became effective immediately upon enactment, while others require extensive Commission rulemaking, in some cases under very tight deadlines. Commission staff have been working to analyze the legislation and provide information to companies and practitioners about the provisions currently in effect. For example, immediately following enactment of the JOBS Act, staff in the Division of Corporation Finance posted procedures on the Commission’s website to assist emerging growth companies that wished to submit draft registration statements for confidential non-public review, as permitted by Title I of the JOBS Act. In the days following enactment, the staff also prepared and posted practical guidance, addressing frequently asked questions by companies and practitioners on the confidential submission process for emerging growth companies and other matters under Title I, and on changes to the requirements for Exchange Act registration and deregistration.

We have formed rulemaking teams, which include staff from across the agency, including economists from the Division of Risk, Strategy and Financial Innovation. These teams are beginning to prepare proposed rules with economic analyses to recommend to the Commission to implement the various provisions of the JOBS Act. To aid the rulemaking process and increase the opportunity for public comment, we have made available to the public a series of e-mail boxes on the SEC website through which interested parties can send preliminary comments on each of the parts of the JOBS Act before any rules are proposed and the official comment periods begin.

Section 967 Response

To fulfill the requirements of Section 967 of the Dodd-Frank Act, the SEC engaged the services of The Boston Consulting Group (BCG), an organizational consulting firm with significant capital markets expertise, to conduct a broad and independent assessment of SEC organization and operations. The SEC retained BCG for the express purpose of carrying out the assessment required by Section 967 of the Dodd-Frank Act, which required, among other things, an independent assessment of the SEC’s internal operations, structure, funding, and need for comprehensive reform. Specific topics of study included: the possible elimination of lower priority or redundant units at the SEC; improvement of internal communications and organizational chain-of-command; the effect of new market technologies such as high-frequency trading; hiring authorities and personnel practices; and oversight and reliance on self-regulatory organizations (SROs).

On March 10, 2011, BCG delivered the results of its assessment to the SEC and to Congress in a 263-page final report titled U.S. Securities and Exchange Commission: Organizational Study and Reform.11 The final report, which was submitted within the 150-day deadline specified in Section 967, identifies initiatives for the SEC to pursue to improve efficiency and effectiveness of operations.

Over the last year, SEC staff have conducted in-depth assessments of the BCG recommendations for potential organizational improvement opportunities across the agency. This initiative, known as the SEC Mission Advancement Program (MAP), has recognized operational improvements in three key areas:

Reorganizing critical internal infrastructure. Following the 2010-2011 reorganizations of the Division of Enforcement and the Office of Compliance Inspections and Examinations (OCIE), the SEC is restructuring the offices of Financial Management (OFM), Administrative Services (OAS), Information Technology (OIT), and Human Resources (OHR) to align the organizations; better define roles, accountabilities and decision rights; and provide improved services to the program offices.

Reviewing key processes for efficiency and effectiveness. Agency working groups have analyzed a broad array of agency activities in an effort to reduce unnecessary steps, improve the distribution of resources to key activities, insert stronger internal controls, and improve responsiveness within the agency and to the public.

Locating cost savings opportunities. A Continuous Improvement Program (CIP) has been created to identify potential program savings and pay constant attention to costs, to date resulting in the identification of opportunities that are projected to save more than $8.3 million over the next two years.

The SEC’s actions with regard to the BCG recommendations are detailed in our most recent semi-annual report.12

Having completed the initial stages of review and analysis, it is anticipated that the level of activity related to MAP projects will be reduced in FY 2012. Staff and management time to devote to this initiative will continue to be in short supply, and future phases of implementation are likely to require levels of funding that must be directed at other agency priorities at this time. For this reason, future activity will be focused on a limited number of projects based on an assessment of their relative potential for operational impact or cost savings. In the coming months, the working groups will continue to assess the changes suggested by BCG to refine and identify those that would provide the most benefit to the SEC and the public.

The SEC’s FY 2013 Budget Request and Future Priorities

The SEC is requesting $1.566 billion for FY 2013, an increase of $245 million over the agency’s FY 2012 appropriation.13 If enacted, this request would permit us to add approximately 676 positions (196 FTE) for both improvements to core operations and implementation of the agency’s new responsibilities.

The FY 2013 funding request would be fully offset by the matching collections of fees on securities transactions. Currently, the fee rate is equal to approximately two cents per every $1,000 of transactions. Under this mechanism, the SEC is deficit-neutral, as any increase or decrease in the SEC’s budget would result in a corresponding rise or fall in offsetting fee collections.

The resources requested for FY 2013 would allow us to achieve four high-priority initiatives: (1) adequately staff mission-essential activities to protect investors; (2) prevent regulatory bottlenecks as new oversight regimes become operational and existing ones are streamlined; (3) strengthen oversight of market stability; and (4) expand the agency’s information technology systems to better fulfill our mission.

Protecting Investors

Investor confidence in the fairness of financial markets is a critical element in capital formation. The SEC intends to continue its efforts to enhance its investor protection activities by directing significant additional staff resources to our enforcement and examinations programs.

Enforcing the Securities Laws: In FY 2013, we hope to increase the resources dedicated to the enforcement program to help improve our ability to identify hidden or emerging threats to the markets and act quickly to halt misconduct, minimize investor harm, and maximize the deterrent impact of our efforts.

Inspection and Examination Program: The investment industry is rapidly evolving, with the development of new products posing new risks to investors and the increased complexity of the markets posing challenges to regulators. We have implemented, and continue to improve, a risk-based inspection and examination program that continually collects and analyzes a wide variety of data about regulatees using modern quantitative techniques. Nevertheless, only analyzing data offsite is not sufficient in our complex markets. There is no substitute for engaging directly with regulatees through on-site examinations. Examinations provide the most timely, accurate, and reliable information to assist us in fulfilling our mission. They also help us to maintain a critical presence with market participants. In FY 2011 we were only able to examine eight percent of registered investment advisers, managing about 30 percent of total industry assets under management. About forty percent of registered investment advisers have never been examined. In FY 2012 we are adding exam staff to help improve this disparity and we hope to add more in FY 2013 as well. Without additional resources, the increasing complexity of registered firms and the disparity between the number of exam staff and the firms could compromise the effectiveness and credibility of the Commission’s inspection and examination program.

Risk Data and Analysis: As the industries we regulate use increasingly sophisticated technology and high-frequency trading algorithms, our ability to use statistical and trend analyses to identify potentially inappropriate or risky industry practices is essential to help inform our enforcement, examination, and rulemaking efforts. Our Division of Risk, Strategy and Financial Innovation plans to continue to develop and implement robust analytical models to identify regulated entities with high-risk profiles.

Preventing Regulatory Bottlenecks

As we continue to implement the Dodd-Frank Act and begin our JOBS Act rulemaking, we will need additional resources, including new subject matter experts, to help make the transition to new rule regimes as smooth as possible and to streamline existing processes for market participants, while still maintaining essential protections for investors.

Over-the-Counter Derivatives: In FY 2013, the Commission’s regulatory responsibilities will significantly expand by the addition of new categories of registered entities (including security-based swap execution facilities, security-based swap data repositories, security-based swap dealers, and major security-based swap participants); the required regulatory reporting and public dissemination of security-based swap data; and the mandatory clearing of security-based swaps. To avoid any unintended market disruptions as the new requirements become operational, the agency will need additional staff with technical skills and experience to process and review on a timely basis requests for interpretations as well as registrations or other required approvals. New staff also will be needed to help conduct risk-based supervision of registered security-based swap dealers and participants, including by using newly-available data to identify excessive risks or other threats to security-based swap markets and investors.

JOBS Act: The rulemaking required for implementation of many new JOBS Act provisions will be complex. Additionally, the JOBS Act requires the Commission to undertake a number of studies and complete several reports. Because many of the rulemakings, studies, and reports are subject to near-term deadlines, resources will need to be shifted to these projects. Longer term, certain of the changes in the federal securities laws caused by the JOBS Act will require ongoing staff resources, including for the review of confidential draft registration statements submitted by emerging growth companies and supervision of intermediaries in crowdfunding transactions.

SRO Rule Approvals: The Commission is responsible for reviewing and processing proposed rule changes of SROs to evaluate their impact on the protection of investors, the public interest, and the national market system. The Dodd-Frank Act’s imposition of new procedural requirements with respect to the SEC’s processing of proposed SRO rule changes has placed further demands on an already complex and resource-intensive process. The volume of annual requests has increased by over 80 percent in the last five years, with the Commission receiving over 2,000 requests for approval or guidance in 2011. We hope to be in a position to dedicate additional resources to these approvals so that market participants do not face greater uncertainty, costs, and delays in obtaining Commission action on new products, trading rules, and platforms.

Economic Analysis: As the Commission undertakes additional rulemaking and evaluates existing rules, continued access to robust, data-driven economic analyses is necessary to develop efficient rules and evaluate the effectiveness of our existing regulations. The Division of Risk, Strategy and Financial Innovation will need additional economists and industry experts to support these efforts.

Providing Interpretive Advice: As the Commission implements the rules required under the Dodd-Frank Act and the JOBS Act, there will be a need for additional staff to respond to the demand from companies, investors, and their advisors for interpretive advice about the new rules. In FY 2013, for example, we expect a heightened number of interpretive inquiries from public companies on new rules relating to listing standards for executive compensation, disqualification of felons and other bad actors from certain exempt offerings, and specialized disclosure rules. In addition, we expect the need for interpretive advice for JOBS Act related matters will only increase, particularly as rulemakings related to a number of the more complicated provisions, like crowdfunding and the new $50 million offering exemption, are completed.

Strengthening Oversight of Market Stability

The rapidly expanding size and complexity of the financial markets presents enormous oversight challenges. For FY2013, the SEC is requesting funding for additional specialists in a number of areas to strengthen our oversight of the markets, protect against known risks, and best enable our markets to facilitate economic growth.

Clearing: Currently, the average transaction volume cleared and settled by clearing agencies is approximately $6.6 trillion a day. The SEC estimates six new clearing entities will register with the SEC in FY 2013, totaling fourteen active registered clearing agencies. The SEC has approximately thirteen examiners devoted to the eight currently active registered clearing agencies, with limited on-site presence in only three of the eight entities. Additionally, the SEC has only approximately twelve other staff principally focused on monitoring and evaluating risk management systems used by existing clearing agencies. We will need to expand these efforts to address the expected increase in the number of clearing agencies and rule filings raising risk management issues.

Market Structure Improvements: The Commission is continuing its efforts to monitor and respond to significant market events, such as the severe market disruption of May 6, 2010. In response to market structure issues, the Commission is currently evaluating a proposed “limit-up/limit-down” mechanism that would help enhance market stability by preventing trades in individual securities from occurring outside of a specified price band. The Commission also continues to review proposed amendments to the existing market-wide circuit breakers designed to address extraordinary volatility across the markets and to make the circuit breakers more useful in the fast-paced electronic trading dynamics of today’s markets. Importantly, the Commission also is likely to move forward on the establishment of a consolidated system for tracking trading activity in the equity markets, which will enhance the data available to securities regulators for a range of critical analytical and regulatory purposes.

Money Market Funds: I have asked Commission staff to prepare recommendations on structural reforms to money market funds to lessen their susceptibility to runs and to enhance the protections afforded investors. These reforms would supplement the rules limiting the portfolio risk in money market funds that the Commission adopted in FY 2010. The Division of Investment Management plans to expand and improve its monitoring and oversight of money market funds and bring on additional staff with industry and data analysis expertise in this highly specialized area.

Exchange Traded Funds: Exchange Traded Funds, or ETFs, are rapidly growing, increasingly complex financial products whose activities raise significant disclosure, conflict of interest, market structure, and macro-prudential issues. The SEC plans to augment its ability to respond effectively to product innovation and potential market stresses in this area. Staff with specialized industry expertise are needed to assist in evaluating novel and complex ETF products, structures, trading mechanisms, and index replication methodologies.

Cybersecurity: Financial entities are recognized as particular targets for attempted cyber attacks. The SEC already has a program in place that monitors cybersecurity at the various securities exchanges, but the growing number of trading and clearing platforms will require additional staff to further enhance this function.

Leveraging Information Technology Systems

The preceding discussion demonstrates that growth in both the size and complexity of U.S. markets requires that the SEC leverage technology to continuously improve its productivity, as well as identify and address the most significant threats to investors. The SEC’s budget request for FY 2013 would support IT investments of approximately $100 million. This level of funding would enable the Office of Information Technology to dedicate adequate resources to new or ongoing projects in areas such as data management, integration and analysis; document management; disclosure review; and internal accounting and financial reporting. Additionally, the SEC plans to continue multi-year initiatives to improve the enforcement and examinations programs’ capabilities to intake and process thousands of tips, complaints, and referrals received annually, as well as massive amounts of electronic evidence. The SEC also plans to make additional investments in electronic discovery, its forensics laboratory, and reporting tools.

As part of our effort to improve key technology, the SEC is also using the Reserve Fund established by the Dodd-Frank Act to address important multi-year technology initiatives. This year and next we plan to use the Reserve Fund to make vital investments to modernize our EDGAR Filer system and external website, SEC.gov, which directly serve investors and public companies. The EDGAR database is used by companies and individuals to file periodic reports and information with the SEC and allows SEC staff and the public to search the filings. With approximately 20 million daily page hits, SEC.gov is one of the Federal Government’s most viewed web sites and a critical gateway for both businesses and individuals to access massive amounts (13.5 terabytes) of financial filer information maintained by the SEC. However, both EDGAR and SEC.gov were developed in the 1990s and use outdated software design and scripting language. We intend to invest in overhauling EDGAR and SEC.gov to create new, modernized systems that would improve the agency’s ability to meet Commission requirements and satisfy public needs; simplify the interchange between filers and the SEC to reduce filer burdens; and reduce the long-term costs of operating and maintaining the systems. We will also be working to improve data structure and database performance, verify data, and construct a single data repository and central staging area for all EDGAR and other SEC data.

In addition, in FY 2013 we plan to use the Reserve Fund to develop Market Oversight and Watch Systems that will provide the SEC with automated analytical tools to review and analyze market events, complex trading patterns, and relationships; develop fraud analysis and fraud prediction analytical models; and deploy natural speech, text, and word search tools to assist our fraud detection efforts. Additionally, we will continue to enhance our analytical tools, databases, and intake systems for market data, mathematical algorithms, and financial data.

Conclusion

I fully recognize that it is incumbent upon the SEC to maximize our efficiencies and continue our organizational modernization efforts. As we protect investors, we have an obligation to be good stewards of the resources provided to us. We are carefully reviewing our activities to identify ways to improve efficiency and productivity. These ongoing efforts, along with continued congressional support, will be essential to enable the SEC to fulfill its mission even as the financial markets continue to grow in size and complexity.

Thank you for your support for the agency’s mission and for allowing me to be here today to discuss the many initiatives and operational reforms taking place at the SEC. I am happy to answer any questions you may have.

THANK YOU ALL – FOR THE TIRELESS HOURS AND WORK TO IMPROVE WORLD FINANCIAL STABILITY

Berny Dohrmann – www.ceospaceinc.com( now you are ore fully informed and thank YOU Mary Shapiro and President Obama for keeping Mary on Deck ).

HOT GULF – ISREAL II

Berny — Fri, 18 May 2012 00:20:11 +0000

Benjamin Netanyahu, Israeli politician (Photo credit: Wikipedia)

ISREAL TAKE TWO – “MANDATE” ….

Benjamin Netanyahu has pulled off what has been acclaimed, by some of his detractors as well as his admirers, as a masterstroke. The Israeli prime minister last week called early elections, only to seal a coalition alliance with his principal opponents, who faced a meltdown at the polls. He is unquestionably a master tactician. Now, Israel and the world need to know whether he is a statesman.

With a grand coalition now numbering 94 out of 120 members of the Israeli Knesset, Mr Netanyahu at a stroke has freed himself from the importunate lobbies gathered inside his narrower, ultra-nationalist coalition, in particular those parties representing Jewish settlers in the occupied West Bank and ultra-orthodox religious Jews.

The new alliance, built around his nationalist Likud party and the Kadima party founded by Ariel Sharon, the former prime minister, reunifies the mainstream right – although it is not clear around what principles. Shaul Mofaz, the Kadima leader, only recently called the prime minister a liar and described his government as “everything that is wrong with Israel”. Now they are partners.

Mr Mofaz’s primary service will be to provide Mr Netanyahu with a shield: against the far right at home through Kadima’s numbers; and against Barack Obama, US president, and his European allies abroad, by virtue of his party’s perceived moderation on both Iran and the Palestinian question.

At home, the new government is now well-placed to tackle two long-overdue and controversial reforms.

The first is to change the so-called “Tal law”, enabling ultra-orthodox Jews to evade military conscription. The Supreme Court recently declared the law unconstitutional but amending it was opposed by allies in the previous coalition such as Shas, a Sephardic ultra-orthodox party whose power comes from its ability to make or break coalitions. The second and related reform is to change Israel’s enfeebling system of proportional representation, whereby any party polling 2 per cent gets into a fragmented Knesset, allowing groups such as the settlers and religious lobbies to extort subsidies and hold the government hostage.

Additionally, the reinforced government is better placed to take measures to deal with any recurrence of last summer’s mass protests by disaffected youth, the secular middle classes and workers, by putting more money into housing and education. That would have the additional attraction of stunting the revival of Labour, now Israel’s only real opposition.

But it is Israel’s regional and Palestinian policies that will be watched most closely – and that will provide the real measure of a reinvigorated Mr Netanyahu.

Although national unity governments have in the past been the prelude to war – as, for example, before Israel launched the 1967 six-day war – it is not clear whether this one makes it more or less likely that Israel will bomb Iran’s nuclear facilities. Certainly, as a former army chief of staff and defence minister during the second intifada, Mr Mofaz has the credentials to blunt the recent criticism of Mr Netanyahu’s belligerence on Iran from the current head of the army and former spy chiefs.

Mr Mofaz has said he regards the Palestinian question as far more important than Iran. In his analysis, failure to negotiate a two-state solution that gives the Palestinians their own country would lead to a binational state in which Jews eventually become a minority, ruling over a majority of Palestinians. That poses a greater existential threat to Israel than Iran’s still opaque nuclear ambitions, which Mr Mofaz apparently trusts Mr Obama to manage, through a policy of sanctions and diplomacy.

The sketchy coalition deal says the government will “advance a responsible peace process”. Yet we know Mr Netanyahu believes it is irresponsible to shrink Israel to anything like its former size. It is unlikely, too, that the recent death of his ideologically intransigent father has made the son less committed to a Greater Israel.

But however much Mr Netanyahu continues to expand Jewish settlements on occupied land, the contours of an agreement with the Palestinians will not change: a viable and contiguous state, on the 22 per cent of Palestine that encompasses the West Bank, Arab east Jerusalem and Gaza. To resolve that would do much more for Israeli security than bombing Iran.

Mr Netanyahu has the opportunity to secure Israel’s future, or to condemn it to a precarious existence in an increasingly hostile region, with its legitimacy eroding abroad. He no longer has the excuse of insufficient support.

We continue to predict Isreal will strike IRAN by the fall – which remains our forcast – and opinion – given the distraction of the EU and the world on the EU issues – we feel the timing in an election year is ideal for the action and frankly without a signal Iran wishes to join FULL PARTNERSHIP with the world waiting to truly WELCOME their leadership in such a signal – Isreal has no choice for the entire world …we can suggest.

Berny Dohrmann www.ceospaceinc.com

US IS THE NEW GULF FOR ENERGY

Berny — Wed, 16 May 2012 15:07:59 +0000

Opec Organization of the Petroleum Exporting Countries countries (Photo credit: Wikipedia)

LARGEST RICHEST CONTINENT…LARGEST ENERGY RESERVES NOW COMING TO USA

Every president since Richard Nixon has called for the U.S. to wean itself from needing oil from unstable or unsavory countries. The nation’s new-found energy riches are likely to bring that ambition closer to reality in the next two decades, according to many forecasters.

It’s no pipe dream. The U.S. is already the world’s fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is “the new Middle East,” Citigroup analysts declare in a recent report.

The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half. Energy billionaire T. Boone Pickens, a major investor in oil and natural-gas companies, said the U.S. can at least end oil imports from Organization of Petroleum Exporting Countries, about half its total, through new drilling and by shifting diesel-swilling trucks to natural gas. Any other oil needs should be from politically stable allies such as Canada, Pickens said.

Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020, as more domestic production and doubling down on conservation produce a virtuous cycle. The U.S. can make itself a net exporter of crude oil, refined products and natural gas — says Citigroup energy strategist Seth Kleinman.

“The notion of the U.S. getting to zero net imports of oil is obviously a sexy notion, but it’s not necessary for it to mean the world will change,” he says. “We are seeing a dramatic collapse in U.S. net imports of oil as we speak, to the tune of almost 1 million barrels a day each year over the last four years.”

If anything like that happens, an improbable-sounding litany of good things can result.

In practical terms, more energy independence could mean 3.6 million new jobs, enough to cut unemployment by two percentage points, Citigroup argues. It could help manufacturers and chemical businesses that use lots of energy or make products from natural gas. It might give the U.S. a structural advantage on trade partners in energy costs, helping to offset the edge that cheaper labor gives nations such as China, Kleinman says. Already, U.S. natural gas prices are a seventh of what they are in Beijing, Pickens says.

“The potential is clearly there for a genuine revitalization and reindustrialization of the economy,” Kleinman says. “In industries where energy is a major element of costs, the U.S. is moving into a uniquely advantaged position.”

After years of gripes that the U.S. imports too much oil, the energy industry is pumping a gusher of good-news numbers:

•The U.S. price of natural gas has plummeted more than 80% since 2008, including nearly 45% in the last year, thanks to new supplies. The falling cost of natural gas alone will save U.S. households $926 a year between now and 2015, consulting firm IHS Global Insight says.

•The USA’s 15% gain in crude-oil production since 2008 is by far the world’s biggest, with new fields just beginning to be developed. The U.S. has overtaken Russia as the world’s largest refined-petroleum exporter, according to Citigroup.

•Utilities’ switchover to cheap natural gas from coal is lowering power bills. One utility switching to more gas plants, Georgia Power, has filed to cut Atlanta-area electricity rates 6%, citing a 19% drop in fuel costs.

Drill and conserve

A dozen years after Texas wildcatter George Mitchell commercialized a new gas-drilling technology called hydraulic fracking, the new energy boom is taking off. It began with gas, as fields such as the Marcellus Shale in the Northeast and the Barnett Shale in Texas began producing gas that hadn’t been recoverable until Mitchell combined fracking — which uses chemicals, water and sand to force gas out of rock — with horizontal drilling, which yielded much more than simply drilling straight down.

More recently, the same technologies have been adapted to drill for oil. Oil fields are being developed from Pennsylvania to Alaska — a half-dozen or more major sites, each including many smaller ones.

The rush to oil from gas is now so fast that Devon Energy, the No. 3 independent oil-and-gas-driller, isn’t drilling a single new gas well this year, CEO John Richels says.

Because of fracking, Citi says U.S. oil production might climb more than a third by 2015, driven by “tight oil” from shale and tar sands that until recently was too costly to extract. Government estimates say domestic production will rise 22% by 2020 to 6.7 million barrels per day. At the same time, the 19 million barrels that Americans burn daily may fall by 2 million, by Citi’s numbers. One reason: The EIA says the U.S. will be 42% more energy-efficient by 2035, continuing an enduring trend.

One reason for all that new efficiency is regulation.

Automakers face federal corporate-average fuel economy standards doubling, to up to 54.5 miles per gallon by 2025. A 2007 law requires oil companies to quadruple production of renewable auto fuels by 2022. States such as California are making utilities buy up to 60% more renewable-sourced electricity by 2020, says Stuart Hemphill, vice president for power supplies at Southern California Edison. “In California, only two kinds of (energy-producing) facilities are getting built — natural gas and solar,” Hemphill says.

Why $2 gasoline is unlikely

For consumers, America’s new energy supplies help contain costs — but they’re not a magic path back to $2 gasoline.

The good news: Natural-gas heating costs have dropped nearly 40% since 2008, undoing half their 160% climb after 1999. Electricity costs have remained flat, too.

The bad news: Gasoline prices have flirted with all-time highs this year, and even the fast-emerging new supplies are unlikely to offer major relief soon.

To understand why, it helps to master some numbers.

First is the number two — the U.S. has two main energy markets, one each for electricity and transportation. They’re very different. Electric utilities use mostly coal, natural gas and nuclear power, or renewables, almost all from the U.S. and Canada. Cars use oil, about 45% of it imported.

The second big number is 86 — the 86 million barrels of crude produced worldwide daily. About 19 million are burned in the U.S., three-fourths of them for transportation, the government says. About 8.9 million are imported, 4.2 million from OPEC. Bringing crude-oil imports down will be about changing how Americans fill gas tanks — or whatever advanced electric-car battery replaces gas tanks.

Domestic natural-gas gluts will do little for real energy independence until more cars use electricity or natural gas, says Hemphill. That’s one reason Pickens is campaigning to subsidize converting business truck fleets to natural gas — legislation the Senate defeated in March.

“I’m for anything American,” Pickens said. “I want at least to get off the 5 million barrels a day we get from OPEC.”

The most important number may be $70 — the estimated cost to produce a barrel of oil from shale or tar sands, the heart of the new U.S. supplies. While natural-gas prices have sunk, oil prices might not, since they typically follow the cost of producing the most expensive barrel on the market.

Today’s world oil prices of about $111 a barrel are boosted by tensions from Iran’s nuclear program, as well as emerging-market oil demand that will exceed that of developed nations for the first time this year, according to the International Energy Agency. At about $95 a barrel, U.S. oil prices have risen, too, even though the U.S. doesn’t import Iranian crude.

Using the rule of thumb from research firm IHS CERA, that a $10 move in crude changes U.S. gasoline prices by 24 cents a gallon, dropping crude to $70 would lower pump prices about $1, leaving gasoline near $3.

Broad economic impact

Even so, all this new energy is creating jobs across the country. North Dakota, now the nation’s fourth-largest oil producing state, boasts a 3% unemployment rate, the nation’s lowest. In Williamsport, the local economy grew 7.8% in 2010, making it one of the nation’s fastest-growing metro areas.

Projections for energy-related jobs vary, but are all pretty large. More than two-thirds of Citi’s estimated 3.6 million new jobs will come from multiplier effects, as the 550,000 new workers in fossil fuel-related jobs spend their incomes, or as other Americans spend the money they save from cheaper energy, Citi says. IHS Global Insight says the natural-gas boom alone has created 600,000 jobs and will rise to 1.6 million by 2025.

The money saved on energy will pay dividends throughout the economy. Lowering the $400 billion the U.S. sends abroad annually for oil would function like a huge tax cut, says Chris Lafakis, energy economist at Moody’s Analytics.

“A third to 40% would be my guess” at how much the U.S. can cut imports by the next decade, Lafakis says. “At 40%, that’s $160 billion a year, and that’s massive. It’s like the temporary payroll tax cut we have now, plus a third, and it lasts forever.”

A less statistical way to reckon all this is to look at Williamsport.

“It put people to work who hadn’t worked in a long time,” Pennsylvania Gov. Tom Corbett says. “It was a natural-gas rush that put demand on housing, on stores, on restaurants.”

Watching for exaggerations

Yet many hopes — and fears — about the U.S. energy boom will likely prove exaggerated.

Citi’s thesis that gas and oil will stay cheaper in the U.S. than abroad, for example, assumes most exports of U.S. crude remain illegal and natural-gas exports stay rare, says Mark Zandi, chief economist at Moody’s Analytics. Instead, U.S. crude is likely to be refined into exportable products such as gasoline, while infrastructure to export liquefied natural gas improves. Both will pull U.S. prices toward higher world levels, he says.

“Markets have a wonderful way of finding their way around restrictions when there’s money to be made,” Zandi says.

Williamsport exemplifies the likeliest impact of all. With natural-gas prices so low, drilling has all but halted. But gas companies are using the lull to build pipelines, as drilling action moves to oil patches in Western Pennsylvania.

In the meantime, some spinoff industries are coming into focus. Shell has announced plans to build a cracking plant, which will make chemicals from natural gas, outside Pittsburgh. The expected payoff includes 10,000 construction jobs, Corbett says. All this is part of turning the short-term energy boom into a long-term economic plan, he says.

While short-term booms wax and wane, hope persists that the new oil and gas means a better future for Williamsport, and for America.

“They tell us not to worry,” the Chamber’s Matteo says. “The gas isn’t going anywhere and neither are they.”

This means untold stablity and leadership for the USA for generations.

Energy Policy takes time but it IS working folks – think about some good news in the USA…

Berny Dohrmann

Chairman – www.ceospaceinc.comMay 22nd next business trade show in Vegas

CROWD FUNDING REGULATORY AGENCY

Berny — Tue, 15 May 2012 16:02:19 +0000

Cover of The Rainmakers

THE INTERNATIONAL CROWD FUNDING ASSOCIATION IFGA

The IFGA launches on Thursday of next week at the Revella Hotel with a founding Board in attendance. The largest industry client community ( issuers ) represented by CEO SPACE – Peak Potentials – Rainmakers – WIN – Laughlin USA – and other larger communities of small business owners, are coming together for the first REGULATORY GRADE self policing agency. FINRA represents the general Broker club of firms that create funding for mezzanene – IPO and Merger Acquisition funding – with experinece in general securities markets and bond trading. FINRA members have limited expertise in the SEED ROUND INDUSTRY as their members do not offer this service.

The ICFA specializes in the unique issues of SEED ROUND. The group will embrace the first REGULATORY GRADE PORTAL – not a consumer issuer and investor matching site – but a fully compliant site to match Congressional mandates for security issurance, escrow transparency, privacy, certiication, single site monitoring of all investor interections and disclosures including electronic security purchases providing cradle to grave legal liabilty reduction for law firms, reglatory agencies, and the issuer investors. The REGULATORY GRADE PORTAL for Crowd Funding RGP will revolutionize everything within a 25 million dollar multi year design tracking the congressional law precisely. Designed specifically for SEC enforcement use the RGP is light years ahead of any other protocol coming from the end user view versus the regulatory requirement.

The software is being demonstrated to key Senate appropriaators, the regulatory community in DC and to the founding board members of the ICFA. The ICFA will associate guide line education as well as uniform application at an OVER COMPLIANCE standard, for both Crowd Funding and the far larger GENERAL SOLICITATION new rules. It remans our opinion those in the industry will either be ICFA members or regulatory targets.

Bad law and bad advice will provide no shelter in this new industry.

The RECENT SEC clamp down on SHELL deals reported on this blog is one welcomed direction.

The recent California shut down of Pro Funding for using Crowd Funding to violate state and federal security laws results in quick action by the state authorities to protect the public.

Sweeping crack downs for the informed early stage Crowd Funding firm lacking ICFA protocols protections and information is predicted.

The ICFA will be what FINRA is to the brokerage industry in the SEED ROUND SPACE. ICFA officials are in discussion with FINRA to establish close working relationships with their govening authorities in a collective conspiracy to enforce the law to the public welfare.

Berny Dohrmann

Chairman

CEO SPACE BAN ON “SHELL” DEALS

Berny — Tue, 15 May 2012 15:48:09 +0000

A photo of US Securities and Exchange Commission Chair (2009-). The file being uploaded is here. (Photo credit: Wikipedia)

SEC CRACKS DOWN ON SHELL DEALS AS WE REPORTED HERE…

CEO SPACE has long standing policy banning SHELL DEALS from the five CEO SPACE annual trade shows? Why? Because investor fraud and risk is so high, that it makes zero sense for these structures to be used as a fronting device for raising capital. Crowd Funding could be used to wholesale SHELL DEALs a big fear of our team, and we have advised the SEC that tougher rules for guidelines in Crowd Funding and in General Soliciation are desired to assure that the appetite for fraudsters to employ either Crowd Funding or General Solicitation to FRONT their shady public shell game firms, is precluded. The public has no way to appreciate the risk issues of shell investing. We so applaud the following action by the SEC and Thomas Sporkin – the great Stanley Sporkin formerally of Gibson Dunn law firm would be so proud…so proud…and now this:

IN THE PUBLIC INTEREST: ( CEO SPACE BANS SHELL DEALS FROM ITS NETWORK IN ALL ITS TRAINING ):

Regulators shut down trading in nearly 400 microcap stocks Monday, the Securities and Exchange Commission‘s biggest effort yet to crack potential fraud using shell companies before it happens.

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SUPER CRASH 2012

Berny — Mon, 14 May 2012 00:14:50 +0000

Map of the top 50 countries with the largest Greek communities (Photo credit: Wikipedia)

FOR TWO YEARS WE HAVE WRITTEN ABOUT SUPER CRASH

The historic melt down of competitive capitalism in over extended credit matrixing that deleverages world financial systems. We now view this week as volatile set ups for:

1. The EU contagion that is spreading from the Greeks leaving the EU which will be spun as not catastrophic – but it will be CATASTROPHIC after almost 100 billion lost to the Greeks – watch carefully.

2. Spain and Italy are next as the credit is melting down.

3. Germany can’t fund the rest of the EU lies and economic bad faith deals.

4. Until they ban speculation from bank trading and greed returning REAL STAKE holder investing the market is a casino of speculation – out of control.

5. China is melting down and this weekend moved to emergency stimulation – of its economy which markets this week will accomodate.

Morgan loosing 2 billion of bank money in raw speculation they admit is DEAD WRONG is a crime – more than negligent – yet no prosecutions of the bankers at the top who loose all the money taking impoossible bonus money to do so – takes place. The entire market is hostage to SUPER CRASH to moderate the GREED – which is 100% historic and always follows what we have just been through – 1929 started the down spiral into deflation until SUPER CRASH later moderated the market space and the regulatory officials than criminally outlawed – all the speculation which created a global prosperity for 50 years to follow – like the world has never seen. In 1999 Congress unanimously passed the return of all the speculation – in a decade the wealth was stolen to greed – financial history is what we seem not to learn from – we should teach financial history to avoid reliving it….

Berny Dohrmann – retired investment banker

ICFA ALERT ON CROWD FUNDING

Berny — Sun, 13 May 2012 23:45:21 +0000

State Seal of California. (Photo credit: Wikipedia)

SWEEP REGULATORY ACTION IS AS WE WARNED NOW COMING

The International Crowd Funding Association issues the recent ALERT that the State of California is effectively moving into regulatory action which will shut the operations of PRO FUNDING a jump the gun Crowd Funding entity. The State of California and others are moving into the Crowd Funding area noting Crowd Funding and General Solicitation as defined by the JOBS ACT of 12012 remain ILLEGAL until the Federal and State authorities release guidelines as called for in the act. It is reamined our position the new guidelines may not be effective until 2013 irrespective of the urgent need to create new JOBS in AMERICA the engine of the world recovery. Regulatory action on breach of crowd funding law, private placement exemption applications, fraud, broker deal violations, disclosure violations, finder violations, and investors will wish to avoid all these offers. Begin to seek out exclusively ICFA members to deal with reducing risk from non member associations. Look for the ICFA seal on web sites of leading Crowd Funding entities developing in this two billion dollar developing new industry. Don’t be fooled. Avoid the die hards and follow the golden rule – if it is too good to be true – it is not golden. Stay informed. Crowd Funding is illegal until the regulatory community declares the Jobs Act is effective with rules to assure investors are protected. These rules are not released yet. Get all the information. Lean everything about Crowd Funding first. Here is how to step ahead of the crowd:

A growing number of entitities are offering Crowd Funding for Pay classes and implimenting Crowd Funding now. These folks are making errors, which the regulatory agencies responsbile for investor fraud and protection, find are not amuesing. Sweeping crack downs are anticipated all over the 2012 Crowd Funding Space.

Industry Leaders such as Laughlin USA, WIN for Woman, Peak Potentials, Rainmakers, and the most famous names you know, are coming together ina founding BOARD LAUNCH at the Revella Hotel on May 24th to establish the INDUSTRY STANDARDs for the International Crowd Funding Association serving as laison to the regulatory community with one voice, and to assure regulatory guidelines remain implimented in OVER COMPLIANCE now and in the future for Assocaition members. The legal liablity of dealing with ICFA members – is going to be protective of investors – general consumers – the industry participants and the congressioal regulatory intent.

CEO SPACE is hosting a launch series of advanced lessons on CROWD FUNDING – the essential information FROM THE SOURCE in Washington DC May 22nd to May 27th in a small busines owner retreat. Law firms enjoy 30 hours of credits for attending plus more new clients in a week than they may get in an entire year – a great tax transfer while they run their billable hours from the CROWD FUNDING SUMMIT – first in history. The program occurs at the Revella Hotel and the leaders in Crowd Funding your reading about in the newspapers will all be on site to meet you.

Registration for a LIFETIME membership for on going training every 60 days ( for free ) for LIFE is acquires as an asset for your business- www.ceospaceinc.com – under enroll and use the CLASS DATE TAB for hotel reservations at the lowest possible discount in the five star Lake Tahoe Resort Hotel – just follow the link. Share with your alls and friends – Crowd Funding is the essential new opportunity for a business owner – professional – inventor – service sector – law firm – investor private or insitutional – hedge fund -private equity – venture funds – and invidiual private investors. Each catagory needs the vital information FROM THE SOURCE they can not acquire anywhere else -

Be early to get it all right.

Invest as Napoleon Hill in Think and Grow Rich and his recent OUTWITTING THE DEVIL publications states – to arrive FIRST where everyone else is soon going – and be waitin for them when they arrive to generate real wealth. The foundation of a TWO BILLION DOLLAR CROWD FUNDING INDUSTRY is taking PLACE wheels UP Tuesday May 22nd – to May 27th – with extraordinary networking business to business to develop new clients and customers. You must speed up your business inside this summit or your money IS refunded before you leave he building.

The risk is you fail to risk WINNING !

Spread the word …see a video and you will want to spread the word.

Tip: Search YouTube for CEOSPACE and look at the SUPER STARS talking about it all over YOUTUBE. The Crowd FUNDING MAY SUMMIT being the most important SPACE in 25 years…

There is NO ACCIDENT this information found you.

The timing from the Universe is always precise and on time – for YOU.

The difference of improving your results as you SPEED UP EVERYTHING revolves around your decision to upgrade your own software.

No other priority pays ten dollars for a single tax dollar invested in – come get your higher returns.

Berny Dohrmann
Chairman www.ceospaceinternational.com

DELEVERGING RISK TO UNWIND EVERYTHING

Berny — Sun, 13 May 2012 18:27:56 +0000

Model of the ECB's new headquarters, which is due to be completed in 2014. (Photo credit: Wikipedia)

We suggest IF nations cut back spending, if banks are unwinding versus

MAY 22nd a HUGE 30 YEAR GROWTH IN YOUR BIZ COOPERATIVE COMMUNITY TO NETWORK INTO – CAN BE YOURS

Swinging UP, where is the lake of circulation coming from that will rebuild economic tissue? How would as a theory on modeling would we proceed. Morgan just lost 2 billion of Chase bank money in the same crises driven derivitive, wild speculations for huge profits that always destory wealth – such instruements should be criminal – world wide – the notion they hedge is ridiculous with 2 trillion in loss now – how do you reclaim 2 trillion in casino capitalistic loss – banks are beyond recovery from these wild speculations in assets that have no value of any nature – and the result is only with fuzzy accounting only banks can use without going to prison – their books look solvent when in fact they are not solvent. In the end it will be required to:

1. Reform Competititive Capitalism into Cooperative Capitalism – world wide

2. Merge Federal Reserve Boards ( privately owned bank stock firms not federal agencies of any nature ) into the TREASURY of nations to stop the franchiase practice of paying out interest to print “we the people’s money supply” – idiotic in the age of the cloud ….stop that debt cycle of competitive manipulative capitalism and stop paying people who profit from the crises. The fed has made billions upon the crises – how is that ‘right”?

3. Make it a felony to invest outside bond and equity direct ownership – hedging requires stock and bond pooling – versus investment in naked short selling and structured assets that are bets like a casion on which way a commodity or equity or debt may take of to – ban them and make them illegal as they were for 70 years world wide.

4. Nationalize illiquid banks into a single Federal Bank and spin the BAD BANKS out to insttutional traps to work out thier issues over long time frames with long term bond refinancing undera Treasury group control.

5. Separate investment banking and deposit banking and assure the two can never again come together -the source of all financial melt downs into war – a policy we can no longer bare to repeat.

The develeging of banks is so enormous going forward one can not appreciate how 11 trillion dollars of bond paper for corporations and commerial paper for commerical real property owners world wide will have the liquidity to refinance in 2012 to 2015. We can not see how the system iteslf will not suffer SUPER CRASH. We feel SUPER CRASH will now follow an Isreali Attack on Iran and we feel that attack is going to happen this summer or fall. We are planning cooperative communities of world business owners small mid and large to band together to prosper during the develop changes – if you believe these changes are likley or coming or you just want to know about CROWD FUNING from the SOURCE – you should exchange a tax dollar for a lifetime membership in CEO SPACE and share this on walls blogs and group mail – so others can build their cooperative community May 22nd.

The Law of Attraction;

1. There are NO Accidents …NONE.

2. Everything finds you precisely when you desire and require the help.

3. The Universe is always accurate in its timing – trust your inner voice

Click www.ceospaceinc.com and see a short video – say Elvis Brothers video David Stanley for a short beverage break overviw on how to SPEED UP EVERYTHING in your agenda.

And now this:

Global bank bond issuance has fallen to its lowest level in seven years, underscoring the impact the eurozone crisis and tougher regulatory environment is having on the way banks operate.

Banks have raised just $523bn in the bond markets so far this year, the lowest year-to-date volume since 2005 and well down on the same period last year, according to Dealogic.

The fall in issuance comes as banks around the world are offloading assets, winding down businesses and increasing the amount of money they hold in reserve as they seek to meet regulatory requirements.

In Europe bank issuance of covered bonds and senior unsecured debt – two mainstays of bank funding – has slowed to a crawl after banks loaded up on cheap loans from the European Central Bank.

European banks have raised just $33bn in the capital markets since the start of April. Though they are only half way through the second quarter, this is still a fraction of the $217bn raised between April and June last year.

While the second quarter tends to be quieter than the first, analysts say the European slowdown reflects continued market volatility amid the eurozone crisis as well as the impact of the ECB’s recent longer-term refinancing operations, when banks borrowed more than €1tn.

Spanish and Italian banks used the cheap, three-year loans to buy government bonds, but a huge swath of lenders tapped the LTRO to pre-fund for 2012.

“LTRO financing has helped massively in allowing banks to meet their funding needs for this year and even into next,” says Demetrio Salorio, global head of debt capital markets at Société Générale. “But banks are also experiencing huge deleveraging so they need much less access to the wholesale funding markets.”

Some Northern European banks and a few lenders from the so-called periphery also took advantage of better market sentiment in the wake of the LTRO to tap the capital markets at the start of this year.

Many banks are reporting that they are already almost totally funded for the year. With spreads widening on debt issued in the capital markets, the incentive to issue has diminished.

“Right now the funding markets are almost closed,” says Mr Salorio. However, he expects that as conditions improve banks, including those in the troubled periphery, will need to tap capital markets to demonstrate that they have access to finance and can pay back LTRO money.

The ripple effects of the LTRO have carried across the Atlantic, cutting into new issuance in dollars as well.

Travis Barnes, head of US financial investment grade capital markets at Barclays, tied fewer banks bond sales this year in the US to a reduction in the amount of so-called Yankee bond issuance, or the sales from banks domiciled outside the US, particularly those out of Europe that have access to the LTRO.

“It is all interrelated,” Mr Barnes said. “We have seen US banks tap the market but it could not make up for the reduction in Yankee supply. Yankee banks have issued about half as much bank debt as they did in 2011.”

Berny Dohrmann

Vegas CEO SPACE May 22nd to 27th – join us – www.ceospaceinternational.com ( Crowd Funding Advanced Class on site )