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Article source: http://www.washingtonpost.com/entertainment/museums/hillwood-estate-museum-and-gardens/2012/05/16/gIQAG9M6bU_story.html

New video games may break through sales slump

USA Today reports that two much-anticipated games, “Max Payne 3” and “Diablo III,” due in stores today, could bring respite from a five-month slump in video game retail sales.

The arrival of the third-person action game and the PC-based fantasy role-playing game will be welcomed by game fans and retailers, because the release schedule of potential hits so far in 2012 has been underwhelming.

Another sign of slumping sales: Retailer GameStop reported last week that first-quarter sales fell 12.5 percent on a drop in store traffic due to fewer blockbuster titles.

Overall April retail sales were $630.4 million, down 32 percent from $930.9 million in April 2011, reports market tracker the NPD Group.

“When we see compelling content come into the market, the games are still selling as well as ever,” says NPD analyst Anita Frazier. “We just saw a lot less this April as compared to last.”

Other factors in the slump: growth in sales of downloadable games and add-on content, as well as a casual gamer shift to mobile and Web games. Some developers have turned design efforts to the next generation of video game consoles, even though only Nintendo’s Wii U has been announced, says Geoff Keighley, host of Spike network’s GameTrailers TV.

“Really, the only big game this year,” he says, “has been Mass Effect 3,” BioWare’s science-fiction role-playing game, which has sold about 4 million copies in two months.

Article source: http://www.citizen-times.com/article/20120520/NEWS/305200038/Engage-Richmond-Hill-Inn-estate-sale-more?odyssey=tab%7Ctopnews%7Ctext%7CFrontpage

Q. My condo association has foreclosed on a couple of units and is renting them while the banks continue to stall their foreclosures. There has been a question at board meetings on how to treat the rental income. Our attorney said that the rental payments should be applied only to the delinquent balance owed on the rented unit. Our accountant said that this revenue is regular income to the association and need not be applied to “pay down” the delinquent assessment balance for the rented unit. Who is correct?— S.B.

MiamiA. We believe your accountant is correct. There is nothing in Chapter 718, The Florida Condominium Act, that requires the association to apply the rent payments to the delinquent assessments and other charges owed on the rented unit. The association now owns the unit, and the unit is an asset of the association just like the clubhouse, tennis courts or other association property. The rental payments are not assessments being paid by the unit owner. The funds are received from a third party, who has no obligation to pay assessments. Further, paying down the balance only on the rented unit will harm the association down the road when a new owner ultimately takes title and the association’s ledger for that unit artificially reflects a lower or negative balance because of the rents received.

According to John Stroemer, of Stroemer Company, CPAs, the rental activity creates tax consequences for the association. The rent is taxable income, and further, there is sales tax if the lease term is less than six months and one day. We recommend that you seek a second opinion from an attorney and CPA on this important issue.

Q. I am on the board of our homeowners association, and we are considering foreclosing on a couple of homes that have serious arrearages. If we end up with title to the homes, what is the risk to the association? Are we obligated to pay the dues on the home while we own it? Do you have any suggestions?— J.F.

NaplesA. The risk to the association is small, but there are some things to consider. First, the association should check with its insurance agent to ensure that there is adequate liability coverage in place for owning and renting the home. If insurance coverage is questionable, the board can minimize liability by taking title in a different entity, such as an LLC. Regarding dues owed for the property, the association cannot pay itself and would merely be absorbing the operating costs for that property. Banks and other purchasers have taken the position that the association cannot recover delinquent fees that became due while the association owned the property, but we have generally been successful defeating that claim. Owning the property in a different entity further helps defend against that claim because technically the association never owns the property. It is also advisable to have an exit strategy. Many associations take title without being advised of all available options or how to ultimately dispose of the property. Your association is not in the business of owning property, and this should be a short term solution. If the association can generate some rental income in the short term, that is a positive and it can be done safely as discussed above. However, the ultimate goal is to put a new owner in the property who pays maintenance fees. Your association counsel should be able to help your board achieve that goal.

Q. My HOA has a master irrigation system. Our community documents require the owners to use the master system and prohibit the installation of wells that serve individual lots. The irrigation controls, however, are on each privately-owned lot. This requires the HOA to set the controls to the proper settings. Some owners tamper with the settings, resulting in excess water usage in violation of the HOA’s mandated watering schedule. Can my HOA enter a homeowners’ property to restore the irrigation controls to the property settings? If so, what are the risks and alternatives?— M.W.

NaplesA. The rights of your HOA to correct this problem largely depend on your community documents. This is an issue that should be closely monitored, particularly if the owners share equally in the irrigation budget and if excess usage will result in violations of the HOA’s water use permit(s). Many community documents for HOA’s contain “self help” provisions. These provisions allow the association to enter a homeowner’s lot to correct a violation after reasonable written notice of the violation. Some typical violations involving “self help” involve landscape maintenance, roof cleaning and unapproved exterior alterations. If your documents give the association the necessary easements or entry rights to correct an individual owner’s water usage, then the association probably has the right to enter the lot and reset the irrigation controls. If the documents are silent on notice, we suggest that the owner be given at least 14 days written notice before the association considers this option. The association should also consider the homeowner’s likely reaction. If the homeowner is in residency and is known to be aggressive toward the association, the association should do what is reasonably necessary to prevent any confrontation with association personnel. Alternatively, the association can impose fines of up to $100 per day until the owner corrects the problem, if the governing documents so provide.

Q. My board is getting conflicting opinions on how to budget for bad debt related to delinquent maintenance fees. We do not want to raise our dues by being ultra conservative, but we also want to avoid financial problems and/or special assessments that might result from poor forecasting. Do you have any suggestions?— J.C.

NaplesA. Properly budgeting for “bad debt” depends on multiple factors, such as total receivables, the age of certain receivables, historical data and the level of operating cash reserves. Since each community has its own special circumstances and historical data, there is no single budgeting solution that applies across the board. We do have some suggestions, however. When setting out to approve the budget for the upcoming year, the board should look at history for delinquencies in prior years and forecast for a similar number of new delinquencies. At yearend, the board should look at the delinquent assessments that are older than 12 months and consider a write-off. The reason for the write-off is the reduced liability given to foreclosing banks under Florida law. If a qualifying bank forecloses, its liability for delinquent assessments is the lesser of 12 months of past assessments or 1 percent of the mortgage debt. If your association ultimately recovers more than this limited amount, that is obviously a positive boost to your cash flows. The problem with keeping those older receivables as an asset on your books is the uncertainty of recovery. It could take years to recover those assessments, and if a bank forecloses, the potential for some sort of write-off is high. Also, your association might include interest and late fees on delinquent assessments as part of its projected revenue. This is fine if backed by historical data, but the association should still consider writing off those projected revenues when the delinquency exceeds 12 months. These are conservative strategies, but depending on your cash operating reserves, these suggestions should help your association avoid an operating deficit because of delinquencies.

Attorney John C. Goede is a founding partner at Goede Adamczyk, PLLC. Visit the website at www.floridacommunitylaw.com or ask questions about your issues for future columns by sending an inquiry to: info@flcommunitylaw.com Goede Adamczyk, PLLC is a full-service law firm with a focus on condominium and homeowner association law, real estate law, litigation, estate planning and business law. With offices in Naples and Miami, the firm represents community associations throughout Florida. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede Adamczyk, PLLC or any of our attorneys.

Article source: http://www.naplesnews.com/news/2012/may/20/how-should-rental-income-from-association-be/

“I’m going to be coming out with both barrels blazing because the reputations of the people I represent have been besmirched,” said attorney Alan May of Troy.

He represents Detroit attorneys John Chase Jr. and Melvin Jefferson Jr. of Detroit, who were accused in court papers Tuesday of raiding Parks’ estate with the help of Wayne County Probate Judge Freddie Burton Jr.

May said his clients billed Parks’ estate $151,000 over five years, not the $507,000 alleged in a probate court petition filed Tuesday by attorney Steven G. Cohen on behalf of Elaine Steele and the Rosa and Raymond Parks Institute, which Steele founded with Parks.

May said Chase and Jefferson were the ones who preserved estate assets by recognizing the historical value of Parks’ belongings and getting them removed from the institute’s damp basement and turned over to a New York City auction house for eventual sale to an institution that can put them on display.

Burton put Chase and Jefferson in charge of Parks’ estate shortly after her death in 2005 and her relatives challenged her estate plan. The estate plan called for Steele and retired 36th District Judge Adam Shakoor to handle the estate, and for the institute and Steele to receive most of the proceeds. Steele was Parks’ friend and aide.

After the parties settled their differences in 2007, Burton left Chase and Jefferson in place, prompting protests from Steele and the institute.

Cohen persuaded the Michigan Supreme Court last December to order Burton to put Steele and Shakoor back in charge.

Article source: http://www.freep.com/article/20120518/NEWS06/205180409/Lawyers-accused-of-overbilling-Parks-saved-her-belongings-attorney-says

May 19, 2012 (SOUTH BEND, Ind.) —
Prosecutors say two charges have been dropped against a Mishawaka High School wrestler after evidence showed he wasn’t present when a teammate was allegedly sexually assaulted.

The South Bend Tribune reports the teen pleaded guilty Friday in St. Joseph County Probate Court to interfering with reporting a crime, a misdemeanor.

He had been among six members of the 2010 state champion Mishawaka High School wrestling team accused of sexually assaulting a teammate.

The St. Joseph County prosecutor’s office said it agreed to dismiss two counts of attempted criminal deviate conduct and battery.

Two of the wrestlers have been found guilty of the juvenile equivalents of attempted criminal deviate conduct and a third was also found guilty of juvenile delinquency. Two others face hearings later this month.

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Article source: http://abclocal.go.com/wls/story?section=news/local/indiana&id=8668387

Attorney Stephen G. Cohen said in court papers that Judge Freddie Burton Jr. conspired with probate lawyers John Chase Jr. and Melvin Jefferson Jr., enabling the pair to rack up more than $507,000 in mostly unnecessary legal fees that drained Parks’ estate of its cash, leaving it $88,000 in debt.

Cohen also said Burton, through secret hearings and improper rulings, allowed the pair to concoct a bogus breach of confidentiality dispute. Cohen said Burton used the dispute to strip Elaine Steele and the Rosa and Raymond Parks Institute that she created with Parks of their share of Parks’ property, said to be worth up to $8 million .

“Chase and Jefferson, together with Judge Burton, illegally, maliciously and wrongfully conspired… for the illegal purpose of raiding Mrs. Parks’ estate of its value,” Cohen said in a 38-page probate petition.

He requested a jury trial in probate court and asked Burton to remove himself from presiding over Parks’ estate.

Burton declined to comment on the dispute, the latest twist in a long-running battle that began when Parks’ nieces and nephews challenged the validity of her trust after her death in 2005. Chase and Jefferson didn’t return calls seeking comment.

Probate experts predicted Cohen’s move would fail.

“This is out there — this is really, really out there,” said Andrew Mayoras, a Troy probate lawyer and coauthor of “Trial Heirs: Famous Fortune Fights!”

“Disagreeing with and challenging rulings of a judge is one thing, but suing a judge and the attorneys he appointed for their actions is another matter altogether,” Mayoras said, adding that Burton, Chase and Jefferson are highly respected.

Patricia Patterson-Courie, a Clinton Township probate lawyer who taught probate law at the University of Detroit Mercy, agreed.

“This is a difficult allegation to prove and it would be very difficult to produce evidence of a conspiracy,” Patterson said. She said Cohen may simply be trying to force Burton to remove himself from Parks’ estate.

But Larry Dubin, a University of Detroit Mercy law professor, said: “Perhaps judge Burton will feel increasing pressure to recuse himself now that he is being placed in a defensive position.”

Cohen said he also wants Burton, Chase and Jefferson to restore all of the money to the estate.

If Burton refuses to recuse himself, Cohen could appeal the decision to Chief Wayne County Probate Judge Milton Mack Jr., to Wayne County Circuit Court and then to state appellate courts.

Court rules make it difficult for lawyers to disqualify judges to discourage forum shopping.

A hearing on Cohen’s requests is set for next Tuesday.

This is the second time in a month that Cohen has accused Chase of misconduct in an estate battle. In April, Cohen file court papers accusing a Detroit law firm and Chase of insinuating themselves into the estate of Don Barden, the late casino mogul. Cohen said Chase and the firm tried to manipulate probate proceedings to rake in excessive fees and got a judge to seal the court file to keep Barden’s siblings in the dark.

Many of Cohen’s allegations were laid out in a series of Free Press stories that began last summer.

Parks became a civil rights hero by refusing to give up her seat to a white man on an Alabama bus in 1955. She and her husband eventually moved to Detroit.

Parks, who had no children, set up an estate plan to give the bulk of her personal and intellectual property to the Rosa and Raymond Parks Institute for Self Development and Steele, her longtime assistant and caregiver. Parks’ estate plan called for Steele and retired 36th District Judge Adam Shakoor to handle the estate.

But that didn’t happen.

After Parks’ 13 nieces and nephews contested her estate plan, Burton appointed Chase and Jefferson to take charge.

Steele, the Institute and the relatives settled their differences in a confidential agreement that gave the relatives 20% of Parks’ property and royalties from licensing her name. The rest went to the Institute and Steele.

Although the agreement called for Burton to put Steele and Shakoor back in charge of the estate, Cohen said Burton refused, allowing Chase and Jefferson to continue to run up huge legal bills.

After most of the estate’s cash was gone, Cohen said, the lawyers accused Cohen of disclosing part of the confidential agreement. That prompted Burton to strip Steele and the Institute of their share. He indicated he planned to give their stake to a charity of his choosing.

Guernsey’s Auctioneers of New York City is trying to sell Parks’ belongings to an institution that can put them on public display.

Chase and Jefferson have denied any wrongdoing and the Michigan Court of Appeals ruled that the fees were proper and that they alone were responsible for recognizing the value of Parks’ possessions.

Last summer, Cohen asked the Michigan Supreme Court to overturn that decision.

In December and again in January, the high court ordered Burton to put Steele and Shakoor back in charge of the estate.

Although Burton reinstated Steele and Shakoor, Cohen said that the judge has refused to give them control over Parks’ property, and has allowed Chase and Jefferson to ding the estate for an additional $120,000 in legal fees.

Contact David Ashenfelter: dashenfelter@freepress.com

Article source: http://www.freep.com/article/20120517/NEWS06/205170722/Lawyer-sues-judge-2-others-in-Rosa-Parks-estate-case

The Cheddar McMahon Estate in Cheddar Rd East includes 39 new apartments in a three-storey building and 14 self-contained units at the rear.

Tenant Debbie Smith, who lives in a three-bedroom unit with her three adult children, praised the estate’s design and layout.

“It’s sustainable, environmentally friendly and it is a good setup,” she said.

Ms Smith said that, while she was happy with the new estate, she missed the space she had at her previous home of 20 years in Preston’s Huttonham public housing estate.

As reported in last week’s Preston Leader, the Huttonham estate is being redeveloped by the Department of Human Services and the replacement estate will be comprised mostly of private housing.

Housing Minister Wendy Lovell said the Cheddar Rd development had been a collaboration between the community, existing tenants and Darebin Council.

“The end result is the replacement of 28 ageing two-bedroom units with 53 modern, comfortable, environmentally friendly homes,” she said.

One of the roads in the redeveloped estate has been named after popular former tenant Lilian Farrer, who lived there from the early 1950s until she died in 2009.

Article source: http://northcote-leader.whereilive.com.au/news/story/tenant-praises-reservoir-estate/

Bar Association President Matt Reeves was excited by the large turnout.

“This is a record-breaking attendance,” he said after the event. “We wanted to give the microphone to the candidates and let them explain why they are the best candidate.”

In the Clerk of Court’s race, challenger Brian Whiteside, an attorney and former law enforcement officer, said the availability of a qualified jury pool is a key issue.

“Two weeks ago, in the case of the state vs. Fuller, in front of [Superior Court] Judge [Debra]Turner, there wasn’t an ability to pick a jury,” he said. Whiteside blamed a lack of organization and cooperation between the clerk’s office and the judicial branch.

His opponent, Clerk of Court Richard T. Alexander said the implementation of the new 1 Day 1 Trial program would resolve the issue and save the county about $100,000 a year. Alexander served as chief deputy to former Clerk of Court Tom Lawler, who passed away late last year.

Buford attorney Chris Balar and Marlene Duwell, chief clerk of Gwinnett Probate Court since 1996, are the candidates in the race for Probate Court Judge.

Balar, a Mercer University graduate, said nearly all of his 11 years as a lawyer have been dedicated to probate issues such as guardianship, wills and estates. “That’s what I’ll bring to this position,” he said.

In addition to her experience as chief clerk, Duwell said, “I was a hearing officer for the court for about 12 of those years. It gives me incredibly strong experience and a readiness to serve the court from day one.”

The race for State Court has a crowded five-candidate field that includes Emily Brantley, Pam Britt, Norman Cuadra, Greg Lundy, and Richard Winegarden.

Brantley earned her law degree at Georgia State Uiversity and went to work at an Atlanta law firm before opening a private practice in Gwinnett County, handling mostly civil cases both from the plaintiff and defendant’s side.

Britt is also a graduate of the GSU law school and past president of the Gwinnett Criminal Defense Bar. An attorney with 15 years experience, she said, “I believe my reputation as an attorney in this community is a good one.” She pledged to treat everyone who comes to the bench with “dignity and respect because that is what we all deserve.”

Cuadra, a courtroom attorney for 16 years and former municipal court judge, said, “To run an effective state court, you need patience, you need tolerance and you need respect for others.” He also said his grandfather, who lived in Nicragua, lost everything when the Communists took over. “It taught me the importance of freedom, the importance of our system of government and the importance of our court system and inspired me to want to become a state court judge,” he said.

Lundy has 19 years experience as an attorney. He currently is a senior staff attorney for Gwinnett County and previously served as chief Municipal Court judge for the City of Suwanee.

Rounding out the field of speakers in the State Court race was former State and Superior Court Judge Richard T. Winegarden. He was first elected to State Court in 1982 and again in 1986 before being appointed by the governor to serve on the Superior Court bench in 1987. Following that he was re-elected to serve five more terms.

Gwinnett Superior Court judge candidates are Tracey Mason Blasi, Chris McClurg, Kathy Schrader, Giles Sexton, and Robert Walker.

Blasi, a former municipal court judge, special master and guardian ad litem, couldn’t attend, but a spokesman said Blasi would draw on her skills as a mediator to “listen thoroughly, evaluate the evidence and make the tough decisions.”

Emory Law School graduate McClurg said in his practice as an attorney, he sees the impact court cases have on people’s day-to-day lives. As a judge he would be “as patient as possible, as civil as possible and give everybody a chance to be heard,” he said.

Schrader, a past president of the Gwinnett Bar Association, brings 25 years of legal exerience to the race. She was appointed by the governor to serve on the state’s Office for Children and Families and, at the federal level, serves on the Advisory Committee on Juvenile Justice. Schrader serves as a Municipal Court judge for the cities of Duluth and Sugar Hill.

Sexton said he has handled more than 500 felony cases in Gwinnett County. He noted that the next Superior Court judge would inherit a death penalty case and added, “Based on my experience in handling felony cases, I feel like I’m the most qualified candidate in this race.”

Gwinnett Magistrate Court Judge Walker, the last candidate to speak, pointed out that he is the only full time sitting judge in the race. “I’ve had the honor and privilege of working side-by-side with our Superior Court judges and learning my craft. “I’ll be fair and just to all who come before the court.”

Qualifying for the 2012 General Election is scheduled May 23-25. The Primary will be held July 31. The General Election occurs Nov. 6.

Article source: http://snellville.patch.com/articles/judicial-candidates-plead-their-cases

The provincial Long-Term Care Task Force on Resident Care and Safety says that the people managing and working in these homes must ensure their organizations are committed to preventing abuse, both on paper and in practice.

In a new report issued Wednesday, the task force makes a series of recommendations for the province’s long-term-care homes.

They include setting up committees at long-term-care facilities to track and respond to issues relating to resident care and safety, as well as identifying indicators of abuse, neglect and quality of life.

The same report is urging the Ministry of Health and Long-Term Care to help design and deploy coaching teams to improve safety and quality of care in poor-performing homes in the province.

The ministry should also work with the long-term-care industry to resolve outstanding issues related to the services available to and placement of individuals with complex care needs, the report says.

Not every facility a problem

There were more than 3,000 cases of abuse reported in the province’s nursing homes last year, though Gail Donner, the task force’s chair, said that doesn’t mean that there are problems in every facility.

“There’s not abuse and neglect everywhere in every home, in every environment,” Donner said Wednesday.

“And there are probably some environments where it’s more than in other environments, and that’s why this report is so important.”

Much of the abuse reported is committed by residents, so the industry wants specialized homes created to handle elderly residents with behavioural problems.

In cases where staff are abusive, the industry wants to make it easier to fire those individuals.

The industry-led task force that put together the report also includes representation from seniors and academics.

It collected survey responses from more than 1,900 people who live, work or otherwise have interaction with long-term-care facilities in Ontario.

The full report can be viewed online on the task force’s website.

With a report from the CBC’s Mike Crawley

Article source: http://www.cbc.ca/news/canada/toronto/story/2012/05/16/toronto-long-term-care-task-force-report.html

“People’s attitudes about investing have not kept pace with the improvement, because of this fly-wheel of troubling news that’s in constant motion,” Duffy tells Penta in his first press interview since becoming CEO of the U.S.’ largest private bank in August of last year. “Investors are still too comfortable holding cash.”

Duffy’s pitch probably became more complicated after JPMorgan produced its own unfortunate headline: a surprise $2 billion trading loss that has already claimed its chief investment officer. (Duffy does not report to the CIO’s office; no assets of private bank clients were involved.) Still, when it comes to the big picture seen from the 31st floor over Park Avenue, the 51-year-old banker sees the moderate U.S. recovery enduring, our economy expanding at a roughly 2% pace while inflation remains benign. Corporate America’s profits are still growing, albeit at a slower pace, as the glut of available homes slowly starts to shrink and the housing market comes out of its trough.

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Brad Trent for Barron’s

JPMorgan’s John Duffy is telling clients to normalize portfolio risk.

The euro zone, which Duffy feels generates shriller headlines than it should, is going to muddle through its fiscal crisis, even if its constituents may look different years from now. Meanwhile, half the planet’s growth is propelled by economies “developing” in name only — 85% of emerging markets are now deemed investment-grade. These developing countries are in fact now extending credit to the more mature economies of the globe.

Duffy comes to his new job with a firm grounding in the investment side of private banking He previously was vice chairman and ran the private bank’s northeast investment business. He also sat on the private bank’s investment strategy and investment review committees, as well as its executive committee. He succeeds Catherine Keating as CEO and now oversees what is by far America’s largest private bank in assets. While it serves investors with $5 million and up, its heritage and stronghold is the ultrarich, with most accounts exceeding $25 million.

Against Duffy’s hopeful macro outlook, the suggestion that investors allocate 31% of their portfolio to public stocks may seem conservative (see table below for JPMorgan’s balanced model portfolio). But Duffy quickly points out the model actually carries a roughly 70% exposure to risky assets; in this atypical recovery, investors might be better off spreading their risk commitments over many asset classes, like opportunistic private equity funds or hedge funds. Duffy also likes high-yield bonds that pay above core government bonds but have low corporate defaults and robust company earnings. Unfortunately, Duffy declines our request to drill down on specific picks — he prefers to fly at 35,000 feet.

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But he did explain how investors can benefit from “other people’s mistakes.” With European banks repairing their balance sheets forced to sell assets wholesale, private-equity firms are ideally positioned to swoop in and pick up choice carrion. For example, commercial mortgage-backed securities issued totaled just $30 billion last year — a fraction of the pre-crisis $200 billion annual haul. As a result, the next five or six years will see hundreds of billions of real-estate debt coming due, and owners who can’t refinance will be forced to liquidate.

There comes a time when pricing is dictated not just by value, but by timing, Duffy says, and “those who have capital when debt is due are going to be dictating price.” Private-equity funds could snag real estate at below replacement cost, a powerful incentive for private bank clients to move some cash into private equity before the play has passed. Sure, private equity is more illiquid than public stocks, but Duffy says investors can expect — and should target — returns at least five percentage points better than those offered by the Standard Poor’s 500.

JPMorgan’s largest allocation after stocks is a roughly 22% slug to hedge funds. “We get active risk management in that portion of the portfolio,” he says, “and it mitigates for us any dependence on toggling back and forth between equities and bonds, since no one has great insight and consistent timing in getting that shift right.”

Hedge funds also offer exposure to targeted strategies. Duffy expects “event-driven” hedge funds that bet on mergers, spinoffs, buybacks, or other special situations to thrive — given the record $1.2 trillion of cash in nonfinancial corporate coffers and the mounting pressure by activist investors to return some of that lucre to shareholders. “We don’t know which companies are going to choose which avenue to return value to shareholders,” he says. “But having an event-driven manager who is focused on these catalysts should benefit our clients.”

Duffy grew up in Park Slope, Brooklyn, before it was stylish to do so. He joined JPMorgan in 1982 and worked in corporate and investment banking before he joined the private bank. Today, the private bank has some 2,880 advisers globally managing $830 billion in client assets — including $530 billion in the U.S.

Duffy’s teeth-pulling task with the bank’s U.S. clients isn’t unexpected in the aftermath of the financial crisis. “No one likes to lose money, and people’s attitudes about that today are still heightened, three years later,” he says. “But there comes a point when that attitude starts to cost investors.” The problems: Artificially low interest rates that can’t keep pace with inflation will quietly and insidiously erode clients’ standards of living.

On another front, JPMorgan is urging investors to huddle with their bank over the Bush-era tax cuts, which are likely to expire at the end of the year. That includes the lifetime gift-tax exemption of up to $5.1 million per person (or $10.2 million per couple) when property is gifted and transferred. It’s a matter of time before taxes for everything from income to capital gains will rise dramatically from today’s low thresholds. “If you own large liquid or illiquid positions, this is the year to ask yourself if you want to manage some of that tax-rate risk by liquidating some of those holdings” and paying the relatively low tax now.

Duffy says investors should consider using credit lines to advance specific business goals, whether expanding a small entrepreneurial business, or scooping up distressed assets in an area of expertise. “It’s critical to think just like a good corporate treasurer, and the beauty of borrowing right now is you can lock in low rates,” while managing any potential rate hikes through swaps.

His overseas plays were not particularly unusual. The growing middle class in China, India, and Brazil represent opportunity, since consumption in emerging markets is accelerating and accounts for 37% of the globe’s total, while the U.S.’s has slid to 27% from 37% over the past two decades. This bodes well for “things that represent the convenience of life,” from autos to electrical appliances like washers and dryers, stoves, refrigerators, and air-conditioning.

He’s bullish on energy infrastructure for both U.S. and foreign countries. Pundits are projecting some $33 trillion in energy spending over the next 15 years. Betting on commodities like oil can prove volatile, of course, but companies facilitating transmission or building pipelines should benefit from growing power consumption. He suggests scouring for companies or geographies that will benefit from productivity drives in the energy sector. “Better technology is going to allow both proven energy reserves to be mined more efficiently, as well as the exploration of previously unexplorable reserves,” he says.

Real estate? California and Florida might have the right address. “Commercial real estate will continue to be a good investment in both economies,” he says. Another wave of innovation is coming out of Silicon Valley, while vacant residential towers in downtown Miami has attracted European and Latin American investors taking advantage of our weak dollar. No surprise, the private bank, seeing new money coming in, has expanded into both states over the past three years.

As we are about to leave the light-filled conference room, Duffy reiterates his core point, making sure we got it. “Now’s the time to normalize the risk in portfolios in order to leave behind what we think is becoming the substantial cost of owning cash.” 

E-mail:
editors@barrons.com

Article source: http://online.barrons.com/article/SB50001424053111904370004577392260986818168.html?mod=googlenews_barrons