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Fired CEO Bahar Files Claim Against Lotus

By Chong Pooi Koon

2012-08-28T02:15:14Z

http://www.bloomberg.com/news/2012-08-27/fired-ceo-bahar-files-claim-again-lotus-malaysian-parent.html Dany Bahar, sacked as chief executive officer of unprofitable British sports-car maker Group Lotus Plc. in June, filed a claim against the company and its Malaysian parent DRB-Hicom Bhd. (DRB) for wrongful dismissal. Bahar, 40, is seeking 6.7 million pounds ($10.6 million) from Lotus for alleged unlawful early termination of his employment, DRB said in a Kuala Lumpur stock exchange filing yesterday. The Malaysian company’s lawyers in the U.K. were notified of the claim on Aug. 23, it said. “Dany Bahar was dismissed after an investigation into his stewardship of Lotus,” DRB said in the filing, without being specific. “We believe we have acted properly at all times,” it said, adding that DRB and Lotus would “vigorously” oppose and defend the claim. DRB, controlled by billionaire Syed Mokhtar Al-Bukhary, is tightening its grip over Lotus after inheriting the British company through its purchase of Malaysian taxi-and-sedan maker Proton Holdings Bhd. Bahar was fired from Lotus following a complaint from DRB about unspecified concerns over his conduct, the U.K.-based auto manufacturer said on June 7. Bahar joined Hethel, U.K.-based Lotus as CEO in 2009 after being recruited from Fiat SpA’s Ferrari, where he was a senior vice president, according to Lotus’s website. Prior to that, the Istanbul-born executive worked at energy drink maker Red Bull GmbH and Fritz Kaiser Group, according to the website. DRB and Lotus will file counter-claims against him, yesterday’s announcement said. Shares of DRB fell 0.4 percent in Kuala Lumpur as of 10:12 a.m. today. The benchmark FTSE Bursa Malaysia KLCI Index was little-changed. Lotus, the maker of Elise sports cars, has struggled to compete against Porsche AG and Ferrari in Europe , and has hung on to relevance in the auto industry partly because of its decades-long expertise in designing lightweight frames. Light Car The Lotus Elise, at 2,010 pounds (912 kilograms), is the lightest performance car sold in the U.S., according to Santa Monica , California-based Edmunds.com. Tesla Motors Inc. has relied on Lotus chassis designs since 2008 for its Roadster sports car. DRB, which in March said it may sell Lotus if it doesn’t meet performance targets, said in May it has decided against selling the British carmaker. DRB announced a 64 percent drop in first-quarter earnings to 32.6 million ringgit yesterday. This was due to higher finance costs related to its Proton acquisition and continuing losses at its Lotus unit, it said in a separate exchange filing. In 2010, Bahar spearheaded a five-year turnaround plan for Lotus to increase sales in emerging markets

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the end of 2013, according to Proton’s annual report for the year ended March 31, 2011. Bahar said in December it could break even by 2014. Lotus sold 1,985 units during the year ended March 2011, according to Proton’s annual report. That compares with Ferrari, which boosted global deliveries by 9.5 percent to a record 7,195 cars during 2011, led by sales in the U.S. and China. To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at [email protected] To contact the editor responsible for this story: Young-Sam Cho at [email protected]

2012

fired-ceo-bahar-files-claim-again-lotus-malaysian-paren

Chile Peso Outstrips Colombian Currency Weakened by Central Bank

By Sebastian Boyd

2012-08-27T16:08:56Z

http://www.bloomberg.com/news/2012-08-27/chile-peso-outstrips-colombian-currency-weakened-by-central-bank.html

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Chile ’s peso climbed to its strongest this year relative to Colombia’s currency after policy makers in Bogota lowered interest rates and expanded the central bank’s dollar buying program. The Chilean peso strengthened 0.4 percent to 3.7884 Colombian pesos as of 11:21 a.m. in Santiago, on course for its highest closing level since Dec. 8. Chile’s currency gained 0.1 percent to 480.67 per U.S. dollar . Chile’s peso is outperforming Latin American peers as faster-than-forecast economic growth leads traders to forecast the central bank will leave benchmark borrowing costs unchanged until next year. Two rate cuts at Colombia’s central bank and pledges by monetary officials and the government to buy dollars have stemmed gains this year in that country’s peso, which was the world’s best performer versus the dollar in the first half of 2012. “The additional intervention wasn’t a big deal but they have shown that they have options,” said Flavia Cattan- Naslausky, a currency strategist at RBS Securities Inc. in Stamford , Connecticut . “Chile has been doing very well despite everything. Macroeconomic growth has been strong and, unlike Colombia and Brazil , the Chileans aren’t rushing to cut rates.” Colombia reduced borrowing costs for a second straight month on Aug. 24 after inflation slowed to the target rate, while also announcing that the central bank will buy $700 million by the end of September to curb gains in the peso. Rate Outlook In Chile, the median forecast of 51 traders and investors surveyed by the central bank for an Aug. 22 report was that the bank would leave rates unchanged at 5 percent through December. On Aug. 20, the bank announced gross domestic product grew 5.5 percent in the second quarter from a year earlier, faster than economists had forecast. Chilean domestic demand may grow 6.7 percent this year as the stronger currency cheapens imports, economist Javier Salinas at Larrain Vial SA wrote today in a note to clients. Larrain Vial raised its growth forecast for this year to 5.3 percent from 5 percent. International investors in the Chilean peso forwards market increased their short peso position to a three-week high of $8.9 billion on Aug. 23. To contact the reporter on this story: Sebastian Boyd in Santiago at [email protected] To contact the editor responsible for this story: David Papadopoulos at [email protected]

2012

chile-peso-outstrips-colombian-currency-weakened-by-central-bank

Waiting for Paul Ryan’s Next Flip

orFlop

B y M a r g a r e t C a r l s o n

2012-08-27T13:19:09Z

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This week represents Mitt Romney 's opportunity to take his party back from Rush Limbaugh, the Tea Party and those House Republicans, with their single-digit approval rating. But wait: The second person on the ticket is a House Republican. That's what I'll be watching this week: U.S. Representative Paul Ryan twisting more energetically than the synchronized divers at the Olympics as he tries both to distance himself from his historically unpopular colleagues and embrace his celebrated role as the House wonk. Ryan's pre-convention flip-flops on Medicare and abortion have been so complete even the Russian judge would have given him a 10. It will be interesting to see what he says on Wednesday. ( Margaret Carlson is a Bloomberg View columnist. Follow her on Twitter.) Read more breaking commentary from Bloomberg View at the Ticker .

2012

waiting-for-paul-ryan-s-next-flip-or-flop

Pertamina Revives Plan for Floating LNG Terminal in Central Java

By Fitri Wulandari

2012-08-27T06:07:21Z

http://www.bloomberg.com/news/2012-08-27/pertamina-revives-plan-for-floating-lng-terminal-in-central-java.html

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PT Pertamina, Indonesia’s state- owned oil company , said it will proceed with a plan to build a floating liquefied natural gas-receiving terminal in Central Java, almost four months after putting the project on hold. The government asked Pertamina to continue construction of the terminal, which will have a capacity of 3 million metric tons of LNG a year, Hari Karyuliarto, the company’s gas director, told reporters in Jakarta today. Pertamina had initially decided to delay the project, Karyuliarto said May 3. “We will try to meet the government’s order of getting the Central Java floating terminal to go on stream by 2014,” Karyuliarto said. Pertamina is seeking 1.5 million tons of LNG from domestic suppliers for the facility, he said. Indonesia is increasing natural gas consumption for electricity generation and transportation to reduce petroleum use and cut fuel subsidies. The terminal will convert LNG into gas, which will be supplied to power plants run by state utility PT Perusahaan Listrik Negara and other industrial consumers, Karyuliarto said. To contact the reporter on this story: Fitri Wulandari in Jakarta at [email protected] To contact the editor responsible for this story: Alexander Kwiatkowski at [email protected]

2012

pertamina-revives-plan-for-floating-lng-terminal-in-central-java

Notre Dame Suspends Leading Rusher for Two Games After Violation

By Eben Novy-Williams

2012-08-27T15:11:10Z

http://www.bloomberg.com/news/2012-08-27/notre-dame-suspends-leading-rusher-for-two-games-after-violation.html

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University of Notre Dame running back Cierre Wood and defensive end Justin Utupo have been suspended for the first two games of the college football season following a violation of team rules. Wood, 21, and Utupo, 20, will miss the Sept. 1 game against the U.S. Naval Academy in Dublin, Ireland, and the Sept. 8 home opener versus Purdue University , the athletic department said in an e-mailed statement. The statement didn’t list what rules were broken. “Our players are aware of the standards I set for our program and that failure to meet my expectations will result in consequences,” Notre Dame coach Brian Kelly said. “Justin and Cierre violated our team rules, so I’ve suspended them for the first two games of the season.” Wood rushed for a team-high 1,102 yards and nine touchdowns last season. Utupo played in all but one game last year, primarily on special teams. Quarterback Tommy Rees and linebacker Carlo Calabrese were suspended earlier for the game against Navy after being arrested when police broke up an off-campus party. Kelly has named sophomore quarterback Everett Golson as the starter for the game in Dublin. To contact the reporter on this story: Eben Novy-Williams in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

notre-dame-suspends-leading-rusher-for-two-games-after-violation

BMW to Nissan Pump Figures With Extra Sales to Dealers

By Craig Trudell

2012-08-27T02:01:04Z

http://www.bloomberg.com/news/2012-08-27/bmw-to-nissan-pump-figures-with-extra-sales-to-dealers.html Bayerische Motoren Werke AG (BMW) and Nissan Motor Co. have turned to unconventional buyers of their vehicles at times this year: their dealers. BMW, locked in a U.S. luxury sales race with Daimler AG (DAI) ’s Mercedes-Benz, began offering dealers allowances of as much as $7,000 a car on July 31 to boost sales to their demo fleets that are used for test drives. Nissan, pushing to pass Honda Motor Co. in U.S. market share, sells vehicles to dealers for use as rentals, as it did in March at the fiscal year-end. The actions by at least two of the world’s largest automakers resemble the ways General Motors Co. (GM) and Ford Motor Co. (F) used such practices to lead luxury and car segments in the 1990s. Dealers said BMW and Nissan’s moves also reflect rivalries within carmakers’ operations, as U.S. sales units vie for vehicles with retailers in China and other markets. “This all comes from tremendous competition,” said Geoffrey Pohanka, president of Pohanka Automotive Group , which owns Nissan and Mercedes dealerships in Maryland and Virginia . “It’s ultimately artificial. The key is to get the car into the customer’s driveway, not to get it from one side of my lot to the other.” BMW introduced “Specialty Demo Allowance” deals late last month by offering total payments ranging from $2,500 for some 2012 5-Series models to $7,000 for the 2012 7-Series, according to a July 31 notice sent to dealers. The allowances, which also were available for the 2012 3-Series, were kept in place this month, according to an Aug. 14 e-mail to dealers. Lead Narrowed The incentives helped BMW narrow Mercedes’s lead in U.S. sales to just 104 vehicle deliveries through July, according to statements from the automakers. Munich-based BMW beat Mercedes last year by 2,715 deliveries, snapping an 11-year reign by Toyota Motor Corp. (7203) ’s Lexus brand. Mercedes’ U.S. sales rose 14 percent to 147,905 through the first seven months of the year, while BMW’s increased 9.4 percent to 147,801. BMW trailed by more than 2,000 U.S. sales entering the month of July. The figures exclude Stuttgart, Germany-based Daimler’s Sprinter vans and Smart cars and BMW’s Mini brand, which aren’t luxury vehicles . “Reporting vehicles being transferred from new vehicle inventory to ‘demo inventory’ as ‘sales’ may look funny from the outside, but in the context of global competition for product and inventory balancing, it is a widespread practice,” said Greg Goodwin, chief executive officer of Kuni Automotive, which counts a BMW franchise among its 14 dealerships in Washington , California , Colorado and Oregon. The Wall Street Journal reported earlier about BMW’s demo sales. 2012 Models BMW’s incentives were aimed at selling down 2012 model-year vehicles to make way for 2013 models, including the all-wheel drive version of the 3-Series and new X1 compact sport-utility vehicle, Kenn Sparks, a BMW spokesman, said August 24 in a telephone interview. “There was a real move to get as many of the model year 2012s off the lots as fast as possible,” he said. The company also wanted to ensure it has enough demo vehicles on dealer lots, because it saw a “surge of interest” from its Olympic sponsorships, Sparks said. China is among the markets contending with BMW’s U.S. operation for allocation. BMW increased deliveries of its namesake brand vehicles in that market by 30 percent to 147,600 in the first half, according to a July 9 statement. Mercedes sales in China rose 11 percent to 105,200. Nissan’s Fleet Nissan asked its dealers to boost vehicle purchases from the manufacturer to use in service fleets in March, according to representatives of 25 Nissan franchises. Most of the dealers asked not to be identified to avoid losing future allocation of vehicles from Yokohama, Japan-based Nissan. “It’s not correct that we had a program similar to BMW’s,” Travis Parman, a spokesman for Nissan’s North American unit in Franklin, Tennessee , said in a phone interview. “We’ve been doing a rental-car program. Some of the dealers have been setting up their own rental operations, and vehicles have been sold for that purpose. There weren’t any special incentives for that.” Parman said he didn’t know how many dealers have rental operations or how many vehicles are sold into those fleets. Dealers’ purchases helped Nissan increase U.S. sales by 13 percent to 136,317 in March, the last month of the company’s fiscal year. Nissan reported that profit in its fiscal fourth quarter more than doubled to 75.3 billion yen, beating the 65 billion yen average estimate of seven analysts surveyed by Bloomberg. Rapid Payback That selling pace was short-lived. Nissan deliveries plunged the next month by 48 percent to 71,329, according to researcher Autodata Corp. in Woodcliff Lake , New Jersey . “If you report more cars than were sold, you’re going to report less cars than were sold in some future period,” Pohanka said in a telephone interview. “It’s going to catch up to you. The advantage will be very fleeting.” Carlos Ghosn , who leads both Nissan and alliance partner Renault SA, is pushing the Japanese carmaker to outsell Honda in the U.S. and eventually take 10 percent of the market, up from 8.2 percent last year. Nissan edged Honda by 2,196 vehicle sales in the first quarter. The maker of Altima sedans now trails its Tokyo-based rival by 141,864 deliveries, as Honda rebounds from last year’s tsunami in Japan that more severely crimped its production. Light-vehicle sales in the U.S. climbed 14 percent to 8.43 million through July, according to Woodcliff Lake, New Jersey- based Autodata. The industry is headed toward a third straight year of at least 10 percent gains, the first such streak since 1973. ‘Dishonorable Performance’ Automakers generally have resorted to “dishonorable performance” in the past during the final months of the year, George Pipas , a retired former Ford sales analyst, said in a telephone interview. To fend off Honda’s Accord for the title of the industry’s best-selling car in 1994, Ford sold “an aircraft-carrier load” of Taurus cars to daily rental fleets or at cheap lease rates in December, Pipas said. The Dearborn, Michigan-based automaker reported 42,198 Taurus sales in December, 31 percent more than the average monthly deliveries for the model in the year’s first 11 months. “We had to hold some back because the numbers got so obscene,” Pipas said. “It was embarrassing.” In 1998, Ford’s Lincoln brand had a shot at outselling Cadillac for the first time since World War II. Hopes were dashed when GM said its luxury brand’s December sales rose 38 percent, boosting full-year deliveries to 187,343 and beating Lincoln by 222 vehicles. Dealers’ Pride “We were disheartened,” Pipas said. “Lincoln never was the sales leader before and hasn’t been since. Dealers take pride in that sort of thing. It meant there was nothing to celebrate.” Months later, the truth came out: In May 1999, GM said it overstated its Cadillac division’s sales for the previous December by 4,773 vehicles and dropped its claim that the brand outsold Lincoln. John F. Smith, then-general manager of Cadillac, notified Ford’s Mark Hutchins, then-general manager of the Lincoln-Mercury division, of the findings and apologized in a letter. “Back in the day, sales races generated a lot of less- than-honorable programs to hype the numbers,” Pipas said. While it would be difficult to quantify the value of being the top seller in a segment, it does help appeal to customers, said Ian Beavis, executive vice president of the global automotive group at Nielsen Holdings NV and a former sales and marketing executive at Ford, Kia Motors Corp. (000270) and Mitsubishi Motors Corp. ‘Focus Groups’ “People in focus groups do say they justify purchases because a vehicle is popular,” said Beavis, who was the head of sales and marketing at Lincoln when Cadillac admitted inflating numbers. “They like to belong to a successful group. It’s a psychological issue, and it works in reverse, because people will be suspicious of models that aren’t popular.” Cadillac and Lincoln ceded leadership in annual U.S. luxury auto sales to Lexus, the luxury brand of Toyota City, Japan- based Toyota. Last year’s tsunami disrupted Lexus production, giving BMW and Mercedes the chance to claim the No. 1 spot. Mercedes said Jan. 9 that it held back final 2011 U.S. sales results from December because it suspected BMW would adjust its own number to be the top seller. Lexus ‘Puzzled’ Lexus was “puzzled” by a discrepancy between BMW’s reported sales in July and registrations tracked by Polk, a data supplier that collects such information from state agencies, Mark Templin , U.S. head of Toyota’s luxury brand said in an Aug. 8 interview in Palo Alto , California. “This whole volume fight for No. 1, God bless them if that’s what they want to fight for,” Templin said. “That’s a difficult place for a luxury brand to be. If you’re fighting for volume

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bad habits creep into the way you do business.” The Polk data, which shows more Lexus vehicles than BMWs were registered in May, does include models sold to dealers as demonstration vehicles, said Tom Libby, an analyst at Polk. The numbers often vary when vehicles that are sold late in one month are registered in the next one, he said. “Some manufacturers offer incentives for dealers to sell units into dealer-rental service or loaner service or demo service, and these may not be registered right away,” Libby said in an e-mail. “Over time the sales and registration results tend to approach one another. In the short term, though, it is not that uncommon for there to be slight differences.” To contact the reporter on this story: Craig Trudell in Southfield, Michigan, at [email protected] To contact the editor responsible for this story: Jamie Butters at [email protected]

2012

bmw-to-nissan-pump-figures-with-extra-sales-to-dealers

Roche Drug ‘Significantly’ Extended Lives in Cancer Trial

By Phil Serafino and Naomi Kresge

2012-08-27T16:11:58Z

http://www.bloomberg.com/news/2012-08-27/roche-drug-significantly-extended-lives-in-cancer-trial.html

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Roche Holding AG (ROG) ’s experimental breast cancer drug T-DM1 “significantly” extended the lives of breast cancer patients in a trial that may improve the likelihood of approval of the medicine. Roche announced in March that the drug, a so-called antibody-drug conjugate that combines the company’s Herceptin with an older chemotherapy, delayed the disease from worsening in the late-stage study dubbed Emilia. T-DM1 has thus met both of the main goals of the trial, the Basel, Switzerland-based company said in a statement today. The drugmaker, which gained Herceptin with its $46.8 billion purchase of Genentech Inc. in 2009, is developing T-DM1 with technology it licensed from Waltham, Massachusetts-based ImmunoGen Inc. (IMGN) Today’s results were important because European regulators had signaled they wanted proof the drug helps patients live longer before approving it, said Odile Rundquist, a Geneva-based analyst for Helvea SA. “Antibody-drug conjugates are really the future of cancer therapy,” Rundquist said by phone. She estimates peak annual sales for T-DM1 of 1.6 billion Swiss francs ($1.67 billion). Roche has applied to the U.S. Food and Drug Administration for approval of the medicine and said today it will “shortly” submit an application to the European Union’s drug regulator. Today’s data is “taking it to the next step on the survival issue” and reinforces the quality of the patient testing of the drug, ImmunoGen Chief Executive Officer Dan Junius said in a telephone interview. ‘Armed Antibody’ T-DM1 is a so-called “armed antibody” that combines Herceptin with DM1, which is derived from an older chemotherapy medicine called maytansine. That drug was found to be too toxic for patients in clinical trials two decades ago. ImmunoGen’s technology enabled chemists to fuse DM1 to Herceptin in such a way that it isn’t activated until Herceptin shepherds it directly to the cancer cell. Roche rose 0.6 percent to 175.9 francs in Zurich. The stock has returned 15 percent this year including reinvested dividends, compared with a 16 percent return for the Bloomberg Europe Pharmaceutical Index. The Emilia trial compared the drug with combined doses of GlaxoSmithKline Plc (GSK) ’s Tykerb and Roche’s Xeloda in women who have a gene mutation that causes the body to create an excess of a protein called HER2. About 25 percent of breast cancer cases are distinguished by HER2 on the surface of the cancer cells that causes them to multiply more quickly. Herceptin, which generated 5.3 billion francs in sales last year, latches on to HER2, interfering with it without killing the cell. Patients in the trial who received the Tykerb-Xeloda combination will be offered T-DM1, Roche said. The company also will set up a program to provide the drug to U.S. patients under certain circumstances while Roche seeks regulatory clearance. The FDA rejected a request in 2010 to accelerate the approval process. To contact the reporters on this story: Phil Serafino in Paris at [email protected] ; Naomi Kresge in Berlin at [email protected] To contact the editor responsible for this story: Phil Serafino at [email protected]

2012

roche-drug-significantly-extended-lives-in-cancer-tria

Yankees Beat Indians as Nationals’ Losing Streak Hits Four Games

By Erik Matuszewski

2012-08-27T04:35:19Z

http://www.bloomberg.com/news/2012-08-27/yankees-beat-indians-as-nationals-losing-streak-hits-four-games.html

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Curtis Granderson hit his 200th career home run as the New York Yankees beat the Cleveland Indians 4-2 in the finale of their six-game road trip. Nick Swisher and Ichiro Suzuki added run-scoring singles for the Yankees (74-53), who pushed their lead in the American League Eastern Division to four games over the Tampa Bay Rays. The Yankees open a six-game homestand today with the first of three games against the Toronto Blue Jays. The Rays were off yesterday, while the Baltimore Orioles, who are 4 1/2 games back in the AL East, had their scheduled game against the Blue Jays rained out. The Washington Nationals’ losing streak hit four games with a 4-1 defeat against the Philadelphia Phillies. The Nationals still have the best record in Major League Baseball at 77-50 and lead the National League East by 4 1/2 games over the Atlanta Braves, who beat the San Francisco Giants 7-1. The Giants still have a two-game NL West against the Los Angeles Dodgers, who lost to the Miami Marlins 6-2. The St. Louis Cardinals pulled within six games of Cincinnati in the NL Central with a 8-2 win over the Reds. To contact the reporter on this story: Erik Matuszewski in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

yankees-beat-indians-as-nationals-losing-streak-hits-four-games

Treasuries Advance Before Bernanke Speaks at Jackson Hole

By Susanne Walker

2012-08-27T21:18:24Z

http://www.bloomberg.com/news/2012-08-27/treasuries-advance-before-bernanke-speaks-at-jackson-hole.html Treasuries rose, pushing 10-year yields almost to a two-week low, on speculation Federal Reserve Chairman Ben S. Bernanke will use his Aug. 31 speech in Jackson Hole , Wyoming , to outline the case for more bond purchases. Five-year yields extended declines from last week before the U.S. auctions the securities among $99 billion of note sales this week. Chicago Fed President Charles Evans called for another round of asset purchases under quantitative easing. The central bank has already conducted two rounds to pump cash into the banking system. “More people are feeling comfortable that the Fed’s going to do more QE,” said Charles Comiskey , head of Treasury trading in New York at Bank of Nova Scotia (BNS) , one of 21 primary dealers that trade Treasuries with the central bank. “There’s a lack of sellers. The auctions should go fine. These markets are manic

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percentage point, to 1.65 percent at 5 p.m. in New York , according to Bloomberg Bond Trader data. It touched 1.64 percent. The price of the 1.625 percent security due in August 2022 rose 10/32, or $3.13 per $1,000 face amount, to 99 3/4. The yield slid 12 basis points last week , touching 1.63 percent on Aug. 24, the lowest since Aug. 13. It dropped to a record of 1.38 percent on July 25, compared with the average of 3.73 percent for the past decade, before reaching a three-month high of 1.86 percent on Aug. 21. Treasury five-year yields declined two basis points to 0.68 percent after losing nine basis points last week. Thirty-year bond yields dropped four basis points to 2.76 percent. Volume Drops Treasury trading volume reported by ICAP Plc, the largest inter-dealer broker of U.S. government debt , dropped to about $109 billion, from $181 billion on Aug. 24. Daily volume has averaged $238 billion this year. The butterfly chart spread formed by seven-, 10- and 30- year Treasury yields suggests that 10-year notes will outperform as U.S. government debt rises, according to CRT Capital Group LLC, citing technical analysis. The spread, which measures how the 10-year note is performing against the other two securities, was at negative 56 basis points today. It may reach negative 59 basis points, a level last seen in May, if it drops below negative 56.5 basis points, Ian Lyngen , a government-bond strategist at CRT in Stamford , Connecticut , said in a telephone interview. A negative reading indicates the market is bullish on the benchmark 10-year note. More Expensive Treasuries are the most expensive in three weeks, according to the term premium, a model created by economists at the Fed that includes expectations for interest rates , growth and inflation. The gauge was at negative 0.87 percent today, the costliest since Aug. 6. It reached negative 0.70 percent on Aug. 16, the least expensive since May. A negative reading indicates investors are willing to accept yields below what’s considered fair value. The Treasury will sell $35 billion of two-year debt tomorrow, the same amount of five-year notes the following day and $29 billion of seven-year securities on Aug. 30. Demand dropped below 2012 averages at the government’s last auctions of notes and bonds this month. A $24 billion sale of 10-year notes on Aug. 8 drew a bid-to-cover ratio , a gauge of demand that compares the amount bid with the amount offered, of 2.49, the lowest level since August 2009. The year-to-date average ratio is 3.09. A $16 billion offering of 30-year bonds on Aug. 9 had a ratio of 2.41, versus 2.6 for the year. Good Demand “These auctions will go very well,” Ray Remy , head of fixed income in New York at the primary dealer Daiwa Capital Markets America Inc., said of the sales scheduled for this week. “There will be plenty of demand for fives and sevens because there’s a lot of dovish sentiment out of the Federal Open Market Committee minutes.” Treasury 10-year notes snapped the longest weekly losing streak since 2010 on Aug. 24, rising for the first time in five weeks amid speculation the Fed will buy more debt under quantitative easing as global economic growth slows, renewing demand for safety. Bernanke is scheduled to speak at the end of the week at the Kansas City Fed’s annual economic symposium in Jackson Hole. “There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” he said in a letter dated Aug. 22 to Representative Darrell Issa , the California Republican who chairs the House Oversight and Government Reform Committee. ‘Additional Accommodation’ Bernanke repeated the statement from the FOMC’s Aug. 1 meeting that the Fed will provide “additional accommodation as needed.” The central bank bought $2.3 trillion of Treasury and mortgage debt from 2008 to 2011 to spur growth. “You know he wants to ease; the question is when,” said Michael Franzese , managing director and head of Treasury trading at Wunderlich Securities Inc. in New York. “It’s a matter of timing and what’s going to give him the biggest bang for the easing dollar.” The Chicago Fed’s Evans urged the central bank to begin a third round of debt purchases and to keep buying until U.S. unemployment declines for at least six months. “These could be open-ended purchases, meaning that they would continue at a certain rate until there was clear evidence of improvement in economic conditions,” Evans said today in a speech in Hong Kong . “To me, one example of clear evidence would be a resumption of relatively steady monthly declines in unemployment for two or three quarters.” Labor Market The U.S. added 120,000 jobs in August, versus 163,000 in July, economists in a Bloomberg News survey forecast before a Labor Department report on Sept. 7. The unemployment rate will remain above 8 percent, where it’s been since 2009. The Fed is implementing a program to put downward pressure on borrowing costs by exchanging shorter-maturity Treasuries in its holdings for longer-term debt. It bought $1.8 billion of Treasuries today due from February 2036 to August 2042 as part of the plan, known as Operation Twist. QE announcements have usually increased inflation expectations and that’s caused a steepening of the yield curve, said Terry Belton, global head of fixed-income and foreign- exchange research at JPMorgan Chase & Co. in New York, in a company video presentation. “The 10s-30s curve has steepened each of the last three balance-sheet expansions by the Fed,” he said, recommending investors add positions in the trade. The gap between yields on 10- and 30-year Treasuries, the yield curve, was little changed today at 1.109 percentage points after widening to 1.121 percentage points on Aug. 17, the most on a closing basis since June 11. The difference in yields between 10-year notes and comparable Treasury Inflation Protected Securities, which represents traders’ expectations for the inflation rate over the life of the securities and is known as the break-even rate, was 2.31 percentage points today, near the highest in more than two weeks. It’s down from the 2012 high of 2.45 percentage points on March 20. To contact the reporter on this story: Susanne Walker in New York at [email protected] To contact the editor responsible for this story: Dave Liedtka at [email protected]

2012

reasuries-advance-before-bernanke-speaks-at-jackson-hole

Samsung to Buy 3% Stake in ASML for 503 Million Euros

By Maaike Noordhuis

2012-08-27T09:20:23Z

http://www.bloomberg.com/news/2012-08-27/samsung-to-buy-3-stake-in-asml-for-503-million-euros.html

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Samsung Electronics Co. (005930) agreed to invest 779 million euros ($974 million) in ASML Holding NV (ASML) , joining Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co. in taking a stake in Europe ’s largest chip-equipment maker to secure future technology. Samsung will buy a 3 percent equity holding in Veldhoven, Netherlands-based ASML for 503 million euros and invest a further 276 million euros in research and development of next- generation lithography technologies, ASML said today. The deal completes ASML’s so-called co-investment program announced in July, with which the company seeks to accelerate product development. Samsung, Intel and TSMC have now agreed to buy 23 percent of ASML for 3.85 billion euros, and the Dutch manufacturer said it no longer plans to solicit the participation of other customers. “ASML is getting the maximum amount to fund research and development costs, and Samsung opted for only a 3 percent equity stake instead of the 5 percent that was still available,” said Niels de Zwart, an analyst at ING Groep NV in Amsterdam who recommends holding ASML shares. “That is good news for existing shareholders.” ASML advanced 0.2 percent to 46.26 euros at 11:18 a.m. Amsterdam time, giving the company a market value of 19.4 billion euros. Since the announcement of the program on July 9, ASML has gained 16 percent. ‘Win-Win’ Under the investment program, ASML will speed up the costly development of extreme ultraviolet, or EUV, technology, which will help shrink the size of chips while increasing their capacity and speed for devices such as mobile phones and tablet computers. The funding from Suwon, South Korea-based Samsung, Intel and TSMC should also allow ASML to step up the transition to a new chipmaking standard that relies on 450-millimeter disks of silicon, compared with the current 300-millimeter standard, a shift that will enable manufacturers to produce more chips faster. The investment program is “a win-win,” giving ASML funding and allowing the shareholders to benefit from a possible appreciation in the company’s value, ASML Chief Executive Officer Eric Meurice said after announcing the plan last month. To contact the reporter on this story: Maaike Noordhuis in Amsterdam at [email protected] To contact the editor responsible for this story: Benedikt Kammel at [email protected]

2012

samsung-to-buy-3-stake-in-asml-for-503-million-euros

Abengoa Plans to Reshape Share Structure to Improve Flexibility

By Charles Penty

2012-08-27T16:22:45Z

http://www.bloomberg.com/news/2012-08-27/abengoa-plans-to-reshape-share-structure-to-improve-flexibility.html

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Abengoa (ABG) SA, a Spanish engineering and renewable-energy company, said it planned to reshape its share structure to give it greater financial flexibility for growth including a U.S. stock listing. Abengoa called an extraordinary shareholders’ meeting for next month to authorize the issue of new class B shares that it will offer in exchange for existing class A or B shares, the company said in a filing to regulators today. Abengoa will also ask investors to approve the class B shares trading in the U.S., the Seville-based company said. The B stock can attract new investors as Abengoa targets growth, Chief Executive Officer Manuel Sanchez Ortega said today on a webcast for analysts. The plan entails distributing four new B shares for each A or B share that investors currently hold, the company said. Class B shares “are a familiar instrument on international markets and, in particular, in the United States of America , where Abengoa has an increasing presence both in the development of its business and on the capital markets ,” the company said. The new class B shares share the same dividend rights as class A shares but carry one vote compared to 100 votes for the class A shares, the company said. Abengoa said it would give investors five years to opt to convert A shares into B shares and the transaction will only go ahead if it is approved by the majority of class A stockholders other than its controlling shareholder. The extraordinary shareholders’ meeting will take place on Sept. 30, Abengoa said. The company has no plans for a capital increase, Sanchez Ortega said. To contact the reporter on this story: Charles Penty in Madrid at [email protected] To contact the editor responsible for this story: Frank Connelly at [email protected]

2012

abengoa-plans-to-reshape-share-structure-to-improve-flexibility

HTC Falls After Apple Wins Samsung Patent Verdict: Taipei Mover

By Tim Culpan

2012-08-27T02:30:04Z

http://www.bloomberg.com/news/2012-08-27/htc-falls-after-apple-wins-samsung-patent-verdict-taipei-mover.html

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HTC Corp. (2498) , the world’s second- largest maker of smartphones using Google Inc. (GOOG) ’s Android system, fell in Taipei trading after Apple Inc. (AAPL) won a patent infringement case against Samsung Electronics Co. HTC dropped as much as 3.2 percent, the most in a week, to NT$254.00 before trading at NT$255.50 as of 10:06 a.m. local time. The benchmark Taiex (TWSE) index fell 0.2 percent. A U.S. jury found that Samsung, the world’s largest maker of Android-based phones, breached six of seven patents Apple held for technology used in mobile devices and ordered the South Korean company to pay more than $1 billion. Apple has also accused HTC of infringing its patents, with suits pending in U.S. courts and an International Trade Commission case scheduled to release findings Nov. 7. “The Samsung/Apple case also suggests that HTC’s upcoming (initial) ruling on Nov. 7 could be a tough battle for HTC,” Jeff Pu, an analyst at Fubon Financial Holding Co. in Taipei, wrote today. He rates HTC reduce. Samsung, which said it will file post-verdict motions to overturn the decision, dropped as much as 7.7 percent in Seoul trading today. To contact the reporter on this story: Tim Culpan in Taipei at [email protected] . To contact the editor responsible for this story: Michael Tighe at [email protected] .

2012

c-falls-after-apple-wins-samsung-patent-verdict-taipei-mover

Russia May Increase Insurance for Banking Deposits, Gazeta Says

By Jason Corcoran

2012-08-27T12:08:02Z

http://www.bloomberg.com/news/2012-08-27/russia-may-increase-insurance-for-banking-deposits-gazeta-says.html

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Russia may raise the insurance on banking deposits to one million rubles ($31,460) from 700,000 rubles, the government newspaper Rossiyskaya Gazeta reported , citing the Deposit Insurance Agency’s deputy director, Andrei Melnikov. The agency will begin consultations in the autumn on a potential increase, the newspaper added. To contact the reporter on this story: Jason Corcoran in Moscow at [email protected] To contact the editor responsible for this story: Frank Connelly at [email protected]

2012

russia-may-increase-insurance-for-banking-deposits-gazeta-says

`Othering' Barack Obama

By Josh Barro

2012-08-27T17:52:10Z

http://www.bloomberg.com/news/2012-08-27/-othering-barack-obama.html The flap over Mitt Romney 's crack on Friday that "no one's ever asked to see my birth certificate" has focused mostly on whether Romney was "dog-whistling" an affirmation to Republican base voters who cling to the conspiracy theory that President Barack Obama was born abroad and faked his Hawaiian birth records. This misses the point. What Romney was doing was straight out of Mark Penn's infamous March 2007 memo . Penn, then Hillary Clinton 's chief campaign strategist, argued that Obama is "not at his center fundamentally American in his thinking and his values." This led to advice for the Clinton campaign: "Let's explicitly own 'American' in our programs, the speeches and the values. He doesn't.… Let's add flag symbols to the backgrounds." Romney didn't suggest that Obama was literally foreign-born, and he's been clear that he doesn't believe he was. What Romney was intimating was that Obama has given people cause to wonder how American he really is. Romney, unlike Obama, is so clearly American that no document check is necessary. What makes Obama look "non-American" to some conservatives isn't just his birth to a Kenyan father. It's his upbringing around the world and in remote Hawaii , his background in elite coastal institutions and academia, and his liberal politics. Last month, top Romney surrogate John Sununu said Obama should "learn how to be an American." The context was Obama's "you didn't build that" speech, and what Sununu deemed to be his un-American view of how jobs should be created. Again, Sununu knows that Obama was born a U.S. citizen; his contention is that Obama is not American in spirit. This line of attack is not new with Obama. Republicans threw similar gibes at John Kerry. Bush Commerce Secretary Don Evans famously said of Kerry during the 2004 campaign, "He looks French." This was meant as an insult. John Kerry was born in Colorado , but he actually does have links to France . His mother's family has an estate in Brittany, and while he was running for president, his cousin served as mayor of the village of Saint-Briac-sur-Mer. As The Guardian reported in 2004, the Kerry campaign sought desperately to de-emphasize these facts. Even fellow Republicans aren't immune. Earlier this year, Newt Gingrich ran an ad attacking Mitt Romney that included the line "And just like John Kerry, he speaks French, too." All of which is to say, Obama isn't the first candidate Republicans will attack as less than fully American and he won't be the last. (And as the Penn and Gingrich examples show, these attacks sometimes come from fellow Democrats or toward fellow Republicans.) Obama is black, so his race is inevitably a part of "othering" him. If he's not American, the implication must be that he is Kenyan. And Obama's race is at the core of other attacks on him, such as the spurious claims that his administration is undermining the Clinton-era welfare reforms. Romney said yesterday that Obama was undermining work requirements in welfare to "shore up his base." But I think Obama's blackness is just an incidental part of the attacks on him as foreign. Imagine that Obama's father had been a French academic rather than a Kenyan one. Wouldn't the narrative of Obama's "secret French birth" be similarly irresistible fodder for conspiracists on the right? What Romney was up to on the stump last week wasn't just stoking the fires under the birth certificate conspiracy that won't die. It was continuing the Republican tradition of asserting that their party's agenda is the only truly American one. That's something that should irritate all Democrats

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2012

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Sprint Joins GE in Leaving Policy Group Backing Voter-ID Laws

By Jonathan D. Salant

2012-08-28T04:01:42Z

http://www.bloomberg.com/news/2012-08-27/sprint-joins-ge-in-leaving-policy-group-backing-voter-id-laws.html

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General Electric Co. (GE) and Sprint Nextel Corp. (S) joined the exodus of companies from the American Legislative Exchange Council following the group’s support of voter-identification and self-defense laws. Spokesmen for both companies said yesterday they are ending their membership with the Washington-based public policy organization, which charged corporations as much as $25,000 and allowed them to help write bills that some lawmakers then tried to enact in their home states. Western Union Co. (WU) also has left ALEC, spokesman Tom Fitzgerald said. GE, Sprint and Western Union were among those lobbied to quit the group by ColorofChange.org , a New York-based civil rights organization that has counted more than three dozen companies that have ended their ALEC memberships, including General Motors Co. (GM) and Walgreen Co. (WAG) “These significant developments, coupled with recent withdrawals from ALEC by companies like Walgreens and GM, further prove that everyday people working together to hold corporations accountable can achieve tremendous change,” said Rashad Robinson, executive director of ColorOfChange.org. ’Ongoing Review’ A spokeswoman for Fairfield, Connecticut-based GE, Lindsay Lorraine, said the company left ALEC “in connection with our ongoing review of the political and policy organizations we belong to.” Overland Park , Kansas-based Sprint was solely involved in telecommunications issues with ALEC and participated on a communications task force “to ensure that Sprint’s voice is heard by state lawmakers,” said John Taylor , a spokesman. Kaitlyn Buss, a spokeswoman for ALEC, said Sprint “simply decided not to renew.” She has previously decried “this corporate intimidation and bully campaign” to get companies to exit ALEC, saying it was “politics at its worst and should be ignored.” Those praising the departures included Bob Edgar, president of Common Cause , a Washington-based advocacy group that has challenged ALEC’s tax-exempt status on the basis that it is a lobbying organization. “Clearly the light bulb has gone on at General Electric that ALEC’s extreme agenda is not good for business,” said Edgar, a former Democratic congressman from Pennsylvania. ALEC has been criticized for advocating the “Stand Your Ground” laws that allow individuals who feel threatened in a public space to fight back rather than retreat. Florida Killing A state version of the law was cited by authorities in Sanford, Florida, when they didn’t initially arrest George Zimmerman, who claimed self-defense in the killing of teenager Trayvon Martin in February. Zimmerman later was charged with second-degree murder and has pleaded not guilty. ALEC also has pushed for voter-identification laws, which the U.S. Justice Department has blocked from taking effect in South Carolina and Texas, saying they discriminate against minorities. Studies by the Brennan Center for Justice at New York University Law School said voter-ID laws disproportionately affect groups that tend to vote Democratic, studies show. The center reported that 25 percent of voting-age blacks, 16 percent of voting-age Hispanics and 15 percent of voting-age Americans in households earning less than $35,000 lack the IDs required by the laws. To contact the reporter on this story: Jonathan D. Salant in Tampa, Florida, at [email protected] . To contact the editor responsible for this story: Jeanne Cummings at [email protected] .

2012

sprint-joins-ge-in-leaving-policy-group-backing-voter-id-laws

France Calls on Syrian Opposition to Form Provisional Government

By Mark Deen

2012-08-27T16:44:09Z

http://www.bloomberg.com/news/2012-08-27/france-calls-on-syrian-opposition-to-form-provisional-government.html

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France called on the Syrian opposition to form a provisional government to prepare for the demise of Bashar al-Assad’s regime as fighting intensified in the civil conflict. “France asks the Syrian opposition to constitute a provisional government that is inclusive, representative, that can become the legitimate representative of the new Syria ,” French President Francois Hollande said today in a speech in Paris to his nation’s ambassadors. “France would recognize the provisional government once it has been formed.” Hollande turned up the pressure on Assad amid escalating violence. Syrian rebels said today they shot down a government helicopter over the capital Damascus. Aug. 25 was the bloodiest day since the uprising began 17 months ago, with 440 people reported dead by the opposition Local Coordination Committees. More than 23,000 lives have been lost, the U.K.-based Syrian Observatory for Human Rights estimates. Hollande said he favors establishing liberated zones in Syria and that the opposition there should form a transitional government. He said France is working with Arab governments to prepare the shadow Syrian government. Separately, he said it is “unacceptable” that Iran develop nuclear weapons. To contact the reporter on this story: Mark Deen in Paris at [email protected] To contact the editor responsible for this story: James Hertling at [email protected]

2012

france-calls-on-syrian-opposition-to-form-provisional-governmen

Ackman Urges General Growth to Pursue Takeover by Simon

By Brian Louis

2012-08-28T16:26:45Z

http://www.bloomberg.com/news/2012-08-27/ackman-urges-general-growth-to-pursue-takeover-by-simon.html

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(Corrects Jim Sullivan ’s title in eighth paragraph of story published on Aug. 27.) Bill Ackman’s Pershing Square Capital Management LP, the second-largest investor in General Growth Properties Inc. (GGP) , urged the mall owner to enter negotiations for a takeover by rival Simon Property Group Inc. (SPG) General Growth should “immediately form a special committee” and “initiate negotiations with Simon promptly,” Ackman said in a letter filed today with the U.S. Securities and Exchange Commission. Ackman first said on Aug. 23 that Simon was interested in buying Chicago-based General Growth. “We believe the Simon transaction is in the best interest of GGP shareholders and will have a positive impact on substantially all other stakeholders,” Ackman said in today’s letter to General Growth’s board. General Growth, the No. 2 U.S. shopping-mall owner, exited bankruptcy protection in November 2010 following a takeover battle between Indianapolis-based Simon, its larger competitor, and an investor group that included Pershing Square and Brookfield Asset Management Inc. (BAM) General Growth filed for bankruptcy in 2009 after weighing itself down with $27 billion in debt that it was unable to refinance because of the financial crisis and collapse of the commercial mortgage-backed securities market . A takeover by Simon may be hard because Brookfield, General Growth’s largest investor, has said it doesn’t want to sell its shares, said John Sheehan, an analyst at Edward Jones in St. Louis . Brookfield has a 42 percent stake in General Growth, and the company’s chairman is J. Bruce Flatt, chief executive officer of Brookfield. ‘Mathematically’ Difficult “It would be difficult for Simon to complete a transaction unless Brookfield changes their public stance,” said Sheehan, who has a hold rating on Simon’s shares. “Even if you got every other shareholder to agree to it, mathematically it would be hard for them to make it work.” David Keating , a General Growth spokesman, and Andrew Willis, a spokesman for Toronto-based Brookfield, declined to comment on Ackman’s letter today. A message left for Les Morris, a Simon spokesman, wasn’t immediately returned. “Simon buying GGP has substantial strategic merit,” said Jim Sullivan, managing director for real estate investment trust research at Green Street Advisors Inc., based in Newport Beach , California. “The impediment is you have a substantial shareholder that may not be a very willing shareholder, when it comes to selling, so I would expect Simon not to invest a lot of time in this if it involved pursuing a prize that’s not readily attainable.” General Growth rose 1.3 percent to $20.02 at the close of New York trading. ‘Create Liquidity’ Simon has discussed paying 0.1765 of a Simon share for each General Growth share, according to Ackman. That would would value General Growth at $27.73 a share, based on Simon’s Aug. 24 closing price. That gives General Growth a higher per-share value than Simon’s proposed takeover from more than two years ago. Simon said in May 2010 that it offered $20 a share for its competitor, which was under bankruptcy protection at the time. Ackman said last week that Brookfield had also expressed interested in taking over General Growth. Following Ackman’s disclosure, Brookfield said in a statement that it “is not taking any steps” to buy General Growth and that Pershing Square was trying to “create liquidity for its interest” in the company. “At no time has Pershing Square sought liquidity for its GGP stake in conversations with Brookfield, Simon or otherwise,” Ackman wrote in today’s letter. Pershing Square would be able to sell its General Growth stake within 90 days “with minimal if any market impact” if it wanted to, he said. To contact the reporter on this story: Brian Louis in Chicago at [email protected] To contact the editor responsible for this story: Kara Wetzel at [email protected]

2012

ackman-urges-general-growth-to-pursue-takeover-by-simon

Ski Lifts Help Open $25 Billion Market for Storing Power:

By Louise Downing

2012-09-06T11:37:11Z

http://www.bloomberg.com/news/2012-08-27/ski-lifts-help-open-25-billion-market-for-storing-power-energy.html

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(Corrects status of the two plants in California in the 22nd paragraph. Story first moved on Aug. 28.) Technology developers are shuttling between caves and mountaintops to build a market for utilities set to attract $25 billion in annual investment within a decade. To store surplus electricity from power plants, they’re trying to squeeze air into salt mines and run empty trains up hills, testing how to harness the energy released when the air bursts out and the cars roll back down. Trials are under way at companies from Germany ’s Siemens AG (SIE) and RWE AG (RWE) to General Electric Co. (GE) and a startup backed by billionaire Bill Gates , which is experimenting with the momentum of ski lifts. “Electricity is the only commodity in the world that isn’t really stored,” said Prescott Logan, who heads GE’s storage business in Schenectady, New York , where last month it opened a $100 million plant to make batteries for utilities. When storage becomes cheap and massive, “the impact will be huge.” The $260 billion renewables industry needs storage so power companies can absorb surges from solar and wind farms from Texas to Mongolia. The devices will be key for plans by Germany to shift Europe ’s biggest electricity market from atomic energy, said Gil Forer, Ernst & Young LLP’s clean-tech head in New York. The consulting firm said annual investment in storage is currently about $2.6 billion, based on data from Pike Research. That’s set to grow to $9.2 billion in 2015 and then to $25 billion by 2021. Logan said Fairfield, Connecticut-based GE expects energy storage to generate $500 million to $1 billion in annual revenue by 2020. Brad Roberts, executive director of the Electricity Storage Association in Washington , said the business in the U.S. alone may grow to $5 billion within five years. Water Uphill While pumping water up a hill has aided in power generation for more than 100 years, the technology is limited to mountainous terrain. Environmentalists have criticized those sites for being harmful to local wildlife, prompting developers to look for alternatives that can be used anywhere anytime. “Energy storage solutions will catalyze growth in the market for renewable energy by enabling its use in greater volumes and in new applications,” Forer said. Clean-energy investment rose 5 percent to a record $260 billion in 2011, Bloomberg New Energy Finance data show. China could use storage more than most, with faster-than-average growth of renewables and populations barely served by the power grid . Nations from the U.S. to South Korea are holding tests. $25 Billion Estimate Almost half of the 150 gigawatts that currently can be stored is in the Asia-Pacific region, according to Ernst & Young, citing Pike Research, with most of the rest in North America and Western Europe. Reaching $25 billion of investment requires boosting demand, especially with clean energy, which depends more on weather than coal or gas, said Keith Harrison, the firm’s lead analyst for global power and utilities. “The mandated growth of renewable generation in place of fossil-fueled generation will drive the growth of battery based storage ,” he said. Pumped water accounts for about 99 percent of the market, and Roberts from the ESA said he expects this to decrease to below 80 percent within 10 years. Even the biggest power generators, from coal plants to nuclear, run most efficiently at a steady rate and take advantage of storage during off-peak hours. Compressed-air energy storage is the most suitable for the biggest plants, Harrison said. Batteries, such as those being developed by GE and Siemens, aren’t yet capable of holding large amounts of power cheaply. Compressed Air There are only two working compressed-air facilities today, in Germany and the U.S. Essen-based RWE is developing its own technology and hopes to build a demonstration project in central Germany in 2016. In times of excess power and low demand, such as when the wind blows at night, RWE’s system squeezes air into underground caverns. When this air is released, it drives a generator via a turbine above ground, to produce electricity. “Pumped-hydro is our preferred large-scale energy storage technology, but in Germany we have only a limited number of sites left for additional large pumped-hydro,” said Peter Moser, head of new technology for power plants at RWE. “Nobody can say that there is a clear winning technology for the future.” Some companies are pushing things uphill besides water to tap gravity for making power. Gravel, Ski Lifts, Trains Bill Gates-backed Energy Cache is shoveling gravel up and down a slope on ski lifts. Gravity Power LLC is pushing water in and out of underground caves. Advanced Rail Energy Storage LLC, headed by James Kelly, the former vice president of transmission and distribution for Southern California Edison Co., sends electric trains between high and low rail yards. For smaller applications, companies including GE and Siemens are developing batteries. Lithium-ion batteries , such as those produced by Siemens, are receiving the most attention, according to Roberts. Siemens technology already is being tested by Enel SpA (ENEL) , Italy ’s biggest utility, as a means of storing energy from its solar farms. “The smaller lithium-ion batteries are produced in tens and hundreds of millions per year,” said John Newman, associate partner at McKinsey & Co. “The experience you get building those can be translated to building larger and larger battery packs, so I think we’re looking more at the scaling effect.” GE is working on a sodium nickel battery, the Durathon, since acquiring in 2007 the U.K. business that had been working on the technology since the 1980s, Logan said. “When you have the ability to store energy, it allows you to better manage the infrastructure that you use to move electricity around the world,” Logan said. California Project Advanced Rail, or ARES, is working on a small-scale demonstration facility in California that’s due to start in about nine months, and a commercial-scale project in Nevada that may eventually accommodate as much as 300 megawatts of energy. Its Nevada project will probably cost as much as $50 million. The Nevada project will be connected to the western regional grid that’s controlled by the California Independent System Operator, Kelly said. Utilities that belong to the CAL ISO including Southern California Edison Co., Pacific Gas & Electric Co. and San Diego Gas & Electric Co. “all have contracts with renewable power generators, and an ARES project could store energy from any or all of them,” he said. “We’re at the beginning of a commercialization phase and there have been a number of promising technologies and these have to mature on the cost front,” McKinsey’s Newman said. Batteries are the most commercially mature storage systems today, he said. To contact the reporter on this story: Louise Downing in London at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected]

2012

ski-lifts-help-open-25-billion-market-for-storing-power-energy

Yen Gains Against Major Peers Amid Global Slowdown Signs

By Emma Charlton and Masaki Kondo

2012-08-28T08:10:23Z

http://www.bloomberg.com/news/2012-08-27/dollar-remains-higher-versus-yen-before-confidence-report.html

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The yen strengthened after Japan cut its economic assessment, underlining the fragility of the global economy and spurring demand for the safest assets. Japan’s currency weakened against all except three of its 16 major counterparts as Asian and European stocks declined. The euro fell to the lowest in a week against the yen after a government report showed Spain ’s recession deepened in the second quarter. New Zealand’s dollar dropped after dairy exporter Fonterra Cooperative Group Ltd. lowered its forecast payout to suppliers, citing the currency’s strength. “It’s not a big surprise that Japan has cut its forecasts because growth is falling short of expectations in many countries,” said Simon Smith , chief economist at FXPro Group Ltd. in London . “The yen is doing pretty well.” The yen climbed 0.2 percent to 98.27 per euro at 9:07 a.m. London time after appreciating to 97.89 yen, the strongest level since Aug. 20. Japan’s currency gained 0.2 percent to 78.58 per dollar. The euro gained 0.1 percent to $1.2508. The yen will probably advance beyond 78 per dollar in the next four-to-six weeks, FXPro’s Smith said. Japan’s Cabinet Office said risks to the economy include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” according to a monthly report released in Tokyo . The government lowered its view on personal consumption, home-building, exports, imports and industrial output. The MSCI Asia Pacific Index of shares dropped 0.5 percent, and the Stoxx Europe 600 Index slid 0.5 percent. Spain Recession Spain’s gross domestic product shrank 0.4 percent from the previous three months, after shrinking 0.3 percent in the first quarter, the Madrid-based National Statistics Institute said. “The overall backdrop to the global economy remains mostly weak,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore. “The yen should outperform the euro.” Europe’s common currency has depreciated 5 percent in the past six months, the biggest decline among the 10 developed- nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen was the best performer, rising 5.9 percent, and the dollar advanced 3.1 percent. “Everybody wants to sell the euro,” said Satoshi Okagawa , a senior global-markets analyst at Sumitomo Mitsui Banking Corp. in Singapore. “I don’t expect a swift recovery” in the euro region’s economy, he said. Spain is scheduled to sell as much as 3.5 billion euros of bills today, while Italy will auction zero-coupon and inflation- linked securities. Dollar Index The Dollar Index (DXY) snapped a two-day gain as investors weighed whether the Federal Reserve will embark on a third round of bond purchases, known as quantitative easing. The gauge, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, was little changed at 81.62. The index dropped to 81.221 on Aug. 23, the lowest level since June 20. Fed Chairman Ben S. Bernanke will speak in Jackson Hole , Wyoming , on Aug. 31 at an annual symposium hosted by the Fed Bank of Kansas City . “The market may be open for disappointment” at Jackson Hole, said Derek Mumford, a Sydney-based director at Rochford Capital, a currency risk-management company. “Assuming there won’t be significant quantitative easing, then the U.S. dollar could have quite a strong performance in the next couple of months.” Factory Index The Fed Bank of Richmond will say today its regional factory index improved to minus 10 this month, from minus 17 in July, according to a Bloomberg survey of economists. A reading below zero signals contraction. A gauge of U.S. consumer confidence rose to 66 in August, from 65.9 last month, a separate survey showed before today’s Conference Board report. New Zealand’s dollar weakened for a second day against the yen after Fonterra, the world’s largest dairy exporter, cut its forecast payout to farmers for the current production season. The company will pay its 11,000 shareholders NZ$5.25 ($4.24) a kilogram of milk solids in the year ending May 31, 2013, down 13 percent from a year earlier, the Auckland-based company said in a statement. The so-called kiwi declined 0.3 percent to 63.47 yen, and dropped lost 0.1 percent to 80.79 U.S. cents. To contact the reporters on this story: Emma Charlton in London at [email protected] ; Masaki Kondo in Singapore at [email protected] To contact the editor responsible for this story: Paul Dobson at [email protected]

2012

dollar-remains-higher-versus-yen-before-confidence-repor

Zara Enters South Africa as Foreign Brands Seek Growth

By Janice Kew

2012-08-27T23:00:48Z

http://www.bloomberg.com/news/2012-08-27/zara-enters-south-africa-as-foreign-brands-seek-growth.html For years, South Africans wanting clothes from stores such as Zara (ITX) and Topshop could only get them when traveling abroad. Now, they’re available at the local mall as mid-market apparel retailers rush into the country, seeking to create a base for expansion across Africa. In the last year at least a half-dozen foreign clothing brands, including Superdry, Steve Madden and G-Star, have opened outlets in South Africa . Arcadia Group Ltd.’s Topshop is slated to open its first stand-alone outlet in South Africa before December, in the Johannesburg suburb of Sandton. A few kilometers away in Hyde Park centre, LVMH Louis Vuitton Moet Hennessey SA (MC) ’s Thomas Pink in June opened its first shop in Sub-Saharan Africa. Retail sales in South Africa advanced 8.3 percent in June from a year earlier, compared with a 1.2 percent decline in the euro region. Spending on clothing and footwear in South Africa totaled 86.9 billion rand ($10.5 billion) last year, according to the central bank. While there’s no shortage of retailers in South Africa, “the average person has not had access to these brands, so there is growth for them,” said Mashuda Cassim, managing director of fund manager Cachalia Capital Ltd. in Johannesburg. Linda Kamauj spent a recent afternoon flipping through 499- rand jeans and 259-rand T-shirts at Zara in Sandton, opposite the newly renovated flagship of local clothing retailer Truworths International Ltd. (TRU) The Zara store appeared to be at least twice as busy as Truworths, with a line of more than a dozen mothers, teenagers and young professionals waiting to check out. Aspirational Appeal “I’d heard Zara had come to South Africa and came to see what was on offer,” said the 34-year-old Kenyan, visiting friends in Johannesburg. “I like the materials and styles, they’re a bit different from what I can get back home” in Nairobi. South African shoppers have been able to buy brands such as Gap and Levi locally for some years, though mostly in other companies’ stores and typically at prices that were 30 percent to 50 percent higher than in their home markets. For many South Africans , having foreign brands in your closet meant you had money to travel and buy abroad. “These brands are seen as aspirational in the South African market,” said Gabriel Sacks, an assistant fund manager at Aberdeen in London . “To be seen buying or wearing a foreign brand is still associated with wealth.” ‘Sophisticated Economy’ The newcomers have to compete with South African stalwarts such as Truworths, Woolworths Holdings Ltd. and the Foschini Group Ltd., which operate chains that sell clothing, cosmetics, jewelry, accessories and sporting goods. “South Africa is quite a sophisticated economy with lots of young emerging professionals who are increasingly becoming aware of fashion,” said Truworths Chief Executive Officer Michael Mark. The foreign brands “will have to still prove to the local market that they can serve them.” Woolworths Holdings Chief Executive Officer Ian Moir says he welcomes the competition, since the arrival of companies such as Zara will help raise consumer awareness of fashion. His company, which has no relation to other Woolworths in the U.S., Britain and Australia , focuses on office attire, casual wear and lingerie. “If your prices and quality are good, you will see customer loyalty,” Moir said. “Whether I’m competing with Zara, Topshop or Truworths, it makes no difference to me

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people increasingly migrate to cities in search of greater opportunity, a new retail culture is springing up. In the Nigerian cities of Lagos and Abuja, at least nine new malls have opened in the past five years. Sub-Saharan Africa ’s economy has grown an average of 5.2 percent a year over the past five years, according to the International Monetary Fund , fueling the expansion of the middle class. Africa now has more families earning in excess of $20,000 a year than India, according to McKinsey & Co. “Africa remains a good long-term investment,” said Woolworths CEO Moir. And he insists that his company and other South African retailers have advantages over the foreigners when it comes to working in Africa. “We’ve been around longer and have developed relationships,” he said. “And it’s easier to supply and source from South Africa.” Planting Brands South African retailers are planning new stores in countries from Angola to Nigeria to benefit from rising wealth on the poorest continent. Woolworths expects to more than triple the proportion of sales it derives from other African countries, Moir said, from about 3 percent today to 10 percent within seven years. Truworths expects to increase its stores on the continent outside South Africa to 45 by yearend, up from 35 in June. The company said revenue from Africa, excluding its home market, rose 14 percent to 268 million rand in the year through June, versus 12.5 percent growth in South Africa. “The brands that get in first will have first mover advantage, to get your brand firmly in the mind of the consumer,” said Syd Vianello, an analyst at Nedbank Group Ltd. (NED) ’s securities unit. “You don’t want to be the last one in.” To contact the reporter on this story: Janice Kew in Johannesburg at [email protected] To contact the editor responsible for this story: Celeste Perri at [email protected]

2012

zara-enters-south-africa-as-foreign-brands-seek-grow

USDA Montana Spot Grain Closing Prices for August 27

By Michael Carone

2012-08-27T21:09:41Z

http://www.bloomberg.com/news/2012-08-27/usda-montana-spot-grain-closing-prices-for-august-27-table-.html August 27 (Bloomberg)

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spot or bid prices for durum wheat. Prices are in dollars a bushel Information is supplied by the U.S. Department of Agriculture . Prices are determined by a USDA survey of grain purchasers with elevators located in seven regions of Montana . Prices are displayed as a "low-high" range, or as a "single" price depending upon the degree of consensus among the purchasers. Durum wheat is the hardest wheat. The test weight is at least 60 pounds a bushel. Durum averages 15 percent protein and is mainly used in the making of pasta.

2012

usda-montana-spot-grain-closing-prices-for-august-27-table-

Solar Panel Maker Doubles Output as Prices Drop: Corporate India

By Sharang Limaye

2012-08-28T09:12:00Z

http://www.bloomberg.com/news/2012-08-27/solar-panel-maker-doubles-output-as-prices-drop-corporate-india.html

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Surana Ventures Ltd. (SURA) , an Indian maker of solar panels, is planning to double production after oversupply from Chinese manufacturers pushed prices down by almost 34 percent in the past year. The company, based in the southern city of Hyderabad, plans to increase output of panels to 30 megawatts this year and invest 250 million rupees ($4.5 million) in a solar cell plant, Managing Director Narender Surana said in an interview. Rising demand for alternative energy driven by coal supply bottlenecks and blackouts may help reverse a slide in revenue, he said. Surana is counting on one of the fastest-growing solar markets where larger local rivals including Moser Baer India Ltd. (MBI) , the country’s biggest maker, and Indosolar Ltd. (ISLR) are struggling to cope with the crash in prices. Prime Minister Manmohan Singh ’s government seeks to turn India into a global hub with rules to help almost triple manufacturing capacity to 5 gigawatts by 2020. “The shortage in coal supply is a great opportunity for us as more and more people are looking at solar energy as a viable alternative,” Surana said. “As India’s energy needs rise, the shift towards solar power shall become more pronounced.” Sales, which slid 29 percent in the year ended March 31 to 727 million rupees, may jump 38 percent in the current financial year to 1 billion rupees, Surana said. Stock Slide Shares of the company have slumped 71 percent since touching 65 rupees on its debut in Mumbai on Jan. 7, 2011, according to data compiled by Bloomberg. The stock fell 2.6 percent to 18.5 rupees as of 2:32 p.m. in Mumbai trading today. India is struggling to add electricity generation capacity to meet peak demand. Power cuts are common across the country, which battles an average 9 percent shortfall that the government says shaves about 1.2 percentage points off annual economic growth. The South Asian country has missed every annual capacity target since 1951, with 76,000 megawatts targeted for the five years ending March 2017. A shortage of coal and gas used in conventional thermal plants has prompted the government to set a sun-power generation target of 20 gigawatts by 2022, a 20-fold increase. Welspun Energy Ltd. , the country’s biggest developer of solar projects, said last month that the nation will surpass the target in the next decade by twofold. Idle Capacity The biggest panel suppliers including China ’s Suntech Power Holdings Co. (STP) and Tempe, Arizona-based First Solar Inc. (FSLR) say India is about to become one of the fastest-growing solar markets, countering waning demand in Europe where governments are cutting back clean-energy subsidies. Surana may be putting up the investment, anticipating such a surge in demand, even though solar-panel makers in India have almost 80 percent of their capacity lying idle now, said Bharat Bhushan , a New Delhi-based analyst for Bloomberg New Energy Finance. India is soon set to release a 3 gigawatt capacity plan for the next four years and it will have a domestic content requirement, Bhushan said. “The home market is the big hope for solar manufacturers in India,” Bhushan said. “The government has already been promoting the use of locally made cells and modules,” which will be extended in the next phase, he said. First Solar, the only profitable panel maker among the 10 biggest in the world, plans to develop solar farms in India, with demand coming from industrial and commercial users without any government subsidies involved, Sujoy Ghosh, the India head of the world’s biggest thin-film panel maker, said last week. Debt Revamp A lot of investment planned for thermal projects will go to renewables, Welspun Energy’s Managing Director Vineet Mittal said last month. Indian power utilities have stalled plans to invest about $34 billion to build 42 gigawatts of capacity as coal output fails to meet demand. The oversupply of solar panels has claimed at least 14 U.S., German and French makers, while prices have plunged 34 percent in the past year amid dwindling demand in Europe , the largest market for the equipment. Moser Baer said in May that it was revamping 35 billion rupees of secured debt and selling bonds to pay off dollar-convertible notes. Surana faces the threat of competition from Chinese makers that are bigger in size and capacity, said Vishal Kothari, a power analyst at JHP Securities Pvt. in Mumbai, adding it will be difficult for a small company to succeed when bigger ones have failed. Dim Outlook “I don’t see any major growth in this sector as the cost of generation is too high and competition is too much,” said Kothari, who doesn’t have a rating for the stock. “Surana’s performance has been volatile historically.” Surana Ventures was spun off from the solar business of Surana Telecom & Power Ltd. (SRTL) in November 2009 and started trading about a year later. Bhagyanagar India Ltd. (BHIL) , the parent company, holds about 24 percent of the solar-panel maker, while the phone company owns about 18 percent. Access to the group’s cash will allow Surana Ventures to buy raw materials from distressed European companies at half the cost, said Surana. Cash reserves and equivalent at Bhagyanagar rose sevenfold to 95 million rupees as of March 31 from 12 months earlier, according to data compiled by Bloomberg. Surana Ventures had 252 million rupees of debt in the period. “This gives us an edge when we bid for contracts,” Surana said. “It also helps in pricing our products competitively.” The company is also exploring opportunities after the country’s phone regulator this year recommended that carriers shift to renewable energy from diesel to power their communication towers, he said. “With the cost of equipment coming down drastically, the cost of generating solar power has also fallen,” he said. “Solar is more attractive than other forms of alternative energy and we expect state governments to encourage setting up of projects as well. That will provide a big boost to us.” To contact the reporter on this story: Sharang Limaye in Hyderabad at [email protected] To contact the editor responsible for this story: Arijit Ghosh at [email protected]

2012

solar-panel-maker-doubles-output-as-prices-drop-corporate-india

Petrobras to Face Tighter Control in Argentina, Cronista Says

By Pablo Gonzalez

2012-08-27T13:42:56Z

http://www.bloomberg.com/news/2012-08-27/petrobras-to-face-tighter-control-in-argentina-cronista-says.html

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Petroleo Brasileiro SA (PETR4) will face tighter control from Argentina’s Santa Cruz province after the Brazilian oil producer failed to invest enough to boost output, El Cronista said, citing provincial governor Daniel Peralta. Santa Cruz also started talks with Argentine state-run oil producer YPF SA (YPFD) to extend its licenses in the province, Peralta said, according to the Buenos Aires-based newspaper. Petrobras, as the Rio de Janeiro-based Brazilian state-run company is known, operates in the neighboring country through its Petrobras Argentina SA (PESA) unit. To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at [email protected] To contact the editor responsible for this story: James Attwood at [email protected]

2012

petrobras-to-face-tighter-control-in-argentina-cronista-says

David Bromberg Parses Britney, Parker, $200,000 Fiddle

By Jeffrey Burke

2012-08-27T04:01:00Z

http://www.bloomberg.com/news/2012-08-27/david-bromberg-parses-britney-parker-200-000-fiddle.html A new documentary on David Bromberg opens with the musician shown as an animated line drawing being told to move along by a policeman. Then he morphs into the flesh-and-blood fellow walking in Wilmington, Delaware . Bromberg, 66, a gifted guitarist with a roots-music archive at his fingertips, has undergone several transformations since his youth in Tarrytown, New York . The biggest came when he quit regular performing in 1980, slipping below the public radar while he remained a warm memory for fans and musical partners. He became a collector of U.S.- made violins and a trader in top fiddles of all types. In 2002 he set up a violin shop in Wilmington and began playing in weekly jam sessions as part of the city’s urban- renewal efforts. A few years later he returned to the recording studio and performing. He’ll be at Manhattan ’s City Winery with his Big Band this week. It was during this latest phase that Bromberg impressed Beth Toni Kruvant , producer and director of the documentary, “David Bromberg: Unsung Treasure.” It opens the Woodstock Film Festival in upstate New York in October. “I saw David perform and he was fabulous. I wondered where he had been all these years,” wrote Kruvant by e-mail from Israel , where she is working on a new project about African refugees in that country. ‘Burnt Out’ In a conversation at Bloomberg world headquarters in New York last week, Bromberg said he quit performing 32 years ago because “I was burnt out.” He studied luthiery and “played three violins I made in three successive years at Carnegie Hall .” He quickly warmed as collector and vendor to the subject of violins. “People talk about the secret of Stradivari,” Bromberg said. “He had a secret. He knew what to do with the wood. That was it. All this nonsense you hear about his varnish is truly nonsense.” He explained that everyone had the same materials to work with under Italy’s guild system. Bromberg has amassed the largest collection of vintage American-made violins in the world. They aren’t for sale. The most expensive violin in the Wilmington shop at the moment is a $200,000 instrument by “a great Milanese maker named Paolo Antonio Testori, and it’s arguably one of the very best he ever made.” At one point he takes note of where he is, cautions against the idea of buying a fine fiddle as an investment and segues to a story: No Sale “When I opened my shop, among the first visitors were a couple of commodities traders. I showed them my vault, which I was very proud of, my walk-in vault. One of them said, ‘OK, which of these would be the best investment, because maybe I’ll buy one for investment.’ And I said, ‘If I knew that, I wouldn’t sell it to you.’” His musical tastes remain as eclectic as when his concert sets bounced from folk to blues, jazz to bluegrass. He singled out a Brooklyn group called Balkan Beat Box, the Abyssinian Baptist Choir and a 1960s septet of Bronx housewives known as the Pennywhistlers. He’s listening to a lot of Eastern European vocal music. The talk jumped around from the ossification of classical music to the rebirth of bluegrass, from Nicolo Amati to Jack White , Charlie Parker to Britney Spears

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girl. “People will use Britney Spears as a curse, as an example of something terrible,” Bromberg said. “Well, it’s not what I like, but I know enough about how music works and how the music business works to know that she must be doing something right. She appeals to a certain audience to whom her music will be like the Beatles are to my generation.” Someone cries “Plastic!” Joplin Rag “This is a different time,” Bromberg said. “My generation didn’t have computers. The current generation doesn’t know life without them. So you say it’s plastic, but to them it’s the most natural thing in the world.” A few moments later, Bromberg did what to him is the most natural thing in the world, pulled his Martin acoustic from its gig bag and played his own clearly unossified arrangement of Scott Joplin’s “Maple Leaf Rag.” (David Bromberg Big Band is at City Winery, 155 Varick St., Aug. 30 and 31 and Sept. 1; information: +1-212-608-0555 or http://www.citywinery.com/newyork/ . The Woodstock Film Festival runs Oct. 10-14; information: +1-845-810-0131 or http://www.woodstockfilmfestival.com/ . Information for the Bromberg documentary and Beth Toni Kruvant’s other film work is here: http://www.goodfootageproductions.com/ .) (Jeffrey Burke is an editor with Muse, the arts and leisure section of Bloomberg News . The opinions expressed are his own. The interview material was adapted from a longer conversation.) Muse highlights include Elin McCoy on wine. To contact the writer on the story: Jeffrey Burke in New York at [email protected] . To contact the editor responsible for the story: Manuela Hoelterhoff at [email protected] .

2012

david-bromberg-parses-britney-parker-200-000-fiddle

Egypt Offers 3-Year T-Bonds as Brotherhood Backs IMF Loan Talks

By Ahmed A. Namatalla

2012-08-27T09:51:48Z

http://www.bloomberg.com/news/2012-08-27/egypt-offers-3-year-t-bonds-as-brotherhood-backs-imf-loan-talks.html

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Egypt will offer 2 billion Egyptian pounds ($328 million) of three-year treasury bonds today as the Muslim Brotherhood threw its support behind loan negotiations with the International Monetary Fund . The dollar bonds rose. The North African country last sold similar-maturity notes at 16.21 percent on Aug. 16, according to central bank data on Bloomberg. The sale is part of a plan to raise a record 175 billion pounds this quarter. The Brotherhood’s political arm, the Freedom and Justice Party, “understands the importance of the agreement with the IMF on the international level, and how it boosts” confidence, the group said in a statement posted on its Facebook page . Egypt is negotiating with the fund for as much as $4.8 billion in aid to help bridge its budget deficit and jump-start economic growth. The party is the country’s biggest. The government has raised about 94 percent of the 121 billion pounds it has offered in securities since the start of the quarter as it tries to control yields. All debt sales in the period have received more bids than the amounts offered, according to central bank data on Bloomberg. The nation’s 5.75 percent dollar bonds due in 2020 advanced for an eighth day, pushing the yield down three basis points, or 0.03 of a percentage point, to 5.46 percent at 10:38 a.m. in Cairo, according to data compiled by Bloomberg. That’s the lowest level on a closing basis since September 2011. The pound, subject to a managed float, weakened 0.1 percent to 6.0917 a dollar, near the lowest level since December 2004. To contact the reporter on this story: Ahmed A. Namatalla in Cairo at [email protected] To contact the editor responsible for this story: Claudia Maedler at [email protected]

2012

egypt-offers-3-year-t-bonds-as-brotherhood-backs-imf-loan-talks

Romanian Ruling Coalition Loses Support on Failed Impeachment

By Andra Timu

2012-08-27T07:15:19Z

http://www.bloomberg.com/news/2012-08-27/romanian-ruling-coalition-loses-support-on-failed-impeachment.html

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Romania ’s governing coalition lost public support after a failed attempt to oust suspended President Traian Basescu because of a low turnout at a nationwide referendum on July 29, a survey showed. The Social Democrats and the Liberals, which now form the Social-Liberal Union and will run together in parliamentary elections later this year, would win 54 percent of the votes if an election were held now, according to an Aug. 22 survey by polling company IRES, Evenimentul Zilei newspaper reported. That compares with 61.4 percent in an IMAS poll published on Aug. 9. The Liberal Democratic Party , which backs Basescu, would win 23 percent up from 16.3 percent of votes, in the previous poll, the survey of 1,547 people showed. It had a error margin of 2.7 percentage points. The new People’s Party , founded by media owner Dan Diaconescu, would get 10 percent, the same as in the previous poll. A political feud between Prime Minister Victor Ponta and Basescu, which led to the president’s suspension on July 6, may continue as the Constitutional Court invalidated an ouster referendum, allowing Basescu to return to his office. The power struggle pushed the currency to a record low and boosted the government’s borrowing costs. Romania will probably hold parliamentary elections on Dec. 2, Mircea Dusa, the minister in charge of relations with parliament, told private television station Realitatea TV. The opposition Democratic Union of Hungarians in Romania, an ethnic minority party, would get 5 percent down from 6.2 percent, according to the survey. To contact the reporter on this story: Andra Timu in Bucharest at [email protected] To contact the editor responsible for this story: James M. Gomez at [email protected]

2012

romanian-ruling-coalition-loses-support-on-failed-impeachmen

New York State Senator Huntley Indicted After Probe

By Chris Dolmetsch

2012-08-27T22:52:33Z

http://www.bloomberg.com/news/2012-08-27/new-york-state-senator-huntley-indicted-after-probe.html

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New York state Senator Shirley Huntley, a Queens Democrat whose nonprofit group has been under state investigation, was indicted on charges of conspiracy, tampering with evidence and falsifying business records. Parent Workshop Inc., an organization founded by the senator, funneled public money to an aide and to Huntley’s niece, New York Attorney General Eric Schneiderman’s office said today in a statement. The aide and the niece submitted fraudulent documents to the state to obtain public money from a legislative member item sponsored by Huntley, and pocketed about $30,000, according to the statement. “The investigation revealed that, after learning of the probe, Senator Huntley personally wrote a template for a false, backdated letter designed to fool investigators into believing that the Parent Workshop had conducted workshops that never took place,” Schneiderman’s office said. “Parent Workshop then submitted this letter to the attorney general’s office in response to a subpoena.” Huntley is charged with tampering with physical evidence and falsifying business records in the first degree, each a felony carrying a maximum sentence of four years in prison, and conspiracy in the fifth degree, a misdemeanor, Schneiderman’s office said. She pleaded not guilty today at a court appearance in Mineola, New York, Schneiderman’s office said. Denies Charges Conviction of a felony would result in her automatic removal from office under state law. Huntley, of Jamaica , who was first elected to the state senate in 2007, has vowed to fight the charges. “Senator Huntley maintains her innocence, believes in our judicial system and will be exonerated of all charges,” her office said in a statement today. “The fact that this indictment against the senator is coming down less than three weeks before the primary election is no coincidence.” Member items are state grants sponsored by a member of the legislature for a specific purpose, according to the indictment. The state has distributed more than $900 million to more than 20,000 not-for-profit groups since 1999, Schneiderman’s office said. The aide, Patricia D. Savage, the president of Parent Workshop, and the niece, Lynn H. Smith, who served as treasurer, were indicted in connection with the probe in December. They face as long as seven years in prison if convicted of the charges. Parent Workshops The indictment accuses Savage and Smith of claiming that Parent Workshop would use the funds secured with the member item to hold workshops and counsel parents on the workings of the city’s public school system, according to the statement from Schneiderman’s office. Savage and Smith never intended to hold such events and instead kept $29,950 that was paid to Parent Workshop by the state, according to the indictment. Two other suspects, Roger N. Scotland , president of the Southern Queens Park Association, and David R. Gantt, a consultant, were also indicted in December. Scotland was accused of creating a fake letter for the Southern Queens Park Association to help hide the theft from investigators, and Gantt was accused of falsifying records to make it seem like he was paid in cash for conducting workshops, while not holding any such events. Court Appearance Savage, Smith and Gantt were scheduled to appear in court in Nassau County today, according to state records. Attorneys representing Savage and Gantt didn’t immediately respond to messages seeking comment on Huntley’s indictment. Smith’s attorney, Howard R. Birnbach, said his client has pleaded not guilty and anticipates a trial sometime around the end of the year. Scotland is apparently a cooperating witness, and may have testified before a grand jury, Birnbach said. “We look forward to a trial and we’re confident when the facts come out she’ll be completely vindicated,” Birnbach said. Scotland didn’t immediately return a telephone message seeking comment and nobody answered the phone at the Southern Queens Park Association after normal business hours. Scotland wasn’t named in the new indictment and his case is still pending, said James Freedland, a spokesman for Schneiderman. To contact the reporter on this story: Chris Dolmetsch in New York at [email protected] To contact the editor responsible for this story: Michael Hytha at [email protected]

2012

new-york-state-senator-huntley-indicted-after-probe

One Big Happy Party That's All Wet

By Ramesh Ponnuru and Margaret Carlson

2012-08-27T21:12:53Z

http://www.bloomberg.com/news/2012-08-27/one-big-happy-party-that-s-all-wet.html This is the first of a series of reports from Ramesh Ponnuru and Margaret Carlson from the Republican National Convention in Tampa, Florida . Ramesh: Every Republican convention I’ve attended has had an optimistic mood. Even in 1996 and 2008, when Republicans didn’t really have a chance, veep picks that excited the conservative base had the delegates and party operatives cheerful. This time, the optimism has a solid foundation. Yes, President Barack Obama is ahead in most polls

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2012

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PhillipCapital Says It Starts Brokerage Operations in Turkey

By Ercan Ersoy

2012-08-27T09:01:24Z

http://www.bloomberg.com/news/2012-08-27/phillipcapital-says-it-starts-brokerage-operations-in-turkey.html

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PhillipCapital Group, a Singapore- based financial services provider, started brokerage operations in Turkey after buying Hak Menkul Kiymetler AS in March, the company said. The company, which has operations in 16 countries, will announce its investment plans for Turkey at a news conference Sept. 5, it said in an emailed statement today. To contact the reporter on this story: Ercan Ersoy in Istanbul at [email protected] To contact the editors responsible for this story: Benedikt Kammel at [email protected]

2012

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BofA Merrill Lynch’s Korishchenko Quits, Vedomosti Reports

By Ilya Khrennikov

2012-08-27T03:54:46Z

http://www.bloomberg.com/news/2012-08-27/bofa-merrill-lynch-s-korishchenko-quits-vedomosti-reports.html

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Bank of America Merrill Lynch’s Russia head, Konstantin Korishchenko is leaving the company after almost two years in his job, Vedomosti reported, citing unidentified people familiar with the matter. Korishchenko may be offered a position of chief executive officer at Investbank, a lender founded by Russian investor Vladimir Antonov who once attempted to acquire automaker Saab AB, according to the newspaper. To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected] To contact the editor responsible for this story: John Viljoen at [email protected]

2012

bofa-merrill-lynch-s-korishchenko-quits-vedomosti-reports

Transocean Evacuates Workers From Several Gulf Rigs on Storm

By David Wethe

2012-08-27T16:22:55Z

http://www.bloomberg.com/news/2012-08-27/transocean-evacuates-workers-from-several-gulf-rigs-correct-.html

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Transocean Ltd. has evacuated about 195 workers from its rigs in the Gulf of Mexico in preparation for Tropical Storm Isaac. The company has begun to move most of its dynamically positioned rigs out of the storm’s path, according to an e-mail today from Guy Cantwell , a spokesman for the Vernier, Switzerland-based company. The company previously said it has evacuated 160 non- essential workers from several of its 13 deepwater rigs. The company planned to evacuate 36 workers remaining workers on its Deepwater Nautilus rig. To contact the reporter on this story: David Wethe in Houston at [email protected] To contact the editor responsible for this story: Susan Warren at [email protected]

2012

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UN Sanctions Kenyan National Over Support for Terror Groups

By Sarah McGregor

2012-08-27T09:14:53Z

http://www.bloomberg.com/news/2012-08-27/un-sanctions-kenyan-national-over-support-for-terror-groups-1-.html

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The United Nations Security Council said it added Abubaker Shariff Ahmed to a list of people subject to travel bans, asset freezes and targeted arms embargoes for supporting extremist groups. Ahmed, a Kenyan national, has been a leading facilitator and recruiter of young Kenyan Muslims for militant activity in Somalia, the council said in a statement on its website. He has told male worshippers at mosques in the port city of Mombasa to travel to Somalia and commit acts of violence on behalf of al- Qaeda including killing U.S. citizens, it said. “He provides material support to extremist groups in Kenya and elsewhere in East Africa ,” the council said. “Through his frequent trips to al-Shabaab strongholds in Somalia , including Kismayo, he has been able to maintain strong ties with senior al-Shabaab members.” Al-Shabaab, which has ties to al-Qaeda, has led an insurgency against Somalia’s UN-backed government for the past five years, and still controls swathes of territory in the south and central regions. African Union forces are targeting Kismayo, one of the last major bastions for al-Shabaab and a key source of its income, after recapturing several militia bases including the capital, Mogadishu, over the last year. While Somalia has had no effective government for the last 20 years, the UN and U.S. have expressed optimism that the selection of a parliament this month, which is due to elect a president and speaker, will mark political progress. Kenyan police arrested Ahmed, who is known by at least six alternate names, two years ago for his role in a grenade attack at a Kenyan bus depot that left at least three people dead. The U.S. said last month that it had imposed sanctions on six men including Ahmed for “contributing to the conflict in Somalia.” To contact the reporter on this story: Sarah McGregor in Nairobi at [email protected] To contact the editor responsible for this story: Andrew J. Barden at [email protected]

2012

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Patriots Cut Stallworth, Gaffney as Jets Release Josh Brown

By Erik Matuszewski

2012-08-28T04:01:00Z

http://www.bloomberg.com/news/2012-08-27/jets-folk-wins-kicking-job-as-team-cuts-brown-in-roster-trim.html

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The New England Patriots released wide receivers Jabar Gaffney and Donte’ Stallworth, the New York Jets parted ways with kicker Josh Brown and the Buffalo Bills cut quarterback Vince Young as National Football League teams reduced their rosters to 75 players from 90. Gaffney and Stallworth, both 31, had combined for 763 career NFL receptions for 10,396 yards and 58 touchdowns. The Patriots also released 12th-year defensive lineman Gerard Warren yesterday. Nick Folk won the kicking job in New York as the Jets released Brown, a nine-year veteran. The 27-year-old Folk, entering his third year with the Jets, made 76 percent of his field-goal attempts and all 44 of his extra-point tries last season. He’s been perfect this preseason, converting field goals from 22, 30, 38 and 46 yards. The Bills cut Young after acquiring quarterback Tarvaris Jackson from the Seattle Seahawks. Young, 29, threw two interceptions in the Bills’ 38-7 loss to the Pittsburgh Steelers on Aug. 25. The Washington Redskins cut kicker Neil Rackers , opting to give the job to Graham Gano, while the New Orleans Saints released defensive tackle Remi Ayodele. To contact the reporter on this story: Eben Novy-Williams in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

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Fed Rejected by Republican Delegates as Wall Street Gets Pass

By Margaret Talev

2012-08-27T08:00:10Z

http://www.bloomberg.com/news/2012-08-27/fed-rejected-by-republican-delegates-as-wall-street-gets-pass.html The U.S. Federal Reserve is bad for the economy, Wall Street has been punished enough for the 2008 financial crisis and the auto bailout was a mistake, according to a survey of delegates to the Republican National Convention . As Mitt Romney prepares to accept his party’s nomination for president at this week’s convention in Tampa, a Bloomberg News sample of 158 delegates from 10 battleground states shows that his stances are in line with the majority of delegates on some of the biggest questions about federal economic intervention during President Barack Obama ’s term. “The Fed is too independent, they have too much control, their manipulation is not good for a free-market system,” Martin Simmons, 51, a delegate from Milton, Florida , said in a follow-up interview. He said he has more faith in Romney than Obama in choosing economic appointees. Romney, in an interview last week with Fox Business Network, said if elected he intends to replace Fed Chairman Ben S. Bernanke when his term is up in 2014. The former Massachusetts governor earlier said he would have let General Motors Co. (GM) and Chrysler Group LLC go bankrupt rather than extend a federal bailout, although he later took credit for recommending a version of the auto restructuring that turned the companies’ fortunes around. He’s also vowed to repeal the 2010 Dodd-Frank financial- regulatory overhaul. Voting Against Fed Sixty-four percent of respondents rated the Fed’s performance as poor and another 30 percent said it was no better than average. Sixty-three percent said the Fed’s independence is a bad thing because the central bank is unaccountable, rejecting the idea that its independence is good because it protects monetary policy from political pressure. Asked whether enough has been done to hold Wall Street responsible for its part in precipitating the financial crisis, 62 percent said yes

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economy by discouraging banks from lending. Nine in 10 respondents said the automotive bailout was a mistake, despite positive assessments by industry analysts. “The bailout of GM was with taxpayers’ money, and we’re hurting enough as it is economically,” said Barbara Finger, a delegate from Oconto, Wisconsin, who lost her job as a crew trainer at a fast-food restaurant in April when the establishment closed. “To prop them up when the rest of us are having trouble doesn’t seem right to me,” she said in an interview. Business Experience Finger, 56, said she’s “not exactly sure” where Romney stands on the auto bailout. “But I do trust him more because he has real-world business experience.” As far as Wall Street is concerned, Simmons, the Florida delegate, said he favors words like “oversight” or “accountability” over “punishment” or even “regulation” to describe the government’s proper role. The questionnaire tapped delegates from Arizona, Colorado, Florida, Iowa, New Hampshire, North Carolina , Ohio, Pennsylvania, Virginia and Wisconsin. Allen Sinai , chief executive officer of Decision Economics Inc. in New York, said the delegates’ views go beyond ideological positions and reflect a feeling that “the Federal Reserve has systematically been late in the last six years in identifying the risks, the extreme downturn and expecting more than the economy delivered.” Alan Baum, a principal of Baum & Associates, an automobile- industry analyst in West Bloomfield, Michigan, said the impact of the bailout of carmakers “has obviously been very positive” for suppliers as well as GM and Chrysler. To contact the reporter on this story: Margaret Talev in Washington at [email protected] To contact the editor responsible for this story: Mark McQuillan at [email protected]

2012

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Asia Typhoon Grounds Flights, Shuts Oil Refinery in Okinawa

By Stuart Biggs and Jacob Adelman

2012-08-27T07:11:25Z

http://www.bloomberg.com/news/2012-08-27/typhoon-bolaven-lashes-okinawa-with-wind-rain-on-path-to-korea.html

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Typhoon Bolaven hammered into Japan ’s southernmost islands, forcing flight cancellations, the closing of an oil refinery and one of the highest weather alerts at the Kadena U.S. military base on Okinawa. As much as 50 millimeters (2 inches) of rain per hour could fall in parts of Okinawa and Kyushu, Japan’s weather agency said. Landslide and high wave warnings were issued as wind gusts reached 213 kph. Video by Japan’s public broadcaster NHK showed tree limbs being snapped in Naha, Okinawa’s capital. “My yard is getting filled with water,” Sayaka Higa said by phone, adding the storm forced her to stay home from her job as a spokeswoman at the U.S. military’s Kadena Air Base about 18 kilometers north of Naha. Japan Airlines Co. canceled 125 domestic flights to Okinawa and surrounding islands, the carrier said on its website. Some international flights are also affected. All Nippon Airways Co. (9202) also canceled flights to the region and advised passengers to check with the airline. Bolaven was about 410 kilometers (255 miles) north- northwest of Naha, a city of 321,000, at 2:45 p.m. local time, according to the Japan Meteorological Agency . It had sustained winds of 148 kilometers per hour (92 mph), making it a Category 1 storm, the weakest on the five-step Saffir-Simpson Hurricane Wind Scale . Refinery Shuts Nansei Sekiyu KK halted refining and shipping operations at its 100,000 barrel-a-day Nishihara plant in Okinawa, the company said in an e-mail today. Refining operations and marine shipping were halted on Aug. 25, while truck terminal operations were halted yesterday, the company said. About 8,900 homes were without power due to storm damage as of 2 p.m., Tomohiro Shimono, an Okinawa Electric Power Co. spokesman, said in a phone interview. Six people in the prefecture had sustained minor injuries, NHK reported on its website, citing fire department officials. The Kadena Air Base was under Storm Watch alert as of 4 p.m., indicating that the typhoon was moving away but the base still felt some effects, according to its website. Earlier in the day, the base had been placed on its highest-level Typhoon Condition-1 Emergency alert, prohibiting all outside activities. The storm is forecast to move northwest toward the Korean peninsula today and may pass to the west of Seoul as a Category 1 storm tomorrow, the U.S. Joint Typhoon Warning Center said on its website. Meteorologists in the northeast Chinese province of Liaoning, where the storm is expected to make landfall tomorrow, had issued a yellow alert, the second-highest level in the country’s four-tier color-coded weather warning system, China ’s official Xinhua News Agency said today. Bolaven is the name for a plateau in Laos , according to the Hong Kong Observatory , which lists names assigned to storms in the northwest Pacific. To contact the reporters on this story: Stuart Biggs in Tokyo at [email protected] ; Jacob Adelman in Tokyo at [email protected] To contact the editor responsible for this story: Teo Chian Wei at [email protected]

2012

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Dell Seeks Reboot as Traders See Junk Status: Corporate Finance

By Mary Childs

2012-08-27T15:44:49Z

http://www.bloomberg.com/news/2012-08-27/dell-seeks-reboot-as-traders-see-junk-status-corporate-finance.html

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Dell Inc. (DELL) , which has $6 billion of debt due before 2016, is being treated like a junk-rated borrower as its cash falls to the lowest level in a decade with customers favoring tablets and smartphones over personal computers. Credit-default swaps tied to the fourth-largest PC maker are trading at levels that imply Dell should be rated Ba1, or six levels below its current grade, according to Moody’s Corp.’s capital markets research group. Moody’s Investors Service has Dell at A2, while Standard & Poor’s puts it at A-. The contracts, which climb as confidence in a borrower’s creditworthiness dims, surged after Round Rock , Texas-based Dell forecast last week third-quarter revenue below analysts’ estimates and cut its full-year outlook. Attempts to transform by adding software, storage and networking equipment have been slow to offset falling sales of desktops and laptops, which make up about half of revenue. Customers increasingly prefer tablets such as Apple Inc.’s iPad to traditional machines. “You have to figure out how you transition the model in a world where you’ve become commoditized,” Noel Hebert, chief investment officer at Bethlehem, Pennsylvania-based Concannon Wealth Management LLC, said in a telephone interview. “Dell’s saying service and maybe selectively software or selectively storage, but those are all rooms where people already live, so you have to figure out how to get into those rooms and take share.” In Line David Frink , a spokesman for Dell, said the company’s bonds are a “more accurate market indicator,” which are “trading in line with indices at our rating.” “Our second-quarter performance and growth of our enterprise solutions provided a proof point that our long-term strategy is making progress,” Frink said in an e-mail. Net cash fell to $3.45 billion last quarter, the least since 2002, according to data compiled by Bloomberg. That’s down from a high of $11.9 billion in the company’s third quarter of 2008 as Dell acquired makers of data storage, networking equipment and business software to diversify beyond PCs. Credit-default swaps tied to the company’s debt have surged to 256 basis points through Aug. 24, from this year’s low of 110 on March 21, according to prices compiled by Bloomberg. That means investors pay $256,000 annually on a contract protecting $10 million of debt for five years. The contracts reached 280 basis points on July 23, the most expensive since December 2008. Shares Tumble The credit-default swaps, which pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt, indicate the market sees Dell as a Ba1 credit, or one level below investment grade, Moody’s Corp. data show. Dell’s $400 million of 4.625 percent notes due in April 2021 traded on Aug. 22 at 110.7 cents on the dollar to yield 3.19 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Investors have boosted the computer maker’s cost of debt maturing in more than 10 years higher than average technology bonds rated BBB, Bloomberg data show. Dell’s bonds with a 15- year tenor yield 4.87 percent, while BBB rated technology bonds average a 4.04 percent yield. Shares have fallen 23 percent this year to $11.25 at 11:40 a.m. in New York and reached a more than three-year low of $11.24 on Aug. 23. Forecast Reduction As some businesses “deteriorated more than we expected,” and macroeconomic conditions worsened, damping consumer spending , the company cut its fiscal 2013 earnings forecast outlook to at least $1.70 a share, Chief Financial Officer Brian Gladden said in an Aug. 21 earnings conference call. That’s 20 percent lower than its projection in February, and shy of the average $1.90 estimate in a Bloomberg survey. The company, started by Michael Dell , 47, in his dormitory room at the University of Texas , traditionally has focused on the PC business, which has helped make its founder the 56th wealthiest person on the Bloomberg Billionaires index with a net worth of $13.3 billion. Dell agreed this year to acquire Quest Software Inc. (QSFT) , a maker of programs to manage corporate computer systems, bought Wyse Technology Inc. in May to gain desktop devices used by cloud-computing customers, and purchased software vendors including data-backup maker AppAssure and network-security company SonicWall Inc. earlier this year. Deploying Cash “The flurry of acquisitions has not pummeled the balance sheet,” Dave Novosel , an analyst at Chicago-based bond researcher Gimme Credit LLC, wrote in an Aug. 23 note titled “Remember When PCs Were Sexy.” “While revenue growth is likely to remain sluggish at best, we do believe margins will begin to increase.” The company has $15 billion in cash and investments and has averaged almost $4 billion of free cash flow over the past three years, he wrote. Dell’s profit margin climbed to 5.05 percent from 4.4 percent in the prior quarter, down from 5.68 percent a year ago, Bloomberg data show. Dell said in June it will initiate a quarterly dividend of 8 cents a share and will use acquisitions to add products for corporate customers and curb reliance on PCs. The dividend “reinforces management’s confidence of generating substantial levels of free cash flow,” Stephen Sohn, a senior credit officer at Moody’s, said in a statement June 12. Dell will “maintain a disciplined approach to capital allocation, which includes modest-sized acquisitions to support its strategy of building higher margin data center and enterprise solutions.” Computer Sales PC sales stalled globally in the second quarter, a seventh straight period of anemic growth, market researcher Gartner Inc. said in July. Dell’s share of the global PC market slipped to 12 percent in 2011 from almost 15 percent in 2007, while Apple grew to 10.9 percent from 5.8 percent, Bloomberg Industries data show. Hewlett-Packard Co. (HPQ) accounted for 17 percent last year, while Lenovo Group Ltd. (992) and Acer Inc. (2353) made up 12.5 and 8 percent. “Dell is in a tough period of transition in purchasing trends of its products and increased competition from Lenovo and Acer,” said Adrian Helfert, a Boulder, Colorado-based senior vice president at Smith Breeden Associates who helps oversee $6.4 billion. Weak consumer and commercial spending will reinforce “the challenging environment for Dell.” To contact the reporter on this story: Mary Childs in New York at [email protected] To contact the editor responsible for this story: Alan Goldstein at [email protected]

2012

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Cattle Decline on Signs of Rising U.S. Beef Supply; Hogs Advance

By Elizabeth Campbell

2012-08-27T15:04:56Z

http://www.bloomberg.com/news/2012-08-27/cattle-decline-on-signs-of-rising-u-s-beef-supply-hogs-advance.html

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Cattle futures declined for the second straight session on signs of increasing U.S. beef supplies. Hog prices rose. On Aug. 24, wholesale beef fell the most in five weeks, and meatpackers processed 653,000 cattle last week, up 1.6 percent from a week earlier, U.S. Department of Agriculture data show. Farmers are doing “the reverse” of expansion, liquidating older cows and unproductive animals amid high feed costs, said Dennis Smith , an analyst at Archer Financial Services. “The beef is topping off,” Smith said in a telephone interview from Chicago. “I expect pressure in beef in cash and futures.” Cattle futures for October delivery slid 0.3 percent to $1.2405 a pound at 10:03 a.m. on the Chicago Mercantile Exchange. Through Aug. 24, the price gained 2.5 percent this year. On Aug. 24, wholesale beef fell 0.9 percent to $1.9214 a pound, the biggest decline since July 19, the latest USDA data show. More than 35 percent of the Midwest was in extreme drought as of Aug. 21, according to the U.S. Drought Monitor. Corn, the main ingredient in livestock feed, surged 60 percent from June 15 through Aug. 24 on the Chicago Board of Trade. Feeder-cattle futures for October settlement dropped 0.2 percent to $1.44175 a pound on the CME. Hog futures for October settlement rose 0.3 percent to 72.575 cents a pound. To contact the reporter on this story: Elizabeth Campbell in Chicago at [email protected] To contact the editor responsible for this story: Steve Stroth at [email protected]

2012

cattle-decline-on-signs-of-rising-u-s-beef-supply-hogs-advance

Fed’s Pianalto Says Bond Buying Can Boost Growth

By Jeff Kearns and Mark Niquette

2012-08-27T17:56:23Z

http://www.bloomberg.com/news/2012-08-27/fed-s-pianalto-says-bond-buying-can-boost-gdp-if-risk-managed.html

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Federal Reserve Bank of Cleveland President Sandra Pianalto said the recovery remains “frustratingly slow” and that additional bond purchases can boost growth if the risks are managed. “Large-scale asset purchases can be effective” and they “justify more analysis,” Pianalto said today in a speech in Newark , Ohio. “It is conceivable that, at some point, policies designed to promote further declines in rates could interfere with financial stability.” Pianalto’s concern about the risks from more bond buying contrasts with the views of presidents Charles Evans of Chicago, San Francisco’s John Williams and Boston’s Eric Rosengren , who favor “open-ended” purchases of securities. Pianalto and Williams vote on the Federal Open Market Committee this year, while Evans and Rosengren don’t. Fed policy makers plan to meet on Sept. 12-13 to assess whether the recovery warrants an increase in record stimulus. Chairman Ben S. Bernanke will have an opportunity clarify his policy views in an Aug. 31 speech at a forum for central bankers in Jackson Hole , Wyoming. Evans said today in a speech in Hong Kong that the central bank should begin a third round of bond purchases and continue buying until unemployment falls for at least six months. Bond buying could “continue at a certain rate until there was clear evidence of improvement in economic conditions,” Evans said. “One example of clear evidence would be a resumption of relatively steady monthly declines in unemployment for two or three quarters.” Core Inflation Gross domestic product will probably expand by about 2 percent this year while unemployment will remain above 7 percent through 2014, Pianalto said. Wage growth will probably be “slow,” while core inflation is likely to remain near the Fed’s 2 percent long-term objective “over the next few years.” “The remarkably unusual economic environment we are in today calls for a highly accommodative monetary policy,” Pianalto said. “Even with the aggressive and extraordinary actions that the FOMC has taken, we remain in a frustratingly slow economic recovery. Our economy is still struggling to build momentum.” The Fed has expanded its balance sheet with two rounds of bond purchases, known as quantitative easing. In the first, starting in 2008, the Fed bought $1.25 trillion of mortgage- backed securities, $175 billion of federal agency debt and $300 billion of Treasuries. In the second round, announced in November 2010, the Fed bought $600 billion of Treasuries. Stocks Rise The Standard & Poor’s 500 Index rose 0.2 percent to 1,414.31 at 1:37 p.m. in New York , while yields on the benchmark 10-year Treasury note fell 0.04 percentage point to 1.65 percent. Policy makers must consider the risks of further actions and the “potentially adverse effects that our policy actions might impose on financial markets and the economy,” she said. While large-scale asset purchases have proved effective, she said that “at some point, the Federal Reserve’s presence in certain securities markets would become so large that it would distort market functioning,” according to the prepared text. There are “limits to what monetary policy can accomplish,” she said, and it “cannot solve all of the economy’s problems.” Pianalto, 58, has been president of the Cleveland Fed since 2003. She first joined the regional bank in 1983 as an economist in the research department. To contact the reporters on this story: Jeff Kearns in Washington at [email protected] ; Mark Niquette in Columbus at [email protected] To contact the editor responsible for this story: Chris Wellisz at [email protected]

2012

fed-s-pianalto-says-bond-buying-can-boost-gdp-if-risk-managed

Saudi Arabia to Open Bids for Jeddah Metro Line, Arab News Says

By Glen Carey

2012-08-27T08:07:39Z

http://www.bloomberg.com/news/2012-08-27/saudi-arabia-to-open-bids-for-jeddah-metro-line-arab-news-says.html

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Saudi Arabia will open bids to build a metro system in Jeddah “shortly,” Arab News reported, citing Ibrahim Kutubkhana, the undersecretary at the Jeddah mayor’s office for projects and urban construction. The 108-kilometer (67-mile) network will have three lines running through the Red Sea city, the newspaper said. The system will have 46 stations, including a connection with King Abdulaziz International Airport, and bus network linking stations with residential districts, the paper said. To contact the reporter on this story: Glen Carey in Riyadh at [email protected] To contact the editor responsible for this story: Andrew J. Barden at [email protected]

2012

saudi-arabia-to-open-bids-for-jeddah-metro-line-arab-news-says

Forest Labs Adopts Shareholder Plan to Fight Icahn Effort

By Andrew Pollack and Ryan Flinn

2012-08-27T22:10:32Z

http://www.bloomberg.com/news/2012-08-27/forest-laboratories-adopts-shareholder-plan-to-fight-takeover.html Forest Laboratories Inc. (FRX) , a drugmaker that has been the subject of two proxy fights led by investor Carl Icahn , adopted a shareholder rights plan to protect against a takeover effort. The plan will be triggered if a person or group acquires 12 percent or more of Forest’s common stock and will expire in a year unless ratified by the shareholders, the New York-based company said today in a statement. Forest’s shareholders on Aug. 15 elected one of four candidates proposed by Icahn in his second effort in two years to run a slate for the company’s 10-member board. Icahn, the second-largest shareholder with more than 11 percent of the company’s stock as of Aug. 24, has said the drugmaker didn’t adequately prepare for the loss of patent protection on its top- selling drug, the antidepressant Lexapro, and questioned the succession plan for Chief Executive Officer Howard Solomon. “After concluding a second proxy contest during which he repeatedly

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model and growth prospects, Mr. Icahn increased his already significant position in Forest with rapid open market purchases,” Solomon said today in the statement. “In light of these recent developments, the Board has adopted a stockholder rights plan that is designed to ensure that all of Forest Laboratories’ stockholders receive fair and equal treatment in the event of any proposed takeover of the Company.” Icahn didn’t immediately return a call seeking comment on Forest’s plan. The two sides have traded barbs since Icahn announced his intention to nominate directors in May. The investor criticized the loss of shareholder value as Forest’s stock, which has declined to $34.69 at the close of trading in New York today from a high of $77.59 in 2004. Icahn has also said he planned to investigate stock sales made by Solomon. Forest countered that Icahn has ignored the progress made in the last year, such as bringing new drugs to the market. To contact the reporters on this story: Andrew Pollack in San Francisco at [email protected] ; Ryan Flinn in San Francisco at [email protected] To contact the editor responsible for this story: Reg Gale at [email protected]

2012

forest-laboratories-adopts-shareholder-plan-to-fight-takeover

Romney’s Shifts Leave Doubts About Which Mitt Voters Would Get

By Julie Hirschfeld Davis and Lisa Lerer

2012-08-27T09:29:42Z

http://www.bloomberg.com/news/2012-08-27/romney-s-shifts-leave-doubts-about-which-mitt-voters-would-get.html When Governor Mitt Romney set out to fix the dysfunctional health-care system in Massachusetts , one of his first moves was to embrace a political nemesis. Romney had faulted John Sasso, a Democratic operative, for his 1994 election loss to Senator Edward Kennedy , yet now he needed Sasso’s political ties and instincts to deal with a Democratic legislature and achieve a signature goal. “He said, ‘Look, you want me to be visible promoting the bill, I’ll be visible. You want me to disappear, I’ll disappear. All I want is to get this legislation on my desk,’” Sasso, who was then the lead lobbyist for the state’s largest hospitals and insurer, recalled in an interview. Read More: Bloomberg Insider It’s a consensus-seeking style starkly at odds with Romney’s approach to the last two presidential campaigns, when he has courted the Republican base on issues from immigration to abortion rights. His shift has been so complete that even some close allies now wonder which Romney will show up if he wins the election. The answer would define his presidency, since he’d face immediate demands to curb the national debt while averting a fiscal crisis. Agonizing Choice For Romney, it would be an agonizing choice: If he follows his pragmatic impulses and strikes a debt accord with Democrats, he’ll be branded a traitor to his party as was President George H.W. Bush in 1990 when he bowed to pressure to raise taxes. If he chooses partisanship

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2012

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Morgan Stanley Sees `Bearish' Cotton Outlook on Demand

By Whitney McFerron

2012-08-27T10:05:40Z

http://www.bloomberg.com/news/2012-08-27/morgan-stanley-sees-bearish-cotton-outlook-on-demand.html

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The outlook for cotton prices is “bearish” in the 2012-13 season as global stockpiles rise while demand shrinks as use of synthetic fibers increases, Morgan Stanley said. The global economic “slowdown could present further downside to demand,” analysts including Hussein Allidina said today in an e-mailed report. “The persistence of synthetic blending after widespread mill reconfigurations in 2011 is likely to keep cotton demand depressed through 2012.” To contact the reporter on this story: Whitney McFerron in London at [email protected] To contact the editor responsible for this story: Claudia Carpenter at [email protected]

2012

organ-stanley-sees-bearish-cotton-outlook-on-demand

Lithuanian Deposits Reach Record as Debt Crisis Forces Savings

By Milda Seputyte

2012-08-27T13:13:30Z

http://www.bloomberg.com/news/2012-08-27/lithuanian-deposits-reach-record-as-debt-crisis-forces-savings.html Lithuanian bank deposits surged to the highest level on record in July as businesses and households responded to Europe ’s debt crisis by increasing savings. Deposits rose by 668.3 million litai ($362.9 million) from June to 44.3 billion litai, the Lithuanian Banking Association said in an e-mailed statement today. Loan portfolios shrank by 166.2 million litai from June to 53.9 billion litai, it said. Lithuanians are holding on their money and businesses are postponing investment plans as the debt crisis clouds the economic outlook. Bank profitability is being eroded by low demand for credit, Stasys Kropas, head of the banking association, said in the e-mail. “Banks are undergoing a process that can be defined as a crisis of deposits, and July was a perfect illustration of this,” Kropas said. “The crisis in this case is not typical, there’s no lack of deposits. On the contrary, deposits at banks are too high.” Economic growth slowed to a preliminary 2.1 percent in the second quarter from 3.9 percent in the previous three months. “That’s an alarming signal

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growing, while opportunities to employ the money aren’t improving,” Kropas said. “Banks hold piles of short money that are expensive to keep when there’s no demand for short money on the market.” To contact the reporter on this story: Milda Seputyte in Vilnius at [email protected] To contact the editor responsible for this story: Balazs Penz at [email protected]

2012

ithuanian-deposits-reach-record-as-debt-crisis-forces-savings

AOL Announces $600 Million Buyback, Special Dividend

By Cecile Daurat

2012-08-27T20:23:00Z

http://www.bloomberg.com/news/2012-08-27/aol-announces-600-million-buyback-special-dividend.html

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AOL Inc. (AOL) announced a $600 million accelerated stock buyback agreement and a special cash dividend of $5.15 a share, the final steps in returning about $1.1 billion to shareholders. The Internet company will purchase $600 million worth of common stock under an agreement with Barclays Plc, according to a statement today. The one-time dividend will be payable Dec. 14, New York-based AOL said. This month AOL, owner of the Huffington Post and TechCrunch websites, rose to its highest value since it was spun out of Time Warner Inc. (TWX) in 2009, after an increase in advertising revenue and a one-time gain on a patent sale helped the company return to a profit in the second quarter . The company also adopted a tax asset protection plan as a deterrent to any individual or fund acquiring more than 4.9 percent of its shares outstanding without approval of the board. AOL said it wants to protect potential benefits that might be curbed if control of the company changed. The shares rose 2.9 percent to $33.86 at the close in New York time. AOL has more than doubled in value this year. To contact the reporter on this story: Cecile Daurat in Wilmington at [email protected] To contact the editor responsible for this story: Kevin Miller at [email protected]

2012

aol-announces-600-million-buyback-special-dividend

Obama Voting Fight on Photo ID Targets South Carolina

By Tom Schoenberg

2012-08-27T18:45:09Z

http://www.bloomberg.com/news/2012-08-27/obama-voting-fight-on-photo-id-targets-south-carolina.html Ten weeks before the U.S. presidential election , the Obama administration is wielding the Voting Rights Act against laws it claims will keep minorities from the polls. Today, the target in federal court in Washington is South Carolina ’s photo identification rules. The Justice Department, in a week-long trial, is asking three judges to reject South Carolina’s measure requiring residents to show federal or state-issued photo ID at polling stations, arguing the burdens imposed by the law will weigh more heavily on minority voters than on white ones. South Carolina is among at least six states awaiting decisions on the legality of new voter identification requirements passed by Republican-controlled legislatures. Texas , whose law was blocked by the Justice Department, said it needs a federal court ruling by the end of the week. Pennsylvania , Mississippi and New Hampshire are waiting to see whether the department will oppose their laws. Wisconsin is appealing a state court judge’s ruling that declared its voter- ID law unconstitutional. “It’ll be interesting to see how Texas and South Carolina play out with the clock ticking down and the difficult administrative problem of trying to get IDs into the hands of people who need them if the courts allow the laws to go forward,” Rick Hasen , an election law blogger and professor at the University of California , Irvine ’s law school, said in an interview. Proposed Changes At issue are proposed changes in procedures that Republican lawmakers say are necessary to prevent fraud. Democrats and liberal activist groups argue the steps are aimed at limiting votes for President Barack Obama and other Democratic candidates for local and federal offices. South Carolina is one of 16 jurisdictions with a history of voting rights violations that need either approval from the Justice Department or a special panel of federal judges in Washington to change election procedures under Section 5 of the Voting Rights Act of 1965. South Carolina’s law requires residents to present one of five approved state or federal-issued photo IDs. It did away with a non-photo voter registration card in favor of one bearing the voter’s photo that would be issued free of charge to all residents. First Rejected South Carolina’s voter ID law, one of eight enacted last year, was the first to be rejected by the Obama administration under the Voting Rights Act. The state responded to the Justice Department ’s refusal to clear the plan by filing a lawsuit in February. “The evidence in the case establishes that South Carolina cannot meet its burden that these strict photo ID requirements will not have a retrogressive effect,” on minorities, Bradley Heard, a lawyer in the Justice Department’s civil rights division, told the judges today during opening remarks. He said minorities are less likely to possess the required identification or the means to obtain it and therefore some won’t vote. The department argues that South Carolina didn’t produce any evidence of in-person voter fraud in the state. Rather, legislators ignored information from election officials showing that of the 178,175 voters who lack state photos, about 36 percent, or 63,756, were non-white. ‘Discriminatory Impacts’ “Given that approximately 30 percent of South Carolina registered voters are non-white, this chart provided clear evidence of the likelihood of racially discriminatory impacts,” according to the department’s trial brief. South Carolina claims that just 149,021 registered voters, less than 6 percent of the state’s 2.7 million registered voters, currently lack the required identification. Of those, about 57,000 are minorities, H. Christopher Bartolomucci, a lawyer for the state, told the judges today. “The law affects many more white voters than minority voters,” said Bartolomucci, a partner at Bancroft Pllc in Washington. The state said the department and the intervening groups ignore the law’s provision that would make photo identification cards available free of charge at motor vehicle offices and polling stations. “Presenting photo ID is a common, if not daily, occurrence in this country,” the state said in an Aug. 21 filing by its legal team, which includes Paul Clement , former solicitor general in the administration of President George W. Bush . Courthouse ID “This very court has a ‘100 percent ID check’ policy,” the state said in its brief. “Voter ID laws do not burden the right to vote (or any other right) any more than courthouse ID checks burden the right of access to the courts.” South Carolina said in a June 29 filing that if the court rules in its favor before Nov. 6, it will immediately enforce the identification requirements. If the law isn’t approved by Sept. 15

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of the law’s provisions, such as offering free ID documents at polling places, can’t be carried out for the November election. For this year, citizens arriving at the polls without the required identification would fill out an affidavit and then cast a provisional ballot that would be valid unless election officials find the affidavit to be false, according to the filing. Fraud Allegations George “Chip” Campsen III, a Republican state senator who sponsored the legislation, testified today that the issue of voter fraud was brought up by constituents after the 2008 election following media reports involving allegations of fraud by minority-activist group Acorn. He said individuals in his state “expressed concern” about the electoral process or lack of confidence in it. Groups that intervened in the case against South Carolina said the plan gives thousands of poll workers discretion to decide whether a vote will count. “The trial will make clear that the state’s proposed photo identification measure will have a significant impact on its minority voters,” Ryan Haygood, director of the political participation group at the NAACP Legal Defense Fund, said in an e-mailed statement. Haygood’s group represents two intervenors in the case, the South Carolina State Conference of the NAACP and a black college student. Bush Appointees The three judges who will decide the South Carolina case are U.S. Circuit Judge Brett Kavanaugh and U.S district judges John Bates and Colleen Kollar-Kotelly. Kavanaugh and Bates were appointed by President George W. Bush. Kollar-Kotelly was appointed by President Bill Clinton . Bates, in September 2011, dismissed a direct challenge to the constitutionality of Section 5 of the Voting Rights Act brought by Shelby County, Alabama , and was upheld by the U.S. Appeals Court in Washington. The U.S. Supreme Court may decide in October whether to hear the county’s appeal of that decision. South Carolina’s voter ID law is the second to go to trial in Washington this year. To ensure the law could be implemented by November, Texas, which sued to have its rules approved, told the court it needs a ruling before the end of the month. “A lot that happens in the South Carolina case might be influenced by what the Texas case does, assuming it comes out before the election,” Hasen said. The case is South Carolina v. U.S., 12-cv-00203, U.S. District Court, District of Columbia (Washington). To contact the reporter on this story: Tom Schoenberg in Washington at [email protected] . To contact the editor responsible for this story: Michael Hytha at [email protected] .

2012

obama-voting-fight-on-photo-id-targets-south-carolina

Isofoton Challenges Hanwha Bid for Solar-Cell Maker Q-Cells

By Stefan Nicola and Sangim Han

2012-08-27T14:57:25Z

http://www.bloomberg.com/news/2012-08-27/hanwha-draws-competing-approach-for-insolvent-solar-cell-maker.html

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Hanwha Group’s bid to buy the insolvent German manufacturer Q-Cells SE (QCE) drew a competing approach from a Spanish power-plant builder that also wants to own what was once the biggest solar-cell maker. Isofoton SA was approved to bid for Q-Cells after Chief Executive Officer Angel Luis Serrano met with the German company’s insolvency administrator Henning Schorisch today, according to an e-mailed statement from Isofoton. Serrano will present the bid, to be made with a U.S. investor it didn’t identify, to Q-Cells’ creditors at an Aug. 29 meeting, it said. Hanwha, South Korea ’s 10th-largest industrial group, yesterday signed a contract with Q-Cells to pay as much as 40 million euros ($50 million) for the Thalheim-based company’s headquarters, factories in Germany and Malaysia, as well as sales units in the U.S., Australia and Japan , Hanwha said today in an e-mailed statement. The deal is subject to approval from Q-Cells’ creditors at their meeting, it said. Interest has increased in Q-Cells after its filing for protection from creditors in April. The company’s market value dropped to 34 million euros after its shares fell 98 percent in the last three years. Q-Cells rose as much as 40 percent in Frankfurt today, and was up 12 percent, at 19.1 euro cents a share, as of 4:53 p.m. local time. “Isofoton is still confident that there’s a chance to buy Q-Cells as the creditors haven’t yet agreed to the Hanwha bid,” Carl Graf von Hohenthal, a spokesman for Isofoton working for Brunswick Group GmbH in Berlin, said today in an interview. Hanwha, whose purchase contract signed with Schorisch yesterday will be reviewed by creditors, also plans to assume 850 million Malaysian ringgit ($273 million) in debt guaranteed by Q-Cells Malaysia , the group said. Optimism Over Creditors “We are optimistic that Q-Cells’ creditors would approve our offer in an Aug. 29 meeting,” Seoul-based spokesman for the Korean group, Park Jang Woo, said by phone today. He said that Isofoton’s possible bid would not affect Hanwha’s attempt to acquire Q-Cells. “It’s almost impossible for them to hold talks with other bidders without breaching the agreement signed yesterday.” Buying Q-Cells would enable Hanwha to boost its capacity to make solar cells and panels to rank the world’s third-largest, it said. Hanwha aims to sign a final contract in early October, the statement said. Isofoton is especially interested in Q-Cells’ research capabilities and its “European dimension,” von Hohenthal said. It would invest 300 million euros in producing solar-cells and keep production and research sites in Germany and Malaysia as the company seeks to boost its production capacity to 1,500 megawatts in the coming two years, it said in the statement. It would cut 10 percent of Q-Cells’ workforce of about 1,300, it said. Government Aid German solar companies are facing reduced government aid and increasing competition from Chinese companies that has created a global glut of panels. Q-Cells and German competitors Solon SE (SOO1) , Solar Millennium AG (S2M) and Solarhybrid AG (SHL) are among a group of solar companies that filed for protection from creditors in the past year. Hanwha plans to hold on to about three quarters of the workforce in Thalheim, Q-Cells said in a statement yesterday. Christoph Moeller, a spokesman for Schorisch, declined to comment further on the planned sale. To contact the reporters on this story: Stefan Nicola in Berlin at [email protected] ; Sangim Han in Seoul at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected]

2012

anwha-draws-competing-approach-for-insolvent-solar-cell-maker

Vin Scully to Return for 64th Season in Dodgers’ Broadcast Booth

By Dex McLuskey and Nancy Kercheval

2012-08-27T04:15:53Z

http://www.bloomberg.com/news/2012-08-27/vin-scully-to-return-for-64th-season-in-dodgers-broadcast-booth.html Vin Scully will return to the broadcast booth for a 64th season of calling Los Angeles Dodgers games, saying he’s revitalized by the new ownership group that two days ago completed a trade that brought Adrian Gonzalez , Josh Beckett and Carl Crawford from Boston. “I’m so convinced of their great purpose and leadership that I eagerly look forward to joining them in pursuit of the next Dodgers championship.” Scully, 84, said in a statement. Scully’s 63 years of service represent the longest tenure of any broadcaster in sports history, the Dodgers said. Basketball Hall of Famer Magic Johnson is a member of the group that completed its purchase of the Dodgers in May. The group is led by Mark Walter , chief executive of Guggenheim Partners LLC, which financed much of the record $2.15 billion purchase from Frank McCourt , who put the Major League Baseball team into bankruptcy in June 2011. “It was a treat to be able to listen to Chick Hearn through my years with the Lakers,” Johnson said. “And it’s been great to be able to listen to Vin work his magic in the broadcast booth since I came to Los Angeles in 1979. Generations of Angelenos have been blessed to have these Hall of Famers in their midst.” Scully began his professional baseball broadcasting career in 1950 with the Brooklyn Dodgers and was presented with the Ford C. Frick award for “major contributions to baseball” by the National Baseball Hall of Fame in 1982. Scully’s Highlights He has called three perfect games

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They join a Dodgers team that’s in second place in the National League Western Division. Scully said baseball still brings out childlike excitement in him and that he’s especially anticipating one interleague series in 2013. “I really would like to see Yankee Stadium and the Dodgers and Yankees,” Scully said. “That really gets my imagination stirring. First of all, I’ve never seen the new Yankee Stadium. But to just go back and play the Yankees.” To contact the reporters on this story: Dex McLuskey in Dallas at [email protected] ; Nancy Kercheval in Washington at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

vin-scully-to-return-for-64th-season-in-dodgers-broadcast-boo

Hamptons Scene, Bruce Richards, $40,000 Colicchio Dinner

By Amanda Gordon

2012-08-27T16:04:55Z

http://www.bloomberg.com/news/2012-08-27/hamptons-scene-bruce-richards-40-000-colicchio-dinner.html

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Bruce Richards stood under a party tent anchored by multiple stakes in the lawn of his Southampton home. He was hosting the United Way of New York City “What’s on the Table?” benefit Saturday night. “They promised it will all be back to normal tomorrow,” said the chief executive of Marathon Asset Management LP, who clearly didn’t mind supporting programs that fight hunger and boost nutrition in New York City. Wearing a light-blue Brioni jacket, Richards and his wife, Avis, welcomed more than 300 guests to their property. Her dressy white shorts were covered in pink and yellow flowers. Tickets were $250, and the event raised more than $200,000. Among its many initiatives, United Way of New York City funds urban farms, teaches healthful cooking, and brings local farm produce to food pantries. Nutritionist Leigh Kusovitsky said she spends about 25 percent of her job at food pantries and soup kitchens. Last week a family at a pantry in Queens, New York, left with a bag of whole-wheat pasta, fresh eggs, green beans and bread from a local bakery. “It looked like what anyone would get at a supermarket,” Kusovitsky said, adding that the United Way promotes and funds “client choice” at pantries, allowing clients to select their own food. Guests had their choice of produce from a farm stand set up near the driveway. On their way out they filled up brown paper bags with peppers, eggplant, zucchini and corn. Small Plates During the party, healthy fare came on small plates prepared by chefs at Tom Colicchio ’s restaurants, including peaches served with prosciutto or sweet ricotta, from Craftbar’s Lauren Hirschberg. William Hardie, a managing director at Houlihan Lokey, gave the evening a boost with his $40,000 bid for a dinner prepared by Colicchio with music by Jon Bon Jovi. The chef and the rocker were event co-chairmen. Was it odd to be helping the hungry at a party in the Hamptons? “Whatever it takes to get people to show up and open up their wallets, that’s what it’s about,” Hardie said. Colicchio’s wife, Lori Silverbush , encouraged guests to call their representatives in Congress to protect funding in the Farm Bill for the Supplemental Nutrition Assistance Program. Her documentary about hunger, “A Place at the Table,” is set for theatrical release in February 2013. “What’s hard is when people don’t ask the obvious question, which is why we have double the food we need in this country, and people are still hungry,” she said. Rose Garden John Demsey , the group president of Estee Lauder Cos. Inc. (EL) , checked out the rose garden with hybrid varieties planted by the home’s former owner, philanthropist Carroll Petrie. Interior decorator Raphael Di Tommaso, who is working on the home, pointed out highlights on the first floor such as an old snooker table and books he arranged by color. On the kitchen counter were home-baked muffins and Think bars. The Richards family eats healthy, said son Dylan, a junior at Columbia Grammar & Preparatory School. With the help of his film-producing mom, he presents 90- second videos on a show called “Dylan’s Lunchbox,” in which he cooks nutritious meals with restaurant chefs. They appear on YouTube and NYC Life, the flagship station of NYC Media, the official network of the City of New York. A half-hour series of the same name is scheduled to have its premiere on Oct. 31. “He makes a very good challah,” his mom said. ( Amanda Gordon is a writer and photographer for Muse, the arts and leisure section of Bloomberg News . Any opinions expressed are her own.) To contact the writer on this story: Amanda Gordon at [email protected] or on Twitter @amandagordon. To contact the editor responsible for this story: Manuela Hoelterhoff at [email protected] .

2012

amptons-scene-bruce-richards-40-000-colicchio-dinner

Stosur Begins Title Defense With Straight-Set Win at U.S. Open

By Mason Levinson

2012-08-27T16:14:13Z

http://www.bloomberg.com/news/2012-08-27/stosur-begins-title-defense-with-straight-set-win-at-u-s-open.html

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Samantha Stosur of Australia began defense of her U.S. Open women’s championship with a straight- set win over Petra Martic. Stosur, the No. 7 seed, beat Martic, of Croatia, 6-1, 6-1, at the National Tennis Center in New York as the season’s final major tournament started today. To contact the editor responsible for this story: Larry Siddons at [email protected]

2012

stosur-begins-title-defense-with-straight-set-win-at-u-s-open

Ukraine Will Allow Imports of Live Canadian Cattle, Agency Says

By Elizabeth Campbell

2012-08-27T14:14:40Z

http://www.bloomberg.com/news/2012-08-27/ukraine-will-allow-imports-of-live-canadian-cattle-agency-says.html

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Canadian producers can ship live cattle to Ukraine for genetics and breeding purposes, the Canadian Agriculture Ministry said. Access to the market in Ukraine may be valued at about C$12 million ($12.1 million) over the next three years, Agriculture and Agri-Food Canada said today in an e-mailed statement. Canada shipped cattle to Ukraine only once in the 1980’s as part of a project for artificial insemination, according to the agency’s statement. To contact the reporter on this story: Elizabeth Campbell in Chicago at [email protected] To contact the editor responsible for this story: Steve Stroth at [email protected]

2012

ukraine-will-allow-imports-of-live-canadian-cattle-agency-says

Cameco to Acquire BHP Uranium Project for $430 Million

By Elisabeth Behrmann and Christopher Donville

2012-08-27T20:15:44Z

http://www.bloomberg.com/news/2012-08-27/cameco-to-buy-bhp-uranium-project-for-430-million-correct-.html

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Cameco Corp. (CCO) , the world’s third- largest uranium miner, agreed to buy BHP Billiton Ltd. (BHP) ’s Yeelirrie uranium project for $430 million to expand in Australia . “Yeelirrie represents an attractive deposit that fits well with Cameco’s vision and corporate strategy,” Tim Gitzel, chief executive officer of Saskatoon, Saskatchewan-based Cameco, said in a statement yesterday. Cameco is buying resources at Yeelirrie for the equivalent of about $3.20 per pound of uranium, or 6.5 percent of the current uranium spot price, Rob Chang, a Toronto-based analyst at Versant Partners, said today in a note. That compares with a 9 percent average for uranium industry transactions since 2007, he said. This is “understandable” given the deposit’s lower grade relative to recent higher-grade transactions, Chang said. Cameco is aiming to increase its annual uranium output to 40 million pounds by 2018 by developing new mines and extending the life of existing ones. The company forecast production of 21.7 million for this year. Cameco had 23 projects in Australia, including 22 operated by the company, according to its website . Among Cameco’s holdings is the Kintyre project in Western Australia acquired through a joint venture with Mitsubishi Development Pty in 2008. Olympic Dam BHP, the world’s biggest mining company, this month announced it will delay an expansion at its Olympic Dam in South Australia in favor of a less capital-intensive development plan. The expansion would have made Olympic Dam into the world’s largest uranium mine. The acquisition is Cameco’s third since Gitzel, who is a former executive of France ’s Areva SA (AREVA) , became the Canadian company’s CEO in July 2011. Cameco agreed in May to buy uranium trader Nukem Energy GmbH for 105 million euros ($131.2 million) after acquiring Areva’s minority stake in a uranium project in Saskatchewan for C$150 million ($151.4 million). Cameco terminated an offer last year to buy Hathor Exploration Ltd. after being outbid by Rio Tinto Group. Cameco fell 1 percent to C$22.23 at the close in Toronto. The shares have increased 21 percent this year. Cameco expects the acquisition of Yeelirrie in Western Australia to close by the end of the year. Yeelirrie has measured and indicated mineral resources of about 139 million pounds of uranium, with an average grade of about 0.13 percent, Cameco said in the statement. Cameco was the third-largest uranium miner last year after Kazatomprom, Kazakhstan ’s state-owned producer, and Paris-based Areva, according to the World Nuclear Association . Uranium is the raw material in nuclear-reactor fuel. To contact the reporters on this story: Elisabeth Behrmann in Sydney at [email protected] ; Christopher Donville in Vancouver at [email protected] To contact the editor responsible for this story: Rebecca Keenan at [email protected]

2012

cameco-to-buy-bhp-uranium-project-for-430-million-correct-

U.S. Treasury’s Brainard Says Europe to Be Focus of APEC Meeting

By Cheyenne Hopkins

2012-08-27T16:56:49Z

http://www.bloomberg.com/news/2012-08-27/u-s-treasury-s-brainard-says-europe-to-be-focus-of-apec-meeting.html

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U.S. Treasury Undersecretary for International Affairs Lael Brainard said the European debt crisis will be a focus of the Asia-Pacific Economic Cooperation meeting of finance ministers in Moscow. “The crisis in Europe only reinforces the imperative of the dynamic emerging economies in the Asia-Pacific region playing a larger role” in bolstering global growth, Brainard said. Brainard will attend the meetings on Aug. 29-30. Treasury Secretary Timothy F. Geithner will not participate in the summit this year. Brainard also said China needs to make further progress on its currency flexibility and has room to expand domestic demand. “We are going to continue to want to see further movement in the direction of a market-determined exchange rate ,” she said. To contact the reporters on this story: Cheyenne Hopkins at [email protected] ; To contact the editor responsible for this story: Christopher Wellisz at [email protected]

2012

u-s-treasury-s-brainard-says-europe-to-be-focus-of-apec-meeting

Hong Kong’s Occupy Protesters Face Deadline to Leave HSBC

By Eleni Himaras and Stephanie Tong

2012-08-28T01:46:36Z

http://www.bloomberg.com/news/2012-08-27/hong-kong-s-occupy-protesters-face-deadline-to-leave-hsbc.html

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Occupy Central protesters in Hong Kong defied a 9 p.m. deadline last night to leave HSBC Holdings Plc (HSBA) ’s Asian headquarters where they have spent more than 10 months demonstrating against income inequality. More than 10 tents were still pitched on the ground floor plaza under HSBC’s Central building today, with some demonstrators sleeping on couches. “There are things that we need to persist in,” Ho Yiu- shing, a protester who was named in the eviction court case HSBC brought against the group. “There’s a symbolic meaning in our move. I will continue to get more people to support the Occupy movement.” The demonstrators, who totaled about 50 at the height of the protest, were to evacuate by 9 p.m., according to an order given by Hong Kong’s Court of First Instance on Aug. 13. Police in other countries have evicted activists from the Occupy Movement, which started in New York last year. Authorities in London removed campaigners in London on June 14, while in November, U.S. demonstrations ended in confrontation with authorities. Last night, media outnumbered a few dozen protesters as cameramen crowded around a band whose music elicited head- banging and shouts from those remaining in the makeshift camp. Security guards didn’t intervene. Dwindling Numbers While Hong Kong has seen its wealth gap widen to a record, stoking public discontent, the Occupy Central movement has failed to attract demonstrators equal in number to those who took part in protest marches this year. On July 1, the anniversary of Hong Kong’s return to China , as many as 112,000 people took to the streets to demand more be done about income inequality , human rights in China and higher minimum wages. “Most of them have already gone,” said D. Tam, a woman who wore a baseball cap and green face mask, and declined to give her full name. “There are not enough people left. Even though we are just a small group we will stay until the last minute to support the anti-capitalist movement.” Six people who came to attend the Occupy Central concert last night were chatting at the area this morning and said they will leave soon. One shirtless male protester clad in ripped trousers and face paint danced under an escalator in the area last night, surrounded by shreds of Chinese funeral money and HK$10 notes. As he filmed himself on a pink digital camera perched on a tripod, the man was joined by a girl who spun in circles around him. If the protesters don’t leave, a writ of possession will be issued by the court, and executed by a bailiff, HSBC spokesman Gareth Hewett said in an e-mail yesterday. Court Bailiff “HSBC will work in consultation with the court bailiff to agree the timing and terms of the execution of the writ of possession,” Hewett said. “No eviction will take place on the plaza until the writ of possession is in place.” Occupy Central aimed to create a community space for the discussion and sharing of the group’s ideals, activists said on its Facebook page. They have pitched tents, laid out couches, and conducted English and music classes at the HSBC plaza since Oct. 15. “We may be forcefully moved out of here but at the same time we will also be making a peaceful protest,” said Riyah Mahbu, a teacher who has participated in in the protest since June. “There will not be violence.” Police Officers HSBC said earlier that it had requested the protesters leave voluntarily on May 29 because of a number of events scheduled at the plaza. The bank sought a court order after the demonstrators failed to comply with the request. In June, as many as 100 police officers were involved in evicting the last Occupy London campaigners from Finsbury Square near the city’s financial district. There were no arrests and no violent incidents during the operation, said a spokesman for London’s Metropolitan Police Service . The non-confrontational end to the London occupation contrasts with cities like New York and Oakland, California . New York City police in riot gear swept into a Lower Manhattan park on Nov. 15 to remove Occupy Wall Street protesters. About 142 people were arrested inside the park and more than 50 outside, Police Commissioner Raymond Kelly said. The U.S. demonstration started as a way to highlight “the role of Wall Street in creating an economic collapse,” according to the Occupy Wall Street website. The action spread to more than 1,500 cities worldwide, it said. Hong Kong is one of several Asian cities including Seoul, Taipei and Tokyo which have seen protests inspired by the Occupy Wall Street movement in New York spread to their streets. To contact the reporters on this story: Eleni Himaras in Hong Kong at [email protected] ; Stephanie Tong in Hong Kong at [email protected] To contact the editor responsible for this story: Hwee Ann Tan at [email protected]

2012

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Thoma Bravo Buys Software Company Deltek for $1.1 Billion

By Devin Banerjee and James Callan

2012-08-27T20:37:13Z

http://www.bloomberg.com/news/2012-08-27/deltek-agrees-to-be-acquired-by-thoma-bravo-for-1-1-billion.html

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Thoma Bravo LLC, one of the two private-equity firms that spun out of Chicago-based buyout pioneer Golder Thoma & Co., agreed to buy Deltek Inc. (PROJ) in an all- cash deal valued at $1.1 billion. Shareholders of Deltek, a provider of computer software for government contractors, will receive $13 a share, the companies said today in a statement. That’s 7.2 percent less than Herndon, Virginia-based Deltek’s closing price on Aug. 24 and 24 percent more than the price on June 11, the day before the company shared information on the sales process to potential buyers on a confidential basis. Thoma Bravo, which specializes in investing in software, education and financial-services companies, plans to expand Deltek through a combination of acquisitions and internal growth. In the past five years, the private-equity firm has bought 14 software companies and has expanded them through 29 “add-on” acquisitions, according to Thoma Bravo’s website. This year, it has invested in Telestream Inc., which makes software for on-demand video viewing, and Blue Coat Systems Inc., the Internet-security software maker. “Thoma Bravo is excited to work with Deltek’s leadership team to accelerate growth of the company through the firm’s proven buy and build strategy,” Holden Spaht, a partner at the firm, said today in the statement. Deltek fell $1.08, or 7.7 percent, to close at $12.93 in New York. The stock has gained 32 percent this year, compared with the 12 percent gain in the Standard & Poor’s 500 Index. Ebitda Multiple Thoma Bravo’s offer is 14.6 times Deltek’s earnings before interest, taxes, depreciation and amortization over the past 12 months as of June 30, Deltek said. The median Ebitda multiple of 85 acquisitions of application-software in the past five years was about 11, according to data compiled by Bloomberg. New Mountain Capital LLC, Deltek’s largest shareholder, agreed to the transaction, which will close in the fourth quarter, according to the statement. The New York-based private- equity firm acquired a majority of Deltek in 2005 and took the company public in November 2007. Deltek’s services are used by 15,000 organizations and 2 million users in more than 80 countries. Secondary sales, where private-equity managers exit an investment by selling to another buyout firm, are the second- most common method of exiting deals, after sales to strategic buyers. The method accounted for seven buyout transactions worth more than $1 billion during the second quarter, according to London-based researcher Preqin Ltd . Net Income Deltek posted net income of $4.24 million in the second quarter compared with a loss of $3 million a year earlier, according to a statement last month. Revenue fell 2.2 percent to $86 million. Thoma Bravo, which manages funds with almost $4 billion of commitments from offices in Chicago and San Francisco , will make the investment out of its flagship Thoma Bravo Fund X pool, which closed in February with $1.25 billion in commitments. Greenhill & Co. provided financial advice, helped by Credit Suisse Group AG (CS) , while Fried Frank Harris Shriver & Jacobson LLP served as legal counsel to Deltek. Jefferies Group Inc. was Thoma Bravo’s financial adviser and Kirkland & Ellis LLP served as legal counsel. Golder Thoma & Co., which was started by Stanley Golder and Carl Thoma in 1980, split into two firms in 1998. GTCR, the other firm, has invested more than $9 billion in more than 200 companies, according to its website. To contact the reporters on this story: Devin Banerjee in New York at [email protected] ; James Callan in New York at [email protected] To contact the editors responsible for this story: Christian Baumgaertel at [email protected] ; Kevin Miller at [email protected]

2012

deltek-agrees-to-be-acquired-by-thoma-bravo-for-1-1-billion

Romney Straddles Warmer Pitch With Obama Attacks in Tampa

By John McCormick and Lisa Lerer

2012-08-27T04:00:01Z

http://www.bloomberg.com/news/2012-08-27/romney-sraddles-warmer-pitch-with-obama-attacks-in-tampa.html When the storm clouds clear, Mitt Romney and the Republican Party will face a compressed political convention that will make the task of balancing biography and criticism of President Barack Obama more difficult. The convention’s new opening night may present the greatest challenge with Ann Romney ’s address aimed at women and independent voters, as tough-talking governors

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Tampa. Editors: Jeanne Cummings, Jodi Schneider To contact the reporters on this story: John McCormick in Tampa at [email protected] ; Lisa Lerer in Wolfeboro, New Hampshire, at [email protected] To contact the editor responsible for this story: Jeanne Cummings at [email protected]

2012

romney-sraddles-warmer-pitch-with-obama-attacks-in-tampa

Portuguese Bond Trading Declines to Lowest Since at Least 2000

By Joao Lima

2012-08-27T09:57:00Z

http://www.bloomberg.com/news/2012-08-27/portuguese-bond-trading-declines-to-lowest-since-at-least-2000.html

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Portuguese government bond trading in the secondary market dropped to an average 3 million euros ($3.8 million) a day in July, the lowest since at least 2000, from 15 million euros in June. Turnover of the securities averaged 46 million euros a day in July 2011 and 185 million euros in July 2010, government debt agency IGCP said on its website. Trading of treasury bills increased to an average of 27 million euros a day last month from 23 million euros in June and from 13 million euros in July 2011. Portugal last year followed Greece and Ireland in requesting a bailout from the European Union and the International Monetary Fund , and Prime Minister Pedro Passos Coelho aims to regain access to bond markets by September 2013. In the first seven months of 2012, Portuguese debt returned 28 percent, the most of 26 markets tracked by indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The fifth quarterly review of Portugal’s aid program starts tomorrow and Passos Coelho said on June 29 that it will focus on the planned return to bond markets in 2013. Portugal is “sounding out” the market as it prepares to resume sales of medium-term notes, Joao Moreira Rato, chairman of the country’s debt agency, said in an interview last month. To contact the reporter on this story: Joao Lima in Lisbon at [email protected] To contact the editor responsible for this story: Stephen Foxwell at [email protected]

2012

portuguese-bond-trading-declines-to-lowest-since-at-least-2000

Hungary to Avoid Rate Cut on Inflation, Bailout Concern

By Edith Balazs

2012-08-28T10:24:31Z

http://www.bloomberg.com/news/2012-08-27/hungary-to-refrain-from-rate-cut-on-inflation-bailout-concern.html

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Hungary ’s central bank will probably refrain from cutting the European Union’s highest benchmark interest rate because of accelerating inflation and possible delays in obtaining a bailout. The Magyar Nemzeti Bank will leave the two-week deposit rate at 7 percent for an eighth month, according to 17 of 18 economists in a Bloomberg survey. One expects a cut to 6.75 percent. The central bank will announce the decision at 2 p.m. in Budapest. Policy makers last month voted five to two to keep rates unchanged, rejecting arguments that easing policy would prop up the economy that entered its second recession in four years, minutes of the July 24 meeting show. The majority argued that the central bank should wait for the outcome of bailout talks with the International Monetary Fund and the European Union before lowering borrowing costs. “We think the National Bank of Hungary will resist pressures and keep its 7 percent base rate on hold, however, this is a close call,” Daniel Hewitt , an economist at Barclays Plc (BARC) in London , said in an e-mailed note. Forward-rate agreements used to wager on interest rates in one month fell 7 basis points to 6.87 percent yesterday, the lowest since November. The FRAs traded 28 basis points below the Budapest Interbank Offered Rate, the biggest spread in more than two years and signaling expectations for a quarter-point rate cut. A basis point is 0.01 percentage point. ECB Rates The European Central Bank this month kept its main interest rate unchanged at a record-low 0.75 percent and the deposit rate at zero. Czech policy makers left their two-week repurchase at a record-low 0.5 percent on Aug. 2, while their Polish colleagues, who surprised the market with a quarter-point increase in May, also kept the benchmark rate at 4.75 percent on July 4. A rate cut may add momentum to the economy and would be accepted by investors, Ferenc Gerhardt, a monetary-policy maker said in an Aug. 10 interview. Meanwhile, Simor, speaking after last month’s rate decision, argued for a “cautious policy stance” until the outcome of bailout talks is known. Hungary is set to resume talks with the international lenders on a credit line of about 15 billion euros ($18.8 billion) to protect the economy from euro-area contagion and to lower financing costs. IMF and EU officials are focusing on untangling policies that contributed to an economic contraction in the first two quarters and the downgrade of Hungary’s credit to junk. ‘Weak GDP’ “Weak second-quarter GDP data further boost the chance of monetary easing, however, we only expect this at the end of September due to accelerating inflation and pending IMF-EU negotiations,” Istvan Horvath, director at the Budapest investment management unit of KBC Groep NV (KBC) , said in a statement yesterday. Hungary may lower borrowing costs in several steps until the end of the year, Horvath wrote. The economy contracted 0.2 percent in the second quarter from the previous three months and shrank 1.2 percent from the year-earlier period. Inflation, the fastest in the EU, accelerated to 5.8 percent in July from 5.6 percent in June, drifting further from the central bank’s 3 percent target. The pace of consumer-price increases may slow to the goal in 2014, Simor said last month. Forint, CDS The forint, which gained 13 percent against the euro this year as investors speculated that Hungary will obtain an IMF bailout, has advanced 1.2 percent this month, the third-best performance among more than 20 emerging-market currencies tracked by Bloomberg. The currency weakened 0.3 percent to trade at 278.47 per euro at 11:38 a.m. in Budapest. The cost of insuring against default on Hungary’s debt for five years using credit-default swaps fell to 427 basis points from this year’s highest close of 735 basis points on Jan. 5. “While we still see 50 basis points in rate cuts this year, we perceive some risks to the path priced in by the market,” analysts at OTP Bank Nyrt. wrote in a research report last week. Policy makers will “take a wait-and-see” stance until the next Report on Inflation is published in September, according to the note. Recent comments by Gerhardt and fellow council member Gyorgy Kocziszky showed a rift between Simor and his two deputies on one side and at least three of the four non- executive rate-setters, who were appointed last year with ruling-party backing, on the other. The four united against the bank’s leadership in January when they outvoted a proposal to raise the benchmark rate by a half-point to 7.5 percent to keep borrowing costs unchanged. Council Rift Gerhardt and Kocziszky, along with fellow non-executive rate-setter Andrea Bartfai-Mager, voted with Simor and his deputies to maintain interest rates against Janos Cinkotai, the fourth non-executive member, who backed rate cuts, since February. Last month, Kocziszky joined ranks with Cinkotai in backing a 25 basis-point reduction. Simor and the two deputy governors will probably vote to hold rates, and three of the non-executive council members are likely to back a 25 basis-point cut, David Nemeth, economist at ING Groep NV in Budapest said in an e-mailed before the rate decision. “The only question is, what will Ms. Bartfai-Mager prefer?” he wrote. To contact the reporter on this story: Edith Balazs in Budapest at [email protected] To contact the editor responsible for this story: Balazs Penz at [email protected]

2012

ungary-to-refrain-from-rate-cut-on-inflation-bailout-concern

Ford Says It Got Clearance to Split China Venture With Mazda

By Bloomberg News

2012-08-27T05:23:56Z

http://www.bloomberg.com/news/2012-08-27/ford-says-it-got-clearance-to-split-china-venture-with-mazda.html

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Ford Motor Co. (F) said it received approval from China ’s top economic planner to split its venture in China with Mazda Motor Corp. (7261) , paving the way for the U.S. automaker to increase control of its expansion in the country. The National Development and Reform Commission approved an application for Ford to have a separate venture with Changan Automobile Co. instead of the current three-way ownership structure with Mazda, Ford Chief Executive Officer Alan Mulally told reporters in Chongqing, China today. The plan still needs to be approved by two ministries, Ford said in a statement. The separation would restore Ford’s ability to have an equal say as its Chinese partner for the first time since 2006, when the U.S. company transferred a 15 percent stake to then- affiliate Mazda. The Dearborn, Michigan-based automaker has sought to break up the China venture after selling down its stake in Mazda in 2008 to raise cash. “For Ford, they won’t have to think of Mazda and will have more freedom in making decision for future development in China,” said Lin Huaibin, a Shanghai-based analyst with industry researcher IHS Global Insight. “They will be able to make full use of Chongqing as a strategic production base in western China and they can focus on developing their own products suitable for the Chinese market.” Increasing its stake in the China venture to 50 percent would allow Ford to book more revenue from car sales and parts, according to Bill Russo , a Beijing-based senior adviser at Booz & Co. China Expansion Mulally was in Chongqing to attend the groundbreaking ceremony for Ford’s third passenger-vehicle assembly plant in the city, which would add annual capacity of 250,000 vehicles a year when completed. The reorganization is still subject to approval from the Ministry of Commerce, State Administration of Industry and Commerce and the Ministry of Industry and Information Technology , according to Ford. Ford this year has disclosed moves to add production output in China, including plans to build a $760 million assembly plant in Hangzhou. The company today signed a letter of intent to expand research and development in the country. “We’re very pleased with the restructuring and the way its going,” Mulally said today. “We have approval from the NDRC and we’re proceeding through the regulatory process, so we’re very appreciative and encouraged.” To contact Bloomberg News staff for this story: Liza Lin in Shanghai at [email protected] ; Ma Jie in Tokyo at [email protected] To contact the editor responsible for this story: Young-Sam Cho at [email protected]

2012

ford-says-it-got-clearance-to-split-china-venture-with-mazda

Deutsche Bank to Claw Back Stock Bonuses From Former Jobs

By Nicholas Comfort

2012-08-27T15:56:01Z

http://www.bloomberg.com/news/2012-08-27/deutsche-bank-to-claw-back-staff-s-stock-from-former-employers.html

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Deutsche Bank AG (DBK) , Europe ’s biggest bank by assets, changed rules on bonuses to allow the company to claw back stock awarded to its workers by former employers. The rules would apply to unvested stock from previous posts converted into shares of Deutsche Bank and affect senior bankers who started in or after January, Ronald Weichert , a spokesman for the Frankfurt-based lender, said today by phone. Deutsche Bank co-Chief Executive Officer Anshu Jain, 49, said on July 31 that the banking industry needs to address the balance of rewards for shareholders and staff. About 17 percent of global banks reclaimed compensation in 2011 as European and North American regulators pressured firms to impose penalties on employee risk-taking, according to consulting firm Mercer. “The sector will have to move in unison for a plan like this to work for Deutsche Bank,” said Christian Hamann , an analyst with Hamburger Sparkasse who recommends investors sell the stock. “They also have to address their total levels of compensation so that more money goes to shareholders and less to staff.” The introduction of clawbacks, or taking back compensation, was spurred by the financial crisis of 2008. Governments and regulators came under public pressure to curb bankers’ pay after top executives whose banks collapsed or required government bailouts walked away with millions of dollars of severance payments or accumulated pay packages. UBS, Lloyds Clawbacks are “relatively new phenomena” in compensation programs, so it will take some time for them to “bed down,” Vicki Elliott, the global financial-services human capital leader at Mercer, said in a statement this month. The Financial Times reported Deutsche Bank’s decision earlier today. Citing pay consultants it didn’t identify, the newspaper said Deutsche Bank’s move was unusual in the banking industry and may be followed by its peers. UBS AG (UBSN) , Switzerland ’s biggest bank, introduced clawback provisions after record losses during the credit crisis. Some of those rules permit the bank to not pay deferred bonuses when units or the group as a whole turn out to be unprofitable. In 2010, senior bankers at UBS were deprived of 300 million francs of deferred bonuses after the company reported a 2.74 billion- franc loss for 2009. UBS said it has a similar compensation system to Deutsche Bank. If previous awards that an employee forfeits as a result of leaving a former employer are tied to performance conditions, the replacement payments that are granted to compensate for joining UBS will likewise be subject to performance criteria, spokeswoman Eveline Mueller-Eichenberger said today in a written response to questions. In the U.K., Lloyds Banking Group Plc (LLOY) , Britain’s largest mortgage lender, denied former Chief Executive Officer Eric Daniels and three other departed directors bonuses in March due to be paid out following the integration of HBOS Plc. HSBC Holdings Plc (HSBA) said in February that it has clawed back bonuses for employees because of the mis-selling of payment protection insurance. To contact the reporter on this story: Nicholas Comfort in Frankfurt at [email protected] To contact the editor responsible for this story: Frank Connelly at [email protected]

2012

deutsche-bank-to-claw-back-staff-s-stock-from-former-employers

Vale Sees Iron-Ore Rebound as China Producers Cut Supply

By Juan Pablo Spinetto

2012-08-27T22:42:36Z

http://www.bloomberg.com/news/2012-08-27/vale-sees-iron-ore-rebound-as-china-producers-cut-supply.html

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Vale SA (VALE3) , the world’s largest iron- ore producer, expects the steel-making ingredient to rebound this year because current prices aren’t profitable for producers in China and other countries. Iron-ore below $120 a metric ton is a “short-lived” situation, the company’s Investor Relations Director Roberto Castello Branco told reporters at an event in Rio de Janeiro today. Vale is not among the suppliers planning to reduce output because it has low production costs, he said. “The iron-ore price is below the cost for marginal producers not only in China but also in other countries,” Castello Branco said at the sidelines of the Platts SBB Steel Markets in Latin America conference. “If you are a producer with higher costs, you won’t continue producing at a loss; you will stop your operations.” Iron-ore fell below $100 for the first time since 2009 last week on concern that rising stockpiles and slowing growth in China, the biggest buyer, will cut demand for the raw material. The decline pushed Vale shares to the lowest level in almost three years. BHP Billiton Ltd. (BHP) , the world’s biggest mining company, expects “long-term” price declines for its commodities because of a slower Chinese economic expansion, Chief Executive Officer Marius Kloppers told the Inside Business program on the Australian Broadcasting Corp. yesterday. Vale dropped 1.6 percent to 33.39 reais in Sao Paulo , the lowest level since Sept. 4, 2009. The stock is down 12 percent this year. To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at [email protected] To contact the editor responsible for this story: James Attwood at [email protected]

2012

vale-sees-iron-ore-rebound-as-china-producers-cut-supply

Partisan Finger-Pointing Misses Real Deficit Story

By Christopher Payne

2012-08-28T15:52:30Z

http://www.bloomberg.com/news/2012-08-27/partisan-finger-pointing-misses-real-deficit-story-bgov-insight.html The federal deficit is a politically charged and highly partisan issue. Yet too little of the debate is based on what actually caused the budget to go so deeply into the red. Democrats blame the Bush-era tax cuts and the wars in Iraq and Afghanistan , while Republicans point the finger at stimulus measures and runaway domestic spending. Both sides miss the mark. A closer analysis of what’s changed in the U.S. fiscal landscape offers a clearer way to think about the deficit and, most importantly, a more practical way to do something about it. There’s no denying the U.S. government’s fiscal position took a nose dive in the years following the financial crisis of 2008. At the end of fiscal 2007, accumulated federal debt held by the public equaled 36.3 percent of the U.S. economy , as measured by the gross domestic product, or GDP. By fiscal 2011, public debt had almost doubled to 67.7 percent of GDP. The annual budget deficit , which feeds the debt, averaged 9.3 percent of GDP during the past three fiscal years. Compare this to the three years before the crisis, 2005 through 2007, when deficits averaged 1.9 percent of GDP. The deterioration is stunning: The average annual deficit ballooned by 7.4 percentage points in the years after the crisis. The largest driver of the increasing deficit was the economy itself, a Bloomberg Government analysis shows. The drop in economic output during the recession made all areas of the budget look larger compared with GDP. Falling tax revenue and spending increases tied to the economic downturn constituted 4.5 percentage points, or 61 percent, of the 7.4 point increase in the deficit, this analysis reveals. Pre-Crisis Levels So, as the economy gets back on track, much of the deficit may automatically get back to pre-crisis levels. Tax receipts will rise and spending should fall on things such as unemployment insurance , food stamps and health care for the poor. The big questions for the next president and Congress are what to do about the other 39 percent change in deficit spending that isn’t tied to the economic downturn. Some of that change can be traced to one-time spending decisions that followed the recession. Economic stimulus measures promoted by the George W. Bush and Barack Obama administrations account for 1.8 percentage points, or 24 percent, of the fiscal deterioration. Another 1.1 percentage points, or 15 percent, can be attributed to non-cyclical spending increases, such as on defense, Social Security and Medicare. Record-Low Rates Ironically, the growing national debt has had no real impact on the annual deficit. Interest on the debt actually fell as a percent of GDP to 1.4 percent post-crisis from 1.6 percent pre-crisis, thanks to record-low interest rates on U.S. Treasuries. These findings suggest two things: Raising taxes across the board shouldn’t be a priority at this point in the economic cycle. Nor should cutting cyclical “safety net” programs and non-defense discretionary spending. Raising the tax burden now could lower household spending and business investment, and may have a negative multiplier effect through the economy. Badly enacted and wrongly timed austerity measures can also worsen the economic environment, actually leading to larger deficits. What may be confusing

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2012

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Forint Gains Before Rate Decision; Hungary Yields Rise 2nd Day

By Andras Gergely

2012-08-27T16:26:09Z

http://www.bloomberg.com/news/2012-08-27/forint-gains-before-rate-decision-hungary-yields-rise-2nd-day.html

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The forint gained as investors waited to see whether Hungary will cut the European Union’s highest central bank rates. Bonds declined. Hungary’s currency appreciated 0.1 percent to 277.95 per euro by 4:45 p.m. in Budapest. The yield on the government’s benchmark five-year notes rose two basis points, or 0.02 percentage point, to 7.142 percent. The Magyar Nemzeti Bank will probably keep its base rate at 7 percent tomorrow, according to 15 out of 16 analysts polled by Bloomberg. One analyst expects a cut to 6.75 percent. A holiday in the U.K. limited trading today, Peter Karsai, a Budapest- based trader at Commerzbank AG, wrote in an e-mailed note today. “The forint started off below 278 per euro today and the bank holiday in London made any substantial moves unlikely for the rest of the day,” Karsai wrote in the note. To contact the reporter on this story: Andras Gergely in Budapest at [email protected] To contact the editor responsible for this story: Gavin Serkin at [email protected]

2012

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Brezhnev Bonds Haunt Putin as Investors Hunt $785 Billion

By Scott Rose

2012-08-28T16:33:45Z

http://www.bloomberg.com/news/2012-08-27/brezhnev-bonds-haunt-putin-as-investors-hunt-for-785-billion.html

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Holders of Soviet bonds first sold in Communist leader Leonid Brezhnev ’s final year are getting in France what they can’t get from President Vladimir Putin : money. The European Court of Human Rights in Strasbourg ordered Russia last month to pay Yuriy Lobanov, a septuagenarian from the Ivanovo region near Moscow, 37,150 euros ($46,497) in compensation for the 1982 notes he held, or about 140 times the average monthly pension. Mariya Andreyeva, a 95-year-old survivor of the Nazi blockade of Leningrad, won a preliminary 4,300 euros on the bonds, which doubled as lottery tickets. The securities are part of the 25 trillion rubles ($785 billion), equal to almost half of Russian economic output , the government says it still owes the public from lost Soviet savings. Putin is stalling, most recently signing an order in April to halt payments on the notes until at least 2015. Now, armed with court rulings, veteran speculators are joining pensioners in seeking to cash in. “This all should have been settled back in the 1990s,” said Boris Kheyfets, a Soviet debt specialist at the Russian Academy of Sciences’ Institute of Economics in Moscow. “How do you assume a debt that huge? It would collapse everything immediately.” Chic Sedan Soviet authorities began selling the 20-year certificates in 1982 for 25, 50 or 100 rubles, partly to redeem earlier bonds and partly to sop up cash from a command economy with few consumer goods. The State Domestic Lottery Bonds offered a token 3 percent interest and a chance at payouts of as much as 10,000 rubles, Kheyfets said. The top winners were entitled to a “chic” Volga sedan, while second prize was a Zhiguli. Unlike other former Soviet republics that settled similar debts in the 1990s at a fraction of what was lost, Russia pledged to cover the whole amount. President Boris Yeltsin signed a law in 1995 ordering the government to restore savings via bank deposits and Soviet bonds based on what those holdings could have purchased in 1990. Payments started in earnest during Putin’s first term, when surging oil prices pushed the budget into surplus. Now Putin is back in the Kremlin for a third term and the budget is barely breaking even. “Clearly, implementing this plan to restore the public’s savings would impose exorbitant obligations on the federal budget ,” the Finance Ministry said in its most recent debt strategy report , released a year ago. “Were that actually to happen, the state would be deprived of the ability to pay for other expenses for an extended period of time.” ‘Nothing Left’ In the 1990s, Russia was passing laws without thinking of how they’d be funded, Putin told a meeting of regional human rights officials Aug. 16. Repaying all lost savings immediately would mean “nothing left to pay salaries to soldiers, to doctors, to teachers,” Putin said, according to a transcript on the Kremlin’s website. Russia should continue to pay what it can to the most elderly people who lost savings, he said. The Finance Ministry’s plan to compensate the most elderly “victims” is the best approach, and gradual payments should be continued, Putin said. “This is something we’ve inherited from the past, but we need to do something about it.” The government has earmarked 50 billion rubles in this year’s budget to repay lost deposits, and the same amount for 2013 and 2014. Savers who die are also eligible for 6,000 rubles, less than $200, in funeral costs. “We make the payments every year, but it’s a miserly amount,” Kheyfets said. “I guess that’s just how it’s going to be until the people die.” Tsarist Debt Running out the clock may now be a losing tactic. In their Lobanov ruling , the Strasbourg judges cited Russia’s refusal to say how many of the 1982 bonds are outstanding and its repeated suspension of a mechanism for redeeming them, “for reasons that remain unclear to the court.” The Justice Ministry, which represents Russia in Strasbourg, said in a faxed statement that it honors all judgments by the European Court of Human rights, adding that the Lobanov ruling only applies to the 1982 notes. The Finance Ministry declined to comment. The estimated 25 trillion rubles in liabilities, if fully recognized, would boost Russia’s debt nearly 10-fold, Vladimir Osakovskiy, chief economist at Bank of America Merrill Lynch in Moscow, said today in an e-mailed comment. Earlier settlements suggest Russia will find a way to avoid damage to its credit ratings or sovereign debt, he said. “Back in 1997, Russia settled outstanding tsarist bonds in France for $400 million, which was less than 1 percent of foregone purchasing power in nearly 100 years of foregone interest,” he said. “We expect similar settlement in this case as well.” Shadow Economy There are no public records for how many Brezhnev bonds were sold, Kheyfets said. As bearer bonds with no ownership records, the 1982 notes served as a second currency supporting the Soviet shadow economy, he said. Russia didn’t mention the notes or estimate of Soviet savings debt in the 143-page prospectus for its $7 billion sale of Eurobonds this year. Some of the securities were cashed in or swapped for new debt in the early 1990s. After the 1995 law, when Russia agreed to restore lost savings at 1990 levels, the state converted the 1982 bonds into so-called promissory rubles, essentially increasing their face value by 40 percent. Later legislation pegged their value to a basket of consumer goods and ensured they would accrue interest of at least 9 percent. The government last valued the promissory ruble in 2003, at 32.34 current rubles, a figure cited by the court in the Lobanov case. The ruble fell 0.5 percent to 32.02 per dollar by the close in Moscow. Trunk Load Lobanov offered a “very sound” valuation, leaving little room for rebuttal, said Vasily Vasilyev, a lawyer at Yukov, Khrenov & Partners in Moscow. Russia dodged similar rulings by changing the law during European court proceedings, he said. Speculation on the certificates has made it as far as EBay.com, where 25-ruble 1982 bonds are being offered for $2.85 apiece. On Russian websites, some sellers claim to have proof their bonds are listed as subject to payment in a Finance Ministry registry. Others are offering notes sold in former Soviet republics, which Russia isn’t legally obligated to repay. Zakir Agabayev said he discovered 600,000 rubles of the notes in a trunk at his wife’s grandmother’s home in Kyrgyzstan . He said he offered to sell the bonds on the Dorus.ru message board, but the best offer was 2.5 percent of face value, so he declined. Soviet Tycoon “People called two or three times, but the offers weren’t serious,” Agabayev said by phone. The biggest bet so far was made by Artem Tarasov, a commodities and computer trader who shot to fame in 1989 after claiming on national television to be the first legal Soviet millionaire . He became part owner of Moscow-based Vitas Bank, which lost its license this year after trying to put 3 billion rubles of the Brezhnev bonds on its books at face value. Putin signed the three-year payment freeze after the central bank first noticed Vitas’s accounting move, Tarasov said in an interview in his Moscow office. After the moratorium, the regulator classified the notes as Category 5, or hopeless, and told the bank to form 100 percent provisions for loan losses. “How could we have ever imagined the central bank would come and declare their country in default?” Tarasov said. “But that’s just what they did.” ‘Cinderella Story’ Central bank First Deputy Chairman Alexei Simanovsky said Vitas’s license was revoked because its capital adequacy ratio fell below the mandatory 2 percent level, not because of the notes. Regulators only saw a fraction of the 3 billion rubles Vitas claimed to have, Simanovsky said by phone. “The bank maintained that this was two tons of paper, that they were in some special depositary and that getting in was somehow very hard,” Simanovsky said. “It’s all a bit like the story of Cinderella, where the pumpkin turns into a carriage.” Still, Tarasov has access to 50 billion rubles of the certificates that he plans to “tender for all they’re worth,” he said. “Suppose they really do start making payments on these bonds in 2015,” Tarasov said. “Their value today in Russian money is 50 to 60 times the nominal value.” ‘Toilet Paper’ Russia probably will only resume payments if a group with enough political clout starts amassing them, said Saleh Daher, managing director at Turan Corp., which has invested in Soviet commercial debt. “People will make money from this,” Daher said by phone from Boston , where Turan is based. “And I doubt very much that much of it will go to the pensioners or the people who actually had the claims in the beginning.” One of those people is Boris Andreyev, a 65-year-old retired electrician with no legal training. For almost two decades, Andreyev and his mother, Mariya Andreyeva, have sent hand-written petitions to courts and ministries seeking repayment. The 4,300 euros the judges in Strasbourg awarded , based primarily on his mother’s advanced age, is a pittance, he said. Their notes, deposited in 1986, were bought up in a state program in 1993 that left them with about 3,000 rubles in a bank account, an amount that shrank to 3 rubles after the currency’s redenomination in 1998. The account, still open and untouched, has grown to 5 rubles, thanks to years of interest payments. Andreyev, who lives on a monthly pension of 6,000 rubles, plans to continue his campaign in Russian courts. “In Soviet rubles, the bonds were equivalent to the cost of a one-room apartment,” Andreyev said. “The 5 rubles we got are equivalent to a roll of toilet paper.” To contact the reporter on this story: Scott Rose in Moscow at [email protected] To contact the editor responsible for this story: Balazs Penz at [email protected]

2012

brezhnev-bonds-haunt-putin-as-investors-hunt-for-785-billion

Lilly’s Alzheimer Drug Finding Splits Investors, Doctors

By Michelle Fay Cortez

2012-08-27T20:12:01Z

http://www.bloomberg.com/news/2012-08-27/lilly-s-alzheimer-drug-finding-splits-investors-doctors.html

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While investors supported the sliver of promise offered when Eli Lilly & Co. (LLY) said its Alzheimer’s drug may slow progression early in the disease, doctors weren’t as impressed, saying it could take years to find out for sure. Lilly announced last week that its experimental treatment solanezumab failed to improve thinking skills, memory and function in a broad range of patients. At the same time, an unusual reanalysis of the data found the drug may slow mental decline in those with the mildest form of Alzheimer’s. Investors responded on Aug. 24 by boosting Indianapolis- based Lilly 3.4 percent in New York trading. Current patients, though, found little solace in the result, said Samuel Gandy, director of Mount Sinai Center for Cognitive Health in New York . The need to reanalyze the data “was a red flag,” Gandy said in a telephone interview. “For the layman, this means poking around a dataset in hand, hunting for a result that may be statistically significant but is unlikely to be clinically significant. So caveat emptor here.” About 5.4 million Americans have Alzheimer’s, the most- common form of dementia, and the number is expected to surge to as many as 16 million by 2050 as the population ages, according to the Alzheimer’s Association . Drugs on the market now address only the symptoms, not the underlying cause, and none has been shown to slow progression of the disease. That makes the finding on solanezumab particularly crucial, doctors said, if it can be duplicated by further research. Brain Target Solanezumab attaches to a protein called beta amyloid before it builds up in the brains of patients, forming clumps that many doctors believe to be the cause of Alzheimer’s. Whether this change makes a difference is a question still largely unanswered, said David Knopman , a neurologist at the Mayo Clinic in Rochester, Minnesota, and head of the data safety monitoring board for the solanezumab trials. To find out for sure, Lilly probably will have to set up new research focusing only on mildly impaired patients. “I take care of people with Alzheimer’s disease who desperately want to see something positive here,” Knopman said in a telephone interview. “For my patients right now, absolutely it won’t be available commercially. I don’t want them thinking this is something being withheld by a ‘nasty’ Food and Drug Administration , or that the scientists are being too cautious. This was a negative study.” Added trials could run as long as three years and cost several million dollars, said R. Scott Turner , director of the Memory Disorders Program at Georgetown University in Washington . ‘Continue to Invest’ “On the first pass it’s a big disappointment that this was negative,” he said. ‘But there were hints of effectiveness and it was relatively safe. I don’t think it’s worth completely abandoning. I hope they would continue to invest in the drug and do the next trial.” Lilly rose 1.7 percent to $44.59 at the close of New York trading. The shares gained 25 percent in the past 12 months. Company officials declined to say whether they are planning a new study focusing on patients with the mildest form of Alzheimer’s. Lilly will present the current results, including the reanalyzed portion, to regulators worldwide and discuss what steps should be taken next, said Dave Ricks, the company’s senior vice president, in a conference call. He wouldn’t rule out anything, including filing for regulatory approval with the current results. The results also will be presented at two medical meetings in October, Lilly officials said. When asked about additional solanezumab trials, his response was to point out that Lilly has other Alzheimer’s disease drugs in development, along with 11 unrelated medicines that are in the last of three stages of testing usually required for U.S. Food and Drug Administration approval. ‘Glimmer of Hope’ J. Anthony Ware, group vice president of Lilly Bio- Medicines Product Development, said in a conference call that company officials were excited rather than surprised by the “glimmer of hope” seen in the secondary analysis. The studies that failed to meet their goals initially are continuing, he said, with all patients now receiving the drug. That effort may yield additional information about the drug by 2014, Tim Anderson , an analyst with Sanford C. Bernstein & Co. in New York, wrote in an Aug. 22 note to investors. “At this point, theoretically all possibilities are still on the table,” including Lilly seeking approval for its drug without added testing, he said. ‘Unmet Need’ The argument for such a move, would be “the large unmet medical need in patients with Alzheimer’s disease and the generally acceptable safety profile,” Anderson wrote. The studies , dubbed Expedition 1 and Expedition 2, included about 2,000 patients, roughly two-thirds with mild disease and one-third with moderate disease. The results of Expedition 1 came in first, with the medicine failing to slow mental and functional decline across all 1,000 patients. A planned analysis of just patients with mild disease showed those getting solanezumab were significantly less likely to worsen, the company said in its statement. After getting those results, Lilly altered the statistical plan for Expedition 2, which was still under way, to look only at cognition in those with mild disease. The second trial didn’t show a significant benefit in patients with mild disease. When the results of the two studies were added together, giving more statistical power, there was a significant decline in the progression of the disease for mild patients alone and a combination of mild and moderate patients, the company said. The only group that didn’t benefit was patients with moderate disease. Early Testing While the Lilly findings probably won’t help current patients, success in patients with a mild form of the disease suggests that early testing for Alzheimer’s could one day make a big difference, said Ronald Petersen , a neurologist at the Mayo Clinic in Rochester, Minnesota . “It does raise the million dollar question of are we still trying to treat these patients too late in the disease process,” said Petersen, who wasn’t involved in the studies and has no financial connection to Lilly. “It’s a mild clinical effect. At this stage of the disease, maybe that’s all we can expect.” To contact the reporter on this story: Michelle Fay Cortez in Minneapolis at [email protected] To contact the editor responsible for this story: Reg Gale at [email protected]

2012

illy-s-alzheimer-drug-finding-splits-investors-doctors

Ecuador Foreign Reserves Fell 5.5% Last Week to $4.61 Billion

By Nathan Gill

2012-08-27T14:52:33Z

http://www.bloomberg.com/news/2012-08-27/ecuador-foreign-reserves-fell-5-5-last-week-to-4-61-billion.html

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Ecuador’s foreign reserves fell 5.5 percent last week to $4.61 billion, the central bank said today in a report on its website. To contact the reporter on this story: Nathan Gill in Quito at [email protected] To contact the editor responsible for this story: David Papadopoulos at [email protected]

2012

ecuador-foreign-reserves-fell-5-5-last-week-to-4-61-billion

Stamp Duty, Slowdown Deter Chinese Homebuyers in Singapore

By Tanya Angerer

2012-08-27T23:45:46Z

http://www.bloomberg.com/news/2012-08-27/stamp-duty-slowdown-deter-chinese-homebuyers-in-singapore.html

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The imposition of Additional Buyer’s Stamp Duty in December and the slowdown in China ’s economy in the second quarter has led to a decrease in Chinese homebuyers in the city-state, according to a report by HSR Global this month. From January to August this year, Malaysians completed 1015 transactions compared to 758 for Chinese buyers, the report said. To contact the reporter on this story: Tanya Angerer in Singapore at [email protected] To contact the editor responsible for this story: Colin Keatinge at [email protected]

2012

stamp-duty-slowdown-deter-chinese-homebuyers-in-singapore

Samsung Seeks Lifting of Ban on U.S. Sales of Galaxy Tab

By Joe Schneider

2012-08-27T05:44:03Z

http://www.bloomberg.com/news/2012-08-27/samsung-seeks-lifting-of-ban-on-u-s-sales-of-galaxy-tab.html

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Samsung Electronics Co. (005930) , ordered by a U.S. jury to pay Apple Inc. more than $1 billion for infringing six mobile device patents, asked a judge to lift a ban on the U.S. sales of the Galaxy 10.1 tablet computer. The jury decided the Galaxy device didn’t infringe an Apple patent so the preliminary ban on its sale should be dissolved, Samsung said in a filing yesterday in federal court in San Jose , California . Samsung fell the most in almost four years in Seoul trading today after the Aug. 24 decision by the San Jose jury. The South Korean company said in June, when Cupertino, California-based Apple won the ban on U.S. sales of the Galaxy tablet, that it wouldn’t have a significant impact on its business. The Suwon, South Korea-based company said in yesterday’s filing that it’s entitled to recover damages caused by the imposition of the improper ban on the sales of the tablet. Samsung proposed that U.S. District Judge Lucy Koh rule on the request without a hearing. The case is Apple Inc. (AAPL) v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose). To contact the reporter on this story: Joe Schneider in Sydney at [email protected] To contact the editor responsible for this story: Douglas Wong at [email protected]

2012

samsung-seeks-lifting-of-ban-on-u-s-sales-of-galaxy-tab

Boeing Says Asia-Pacific Region Needs 185,600 Pilots

By Kyunghee Park

2012-08-27T05:29:23Z

http://www.bloomberg.com/news/2012-08-27/boeing-says-asia-pacific-region-needs-185-600-pilots.html

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Boeing Co. (BA) , the world’s second- biggest planemaker, said about 185,600 new pilots will be needed in the Asia-Pacific region within the next two decades as economic growth encourages more people to travel by air. China will lead growth in the region, with 71,300 pilots in demand through 2030, Boeing said in a statement today. The region will also need an additional 243,500 technicians in the period, with 99,400 in China, it said. “Asia is where the growth is,” Bob Bellitto, global sales director for Boeing’s flight services, said at a briefing in Singapore . “We can sell new airplanes, but if we don’t have enough people to maintain them or people to fly them, they’re going to sit on the ground.” Boeing forecasts demand for pilots and technicians will be the greatest in Asia-Pacific markets as the region will get 12,030 planes of the 34,000 to be delivered in the period. Singapore Airlines Ltd.’s SilkAir unit and Cathay Pacific Airways Ltd. are among carriers that are expanding their fleet. The global airline industry may post net income of $3 billion in 2012, of which $2 billion is forecast for Asia- Pacific carriers, according to the International Air Transport Association . Travel demand in the Asia-Pacific region is expected to rise 3.9 percent this year, compared with 2.3 percent in Europe, it said in June. Europe will get 7,760 planes through 2030, while North America will receive 7,290, Boeing said. Airbus SAS is the world’s largest maker of airplanes. To contact the reporter on this story: Kyunghee Park in Singapore at [email protected] To contact the editor responsible for this story: Neil Denslow at [email protected]

2012

boeing-says-asia-pacific-region-needs-185-600-pilots

Congolese to Invest 7.5 Billion CFA Francs in Timber Production

By Robert Mbakouo

2012-08-27T13:02:07Z

http://www.bloomberg.com/news/2012-08-27/congolese-to-invest-7-5-billion-cfa-francs-in-timber-production.html

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Three logging companies will spend 7.5 billion CFA francs ($14 million) developing forests in southern and northeastern Republic of Congo, the Forestry Ministry said. Trabec, based in Pointe Noire, Congo, will spend 1.91 billion francs to produce 8,920 cubic meters (315,007 cubic feet) of wood at Mouliene in Congo’s southern Bouenza region, while Kimbakala will spend 2.34 billion francs producing 2,775 cubic meters at Loamba in Bouenza, the ministry said in a statement today in Brazzaville, the capital. A third company, Societe Exploitation et Transformation de Bois de Moungouma, will invest 3.3 billion francs to produce 6,216 cubic meters of wood at Likouala in northeastern Congo, the ministry said. Congolese forestry laws require companies to process 85 percent of their timber, while restricting exports of logs to 15 percent of total production. Lumber is the second-biggest source of foreign exchange, after oil. Forests cover two-thirds of the Central African nation’s territory. To contact the reporter on this story: Robert Mbakou in Brazzaville at [email protected] To contact the editor responsible for this story: Paul Richardson at [email protected]

2012

congolese-to-invest-7-5-billion-cfa-francs-in-timber-production

IBM to Buy Social-Business Company Kenexa for $1.3 Billion

By Sarah Frier

2012-08-27T20:15:53Z

http://www.bloomberg.com/news/2012-08-27/ibm-to-buy-social-business-company-kenexa-for-about-1-3-billion.html

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International Business Machines Corp. (IBM) agreed to buy Kenexa Corp. (KNXA) for about $1.3 billion in cash, adding social-networking services that help companies handle human resources and recruiting. IBM will pay $46 a share for the Wayne, Pennsylvania-based company, a 42 percent premium over the stock’s closing price on Aug. 24. The deal is expected to be completed in the fourth quarter, IBM said today in a statement. The purchase bolsters IBM’s business-analytics software, which helps companies cull vast amounts of data to make decisions and study trends. Kenexa works with more than 8,900 customers, including Starbucks Corp., General Electric Co. and Boeing Co. Armonk, New York-based IBM has spent $16 billion on 30 analytics acquisitions in the past five years. “This ties very directly into the investments we’ve made in helping clients create enterprise social networks and how we apply analytics,” Alistair Rennie, IBM’s general manager of social business, said in an interview. “This idea of how you leverage talent and bring it forward has become a significant operational issue.” IBM will focus on analysis of the communication patterns using Kenexa’s systems, Rennie said. The company has been moving into software and analytics for income growth as hardware and services become less profitable. Kenexa’s software helps companies recruit new workers, communicate with employees about goals and develop succession plans. Rival Acquisitions The acquisition follows deals by IBM’s competitors for human-resources software makers, including SAP AG (SAP) ’s agreement in December to purchase SuccessFactors Inc. for $3.4 billion and Oracle Corp. (ORCL) ’s $1.9 billion takeover of Taleo Corp., announced in February. Kenexa is unlikely to get a rival bid because of the price IBM is paying and because there probably won’t be regulatory delays, Bryan Schwartz, an analyst with Oppenheimer & Co. in New York, said in a note to investors. Kenexa shares jumped 41 percent to $45.79 at the close in New York. They have climbed 71 percent in 2012. IBM, up 6.4 percent this year, fell 1 percent today to $195.69. The $1.3 billion purchase price excludes Kenexa’s cash on hand. The company had about $90 million in cash and short-term investments at the end of the second quarter. IBM is aiming to generate $16 billion from business analytics by 2015. Lazard Ltd. served as Kenexa’s financial adviser, while Pepper Hamilton LLP was its legal adviser. To contact the reporter on this story: Sarah Frier in New York at [email protected] To contact the editor responsible for this story: Nick Turner at [email protected]

2012

ibm-to-buy-social-business-company-kenexa-for-about-1-3-billion

Kim Clijsters Starts Final U.S. Open With Win as Federer Rolls

By Erik Matuszewski

2012-08-28T05:19:51Z

http://www.bloomberg.com/news/2012-08-27/defending-champion-samantha-stosur-wins-as-u-s-open-begins.html Kim Clijsters is looking forward to life after tennis. Before that, the four-time Grand Slam singles champion from Belgium said she’s gearing for another deep run in her final U.S. Open. Clijsters, 29, kicked off her last tournament with a 6-3, 6-1 victory over 16-year-old American Victoria Duval last night at the National Tennis Center in New York. The 51-minute victory in Arthur Ashe Stadium

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major championship to 22 matches. While she’s missed five of the past eight U.S. Opens due to retirement or injuries, Clijsters’s last loss in New York came against fellow Belgian Justin Henin in the 2003 final. “There’s a lot of great emotions and positive feelings that I use whenever I’m out here,” said the 23rd-seeded Clijsters, who plans to retire again following the tournament. “I’ve had a good feeling now in practice for a few weeks now. It’s going in the uphill direction, so that’s good.” Roger Federer of Switzerland also extended a winning streak last night, improving to 22-0 in U.S. Open night matches with a 6-3, 6-2, 6-4 victory over Donald Young . “It definitely brings the best out of me,” said Federer, who will play Bjorn Phau of Germany in the second round. “The crowds are amazing and it makes it a lot of fun.” Top Seeds The 31-year-old Federer, a five-time champion who’s won a record 17 Grand Slam singles titles, capped Day 1 at the U.S. Open by joining fellow No. 1 seed Victoria Azarenka of Belarus in the second round. Azarenka was a 6-0, 6-1 winner against Alexandra Panova of Russia. While Azarenka is the top seed in the women’s draw, three- time champion Serena Williams of the U.S. is the oddsmakers’ favorite and plays her first-round match today against American Coco Vandeweghe. Williams, who turns 31 next month, would be the oldest U.S. Open winner since Margaret Court in 1973 by continuing the form that yielded dominating wins at Wimbledon and the Olympics. Defending men’s champion Novak Djokovic of Serbia is also scheduled to be in action today, facing Paolo Lorenzi of Italy. Roddick, Venus Williams Americans Andy Roddick and Venus Williams play matches in Arthur Ashe Stadium today, as does women’s No. 2 seed Agnieszka Radwanska of Poland. Other men’s seeds scheduled to play their tournament openers include No. 5 Jo-Wilfried Tsonga of France, No. 6 Tomas Berdych of the Czech Republic and No. 10 Juan Monaco of Argentina. Eighth-seeded Caroline Wozniacki of Denmark faces Irina- Camelia Begu of Romania, while No. 6 Angelique Kerber of Germany and No. 10 Sara Errani of Italy also begin play. Olympic gold medalist Andy Murray and defending women’s champion Samantha Stosur won their first-round matches yesterday, when rain halted play during the day session for more than two hours. Murray, the No. 3 seed from the U.K., beat Alex Bogomolov Jr. of Russia 6-2, 6-4, 6-1, while Stosur, the No. 7 seed from Australia, topped Petra Martic of Croatia 6-1, 6-1. Maria Sharapova of Russia, the 2006 U.S. Open champion who is seeded third this year, defeated Melinda Czink of Hungary 6-2, 6-2. American Mardy Fish, the men’s 23rd seed, also won in straight sets, as did women’s fifth-seed Petra Kvitova of the Czech Republic, No. 9 Li Na of China, No. 11 Marion Bartoli of France and No. 15 Lucie Safarova of the Czech Republic, who beat Melanie Oudin of the U.S. 6-4, 6-0. Upset Win American wild card Jack Sock upset No. 22 seed Florian Mayer of Germany, who retired while trailing 6-3, 6-2, 3-2, while 16th-seeded Sabine Lisicki of Germany was eliminated by Sorana Cirstea of Romania 4-6, 6-2, 6-2. Clijsters cruised to victory against a teenager who’s ranked 562nd in the world and received a wild-card invitation to make her debut in a Grand Slam. Clijsters’s 22-match winning streak is the second-longest at the tournament since professionals were permitted to enter major championships in 1968, trailing only Chris Evert ’s run of 31 straight victories from 1975-79. “Vicky before the match was saying how she hardly slept the night before and I did the same back then, so I said we’ve all been there,” said Clijsters, who will play Laura Robson of Britain in the second round. “I was even nervous to come out here. I’m happy that I’m still here and still winning some matches, so it’s been exciting.” To contact the reporter on this story: Erik Matuszewski in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

defending-champion-samantha-stosur-wins-as-u-s-open-begins

GoldenTree Hires Morgan Stanley’s Ornstein to Co-Head Trading

By Kristen Haunss

2012-08-27T19:21:20Z

http://www.bloomberg.com/news/2012-08-27/goldentree-hires-morgan-stanley-s-ornstein-to-co-head-trading.html

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GoldenTree Asset Management LP, a money manager overseeing $15.9 billion in assets, hired Daniel Ornstein from Morgan Stanley (MS) to co-head its trading business. Ornstein is a partner reporting to Steve Tananbaum, managing partner and chief investment officer at GoldenTree, according to Scott Sunshine, a spokesman for the firm. Ornstein led the North American distressed trading group at Morgan Stanley. He will work with Corey Geis, co-head of trading, Sunshine said. GoldenTree, a New York-based firm founded in 2000, invests mostly in leveraged loans and high-yield bonds via hedge funds and collateralized loan obligations. Lauren Onis, a Morgan Stanley spokeswoman, declined to comment. GoldenTree raised a CLO of about $590 million with Bank of America Corp. last week that replaces a financing for a credit opportunity fund it oversees. The deal allows for as much as a 40 percent investment in second-lien loans and high-yield bonds. The firm also raised a $526.8 million fund with the bank earlier this year. CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return. Trading in leveraged loans dropped to $98 billion during last quarter, a decline of nine percent from the first three months of the year, according to the Loan Syndications and Trading Association. To contact the reporter on this story: Kristen Haunss in New York at [email protected] To contact the editor responsible for this story: Faris Khan at [email protected]

2012

goldentree-hires-morgan-stanley-s-ornstein-to-co-head-trading

Brazil Will Have Good Weather for Sugar-Cane Harvest

By Mario Sergio Lima

2012-08-27T20:40:56Z

http://www.bloomberg.com/news/2012-08-27/brazil-will-have-good-weather-for-sugar-cane-harvest.html

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Brazil ’s sugar-cane harvest will be helped by dry weather this week in areas that produce the crop, Somar Meteorologia said. Dry weather in the past few weeks has boosted the sugar- cane crop in Brazil, the weather consultant said in an e-mailed report today. Heavy rain forecast for the second half of September will hurt the harvest, Somar said. To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at [email protected] To contact the editor responsible for this story: James Attwood at [email protected]

2012

brazil-will-have-good-weather-for-sugar-cane-harves

H.K. Share Sale Drought Worsens, Everbright Pulls Deal

By Bloomberg News

2012-08-27T03:07:37Z

http://www.bloomberg.com/news/2012-08-27/h-k-share-sale-drought-worsens-everbright-pulls-deal.html

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China Everbright Bank Co. (601818) became the latest company to scrap a first-time share sale in Hong Kong, where listings are on track for the worst year in almost a decade. Everbright Bank will delay the offering because of “continuous sluggish capital markets and relatively low valuations of banking shares,” it said in a statement to Shanghai ’s stock exchange late yesterday. The sale could have raised about $1.7 billion, based on the price of Everbright Bank shares traded in Shanghai. Everbright Bank had already cut the proposed size of the share sale from $6 billion last year. The lender joins companies including London-based diamond retailer Graff Diamonds Corp. and Chinese machinery maker Sany Heavy Industry Co. in shelving at least $4.8 billion of offerings in Hong Kong this year, data compiled by Bloomberg show. The Beijing-based lender will restart listing preparations when there is a “relatively good window,” according to the filing. As Europe ’s debt crisis and concerns about China ’s economic slowdown roiled stock markets, companies have raised just $5.7 billion in first-time offerings in the city this year, down from $14.3 billion in the same period of 2011. Companies raised $1.9 billion going public in Hong Kong in the first nine months of 2003, data compiled by Bloomberg show. The figures include offerings by companies already listed elsewhere. Profit Pressure Chinese banks trade at close to record-low valuations in Hong Kong amid expectations that borrowers will have trouble repaying debt as the nation’s economy slows. China is also loosening controls on how much banks can charge borrowers, allowing them to lower interest rates to take market share, potentially hurting profit from lending. First-half earnings at Chinese banks will mark their “last solid results with a bumpy road ahead,” Deutsche Bank AG analysts wrote in a July research note. The analysts expect the nation’s 16 publicly traded lenders to post net income growth of 16 percent for the first six months, followed by a 1.5 percent drop in the second half of the year. Everbright Bank last week reported a 40 percent gain in first-half profit, to 12.9 billion yuan ($2 billion). The lender’s core capital adequacy ratio, a key measure of financial strength, rose to 8.05 percent as of June 30 from 7.89 percent at the start of the year. The ratio is still lower than the 8.5 percent minimum requirement imposed under new capital rules to be phased in next year. Deals Pulled Sany Heavy Industry Co., China’s biggest machinery maker, scrapped a $2 billion share sale in Hong Kong last month, while Graff Diamonds Corp., based in London , canceled a $1 billion initial offering in May. Bank of Communications Co., the nation’s fifth-largest, yesterday raised $8.9 billion by selling 6.5 billion shares in Shanghai and 5.8 billion shares in Hong Kong through a private placement. China Merchants Bank Co. (3968) last month extended by another year its plan to raise as much as 35 billion yuan through a rights offering. China’s central bank in June began to allow banks to charge less for loans as it liberalizes rules on how they set interest rates. After widening the discount on borrowing costs to 20 percent below the benchmark rate that month, it increased the gap to 30 percent in July. To contact Bloomberg News staff for this story: Fox Hu in Hong Kong at [email protected] ; Jun Luo in Shanghai at [email protected] To contact the editor responsible for this story: Philip Lagerkranser at [email protected]

2012

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Brazil’s Next Soy Crop 43% Sold, Up From 15% Year Earlier

By Mario Sergio Lima

2012-08-27T17:56:49Z

http://www.bloomberg.com/news/2012-08-27/brazil-s-next-soy-crop-43-sold-up-from-15-year-earlier.html

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Soybean growers in Brazil , the largest producer of the oilseed after the U.S., had sold 43 percent of the coming 2012-2013 crop in advance as of Aug. 24, forecaster Celeres said in an e-mailed report. That compares with 15 percent a year earlier, Celeres said. Growers will start planting the 2012-2013 crop next month. To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at [email protected] To contact the editor responsible for this story: James Attwood at [email protected]

2012

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JinkoSolar Rises on 30-Megawatt Order From Guangdong Nuclear

By Ehren Goossens

2012-08-27T20:08:17Z

http://www.bloomberg.com/news/2012-08-27/jinkosolar-to-supply-30-megawatts-of-panels-to-guangdong-nuclear.html

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JinkoSolar Holding Co. (JKS) , a Chinese solar manufacturer, rose the most in more than six months after it agreed to supply China Guangdong Nuclear Power Holding Corp. with panels for a 30-megawatt project. JinkoSolar’s American depositary receipts rose 16 percent to $3.32 at the close in New York, the most since Feb. 9. Each ADR is worth four ordinary shares. The company didn’t disclose terms of the deal or construction dates for the project in a statement today. China Guangdong is planning the solar farm in the city of Hami in the Xinjiang Uyghur autonomous region. JinkoSolar, whose ADRs have fallen 34 percent this year, has capacity to produce about 1,200 megawatts of solar panels a year, it said. To contact the reporter on this story: Ehren Goossens in New York at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected]

2012

jinkosolar-to-supply-30-megawatts-of-panels-to-guangdong-nuclear

Sberbank’s Ukrainian Unit Wins Railways Loan, Interfax Says

By Kateryna Choursina

2012-08-27T12:03:54Z

http://www.bloomberg.com/news/2012-08-27/sberbank-s-ukrainian-unit-wins-railways-loan-interfax-says.html

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The Ukrainian unit of Russia’s OAO Sberbank (SBER) won a tender for a $40 million loan to the railway company DP Pivdenna Zaliznytsya, Interfax-Ukraine newswire reported, citing government documents. PAT Docherniy Bank Sberbanka Rossii will provide the three- year loan, which carries an annual interest rate of 12 percent, Interfax said. The loan agreement was signed on Aug. 17, according to Interfax. To contact the reporter on this story: Kateryna Choursina in Kiev at [email protected] To contact the editor responsible for this story: James M. Gomez at [email protected]

2012

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Hertz Said to Set Financing Mix for $1.95 Billion Buyout Loan

By David Holley

2012-08-27T16:21:42Z

http://www.bloomberg.com/news/2012-08-27/hertz-said-to-set-financing-mix-for-1-95-billion-buyout-loan.html

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Hertz Global Holdings Inc. (HTZ) may sell about $1.45 billion in bonds and borrow as much as $500 million in loans to finance its $2.6 billion purchase of Dollar Thrifty Automotive Group Inc. (DTG) , according to a person with knowledge of the transaction. Hertz has obtained a $1.95 billion bridge financing commitment from Barclays Plc, Bank of America Corp. and Deutsche Bank AG, the company said in a regulatory filing . The loan and the bond sale will replace the bridge debt once the acquisition has obtained regulatory approval, said the person, who asked not to be identified because the terms are private The loan may add to Park Ridge, New Jersey-based Hertz’s $1.4 billion debt due March 2018, said the person. The piece pays interest at 2.75 percentage points more than the London interbank offered rate and will have 1 percent floor, according to data compiled by Bloomberg. “Given where we see the high yield market, the majority of the financing we see being done in bonds,” Elyse Douglas, executive vice president and chief financial office of Hertz said today in a conference call with analysts. Hertz is rated B+, the fourth level of speculative grade, by Standard & Poor’s . Libor is rate at which banks say they can borrow in dollars from each other. To contact the reporter on this story: David Holley in New York at [email protected] To contact the editor responsible for this story: Shannon D. Harrington at [email protected]

2012

ertz-said-to-set-financing-mix-for-1-95-billion-buyout-loan

Samsung Shares Fall After Apple Wins $1 Billion Verdict

By Saeromi Shin and Jun Yang

2012-08-27T00:19:11Z

http://www.bloomberg.com/news/2012-08-27/samsung-shares-fall-after-apple-wins-1-billion-verdict.html

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Samsung Electronics Co. (005930) fell the most in almost four years in Seoul trading after a U.S. jury found the mobile-phone maker infringed Apple Inc. (AAPL) ’s patents and ordered the South Korean company to pay more than $1 billion. Samsung dropped as much as 7.7 percent, headed for the biggest decline since Oct. 24, 2008, to 1,177,000 won before trading at 1,187,000 won as of 9:20 a.m. on the Korea Exchange, while South Korea ’s benchmark Kospi index declined 0.4 percent. Yields on Samsung’s five-year U.S. dollar-denominated bonds due April 2017 rose 1 basis point to 1.58 percent as of 9:10 a.m. in Seoul, according to prices from Credit Agricole SA. The nine-member panel in San Jose , California , found on Aug. 24 that Samsung infringed six of seven patents for mobile devices in the first lawsuit between the dominant global smartphone competitors to go before a U.S. jury. The verdict may also lead to a ban on U.S. sales of some Samsung mobile products. “We expect there is a two-thirds chance of an injunction against Samsung products,” Peter Misek , an analyst at Jefferies & Co. Inc., wrote in an Aug. 26 report. “While there is going to almost certainly be an appeal by Samsung, we believe the evidence and weight of the case are heavily in Apple’s favor.” Samsung, which called the U.S. verdict a loss for the American consumer, said it will file post-verdict motions to overturn the decision and will appeal if the filing is unsuccessful. The jury rejected Samsung’s patent counterclaims against Apple and its request for damages. A Seoul court ruled hours earlier that both companies infringed each other’s patents. Design, Software LG Electronics Inc., the world’s fourth-largest mobile- phone maker, gained 3 percent to 69,100 won in Seoul. Nokia Oyj (NOK1V) rose 4.2 percent on Aug. 24. Apple sued Samsung in April 2011, and the Korean company countersued as part of a battle being waged on four continents over a smartphone market valued at $219.1 billion according to Bloomberg Industries. The world’s two largest makers of high-end handheld devices that blend the functionality of a phone and a computer have accused each other of copying products, design and technology. In the U.S. trial, Apple sought $2.5 billion to $2.75 billion for its claims that Samsung infringed four design patents and three software patents in copying the iPhone and iPad. Samsung’s demand for as much as $421.8 million in royalties was based on claims that Apple infringed five patents. Hours earlier on Aug. 24, a Seoul court ruled that the companies infringed each other’s patents and must stop selling the involved products. Commercial Tie The allegations over intellectual property contrast with the commercial ties that bind the two companies. Apple’s reliance on Samsung chips for its best-selling phones and tablets will be worth as much as $7.5 billion to Samsung this year, a 60 percent jump from 2011, according to estimates from industry researcher Gartner Inc. Apple accounts for about 9 percent of Samsung’s revenue, making it the company’s largest customer, according to a Bloomberg supply- chain analysis. In the last quarter, Samsung controlled about 35 percent of the global smartphone market, followed by Apple with about 18 percent, according to market researcher Strategy Analytics . Both sides have had legal victories. Apple won a U.S. court order on June 29 blocking sales of Samsung’s Galaxy Nexus smartphone, the first smartphone to use Google Inc. (GOOG) ’s Android 4.0 operating system. The product has remained on the market as Samsung appeals the order to the U.S. Court of Appeals for the Federal Circuit in Washington . In November, Samsung won a battle in an Australian court that allowed customers to buy Samsung’s rival to the iPad. “Pending court cases in other regions are also increasing uncertainties over the company,” Ahn Seong Ho, an analyst with Hanwha Securities Co., wrote in a report yesterday. To contact the reporter on this story: Saeromi Shin in Seoul at [email protected] To contact the editors responsible for this story: Michael Tighe at [email protected] ; Darren Boey at [email protected]

2012

samsung-shares-fall-after-apple-wins-1-billion-verdic

Are Jews Who Fear Iran Obsessed With the Holocaust?

By Jeffrey Goldberg

2012-08-27T22:30:44Z

http://www.bloomberg.com/news/2012-08-27/are-jews-who-fear-iran-obsessed-with-the-holocaust-.html Bringing up the subject of the Holocaust at a dinner party can be a downer. Genocide is an unpleasant and apparently insoluble problem, and, when Jews raise it, they run the risk of seeming parochial, even narcissistic. Sophisticated, cosmopolitan people don’t want to be thought of as “Holocaust-obsessed,” and applying the lessons of the Holocaust to current events

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the onslaught that “dismantled” their government would face immediate dispossession, and perhaps much worse. Rosenbaum, an expert on Hitlerian euphemism, told me that one difference between Nazi rhetoric and that of the Iranian regime is that the Iranians’ words are blunter, especially when compared with pre-Kristallnacht Nazi language. Rosenbaum notes, in particular, the Iranian reliance on epidemiological metaphor when describing Israel: This year, the Iranian supreme leader, Ayatollah Ali Khamenei , said Israel is “a true cancer tumor on this region that should be cut off.” Which returns us to Rosenbaum’s central question: Is it obsessive for a group of people who not long ago saw a third of their number slaughtered to worry when the leaders of Iran call Israel a cancerous tumor? Or is it the natural and appropriate response of a people who, conditioned by history, choose to err on the side of caution? (Jeffrey Goldberg, a national correspondent for The Atlantic, is a Bloomberg View columnist. The opinions expressed are his own.) Read more opinion online from Bloomberg View . Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles. Today’s highlights: the editors on applying Mitt Romney’s business sense to defense and on Libor-rigging ; Ramesh Ponnuru on why we shouldn’t forget about Social Security’s problems ; William Pesek on South Korea’s presidential election ; Fouad Ajami on Obama’s callow cruelty on Syria extending to Lebanon; Stephen Smith on the inflated cost of U.S. commuter trains . To contact the author of this column: Jeffrey Goldberg at [email protected] . To contact the editor responsible for this column: Timothy Lavin at [email protected] .

2012

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Europe Naphtha Cargoes Headed to Asia in August Rise to Eight

By Ann Koh

2012-08-27T06:15:03Z

http://www.bloomberg.com/news/2012-08-27/europe-naphtha-cargoes-headed-to-asia-in-august-rise-to-eight.html

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An eighth tanker was scheduled to transport naphtha from Europe to Asia this month, one more than booked last week, according to shipbroker data. The Four Wind was chartered to haul the gasoline and petrochemical feedstock, taking the total volume of naphtha loading in August for delivery to Asia to about 640,000 metric tons, shipping data compiled by Bloomberg showed. Bookings are provisional and subject to change or cancellation. The East-West spread, or the premium of European naphtha to Asian prices, dropped to $2.62 a ton on Aug. 24, the smallest difference in four months, signaling lower profit from transporting cargoes. The spread was at $2.76 a ton today, according to data from PVM Oil Associates Ltd. It has averaged $9.38 in August, compared with $15.91 in July. “Asia’s appetite for European naphtha appears to be satisfied for the time being,” David Wech , a managing director at JBC Energy GmbH, a Vienna-based energy consultant, said in a report dated Aug. 24. About 700,000 tons of naphtha may load in Europe in August for shipment to Asia, according to the median estimate in a Bloomberg survey of seven shipbrokers and traders this month. That compares with 410,000 tons in July and would be the biggest monthly volume since Bloomberg records began in January 2010, the survey showed. A vessel traveling from Italy to Japan would take about 37 days to complete the voyage, based on calculations from the e- ships.net website. The following table lists oil-product tankers reported to ship naphtha in July and August, according to shipbroker data and transmissions captured by IHS Inc. (IHS) on Bloomberg: The following table lists the monthly volume of European naphtha shipments to Asia by loading month, according to ship transmissions captured by IHS Inc. and a Bloomberg News survey of traders and shipbrokers: To contact the reporter on this story: Ann Koh in Singapore at [email protected] To contact the editor responsible for this story: Alexander Kwiatkowski at [email protected]

2012

europe-naphtha-cargoes-headed-to-asia-in-august-rise-to-eig

ALLAHABAD & CANARA CDs Deals: Indian Money Market

By Shraddha Kothari

2012-08-27T13:00:03Z

http://www.bloomberg.com/news/2012-08-27/allahabad-canara-cds-deals-indian-money-market.html

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Following is a table showing certificate of deposits dealt by Indian companies. The data has been provided by LKP Securities,and Trust Financial Consultancy Services Contributed via: Bloomberg Publisher WEB Service Provider ID: bb917cfc35e04e5da2c8fa930c7f64f7

2012

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Foxconn, Sharp Need to Tackle High Tax, Labor, Gou Says

By Mariko Yasu and Tim Culpan

2012-08-28T07:38:05Z

http://www.bloomberg.com/news/2012-08-27/foxconn-sharp-need-to-tackle-high-tax-labor-gou-says.html

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Foxconn Technology Group and Sharp Corp. (6753) need to tackle Japan ’s high tax rate, strong yen and expensive labor force to make their tie-up succeed, said Terry Gou, chairman of the Taiwanese company. Gou spoke with Sharp President Takashi Okuda by phone yesterday and hopes to meet with his Japanese counterpart in the evening of Aug. 30 or the following day, he said after a press conference in Tokyo. Gou said he hopes talks with the Osaka- based company will proceed smoothly this week. Sharp’s shares rose for a sixth straight day in Tokyo trading. Sharp, facing back-to-back annual losses, is seeking to raise money by selling a stake even as its shares have plunged 69 percent this year. Gou and Foxconn, whose flagship Hon Hai Precision Industry Co. (2317) makes Apple Inc.’s iPad, announced plans March 27 to invest 133 billion yen ($1.7 billion) in the TV maker and its display venture before a decline in Sharp’s market value prompted Foxconn to say it would renegotiate. “Hon Hai wants to come in as soon as possible,” Gou said. “If Hon Hai can’t come soon to help Sharp speed up development of products, lower manufacturing cost, improve supply-chain management, it’s probably hard to make an achievement.” Gou, who invested 66 billion yen of his own money into a display venture with Sharp, will be in Japan until Aug. 31, Simon Hsing, a spokesman for Hon Hai, said by phone yesterday. Sakai Display Sharp rose 9.1 percent to close at 215 yen on the Tokyo Stock Exchange, the highest since Aug. 2, the day the company widened its annual loss forecast after market hours. The company, the biggest loser this year on Japan’s benchmark Nikkei 225 (NKY) Stock Average, fell to a 38-year low on Aug. 15 after Deutsche Bank AG cut its rating on the stock, citing concerns Sharp’s cash flow won’t cover funding needs. Sharp will offer buyouts to about 2,000 workers in November, the company said in a statement today. Gou’s schedule includes attending meetings with a Taiwan- Japan business delegation in Tokyo and leading the group on a tour of the Sakai Display Products Corp. facility in Osaka on Aug. 30, Hsing said. Operations at Sakai Display are running smoothly, Gou said. Foxconn agreed in March to pay 66.9 billion yen for a 9.9 percent stake in Sharp through its Hon Hai and Foxconn Technology Co. (2354) units at 550 yen per share. The Taiwanese company said earlier this month it will renegotiate the deal and hopes to make the details final by the end of August. The two sides agreed Aug. 3 not to discuss the matter with outside parties, Gou said yesterday. Loss Forecast Sharp widened its loss forecast eightfold this month as a stronger yen, slumping demand for televisions and intensifying competition erode earnings. The Japanese company is counting on the proposed tie-up with Foxconn to turn around its money-losing LCD unit. The unit may lose 105 billion yen in the year ending in March 2013, Sharp said Aug. 2. The operation rate of the display venture with Gou is expected to rise to 80 percent during the quarter ending Sept. 30 from 30 percent in the previous quarter, helped by orders through Foxconn group, Sharp said at the time. To contact the reporters on this story: Mariko Yasu in Tokyo at [email protected] ; Tim Culpan in Taipei at [email protected] To contact the editor responsible for this story: Michael Tighe at [email protected]

2012

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Sands China Sees Macau Pick Up, Says No Illegal Activity

By Vinicy Chan

2012-08-28T08:58:14Z

http://www.bloomberg.com/news/2012-08-27/sands-china-sees-macau-pick-up-says-no-illegal-activity.html

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Sands China Ltd. (1928) , the Asian unit of Sheldon Adelson ’s U.S. casino operator, expects growth to pick up next year in Macau and said it has followed regulations in its home territory and Las Vegas. More hotel rooms and transportation to Macau will aid growth in the world’s largest gambling hub next year, Sands China ’s Chief Executive Officer Edward Tracy said in an interview in Hong Kong yesterday. The company, which is being investigated by the Macau government in connection with data transfers to the U.S., doesn’t engage in any “crimes or any illegal activities,” he said. Sands China is facing weaker growth in the former Portuguese colony this year as China’s economy slows and high- stake gamblers cut spending. The company and its U.S. parent Las Vegas Sands Corp. (LVS) are also under greater scrutiny amid the Macau investigation and probes by U.S. regulators. “We not only abided by the rules in Macau, we also abided by the rules in Las Vegas,” Tracy said, while declining to comment on specific investigations. Sands China shares closed up 2.2 percent at HK$27.70 at the 4 p.m. close in Hong Kong. The benchmark Hang Seng Index gained 0.07 percent. The company’s Venetian Macau Ltd. subsidiary is being investigated by the Macau government in connection with the transfer of data to the U.S. Steven Jacobs , the former Sands China chief executive officer who is suing the company, has in filings said that a large amount of evidence in his case has been transported from Macau to the U.S. More Growth The company is “cautiously optimistic” about revenue growth this year, Tracy said. Macau’s gambling revenue rose 1.5 percent to 24.6 billion patacas ($3.08 billion) in July, the slowest pace since June 2009, on easing demand and the effects of a typhoon. The casino operator expects to add about 200 more gambling tables next year, when growth is likely to pick up. “Macau will have new supply, new hotel rooms, and new facilities,” Tracy said. “It will keep growing.” Other casino operators are predicting a similar pick up in Macau. Galaxy Entertainment Group Ltd. (27) ’s Chief Financial Officer Robert Drake in an interview today said the mass market will grow 25 percent to 30 percent in 2013, higher than the “high- teens growth” expected this year. He projected 8 percent to 15 percent growth for the VIP, or high-stakes gambling, industry next year. Taipei Resort Sands is interested in building a resort in Taipei that would be the size of its Venetian Macau gambling center, if it can get government permission, Tracy said. Casinos aren’t allowed in Taiwan, only on offshore islands. Taiwan legalized casinos on its outlying islands in January 2009, allowing Kinmen, Matsu and Penghu to open casinos pending referendum approval. “We like the demographics in Taipei, we think there’s enough population to support an integrated resort,” Tracy said. “We’re not looking at any outlying islands.” Sands would also be interested in expanding to Vietnam , Japan and South Korea if it can get government permissions to set up casinos in those countries, Tracy said. Macau Investigation The Macau government’s Office For Personal Data Protection confirmed via e-mail this month that it has started an investigation into whether the Venetian Macau breached local rules. Jacobs’ filings have said that among missing documents are e-mails outlining Sands’s strategy of allowing prostitutes in casinos and its hiring of a casino attorney who also represents the Macau government. Las Vegas Sands responded in a July filing that Jacobs’s claims regarding it having a “prostitution strategy” were reckless, irrelevant and false. Las Vegas Sands in 2011 received a subpoena from the Securities and Exchange Commission requesting the company produce documents relating to its compliance with the Foreign Corrupt Practices Act. The company has said the Department of Justice was conducting a similar investigation. The subpoena may also have emanated from allegations contained in the Jacobs lawsuit, Las Vegas Sands has said in corporate filings. To contact the reporter on this story: Vinicy Chan in Hong Kong at [email protected] To contact the editor responsible for this story: Anjali Cordeiro at [email protected]

2012

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Venezuela Refinery Fire Spreads as Death Toll Reaches 48

By Daniel Cancel

2012-08-27T22:32:00Z

http://www.bloomberg.com/news/2012-08-27/venezuela-battles-flames-at-largest-refinery-after-deadly-blast.html

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A blaze at Venezuela ’s largest refinery spread to a third storage tank as firefighters try to contain flames burning since an Aug. 25 gas explosion killed at least 48 people. Gasoline prices rallied in New York . Oil Minister Rafael Ramirez said two of the fires at tanks holding naphtha at the Amuay refinery probably will burn out by tomorrow as firefighters contend with a third fire that started at 2:15 p.m. local time today. There was no structural damage to the processing units at the facility about 240 miles west of Caracas, he said, adding that exports haven’t been unaffected. “We have to announce that a third tank which has had flames on its roof is also catching fire at this moment,” Ramirez, who is also head of state oil company Petroleos de Venezuela SA, said on state television. “We estimate that with the wind and conditions the two tanks should extinguish themselves by tomorrow, with this new tank we’re obliged to continue putting in all the effort to extinguish the fire.” President Hugo Chavez , who faces elections in October, declared three days of mourning and toured the affected areas. The explosion occurred after a gas cloud formed and erupted into a ball of flames that engulfed a National Guard post as well as homes and shops in front of the refining complex. The shutdown threatens refined product supply as U.S. Gulf Coast plants halt operations as Tropical Storm Isaac heads toward the region. Chavez said he ordered an investigation into the causes and said they won’t discard any hypotheses. Gasoline Inventories Venezuela has 4 million barrels of inventories of gasoline and other petroleum products and continues to produce 735,000 barrels of gasoline a day at plants, including nearby Cardon, according to Ramirez. Amuay, which has capacity to produce 645,000 barrels a day, will be restarted within two days after all of the fires have been extinguished, he said. PDVSA, as the Caracas-based company is known, has 10 days of inventory to meet its supply obligations internally and externally, Ramirez said. The state-owned company shipped five tankers of crude oil from Paraguana yesterday, he said. “It’s probably going to be far longer than their public statements given the track record we’ve seen of maintenance at PDVSA facilities over the last couple of years,” Andy Lipow , president of Houston-based Lipow Oil Associates LLC, said by phone. “I think it concerns the market that it could take a long time given that it’s their largest refining complex.” Refinery Accidents PDVSA is the sole owner and operator of the refinery. The blast is among the world’s deadliest at an oil refinery. Fifteen workers were killed at BP Plc (BP/) ’s Texas City refinery in 2005, while more than 50 people died in a fire at Hindustan Petroleum Corp.’s refinery in Visakhapatnam, India , in 1997. Amuay, Cardon and Bajo Grande form the Paraguana complex, which has a capacity of about 950,000 barrels a day. That’s second in size to Reliance Industries Ltd. (RIL) ’s Jamnagar refinery in India, according to data compiled by Bloomberg. CRP, as the complex is known, supplies 67 percent of gasoline to the local market, according to PDVSA’s website . Cardon and Amuay also export refined products to the Caribbean and the U.S. Stella Lugo, governor of Falcon state in western Venezuela, described the early-morning blast as similar to an earthquake and said more than 200 homes near the refinery were damaged. Lugo told Union Radio today that the death toll had risen to 48 from a previous estimate of 39. Prices Rise The National Guard stationed at the refinery bore the brunt of the deaths, including 18 troops and 15 family members, according to Vice President Elias Jaua. More than 500 homes in vicinity of the plant have been damaged, Chavez said today. Gasoline rose to the highest level in almost four months today as some refineries shut with the approach of Isaac and the disruption at Amuay. BP and other companies have suspended some crude and gas operations in the Gulf of Mexico . The area is home to 23 percent of U.S. oil production and 44 percent of refining capacity, according to the U.S. Energy Department. Gasoline for September delivery advanced 7.68 cents to $3.1548 a gallon on the New York Mercantile Exchange , the highest settlement since April 30. Refiners with Texas operations that are less exposed to Isaac stand to benefit by exporting more product after the Venezuela explosion, said John Auers , senior vice president at Turner Mason & Company, a Dallas-based energy consultant. U.S. Refiners “On a sustainable basis, Venezuela hasn’t been able to produce much product as they used to,” Auers said by telephone. “The U.S. refiners have taken their place. Now in a short term, they certainly can step up and do even more.” Shares in Valero Energy Corp., based in San Antonio , Texas, jumped 5.2 percent to $30.77 today, while Marathon Petroleum Corp., based in Findlay, Ohio , gained 1.7 percent to $49.60. The fire at Amuay, which opened in 1950, highlights the risk to supplies of oil products from large, aging plants and may lead to more exports from Asia to the U.S., according to Goldman Sachs Group Inc. Other major refinery fires elsewhere caused months of delays before full operations resumed, Nilesh Banerjee, an analyst at Goldman in Mumbai, said in a note e-mailed today. Venezuela, one of the 12 members of the Organization of Petroleum Exporting Countries and South America ’s biggest crude producer, had an average output of 2.7 million barrels of oil a day last year, according to BP statistics . Its main export markets are the U.S. and China . Crude Exports Venezuela was the fourth-largest source of crude for the U.S. in May, after Canada , Saudi Arabia and Mexico , at 821,000 barrels a day, based on data from the U.S. Energy Information Agency. Venezuelan product imports from the U.S. nearly doubled in the first five months of 2012 to 38,000 barrels a day from 23,000 in the year earlier period, according to the EIA. They include gasoline, fuel additives and liquefied petroleum gas. Cardon has closed units several times this year after incidents. PDVSA had to halt production and evacuate workers from its Petropiar heavy-crude upgrader last year after a gas leak and a fire. Jose Bodas, an oil union leader, told Globovision on Aug. 25 that PDVSA has ignored calls by workers to improve “hazardous” working conditions at refineries. Seven out of nine planned maintenance programs for the Amuay refinery were postponed last year because of a lack of materials, according to PDVSA’s 2011 annual report . Maintenance Ramirez denied that PDVSA has failed to invest in maintenance and said the company spent $6 billion in the past five years on its refining circuit. Chavez also denied reports that the leak of gas had begun hours before the explosion. “Today’s price action probably already discounts refinery outages of a few days duration,” Tim Evans , an energy analyst at Citi Futures Perspective in New York, said in an e-mailed response to questions. “If refineries are in restart mode by the end of the week we could see the futures market rebalance. If the outages are extended beyond the next few days, then we’d look for more gains for gasoline and more weakness in crude.” To contact the reporter on this story: Daniel Cancel in Caracas at [email protected] To contact the editor responsible for this story: James Attwood at [email protected]

2012

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Apple Rises on Samsung Mobile Patent Infringement Ruling

By Lisa Rapaport

2012-08-27T20:27:33Z

http://www.bloomberg.com/news/2012-08-27/apple-rises-on-samsung-mobile-patent-infringement-ruling.html

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Apple Inc. (AAPL) climbed 1.9 percent to close at a record high after a U.S. jury found that Samsung Electronics Co. infringed on six of its mobile-device patents. The shares of Cupertino, California-based Apple rose to $675.68 at the close in New York. Apple has gained 67 percent this year. A California court on Aug. 24 ruled that Suwon, South Korea-based Samsung must pay more than $1.05 billion in damages in the first lawsuit between the dominant global smartphone rivals to go before a U.S. jury. A judge scheduled a hearing next month to consider Apple’s request for a permanent U.S. sales ban on devices such as the Galaxy S and S II smartphones and the Galaxy Tab 10.1 computer. A ban may undermine Samsung’s grip on a smartphone market valued at $219.1 billion by Bloomberg Industries and set a precedent for rival handset makers that use Google Inc.’s Android operating system. In a court filing today, Apple sought a ban on eight models of Samsung’s smartphones, including several of its Galaxy S devices. To contact the reporter on this story: Lisa Rapaport in New York at [email protected] To contact the editor responsible for this story: Tom Giles at [email protected]

2012

apple-rises-on-samsung-mobile-patent-infringement-ruling

U.S. Corn Harvest Accelerates After Drought; Soy Ratings Decline

By Jeff Wilson

2012-08-27T20:09:01Z

http://www.bloomberg.com/news/2012-08-27/u-s-corn-harvest-accelerates-after-drought-soy-ratings-decline.html

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The U.S. corn harvest is proceeding at the fastest pace ever after farmers planted early and the worst drought in generations accelerated crop maturity, the government said. Soybean conditions fell. About 6 percent of the corn was harvested as of yesterday, compared with 4 percent a week earlier and none a year ago, the U.S. Department of Agriculture said today in a report . About 26 percent of the crop was rated mature, up from a revised 16 percent a week earlier, increasing the risks wind and rain will knock ears off stalks or blow plants over. Corn futures surged 60 percent since mid-June before today, prompting the United Nations to predict higher global food costs. Tyson Foods Inc. (TSN) , the largest U.S. meat processor, said Aug. 6 its profit will be lower after paying more for grain to feed animals. “We started taking in corn on Aug. 17, the earliest ever,” Scott Docherty, the general manager for Monticello, Illinois-based Top Flight Grain Cooperative, said in a telephone interview before the report. “Farmers are harvesting early because many fear that the heat weakened the stalks and they don’t want to lose any more bushels.” Docherty said the corn crop in central Illinois may be 35 percent smaller than last year. Nationwide, about 22 percent of the crop was in good or excellent condition, down from 23 percent a week earlier and 54 percent a year earlier. About 30 percent of the nation’s soybeans were rated good or excellent of Aug. 26, compared with 31 percent a week earlier, the USDA said. Approximately 8 percent of the plants were dropping leaves, a sign of maturity, up from 4 percent a week earlier and 4 percent on average the prior five years. Crop ratings are the worst for this time of year since 1988, when corn production plunged 31 percent from a year earlier and soybeans declined 20 percent. This year, corn output will fall 13 percent to 10.779 billion bushels, the smallest since 2006, the USDA said Aug. 10. The soybean crop may be 12 percent smaller at 2.692 billion bushels. The government will update its crop forecasts on Sept. 12. Corn and soybean prices surged to records this month as output was poised to decline for the third straight year. Based on average temperatures and rain in June and July, the drought in the Midwest was the most-severe since 1936, according to T- Storm Weather LLC. About 51 percent of the Midwest was in a moderate to exceptional drought on Aug. 21, down from 66 percent a week earlier and up from 9.5 percent a year earlier, according to the U.S. Drought Monitor. To contact the reporter on this story: Jeff Wilson in Chicago at [email protected] . To contact the editor responsible for this story: Steve Stroth at [email protected] .

2012

u-s-corn-harvest-accelerates-after-drought-soy-ratings-decline

Tribune Judge Demands Creditor Bond to Halt Chap. 11 Exit

By Steven Church

2012-08-27T22:23:07Z

http://www.bloomberg.com/news/2012-08-27/tribune-judge-demands-creditor-bond-to-halt-chap-11-exit.html Tribune Co. creditors lost their bid to halt the newspaper chain’s plan to exit bankruptcy without first posting a $1.5 billion bond. The decision by U.S. District Judge Gregory M. Sleet means noteholders must post the bond by Aug. 29 if they want to temporarily prevent the company from exiting bankruptcy while they appeal its reorganization plan. Sleet, in Wilmington, Delaware , found that a bankruptcy court ruling last week that required the bond “was appropriate.” Aurelius Capital Management LP and other creditors had sought to overturn a decision by U.S. Bankruptcy Judge Kevin Carey that required the bond to protect Tribune lenders from any delay stemming from an appeal of the exit plan. On Aug. 22, Carey gave Aurelius and other Tribune noteholders the chance to temporarily halt the television and newspaper company’s exit from bankruptcy, if they agreed to post a $1.5 billion bond. Aurelius and other holders of Tribune’s oldest debts say Carey erred in approving Tribune’s reorganization plan and a related legal settlement. That settlement ended some lawsuits against lenders that financed the more than $8 billion leveraged buyout of Tribune in 2007. Tribune, based in Chicago , owes creditors about $13 billion. The company is valued at more than $7 billion, Tribune said in court papers. Tribune owns the Los Angeles Times, the Chicago Tribune and television and radio stations around the country. Without a temporary halt to the reorganization plan, Tribune will be free to move to the next phase in the bankruptcy: winning approval from federal regulators to transfer its radio and television licenses to the proposed new owners. Tribune officials have said the company will be able to exit bankruptcy this year if federal regulators approve the reorganization plan and the license transfers. The case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court , District of Delaware (Wilmington).

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Steven Church in Wilmington, Delaware at [email protected] To contact the editor responsible for this story: John Pickering at [email protected]

2012

ribune-judge-demands-creditor-bond-to-halt-chap-11-exi

Pot-Smoking Teens May Become Slower-Thinking Adults

By Elizabeth Lopatto

2012-08-28T04:01:00Z

http://www.bloomberg.com/news/2012-08-27/pot-smoking-teens-may-become-slower-thinking-adults.html

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Teens may lose IQ points later in life if they smoke marijuana before age 18, according to a study that follows a survey showing use of the drug has increased in this age group for four straight years. The research reported in the Proceedings of the National Academy of Sciences found an average decline of eight points on IQ, or intelligence quotient, tests done at age 13 and 38 among those who began using marijuana as teenagers. That compared with no decrease in those who used pot later in life, and a slight increase in those who never used it. Because marijuana is the most frequently used illegal drug in the U.S., looking into how it changes the brain is important, said Madeline Meier , a post-doctoral researcher at Duke University in Durham, North Carolina , who led the study. Daily use among high school seniors is at a 30-year peak, according to a 2011 survey by the National Institute on Drug Abuse in Bethesda, Maryland . “What this says is not don’t ever do it, but if you do it during this critical period of development, you’ll get these long-term negative changes,” said Staci Gruber, an assistant professor of psychology at Harvard University in Cambridge, Massachusetts , who wasn’t involved in the study. “In almost every case, the subjects who started as adults don’t have declines. Those who started as teenagers do.” Tests for intelligence quotient, or IQ, measure a person’s capacity to learn, apply knowledge, and use abstract reasoning. The average score is 100. Although a drop of eight points may not seem like much, going from a score of 100 to 92 drops someone from being in the 50th percentile in intelligence to the 29th, Duke’s Meier said. School Survey The 2011 report by the institute on drug abuse found that about 6 percent of 12th graders smoked pot 20 or more times in the 30 days before the survey; 46 percent of high school seniors had tried it at least once, according to the U.S. agency’s annual Monitoring the Future survey of U.S. High Schools. The research released yesterday used a cohort of more than 1,000 New Zealanders in the Dunedin Study, who have been followed since their births in 1972 through 1973. Previous work, including a 2010 finding by Harvard’s Gruber that early marijuana use may change the brain structure, couldn’t rule out other underlying factors that may have contributing to the brain changes. The Dunedin cohort may help settle those questions. The group got IQ tests at 13, before any of them began smoking weed. They were tested again at 38. Friend and family, who were routinely interviewed as part of the study, said these people had attention and memory problems. Executive Functioning The decline in IQ couldn’t be explained by alcohol or other drug use, or education gaps between those who smoked pot as adolescents and those who didn’t, the study found. The greatest impairments were in processing speed and executive functioning, a name for the mental processes involved in planning, organizing, and detail work. “Most other studies had data at one time point, and they couldn’t rule out that cognitive deficits were already in play,” Meier said. “We ruled that out.” The brain makes a lot of changes in adolescence, Meier and Gruber said. Marijuana may interfere with those changes, making it more difficult for those who used as adolescents to think. It’s not clear from the new data what dose might be harmful, Meier said. To contact the reporter on this story: Elizabeth Lopatto in New York at [email protected] . To contact the editor responsible for this story: Reg Gale at [email protected] .

2012

pot-smoking-teens-may-become-slower-thinking-adults

Live Nation’s Unit Biletix Probed by Turkey’s Antitrust Board

By Ercan Ersoy

2012-08-27T09:16:00Z

http://www.bloomberg.com/news/2012-08-27/live-nation-s-unit-biletix-probed-by-turkey-s-antitrust-board.html

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Turkey’s antitrust regulator started an investigation into Biletix Bilet Dagitim Basim & Ticaret AS, Turkey’s biggest event ticketing company, on allegations that it blocked the operations of competitors. The investigation aims to establish whether Biletix negotiated exclusivity accords with customers in the soccer and concert ticket-sales market, the Ankara-based regulator said on its website today. Biletix has been owned by Beverly Hills , California-based Live Nation Entertainment Inc.’s unit Ticketmaster since 2007. To contact the reporter on this story: Ercan Ersoy in Istanbul at [email protected] To contact the editors responsible for this story: Benedikt Kammel at [email protected]

2012

ive-nation-s-unit-biletix-probed-by-turkey-s-antitrust-board

Ukrainian Court to Issue Verdict on Tymoshenko Appeal on Aug. 29

By Kateryna Choursina

2012-08-27T14:14:05Z

http://www.bloomberg.com/news/2012-08-27/ukrainian-court-to-issue-verdict-on-tymoshenko-appeal-on-aug-29.html

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A Ukrainian court said it will announce its verdict in the case of jailed opposition leader Yulia Tymoshenko on Aug. 29. The High Specialized Court for Civil and Criminal Cases in the capital, Kiev, completed an appeal hearing into her conviction for abuse of office on Aug. 21 without issuing a verdict or indicating a date for the decision. Tymoshenko asked the court to overturn her seven-year jail term. In October, she was convicted of abuse of office as a prime minister when signing a 10-year supply and transit accord with the Russian government on natural gas. The appeal needed to be heard before Tymoshenko could send her case to the European Court of Human Rights . To contact the reporters on this story: Kateryna Choursina in Kiev at [email protected] To contact the editor responsible for this story: James M. Gomez at [email protected]

2012

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Fed Funds Projected to Open at 0.14% to 0.18%, ICAP Says

By Liz Capo McCormick

2012-08-27T11:23:28Z

http://www.bloomberg.com/news/2012-08-27/fed-funds-projected-to-open-at-0-14-to-0-18-icap-says.html

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Fed funds, the U.S. overnight inter- bank lending rate , is projected to open at 0.14 percent to 0.18 percent, within the Federal Reserve ’s target of zero to 0.25 percent. Fed funds closed at 0.28 percent on Aug. 24 after trading from 0.1 percent to 0.28 percent and averaging 0.13 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e- mailed statement. The central bank will acquire $1.5 billion to $2 billion of Treasuries maturing from February 2036 to August 2042. The purchases are the part of the Fed’s program, which lasts through the end of the year, to replace $267 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to reduce borrowing costs. To contact the reporter on this story: Liz Capo McCormick in New York at [email protected] To contact the editor responsible for this story: Dave Liedtka at [email protected]

2012

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China Refiners to Cast Abroad as Price Curbs Hit Profit: Energy

By Aibing Guo

2012-08-27T16:32:20Z

http://www.bloomberg.com/news/2012-08-27/china-refiners-to-cast-abroad-as-price-curbs-hit-profit-energy.html

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China Petroleum & Chemical Corp. (386) , Asia ’s largest refiner, and rival PetroChina Co. (857) are poised to seek assets overseas to diversify as domestic earnings are depressed by state-controlled prices for processed fuels. Refining losses resulted in China Petroleum, known as Sinopec, reporting a 41 percent decline in first-half net income to 24.5 billion yuan ($3.9 billion) yesterday. PetroChina, the nation’s biggest oil and gas producer, last week said first-half profit declined 6 percent to 62 billion yuan. Chinese refiners, which sell gasoline and diesel below cost because the government caps retail prices to contain inflation, aren’t waiting for the controls to be relaxed. PetroChina said it plans to generate more than half its oil and gas output from overseas projects by 2020 to offset refining losses, while China Petrochemical Corp., Sinopec’s state-owned parent, said it would more than double its foreign production by 2015. “Every dollar spent on domestic refining projects would be a waste of a dollar, since it generates absolutely no return,” said Simon Powell, the Hong Kong-based head of Asian oil and gas research at CLSA Ltd. “Overseas acquisition is a short cut to balance refining losses, but it’s a gradual process and takes a long time because of political scrutiny and availability of assets globally.” China’s state oil companies have spent more than $100 billion on assets over the past decade to supply the world’s largest energy importer. Sinopec lost 9.3 percent in Hong Kong trading this year through today, while PetroChina fell 1.8 percent. They’re the second- and third-biggest members of the MSCI Far East Energy Index (MXMF0EN) , which also fell 1.8 percent in the period. The Bloomberg World Oil & Gas index, whose largest member is Exxon Mobil Corp., dropped 1.3 percent. Sinopec climbed 3.4 percent to HK$7.41 today and PetroChina slipped 1.6 percent to HK$9.50 in Hong Kong. Cnooc Deal Cnooc Ltd. (883) , China’s biggest offshore oil and natural gas maker with no refining operations, has proposed the nation’s biggest overseas acquisition, offering $15.1 billion for Canada ’s Nexen Inc. (NXY) Canadian and U.S. regulators are reviewing the takeover. “If the Cnooc deal is approved, we can expect more Chinese energy investment in those countries almost right away,” said CLSA’s Powell. Sinopec lost 18.5 billion yuan after processing 811 million barrels of oil in the first half compared with PetroChina’s loss of 23.3 billion yuan from refining 489.7 million barrels. “The loss came purely from the government’s policy of capping retail fuel prices,” said Laban Yu, head of Asia oil & gas equity research at Jefferies Hong Kong Ltd. “There is not much Sinopec can do. We believe current low inflation will allow higher refiner margins in the second half and quite possibly a change in the fuel-pricing mechanism.” Price Controls Gasoline and diesel prices are set by the National Development and Reform Commission, China’s economic planner, under a system that tracks the 22-day moving average of a basket of crudes, including Brent, Dubai and Indonesia ’s Cinta. The cycle may be shortened to 10 days, China Petrochemical said March 28. NDRC has indicated it may relax price controls on natural gas and fuels in the second half, PetroChina President Zhou Jiping said at a post-earnings briefing on Aug. 23. The fuel pricing reform may not materialize in the second half, especially after the government has made and missed similar commitments in the past, said Shi Yan, a Shanghai-based energy analyst at Uob-Kay Hian Ltd. “I believe both Sinopec and PetroChina understand the situation well and both of them are determined to expand in upstream quickly with or without the pricing reform being finally implemented,” she said. Overseas Targets PetroChina wants half its oil and gas output to come from overseas by the end of the decade, Chairman Jiang Jiemin said in March. Production abroad rose 0.9 percent to the equivalent of 62.5 million barrels, accounting for 9.4 percent of the company’s output in the first half. Chinese companies can sell oil and gas from overseas assets at market prices. President Zhou said in Hong Kong on Aug. 23 the explorer is looking closely at assets in Central Asia, east Africa , Australia and Canada. Zhou said he’s “completely confident” of achieving the 2020 goal. China Petrochemical, Sinopec’s parent, seeks to produce 50 million metric tons of crude a year overseas by 2015. Last year, foreign production was 22.9 million tons. Sinopec said it boosted first-half crude output 4.3 percent to 163.09 million barrels and overseas production jumped 82 percent to 11.13 million barrels. Opportunities vs. Risks Sinopec has been looking at many energy projects globally and from a strategic point of view Sinopec needs to buy up assets to balance its refining losses, Sinopec Chairman Fu Chengyu told a press conference in Hong Kong today. “But I wouldn’t prefer the word ’eager’ to describe our attitude in overseas acquisition, because eagerness usually leads to risks,” Fu said. There are many acquisition opportunities because of sluggish global economy, “but opportunities come with risks and we have to be careful not to buy assets because they look cheap,” Fu said. “We buy assets only because they can bring long-term value to our shareholders.” Shale Assets Sinopec has held talks with Oklahoma-based Chesapeake Energy Corp. (CHK) and others about investing in shale assets, Chairman Fu said after the company’s annual shareholder meeting in May. “We’ve always been talking to and cooperating with U.S. and Canadian companies on unconventional and shale gas and oil,” said Fu, who became chairman in April 2011. “Not just Chesapeake.” Fu has already announced at least $12 billion in deals at Sinopec and its parent since he was appointed, data compiled by Bloomberg show. That includes a $1.5 billion agreement for a 49 percent stake in Talisman Energy Inc. (TLM) ’s U.K. unit on July 23 and the acquisition of a 30 percent stake in Galp Energia SGPS SA (GALP) ’s Brazilian unit in November. Cnooc cut the interim dividend by 40 percent to 15 Hong Kong cents a share on Aug. 21 in order to fund its acquisition of Nexen, a Calgary-based company that operates in the U.S. portion of the Gulf of Mexico , and other potential overseas deals and future production growth. Cnooc posted a 19 percent profit decline after a spill closed its largest offshore oilfield, Penglai 19-3, in China’s Bohai Bay. Regulatory Approvals The Nexen acquisition needs approval from regulators in Canada, and the U.S., where the Committee on Foreign Investment in the United States examines whether foreign purchases of U.S. assets raise security risks. Nexen’s oil and gas assets include production platforms in the North Sea , the Gulf of Mexico and Nigeria , as well as oil- sands reserves at Long Lake, Alberta , where it already produces crude in a joint venture with Cnooc. Sinopec and PetroChina would probably wait until the outcome of the Nexen regulatory screenings before announcing new deals, said Uob-Kay’s Shi. “They certainly want to push the tempo but they also understand acquisition is a game of patience and timing,” Shi said. “Takeovers are only going to happen over a long period of time, not something that can be achieved in days or months.” PetroChina will spend at least “over 10 billion yuan ” in developing unconventional natural gas in the next couple of years, President Zhou said last week in Hong Kong. Sinopec is one of the two winners of China’s first shale gas parcel auction last June and plans to accelerate the exploration of the fuel by teaming up with domestic and international shale gas explorers, Chairman Fu said in March. In the second half, Sinopec will “step up efforts in exploration and development of unconventional resources,” including building production capacity in the Fuling continental shale gas project and preparing for coal-bed-methane production in the southern part of Yanchuan, it said in a statement to Hong Kong’s stock exchange yesterday. To contact the reporter on this story: Aibing Guo in Hong Kong at [email protected] To contact the editor responsible for this story: Jason Rogers at [email protected]

2012

china-refiners-to-cast-abroad-as-price-curbs-hit-profit-energy

In South Korea, It’s Ross Perot vs. Queen Elizabeth I

By William Pesek

2012-08-27T21:00:39Z

http://www.bloomberg.com/news/2012-08-27/in-south-korea-it-s-ross-perot-vs-queen-elizabeth-i.html

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South Koreans may face a fascinating choice come December’s presidential election: Elizabeth I or Ross Perot ? Park Geun Hye, the unmarried ruling-party candidate, touts the virgin queen who ruled England from 1558 to 1603 as a role model. Ahn Cheol Soo is the businessman most Koreans want to take her on. He’s Korea ’s answer to Perot, the billionaire who 20 years ago ran as America’s most successful modern third-party candidate. So far, Ahn hasn’t said if he will run. Should he do so, he could stand as an independent or as part of Korea’s opposition party. Either way, his involvement may leave Asia ’s fourth- biggest economy better off. Ahn has talked about narrowing the income gap , reining in family-owned conglomerates known as chaebol, and economic engagement with North Korea . Even if he doesn’t run, he is already altering the dynamics of the election in the same vein as Perot. For all his erratic behavior and idiosyncrasies, Perot fired up Americans disenchanted with the two major parties in 1992. Perot surged in polls at a time of legislative gridlock and distraction. While he finished third, Perot forced incumbent George H.W. Bush and the winner, Bill Clinton , to address prickly fiscal and trade matters they might have preferred to ignore. Forsaking Koreans Ahn’s criticism rests on the premise that Korea’s two main parties are ignoring the interests of the nation’s 50 million people. The gap between rich and poor is widening; competitiveness has waned; the population is aging; and North Korea’s Kim Dynasty poses a constant threat. Part of Ahn’s appeal is his quirky pedigree. He’s a physician-turned-technology-guru-turned-academic; Ahn, 50, is now the dean of Seoul National University’s Graduate School of Convergence Science and Technology . His eclecticism, philanthropy and success as founder of software firm Ahnlab Inc. have made him a draw as a motivational author and speaker. What he has to say might rouse a nation that needs a collective pick- me-up. Park, 60, is a veteran legislator and inspiration in her own right. She would be the first female leader in a nation where sexism is part of the political and business landscapes. Park is the daughter of Park Chung Hee, who ruled Korea from 1961 until his assassination in 1979. Like Elizabeth I, Park Geun Hye lost her parents to tragedy. Many credit Park Chung Hee with reviving the South’s economy after the devastation of the Korean War . That, for some Koreans, is just the problem. Park’s policies empowered a handful of politically connected conglomerates such as Samsung Electronics Co., LG Corp. and Hyundai Motor Co. to form the core of the economy. Their ambition and hard work transformed the nation into the export power it is today. The sitting president, Lee Myung Bak , is enmeshed in that world, serving as head of several Hyundai units from 1977 to 1992. These same family-controlled businesses that did so much to help Korea get where it is today, now may be holding it back. Their dominance stymies innovation and fosters wariness of the kind of startup community that gives birth to small and medium- sized enterprises. Park, whose father established this arrangement, would be replacing Lee, a creature of the chaebol system who has presided over rising youth unemployment and waning national confidence. (He is constitutionally barred from running run again.) Ahn, for better or worse, is coming from a different place. He calls for a restoration of “welfare, justice and peace” and advocates banning cross-shareholdings and investments in subsidiaries among the family conglomerates. He also has a more moderate stance on North Korea. That includes expanding a joint economic zone in Gaeseong, north of the border, and resuming tours of North Korea’s Mount Geumgang . North Korea Lee’s administration, let’s face it, has achieved zero on North Korea. His government doesn’t seem to realize that Kim Jong Un, the third in a dynasty of communist dictators in the North, may be different from his father, who died in December. Where has refusing to negotiate with North Korea’s leaders gotten the world? It is true that Ahn has no legislative experience. As president, he might be hard-pressed to get big things done. Yet Ahn’s outsider status may be an advantage, distancing him from what he calls the “outdated” practices of Korea’s dominant parties. Even if Park wins four months from now, Korea will be better off for Ahn’s participation. He is putting the biggest challenges up for discussion: Korea’s role in an Asia torn apart by territorial disputes; its ability to prosper in the space between wealthy Japan and low-cost China ; why rapid economic growth hasn’t made South Koreans any happier. It takes more than one candidate to alter a nation’s political trajectory. Perot’s obsession with the U.S. budget deficit was forgotten in the 2000s amid tax cuts, wars and financial crises. Yet South Korea shows how even a fairly healthy democracy can get so bogged down in party infighting that the leadership forgets whom they are fighting for: the people and anything, or anyone, who gets to the root of the nation’s malaise. (William Pesek is a Bloomberg View columnist. The opinions expressed are his own.) Read more opinion online from Bloomberg View . Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles. Read more opinion online from Bloomberg View . Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles. Today’s highlights: the editors on applying Mitt Romney’s business sense to defense and on Libor-rigging ; Jeffrey Goldberg on Jews’ “obsession” with the Holocaust ; Ramesh Ponnuru on why we shouldn’t forget about Social Security’s problems ; Fouad Ajami on Obama’s callow cruelty on Syria extending to Lebanon; Stephen Smith on the inflated cost of U.S. commuter trains To contact the writer of this article: William Pesek in Tokyo at [email protected] . To contact the editor responsible for this article: James Greiff at [email protected]

2012

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Tenaska Purchases 160-Megawatt Solar Farm in California

By Justin Doom

2012-08-27T14:23:26Z

http://www.bloomberg.com/news/2012-08-27/tenaska-purchases-160-megawatt-solar-farm-in-california.html

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Tenaska Inc., a closely held U.S. power generator, purchased a 160-megawatt solar project under development in Southern California . Construction on the Tenaska Silverleaf Solar Energy Center may begin by 2014, and electricity production may start the following year, the Omaha, Nebraska-based company said in a statement today. The photovoltaic farm will be on about 1,100 acres of agricultural land west of El Centro, California. Terms of the purchase from San Bruno, California-based Agile Energy Inc. weren’t disclosed. The sale closed Aug. 1. Tenaska has developed about 9 gigawatts of generating capacity in the U.S., according to the statement. To contact the reporter on this story: Justin Doom in New York at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected]

2012

enaska-purchases-160-megawatt-solar-farm-in-california

Advanced Info Declines Most in Nine Months on RSI Signal

By Anuchit Nguyen

2012-08-27T09:04:54Z

http://www.bloomberg.com/news/2012-08-27/advanced-info-declines-most-in-nine-months-on-rsi-signal.html (Corrects spelling of company name in headline.) Advanced Info Service Pcl (ADVANC) , Thailand’s biggest mobile-phone company, fell the most in nine months in Bangkok trading after a technical signal indicated the stock was poised to decline. Advanced Info dropped 4 percent to 218 baht as of 3:42 p.m., headed for the biggest decline since Nov. 25. The stock was the worst performer in the SET50 Index (SET50) , which gained 0.2 percent. The shares advanced 10 percent in the three trading days through Aug. 24, when they closed at a record 227 baht. “The shares have risen very fast and have almost reached our price estimate,” Athaporn Arayasantiparb, head of research at UOB-Kay Hian Securities (Thailand) Pcl in Bangkok, said by telephone today. “Some investors may view it’s time to take profit as the stock has limited room for upside gains.” The brokerage has a buy rating on Advanced Info and a 12- month price estimate of 224 baht. The Bangkok-based company’s 14-day relative strength index , a gauge of how rapidly share prices advance or decline, closed at 72.9 on Aug. 24, the highest level since July 11, according to data compiled by Bloomberg. A reading above 70 suggests a security is overvalued and is seen by some investors as a signal to sell. The shares have rallied 56 percent this year, compared with a 21 percent gain in Thailand ’s benchmark SET Index.

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Anuchit Nguyen in Bangkok at [email protected] To contact the editor responsible for this story: Darren Boey at [email protected]

2012

advanced-info-declines-most-in-nine-months-on-rsi-signa

Sweden’s Krona Slumps as Rate Cut Bets Grow: Stockholm Mover

By Stephen Treloar

2012-10-03T12:28:36Z

http://www.bloomberg.com/news/2012-08-27/sweden-s-krona-strengthens-as-retail-sales-rise-stockholm-mover.html

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Sweden ’s krona was the worst performing major currency against the euro and the dollar amid rising speculation the central bank will cut interest rates again at the end of the month. The krona fell 0.83 percent against the euro to 8.6093 and traded 0.9 percent lower at 6.6662 per dollar as of 2:28 p.m. in the Swedish capital. It slumped against all major currencies tracked by Bloomberg. The krona “remains vulnerable after its strong third- quarter run,” said Kit Juckes, the London-based head of foreign-exchange research at Societe Generale SA, in a note today. “The rate support it enjoys has all but gone away.” A survey released today showed Sweden’s services economy contracted in September, sinking at the fastest pace since August 2009. That came after a manufacturing survey earlier this week signaled a deepening contraction, as slumping demand from Europe endangers growth in the largest Nordic economy. Overnight index swaps in Sweden showed a probability of 35.7 percent that the Riksbank will cut by a quarter percentage point later this month, up from 9.2 percent yesterday. By December, the probability of a cut to 1 percent has risen to 43.2 percent, according to OIS implied probability calculated by Bloomberg. Policy makers, who cut rates last month for a third time since December to 1.25 percent, estimated then they will keep rates unchanged and then raise in a year as growth withstands a contraction in the euro area. The bank said its September cut was driven by the deepening debt crisis in Europe and a surge in the Swedish currency to a 12-year high against the euro. The Riksbank’s next interest rate decision is scheduled to be announced on Oct. 25. To contact the reporter on this story: Stephen Treloar in Oslo at [email protected] To contact the editor responsible for this story: Christian Wienberg at [email protected]

2012

sweden-s-krona-strengthens-as-retail-sales-rise-stockholm-mover

Totalcarscore.com's Brauer Favors Ford Fusion (Audio)

By

2012-08-27T13:15:18Z

http://www.bloomberg.com/news/2012-08-27/totalcarscore-com-s-brauer-favors-ford-fusion-audio-.html

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Karl Brauer, editor in chief at Totalcarscore.com, shares his list of the top ten cars of 2013. Brauer talks with Bloomberg's Courtney Donohoe on Bloomberg Radio's "Taking Stock." They are joined Stephen Guilfoyle, economist at Meridian Equity Partners. (Source: Bloomberg) Running time 04:46

2012

otalcarscore-com-s-brauer-favors-ford-fusion-audio-

U.K. Mortgage Bonds Trade at Best Levels Since ’08 on Haven Bid

By Esteban Duarte

2012-08-27T10:36:01Z

http://www.bloomberg.com/news/2012-08-27/u-k-mortgage-bonds-trade-at-best-levels-since-08-on-haven-bid.html

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Mortgage bonds in the U.K., Europe ’s biggest market, are trading at their best levels in 4 1/2 years as buyers shrug off the impact of a worsening economy and seek top-rated alternatives to benchmark government debt. Investors demand 95 basis points more than the euro interbank offered rate to hold five-year bonds backed by prime U.K. home loans, according to JPMorgan Chase & Co. That’s the first time the spread has narrowed to less than 100 basis points, or a percentage point, since February 2008. “We expect the tightening trend to continue as the search for yield goes on,” said Markus Ernst, a strategist at UniCredit SpA in Munich. “U.K. prime RMBS are characterized by a sound fundamental performance despite a challenging economic and housing-market environment in the country.” Fund managers seeking a haven from the euro-region crisis are stoking demand for bonds pooling British home loans even as the continent’s third-biggest economy wallows in a double-dip recession. U.K. residential mortgage-backed securities offer top ratings and low defaults while at the same time paying investors a return when yields on government bonds from countries such as Germany have turned negative . Stable Performance The performance of the mortgages underpinning the U.K. bonds has remained stable amid Europe’s sovereign debt woes, with outstanding repossessions at 0.2 percent and cumulative losses at 0.3 percent as of the end of May, Moody’s Investors Service said in a July 31 report. That’s despite Britain’s economy shrinking 0.5 percent in the three months through June, the third straight quarter of contraction, according to official figures published Aug. 24. U.K. house prices fell for a second month in August as demand declined amid a “fragile” market, London-based property-research company Hometrack Ltd. said today. U.K. residential mortgage bonds are the most popular asset- backed securities in Europe, with 20 billion euros ($25 billion) of primary sales this year out of a total market of 43 billion euros, according to JPMorgan data. Supply has been hurt by banks having less need to sell ABS to raise money because of the flood of liquidity from central banks. Lenders are also using the bonds as collateral for central bank loans instead of offering them to investors, helping to keep prices buoyant. To contact the reporter on this story: Esteban Duarte in Madrid at [email protected] To contact the editor responsible for this story: Paul Armstrong at [email protected]

2012

u-k-mortgage-bonds-trade-at-best-levels-since-08-on-haven-bid

Zloty Appreciates After Biggest Weekly Decline in Three Months

By Piotr Skolimowski

2012-08-27T11:48:27Z

http://www.bloomberg.com/news/2012-08-27/zloty-appreciates-after-biggest-weekly-decline-in-three-months.html

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The Polish zloty advanced, rebounding after its biggest weekly decline in almost three months, amid speculation policy makers will take steps to support economies worldwide. The zloty appreciated 0.4 percent to 4.0771 per euro as of 1:32 p.m. in Warsaw for the second-steepest gain among more than 20 emerging-market currencies tracked by Bloomberg. It lost 0.6 percent last week, the steepest weekly drop since the period ended June 1. European Central Bank President Mario Draghi may provide further hints on policy when he speaks at the U.S. Federal Reserve’s annual symposium in Jackson Hole, Wyoming, on Sept. 1. Fed Bank of Chicago President Charles Evans urged the central bank to begin a third round of bond purchases in a speech in Hong Kong today. China’s Premier Wen Jiabao called for extra measures to support exports and help meet economic targets, Xinhua News Agency said Aug. 25. “The zloty may appreciate in the first half of the week toward” 4.05 per euro “supported by expectations for more actions from the ECB and the Fed,” Grzegorz Maliszewski , chief economist at Bank Millennium SA in Warsaw, wrote in a note to clients today. To contact the reporter on this story: Piotr Skolimowski in Warsaw at [email protected] To contact the editor responsible for this story: Gavin Serkin at [email protected]

2012

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