Governor's Clean Water Initiative Helped Draw World's Largest Water Pump Manufacturer to Illinois

DOWNERS GROVE - As part of his agenda to create jobs and drive Illinois' economy forward, Governor Pat Quinn today was joined by Grundfos officials to break ground on the global water pump manufacturer's new North American headquarters in Downers Grove, Illinois. Denmark-based Grundfos, the world's largest water pump producer, will create 40 new jobs at the headquarters. The Illinois Clean Water Initiative - which was launched by Governor Quinn in 2012 to overhaul the state's water infrastructure - was cited by the company as a key reason why they chose Illinois.

"I am pleased that Grundfos has chosen Illinois as the location for their North American headquarters," Governor Quinn said. "Illinois continues to be one of the best places to do business in the world. My Clean Water Initiative has made Illinois a hub for water technology and even more attractive for international businesses like Grundfos. Today's announcement will grow our economy and create jobs."

Governor Quinn and Downers Grove Mayor Martin Tully joined Grundfos executives Jes Munk Hansen, Grundfos North America president and Søren Sorensen, Grundfos Group Executive Vice President and Chairman of the Grundfos North American Board, to kick-off construction by using sledgehammers to knock down a wall in the existing structure. Grundfos already employs about 100 people at its Aurora location, and the new headquarters will add an additional 40 jobs over the next several years.

Grundfos representatives recently participated in the governor's trade mission to Mexico, along with other Illinois water technology firms. The Mexican market for water technologies is estimated to grow three percent during 2013, and Grundfos may benefit from heightened Mexican demand and the country's strong economic ties with Illinois. In addition, Grundfos is pursuing LEED certification at its new 10,871 square-foot facility, which will utilize Energy Star-rated equipment and the latest technology in lighting and controls, as well as sustainable building materials for the office's furniture, flooring and fixtures.

"The Chicago area is emerging as an important hub for the water industry, and is one of the reasons why we're establishing our North American headquarters here," Hansen said. "The State of Illinois has shown commitment to water infrastructure, most recently through a $1 billion initiative to upgrade water infrastructure across the state, and we anticipate playing a major role in the further development of critical water initiatives in the state and around the country."

Governor Quinn launched the $1 billion Illinois Clean Water Initiative in his 2012 State of the State Address to help local governments facing a critical need to overhaul aging drinking water and wastewater treatment plants and distribution and collection systems. The initiative is funded with annual federal grants, funds from the American Recovery and Reinvestment Act and additional principal and interest from loan repayments. No new state tax dollars are used. According to the U.S. EPA, it is estimated that total water infrastructure needs in Illinois over the next 20 years will total $32 billion, including $17 billion in wastewater projects and $15 billion in drinking water projects. To learn more about Governor Quinn's Illinois Clean Water Initiative, please visit CleanWater.Illinois.gov.

With an annual production of more than 16 million pumps, Denmark-based Grundfos is a global leader in advanced pump solutions and a trendsetter in water technology. The company specializes in circulator pumps for heating and air conditioning as well as centrifugal pumps for industrial applications, water supply, sewage and dosing. Grundfos also manufactures standard and submersible motors and state-of-the-art electronics for monitoring and controlling pumps. This year, the company celebrates its 40th anniversary in the United States, where it employs nearly 1,300 people. Grundfos North America maintains operations in Illinois, Kansas, Pennsylvania, California, Texas, Indiana, Canada and Mexico.

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(DES MOINES) - Gov. Branstad will continue building Iowa's long-term relationship with China President Xi Jinping by meeting with him Monday, strengthening ties to one of the state's most important economic trading partners.

 

Branstad first met with Xi in the governor's formal office in 1985, when Xi was a local party leader traveling on an exchange program through the Iowa Sister States program.

 

"I am excited to catch up with our old friend, Xi Jinping," said Branstad. "The value of this relationship cannot be overstated. As a result, Iowa is the preferred provider to feed China's growing population and our agriculture exports to China continue to grow. This type of international trade currently supports 430,000 jobs right here in Iowa."

 

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2013 stock markets started like 2012 stock markets - with a bang. U.S. stock markets kicked off 2013 with a very good 10.7% return. Also like 2012's first quarter, foreign markets didn't fare as well, earning only 3.5% in the quarter. If we merely hold onto these gains for the remainder of the year we'll do fine.

In the following I examine the details of what has been working in global stocks, providing quick insights into market segments that have succeeded and failed.

Smaller value stocks led the way in the quarter, earning more than 13%. By contrast, large core companies earned only 7.5% and large value earned 9.5%. Other than these extremes, style returns clustered around 12%. This has been one of those unusual periods where the "stuff in the middle" (core) has not performed in line with the "stuff on the ends." I use Surz Style Pure® classification throughout this commentary.

On the sector front, health care and consumer staple stocks fared best, earning 15% and 14% respectively. By contrast, materials earned only 1%, and infotech gained only 6%.

But the interesting details lie in the cross-sections of styles with sectors, as shown in the following heat map. A heat map shows shades of green for "good," which in this case is good performance relative to the total market. By contrast, shades of red are bad, indicating underperformance. Yellow is neutral. In the table below, we see that the best performing market segment was comprised of mid-cap core companies in the consumer staples sector, earning 24.1%. And the worst performing segment was small cap core in the utilities sector, losing 11.4%. Many quantitative managers employ momentum in their models, buying the "green" and selling the "red." Fundamental managers use heat maps as clues to segments of the market that are worth exploring, for both momentum and reversal potential.

Foreign Stocks Looking outside the US, foreign markets earned 3.5%, lagging both the U.S. stock market's 10.7% return and EAFE's 5.3% return. Japan was the big story, earning 12.8% in $U.S. The return in Japanese yen was an even more impressive 23%. The Japanese stock market soared in the quarter as the yen was weakening against the dollar. By contrast, emerging markets suffered a setback, losing 2%.

On the style front, core surprised, as it did in the U.S., but core led rather than lagged. Like the U.S., further insights into market behavior are provided by heat maps, as shown in the following. As you can see, Japan was "green" in almost all styles and sectors, and emerging markets and the materials sector were both mostly red -- underperming.

How to Use This Information

We all have outlooks on the economy and the stock market, and adjust our thinking as results roll in. I personally remain surprised and grateful that stocks have performed so well recently. In my end of year commentary, I pointed out Japan as a bargain play, and the movement of assets into emerging markets. As 2013 has unfolded so far, bargain hunting has won, and asset flow has lost. You can use the information above to test your personal outlooks, to see which are unfolding as you think they should and which are not, with the intention to clear the haze from those crystal balls. After four long years of anxiously awaiting, the Department of Labor has finally released must-read guidance on the selection and monitoring of target date funds. These new rules clarify several safe harbor provisions, as well as provide various opportunities for proactive investment advisors.

The new DoL rules can be a threat or an opportunity. Advisors can ignore them, or embrace them. If you don't capitalize on these openings, someone else will. TDFs have grown from nothing to $1 Trillion in seven short years, and are forecast to grow another $3 Trillion, to $4 Trillion, by 2020.

To learn how you can profit from the DoL guidance, see OPPORTUNITIES and Fiduciary Guide.

by U.S. Senator Chuck Grassley

What we saw unfold in the Senate budget vote-a-rama just before the Easter recess is important in evaluating competing claims about the reason for dysfunction in the Senate.

Democratic leaders push an aggressive narrative that all the blame goes to Republican obstructionism and abuse of the filibuster, but those who adhere to this partisan account cannot use it to explain why the Democrat-controlled Senate hadn't passed a budget resolution since 2009.

Unique rules govern consideration of a budget resolution.  There's fixed time for debate.  It can't be filibustered.  It can be passed in relatively short order with a simple majority.  At the same time, there are few limits on offering amendments, as long as amendments are germane.  That's undoubtedly a major reason Democratic leaders avoided the annual budget process through two election cycles, despite requirements of the Budget Act of 1974.

Separate from the budget resolution and its unique rules, current majority party leaders have gone to great lengths to avoid having their senators cast difficult votes.  These leaders have used procedural tactics to block any amendments from being offered to pending legislation while making motions to end consideration of bills.  Time and again, when Republicans vote against giving up our right to offer amendments, the Democratic leadership has called it a Republican-launched filibuster.

Merriam-Webster's definition of a filibuster is "the use of extreme dilatory tactics in an attempt to delay or prevent action especially in a legislative assembly."  That leaves some room for debate about when a filibuster is being employed, but any fair observer would say that when the majority leader moves to shut off consideration of a bill the same day he brings it to the floor and before any amendments have been considered, he cannot reasonably claim it is in response to a filibuster.

The real story may be that Senate Democratic leaders fear that Republicans will offer amendments that attract enough votes from Democratic senators to pass.  What happened during Senate debate on the budget resolution seems to prove that point.  A Republican amendment in support of repealing the tax on life-saving medical devices in President Obama's health care law passed by an overwhelming 79 to 20, with more than half of Democrats voting with Republicans, rather than their party leader.  A Republican amendment in support of approval of the Keystone XL Pipeline to bring oil from Canada passed 62 to 37.

Votes like these that split the Democrats and hand a win to Republicans are exactly what the majority leader has been trying to avoid by not considering a budget resolution for more than three years and by cutting off consideration of other bills aggressively.

As a result, more than 200 years of Senate tradition as a deliberative body is sacrificed to short-term partisan considerations.  Every senator represents from hundreds of thousands to millions of Americans, and every senator has an individual right to offer amendments for consideration.  When senators are denied this right, it hampers our ability to represent the citizens of our respective states.  For example, when the Senate majority leader prematurely ended consideration of the fiscal year 2013 Continuing Resolution in March, the Senate was prevented from considering an amendment by Senator Max Baucus that would have checked the cost-saving claims of removing National Guard aircraft like those in Des Moines, Iowa.  An amendment by Senator Jerry Moran to prevent the closure of contract air traffic control towers like the one in Dubuque, Iowa, also was shut out.

For the Senate to function, the right of senators to offer amendments for consideration must be preserved.  This fundamental reality should have been a bigger focus of the January agreement on filibuster rules.  Yet, news reports in days leading up to the agreement cited Democratic senators who were advocating for sweeping reforms to make the Senate more majoritarian expressing great concern that a deal might be struck that allowed Republican amendments to be adopted on a simple majority vote.  Well, that shatters any pretense that complaints about the filibuster stemmed from deeply held convictions about majority rule.

The budget resolution debate in March gave us what has become a rare opportunity, unfortunately, for senators to put forward ideas and see whether the ideas have support in the Senate.  Some amendments were successful, and some were not.  Either way, senators were forced to go on record on all sorts of issues that might not otherwise see the light of day and explain their positions to those who elected them.  As lawmakers return to work in Washington, they ought to consider, what's wrong with that?

Monday, April 8, 2013