DealBook: Stocks Slump Following Weak Economic Data

Siemens C.E.O. to Leave Following Profit Warning

Siemens said in a statement late on Saturday that at a meeting on July 31, the supervisory board would pass the decision on Loescher's early departure.

"In addition, it will decide on the appointment of a member of the managing board as President and CEO," it added.

Siemens, among Germany's three biggest companies by market value, did not provide further details.

Two people familiar with the matter earlier told Reuters that the majority of Siemens' 20-member supervisory board favored finance chief Joe Kaeser as replacement for Loescher. The company declined to comment.

There have been persistent rumors over the past year that Kaeser, who was already on Siemens' management board when Loescher joined in 2007, had his eye on Loescher's job, though the two have repeatedly said they worked well together.

Late last year, when questioned about the rumors, the CFO said the two complemented each other like "light and dark".

OVERPROMISED, UNDERDELIVERED

When Loescher became CEO six years ago as the first company outsider to take the helm at Siemens, he was presented as a hero who would lead Siemens out of a massive bribery scandal that had tarnished its image and its finances.

But after tackling that task, Loescher started losing credibility as he repeatedly misjudged demand development in its main markets.

A bellwether of Germany's economy whose products range from gas turbines to fast trains and hearing aids, Siemens is suffering from the stuttering global demand that saw German exports fall the most since late 2009 in May.

In addition, Siemens' earnings have been hit repeatedly by one-time charges related to project delays and other issues.

Loescher was forced to put on the back-burner a strategy to increase annual sales by about a third to 100 billion euros last year, announcing instead a plan to save 6 billion euros over two years to compete with rivals such as General Electric Co.

The plan, which unions fear could affect 10,000 jobs, was meant to boost Siemens' core operating profit margin to at least 12 percent from 9.5 percent by 2014.

On Thursday, the company scrapped that target, issuing a brief statement in which it cited lower expectations for how its markets would perform.

Siemens is scheduled to release third-quarter results on Thursday when analysts expect Loescher to elaborate on what prompted the company to scrap its margin target.

(Reporting by Jens Hack.; Writing by Maria Sheahan. Editing by Andreas Cremer and David Evans)

Warren Mosler, a Deficit Lover With a Following

Richard Perry/The New York TimesWarren Mosler and adherents of modern monetary theory, called deficit owls, are seen as a counterpoint to those who want to return to the gold standard.

CHRISTIANSTED, V.I. — Warren Mosler is a card-carrying member of the 1 percent. A deeply tanned, tennis-lean hedge fund executive, Mr. Mosler lives on this run-down but jewel-toned Caribbean island for tax reasons. Transitioning into an active retirement, he recently designed and had built an $850,000 catamaran called Knot My Problem. He whizzes around St. Croix in a white, low-slung sports car he created himself, too.

Mr. Mosler, who lives in St. Croix, V.I., started his career at a small bank in Connecticut, became a Wall Street trader and in 2010 ran for Senate in Connecticut as an independent.

But his prescriptions for economic policy make him sound like a warrior for the 99 percent. When the recession hit, Mr. Mosler said, the government should have spent and spent until unemployment came down to a comfortable level. Forget saving the banks through the Troubled Asset Relief Program. Washington should have eliminated the payroll tax, given every state $500 per resident and offered a basic job to anyone who wanted one.

“There would have been no recession,” Mr. Mosler, 63, said over a salad at a hole-in-the-wall seaside cafe called Rum Runners.

Washington’s debts would have soared, of course. But Mr. Mosler sees no problem with that. A failed Senate candidate in Connecticut with unorthodox but attention-grabbing economic theories, he says he believes the United States should be running much bigger deficits and that the last thing the government needs to worry about is balancing its budget.

Mr. Mosler’s ideas, which go under the label of “modern monetary theory,” or M.M.T., are clearly on the fringe, drawing skeptical reactions even from many liberal Keynesian economists who agree with some of his arguments. But they have attracted a growing following, flourishing on the Internet and in a handful of academic outposts, as he and others who share his thinking have made the case that austerity budgeting in the United States and in Europe is doing irreparable harm.

Like many Keynesian economists, Mr. Mosler and other modern monetary theorists are particularly disturbed by the longstanding campaign articulated and financed by Peter G. Peterson, a former commerce secretary who co-founded the Blackstone Group private equity fund, to reduce the deficit or else.

“There’s a whole deficit lobby of Peterson-funded groups arguing we’re turning into Greece,” said James K. Galbraith, an economist at the University of Texas at Austin. “They’re blowing smoke and the M.M.T. group has patiently explained why.”

Still, even for those with some knowledge of economics, the tenets of the modern monetary theory can make your head spin. The government does not tax its citizens to pay for federal spending. It taxes them to ensure they use the dollar and to help to regulate demand. Since the government prints the dollar, it can never run out of money and it need never balance its budget, not even to prevent the crowding out of private investment when the economy is humming along.

What about inflation? “What about it?” Mr. Mosler replied. “How can the United States have $16 trillion in debt and still be on the verge of deflation, even when Chairman Bernanke’s using every alphabet-soup trick in his book?”

To mainstream economists, Mr. Mosler and his adherents represent something of a counterpoint to the handful of academics on the right who believe the United States should return to the gold standard because the government is supposedly going bankrupt and the Federal Reserve under Ben S. Bernanke is debasing the currency.

“They deny the fact that the government use of real resources can drive the real interest rate up,” said Mark Thoma, an economics professor and widely followed blogger who teaches at the University of Oregon. After delving into the technical details of modern monetary theory for a few minutes, he paused, then added, “I think it’s just nuts.”

But just as a return to the gold standard has attracted a popular following — including many supporters of Ron Paul, the charismatic former Texas congressman — so has modern monetary theory, which has been spread on the great stage of the Web. A thriving academic blogosphere brings ideas up and knocks them down, and popular sites like Business Insider and Naked Capitalism have given modern monetary theorists a platform to join in.

“These ideas definitely aren’t disseminated through published academic journals,” said Stephanie Kelton, an economist at University of Missouri-Kansas City, who coined the term “deficit owls” to distinguish modern monetary theorists from “deficit hawks.” “It’s all on the Internet.”

Lawyers Say Estate Planning Is Hot Following Gas Boom

Credit: Pittsburgh Post-Gazette

Trusts and estates lawyers in Central and Western Pennsylvania said they've recently seen an uptick in inquiries from landowners with oil and gas interests who are interested in beginning the process of estate planning.

But, those lawyers added, there are several schools of thought regarding when -- and even if -- it's advisable for a landowner to consider gifting those interests.

R. Douglas DeNardo, a shareholder at Rothman Gordon in Pittsburgh and chairman of the firm's estates, trusts and taxation department, told the Delaware Law Weekly that inquiries have been "way up" recently, mostly from people who own land in the Utica Shale regions of Western Pennsylvania and Eastern Ohio, where there are high concentrations of "wet" gas.

Wet gas is a combination of methane and other components such as propane, benzenes and ethane that, in the current market, is much more valuable than "dry" gas, which is almost pure methane.

Dale A. Tice, head of the gas planning group at Marshall, Parker & Associates in Williamsport, Pa., said he began receiving an influx of calls from landowners with oil and gas interests in 2010, when the estate tax was originally scheduled to revert back to a $1 million exemption at the beginning of 2011.

While a last-minute agreement between President Barack Obama and Congress stopped that from happening, Tice said his practice has continued to be busy.

"There has certainly been an increase in the amount of work I'm doing for landowners with the goal of protecting their oil and gas rights and royalty income for future generations," Tice said.

But while DeNardo called the oil and gas boom "the most exciting thing that's come along in estate planning in years," he noted that not everyone is a good candidate, explaining that there are several considerations to be made before moving forward with estate planning.

First of all, DeNardo said, not all landowners with potentially valuable oil and gas interests are necessarily wealthy.

For them, he said, it's especially important to consider whether it would be prudent to give those interests away -- and to spend money doing so -- prematurely.

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