Rubye notes

Hosting Lee for a formal state visit, Obama underscored what is widely seen as a high point in the long-time alliance between Washington and Seoul as well as his strong relationship with the South Korean leader.The top item on the agenda was a new U.S.-Korea trade pact, which is expected to help anchor the United States in the economically dynamic Asia-Pacific region as it competes with an increasingly assertive China.The two leaders also coordinated strategy to pressure North Korea to abandon its nuclear ambitions, saying Pyongyang had a stark choice to make. But they stopped short of offering any new ideas for re-engaging with the isolated communist state.The U.S. Congress ratified the U.S.-South Korean trade deal just hours after Lee arrived on Wednesday. It was the largest of three pending bilateral agreements, the other two with Colombia and Panama, and each passed in rapid succession.Lee received an enthusiastic reception in an address to Congress, where he thanked leaders of both parties for approving the trade pact “in a swift manner, which I am told was quite unprecedented.”Obama has touted the accords as a way to boost U.S. exports and create tens of thousands of jobs at home, as his 2012 re-election chances likely hinge on whether he can reduce an unemployment rate stuck above 9 percent.But critics, including American labor leaders, say the pacts will actually hurt U.S. employment partly because of heightened competition from South Korean imports.”America is leading once more in the Asia-Pacific,” Obama said, standing with Lee at a welcoming ceremony. “With our landmark trade agreement we will bring our nations even closer, creating new jobs for both our people.”Calling it a “win” for both countries, Lee — who must still secure endorsement by South Korea’s parliament — said it would become “a new engine of growth” for both countries.The deal would be the biggest U.S. pact since the North American Free Trade Agreement went into effect in 1994.Obama, a Democrat, sent the three pacts to Capitol Hill just 10 days ago, four to five years after they were first negotiated under his Republican predecessor, George W. Bush.NORTH KOREA ON THE AGENDALee has proved a reliable partner for Obama, lining up with U.S. policy on North Korea, Afghanistan and the G-20 summit aimed at stabilizing the world economy.But South Korea had chafed over U.S. delays in getting the trade deal passed, including the renegotiation of auto provisions to get a better deal for U.S. car makers.Despite that, Lee — whose mandatory single term ends in early 2013 — has managed to build personal chemistry with a U.S. president known for a mostly detached diplomatic style.Lee was treated to an elegant dinner at the White House on Thursday, with the State Dining Room draped in autumn colors and decorative apple centerpieces on each table.The menu included Texas beef. South Korean concern over the safety U.S. beef, following the discovery of some cases of mad cow disease in the U.S. herd in the early 2000s, was one of issues that delayed approval of the trade deal.Obama on Friday will then take Lee for a road trip to Detroit, home of the U.S. auto industry.As Washington deals with an alleged Iranian plot to kill the Saudi ambassador to the United States, the focus on North Korea was a stark reminder that Iran is not the only nuclear standoff that continued to dog the Obama administration.The U.S. and South Korean leaders sought to show they saw eye to eye over North Korea’s disputed nuclear program.”The choice is clear for North Korea: If Pyongyang continues to ignore its international obligations, it will invite even more pressure and isolation,” Obama told a joint news conference. “If the North abandons its quest for nuclear weapons and moves toward denuclearization, it will enjoy greater security and opportunity for its people.”Lee made clear that Seoul and Washington spoke with “one voice” on their insistence Pyongyang must first take concrete steps to show it is serious about getting rid of its nuclear weapons as it pledged to do in a 2005 international agreement.Ties between the two Koreas have been frosty since Lee took office in 2008 and linked aid to progress on North Korean nuclear disarmament. Relations deteriorated further after the North’s deadly attacks on the South last year — the sinking of a South Korean warship and the shelling of an island.The provocations by the North, which walked away from six-country nuclear talks and conducted its second nuclear test in 2009, helped bring Washington and Seoul closer together.Recent conciliatory gestures by both Koreas have raised hopes for an opening to restart negotiations, but Seoul and Washington insist Pyongyang must first show it is sincere.

U.S. and European money managers are eager to capture fast-growing pools of wealth in Asia and Latin America. Yet Bank of America on Tuesday said its overseas activities would be led by someone with no private client background.”Having a guy who doesn’t have a history in wealth management is not necessarily a good fit,” said recruiter Tim White of Kaye/Bassman International in Dallas. “His credibility will be challenged.”Cummings, who was the head of global equity capital markets, will continue to be based in New York and report to Bank of America co-chief operating officer Thomas Montag, who oversees investment banking and capital markets.Montag, in a memo Tuesday, said Cummings was appointed to the role “to drive stronger connections between our global distribution network and the international wealth management business.” IFR, a Thomson Reuters publication, broke the news on the management changes on Tuesday.The bank also said Michael Benz, head of Asia Pacific, Sonia Dula, head of Latin America, and David Jervis, head of Europe, Middle East and Africa, would report to Cummings as well as their regional presidents, according to the memo.A Bank of America spokeswoman said Cummings declined requests to be interviewed. Bank of America and Merrill officials declined to comment on the moves.Merrill advisers have seen plenty of change this year, spurred by turbulent markets and their parent bank’s massive mortgage-related losses stemming from the financial crisis.Last month Bank of America pushed out Sallie Krawcheck as global wealth management head as part of a company-wide reorganization designed to slash spending.BofA says little about the overseas wealth management business other than it has a presence in about 40 countries in Europe, the Middle East, Asia Pacific and Latin America.The United States brokerage still generates the lion’s share of revenue and profit, but industry studies show the fastest-growing pools of wealth are found outside developed markets in Europe and North America.Krawcheck, at an April 2010 securities industry conference, said 70 percent of new growth would come from emerging markets and that the Asia-Pacific could overtake the United States as home to the most millionaires by 2013.One recruiter, who asked not to be identified, speculated that Cummings was not the firm’s first choice for such an important role. Struggles at Bank of America — as illustrated by a 50 percent stock price decline this year — may have made it hard to recruit a wealth industry veteran, he said.”It’s a big job,” he said. “I would think that’d be attractive for a veteran.”Cummings joined Merrill in 1995 and has worked his way up the ladder in equity capital markets, responsible for initial public offerings, equity derivatives and private placements. Cummings briefly worked in investment banking, raising capital and advising on mergers for financial institutions.Merrill previously turned to its capital markets when it asked veteran Robert McCann to lead the brokerage. McCann ran the business for several years, until Merrill’s financial woes forced it into a shotgun wedding with BofA in January 2009. For two years, McCann has led UBS Wealth Management Americas.Some recruiters said bankers are often called upon to run wealth management, especially at firms eager to capture business from people made wealthy through mergers and IPOs.”Wealth management is a hot area at every global bank,” said Jeanne Branthover, who heads financial services recruiting at Boyden Global Executive Search. “When it comes to money management and wealth management, people cross over.”

The company sold $1 billion of six-month bills due April 11, 2012, at a 0.095 percent stop-out rate, up from a 0.091 percent rate for its $1 billion of six-month bills sold a week ago.The three-month bills were priced at 99.994 with a money market yield of 0.025 percent, and the six-month bills were priced at 99.952, with a money market yield of 0.095 percent.Settlement is Oct. 12-13.

* AEA Investors, a U.S.-based private equity group, has tabled an offer for Asco Group, the fast-growing oil and gas logistics business, the Financial Times reported on Wednesday.

Major U.S. fund companies in January had proposed creating the liquidity facility to backstop the $2.6 trillion money fund industry during times of stress. The facility would have been funded with fees on fund sponsors.But that plan now seems to have little support, said Gregory Johnson, new chairman of industry trade group The Investment Company Institute, in an interview late on Monday.”It’s a fairly complex area and they (regulators) are looking at other ideas and solutions,” said Johnson, who is also Chief Executive of California asset manager Franklin Resources Inc.Johnson’s comments come as regulators including the U.S. Securities and Exchange Commission, the Federal Reserve and others mull whether to put new restrictions on money funds to make them more robust after some scares during the financial crisis.The SEC has made some changes since the crisis, such as having money funds keep minimum liquidity levels. Some academics and regulators have suggested changes like allowing fund net asset values to vary from $1 per share, known as a “floating NAV.”The idea is to condition investors to swings in a fund’s value stemming from volatility. But the industry opposes the concept, concerned investors would move their money away.Johnson and other company leaders acknowledged regulators have expressed doubts about the industry liquidity facility plan, including whether the funds could build capital quickly enough when interest rates are low. Johnson said the changes the SEC has already made are probably enough to stabilize the funds, but said regulators may still seek more new rules. Currently, he said, “Everything is on the table.”Spokespeople for the SEC and the Federal Reserve declined to comment.TOP ISSUEJust how money market funds should be regulated is the top issue facing the U.S. mutual fund industry, Johnson said. Although companies have waived hundreds of millions of dollars in fees amid low interest rates, the funds remain popular with investors and give corporations and banks much financing.The funds came under pressure during the financial crisis in the fall of 2008 when one fund “broke the buck” and saw its net asset value fall below $1 per share. The Fed stepped in with emergency liquidity lines, and some money funds required millions of dollars in support from their parent firms.The experience seems to have left regulators wary. On September 29, Eric Rosengren President of the Federal Reserve Bank of Boston, said that funds should be made to hold what he called a “capital-like buffer” of a certain size; any fund with less would convert to a floating NAV.Instead of a floating NAV, in January the ICI proposed the liquidity facility that could buy assets to help funds meet redemptions.While government officials have not spoken to the trade group formally, ICI general counsel Karrie McMillan noted that at a public roundtable discussion in May with industry specialists and fund executives regulators including then-chairman of the Federal Deposit Insurance Corp Sheila Bair, raised various concerns. These included doubts about opening the Fed’s borrowing window to money funds, and the length of time it might take for the proposed liquidity facility to build sufficient capital, amid low rates.In a telephone interview on Friday McMillan said the trade group is still studying how to address regulators’ concerns while keeping investors in the funds. On the liquidity facility, she said, “That was the idea we liked at the time, but a lot has happened since then.”Franklin’s Johnson took over leadership of the ICI last week. His predecessor, Edward Bernard, vice-chairman of T. Rowe Price Group Inc, also said in a recent interview he doubts a liquidity bank would be adopted. Now regulators must find a way to balance goals like preserving funds for customers while avoiding too much concentration in the industry.A final set of rules, Bernard said, “is months away, but they (regulators) don’t want it to be lots of months.”

* Private taxis could take over station flights in 2016By Irene KlotzCAPE CANAVERAL, Fla., Oct 11 (Reuters) - A seven-seat space taxi backed by NASA to ferry astronauts to the International Space Station will make a high-altitude test flight next summer, officials said on Tuesday.Sierra Nevada Corp’s “Dream Chaser” space plane, which resembles a miniature space shuttle, is one of four space taxis being developed by private industry with backing from the U.S. government.For the unmanned test flight, it will be carried into the skies by WhiteKnightTwo, the carrier aircraft for the commercial suborbital passenger ship SpaceShipTwo, backed by Virgin Galactic, a U.S. company owned by Richard Branson’s London-based Virgin Group .The test flight was added after privately held Sierra Nevada got a $25.6-million boost to its existing $80 million contract with NASA.The test flight will take place from either Edwards Air Force Base in California’s Mojave Desert, or from the White Sands Missile Range in New Mexico, Ed Mango, manager of NASA’s Commercial Crew Program, said at a community briefing at the Kennedy Space Center in Florida.With the retirement of the space shuttles this summer, NASA is now dependent on Russia to fly astronauts to the space station, at a cost of more than $50 million per person.The agency hopes to turn over crew transportation services to one or more commercial firms before the end of 2016, Mango said.In addition to Sierra Nevada, NASA is funding spaceship development work at Boeing Co , Space Exploration Technologies, and Blue Origin, a start-up firm owned by Amazon founder Jeff Bezos.”Having only one way to get crew to the station is a limitation,” NASA astronaut Mike Fossum, who is currently living aboard the outpost, said during an in-flight interview last week.The station, a $100 billion project of 16 nations, was finished this year after more than a decade of construction 225 miles (350 km) above the planet. The outpost, which is about the size of a five-bedroom house, supports a variety of scientific research and technology demonstrations.Along with helping to develop commercial space taxis, NASA is working on a heavy-lift rocket and capsule to fly astronauts and cargo to asteroids, the moon, Mars and other destinations beyond the space station’s orbit.Drawing heavily on equipment originally built for predecessor programs, including the space shuttle and the canceled Constellation moon exploration initiative, the new rocket, called the Space Launch System or SLS, is scheduled to debut in 2017.That unmanned test flight would be followed in 2021 by a trial run with astronauts, said Kennedy Space Center director Bob Cabana.