title
stringlengths 0
104
| author
stringlengths 0
127
| datetime
stringlengths 6
75
| url
stringlengths 20
37.4k
| month
stringclasses 12
values | day
stringlengths 1
2
| doc_id
stringlengths 32
40
| text
stringlengths 0
73.2k
| year
stringclasses 8
values | doc_title
stringlengths 1
102
|
|---|---|---|---|---|---|---|---|---|---|
U.S. Stocks Fall as Investors Await Fed Stimulus Signals | By Rita Nazareth | 2012-08-27T20:55:26Z | http://www.bloomberg.com/news/2012-08-27/u-s-stock-futures-little-changed-chevron-gains-on-oil.html | 8 | 27 | 692bc9d54d8f451aada63de4b2cb83fe | U.S. stocks fell, following the
first weekly decline in about two months for the Standard &
Poor’s 500 Index, as investors awaited indications on whether
the Federal Reserve will provide further stimulus measures. Hewlett-Packard Co., Alcoa Inc. and Bank of America Corp.
dropped at least 1.1 percent to pace losses in the biggest
companies. Apple Inc., (AAPL) the most valuable company, climbed 1.9
percent after a jury found Samsung Electronics Co. infringed six
of seven patents for its mobile devices. Google Inc. (GOOG) , which
offers the Android mobile software, declined 1.4 percent. The S&P 500 slid 0.1 percent to 1,410.44 at 4 p.m. New York
time. The Dow Jones Industrial Average fell 33.30 points, or 0.3
percent, to 13,124.67. The Nasdaq-100 Index gained 0.2 percent
to 2,782.55, after rising to the highest since 2000 during the
day. Volume for exchange-listed stocks in the U.S. was 4.5
billion shares, the lowest level since at least 2008 excluding
days surrounding holidays, data compiled by Bloomberg show. “There’s no great conviction in either direction,” said
Richard Sichel , who oversees $1.6 billion as chief investment
officer at Philadelphia Trust Co. He spoke in a phone interview.
“There are a couple of bright spots, such as Apple. People are
looking ahead for Fed signals. I believe Bernanke’s speech will
probably be more of the same. It’s more likely that it will be a
continuation of what we’ve been hearing and less of an event.” Fed Chairman Ben S. Bernanke probably won’t use his Aug. 31
speech at the Fed’s annual symposium in Jackson Hole, Wyoming,
to suggest a third round of bond buying is at hand, according to
economists such as Michael Feroli at JPMorgan Chase & Co. and
James O’Sullivan at High Frequency Economics. Monthly Gain The S&P 500, which last week failed to stay above a four-
year high, is still on pace for its third straight monthly gain
amid bets central banks will provide further economic stimulus.
The index has risen 2.3 percent so far in August. Commodity, phone and industrial shares had the biggest
losses in the S&P 500 among 10 groups. HP dropped 2.1 percent to
$17.21, the lowest since 2004. Alcoa slid 1.7 percent to $8.48.
Bank of America retreated 1.1 percent to $8.07. Technology
shares in the S&P 500 rose 0.2 percent as a group. Apple gained 1.9 percent to a record $675.68. Victories in
patent disputes over phones using Google’s Android may extend,
rather than end, the litigation that’s lasted more than two
years and spanned four continents. The jury verdict won Aug. 24
against Samsung came shortly after a trade agency in Washington
cleared Apple of some claims by Google’s Motorola Mobility unit
that could have led to a U.S. ban on the iPhone and iPad. Steve Jobs Together, the decisions embolden Apple to continue the
campaign envisioned by its late co-founder, Steve Jobs , to prove
phones running on Android copied the iPhone’s features and
designs. Apple won’t stop unless there’s a decisive blow against
it, and Samsung, with its reputation at stake, also has little
incentive to settle, said Tom Scott, a patent lawyer at Goodwin
Procter LLP. “Most commercial disputes are on the merits of the case,”
said Scott, chairman of the firm’s intellectual property group
in Washington. “This is different. It’s a war. It’s an economic
war.” Google dropped 1.4 percent to $669.22. Best Buy Co. added 3.2 percent to $17.87. The world’s
largest electronics retailer and founder Richard Schulze reached
an agreement allowing him to conduct due diligence in his effort
to acquire the company a week after earlier talks failed. Dollar Thrifty Automotive Group Inc. (DTG) rallied 7.5 percent to
$87.08. Hertz Global Holdings Inc. (HTZ) struck a deal to buy the
company for about $2.6 billion in cash and secure its place as
the No. 2 player in the U.S. market. Hertz jumped 8.1 percent to
$14.21. Hudson City Hudson City Bancorp soared a record 16 percent to $7.45.
M&T Bank Corp. (MTB) , which counts Warren Buffett ’s Berkshire Hathaway
Inc. among its largest investors, agreed to buy the bank to
expand in New Jersey in a deal valued at about $3.7 billion.
Under terms of the agreement, each Hudson City shareholder will
receive 0.08403 of an M&T share in the form of either M&T stock
or cash. M&T climbed 4.6 percent to $89.82. Kenexa Inc. jumped 41 percent to $45.79. International
Business Machines Corp. (IBM) will spend about $1.3 billion for the
maker of Web-based human-resources and recruiting services, part
of its effort to reach $16 billion in annual analytics revenue.
IBM slipped 1.1 percent to $195.69. Tiffany & Co. (TIF) climbed 7.2 percent to $62.71. The world’s
second-largest luxury jewelry retailer reported a drop in
worldwide comparable-store sales that was smaller than some
analysts projected. Buyback, Dividend AOL Inc. (AOL) gained 2.9 percent to $33.86 after announcing 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. ImmunoGen Inc. (IMGN) rose 5.6 percent to $14.62. Partner Roche
Holding AG said its experimental breast cancer drug
significantly extended the lives of patients when compared with
standard therapy. American stocks are dominating global equities by the most
in a decade, taking a majority of the spots in a ranking of the
20 biggest companies, after earnings rose faster than the rest
of the world as the global economy rebounded. Apple,
International Business Machines Corp., Wells Fargo & Co. and
four more U.S. companies joined the top 20 since stocks peaked
in 2007, bringing the total to 14. They replaced Moscow-based Gazprom OAO, China Petroleum &
Chemical Corp. in Beijing, Petroleo Brasileiro SA of Rio de
Janeiro and six others from Europe and Asia. Of the nine added,
only BHP Billiton Ltd. and Nestle SA (NESN) are based outside the U.S. 10 Quarters More U.S. corporations are represented than any time since
2003 after 10 quarters of economic expansion and profit growth
lifted the S&P 500 109 percent since shares bottomed in March
2009. The shift reflects volatility in emerging markets and
shows how innovation builds value in the U.S. “The U.S. is just the best place on the planet to have a
great idea and turn it into a big business,” according to
Michael Shaoul , chairman of New York-based Marketfield Asset
Management, which oversees $2.7 billion. “There’s another
reason for this list to have shifted and that is the falling of
prior darlings,” said Shaoul, whose fund beat 99 percent of
competitors in the past year. “A lot of the ones which have
fallen are energy and emerging-market related.” To contact the reporter on this story:
Rita Nazareth in New York at
[email protected] To contact the editor responsible for this story:
Lynn Thomasson at
[email protected] | 2012 | u-s-stock-futures-little-changed-chevron-gains-on-oi |
Yellow Tail Maker Plans $10 Wine as Dollar Shaves Profits | By David Fickling | 2012-08-27T05:00:02Z | http://www.bloomberg.com/news/2012-08-27/yellow-tail-maker-plans-10-wine-as-dollar-shaves-profits.html | 8 | 27 | 8ea3f5da7ae54c5faaf8cce0f3fd54ad | Casella Wines Pty., the maker of
Yellow Tail wine, is developing a product that will sell for
about 50 percent more than its main brand to escape a squeeze on
Australia ’s wine exports from the strong local currency. A good vintage during 2012 will allow the winemaker to
introduce the new brand by the end of next year, with two red
and one white varieties priced at about $10 a bottle, about 50
percent above the cost of Yellow Tail, John Casella, managing
director, said in a telephone interview Aug. 22. Australian wine exports fell 10 percent from a year earlier
to decade lows during 2011 as the strength of the local currency
and bargain-hunting by U.S. drinkers pared profit margins. The
success of cheaper Yellow Tail, the third-best selling wine in
U.S. supermarkets according to data compiled by Nielsen Co. and
Goldman Sachs Group Inc., has also been blamed for pushing the
image of Australian wine down-market. “There’s scope for some premium Australian wines that are
badly under-represented,” Casella said. “This dollar level
isn’t sustainable for this economy.” Some critics and rivals have said Yellow Tail’s low price
and uncomplicated style has damaged the image of Australian wine
overseas. A 2003 tasting by the Los Angeles Times described its
2002 chardonnay as “excellent lighter fluid” and reminiscent
of “pineapple juice.” Kangaroo Label The dominance of Yellow Tail, whose labels carry an
Aboriginal-style painting of a kangaroo, “left most Americans
with the impression that Australian wine is sweet, cheap, and
adorned with a ’critter’,” U.K.-based wine critic Jancis Robinson wrote in an April 18 article . “A focus on volume sales and not value building” had hurt
the reputation of Australian wine, Pernod-Ricard SA (RI) ’s Premium
Wine Brands unit said in a October 2011 government inquiry
submission. The success of Yellow Tail wasn’t to blame for the poor
performance of other brands, Casella said. Treasury Wine Estates
Ltd. (TWE) , Australia’s largest listed winemaker, said net sales in
constant currency terms in the six months through June fell 7.8
percent in the Americas, its biggest market. “Yellow Tail is at a certain price point and people buy it
because it’s there; the Toyota Corolla didn’t destroy the
Lexus ,” Casella said. “Someone buying $12 wine doesn’t buy $6
wine.” Australian Exports Australian wine exports have suffered as the local
currency, driven by mining and energy investment, has risen in
recent years. The Australian dollar is the best-performer among a basket
of major currencies against the U.S. dollar over the past three
years, according to data compiled by Bloomberg. The currency is
more than 24 percent stronger against the greenback than at the
same time in 2009, the data show. Accounting for about a fifth of Australia’s bottled wine
exports, Yellow Tail has been squeezed by the move in the
currency, Casella said. The company was having to explore
alternatives to offset the effect of the currency, including
buying vineyards overseas, developing the higher-priced product,
and a move into brewing, he said. It’s built a brewery adjacent to its vineyard in Griffith
in central New South Wales state capable of producing 500
million liters of beer a year, equivalent to about 15 percent of
Australia’s premium beer market. Coca-Cola Amatil Ltd. (CCL) , the country’s largest soft-drink
maker, announced Aug. 22 a A$46 million ($47.8 million)
convertible loan agreement with Casella that will give it rights
to a stake in the business. To contact the reporter on this story:
David Fickling in Sydney at
[email protected] To contact the editor responsible for this story:
Anjali Cordeiro at
[email protected] | 2012 | yellow-tail-maker-plans-10-wine-as-dollar-shaves-profits |
China Cement Plant Explosion Kills Nine, Xinhua Says | By Bloomberg News | 2012-08-27T14:27:28Z | http://www.bloomberg.com/news/2012-08-27/china-cement-plant-explosion-kills-nine-xinhua-says-1-.html | 8 | 27 | ac26470b0ef81f5785a8f58c2b75c2bbb7454c05 | An explosion at the quarry of a
cement plant in southern China killed nine people and left one
person missing, the official Xinhua News Agency reported, citing
local authorities. The blast occurred at around 2:30 p.m. when workers were
unloading explosives off three trucks in the city of Yingde in
Guangdong province , the report said, citing a city government
statement released late today. The trucks were carrying 13
tonnes of explosives and workers had already unloaded six tonnes
when the accident happened, Xinhua said. The quarry belongs to a subsidiary of Anhui Conch Cement
Co., the largest cement manufacturer in China, Xinhua said,
citing the government statement. Anhui Conch Executive Director
Zhang Mingjing, reached by telephone late today, denied that the
plant was its subsidiary. “It is not related to us,” Zhang said. Employees of the quarry and workers who transported the
explosives from a local private explosives company were among
those killed, Xinhua said, adding that the blast shattered
windows in a nearby township across a river, injuring nine
villagers. The city has set up an emergency response team and sent
experts to remove the unexploded explosives, while an
investigation into the cause of the blast is under way, Xinhua
said. To contact Bloomberg News staff for this story:
Alfred Cang in Shanghai at
[email protected] ;
Daryl Loo in Beijing at
[email protected] To contact the editor responsible for this story:
Nicholas Wadhams at
[email protected] | 2012 | china-cement-plant-explosion-kills-nine-xinhua-says-1- |
South Korea Has 18,486 MW of Nuclear Capacity Online | By Sangim Han | 2012-08-27T23:42:55Z | http://www.bloomberg.com/news/2012-08-27/south-korea-has-18-486-mw-of-nuclear-capacity-online-table-.html | 8 | 27 | fe5dcb89ecf3fc7be559de8073ba472ead69f488 | South Korea has 21 nuclear reactors
in operation, producing 18,486 megawatts of power, or about 89
percent of total capacity, according to data compiled by
Bloomberg. The following table shows the status of the nation’s 23
reactors operated by state-run Korea Hydro & Nuclear Power Co.
as of today, with a combined regular capacity of 20,716
megawatts.
Source: Korea Hydro & Nuclear Power Co. To contact the reporter on this story:
Sangim Han in Seoul at
[email protected] To contact the editor responsible for this story:
Jason Rogers at
[email protected] | 2012 | south-korea-has-18-486-mw-of-nuclear-capacity-online-table- |
U.S. Regulators May Give Banks More Time to Run Stress Tests | By Jesse Hamilton | 2012-08-27T19:48:55Z | http://www.bloomberg.com/news/2012-08-27/u-s-regulators-give-banks-more-time-for-internal-stress-tests.html
U.S. banks with more than $10
billion in assets may get more time to institute internal stress
testing required by the Dodd-Frank Act, U.S. banking regulators
said today. The regulators proposed rules in December and January to
require the big banks | 8 | 27 | ba8776cb6b6d810f5918197db17f4bb6304cb480 | against adverse scenarios annually. The proposals, which
initially called for banks to conduct tests this year, may be
revised with a September 2013 deadline, the regulators said in
coordinated statements. The extension would apply to banks between $10 billion and
$50 billion in assets, according to the Fed, OCC and the Federal
Deposit Insurance Corp. The OCC said in its statement today that
banks with more than $50 billion may still have to run tests
this year, with the agency reserving the right to let them
“delay implementation on a case-by-case basis where
warranted.” Dodd-Frank, the 2010 regulatory overhaul, instituted the
tests after the 2008 credit crisis in order to ensure banks were
stable enough to withstand a future calamity. The final timeline
for implementing the stress tests will be included in the rules
eventually adopted by each agency. In a separate stress-test requirement from Dodd-Frank, the
Fed has conducted its own annual tests, reporting the first
results in March. The Fed found 15 of the 19 largest U.S. banks,
including JPMorgan Chase & Co., Goldman Sachs Group Inc. and
Wells Fargo & Co. (WFC) , could maintain adequate capital levels in a
recession scenario in which they kept paying dividends and
buying back stock. To contact the reporter on this story:
Jesse Hamilton in Washington at
[email protected] . To contact the editor responsible for this story:
Maura Reynolds at [email protected] . | 2012 | u-s-regulators-give-banks-more-time-for-internal-stress-tests |
Energy Drinks May Have Positive Effect on Heart: Study | By Allison Connolly | 2012-08-27T08:10:00Z | http://www.bloomberg.com/news/2012-08-27/energy-drinks-may-have-positive-effect-on-heart-study.html | 8 | 27 | bfd515792638ec1a7a114c3e37034f4b90b69c7d | Energy drinks containing caffeine
and taurine boost heart function in healthy people, an Italian
study found. Function in the left and right ventricles, which pump blood
to the body, increased one hour after consuming an energy drink,
according to the researchers, who used echocardiography on 35
healthy people with an average age of 25. Diastolic blood
pressure rose 6 percent, while an increase in heart rate and
systolic blood pressure wasn’t statistically significant, they
said. The results were presented at the European Society of
Cardiology conference in Munich today. The global energy-drink market grew 14 percent in 2011 to
$41.5 billion, accounting for 8.7 percent of the $498 billion
global soft drinks industry, according to an analysis by
Bloomberg Industries. As the market has expanded, concerns have
been raised about the beverages’ impact on the heart, Matteo
Cameli, a researcher at the University of Siena in Italy and co-
author of the study, said in a statement today. “Future studies need to focus on whether such benefits
persist after long-term consumption of energy drinks, and what
the effects are of consuming these drinks during physical
activity,” Cameli said. “It will also be important to
determine which of the effects are induced in patients with
cardiac disease to further our understanding of the potential
benefits or risks of energy-drink consumption.” The improvement in heart contractions may be caused by
taurine, an amino acid in energy drinks which is known to
stimulate calcium production in muscle, Cameli said. Too much caffeine can cause people to sweat and experience
heart palpitations, W. Douglas Weaver, former president of the
American College of Cardiology , said in an interview in Munich. “People are showing up in the emergency room and doctor’s
office after having these drinks and not feeling well,” Weaver
said. “Now we can see some of the physiological effects.” Monster Beverage Corp., (MNST) the largest U.S. energy drink maker
by volume sales, said Aug. 9 that an unspecified attorney
general is investigating the company’s flagship drink and
ingredients. To contact the reporter on this story:
Allison Connolly in Frankfurt at
[email protected] To contact the editor responsible for this story:
Phil Serafino at
[email protected] | 2012 | energy-drinks-may-have-positive-effect-on-heart-study |
Bolivia on Course to Meet Growth Forecast, Patria Nueva Says | By Sara Shahriari | 2012-08-27T14:59:18Z | http://www.bloomberg.com/news/2012-08-27/bolivia-on-course-to-meet-growth-forecast-patria-nueva-says.html | 8 | 27 | e437dfe2a8402cde9eb8184f1177c816a9c63680 | Bolivia’s economy is on course to
meet the government’s growth forecast of more than 5 percent,
Finance Minister Luis Arce said, according to state online news
service, Patria Nueva . The growth estimate is being corroborated, Arce said in
comments published by Patria Nueva, which didn’t give details. The country’s 2012 budget projections released in November
2011 forecast growth of 5.52 percent for this year. To contact the reporter on this story:
Sara Shahriari in La Paz at
[email protected] . To contact the editor responsible for this story:
Joshua Goodman at [email protected] . | 2012 | bolivia-on-course-to-meet-growth-forecast-patria-nueva-says |
Biggest Nasdaq Changes in Short Interest vs Float as of Aug. 15 | By Bloomberg News | 2012-08-27T15:43:11Z | http://www.bloomberg.com/news/2012-08-27/biggest-nasdaq-changes-in-short-interest-vs-float-as-of-aug-15.html
The following tables show companies listed on the
Nasdaq Stock Market that have the largest changes in short interest as a
percentage of shares available for trading as of the Aug. 15 settlement date. | 8 | 27 | bc5e7e21ea8f9f9acbf80f66006f2b22361486fb | [email protected] #<372740.1038987.2.2.0.1.25># | 2012 | biggest-nasdaq-changes-in-short-interest-vs-float-as-of-aug-15 |
Bayer’s Xarelto Helped Survival After Heart Attack: Study | By Allison Connolly and Naomi Kresge | 2012-08-27T13:33:37Z | http://www.bloomberg.com/news/2012-08-27/bayer-s-xarelto-helped-survival-after-heart-attack-study.html | 8 | 27 | d4cc2ffb316d606975bf5e2a0ccbf2f94cdc5257 | Patients who took Bayer AG (BAYN) and
Johnson & Johnson’s (JNJ) Xarelto with blood-thinning treatment after
a severe heart attack had a better chance of surviving without
another attack or stroke compared with placebo, a study found. The 7,817 patients studied had a more serious type of heart
attack that is typically caused by a blood clot completely
blocking the coronary artery, leading to damage and the death of
heart muscle . The treatment period was 24 months. Xarelto is approved in the U.S. to prevent venous clots in
patients undergoing knee and hip surgeries and to prevent stroke
in people with atrial fibrillation. It’s surprising that a
benefit in mortality could be seen in such a small group because
normally it wouldn’t be statistically significant, Frank Misselwitz, head of Leverkusen, Germany-based Bayer’s
cardiovascular unit, said in a telephone interview. “This is, if you wish, a paradigm shift and has the
potential to position rivaroxaban in a specific way, and not
just as a drug used on the venous side,” he said, referring to
Xarelto by its active ingredient. Anticoagulants like Xarelto dissolve existing blood clots
while antiplatelet therapies prevent components of the blood
from clumping together and forming a clot. Bleeding Concern Prior to this study, patients who suffered a severe heart
attack known as ST-segment elevation myocardial infarction, or
STEMI, weren’t given long-term treatment with anticoagulants
such as warfarin in combination with antiplatelet drugs like
Bayer’s Aspirin and Plavix from Sanofi (SAN) and Bristol-Myers Squibb
Co. (BMY) That’s because of concern that that would cause a “massive
increase in bleeding,” Misselwitz said. Today’s data, presented at the European Cardiology
Conference in Munich, shows a low dose of anticoagulant Xarelto
in combination with an antiplatelet can offer a benefit,
Misselwitz said. Patients who received 2.5 milligrams of Xarelto
twice a day saw the most benefit, though with more bleeding than
the placebo, Misselwitz said. Patients who took a larger 5 milligram dose didn’t see the
same benefit and had a higher risk of bleeding as a side effect,
according to slides presented at the conference today. The
findings in that group weren’t statistically significant. About one-third of the 300,000 patients who have acute
coronary syndrome in the U.S. every year suffer STEMI,
Misselwitz said. Bayer has included the data in dossiers that
governments consult when setting prices for the drug, which
competes with Boehringer Ingelheim GmbH’s Pradaxa. Bayer still
expects Xarelto will have peak annual sales of 2 billion euros
($2.5 billion), Misselwitz said. Today’s study was a subset of about half of patients with
acute coronary syndrome in a study known as Atlas, which looked
at rates of heart attack, stroke and death. Traditional Therapy “After heart attack, our traditional treatment is to keep
people on antiplatelet therapy,” Spencer King, former president
of the American College of Cardiology and professor emeritus of
Emory University in Atlanta, said in an interview today. “This
study seems to indicate that anticoagulants, though with
increased bleeding, somewhat decrease mortality.” King wasn’t
involved in the study. Bayer and J&J of New Brunswick , New Jersey , await a ruling
from European regulators to expand the use of Xarelto to prevent
heart attacks and strokes in patients with serious chest pain or
a previous heart attack. The companies said June 22 they failed
to get approval from the U.S. Food and Drug Administration for a
2.5 milligram dose of Xarelto in the same group of patients,
saying the agency had questions about their application. To contact the reporters on this story:
Allison Connolly in Frankfurt at
[email protected] ;
Naomi Kresge in Berlin at
[email protected] To contact the editor responsible for this story:
Phil Serafino at
[email protected] | 2012 | bayer-s-xarelto-helped-survival-after-heart-attack-study |
Japanese, Australian Stock Futures Are Little Changed | By Adam Haigh | 2012-08-27T23:48:27Z | http://www.bloomberg.com/news/2012-08-27/japanese-australian-stock-futures-are-little-changed.html
Japanese and Australian stock futures were little changed as investors await details on economic growth in the U.S. tomorrow and indications from the Federal Reserve at the end of the week. American depositary receipts of BHP Billiton Ltd. (BHP) , the world’s largest mining company, slid 0.4 percent as commodity prices declined. ADRs of Nippon Telegraph & Telephone Corp. (9432) , the world’s biggest telecommunications carrier, slid 0.5 percent as the Nikkei reported it will cut fiber-optic fees by 30 percent from September. Flight Centre Ltd. shares may be active in Sydney after the travel operator reported profit that topped estimates. Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 9,100 in Chicago yesterday, down from 9,110 in Osaka, Japan. They were bid in the pre-market at 9,090 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index were little changed today. New Zealand’s NZX 50 Index retreated 0.1 percent in Wellington. “The market’s primary focus is on Wednesday’s U.S. GDP report and Friday’s Jackson Hole ’s talk by U.S. Fed Chairman Ben. S Chairman Bernanke, who might provide some guidance on upcoming Fed monetary policy,” said Matthew Sherwood, Sydney- based head of investment markets research at Perpetual Investments. Perpetual manages about $25 billion. The MSCI Asia Pacific (MXAP) Index climbed 9.9 percent from a June low through yesterday on bets the U.S., Europe and China will take action to propel economic expansion. This left the benchmark gauge valued at 12.5 times estimated earnings on average, compared with 13.7 for the S&P 500 and 11.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. Volume Falls Volume on the Asian measure yesterday fell to 6 billion shares, 22 percent below the average of 7.7 billion during 2012, according to data compiled by Bloomberg. Bernanke probably won’t use his Aug. 31 speech at the Fed’s annual symposium in Jackson Hole, Wyoming, to suggest a third round of bond buying is at hand, according to economists including Michael Feroli , of JPMorgan Chase & Co., and James O’Sullivan , at High Frequency Economics. Fed Bank of Chicago President Charles Evans yesterday urged the central bank to begin a third round of asset buying. The Fed should buy bonds until the U.S. unemployment rate declines for at least six months, Evans said in a speech in Hong Kong . Members of the Federal Open Market Committee | 8 | 27 | ea7888115f9e4475aa448f2b46a5f3fa | 2012 | japanese-australian-stock-futures-are-little-changed |
|
Storm Isaac May Become Hurricane on Katrina Anniversary | By Brian K. Sullivan | 2012-08-27T13:09:58Z | http://www.bloomberg.com/news/2012-08-27/storm-isaac-may-become-hurricane-on-katrina-anniversary.html | 8 | 27 | cf6cc7c5d1374802acc7db9f6c058bc8 | Tropical Storm Isaac churned through
the Gulf of Mexico on a path toward offshore oil and gas
operations and may go ashore near New Orleans on the seventh
anniversary of Katrina’s devastating strike. Gasoline and natural gas futures rose and some offshore
production was halted as a hurricane warning was posted along a
290-mile stretch from Louisiana to Florida. Isaac was about 360
miles (579 kilometers) south of mouth of the Mississippi River
with top winds of 65 miles per hour and moving west-northwest at
14 mph, the National Hurricane Center said in an advisory at 8
a.m. East Coast time. “It looks like it hasn’t done a whole lot overnight,”
said Matt Rogers , president of Commodity Weather Group LLC in
Bethesda, Maryland. “The key is going to be tonight and
tomorrow, and that may be the time for some potential rapid
development.” Gasoline advanced 2.8 percent on the New York Mercantile
Exchange as of 9:07 a.m. and natural gas climbed 1.3 percent.
The storm shut 24 percent of U.S. Gulf oil production and 8.2
percent of Gulf natural gas output, the Bureau of Safety and
Environmental Enforcement said yesterday. The region is home to
23 percent of U.S. oil production, 7 percent of natural gas and
44 percent of refining capacity. The Republican Party ’s national convention in Tampa was
pushed back a day from its scheduled start today even as Isaac
tracked west of earlier forecast paths that indicated it might
hug Florida’s western coast. Storm Anniversary The storm may go ashore in southeastern Louisiana early
Aug. 29 with winds peaking at Category 1 strength of 85 mph to
90 mph, according to the hurricane center. Katrina struck the
Gulf Coast on Aug. 29, 2005, causing levees to fail in New
Orleans and killing more than 1,800 people. Isaac won’t have the power of Katrina when it hits, said
Jim Rouiller , senior energy meteorologist at Planalytics Inc. in
Berwyn, Pennsylvania. Current hurricane center forecasts call for Isaac to peak
at Category 1 strength on the five-step Saffir-Simpson scale.
Katrina grew into a Category 5 system, the strongest, and went
ashore as a Category 3, according to Weather Underground in Ann
Arbor, Michigan. Isaac will probably cause minimal damage to rigs and
platforms as well as onshore refineries and pipelines, Rouiller
said. Gulf Impact “Shut-ins are widespread south and east of New Orleans,”
he said. “There could be a bullish market reaction this
morning. Most should be up and running by Friday morning.” Andy Lipow , president of Houston-based Lipow Oil Associates
LLC, estimated yesterday that the storm may force shutdowns of
12 coastal refineries in Louisiana, Alabama and Mississippi that
together account for 16 percent of the nation’s gasoline
production capacity. Phillips 66 (PSX) is temporarily shutting down its 247,000
barrel-a-day Alliance refinery at Belle Chasse, Louisiana, the
company said in a statement on its website. The refinery
shutdown is expected to be completed today, and non-essential
staff have been released from work, the company said. The
239,000 barrel-a-day Lake Charles refinery at Westlake hasn’t
been affected by the storm, Phillips 66 said. Marathon Oil Corp. (MRO) is initiating the shutdown of its
Garyville refinery in Louisiana because Isaac, Shane Pochard,
communications manager for the company, said in an e-mail today.
The plant has the ability to produce 460,000 barrels of oil per
day, according to data compiled by Bloomberg. Rig Preparations Companies including BP Plc (BP/) , ConocoPhillips and Murphy Oil
Corp. were evacuating personnel or halting production at
offshore rigs and platforms. The Louisiana Offshore Oil Port ,
the largest point of entry for crude coming into the U.S., said
it planned to suspend offloading tankers today. Rogers said Isaac has potential to cause damage with storm
surge and wave height as it nears the shore. Waves 30 feet high
are possible, he said. The hurricane center said if the surge strikes at high
tide, the ocean may rise 6-12 feet above normal across
southeastern Louisiana, Mississippi and Alabama. In addition,
the storm may bring as much as 18 inches of rain to the area. Isaac flooded Haiti with heavy rains on its path through
the Atlantic and Caribbean and killed at least eight people
there, according to the Associated Press . To contact the reporter on this story:
Brian K. Sullivan in Boston at
[email protected] . To contact the editor responsible for this story:
Dan Stets at
[email protected] | 2012 | storm-isaac-may-become-hurricane-on-katrina-anniversary |
Peru Yields Fall to Lowest Since 2006 as Fed Bets Fuel Demand | By John Quigley | 2012-08-27T19:29:55Z | http://www.bloomberg.com/news/2012-08-27/peru-yields-fall-to-lowest-since-2006-as-fed-bets-fuel-demand.html | 8 | 27 | 38ee7f7d473297b370db80926ce8113ea17b47e1 | Peruvian bonds rose, pushing down
yields to their lowest level in six years, as speculation the
Federal Reserve will expand monetary stimulus spurred demand for
higher-yielding, emerging-market assets. The yield on the nation’s benchmark 7.84 percent sol-
denominated bond due in August 2020 fell three basis points, or
0.03 percentage point, to 4.52 percent, according to data
compiled by Bloomberg. The price increased 0.19 centimo to
121.86 centimos per sol. “We continue to see foreign investors seeking yield in the
belly of the curve on the expectation the Fed is going to act
and yields will fall further,” said Diego Alvarez, a trader at
Banco Internacional del Peru. Treasuries rose as investors wagered Fed Chairman Ben S. Bernanke will use his Aug. 31 speech in Jackson Hole , Wyoming,
to outline the case for further central bank action to support
the economy. The Fed has already conducted two rounds of asset
purchases known as quantitative easing to pump cash into the
banking system. The sol appreciated 0.1 percent to 2.6110 per U.S. dollar ,
according to Deutsche Bank AG’s local unit. Peru’s central bank bought $16 million in the spot market
to stem gains in the currency. The bank said on its website it
paid an average 2.6110 soles per U.S. dollar. The yield on the nation’s benchmark 6.55 percent dollar-
denominated bond due in March 2037 fell one basis point to 3.87
percent, according to Bloomberg prices. The bond’s price rose
0.23 cent to 142.24 cents per dollar. To contact the reporter on this story:
John Quigley in Lima at
[email protected] To contact the editor responsible for this story:
David Papadopoulos at
[email protected] | 2012 | peru-yields-fall-to-lowest-since-2006-as-fed-bets-fuel-demand |
Oil Trades at Two-Week Low on Isaac; Gasoline at Four-Month High | By Ben Sharples | 2012-08-28T06:56:10Z | http://www.bloomberg.com/news/2012-08-27/oil-trades-near-two-week-low-on-forecasts-isaac-impact-limited.html | 8 | 27 | aa1a325b166e49fa9762bc143e5e29e3 | Oil traded near the lowest level in
two weeks on speculation Tropical Storm Isaac’s impact on output
in the Gulf of Mexico will be limited. Gasoline was near a four-
month high amid a fire at Venezuela ’s biggest refinery. West Texas Intermediate futures were little changed in New
York after dropping a third day yesterday, the longest losing
streak since June. Isaac was near hurricane strength as it
headed for the Gulf coast , according to the National Hurricane
Center. Storage tanks burned for a fourth day at Venezuela’s
645,000 barrels-a-day Amuay plant, where an Aug. 25 gas
explosion killed 48 people. Oil has pared gains before a U.S.
Federal Reserve symposium in Jackson Hole , Wyoming , on Aug. 31. “It seems likely now that Isaac won’t be doing any lasting
damage to oil facilities in the Gulf,” said Ric Spooner, a
chief market analyst at CMC Markets in Sydney. “Buyers seem
reluctant to take prices too much higher from here until they
get further detail” on what the Fed might do to boost economic
growth, he said. Oil for October delivery was at $95.35 a barrel, down 12
cents, in electronic trading on the New York Mercantile Exchange
at 4:46 p.m. Sydney time. The contract yesterday fell 68 cents,
or 0.7 percent, to $95.47, the lowest close since Aug. 15.
Prices are 3.5 percent lower this year. Brent oil for October settlement was at $112.27 a barrel,
up 1 cent, on the London-based ICE Futures Europe exchange. The
European benchmark grade’s premium to WTI was at $16.92, from
$16.79 yesterday. Gulf Output Isaac’s center was about 145 miles (235 kilometers)
southeast of the mouth of the Mississippi River with top winds
of 70 miles per hour, the National Hurricane Center said in an
advisory at 2 a.m. in Miami. That’s 4 mph less than hurricane
intensity. It was moving northwest at 12 mph and is forecast to
strengthen before approaching southeastern Louisiana and
Mississippi today, the center said. The storm halted about 78 percent of oil output and 48
percent of natural-gas production in the Gulf and forced
evacuations from 346 production platforms and 41 rigs, the
Bureau of Safety and Environmental Enforcement said yesterday.
Four refineries in Louisiana were shut, idling combined capacity
of 832,700 barrels a day, or 4.8 percent of the U.S. total, and
at least four are running at reduced rates. The region accounts for 23 percent of U.S. oil output and 7
percent of natural gas production, according to the U.S. Energy
Department in Washington . Refinery Closures Valero Energy Corp. (VLO) is shutting the St. Charles and Meraux
refineries in Louisiana, Bill Day , a company spokesman in San
Antonio , said by e-mail. Phillips 66 is temporarily shutting
down its 247,000 barrel-a-day Alliance refinery at Belle Chasse,
Louisiana, the company said in a statement on its website. Exxon
Mobil Corp. began closing operations at the Chalmette plant near
New Orleans , the company said on a community hotline. Marathon Petroleum Corp.’s Garyville refinery in Louisiana
is operating at reduced rates, Shane Pochard, communications
manager for the company, said in an e-mail. Motiva Enterprises
LLC’s Norco and Covent refineries in Louisiana are also running
at lower rates, the company said on its website, as is Exxon
Mobil’s Baton Rouge plant. In Venezuela, firefighters have put out one of the three
blazes at the Amuay refinery and extinguished about 75 percent
of another, President Hugo Chavez said on his Twitter account
today. There is no structural damage to the processing units at
the facility about 240 miles west of Caracas, according to Oil
Minister Rafael Ramirez . Gasoline Premium 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 will be restarted within two days
after all the fires have been extinguished, he said. Gasoline for September delivery advanced as much as 0.2
percent to $3.1621 a gallon on the New York Mercantile Exchange
today after climbing 2.5 percent to $3.1548 yesterday, the
highest settlement since April 30. The premium of the motor fuel
to WTI gained as much as 1 percent to $28.71 a barrel, the
widest gap in a week, after increasing 9 percent yesterday. U.S. crude stockpiles probably shrank 2 million barrels
last week, according to a Bloomberg News survey before an Energy
Department report tomorrow. That would be the fifth weekly drop,
the longest run of declines since July 2011. The decrease would
leave inventories at the lowest level since March 23. Fuel Supplies Gasoline supplies may have fallen 1.4 million barrels ,
according to the median estimate of 11 analysts in the Bloomberg
survey. Distillate stockpiles, a category that includes diesel
and heating oil, probably rose 400,000 barrels. The American Petroleum Institute will release separate
inventory data today. The API collects stockpile information on
a voluntary basis from operators of refineries, bulk terminals
and pipelines. The government requires that reports be filed
with the Energy Department for its weekly survey. Oil in New York has technical support around $94.05 a
barrel along the bottom of a short-term uptrend channel on the
daily chart, according to data compiled by Bloomberg. This
channel started from the June 28 drop to $77.28, the 2012
intraday low. Crude’s moving average convergence-divergence
indicator yesterday fell below its signal line, indicating a
loss of momentum. Investors tend to sell contracts on a so-
called MACD crossover. Federal Reserve Chairman Ben S. Bernanke will speak at the
Kansas City Fed’s annual symposium in Jackson Hole, where he may
shed light on the likelihood of a third round of asset
purchases. The central bank bought $2.3 trillion of debt since
2008 in two previous rounds of quantitative easing. To contact the reporter on this story:
Ben Sharples in Melbourne at
[email protected] To contact the editor responsible for this story:
Mike Anderson at
[email protected] | 2012 | oil-trades-near-two-week-low-on-forecasts-isaac-impact-limited |
Consumer Bureau Names Acting Director for Its Rule-Writing Unit | By Carter Dougherty | 2012-08-27T18:39:02Z | http://www.bloomberg.com/news/2012-08-27/consumer-bureau-names-acting-director-for-its-rule-writing-unit.html | 8 | 27 | 3da80e8857fdb6bb2e4e1802afd0a5bb56c493d5 | The U.S. Consumer Financial
Protection Bureau named Kelly Thompson Cochran, formerly a
lawyer with Wilmer Cutler Pickering Hale & Dorr LLP, to serve as
the agency’s acting assistant director for regulations. Cochran, who worked as the bureau’s deputy assistant
director for regulations after joining from the Treasury
Department, will replace Leonard Chanin, who left last week to
join law firm Morrison & Foerster LLP . The consumer agency
announced Cochran’s appointment in a statement today. Stephen Van Meter will be deputy general counsel, having
previously been assistant general counsel for policy, the bureau
said in its statement. Meredith Fuchs became general counsel of
CFPB in June after Leonard Kennedy became an adviser to consumer
bureau Director Richard Cordray . The bureau also announced that Chris Lipsett will join from
Wilmer Hale to become senior counsel in Cordray’s office and
Delicia Reynolds Hand will serve as staff director for the
consumer advisory board and councils. “I am pleased to announce these new additions and updates
to the CFPB leadership team,” Cordray said in the statement.
“We look forward to welcoming them as we continue to work on
behalf of the American consumer.” To contact the reporter on this story:
Carter Dougherty in Washington at
[email protected] To contact the editor responsible for this story: Maura Reynolds
at [email protected] | 2012 | consumer-bureau-names-acting-director-for-its-rule-writing-uni |
China Lead Stockpiles Seen Dropping as Battery Makers Expand | By Bloomberg News | 2012-08-27T08:30:33Z | http://www.bloomberg.com/news/2012-08-27/lead-stockpiles-in-china-seen-falling-as-demand-growth-picks-up.html | 8 | 27 | fc9e7aacad454d509512b69b72ffa312 | Lead stockpiles held in so-called
commercial warehouses in China, the world’s largest user, have
dropped to the lowest level in more than two years as battery
makers expand output, boosting demand growth for the metal. The inventories in Guangdong province and Shanghai , the two
main trading regions, fell to about 100,000 metric tons this
month, the lowest level since February 2010 and down from a
record 300,000 tons in August 2011, according to SMM Information
& Technology Co., citing data from a weekly survey. The figure
doesn’t include holdings in Shanghai Futures Exchange warehouses,
which have dropped 52 percent since the year’s peak in February. Falling inventories and higher demand growth may support
prices on the London Metal Exchange, while boosting profit at
China’s biggest lead producer, Henan Yuguang Gold & Lead Co.
Chinese battery production expanded to a record in June,
according to Barclays Plc, which said that there may be a global
lead deficit in the final quarter of this year. “Compared with other base metals, lead has a relatively
good fundamental picture,” said Hu Yongda, an analyst at
Beijing Antaike Information Development Co. Demand in China may
rise 10 percent to an all-time high of almost 4.5 million tons
this year, up from growth of 6.8 percent in 2011, Hu said,
citing increased sales of electric bicycles. China Slowdown Three-month lead declined 21 percent to $1,971 a ton on the
LME over the past year as copper and zinc lost 16 percent and
nickel tumbled 23 percent. Base metals have declined amid
concern that slower economic growth in China, the largest user,
will hurt demand. Lead for immediate delivery on Shanghai’s
Changjiang market was quoted at about 15,150 yuan ($2,383) a ton
today, down 7.6 percent in the past year. Lead stockpiles monitored by the SHFE declined 40 percent
this year to 18,282 tons last week, the lowest level since April
2011, according to bourse data. Reserves monitored by the LME
lost 11 percent in 2012, dropping to 315,125 tons last week, the
smallest amount since August last year. China last year started to shut down battery makers and
recycled-lead producers that didn’t meet environmental standards
after reports of lead poisoning in Zhejiang and Guangdong. As
much as 90 percent of battery units were closed, according to a
November estimate from the China Battery Industry Association.
The Ministry of Environmental Protection also released revised
entry criteria for the industry in May. Adding Capacity China’s biggest battery producers are now adding capacity,
said Zhang Shu, an analyst at SMM, without providing details.
“They want to grab market share after the new industry entry
criteria wiped out smaller players,” Zhang said. Lead production in China rose 8.9 percent to 2.68 million
tons in the first seven months of this year from a year earlier,
according to data from the National Bureau of Statistics. Output
of zinc, nickel and tin declined in the period. “Orders are picking up at the large battery producers,”
said Chen Jianfang, vice president of Nanjing, Jiangsu-based
Chunxing Group’s recycled-lead production division, the
country’s biggest re-user of lead-acid batteries. “Some
companies even find it difficult to deliver in time.” Lead-acid battery output jumped 21 percent in the first
half to 83.4 million Kilovolt-Ampere Hours, according to SMM. “Demand for lead is very good now,” said Zhang. “The
situation may get even better from October as lower temperatures
lead to faster consumption of batteries.” Global lead production may expand 1.1 percent to 10.77
million tons this year, according to an Aug. 16 report from
Barclays, with China accounting for 43 percent of forecast
output. While supply may exceed usage by 49,000 tons in 2012,
there may be a fourth-quarter deficit of 17,000 tons, it said. To contact Bloomberg News staff for this story:
Helen Sun in Shanghai at
[email protected] To contact the editor responsible for this story:
James Poole at
[email protected] | 2012 | ead-stockpiles-in-china-seen-falling-as-demand-growth-picks-up |
Nose Job Implants May Raise Infection Risk, Study Finds | By Nicole Ostrow | 2012-08-27T20:00:00Z | http://www.bloomberg.com/news/2012-08-27/nose-job-implants-may-raise-infection-risk-study-finds.html | 8 | 27 | 5695d3430e53ce9f13d1f27f363498a18035b751 | Patients who undergo nose surgery
with synthetic implants may increase the risk of infection
requiring additional medical procedures, a study found. About 20 percent of the patients who used implants such as
Stryker Corp. (SYK) ’s Medpor developed infections, while 5.3 percent
who used products like W. L. Gore & Associate’s Gore-Tex got
infections, according to research released today by the Archives
of Facial Plastic Surgery . Nose surgery, called rhinoplasty, is the most common
cosmetic or reconstructive procedure for men and women younger
than 35, the American Academy of Facial Plastic and
Reconstructive Surgery said in a February report based on a
survey of its member doctors. Today’s study, one of the largest
to look at synthetic implants such as Stryker’s Medpor, shows
that patients need to know the risks before the procedure, said
Andrew Winkler, the lead study author. “This is a cautionary paper,” said Winkler , an assistant
professor in the Department of Otolaryngology at the University
of Colorado in Aurora, in an Aug. 24 telephone interview. “The
patient needs to be aware that the complication rate is higher
with this implant at least in this study.” Joe Cooper, a spokesman for Kalamazoo, Michigan-based
Stryker, declined to comment on the study findings. Implants may be used when a patient’s tissue is unavailable
from the nose, the ear or the ribs. Medpor, a type of porous
high-density polyethylene, is firm and used in rhinoplasty to
help structurally rebuild the nose. Stryker gained the product
in its October 2010 acquisition of Porex Surgical. Gore-Tex , or
expanded polytetrafluoroethylene, is floppy and most commonly
used on the ridge of the nose to build up height, Winkler said. If an infection occurs, patients may have to take an
antibiotic and if it doesn’t clear up then the implant needs to
be removed and the surgery may have to be redone, he said. Researchers in the study looked at 662 rhinoplasty
procedures conducted from 1999 to 2008. Of those, 151 procedures
used implants. They found that 19 of the patients developed an
infection. All the infections occurred in patients who had
implants used during their surgery. To contact the reporter on this story:
Nicole Ostrow in New York at
[email protected] To contact the editor responsible for this story:
Reg Gale at
[email protected] | 2012 | nose-job-implants-may-raise-infection-risk-study-finds |
Tottenham Sells Modric to Real Madrid for Reported $47 Million | By Dan Baynes and Alex Duff | 2012-08-27T14:56:01Z | http://www.bloomberg.com/news/2012-08-27/tottenham-sells-modric-to-real-madrid-for-reported-47-million.html | 8 | 27 | d8f9c8ba71d76ae39fa2a6e5ca767ed69e78f1ab | Tottenham Hotspur traded Luka Modric
to Real Madrid after more than a year of rejecting offers for
the playmaker. The 26-year-old from Croatia signed a five-year contract
after passing a medical examination today, Real Madrid said on
its website. Real will pay about 30 million pounds ($47.4
million), the British Broadcasting Corp. reported. Modric, who scored 17 goals in 160 games for Spurs after
joining from Dinamo Zagreb in 2008, was a target for Chelsea
among other clubs since June 2011. Tottenham said Real Madrid agreed to collaborate with the
London team with regard to players, coaching and commercial
relationships as part of the deal. It didn’t provide details. “Luka has been a terrific player for us and, whilst we
preferred not to part with him, we are pleased that it is to
Real Madrid, a club with which we now look forward to sharing a
long and productive partnership,” Spurs Chairman Daniel Levy
said in a statement . Tottenham has signed three players since finishing fourth
in the Premier League last season, adding striker Emmanuel Adebayor from Manchester City , Hoffenheim midfielder Gylfi
Sigurdsson and Ajax defender Jan Vertonghen. Spurs hired Andre Villas-Boas as manager last month to
replace Harry Redknapp . Real, the defending champion, saw its 24-game unbeaten run
in the Spanish league end yesterday with a 2-1 defeat at Getafe.
It was Real’s first La Liga loss since a 3-1 defeat by Barcelona
on Dec. 10. Real opened its title defense with a 1-1 draw against
Valencia. The last time it was winless after two matches was in
2001-02, according to Infostrada Sports. Modric is Real’s first signing of the season. “I am honored and proud to have joined the best club in
the world,” Modric said, according to the Real website. “It’s
the biggest challenge of my soccer career.” To contact the reporter on this story:
Dan Baynes in Sydney at
[email protected]
Alex Duff through the London newsroom
at [email protected] To contact the editor responsible for this story:
Christopher Elser at
[email protected] | 2012 | ottenham-sells-modric-to-real-madrid-for-reported-47-million |
Certificate of Deposits Reported: India Money Markets | By | 2012-08-27T12:57:00Z | http://www.bloomberg.com/news/2012-08-27/certificate-of-deposits-reported-india-money-markets.html | 8 | 27 | 96b234425f795e37ab62dd6d457c8928de911cf6 | Following is a table showing certificate of deposits
reported by Companies. The data has been provided by the Fixed Income Money
Market & Derivatives Association of India .
Contributed via: Bloomberg Publisher WEB Service Provider ID: 0496ec1ae3b04da698bb2b5ed3700f72 | 2012 | certificate-of-deposits-reported-india-money-markets |
Egypt Court Advisory Report on Parliament Expected Next Week | By Tarek El-Tablawy | 2012-08-27T12:59:03Z | http://www.bloomberg.com/news/2012-08-27/egypt-court-advisory-report-on-parliament-expected-next-week.html | 8 | 27 | 0fdcc03aab0bc0f549669415550042c48531cc14 | An advisory body for Egypt ’s
constitutional court is expected to complete by next week a
report on whether parliament’s upper house should be disbanded,
the court’s spokesman said. Following the recommendation, the high court will set a
date for a hearing to determine the legality of the election law
that paved the way for Islamists to dominate the assembly, the
state-run Middle East News Agency cited Judge Maher Sami as
saying. Parliament’s lower house was dissolved in June after the
same court ruled it was improperly elected, raising tensions
between incoming Islamist President Mohamed Mursi and the
generals from whom he inherited power. Mursi, who was nominated for the presidency by the Muslim
Brotherhood, took back legislative authority from the military
council on Aug. 13, voiding a constitutional addendum they had
issued hours after polls closed in the presidential election.
Mursi’s office has defended the move and his refusal to pass on
those powers to the parliament’s upper house, arguing that the
body could be dissolved as a result of the case now before the
court. To contact the reporters on this story:
Tarek El-Tablawy in Cairo at
[email protected] ; To contact the editor responsible for this story:
Andrew J. Barden at
[email protected] | 2012 | egypt-court-advisory-report-on-parliament-expected-next-week |
Investors Prefer Options to Structured Notes Amid Low Volatility | By Kevin Dugan | 2012-08-27T14:45:11Z | http://www.bloomberg.com/news/2012-08-27/investors-prefer-options-to-structured-notes-amid-low-volatility.html | 8 | 27 | 585971fe195d8c0d444b3fcc75a77b221131cb1e | Investors are starting to buy
options and swaps tied to stocks instead of structured notes
that use the derivatives as declining volatility makes the
contracts a more attractive purchase. U.S. sales of equity-linked notes and reverse convertibles,
high-yielding bank bonds that convert into stock if a company’s
share price plunges, have dropped 16 percent this year to $17
billion. Fund managers say they’d rather buy directly in the options
market, where prices have decreased, than pay a premium for the
notes. Volatility, as measured by the Chicago Board of Options
Exchange, known as the VIX (VIX) , has fallen 31 percent to 16.21 this
year. When price swings are expected to be smaller, options to
buy and sell stocks at set prices can be purchased more cheaply. “Notes are great because they’re efficient, but if the
returns aren’t there, we have to look elsewhere to try to
achieve that,” John Farrall, director of derivatives strategy
at PNC Wealth Management in Cleveland , said in a telephone
interview. The fund has $112 billion in assets under management. Low volatility also makes it harder for issuers to create
certain types of equity-linked notes with enticing terms such as
large coupons or big cushions against losses. At the same time,
fees on U.S. products tied to stocks have been as high as 7.85
percent this year . “With volatility as low as it is, those associated fees
become a bigger drag on performance,” said Max Breier, senior
volatility trader at BMO Capital Markets Corp. in New York . Counterparty Risk Moving away from structured notes also reduces counterparty
risk, said Jerry Miccolis, chief investment officer of Brinton
Eaton Associates Inc. in Madison, New Jersey . There’s too great
a chance that the banks guaranteeing payment on the notes could
fail, he said. “We’ve been replacing structured notes with other vehicles
over the last twelve months,” he said in a telephone interview.
Brinton Eaton bought swaps with a face value of $80 million to
hedge its investments, and didn’t have to pay any upfront costs,
he said. Accuvest Global Advisors likes options after buying two
structured notes from Lehman Brothers Holdings Inc. that plunged
in value after the company declared bankruptcy, said David Garff, the company’s president and chief investment officer. “The bottom line for us on structured notes vs. options is
that options are more simple vehicles that don’t imply the same
level of credit risk that structured notes do,” he said in an
e-mail. To contact the reporter on this story:
Kevin Dugan in New York at
[email protected] To contact the editor responsible for this story:
Alan Goldstein at
[email protected] . | 2012 | investors-prefer-options-to-structured-notes-amid-low-volatility |
Baoshan Steel’s Quarterly Profit Surges on Unit Sale to Parent | By Bloomberg News | 2012-08-27T13:52:51Z | http://www.bloomberg.com/news/2012-08-27/baoshan-steel-s-quarterly-profit-surges-on-unit-sale-to-parent.html | 8 | 27 | badb050febd84045add28c5d66cb3b18 | Baoshan Iron & Steel Co. (600019) , China ’s
biggest publicly traded steelmaker, posted a four-fold increase
in the second-quarter profit after selling two unprofitable
units. Nine-month profit may rise more than 50 percent, it said. Net income surged to 8.39 billion yuan ($1.32 billion) in
the quarter ended June 30 from 2 billion yuan a year earlier,
based on first-half earnings reported today in Shanghai. Baoshan completed the sale of its stainless-steel and
specialty-steel units to its parent for 42.6 billion yuan on
April 1. The Shanghai-based company, which supplies half of
China’s automobile steel, is facing shrinking margins as the
European debt crisis and domestic property curbs sap steel
demand and prices. “We aren’t optimistic about the outlook for the third
quarter as Baoshan has been cutting prices drastically,” Sarah
Wang, an analyst with Masterlink Securities Corp. (2856) in Shanghai,
said before the earnings announcement. “Demand from end users
such as automakers, machinery and shipbuilders is stagnant.” Operating profit at Baoshan declined 60 percent to 2.72
billion yuan in the first half from a year ago as weakening
steel demand weighed on prices, it said today. Baoshan reported
a pretax profit of 9.09 billion yuan by selling the units. First-half profit rose 89 percent to 9.61 billion yuan from
a year ago, Baoshan said. The company had expected an 80 percent
to 100 percent increase in earnings, it said April 27. Shares Drop Baoshan declined 0.7 percent to close at 4.07 yuan today
before the earnings announcement, compared with a 1.7 percent
drop in the benchmark Shanghai Composite Index. The stock has
fallen 16 percent this year. Baoshan plans to spend as much as 5
billion yuan buying back shares at no more than five yuan
apiece, the company said today. Chinese steel mills , overwhelmed by increasing capacity and
sluggish demand, have struggled to remain profitable as prices
plunged to an almost three-year low this month. Wuhan Iron &
Steel Co. (600005) ’s first-half profit plunged 89 percent to 135 million
yuan from a year ago, the company said yesterday, while Maanshan
Iron & Steel (323) Co. posted a wider-than-expected loss last week of
1.9 billion yuan for the first six months. Angang Steel Co., China’s biggest Hong Kong-traded
steelmaker, today posted a net loss of 1.98 billion yuan in the
first half from a profit of 220 million yuan a year ago. Quarterly Challenges The Chinese steel industry will face challenges in the
fourth-quarter and the first-quarter next year without strong
economic stimulus, China Securities Journal reported Aug. 24,
citing Wang Xiaoqi, vice chairman of China Iron and Steel
Association. Baoshan has cut prices for major products,
including cold-rolled coils, used in cars and appliances, and
hot-rolled coils, used in cargo containers and buildings, for
three straight months starting July. “There’s mounting pressure on the domestic economy” to
slow further, Baoshan said in the statement, “Steel prices are
unlikely to rebound in the third quarter.” The company will carry out annual maintenance of its major
production lines in the second half, it said. China’s passenger-vehicle sales gained 11 percent to 1.12
million units last month, lagging behind analyst estimates of
1.16 million units for the first time in five months, as demand
fell with the slowing economy and some consumers held back
purchases in anticipation of government stimulus measures. The country’s manufacturing may be contracting at a faster
pace this month, signaling the need for more monetary and fiscal
stimulus. A preliminary reading of 47.8 for a purchasing
managers’ index released Aug. 23 by HSBC Holdings Plc and Markit
Economics compares with July’s final 49.3 figure. To contact Bloomberg News staff for this story:
Helen Yuan in Shanghai at
[email protected] To contact the editor responsible for this story:
Rebecca Keenan at
[email protected] | 2012 | baoshan-steel-s-quarterly-profit-surges-on-unit-sale-to-paren |
Romney Tax Returns Show Strategy for Moving Money to Kids | By Margaret Collins and Richard Rubin | 2012-08-27T18:38:37Z | http://www.bloomberg.com/news/2012-08-27/romney-tax-returns-show-strategy-for-moving-money-to-kids.html
Republican presidential candidate Mitt Romney and his wife, Ann, have used sophisticated estate- planning techniques for more than a decade to minimize taxes and amass at least $100 million for their family outside of their estate. The couple created trusts as early as 1995, when Romney was building wealth as chief executive officer of Bain Capital LLC. They packed one for their children with investments that stood to appreciate and set up another for charity that provides a tax deduction and income. The candidate’s retirement account, valued at as much as $87.4 million, may benefit his heirs for decades. “It’s beneficial for your kids and grandkids to push the money downstream,” said David Scott Sloan, chairman of the national private wealth services estate-planning practice at the law firm Holland & Knight LLP in Boston. “The Romneys appear to be doing things that are similar to what other high-net-worth families do.” Wealthy couples use strategies allowed under the federal tax system such as moving assets to trusts so that the money may be subject to little or no gift and estate taxes , Sloan said. The Romney family trust is worth $100 million, according to the campaign. That money isn’t included in the couple’s personal fortune, which the campaign estimates at as much as $250 million. Romney’s use of the tax code to minimize levies for his family has drawn scrutiny from Democrats portraying him as an elite person of wealth who is out of touch with many Americans. Estate Tax The Romneys would pay higher taxes under the estate-tax proposals of President Barack Obama and would pay less under Romney’s plan. Obama has proposed increasing the estate tax from current levels and curtailing wealth-transfer strategies. The Republican presidential candidate wants to eliminate the estate tax, which currently applies a top rate of 35 percent and a $10.24 million exemption on a married couple’s combined assets. A repeal of the levy may save the Romneys about $70 million in federal estate taxes after they both die, assuming the couple’s combined taxable estate was $200 million after deductions for items such as administrative expenses and charitable contributions. Compared with today’s rates, Obama’s proposal may cost the Romneys an additional $20 million. At the core of the Romneys’ estate-planning strategy is a family trust . The technique pushes money out of their taxable estate and lets the couple pay the annual taxes on their family’s investment income. Future Generations The Romneys frequently spend time with their five adult sons and their families; the candidate and his wife have 18 grandchildren. The couple established the family trust in November 1995 for their children and other heirs, according to the entity’s 2010 tax return , which was made public by the candidate. Romney released an estimated 2011 income-tax return and he has said he will release the final documents when they are completed. “Their family trusts are set up to provide for future generations,” Andrea Saul, a spokeswoman for the Romney campaign, said in a statement. Brad Malt, a partner at the law firm Ropes & Gray LLP in Boston, manages Romney’s investments and is the trustee of the family trust. He declined to comment on the family’s estate planning. The Romneys have transferred assets into the family trust and invested them, amassing a substantial and diversified portfolio of stocks, bonds and alternative investments such as private-equity and hedge funds that generate income. In 2010 alone, the trust realized more than $7 million in long-term capital gains, about $1.5 million in ordinary dividends and $741,407 in U.S. government interest, according to the trust’s tax return. Gains or Losses The family trust realized gains or losses from more than 100 securities including those in JPMorgan Chase & Co. (JPM) , Bank of America Corp. , Nike Inc. (NKE) and PepsiCo Inc. (PEP) in 2010. It also reported investments in Goldman Sachs Group Inc. (GS) hedge funds as well as interests in hedge funds and private-equity funds managed by Bain Capital, including Sankaty Advisors LLC and an affiliate based in Munsbach, Luxembourg. Because the candidate doesn’t own the trust, he isn’t required to detail its holdings on federal disclosure forms. Romney co-founded Bain Capital in 1984. When he retired, he entered into an agreement with the Boston-based private equity firm to retain the right to make passive investments in certain Bain Capital entities until 2009, according to financial disclosures filed by his campaign. Lifetime Limit The Romneys could have contributed as much as $1.2 million, or $600,000 each, into the family trust in 1995 and invested it in securities or funds they expected to appreciate. They wouldn’t have paid transfer taxes because that was the lifetime limit on tax-free gifts at the time. Even if they contributed more money over time as Congress lifted the gift-tax exemption to the current $10.24 million for a couple, the amount they invested in securities and other assets would have grown at least 10 times to reach $100 million. Bain Capital has seen its assets under management rise more than 16 times to $65 billion from $4 billion in 1999 when Romney left to run the Winter Olympics in Salt Lake City . Private-equity funds pool money from so-called limited partners such as pensions, endowments and wealthy families and use that money, usually paired with debt, to buy companies they later sell. The profits are split between the limited partners, who get 80 percent, and the fund’s managers, who receive the remaining 20 percent. That portion, known as the carried interest, is considered a capital gain under current tax law. The top rate on long-term capital gains is now 15 percent. Romney’s Wealth Romney has been confronted by persistent questions about his personal finances. His 2010 return shows that he paid an effective tax rate of 13.9 percent on more than $21 million in income, most of it from capital gains and dividends. The candidate said on Aug. 16 that he had never paid less than 13 percent in the past decade and his campaign said the figure he cited represented his share of federal income tax. Romney’s estimated $250 million in wealth is less than some of his peers who founded private-equity firms at about the same time. Stephen Schwarzman , who created New York-based Blackstone Group LP (BX) in 1985 with Peter G. Peterson , earned $398.3 million in 2006 | 8 | 27 | 8067f7ae04a1406aa9d177802bc16d50 | 2012 | romney-tax-returns-show-strategy-for-moving-money-to-kids |
|
Shearman & Sterling, Cleary, Merrill: Business of Law | By Ellen Rosen | 2012-08-27T04:01:01Z | http://www.bloomberg.com/news/2012-08-27/shearman-sterling-cleary-merrill-business-of-law.html | 8 | 27 | cb95e5359315433aa1ec63a08d37dd55 | Former brokers of Bank of America
Corp. (BAC) ’s Merrill Lynch & Co. unit asked a federal judge to
approve a $40 million settlement in a lawsuit over deferred
compensation. Charles McCallum , a lawyer for the brokers, told U.S.
District Judge Alison Nathan on Aug. 24 in Manhattan federal
court that the proposed settlement would cover more than 1,400
people. The judge said she will rule later on preliminary
approval. The lawsuit, filed by Scott Chambers and John Burnette,
relates to Bank of America’s 2009 purchase of the investment
firm. The brokers alleged in their complaint that they were
entitled to cash distributions stemming from a change in control
of Merrill Lynch. “We’re hopeful, given the nature of the settlement and the
amount involved, the settlement will be well-received,”
McCallum, lawyer at McCallum Hoaglund Cook & Irby LLP in
Vestavia Hills, Alabama , told the judge. William Halldin , a spokesman for Charlotte , North Carolina-
based Bank of America, said in a phone interview that the firm
“agreed to a resolution to avoid the cost and distraction of
what would likely be continued, lengthy litigation.” The case is Chambers v. Merrill Lynch & Co., 10-cv-07109,
U.S. District Court, Southern District of New York (Manhattan). Stem-Cell Funding Challenge Rejected by U.S. Appeals Court A lawsuit challenging U.S. funding for human embryonic
stem-cell research was rejected by a federal appeals court in
Washington , which upheld a lower court’s ruling dismissing the
case. A three judge panel of the U.S. Court of Appeals in
Washington on Aug. 24 said that U.S. District Judge Royce Lamberth “committed no error” when he threw out the lawsuit
filed by James Sherley , a researcher at Boston Biomedical
Research Institute, and Theresa Deisher, founder of AVM
Biotechnology in Seattle . Lamberth, in his July 2011 dismissal
ruling, cited an earlier appeals court finding that the
government-backed research is probably lawful. The two doctors sought to block the U.S. Health and Human
Services Department and the National Institutes of Health from
spending federal funds on research involving human embryonic
stem cells , arguing it violates a law known as the Dickey-Wicker
Amendment. The 1996 statute bars government spending on research that
damages or destroys a human embryo. In a 2-1 decision in April
2011, the appeals court let the funding continue while Lamberth
considered a final ruling. The appellate panel said the language
of the statute wouldn’t support a funding cutoff. The case is Sherley v. Sebelius, 11-5241, U.S. Court of
Appeals for the District of Columbia Circuit (Washington). Deals Codelco, Anglo Settle Dispute Over Fifth-Biggest Copper Mine Codelco, the biggest copper producer, reached an agreement
with Anglo American Plc (AAL) to end a 10-month dispute over the
world’s fifth-largest copper mine. Partners George Casey and Michael McGuinness and counsel
Heiko Schiwek of Shearman & Sterling LLP represented Anglo
American. Partners Jeffrey Lewis and Duane McLaughlin, and
counsel Grant Binder of Cleary Gottlieb Steen & Hamilton LLP
represent Codelco. According to terms of the deal released last week, Anglo
American will reduce its stake in its Sur unit, which owns the
Los Bronces mine in central Chile , to 50.1 percent from 75.5
percent. A joint venture between Codelco and Mitsui & Co. (8031) will
buy 29.5 percent of Sur in a cash deal valued at about
$2.8 billion. The arrangement ends a feud that began Oct. 12 when Codelco
announced it secured financing from Mitsui to take up an option
to acquire 49 percent of Sur for about $6 billion. Anglo reacted
by selling a 24.5 percent stake to Mitsubishi Corp. (8058) in November
in a deal that valued Sur at twice that of the Codelco option.
Anglo American and Codelco halted legal proceedings in June to
seek an out-of-court settlement. “The combination of Anglo American, Codelco, Mitsubishi
and Mitsui forms a compelling proposition for future investment
in the Los Bronces district,” Anglo Chief Executive Officer
Cynthia Carroll said in the statement. Debevoise & Plimpton LLP represented Mitsui. On the
Debevoise team are partners Maurizio Levi-Minzi, Craig A. Bowman, Gary M. Friedman and Christopher Smeall and counsel Kyra
K. Bromley. For more on the deal, click here. Law Schools Stanford Law Makes Course, Career Guide Available to Public In a move akin to open source software, Stanford Law School
has created an online career and curriculum guide that enables
law students to learn about legal careers and shape their course
choices for those careers. The content of the guide is based on interviews with
faculty, alumni, practicing attorneys and other legal
professionals. It is geared around offerings throughout Stanford
University and incorporates more than 1,500 courses that may be
useful to the school’s law students as they consider different
specialties. Called the SLSNavigator , the guide is the brainchild of
Larry Kramer, the outgoing dean of the law school. “Most law schools teach students how to spot problems, but
not how to solve problems,” Kramer said in a telephone
interview. There is “no generic problem-solving class,” he
said. “An environmental lawyer faces different problems than a
corporate lawyer.” By spelling out “what lawyers do and what skills they
have,” Kramer said the guide can show students “the
foundational requirements” for particular careers. The guide was created as part of broader curriculum changes
at the law school undertaken during Kramer’s tenure. He is
leaving to head the William and Flora Hewlett Foundation . The school decided to release it to the public because it
could be “of use to students anywhere,” Kramer said. Moves Milbank Tweed Adds New Partner in London Office Clive Ransome, formerly a partner in the London office of
Linklaters LLP, left to join the London office of Milbank Tweed
Hadley & McCloy LLP. Ransome, an energy and infrastructure lawyer, will join the
firm’s global project finance group. Ransome’s experience
includes power, refinery, liquid natural gas and petrochemical
projects in Europe, the Middle East and Asia. “We have long known and worked with Clive in both London
and Asia, and we are confident that he has the experience and
relationships to help reinforce and expand our energy and
natural resources practice,” Phillip Fletcher, practice group
leader of Milbank’s Global Project Finance group, said in a
statement. Ransome is the fourth new partner to join Milbank’s London
office in the past three months. In May, the firm announced the
arrival of corporate lawyer Mark Stamp from Linklaters. In June, Nicholas Spearing joined from Freshfields as the
office’s first competition/antitrust partner. This month, Neil
Caddy joined from Mayer Brown to expand the firm’s leveraged
finance practice. Milbank has 575 lawyers worldwide. Intellectual Property Attorney Joins McCarter & English Thomas O. Hoover, an intellectual-property lawyer, joined
the Boston office of McCarter & English LLP as a partner. He focuses his practice on patent, trademark and copyright
law. He previously was with Weingarten, Schurgin, Gagnebin &
Lebovici LLP in Boston. “His technical background and legal experience are a great
benefit to our clients and we’re delighted to have him on
board,” said Elizabeth A. Hanley, leader of the firm’s IP
group. Hoover’s practice includes the prosecution of patents
before the U.S. Patent and Trademark Office, patent appeals and
opposition proceedings in foreign jurisdictions, the firm said
in a statement. He also has been involved in trade-secret and
infringement litigation. Hoover has experience in industries
including medical devices and imaging technologies,
semiconductors and optics. McCarter’s IP group has more than 90 lawyers and patent
agents. The firm has 400 attorneys nationwide. To contact the reporter on this story:
Ellen Rosen in New York at
[email protected] To contact the editor responsible for this story:
Michael Hytha at
[email protected] | 2012 | shearman-sterling-cleary-merrill-business-of-law |
Bidvest Enters Chile in Growth Move as Earnings Increasd | By Sikonathi Mantshantsha | 2012-08-27T11:43:19Z | http://www.bloomberg.com/news/2012-08-27/bidvest-enters-chile-in-growth-move-as-earnings-increasd.html | 8 | 27 | 6932d9065a7ba85d3b4ef6476e910e4f90cdf89a | Bidvest Group Ltd. (BVT) said it made an
acquisition in Chile to enter South America after earlier
purchases helped full-year sales and profit increase. Earnings per share after one-time transactions rose 27
percent to 14.74 rand in the 12 months through June, beating the
13.57-rand median of 12 analyst estimates compiled by Bloomberg.
Revenue advanced 13 percent to 133.5 billion rand ($15.9
billion), Johannesburg-based Bidvest said in a statement today. The company, which has interests from cleaning to car
sales, said earnings at its industrial-products division were
bolstered by the takeover of work-clothes manufacturer Alsafe.
It has also bought a 26.4 percent stake in South African
services company Mvelaserve Ltd. (MVS) Following the acquisition of
Deli Meals in Chile , Bidvest will seek other opportunities in
South America, particularly in Brazil , Finance Director David Cleasby said in an interview. “Brazil lends itself to the kind of food business we do,”
Cleasby said by phone from Johannesburg. He declined to predict
when further deals may materialize, saying that “other
acquisitions in the region will come when they come.” Bidvest increased its dividend 30 percent to 6.22 rand a
share and is making a special payout of 80 cents. Growth Strategies The company, which also owns Seafood Holdings in the U.K.,
said it will use innovation and acquisitions to accelerate
expansion in the Asia-Pacific region, where it has operations in
New Zealand , Australia and China. Bidvest will otherwise focus
on expanding existing businesses in its main markets worldwide,
Cleasby said. “Our management teams are well positioned to deal with the
current economic environment and will pursue organic growth
mainly,” Cleasby said. Bidvest rose as much as 2.2 percent to 205.22 rand, the
biggest intraday gain since Aug. 1, and traded 1.9 percent
higher at 1:41 p.m. in Johannesburg. Mvelaserve operates the Total Facilities Management Co. ,
which provides services ranging from office cleaning through
engineering project management. Bidvest is Mvelaserve’s biggest
shareholder, according to data compiled by Bloomberg. “It certainly has businesses that fit our profile
perfectly,” Cleasby said. “Our intention with the company will
become clearer in the next while.” To contact the reporter on this story:
Sikonathi Mantshantsha in Johannesburg at
[email protected] To contact the editor responsible for this story:
Kenneth Wong at
[email protected] | 2012 | bidvest-enters-chile-in-growth-move-as-earnings-increasd |
Julius Baer Says Employee Stole German Offshore Client Data | By Giles Broom | 2012-08-27T17:16:12Z | http://www.bloomberg.com/news/2012-08-27/julius-baer-says-employee-stole-data-on-german-offshore-clients.html | 8 | 27 | 4cf75ceeccc64fa3bcb7add7f9bc9f23 | Julius Baer Group Ltd., the Swiss
wealth manager established in 1890, is contacting German
customers after an employee stole information on their offshore
bank accounts in Switzerland. “We launched an internal investigation and we discovered a
case of data abuse,” Jan Vonder Muehll, a spokesman for the
Zurich-based bank, said today by phone. “We are in contact with
potentially affected clients.” The suspected data thief was fired by the company and
arrested, according to Vonder Muehll, who declined to give
further details of the theft. SonntagsZeitung reported the
information theft yesterday, citing an interview with Julius
Baer Chief Executive Officer Boris Collardi. U.S. and European authorities are analyzing information
from thieves, whistle-blowers and client disclosures to probe
the alleged role of Swiss banks in fostering tax evasion by
wealthy customers. North-Rhine Westphalia, a state run by
Germany’s Social Democratic Party , has regularly been the
subject of reports it bought CDs with stolen Swiss bank account
information on rich Germans. “These presumed data purchases are making Germans with
untaxed Swiss accounts more nervous and a voluntary disclosure
is usually the cheapest way to resolve the situation,” said
Gerd Kostrzewa, a lawyer working in Dusseldorf and Zurich for
Heuking Kuehn Lueer Wojtek. “North-Rhine Westphalia will keep
buying data and increase its prosecution efforts.” Jail Threat Julius Baer said Aug. 22 it had contacted some German
clients because of speculation over data theft and the
acquisition of CDs by German authorities. Switzerland’s Office of the Attorney General is
investigating the data theft , Jacqueline Buhlmann, a spokeswoman
for the office, said in an e-mailed statement. The suspected
data thief is still being detained, she said. Zurich’s police department declined to confirm whether it
was involved in the matter. Swiss secrecy laws threaten bank
employees with a jail term if they divulge client information. Julius Baer rose 1.1 percent to 32.04 Swiss francs in
Zurich trading, paring this year’s decline to 13 percent and
giving the bank a market value of 6.29 billion francs ($6.6
billion). Tax authorities have increasingly been offered secret bank
information since Germany in 2009 prosecuted tax evaders,
including former Deutsche Post AG (DPW) Chief Executive Officer Klaus Zumwinkel, using the information bought from a former computer
consultant at LGT, owned by Liechtenstein’s princely family. Customer Data UBS AG, Switzerland ’s biggest bank, and Coutts, a
subsidiary of Royal Bank of Scotland Group Plc, have both said
in response to German media reports over the summer they haven’t
found evidence of staff stealing customer data. Merrill Lynch Bank Suisse SA has also investigated the
possibility of data theft, said Valerie Bastardoz, a Geneva-
based spokeswoman, who declined to comment on the outcome of the
inquiry. Julius Baer agreed two weeks ago to buy Bank of America
Corp.’s Merrill Lynch wealth management units outside the U.S.
for about 860 million francs. Baer has opened offices in Munich, Wurzburg and Kiel in the
past three years as it tries to retain offshore clients
repatriating money to Germany . While the onshore business, which
also has offices in Dusseldorf, Hamburg, Stuttgart and
Frankfurt , attracted inflows in the first half of this year, it
wasn’t profitable, Baer said last month. Swiss Haven “Most Julius Baer clients I’ve seen have kept their
offshore accounts after disclosing their affairs to the
authorities,” Kostrzewa said. “There’s still a demand for
banking in the Swiss haven given the level of uncertainty in the
euro region.” Julius Baer agreed last year with German authorities to pay
50 million euros ($63 million) to end an investigation over
undeclared client assets in a separate case of data theft. Rudolf Elmer, who worked for Baer’s Cayman Islands unit
until December 2002, handed over data on about 2,000 cross-
border accounts to WikiLeaks’ founder Julian Assange last year.
Elmer was later detained by Swiss prosecutors investigating
whether he broke banking secrecy laws. Julius Baer is one of 11 Swiss financial firms under
investigation for allegedly helping Americans hide money from
the Internal Revenue Service and expects to pay a fine to the
U.S. authorities as part of a settlement. To contact the reporter on this story:
Giles Broom in Geneva at [email protected] To contact the editor responsible for this story:
Frank Connelly at [email protected] | 2012 | julius-baer-says-employee-stole-data-on-german-offshore-clients |
Real Madrid to Pay $42.7 Million for Luka Modric: Soccer Roundup | By Dan Baynes | 2012-08-27T07:06:44Z | http://www.bloomberg.com/news/2012-08-27/real-madrid-to-pay-42-7-million-for-luka-modric-soccer-roundup.html | 8 | 27 | d59fc37190875632fe489f87f9755290e76f48b9 | The following is a roundup of soccer
stories from U.K. newspapers, with clickable Internet links. Modric Fee Tottenham Hotspur midfielder Luka Modric will join Real
Madrid after the Spanish champion worked out a 27 million-pound
($42.7 million) fee for the Croatian playmaker last night, the
Daily Mail reported . Spurs will use the money to fund moves for Brazilian duo
Willian of Shakhtar Donetsk and Internacional’s Leandro Damiao,
the Mail said. Spurs manager Andre Villas-Boas is also keen on
Fulham’s Moussa Dembele, the newspaper added. Rooney Injury Manchester United striker Wayne Rooney may miss as many as
14 games after his right thigh was cut in the Premier League win
against Fulham two days ago, the Sun reported . The gash, which occurred when Hugo Rodallega inadvertently
stood on Rooney, went through to the bone and required 10
stitches to pull the skin together, the newspaper said. United
manager Alex Ferguson said after the game that the injury would
only sideline Rooney for a month, the Sun added. Sinclair to City Swansea winger Scott Sinclair is set to complete his move
to Manchester City tomorrow for a transfer fee said to be 6.2
million pounds, the Daily Mail reported . Swansea manager Michael Laudrup left Sinclair out of his
squad for the 3-0 win against West Ham United two days ago in a
sign that Sinclair’s future lies elsewhere, the Mail added. Frantic Five Days Manchester City manager Roberto Mancini said the club’s
activity before the transfer window closes Aug. 31 will shape
the defense of its Premier League title following yesterday’s
2-2 draw at Liverpool, the Guardian reported . “We need to bring players in and we have five days in
which to do it,” the newspaper cited Mancini as saying. “We
have to work very hard in these four or five days. It will be a
long week for us.” Arsenal Targets Arsenal wants to bring in two players this week and is
considering a 15 million-pound move for Newcastle midfielder
Yohan Cabaye, the Mail reported . The Gunners’ list of targets includes Rennes midfielder
Yann M’Vila and Arsenal manager Arsene Wenger is also keen to
sign a defender, the Mail added. To contact the reporter on this story:
Dan Baynes in Sydney at
[email protected] To contact the editor responsible for this story:
Christopher Elser at
[email protected] | 2012 | real-madrid-to-pay-42-7-million-for-luka-modric-soccer-roundup |
Taiwan Dollar Climbs on China Stimulus Speculation; Bonds Steady | By Andrea Wong | 2012-08-27T08:20:15Z | http://www.bloomberg.com/news/2012-08-27/taiwan-dollar-climbs-on-china-stimulus-speculation-bonds-steady.html | 8 | 27 | 41261ac9567f6f2ede4f140b9be593485364af4f | Taiwan’s dollar gained on
speculation China will take further steps to combat an economic
slowdown. Government bonds were little changed. Global funds bought $586 million more Taiwanese shares than
they sold last week, boosting net purchases for the month to
$3.11 billion, exchange data show. Chinese Premier Wen Jiabao
urged extra measures to help meet economic targets as he toured
Guangdong, the nation’s biggest exporting province, the official
Xinhua News Agency said Aug. 25. China, the world’s second-
biggest economy, is the island’s biggest trading partner. “China wants to stabilize exports and keep its economy
going,” said Tarsicio Tong, a foreign-exchange trader at Union
Bank of Taiwan. (2838) “It’s mainly exporters selling the greenback.” Taiwan’s dollar advanced 0.1 percent to NT$29.98 against
its U.S. counterpart, according to Taipei Forex Inc. One-month
implied volatility, a measure of exchange-rate swings used to
price options, was little changed at 3.3 percent. U.S. Federal Reserve Chairman Ben S. Bernanke said policy
makers can take additional steps to boost the economy before
they meet on Aug. 30 in Jackson Hole , Wyoming. The central bank
has already conducted two rounds of bond purchases to pump cash
into the banking system, a policy known as quantitative easing. The yield on Taiwan’s 1.25 percent notes due March 2022 was
little changed at 1.183 percent, according to Gretai Securities
Market. The overnight money-market rate slipped one basis point to
0.386 percent, according to a weighted average compiled by the
Taiwan Interbank Money Centre. A basis point is 0.01 percentage
point. To contact the reporter on this story:
Andrea Wong in Taipei at
[email protected] To contact the editor responsible for this story:
James Regan at
[email protected] | 2012 | aiwan-dollar-climbs-on-china-stimulus-speculation-bonds-steady |
Guangzhou Auto First-Half Profit Misses Analysts’ Estimate | By Bloomberg News | 2012-08-27T15:40:48Z | http://www.bloomberg.com/news/2012-08-27/guangzhou-auto-first-half-profit-misses-analysts-estimate.html | 8 | 27 | 8e0919664583b6e77d82dd6e06c458c270c08d02 | Guangzhou Automobile Group Co. (2238) ,
which makes cars with Toyota Motor Corp. (7203) , Honda Motor Co. (7267) and
Fiat SpA (F) , reported first-half profit that missed analysts’
estimates amid an industry-wide slowdown in vehicle demand. Net income fell 14 percent to 1.48 billion yuan ($233
million), or 0.24 yuan a share, in the six months ended June 30,
compared with 1.72 billion yuan, or 0.28 yuan, a year earlier,
Guangzhou Auto said in a statement to Hong Kong’s stock exchange
today. Sales rose 5.6 percent to 5.48 billion yuan. Profit was 28 percent lower than the average net income
estimate of three analysts compiled by Bloomberg. Distributors
have stepped up discounts amid rising stockpiles, as demand
slowed with the weakest economic expansion in three years. “In the second half of the year, the company will further
heighten its sense of crisis and urgency,” said Guangzhou Auto
in the statement today. China’s vehicles market “will maintain
its growth trend with the focus of development gradually
shifting to the third and fourth-tiered cities,” the company
added. Guangzhou Auto shares fell 0.4 percent to HK$5.76 in Hong
Kong trading today before the announcement, widening its loss
this year to 11.1 percent. The company’s Shanghai-traded stock
fell 5.2 percent to 6.24 yuan today. The city government of Guangzhou, where the carmaker is
based, imposed a cap on new vehicle registrations in the 12
months from July 1, or about half of last year’s total, as part
of measures to control traffic jams and reduce pollution. Anti-Japan Protests broke out in Guangzhou and other Chinese cities
this month as Japanese activists landed on an island in the East
China Sea claimed by both countries. Demonstrators called for a
boycott of Japanese goods, the state-run China Youth Daily
reported Aug. 20. Zhongsheng Group Holdings Ltd. (881) , which distributes Toyota,
Honda and Nissan Motor Co. cars in China, said the same day that
the anti-Japan protests had limited impact on sales. Guangzhou Auto began producing the Viaggio car with Fiat in
June. The venture plans to boost annual sales of locally built
cars to 200,000 cars in 2014, Jack Cheng, general manager of the
joint venture, GAC Fiat Automobile Co., said in an interview in
April. To contact Bloomberg News staff for this story:
Tian Ying in Beijing at
[email protected] ;
Daryl Loo in Beijing at
[email protected] To contact the editor responsible for this story:
Young-Sam Cho at
[email protected] | 2012 | guangzhou-auto-first-half-profit-misses-analysts-estimate |
Plane Part Failed Before Reno Air-Race Crash, NTSB Finds | By John Hughes | 2012-08-27T16:58:23Z | http://www.bloomberg.com/news/2012-08-27/plane-part-failed-before-reno-air-race-crash-ntsb-finds.html | 8 | 27 | 0886dc8208558083fb1bde977a6e11768be99dc6 | An air-race crash last year in Reno,
Nevada , that killed 11 and injured 66 resulted from aircraft
vibrations that caused a tail-wing part to fail, a U.S. safety
board found. Loose screws in the part that helped the pilot keep the
nose pointed downward made the aircraft susceptible to what’s
known as flutter, the National Transportation Safety Board found
in Washington . The part failure on the modified 1944 P-51D
Mustang plane called the Galloping Ghost occurred during a race
in which the aircraft reached speeds of 530 miles per hour, the
NTSB found. “One moment spectators were thrilled at the spectacle of
speed, only to have it followed by inescapable tragedy,” NTSB
Chairman Deborah Hersman said at a meeting today. “The fine
line between observing risk and being impacted by consequences
when something goes wrong was crossed.” The NTSB’s findings today and recommendations it issued
months ago are an effort to improve safety at future Reno races,
starting with the one to be held in two weeks. While the NTSB has investigated 22 accidents associated
with Reno air races in the past 30 years, and positions
investigators at events in case of mishaps, this was the first
time spectators as well as participants were killed. This year’s Reno race will be safer as a result of changes
the NTSB sought, including a course redesign that moved the race
to the north and flattens one of the turns, Hersman told
reporters after the meeting. Galloping Ghost The Galloping Ghost, running in third place in the third
lap of a race on Sept. 16, had been in a steep left turn before
it banked sharply to the left, then right, and pitched upward
ahead of the crash. The NTSB couldn’t decide whether the initial steep-left
bank was due to the plane being buffeted by the wake of another
aircraft ahead of it in the race, or due to the tail-part
failure. The board, after studying hundreds of photograhs of the
race from fans and a dozen videos, concluded the tail parts were
vibrating a second after the left-bank upset. The G-force
generated at that moment, which exceeded 17 times the force of
gravity, incapacitated the pilot, who slumped forward in the
cockpit next to the control stick he’d just moved to the right
in response to the left-bank upset. The plane at the annual race exhibition was flown by Jimmy
Leeward, 74, a movie stunt pilot. Modifications made to the
plane by Leeward, who was also its owner, were listed by the
safety board as a contributing factor to the accident. Stressed Aircraft The 10 modifications, nine of which he failed to notify the
Federal Aviation Administration about, were designed to make the
plane easier to handle at the high speeds he sought in the race.
For instance, a right tail-wing part that helped him control the
nose of the plane was anchored in place, so he relied only on
the similar part on the left tail wing for that control. The mechanism that let him control that part, called the
left trim tab control rod, was the first part to fail as a
result of the flutter, the NTSB found. The pilot was operating the plane at such high speeds that
he exceeded the structural limits of the aircraft, originally
built in 1944 and rebuilt in 2009. Photographs showed the skin
of the plane buckling during the race and the dome over the
cockpit being pushed off center. “He was really testing the limits on this aircraft,”
Hersman said. To contact the reporter on this story:
John Hughes in Washington at
[email protected] To contact the editor responsible for this story:
Bernard Kohn at
[email protected] | 2012 | plane-part-failed-before-reno-air-race-crash-ntsb-finds |
Chinese Industrial Companies’ Profits Drop by Most This Year | By Bloomberg News | 2012-08-27T03:10:10Z | http://www.bloomberg.com/news/2012-08-27/china-july-industrial-profits-fall-5-4-after-1-7-drop-in-june.html
Chinese industrial companies’
profits fell in July by the most this year, a government report
showed today, adding to evidence the nation’s economic slowdown
is deepening. Income dropped 5.4 percent last month from a year earlier
to 366.8 billion yuan ($57.7 billion), the fourth straight
decline, National Bureau of Statistics data today showed. That
compares with a 1.7 percent slide in June and a 5.3 percent drop
in May. Today’s data add pressure on the government to step up
policy easing to reverse a slowdown that may extend into a
seventh quarter. On an inspection of Guangdong province from Aug.
24 to 25, Premier Wen Jiabao said difficulties in stabilizing
the expansion are “still relatively large” and called for
measures to promote export growth to help meet the country’s
annual economic targets, the Xinhua News Agency reported. “The economy is slowing faster than what had previously
been expected,” said Patrick Bennett , a strategist at Canadian
Imperial Bank of Commerce in Hong Kong . The profit outlook is
for “further weakness throughout the year,” he said. Industrial companies’ profits in the first seven months of
the year declined 2.7 percent to 2.7 trillion yuan, according to
today’s statement. That compares with a 2.2 percent drop in the
first half and a 28.3 percent gain in the same period in 2011. Stocks Decline China ’s benchmark Shanghai Composite Index of stocks
dropped 1 percent at 10:19 a.m., extending a decline after
falling last week to the lowest level in more than three years. State-owned companies’ profits declined 12.2 percent in the
first seven months from a year earlier, while foreign-funded
companies’ earnings dropped 12.6 percent, today’s report showed.
Private industrial companies’ profits increased 15.5 percent. Among 41 industries, 25 reported year-over-year profit
growth in the first seven months and 15 recorded declines, while
one group | 8 | 27 | ba352f0301904b14a589d966d98d6f43 | requirements and boost infrastructure investment and consumption
incentives, among other steps, said Dariusz Kowalczyk, senior
economist and strategist at Credit Agricole CIB in Hong Kong. “Today’s profit data and Wen’s weekend comments should be
supportive for market sentiment as they suggest that the
situation is bad enough for policy makers to take more action to
support the economy,” Kowalczyk said. Growth Pace Gross domestic product expanded 7.6 percent last quarter,
the slowest pace in three years, as Europe ’s debt crisis hurt
exports and Wen’s campaign to cool consumer and property prices
damped domestic demand. Bank of America Corp. estimates a
further slide to 7.4 percent in the three months through
September. Bank of America and Deutsche Bank AG this month reduced
their forecasts for full-year economic expansion to 7.7 percent,
which would be the slowest pace since 1999. Wen in March set a
target of 7.5 percent. Company profits are declining amid falling prices, higher
costs and slower demand. Xinjiang Goldwind Science & Technology Co. (2208) , China’s second-
biggest maker of wind turbines , said last week that first-half
profit slumped 83 percent as competition intensified and market
growth slowed. Manufacturing Gauge A preliminary reading of a manufacturing purchasing
managers’ index released by HSBC Holdings Plc and Markit
Economics on Aug. 23 showed the lowest reading since November.
Export growth almost stalled in July and new yuan loans and
industrial production both trailed estimates. China cut interest rates in June for the first time in
three years, and again in July. The central bank has also
lowered the reserve-requirement ratio for lenders three times
starting in November to support growth. The ruling Communist
Party last month pledged to keep adjusting policies to ensure
stable economic expansion this year. Industrial companies’ revenue in the first seven months
increased 10.6 percent to 50 trillion yuan, today’s report
showed. “A big problem at present is the weak investment from the
corporate sector, and China has to do more to encourage
corporate investment,” Li Daokui , a former central bank adviser,
said in an interview last week. To contact Bloomberg News staff for this story:
Zheng Lifei in Beijing at
[email protected] To contact the editor responsible for this story:
Paul Panckhurst at
[email protected] | 2012 | china-july-industrial-profits-fall-5-4-after-1-7-drop-in-june |
NRW, EU’s Schulz Call for Broader Swiss Tax Treaty | By Annette Weisbach | 2012-08-28T13:17:06Z | http://www.bloomberg.com/news/2012-08-27/german-state-nrw-eu-s-schulz-call-for-broader-swiss-tax-treaty.html | 8 | 27 | 99c3a43103ecbb3640d232086db8d0373403ac75 | (Corrects inaccurate designation for Schulz in ministry
statement in first paragraph of story that ran Aug. 27.) Martin Schulz , president of the
European Parliament, and the finance minister of Germany’s
North-Rhine Westphalia call for an effective bilateral tax
treaty with Switzerland as a prerequisite for a necessary EU-
wide rule. “A treaty on the European level is better than a treaty
between single states,” Norbert Walter-Borjans, finance
minister of North-Rhine Westphalia said in a statement issued by
his office. “Until we reach a pan-European solution, we need
instruments that can already be used efficiently to fight tax
evasion ,” he added. Schulz and Walter-Borjans met in Brussels
today. To contact the reporter on this story:
Annette Weisbach in Frankfurt at
[email protected] To contact the editor responsible for this story:
Frank Connelly at
[email protected] | 2012 | german-state-nrw-eu-s-schulz-call-for-broader-swiss-tax-treaty |
Japan Contraction Risk Rises on Faltering Global Demand: Economy | By Keiko Ujikane | 2012-08-27T08:38:54Z | http://www.bloomberg.com/news/2012-08-27/japan-contraction-risk-rises-on-faltering-global-demand-economy.html
Aug. 27 (Bloomberg) | 8 | 27 | 09ee50d1c1e64ff0ac2c8214f6058f84 | contraction this quarter has increased as faltering demand from
Europe to China drags down exports, strengthening the case for
more government measures to support growth. JPMorgan Securities Japan Co. forecasts a 0.3 percent
annualized decline in gross domestic product in the three months
through September after previously seeing 1 percent growth. BNP
Paribas SA estimates a 0.9 percent fall after earlier predicting
no change. China’s failure to secure an economic rebound is adding to
austerity measures in Europe and unemployment in the U.S. in
limiting prospects for Japanese trade and growth. Pressure may
build for an extra government budget and additional stimulus
from the Bank of Japan as subsidies for purchases of fuel-
efficient cars wind down, damping consumer spending . “We’ve revised down our forecast because the global
economy is looking weaker than we anticipated,” said Ryutaro Kono , chief Japan economist at BNP and a former government
nominee for the central bank board. “We expected a gradual
rebound for the emerging economies but the recent data aren’t
signaling it. Europe continues to slump and exports to the U.S.
also are slowing.” Japan will downgrade its assessment of the domestic economy
for the first time in 10 months in a report to the cabinet
tomorrow, according to the Nikkei newspaper. The nation had a
wider-than-estimated trade deficit in July as shipments to the
European Union fell 25 percent from a year earlier and those to
China slid 12 percent. Stocks, Yen The MSCI Asia Pacific Index fell 0.4 percent as of 5:36
p.m. in Tokyo after Chinese firms reported profit declines. “Chronic” upward pressure on the yen is placing downward
pressure on Japan’s economy, central bank Governor Masaaki Shirakawa said Aug. 24. Gains in the currency erode the sales
and profits of exporters such as Nissan Motor Co. (7201) The yen traded
at 78.71 per dollar as of 5:37 p.m. in Tokyo. For now, the economists forecasting a contraction this
quarter are in a minority. The median of 27 forecasts compiled
by Bloomberg News this month was for a 1 percent expansion.
Besides BNP and JPMorgan Securities Japan, those now seeing a
decline include Bank of America Merrill Lynch and Credit Suisse
Group AG. Growth was 1.4 percent in the second quarter. Mitsubishi Research Institute, the best forecaster of
Japan’s GDP in the past two years according to Bloomberg data,
sees a 0.2 percent expansion in the third quarter and a 0.7
percent gain in the fourth quarter, with earthquake
reconstruction work playing a role. Avoiding Recession “Exports are slowing more than we thought,” said Akihiro
Morishige, an economist at Mitsubishi Research. “However, Japan
will probably be able to avoid a recession because the
reconstruction demand continues to support the recovery.” Second-quarter figures for gross domestic product showed
that consumption rose the least since households cut spending in
the immediate aftermath of the March 2011 earthquake. “Without a smooth baton pass from domestic demand to
external demand, the Japanese economy may get into serious
trouble,” said Masamichi Adachi , a senior economist at JPMorgan
Securities in Tokyo and a former central bank official. “There
is high possibility that not only the Bank of Japan (8301) but also the
government will need to introduce stimulus measures.” Chinese Premier Wen Jiabao said his nation needs to do more
to support exports, the official Xinhua News Agency reported
Aug. 25. China’s industrial companies’ profits dropped for a
fourth month in July, the government said today. German business
confidence fell for a fourth month in August, a report showed
today, and South Korean consumer sentiment slipped to the lowest
level in seven months. Export Weakness Weakness in Chinese manufacturing has dashed hopes for a
quick, strong recovery in Japan’s exports in coming months,
Masaaki Kanno, chief economist at JPMorgan Securities Japan Co.
in Tokyo and a former BOJ official, wrote in a report. “The
odds are rising that real exports will contract in the third
quarter.” Meanwhile, most of the 300 billion yen ($3.8 billion)
budgeted by the government for car subsidies has been spent. “Car sales will likely decline as the boosts from the
government’s subsidy program fade out,” said Takashi Shiono, an
economist at Credit Suisse Group AG in Tokyo. “The adjustments
in consumption will be the biggest drag on Japan’s economy” in
the third and fourth quarters, Shiono said. Shiono said a 2 trillion yen extra budget is possible by
year end, including measures to spur investment in green
technology and agriculture, and subsidies for environmentally-
friendly housing. To contact the reporter on this story:
Keiko Ujikane in Tokyo at
[email protected] To contact the editor responsible for this story:
Paul Panckhurst at
[email protected] | 2012 | japan-contraction-risk-rises-on-faltering-global-demand-economy |
BLUESTAR and TMFL CP:India Money Markets | By Shraddha Kothari | 2012-08-27T12:59:32Z | http://www.bloomberg.com/news/2012-08-27/bluestar-and-tmfl-cp-india-money-markets.html | 8 | 27 | 913d3d89c587ed4cd4b90911de8971250445beed | Following is a table showing commercial paper
reported by Companies. The data has been provided by LKP Securities,
NVS Brokerage Ltd.,SPA Securities Ltd.and Trust Financial Consultancy Services.
Contributed via: Bloomberg Publisher WEB Service Provider ID: 87a5a7b8907a4b52bc8d00673a3709b2 | 2012 | bluestar-and-tmfl-cp-india-money-markets |
Ford’s European Legacy Losing to Hyundai’s Newcomer Edge: Cars | By Alex Webb | 2012-08-27T22:01:00Z | http://www.bloomberg.com/news/2012-08-27/ford-s-european-legacy-losing-to-hyundai-s-newcomer-edge-cars.html | 8 | 27 | 735e76263ac84e848bb4eece205844ea | For Anja Schlosser, Ford Motor Co. (F) ’s
Fiesta and Focus didn’t stand much of a chance against the i30
from Hyundai Motor Co. (005380) “I chose the Hyundai because it was the cheapest,” said
the 31-year-old purchasing manager from Frankfurt , who was
looking to replace her Fiat Punto. “And I liked the design
better than Ford.” Schlosser’s decision against Ford isn’t an isolated case.
The Dearborn, Michigan-based company is losing market share and
piling up losses in Europe with a model lineup that has failed
to stand out from the competition. That’s forced Ford to compete on price, even though it’s
hampered by labor costs in Europe that are more than double
those at Hyundai’s factories. Like other legacy carmakers in the
region, the root of Ford’s disadvantage is plants set up decades
ago in western European countries like Germany where workers
command high wages and growth prospects are now dim. By
contrast, newcomer Hyundai swooped in to build modern facilities
in the low-cost east, taking advantage of cheap wages and
efficient infrastructure. “Labor costs have a big influence on car manufacturers’
profitability,” said Marc-Rene Tonn , an analyst with Warburg
Research in Hamburg, who estimates that wages and related
expenses account for as much as 10 percent of production costs. Europe Losses At its factory in Saarlouis, Germany, which dates to 1970,
Ford pays workers a total of about 480 euros ($600) to make each
Focus compact, based on man-hour estimates and published labor
costs. That compares with 207 euros for the Hyundai i30 at the
Korean carmaker’s four-year-old plant near the Czech town of
Nosovice. The difference helps Hyundai offer the i30 from 15,990
euros, 960 euros below the Focus’s starting price. With discounting in Europe’s slumping car market
accentuating the cost disadvantages, Ford reported a second-
quarter operating loss in the region of $404 million after a
profit of $176 million a year earlier. Its European sales
dropped 9.9 percent to 532,819 vehicles in the first half, while
Seoul-based Hyundai grew 12 percent to 232,454 cars, and sister
brand Kia jumped 25 percent to 173,232, according to the ACEA,
an auto industry group. Hyundai says it builds a car in Nosovice with 19.5 man-
hours. Ford is quicker, needing around 11 hours to produce
vehicles in Europe, according to Ferdinand Dudenhoeffer ,
director of the Center for Automotive Research at the University
of Duisburg-Essen . The company declined to comment on production
hours. Century Old Still, Ford’s speed isn’t enough to offset German labor
costs, which at 43.85 euros per hour are more than quadruple the
10.62-euro rate for workers in the Czech Republic , according to
the European Labor Cost Index. While Ford opened its first European plant in 1911 and
built up a network of 23 factories in the region over the
following decades , Hyundai-Kia began European assembly in 2005.
The Korean manufacturer now has plants in Slovakia, Turkey and
the Czech Republic, allowing for a more efficient production
network, according to Ron Harbour, a partner at New York-based
consulting company Oliver Wyman . Alongside the Hyundai plant in Nosovice, for instance, the
company has built a companion factory that produces 600,000
transmissions annually. A Kia plant 56 kilometers (35 miles)
away in Zilina, Slovakia, makes the same number of engines in
addition to cars. Trucks can therefore depart the Czech plant
loaded with transmissions and return with engines from Slovakia. Full Trucks “You’ve always got a full truck going both ways, and it
helps optimize costs,” said Harbour, who developed industry
standards for measuring the productivity of auto factories. “If
Ford were starting new today and building their footprint in
Europe, they would be doing exactly the same. You’re dealing
with the legacy of what was built over 100 years.” Ford’s main European assembly plants are in the more
affluent west, with facilities in Germany, Belgium , the U.K. and
Spain . While the second-biggest U.S. carmaker does have plants
in Romania and Turkey, where it makes vans, it’s failed to make
the most of lower costs there, said Christoph Stuermer, a
Frankfurt-based analyst with IHS Automotive. Rival Renault SA (RNO) ,
by contrast, based its budget Dacia brand in Romania. Ford didn’t find the right vehicles to build in the low-
cost factories, Stuermer said. Because Hyundai’s “products are
comparatively affordable,” he said, “they can keep their
factories running at full pace so that they’re not losing
money.” Overcapacity Fix The utilization rate of Ford’s European plants is 63
percent, according to Morgan Stanley, while auto factories
typically need to produce at around 80 percent of capacity to
make money. “We do have overcapacity,” Ford spokesman Mark Truby said
in an e-mailed response to questions. “We will continue to
match production to demand and further raise our capacity
utilization rate.” Experience suggests that the solution is not as simple as
relocating production to eastern Europe from the west. Ford’s
sales in Britain have declined 44 percent to 265,894 units since
2002, when it moved its European headquarters to Germany and
closed much of its Dagenham facility, according to U.K. auto
industry association SMMT. “If I pull out of a country, do I lose my brand image
there?” said Wyman’s Harbour. “If I save a billion, do I lose
a billion in revenue in that country? There is no magic formula.
But it has hurt Ford in the U.K.” To contact the reporter on this story:
Alex Webb in Frankfurt at
[email protected] To contact the editor responsible for this story:
Chad Thomas at
[email protected] | 2012 | ford-s-european-legacy-losing-to-hyundai-s-newcomer-edge-cars |
Labor Rules Snarl U.S. Commuter Trains | By Stephen Smith | 2012-08-27T22:31:00Z | http://www.bloomberg.com/news/2012-08-27/labor-rules-snarl-u-s-commuter-trains.html
Railroading has, like almost all
industries, made great strides in labor productivity since its
inception more than two centuries ago. From the replacement of horses with steam engines in the
19th century to the elimination of drivers entirely with recent
generations of automated trains, railway engineers have been
relentless in the pursuit of more efficient transit. For the past 50 years, however, this progress has eluded
passenger rail in the U.S. While unions and management squabble
over wages and benefits, the overarching issue of labor
productivity remains unresolved. The resulting high labor costs
drag down service, prevent new lines from opening, and depress
ridership and revenues. Inefficient use of labor is found throughout American
transit, but nowhere more so than with the nation’s regional, or
commuter, railroads. Built decades before the first subways,
these lines are some of the oldest , and their labor practices
are antiquated. As a result of their high labor costs, regional
railways are treated as a luxury commuter service for
suburbanites, with few attempts made to operate the lines more
like the high-frequency, low-cost rapid transit that they have
the potential to be. According to Vukan Vuchic , a professor of transportation
engineering at the University of Pennsylvania , the main
impediment to more frequent service is the way that tickets and
fares are collected. Unneeded Conductors The standard regional-rail operating practice of having an
onboard conductor punch every ticket on every ride is “extremely
obsolete,” he says. “The conductors stepping on and off the
train, punching tickets, shouting | 8 | 27 | 6a26141c32a44e219aa7d76d1023f64c | has made no systematic attempt to do, according to Vuchic. The problem isn’t limited to the nation’s regional
railroads. The New York City Subway and its New Jersey
counterpart, the PATH (for Port Authority Trans-Hudson), have
clung to their conductors long after other U.S. rapid-transit
systems cut back to a single worker driving and controlling its
doors. And the labor issues in New York’s transit system extend
outside of the train cars. When asked by transit blogger
Benjamin Kabak about its high construction costs, Michael
Horodniceanu, president of the New York City Metropolitan
Transportation Authority’s capital construction division, gave a
two-word answer: “work rules.” Citing the example of the city’s
revered sandhogs, he said the MTA employs 25 for tunnel-boring
machine work that Spain does with nine. To the extent that organized labor is opposed to
rationalizing staffing levels, John Allen argued that major
service increases should accompany the elimination of redundant
positions. “The intention is to build a win-win situation for
all parties,” he wrote. “Management gains greater efficiency,
labor enjoys a greater number of more secure jobs, and customers
benefit from more frequent service at all hours.” ( Stephen Smith is a writer based in Brooklyn , New York, who
covers land use and transportation. The opinions expressed are
his own. Read his first article here .) 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 ; William
Pesek on South Korea’s presidential election ; Fouad Ajami on
Obama’s callow cruelty on Syria extending to Lebanon. To contact the writer of this article:
Stephen Smith at [email protected] . To contact the editor responsible for this article:
Katy Roberts at [email protected] . | 2012 | abor-rules-snarl-u-s-commuter-trains |
Rhoen-Klinikum Falls on B. Braun Stake: Frankfurt Mover | By Naomi Kresge | 2012-08-27T16:06:22Z | http://www.bloomberg.com/news/2012-08-27/rhoen-klinikum-falls-on-b-braun-stake-frankfurt-mover.html | 8 | 27 | 547f9ec1cdefd890a9a3ba847f2ae14be989e862 | Rhoen-Klinikum AG (RHK) fell in Frankfurt
trading as B. Braun Holding GmbH took a stake of at least 5
percent in the German hospital operator and a renewed takeover
bid from Fresenius SE (FRE) failed to materialize. B. Braun, a closely held maker of medical supplies,
notified Rhoen-Klinikum of the stake today, Rhoen-Klinikum said
in a statement. Braun, based in Melsungen, Germany , crossed the
thresholds of 3 percent and 5 percent, according to the
statement. B. Braun purchased the stake “because they trust the
positive development of the private hospital market in
Germany,” according to a statement from law firm Clifford
Chance , which is representing the medical company in the matter.
The firm declined to comment further. The stake may make it more difficult for Fresenius to
revive its offer for Bad Neustadt an der Saale-based Rhoen-
Klinikum. Fresenius has said it will announce by the end of
August whether it will pursue the acquisition, scuttled after
hospital operator Asklepios Kliniken GmbH blocked the 3.1
billion-euro ($3.9 billion) deal by buying shares of the target
in June. Rhoen-Klinikum fell 0.7 percent to 20.14 euros at the close
of trading. Blocked Bid Asklepios’s stake blocked Bad Homburg , Germany-based
Fresenius from getting the 90 percent of Rhoen-Klinikum’s shares
it needed in its initial tender offer. Fresenius now is leaning
toward a new offer under which it would need 50 percent plus one
share to complete the deal, said two people with knowledge of
the company’s deliberations who declined to be identified
because the matter is confidential. Matthias Link, a spokesman for Fresenius, declined to
comment on Braun’s stake in an e-mail. Rhoen-Klinikum said in an
e-mailed statement it doesn’t comment on changes in its
shareholders’ structure. Manager Magazin reported last week that Fresenius was
considering a bid for 50 percent plus one share. To contact the reporter on this story:
Naomi Kresge in Berlin at
[email protected] To contact the editor responsible for this story:
Phil Serafino at
[email protected] | 2012 | rhoen-klinikum-falls-on-b-braun-stake-frankfurt-mover |
Chinese Stocks Decline Most in Six Weeks on Earnings Concerns | By Bloomberg News | 2012-08-27T07:27:26Z | http://www.bloomberg.com/news/2012-08-27/china-s-stock-futures-drop-as-slowdown-spurs-earnings-concerns.html
China’s stocks tumbled the most in
six weeks as weaker profit from China Petroleum & Chemical Corp. (600028)
to Haitong Securities Co. underscored concern that the nation’s
economic slowdown is deepening. China Petroleum, Asia’s biggest oil refiner and also known
as Sinopec, slid 1.8 percent after posting the lowest half-year
profit since 2008. Haitong plunged 5.2 percent, pacing losses by
brokerages, after saying six-month profit declined. Xinjiang
Goldwind Science & Technology Co. (002202) , the country’s second-largest
maker of wind turbines , dropped to its lowest level on record
after reporting first-half profit slumped 83 percent. “Investors are becoming more worried about earnings for
this quarter after the poor performance of the first half,”
said Wu Kan, Shanghai-based fund manager at Dazhong Insurance
Co., which oversees $285 million. “Government tools to boost
the economy are limited: policy makers could cut interest rates
and bank reserve ratios but they’re worried that would spur
inflation.” The Shanghai Composite Index (SHCOMP) sank 1.7 percent to 2,055.71
at the close, the lowest level since Feb. 2, 2009. The CSI 300
Index (SHSZ300) declined 2.1 percent to 2,228.20. The Hang Seng China
Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong
retreated 1.5 percent. The Bloomberg China-US 55 Index (CH55BN) , the
measure of the most-traded U.S.-listed Chinese companies, fell
0.2 percent in New York on Aug. 24. Inspection Tour The Shanghai Composite slumped 1.1 percent last week as a
report from HSBC Holdings Plc and Markit Economics showed
manufacturing may be contracting at a faster pace this month.
The index has fallen 6.5 percent this year, dragging down
estimated earnings to 9.3 times, compared with the average of
17.4 since Bloomberg began compiling the data in 2006. Premier Wen Jiabao urged extra measures to support exports
and help meet economic targets as evidence mounts that the
nation’s slowdown is deepening. Industrial companies’ profits
fell in July by the most this year, a government report showed
today. “The third quarter is a crucial period for realizing full-
year targets on export growth,” Wen said during an inspection
tour of Guangdong, the nation’s biggest exporting province, the
official Xinhua News Agency said Aug. 25. “Facing the current
difficulties, China should substantially improve the environment
for companies’ operation and improve companies’ confidence.” Wen’s speech suggests the nation’s export performance may
have remained weak or worsened in August, Zhang Zhiwei, chief
China economist at Nomura Holdings Inc., said in a note today. Earnings Decline Sinopec lost 1.8 percent to 5.91 yuan . The company’s first-
half net income fell 41 percent from a year earlier to 24.5
billion yuan ($3.9 billion), the company said in a statement
yesterday. Haitong Securities, China’s second-largest brokerage by
market value, slid 5.2 percent to 8.07 yuan after the brokerage
said first-half profit dropped 9.4 percent to 2 billion yuan
from a year earlier. GF Securities Co. (000776) , the third biggest, tumbled by the 10
percent daily limit to 11.04 yuan. Some 905.2 million shares in
the company became tradable today, accounting for 15.29 percent
of the total stock, GF Securities said on Aug. 23. Goldwind retreated 2.2 percent to 5.67 yuan, the lowest
since the stock listed in December 2007. Net income fell to
about 72 million yuan in the first half from 425 million yuan a
year earlier. Goldwind expects profit to decline at least 50
percent in the first nine months from a year earlier. ‘Get Worse’ “The situation in China has gone beyond a soft landing
already, and the next stage is that things will continue to get
worse,” Michael Shaoul , the chairman of Marketfield Asset
Management in New York, said by phone on Aug. 24. “The move in
local equity markets signals that the actual corporate earnings
are really deteriorating there.” Chinese industrial companies’ profits fell 5.4 percent in
July from a year earlier to 366.8 billion yuan, the National
Bureau of Statistics said today, compared with a 1.7 percent
decline in June. Profits in the first seven months of the year
dropped 2.7 percent, the bureau said, after a 2.2 percent
decline in the first half. Thirty-day volatility in the Shanghai Composite was at 12.1
today, compared with this year’s average of 17.2. About 6
billion shares changed hands in the gauge today, 23 percent
lower than the daily average this year. The iShares FTSE China 25 Index Fund , the biggest Chinese
exchange-traded fund in the U.S., dropped 1.4 percent last week
to $34.01. | 8 | 27 | 42daa93262174ef68fa08d5cb807a842 | Zhang Shidong in Shanghai at
[email protected] To contact the editor responsible for this story:
Darren Boey at [email protected] | 2012 | china-s-stock-futures-drop-as-slowdown-spurs-earnings-concerns |
Fed Returns $46.4 Billion to Treasury as Value of Assets Rise | By Joshua Zumbrun | 2012-08-27T15:05:49Z | http://www.bloomberg.com/news/2012-08-27/fed-returns-46-4-billion-to-treasury-as-value-of-assets-rise.html | 8 | 27 | d19a2c9ee3eef05e34a670a622644f96ea6854ac | The Federal Reserve paid the
Treasury $46.4 billion during the first six months of 2012, a 15
percent increase from $40.5 billion in the same period last
year. The Fed disclosed the payments to the Treasury in a new
quarterly release of the central bank’s financial reports
released today in Washington. The data was previously disclosed
on an annual basis when the Fed released its audited financial
statements. The new unaudited quarterly reports are aimed at providing
“greater transparency by communicating financial information on
a more frequent basis and in greater detail,” the Fed said in a
statement. The central bank earns income through its $2.58 trillion
portfolio of securities and other assets on a balance sheet that
totaled $2.83 trillion as of Aug. 22. Assets such as Treasury
securities and mortgage-backed securities, mostly acquired
through two rounds of large-scale asset purchases, known as QE,
pay interest to the Fed. The Fed pays its operating expenses
from these funds and remits most of what’s left over to the
Treasury. Through June 30 of this year, the Fed has earned $42.7
billion in interest income from its portfolio of assets. The
central bank’s holdings of Treasuries increased in value by $5.5
billion. The Fed system’s operating expenses, which include Fed
funding for the Bureau of Consumer Financial Protection and the
Office of Financial Research, totaled $2.79 billion, up from
$2.56 billion during the same period of time in 2011. To contact the reporter on this story:
Joshua Zumbrun in Washington at
[email protected] To contact the editor responsible for this story:
Chris Wellisz at
[email protected] | 2012 | fed-returns-46-4-billion-to-treasury-as-value-of-assets-rise |
Lonmin Seen Tempting Chinese Offers on Discount: Real M&A | By Carli Cooke | 2012-08-28T16:31:12Z | http://www.bloomberg.com/news/2012-08-27/lonmin-seen-tempting-chinese-platinum-bid-on-discount-re.html
For an acquirer willing to bet
platinum prices will rebound, Lonmin Plc (LMI) has never been valued
so cheaply versus its biggest mining competitor. The third-largest platinum producer has plunged to the
lowest share price since 2008 as Lonmin posted an unexpected
loss and grappled with higher wage and power costs and an
industrywide glut of platinum that’s used in jewelry and cars.
The stock slump accelerated this month as 44 protesters and
police officers were killed at Lonmin’s Marikana project, the
worst mine violence in South Africa since apartheid ended. With Lonmin’s chief executive officer also out for “some
months,” investors are willing to pay the least on record per
dollar of profit to own the London-based company’s shares
compared with Anglo American Platinum Ltd. (AMS) , according to data
compiled by Bloomberg. After Lonmin said it may need to sell new
shares as it faces a likely breach of debt covenants, Stanlib
Collective Investments Ltd. and Renaissance Group said a Chinese
buyer may see a chance for a takeover if Xstrata Plc (XTA) will sell
its 25 percent stake. Other South African mining companies may
also be interested, said Momentum Asset Management. “These are extreme conditions and that’s when extreme
things happen,” Peter Major, head of mining at Cadiz Corporate
Solutions, which advises on mergers and acquisitions, said in a
telephone interview from Johannesburg. “Everything’s got a
price. It’s a real asset. It’s a platinum company with metal in
the ground.” Police Violence James Clark, an outside spokesman for Lonmin at Cardew
Group in London , said the company doesn’t comment on
speculation. While Lonmin is registered in London, the
operational headquarters and some of the management team have
moved to Johannesburg. Lonmin’s shares reached their lowest price since December
2008 last week in the wake of a labor uprising at its Marikana
mine. On Aug. 16, police killed 34 people at the mine, the
deadliest police action since the end of apartheid in 1994.
Prior to the shooting, 10 people, including two policemen, died
in fighting and protests after an illegal strike that began Aug.
10 at the operation about 100 kilometers (62 miles) west of
South Africa ’s capital, Pretoria . About 3,000 rock-drill operators had gone on strike this
month demanding that Lonmin increase their pay. Lonmin said the
protests turned violent because of rivalry between two unions.
Marikana accounts for about 96 percent Lonmin’s output. Today, Lonmin shares fell 1.6 percent to 630 pence. Platinum Prices Spot prices for platinum have advanced 9 percent since Aug.
15 as violence idled about a fifth of the world’s platinum-
output capacity. Previously, prices were down 23 percent in a
year as demand slowed for the metal. According to Impala
Platinum Holdings Ltd., global supply last year exceeded demand. Platinum is little changed from 2010, when prices averaged
$1,613.46 an ounce, while electricity and labor costs increased
by amounts exceeding inflation each year in South Africa, the
nation with the most known platinum reserves. Lonmin gave
workers pay increases of as much as 10 percent last year, and
state-owned Eskom Holdings SOC Ltd. raised average electricity
prices 26 percent in the country in the year ended March 31. That led to a net loss in the six months ended in March and
sent the stock down 46 percent in a year, giving Lonmin a market
value of 1.3 billion pounds ($2 billion). In addition, Lonmin
said last week that CEO Ian Farmer won’t return to full-time
work for “some months” as he is treated for a “serious
illness.” Chief Financial Officer Simon Scott is acting CEO. Declining Valuation Anglo American Platinum, the world’s largest producer of
the metal, has fallen 21 percent in the past year, less than
half of Lonmin’s decline, giving the Johannesburg-based company
a price-earnings ratio of more than 109. Lonmin traded at 13
times profit on Aug. 24. Anglo American Platinum’s multiple was
more than eight times higher than Lonmin’s last week, the
biggest premium on record, according to data compiled by
Bloomberg that dates back to 1999. Last week, Lonmin’s price-book ratio was as much as 59
percent less than Johannesburg-based Impala (IMP) ’s multiple of 1.64
for the steepest discount since December 2008, data compiled by
Bloomberg show. Lonmin was at 0.71 times book value, a measure
of its assets minus liabilities, on Aug. 24. Impala, the second-
largest platinum producer, is down 18 percent in the past year. “Long-term it has traded above 2 times book over the last
14 years,” Paul Whitburn, a mining analyst at Regarding Capital
Management in Cape Town , said of Lonmin. “I wouldn’t say it’s
the best business around, but it’s a good business.” ‘Widespread Crime’ The violent Marikana protests highlight structural problems
in South Africa, including high unemployment that’s associated
with “widespread crime, which is regularly cited as one factor
deterring foreign investment,” Fitch Ratings said Aug. 24. The now-expelled youth leader of the ruling African
National Congress last year called for mines to be nationalized,
saying it will create more jobs in a country where about one in
every four people are unemployed. Mining accounts for 8.8
percent of the country’s gross domestic product and generates
jobs for about 1 million of the nation’s 51 million people,
according to the South African Chamber of Mines. “If you look at developments in South Africa | 8 | 27 | dbf7f6e874a84dadaeb4099e3b4332fd | for assets at this time,” said Abhishek Shukla, an analyst at
Paris-based Societe Generale SA. “While price has certainly
come down, the fact remains that you might keep on losing money
for several years if platinum prices don’t recover. I just don’t
see why someone would be in a great hurry to buy Lonmin.” Selling Shares Lonmin said on Aug. 21 it will probably breach debt
covenants and is studying funding options including issuing
shares. It may need to raise $1 billion, Societe Generale
estimated Aug. 16. Xstrata, the owner of 24.6 percent of Lonmin’s shares
according to data compiled by Bloomberg, could maintain its
holding by purchasing stock should the company offer new equity,
or it could opt not to exercise those rights and reduce its
stake. A spokesman for Xstrata declined to comment on the
company’s plans. Xstrata raised its ownership in Lonmin in October 2008
after scrapping a bid to acquire the whole company. The
following year, Xstrata CEO Mick Davis said the attempt was
“one deal too many” and that it was “not so smart” to raise
its stake to prevent any other company from buying Lonmin. He
paid an average 1,979 pence a share to raise the stake after
bidding 3,300 pence a share for Lonmin in August 2008. Xstrata’s Options Xstrata is being acquired by Glencore International Plc (GLEN) ,
which hasn’t been “too enamored with deep-level mining or
platinum,” said Whitburn of Regarding Capital, which owned
shares of Lonmin as of June 30, data compiled by Bloomberg show. If Xstrata doesn’t want to increase its holdings of Lonmin
shares through the rights offering, “then there’s a chance that
you can see corporate activity on the company,” Kobus Nell, a
fund manager at Stanlib Collective Investments, said in a phone
interview from Johannesburg. “The obvious crowds are the
Chinese and Russians.” Stanlib, which manages more than 365 billion rand ($43
billion) according to its website, owned shares of Lonmin as of
June 30, data compiled by Bloomberg show. Companies in China may consider acquiring Lonmin to secure
platinum supplies for the automotive industry, said Patrick Mathidi, a fund manager in Johannesburg at Momentum Asset
Management, a unit of Momentum Investments which has more than
320 billion rand under management. Platinum is used in
pollution-control equipment for cars. Chinese Buyers “Longer term, platinum is still a very strategic metal,”
Sven Richter, who helps manage $3 billion of assets at
Renaissance, said in a phone interview. “There have been issues
of oversupply but I don’t perceive that pollution controls are
going to go away. So, especially if you’re Chinese and you’re
thinking strategically, it must be very attractive.” Jeffrey Rhodes, global head of precious metals at INTL
FCStone Inc., forecasts that platinum may climb to $2,000 an
ounce by December, which would be 31 percent higher than the
metal’s spot price of $1,521.38. Mathidi of Momentum Assets said African Rainbow Minerals
Ltd. (ARI) may also be a potential buyer as it seeks to boost
platinum’s contribution to its net income, while Exxaro
Resources Ltd. (EXX) might study a deal to diversify into new metals. African Rainbow, which owns platinum mines with Russia ’s
OAO GMK Norilsk Nickel, Anglo and Impala, said in February it
appointed banks to advise it on potential platinum deals. African Rainbow “In line with ARM’s growth strategy, we continually
evaluate new business and acquisition opportunities in all
commodities that we see value in,” Johannesburg-based African
Rainbow said in an e-mailed response to questions. Exxaro, based in Pretoria, declined to comment about
whether it has any interest in acquiring Lonmin. On Aug. 1,
Exxaro, the country’s second-largest supplier of coal, said it
was studying gold, platinum and copper acquisitions. A takeover of Lonmin won’t happen any time soon even though
“the potential upside in Lonmin is enormous,” according to
Blake Allen, a London-based mining analyst at Anchor Capital.
“Although we think the platinum companies are cheap and the
metals they produce are fundamentally undervalued, we still
think an acquisition of Lonmin won’t happen in the near term.” While acquirers may remain on the sidelines during the
political fallout from the recent violence, buyers, including
Chinese companies, could still see an opportunity, said Kurt Benn, head of resources at Cape Town-based Cadiz, which owned
shares of Lonmin as of June 30, data compiled by Bloomberg show. “Anyone who is looking for top-quality assets in the
platinum space would definitely be interested” in Lonmin, Benn
said in a phone interview. “You’d need deep pockets. The
Chinese government wouldn’t have a shareholder to explain things
to.” To contact the reporter on this story:
Carli Cooke in Johannesburg at
[email protected] . To contact the editor responsible for this story:
Sarah Rabil at [email protected] . | 2012 | onmin-seen-tempting-chinese-platinum-bid-on-discount-re |
PTT Bids S$1.2 Billion for Rest of Sakari to Add Coal Assets | By Elisabeth Behrmann and Daniel Ten Kate | 2012-08-27T06:17:54Z | http://www.bloomberg.com/news/2012-08-27/ptt-bids-s-1-2-billion-for-remaining-shares-in-sakari-resources.html | 8 | 27 | c5b9762e653442289c318f2c5afbe9c6 | PTT (PTT) Pcl, Thailand’s biggest company,
offered S$1.2 billion ($959 million) for the rest of Sakari
Resources Ltd. (SAR) to add energy coal assets in Indonesia , giving
the target the biggest gain in almost six years. State-controlled PTT offered S$1.90 a share for Singapore-
based Sakari through its PTT International Co. unit, the
Bangkok-based company said today in a statement. The bid, which
valued the target at S$2.2 billion, sent the shares up 28
percent to S$1.905. PTT already owns a 45.3 percent stake in
Sakari, according to data compiled by Bloomberg. Buying Sakari would give PTT control of two mines in
Indonesia and a Singapore-based trading company after a slump in
coal prices depressed values. PTT, which this year made the
nation’s biggest overseas energy takeover through its publicly-
traded PTT Exploration & Production Pcl (PTTEP) unit, plans to invest
720 billion baht ($23 billion) over the next five years as it
adds assets. The nation’s energy reserves in the Gulf of Thailand are
“not sufficient to meet the rapidly growing domestic demand,
hence the interest in overseas assets,” said Tony Regan, a
consultant with Singapore-based Tri-Zen International Ltd. “The
chairman seems to have a mandate to spend really quite a lot of
money on overseas acquisitions.” Sakari surged 28 percent to S$1.905 at 1:53 p.m. local
time, the most since Nov. 3, 2006. Deal Comparisons The bid values Sakari at 8.8 times earnings before interest
and tax compared with an average of 17 times for 10 comparable
deals collated by Bloomberg. The value of coal deals globally
this year has dropped to $12 billion, with an average premium of
19.6 percent. That compares with total value of $39 billion last
year at a 20.2 percent premium. The bid implies a value of $12 a metric ton for Sekari’s
coal reserves, Bualuang Securities Pcl said today in a note. The
scope for upgrading production and reserves means the price is
“reasonable,” Bualuang said in the note. “Coal represents an important long-term diversification
strategy and growth opportunity for PTT,” the Thai company said
in the statement. Coal sales accounted for 1.2 percent of PTT’s
sales last year, according to data compiled by Bloomberg. Coal Share Coal generated about 20 percent of Thailand ’s electricity
last year, compared with 67 percent from natural gas, according
to the Energy Ministry. Chatchawal Eimsiri, acting president of PTT International,
didn’t answer four calls made to his office in Bangkok today.
Chatchawal is responsible for PTT’s coal businesses. PTT, which owns 65 percent of PTT Exploration, completed
the purchase of Straits Resources Ltd. (SRQ) ’s Indonesian coal assets
for A$544 million ($565 million) in March last year. Benchmark
prices for thermal coal at Australia ’s port of Newcastle have
declined 21 percent since the start of the year. PTT and its major affiliates account for about a fifth of
the value of Thailand’s benchmark SET index. The company is
seeking to acquire new oil and gas reserves and secure LNG
imports as it aims to supply half of Thailand’s daily energy
demand by 2020, up from 15 percent now, it said in March. PTT Exploration added gas assets in Mozambique ’s Rovuma
Area 1 through its acquisition of Cove Energy Plc. (COV) The bid,
which valued Cove at 1.2 billion pounds ($1.9 billion), had
achieved acceptances from 97.8 percent of Cove holders as of
Aug. 24. To contact the reporters on this story:
Elisabeth Behrmann in Sydney at
[email protected] ;
Daniel Ten Kate in Bangkok at
[email protected] To contact the editor responsible for this story:
Rebecca Keenan at
[email protected] | 2012 | ptt-bids-s-1-2-billion-for-remaining-shares-in-sakari-resources |
Spain Revises Down Data for Economic Growth for 2010-2011 | By Andrew Davis and Angeline Benoit | 2012-08-27T14:55:24Z | http://www.bloomberg.com/news/2012-08-27/spain-revises-down-data-for-economic-growth-for-2010-2011-1-.html | 8 | 27 | ebee8cad11aa04936ee9e74c37ba171a5e08bbc4 | Spain lowered its economic-growth
data for 2010 and 2011, a revision that will affect estimates
for second-quarter growth due to be released tomorrow, the
National Statistics Institute said. The euro region’s fourth-biggest economy grew 0.4 percent
last year, less than the 0.7 percent originally reported, INE
said in a statement posted on its website. The economy
contracted 0.3 percent in 2010, more than the 0.1 percent
initially stated, the statistics agency said in the statement. “We have decided not to modify our estimate” of second-
quarter economic performance, said Tomas Garcia, a Madrid-based
analyst at Cortal Consors, which forecasts a 0.4 percent
contraction. “Logically it may improve to 0.2 or 0.3 percent, but we
won’t take the improvement into account because it will be a
purely statistical effect.” Gross domestic product figures for 2008 and 2009, which
were included in the review, were not revised, INE said. Here
are the revised numbers: To contact the reporters on this story:
Andrew Davis in Rome at
[email protected] ;
Angeline Benoit in Madrid at
[email protected] To contact the editor responsible for this story:
Tim Quinson at
[email protected] | 2012 | spain-revises-down-data-for-economic-growth-for-2010-2011-1- |
Natural Gas Drops as Storm Concerns Ease: Commodities at Close | By Thomas Galatola | 2012-08-27T20:43:49Z | http://www.bloomberg.com/news/2012-08-27/natural-gas-drops-as-storm-concerns-ease-commodities-at-close.html | 8 | 27 | aa0c043c7ccc439f9c39833324dfba00 | The Standard & Poor’s GSCI gauge of
24 raw materials fell 0.5 percent to settle at 666.96 at 4 p.m.
in New York , led by natural gas and crude oil. NATURAL GAS Natural gas fell to a two-month low on speculation that
production cuts in the Gulf of Mexico because of Tropical Storm
Isaac will do little to ease a supply glut. The National Hurricane Center said Isaac will become a
Category 1 hurricane before reaching Louisiana on Aug. 29. About
48 percent of offshore output was shut today, the government
said. The Gulf accounted 7 percent of U.S. production in 2011,
down from 17 percent in 2005. On the New York Mercantile Exchange , gas futures for
September delivery dropped 1.8 percent to $2.653 per million
British thermal units, the lowest settlement since June 22. CRUDE OIL Crude oil fell for the third straight session on
speculation that Isaac will have limited impact on U.S.
production. On the Nymex, oil futures for October delivery dropped 0.7
percent to $95.47 a barrel. Brent oil for October slid 1.2 percent to $112.26 a barrel
on the London-based ICE Futures Europe exchange. GRAINS, OILSEEDS Soybean futures fell from a record after a government
report showed a slowdown in demand for supplies from the U.S.,
the world’s largest grower and exporter last year. On the Chicago Board of Trade, soybean futures for November
delivery slid 0.6 percent to $17.215 a bushel. Earlier, the
price reached $17.605, the highest ever for a most-active
contract. Wheat futures for December delivery fell 0.8 percent to
$8.8125 a bushel. Corn futures for December delivery dropped 1 percent
$8.0075 a bushel. LIVESTOCK Cattle declined to a one-month low on signs of increasing
U.S. beef supplies. On the Chicago Mercantile Exchange, cattle futures for
October delivery slid 0.8 percent to $1.23475 a pound, the
biggest decline since Aug. 16. Earlier, the price touched
$1.234, the lowest since July 27. Feeder-cattle futures for October settlement dropped 0.3
percent to $1.43925 a pound. Hog futures for October settlement rose 1.2 percent to
settle at 73.25 cents a pound. BASE METALS Copper fell for the second straight session as concern that
the Federal Reserve will hold off on signaling more U.S.
stimulus measures clouded the outlook for demand. On the Comex in New York, copper futures for December
delivery slid 0.2 percent to $3.4825 a pound. The metal dropped
0.3 percent on Aug. 24. The London Metal Exchange was closed for a public holiday. OIL PRODUCTS Gasoline rose to the highest in almost four months as U.S.
Gulf Coast refineries shut with the approach of Isaac, and a
fire in Venezuela closed the country’s largest refinery. On the Nymex, gasoline futures for September delivery
advanced 2.5 percent to $3.1548 a gallon, the highest settlement
since April 30. Heating-oil futures for September-delivery gained 0.17 cent
to $3.1118 a gallon. PRECIOUS METALS Gold rose to a 19-week high on speculation that Europe may
take steps to bolster the region’s economy. On the Comex, gold futures for December delivery gained 0.2
percent to $1,675.60 an ounce. Earlier, the price reached
$1,679.30, the highest since April 12. Silver futures for December delivery climbed 1.4 percent to
$31.137 an ounce. On the New York Mercantile Exchange, platinum futures for
October delivery dropped 0.1 percent to $1,553.20 an ounce. Palladium futures for September delivery advanced 0.4
percent to $656.30 an ounce. SOFT COMMODITIES Coffee rallied the most in five weeks on speculation that
Isaac will damage beans stored in warehouses in New Orleans . On ICE Futures U.S. in New York, arabica coffee for
December delivery increased 2.7 percent to $1.6735 a pound, the
biggest increase since July 19. Cocoa futures for December delivery rose 3.2 percent to
$2,473 a metric ton, the biggest advance since July 26. Raw-sugar futures for October delivery slid 0.1 percent to
19.56 cents a pound. Orange-juice futures for November delivery tumbled 3.5
percent to $1.138 a pound. Cotton futures for December delivery rose 1.2 percent to
76.14 cents a pound. To contact the reporter on this story:
Thomas Galatola in New York at
[email protected] To contact the editor responsible for this story:
Steve Stroth at
[email protected] | 2012 | natural-gas-drops-as-storm-concerns-ease-commodities-at-close |
Apple Opposes Samsung Bid to Quickly End Galaxy Tab Sales Ban | By Peter Blumberg | 2012-08-27T17:30:02Z | http://www.bloomberg.com/news/2012-08-27/apple-opposes-samsung-bid-to-quickly-end-galaxy-tab-sales-ban.html | 8 | 27 | 79fe1a48af6e07b8570132f32ee320f4b8c3ad71 | Apple Inc. (AAPL) filed court papers
oppposing a bid by Samsung Electronics Co. to quickly dissolve a
court-ordered sales ban on the Galaxy Tab 10.1 tablet computer. To contact the reporter on this story:
Peter Blumberg in San Francisco at
[email protected] To contact the editor responsible for this story:
Peter Blumberg at
[email protected] | 2012 | apple-opposes-samsung-bid-to-quickly-end-galaxy-tab-sales-ban |
Jordan Says SNB May Ask for Activation of Buffer in 2013 | By Klaus Wille and Simone Meier | 2012-08-27T14:29:16Z | http://www.bloomberg.com/news/2012-08-27/snb-says-countercyclical-buffer-won-t-be-activated.html | 8 | 27 | 9efc9027a3453e437c69b42b606843e2f94fa559 | Swiss National Bank President Thomas Jordan said policy makers may ask for the activation of the so-
called countercyclical capital buffer to stem developments in
the mortgage and real-estate markets in 2013 at the earliest. “We can activate it at any time, respectively make a
request,” Jordan told Swiss television station SF in an
interview today. “We’re closely observing the situation on the
property and mortgage markets, and we’ll regularly assess
whether there’s a need to make a request for activation. It has
to be expected that it will only be the case in 2013.” Under the measure introduced in July, the Swiss government
can force lenders to hold additional capital of as much as 2.5
percent of their domestic risk-weighted assets to counter
threats to financial stability following an SNB request. While
the Zurich-based central bank said in a statement today that
there were “some indications of a possible slowdown” in the
second quarter of the “exceptionally strong” momentum in the
domestic residential mortgage and real-estate markets, Jordan
called the situation still “tense.” The decision not to ask for activation of the buffer
“should not be interpreted as an all-clear,” the SNB said.
“ Interest rates are still exceptionally low and there are signs
of high risk appetite in mortgage lending. As a consequence, the
risk of a further buildup of imbalances and the associated risks
to financial stability remain high.” Apartment Costs In its June Financial Stability Report, the SNB said the
mortgage market poses a significant risk to lenders. Home loans
have increased by almost 300 billion francs ($313 billion) in a
decade and gained 5.2 percent last year to 797.8 billion francs.
That’s about 140 percent of Swiss gross domestic product. The cost of owner-occupied apartments with as many as five
rooms has risen the most in the past 10 years, with prices
jumping 40 percent, SNB data show. Prices of rental apartments
have climbed 29 percent. UBS AG (UBSN) and Credit Suisse Group AG (CSGN) , Switzerland ’s two
biggest banks, had combined outstanding mortgages of 240.6
billion francs at the end of 2011, up 2.8 percent from the
previous year. Cantonal banks, which are largely owned by the
regions, had a 6 percent increase, while the cooperative-based
Raiffeisen banks saw mortgages surge 7.4 percent. Happy Banks? Jordan, 49, said “banks are very much aware that there are
risks in this situation.” He also said “it’s not our
motivation whether banks are happy or whether they’re unhappy;
we’re observing this market and if it makes sense from an
macroeconomic perspective, we’ll make a request. At the moment,
we came to the conviction that it’s better to wait.” The SNB will assess the impact of government measures aimed
at curbing credit supply before making a decision, he said. The government toughened lending rules last month, forcing
borrowers to provide at least 10 percent of the value of the
property from their own funds without using pension assets.
Under the measures, mortgages will have to be paid down to two-
thirds of the lending value within 20 years. The “measures are intended to have a damping effect on
real-estate prices and mortgage-market momentum,” the SNB said.
“The SNB will regularly reassess the need to activate the
countercyclical capital buffer.” To contact the reporters on this story:
Klaus Wille in Zurich at
[email protected] ;
Simone Meier in Zurich at
[email protected] To contact the editor responsible for this story:
Craig Stirling at
[email protected] | 2012 | snb-says-countercyclical-buffer-won-t-be-activated |
Ahold to Open Food Shops in Germany for Singles, FTD Reports | By Annette Weisbach | 2012-08-27T19:08:21Z | http://www.bloomberg.com/news/2012-08-27/ahold-to-open-food-shops-in-germany-for-singles-ftd-reports.html | 8 | 27 | 7cbd0e4ecd44874e5fd320d04ed6b64597891322 | Koninklijke Ahold NV (AH) will open its
first food shop tailored to singles in Germany in two weeks,
making it the first retailer to enter the German market since
Wal-Mart Stores (WMT) tried and failed, Financial Times Deutschland
reported, citing Juergen Holz, the head of Ahold’s German
operations. The first outlet will open in the city of Aachen Sept. 12,
with 11 more to follow in the state of North-Rhine Westphalia,
the FTD said. To contact the reporter on this story:
Annette Weisbach in Frankfurt at
[email protected] To contact the editor responsible for this story:
Frank Connelly at
[email protected] | 2012 | ahold-to-open-food-shops-in-germany-for-singles-ftd-reports |
Moscovici Says France to Cut Deficit Below 3 Percent in 2013 | By Rainer Buergin and Tony Czuczka | 2012-08-27T12:08:28Z | http://www.bloomberg.com/news/2012-08-27/moscovici-says-france-to-cut-deficit-below-3-percent-in-2013.html | 8 | 27 | 11a1647e0544a66aff2c5bd8886bb048dfb8ace8 | French Finance Minister Pierre Moscovici said France will cut its budget deficit below 3
percent of gross domestic product next year. “We want to have a credible budget policy,” Moscovici
said today after a meeting with German Finance Minister Wolfgang Schaeuble in Berlin. “We will be under 3 percent in 2013.” France’s revised 2012 budget law includes 7.2 billion euros
($9 billion) of tax increases to meet deficit-reduction goals.
France’s next budget will be based on a growth estimate that is
“solid, reasonable and credible,” Moscovici said. To contact the reporters on this story:
Rainer Buergin in Berlin at
[email protected] ;
Tony Czuczka in Berlin at
[email protected] To contact the editor responsible for this story:
James Hertling at
[email protected] | 2012 | oscovici-says-france-to-cut-deficit-below-3-percent-in-2013 |
Aussie Poised to Extend Drop on Elliott Wave: Technical Analysis | By Anchalee Worrachate | 2012-08-27T15:26:49Z | http://www.bloomberg.com/news/2012-08-27/aussie-poised-to-extend-drop-on-elliott-wave-technical-analysis.html | 8 | 27 | 5b0b448732b4150a520b8d29429578a699870431 | The Australian dollar, which fell to
a one-month today, may extend losses to $1.017 if it declines
below so-called support at $1.0342, according to Skandinaviska
Enskilda Banken AB, citing trading patterns. Australia ’s currency closed last week below a previous
level of support at $1.041, before briefly rallying today,
though not enough to indicate it won’t weaken further,
strategists Anders Soderberg and Dag Muller in Stockholm wrote
in an e-mail to clients. “Since Friday’s low point, a three wave upside correction
has been completed and the market this morning made a second
attempt to extend the break lower,” the strategists wrote in
the note, referring to Elliott Wave Theory. “Continued weakness
beyond $1.0342 will add a lot of credibility to a bearish
case,” or the argument that it will keep weakening, they wrote. The Australian dollar depreciated 0.1 percent to $1.0392 at
11:23 a.m. in New York , after dropping to $1.0372, the weakest
level since July 26. The currency is currently above its 50-day
moving average at $1.0342. If the Aussie breaks below $1.0342 it is likely to weaken
toward other levels of support at $1.0281 and $1.017, Soderberg
and Muller wrote. Elliott Wave Theory, created by American accountant and
author Ralph Nelson Elliott in the 1930s, seeks to predict moves
in financial markets by dividing past trends into five sections,
or waves. The theory proposes that a five-wave gain or decline
is followed by a three-wave move in the other direction. Support refers to an area where technical analysts
anticipate buy orders to be clustered. In technical analysis , investors and analysts study charts of
trading patterns and prices to predict changes in a security,
commodity, currency or index. To contact the reporter on this story:
Anchalee Worrachate in London at
[email protected] To contact the editor responsible for this story:
Paul Dobson in London at
[email protected] | 2012 | aussie-poised-to-extend-drop-on-elliott-wave-technical-analysis |
Perfect World Falls Most in Three Weeks on Earnings Speculation | By Leon Lazaroff | 2012-08-27T18:58:16Z | http://www.bloomberg.com/news/2012-08-27/perfect-world-falls-most-in-three-weeks-on-earnings-speculation.html | 8 | 27 | b907f8f745dd0007a9f68fb3f834127ab7e38666 | Perfect World Co., a Chinese online
games developer, fell the most since Aug. 2 as investors
speculated the company may report second-quarter earnings below
analyst estimates. Beijing-based Perfect World lost 4.8 percent to $10.48 at
2:35 p.m. New York time. Earlier it declined as much as 7.1
percent, the most on an intraday basis since May 30. The company
is scheduled to report second-quarter earnings at the close of
trading. Investors are expecting that Perfect World’s results will
mirror rivals Shanda Games Ltd. (GAME) and NetEase Inc., which both
reported sales and profits that fell short of analyst
expectations, said Andy Yeung, a technology and Internet
companies analyst at Oppenheimer & Co. Shanda said on Aug. 26
that sales for the period was $178.7 million, less than the
estimate of nine analysts in a Bloomberg survey. “The tone for the gaming sector has been weak this
quarter, and investors seem to be anticipating Perfect World
will show results similar to its competitors,” Yeung said in a
New York phone interview. “Growth has been moderating while
margins are compressing as expenses continue to rise because
these companies are investing more in developing games and
marketing them.” Yeung, who has a market perform rating on Perfect World,
expects the company to report adjusted earnings of 63 cents per
American depositary receipt on sales of $106.5 million. Perfect
World is expected to report an adjusted EPS of 56 cents and
sales of $106 million, according to the estimate of eight
analysts surveyed by Bloomberg. To contact the reporter on this story:
Leon Lazaroff in New York
[email protected] To contact the editor responsible for this story:
Tal Barak Harif at
[email protected] | 2012 | perfect-world-falls-most-in-three-weeks-on-earnings-speculation |
Ukraine Seen by UkrAgroConsult Planting 36% of Rapeseed | By Kateryna Choursina | 2012-08-27T14:01:25Z | http://www.bloomberg.com/news/2012-08-27/ukraine-seen-by-ukragroconsult-planting-36-of-rapeseed.html | 8 | 27 | 07293944b7fadde17c4eaf9f7ef124d45189228a | Ukrainian farmers planted 36 percent
of intended winter rapeseed by Aug. 22 after rainfall helped
improve soil moisture, according to agriculture researcher
UkrAgroConsult. That accounts for 340,400 hectares (840,788 acres),
UkrAgroConsult, which is based in the capital, Kiev, said today
in an e-mailed report. No comparison with a year earlier was
provided. 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 | ukraine-seen-by-ukragroconsult-planting-36-of-rapeseed |
France’s Leclerc Stores to Sell Fuel at Cost, Chairman Says | By Tara Patel | 2012-08-27T13:27:48Z | http://www.bloomberg.com/news/2012-08-27/france-s-leclerc-stores-to-sell-fuel-at-cost-chairman-says.html | 8 | 27 | 0a20192694307d80a8ce94fdea5ee973994b9fcc | E.Leclerc, the French supermarket
chain, will sell gasoline and diesel at cost during September,
adding to the government’s promised consumer tax rebate, said
Chairman Michel-Edouard Leclerc. “Prices will probably fall 2 or 3 cents a liter” at all
of the company’s retail gas stations in France because of the
measures, Leclerc said today on RTL radio. “We won’t be making
any profit.” French Finance Minister Pierre Moscovici will unveil the
government’s plan tomorrow, which will reduce prices by a couple
of cents a liter, the executive said. E.Leclerc has 546 gas
stations in France, holding 12 percent of the retail fuel market
and 7 percent of the diesel market, according to an e-mailed
statement from the company. Leclerc said he will be among the French fuel distributors
meeting with Moscovici and Energy Minister Delphine Batho
tomorrow on public and private measures to cut gas prices. Prime
Minister Jean-Marc Ayrault said last week that in addition to a
tax rebate, the government is seeking a longer-term plan to curb
prices. President Francois Hollande pledged a three-month freeze
during elections in May. “It’s political signal,” Leclerc said today. “Fuel is an
extremely symbolic product.” French consumers’ purchasing power will keep dropping
through the end of the year as the costs of housing and other
necessities rise, he said. ‘Who Will Pay’ While the government has the power to block prices, “the
question is who will pay,” Leclerc said. The government and
private sector measures will mean fuel prices could fall this
week, he said. The reduction in the fuel tax rate will be “modest and
temporary” while the government devises a system to regulate
prices, Ayrault said last week. Moscovici said today that France
will cut its budget deficit to below 3 percent of gross domestic
product next year after tax increases this year. A 1 cent-a-liter tax cut would cost the state an annual 500
million euros ($626 million), according to the Union Francaise
des Industries Petrolieres , an oil industry lobby. France’s parliament last month voted in a one-time charge
on fuel inventories that will cost refiners and other holders of
stock 550 million euros this year, according to the industry
group. Hollande vowed during election campaigning to ease the
burden of higher energy costs on consumers by imposing a price
freeze as well as developing a system of lower electricity and
water prices for low-income households. To contact the reporter on this story:
Tara Patel in Paris at
[email protected] To contact the editor responsible for this story:
Will Kennedy at
[email protected] | 2012 | france-s-leclerc-stores-to-sell-fuel-at-cost-chairman-says |
Tanker Trackers Turn Bearish as IEA Trims Oil Forecast: Freight | By Isaac Arnsdorf | 2012-08-27T23:01:00Z | http://www.bloomberg.com/news/2012-08-27/tanker-trackers-turn-bearish-as-iea-trims-oil-forecast-freight.html | 8 | 27 | e2006f70c582420bab52602d9fa36fb6 | For the first time this year,
slowing growth in oil demand is spurring analysts to cut
estimates for earnings in the tanker industry’s largest vessels. Rates for very large crude carriers, each hauling 2 million
barrels, will average $21,250 a day in 2012, 5.6 percent less
than previously forecast, based on the median of 12 estimates
compiled by Bloomberg. Frontline Ltd., the biggest operator,
will report a second consecutive annual loss and shares of the
Hamilton, Bermuda-based company will drop 27 percent in 12
months, the average of as many as 18 analyst predictions shows. The International Energy Agency , an adviser to 28 nations,
reduced its oil-demand forecast on Aug. 10 and predicted slower
growth in 2013. Stockpiles in the U.S., the biggest importer,
are already near a 22-year high, Energy Department data show.
Slower growth will worsen the glut in shipping, with the VLCC
fleet projected to expand 6.9 percent in 2012, according to
Clarkson Plc. The world’s biggest shipbroker anticipates demand
for the vessels will rise 3.9 percent. “The modest increase in oil consumption is not going to be
enough to turn the crude-tanker market around,” said Martin Korsvold, an analyst at Pareto Securities AS in Oslo, whose
recommendations on shipping equities returned 30 percent in the
past two years. “We don’t think tanker operators are going to
get any material relief until 2014.” Annual Average VLCC earnings plunged 73 percent to $8,191 since the start
of January and averaged $31,127 so far this year, Clarkson data
show. Rates are volatile, moving 29 percent or more in five of
the past seven months. The annual average predicted by the
analysts would be the lowest since 1999 and below the $24,100
that Frontline says it needs to break even. Frontline, founded by billionaire John Fredriksen , will
narrow its loss to $21.76 million this year, from $529.6 million
in 2011, the mean of 16 estimates shows. Overseas Shipholding
Group (OSG) Inc., the largest U.S. tanker company, said in a filing
Aug. 7 it will be about $100 million short of the funds it needs
to repay $1.5 billion of loans by February. The New York-based
company has reported 13 consecutive quarterly losses. Shares of Frontline, which operates 42 VLCCs, dropped 13
percent to 22.09 kroner in Oslo trading this year and are
predicted to reach 16.11 kroner in 12 months, based on the
median of 18 estimates. Oil fell 4 percent to $94.83 a barrel
on the New York Mercantile Exchange and the MSCI All-Country
World Index of equities advanced 8.4 percent. Treasuries
returned 1.9 percent, a Bank of America Corp. index shows. World oil demand will increase by 870,000 barrels a day
this year, compared with January’s estimate of 1.08 million, and
830,000 barrels in 2013, the IEA said. It was the first time the
Paris-based group had predicted weaker growth for next year. Monetary Fund The International Monetary Fund cut its 2012 forecast for
growth in world trade to 3.8 percent from 4 percent last month,
down from 5.9 percent in 2011. The 17-nation euro area
contracted 0.2 percent in the second quarter and China has been
slowing since the beginning of last year. Europe accounts for 21
percent of oil consumption and China 11 percent, according to
data from London-based BP Plc. The Asian nation is the biggest
destination for laden VLCCs. Rates may exceed the predicted $21,250 because owners are
slowing down vessels to reduce fuel costs, their biggest
expense. That effectively reduces capacity as voyages lengthen.
The VLCC fleet sailed at an average of 9.57 knots last month,
compared with 11.55 knots three years earlier, according to data
compiled by Bloomberg. Fleet Expansion Fleet growth this year may be smaller than anticipated as
owners scrap older vessels. Companies will send 3.6 million
deadweight tons of capacity for demolition this year, compared
with 3.3 million tons in 2011, Clarkson estimates. The existing
fleet is 183.2 million deadweight tons, a measure of carrying
capacity. The pace may also slow after owners held off ordering new
vessels. Orders at ship yards reached 48 percent of existing
capacity in 2008, just after rates peaked at $229,000, and were
last at about 10 percent, according to data from IHS Inc., an
Englewood, Colorado-based research company. The IEA’s forecast for slowing demand growth in 2013 may be
partly offset by shifting trade patterns that are lengthening
tanker journeys. About 700,000 barrels a day that used to be
delivered within the Atlantic is now going to Asia , according to
Tufton Oceanic Ltd., a shipping hedge fund managing about $1
billion of assets. China will overtake the U.S. next year as the
largest customer for all sizes of crude tankers, estimates
Arctic Securities ASA, an Oslo-based investment bank. Oil Consumer VLCC rates slumped 84 percent since the beginning of April,
after jumping as much as 67 percent in three months as buyers
stockpiled crude in anticipation of an embargo on Iranian
supply. The 27-nation European Union agreed to impose sanctions
on OPEC’s third-biggest member in January, phasing in the curbs
through July 1. The U.S. and EU say Iran’s nuclear program is
aimed at producing atomic weapons while the government in Tehran
says it is for civilian purposes. China, the second-largest oil consumer, stockpiled about 90
million barrels in the first five months of the year, the most
since preparing for the 2008 Olympics in Beijing, government
data show. U.S. inventories rose 9.4 percent this year and are
within 6.9 percent of the 387.3 million barrels reached June 15,
the highest level since 1990. Investment Banking The scale of reserves is diminishing demand for ships, with
109 Middle East cargoes scheduled to load this month, compared
with an average of 132 in the first half, according to Nordea
Markets in Oslo, the investment-banking unit of the world’s
fourth-largest shipping lender. Clarkson’s predicted 3.9 percent
growth in VLCC demand this year compares with a 5.3 percent
expansion in 2011. Crude reached $110.55 a barrel in New York in March because
of concern that Iran would retaliate against EU sanctions by
blocking the Strait of Hormuz , the transit point for about 20
percent of the world’s oil. Prices then tumbled 30 percent,
before rebounding when the full sanctions started in July. “Some special effects with tensions around Iran made the
market look stronger than it really was,” said Marius Magelie,
an Oslo-based analyst at ABG Sundal Collier ASA, whose
recommendations on shipping companies returned 20 percent in the
past year. “Lower oil consumption means lower demand for
transportation.” To contact the reporter on this story:
Isaac Arnsdorf in London at
[email protected] To contact the editor responsible for this story:
Alaric Nightingale at
[email protected] | 2012 | anker-trackers-turn-bearish-as-iea-trims-oil-forecast-freig |
Troika Heads to Return to Athens on Sept. 5, Naftemporiki Says | By Eleni Chrepa | 2012-08-27T06:57:49Z | http://www.bloomberg.com/news/2012-08-27/troika-heads-to-return-to-athens-on-sept-5-naftemporiki-says.html | 8 | 27 | c41a6e261a48541c9a63ffe089098bffcf43c714 | A team of inspectors from Greece’s
international creditors will resume talks with the Greek
government on Sept. 5 in Athens, Naftemporiki reported without
citing anyone. A technical delegation arrived in Athens today to begin
preparatory talks with the country’s ministries, the Athens-
based newspaper said. Officials representing the so-called
troika of the European Central Bank , the European Commission and
the International Monetary Fund must have completed their
assessment on the Greek economy by Sept. 28, according to the
newspaper. To contact the reporter on this story:
Eleni Chrepa in Athens at
[email protected] To contact the editor responsible for this story:
Jerrold Colten at
[email protected] | 2012 | roika-heads-to-return-to-athens-on-sept-5-naftemporiki-says |
Taliban Behead 17 Afghans in Southern Militant Stronghold | By Eltaf Najafizada | 2012-08-27T07:38:04Z | http://www.bloomberg.com/news/2012-08-27/taliban-behead-17-afghans-in-southern-militant-stronghold-1-.html | 8 | 27 | c475207f7157ae367627c7a3e9c6875971ad57cf | Taliban militants opened fire and
then beheaded 17 Afghan civilians, including two women, in the
southern province of Helmand, the government said. The Ministry of Interior Affairs condemned in a statement
the “inhumane and cowardly act” yesterday that it said
occurred in the region’s Kajaki district. The victims had
gathered for a celebration and were listening to music and
dancing when the attack took place, the Associated Press
reported, citing provincial government spokesman Daoud Ahmadi.
The area is under Taliban control, the news agency said, making
it hard to gather details. AP said the killings were in
Helmand’s Musa Qala district. Helmand is a militant stronghold where Taliban insurgents
yesterday also killed 10 Afghan soldiers in an attack. In other
violence, an Afghan soldier shot dead two members of the NATO
force in the country’s east, the latest in a series of so-called
“insider attacks” that have cast a shadow over the transition
of security duties to local troops. The Taliban regime ousted by U.S. forces following the
Sept. 11 attacks banned music, games and other forms of
entertainment during its five years in power. The movement
interpreted Islamic law as banning women from work and school
and requiring them to wear the burqa in public. Shootings Surge Killings of Western troops by Afghan forces have raised
questions about a U.S. strategy that depends on training and
developing the Afghan army and police so that coalition combat
troops can leave by the end of 2014. There have been more than 40 insider killings so far this
year, including about a dozen in the past month, compared with
35 in all of 2011, according to the International Security
Assistance Force . General John Allen, the top allied commander in
Afghanistan , said this month that the attacks won’t disrupt his
strategy or require pulling troops from patrols with Afghan
forces. The general indicated Aug. 23 he doesn’t agree with an
assertion by the Afghan government that spy agencies from other
countries were behind most of the attacks. “I’m looking forward to Afghanistan providing us with the
intelligence that permits them to come to that conclusion,”
Allen said. U.S. officials have attributed most of the episodes
to personal grievances and stress on Afghan forces. About 25 percent of the attacks stem from Taliban
insurgents who infiltrate and impersonate Afghan forces or who
coerce Afghan soldiers to turn against the coalition, Allen
said. To contact the reporter on this story:
Eltaf Najafizada in Kabul at
[email protected] To contact the editor responsible for this story:
Peter Hirschberg at
[email protected] | 2012 | aliban-behead-17-afghans-in-southern-militant-stronghold-1- |
Gulf Coast Gasoline Hits Four-Year High on Isaac, Amuay | By Barbara Powell | 2012-08-27T19:51:51Z | http://www.bloomberg.com/news/2012-08-27/gulf-coast-gasoline-hits-four-year-high-on-isaac-amuay.html | 8 | 27 | 233a502abb00427cae656e7f3fb29506 | Spot gasoline on the U.S. Gulf Coast
rose to the highest level in almost four years as refineries
shut as Tropical Storm Isaac approached Louisiana and a fire
shut Venezuela’s largest plant. Tropical Storm Isaac may go ashore south of New Orleans
early Aug. 29 as a hurricane. Valero Energy Corp. (VLO) shut its
refineries in Meraux and Norco, Phillips 66 idled its Alliance
plant, Marathon Petroleum Corp. closed its Garyville facility
and Exxon Mobil began shutting the Chalmette plant near New
Orleans. Venzuela’s Amuay plant fire may boost demand for U.S.
exports to Latin America. “There’s some caution here ahead of the storm,” said
Addison Armstrong , director of market research at Tradition
Energy in Stamford, Connecticut. “It’s still a long way off
before it comes ashore and a lot could happen between now and
then.” Conventional 87-octane gasoline in the Gulf jumped 18.5
cents to 32 cents a gallon over October gasoline futures on the
New York Mercantile Exchange , according to data compiled by
Bloomberg at 2:03 p.m. in New York . That’s the largest premium
since Sept. 19, 2008, when the Gulf Coast was ravaged by
hurricanes Gustav and Ike. A total of 15 percent of fuel-making capacity in the region
has been shuttered, according to Bloomberg data. About 78
percent of Gulf oil production was shut in as of 12:30 p.m. East
Coat time today, the Bureau of Safety and Environmental
enforcement reported. ‘Orderly Shutdowns’ “If you’re short, you want to cover,” said Andrew Lebow ,
a senior vice president at Jefferies Bache LLC in New York.
“The good news is these will be orderly shutdowns and one would
hope this would be short-term in nature.” A hurricane warning was posted from Louisiana to the
Florida panhandle . Isaac was about 280 miles (450 kilometers)
southeast of the mouth of the Mississippi River at 2 p.m. East
Coast time, with top winds of 65 miles per hour, the National
Hurricane Center in Miami said. It was moving northwest at 14
mph. The Louisiana Offshore Oil Port , the single largest entry
point for crude coming into the U.S., planned to suspend
offloading oil tankers today. Between 900,000 barrels and 1
million barrels of oil a day is offloaded at the LOOP, Barb Hestermann, a spokeswoman for the port, said yesterday. “I’m guessing you see other refineries at minimum rates
because there’s not going to be crude up the Mississippi and the
Loop is shutting operations,” said Andy Lipow , president of
Lipow Oil Associates LLC in Houston. October Rollover Conventional, 87-octane gasoline in Chicago jumped to a 44-
cent premium to October futures from a 5-cent discount to
September futures last week. About 16 cents of the increase can be accounted for by the
switch today to pricing against October futures, said Lewis Adam, president of ADMO Energy LLC, a supply consultant in
Kansas City. He said the rest of the gain came after Marathon, which has
a refinery in Robinson, Illinois, announced it would close its
Garyville refinery in Louisiana because of the storm. “Garyville pumps lot of barrels to Robinson for
processing,” Adam said. “I think Marathon was a big buyer up
there.” In New York, conventional 87-octane gasoline gained 7.13
cents to trade at a 5-cent premium to September futures, the
highest level since November. Ultra-low sulfur diesel in the Gulf Coast increased its
premium to futures widening 2.75 cents to 11.63 cents a gallon,
the strongest performance since Oct. 2, 2008. To contact the reporter on this story:
Barbara J Powell in Dallas at
[email protected] To contact the editor responsible for this story:
Dan Stets at
[email protected] | 2012 | gulf-coast-gasoline-hits-four-year-high-on-isaac-amuay |
S. Korea Says Japan Free Trade Talks ‘Difficult’ Due to Tensions | By Cynthia Kim | 2012-08-27T05:08:54Z | http://www.bloomberg.com/news/2012-08-27/s-korea-says-japan-free-trade-talks-difficult-due-to-tensions.html | 8 | 27 | 6135c147c8a880b3f785cb32c07fe9562191ad58 | South Korea said resuming
negotiations with Japan over a free trade agreement will be
difficult given a maritime territorial spat. “Soured relations between Korea and Japan pose a
difficulty for us,” head trade negotiator Choi Kyung Lim said
at a briefing today in Seoul. “It is difficult for us to decide
whether we will resume the talks unless these problems are
resolved.” Choi’s comments were the latest indication economic ties
between Asia ’s second and fourth-biggest economies have soured
since South Korean President Lee Myung Bak ’s Aug. 10 visit to
rocky islets claimed by both nations. Japan last week said the
spat threatens a bond purchase deal that was aimed to strengthen
regional cooperation in the face of global uncertainty. “The deal won’t progress for years with the relationship
between the two sides this bad,” said Kim Hyung Joo, an
economist at the LG Economics Research Institute in Seoul.
“There may be working-level discussions, but it will be all-
talk, no-action in this climate.” Japan is South Korea’s second-biggest trading partner, and
commerce between the two rose 16.8 percent to $108 billion in
2011, according to the Korea International Trade Association
website. The two countries played diplomatic ping-pong last week
over a letter Japanese Prime Minister Yoshihiko Noda wrote to
Lee protesting the visit to the rocks, known as Takeshima in
Japanese and Dokdo in Korean. South Korea returned the letter
without response because it referred to the islets by the
Japanese name. Japan’s foreign ministry initially refused to
accept the returned letter. Noda on Aug. 24 said Japan will increase security around
its outlying islands given separate disputes with South Korea
and China . He called South Korea’s occupation of the islets
“illegal.” The islets are 87 kilometers (54 miles) east of the closest
South Korean territory and 158 kilometers from the nearest
Japanese land. Sovereignty over the area means control of
fishing grounds and natural gas reserves, and South Korea has
bolstered its claims by stationing coast guard personnel there
year-round. To contact the reporter on this story:
Cynthia Kim in Seoul at
[email protected] To contact the editor responsible for this story:
Paul Panckhurst at
[email protected] | 2012 | s-korea-says-japan-free-trade-talks-difficult-due-to-tensions |
Saudi Arabia’s King Abdullah Travels Outside Kingdom, SPA Says | By Glen Carey | 2012-08-27T12:01:07Z | http://www.bloomberg.com/news/2012-08-27/saudi-arabia-s-king-abdullah-travels-outside-kingdom-spa-says.html | 8 | 27 | 0fd923f7ed1aa1a299defbd21a94f4239d1dc232 | Saudi Arabia’s King Abdullah has
traveled outside the kingdom for “special leave,” the Saudi
Press Agency said, citing a statement from the Royal Court . It
didn’t say where the king was going. Crown Prince Salman bin Abdulaziz will manage state affairs
during his absence, the Riyadh-based news service reported. 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-s-king-abdullah-travels-outside-kingdom-spa-says |
Typhoon Bolaven Capsizes Fishing Boats, Lashes Korea | By Seonjin Cha and Rose Kim | 2012-08-28T10:50:21Z | http://www.bloomberg.com/news/2012-08-27/typhoon-bolaven-sinks-chinese-fishing-boats-heads-toward-seoul.html | 8 | 27 | f625e8ce83ae5b2648b584f78f73f7b7f2c82de6 | Typhoon Bolaven killed at least
eight people as it lashed the Korean peninsula with strong winds
and heavy rain, capsizing fishing boats and grounding aircraft. Five fishermen from two Chinese vessels drowned, 10
remained missing and 18 were safe ashore after the storm passed
Jeju Island off the southern tip of Korea , according to an e-
mailed statement from the Coast Guard. Another three people were killed in separate accidents, the
Ministry of Land, Transport and Maritime Affairs said, without
providing details. Yonhap News reported that one of the victims
was an apartment guard who was crushed by a container box,
another a truck driver struck by a falling tree and the third a
man who was hit by a cross that fell from a church. While Seoul escaped widespread damage , as many as 109
overseas flights in and out of Incheon International Airport,
the nation’s biggest gateway, were canceled as of 6 p.m. Almost
300 domestic flights from Gimpo, Gimhae, Jeju and other smaller
South Korean airports were canceled, and some 87 ferry routes
were closed today, according to the transport ministry. The center of Bolaven was over the sea and 120 kilometers
(75 miles) south of the North Korean capital of Pyongyang as of
6 p.m. local time, said Kim Dong Jin, a forecaster from the
Korea Meteorological Administration’s typhoon center in Seoul. U.S. and South Korean forces suspended military exercises
due to the typhoon and will resume the drills tomorrow if the
weather improves, Defense Ministry spokesman Kim Min Seok said
by phone. Power Cut Power outages due to the typhoon disrupted operations at
petrochemical plants at the Yeosu Industrial Complex, including
those owned by LG Chem Ltd. (051910) and Hanwha Chemical Corp. LG Chem
resumed operations after a one-hour stoppage while Hanwha
Chemical forecast its plant may restart operations later in the
day, spokesmen for the companies said. A total of 1.7 million homes and commercial buildings
temporarily lost power in southern areas of the peninsula, Korea
Electric Power Corp. (KEP) said in an e-mailed statement. As of 5 p.m.,
power was restored to 80 percent of the houses and buildings. The typhoon flooded 314 hectares (776 acres) of rice
paddies and damaged fruit across 800 hectares of pear farms,
according to an e-mailed statement from the Ministry for Food,
Agriculture, Forestry and Fisheries. Most schools in areas in South Korea hit or expected to be
affected by the typhoon were closed today, the Ministry of
Education, Science and Technology said. Bolaven yesterday 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. 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:
Seonjin Cha in Seoul at
[email protected] ;
Sangim Han in Seoul at
[email protected] To contact the editor responsible for this story:
Brett Miller at
[email protected] | 2012 | yphoon-bolaven-sinks-chinese-fishing-boats-heads-toward-seou |
Crude Rises on Storm, Fire; Gold Increases: Commodities at Close | By Christian Schmollinger | 2012-08-27T09:21:49Z | http://www.bloomberg.com/news/2012-08-27/crude-rises-on-storm-fire-gold-increases-commodities-at-close.html | 8 | 27 | 7d0d6da1067d464793c5893250ba295f | The Standard & Poor’s GSCI gauge of
24 commodities climbed 0.9 percent to 676.27 at 6:10 p.m.
Singapore time. The UBS Bloomberg CMCI index of 26 raw materials
fell 0.2 percent to 1,594.5234. CRUDE OIL Oil climbed the most in a week and gasoline rose to the
highest in almost four months as Tropical Storm Isaac
strengthened, crimping output in the Gulf of Mexico, and a fire
in Venezuela shut part of the world’s No. 2 refinery. Oil for October delivery increased as much as $1.57 to
$97.72 a barrel in electronic trading on the New York Mercantile
Exchange and was at $97.17 at 9:00 a.m. London time. Front-month
prices were up 0.2 percent last week, closing at $96.15 on Aug.
24. Futures are down 1.7 percent this year. NATURAL GAS Natural gas rose from the lowest level in two months in New
York as Tropical Storm Isaac shut production in the Gulf of
Mexico . Futures advanced as much as 2.4 percent after Isaac moved
into the southeast Gulf and was forecast to strengthen into a
hurricane. Offshore operators evacuated platforms and rigs in
the storm’s path, shutting in about 8.2 percent of the region’s
gas production and 24 percent of its oil output, the Bureau of
Safety and Environmental Enforcement said yesterday . OIL PRODUCTS The premium of gasoil, or diesel, to Asian marker Dubai
crude rose $1.81 to $21.62 a barrel at 11:20 a.m. Singapore
time, according to data from PVM Oil Associates Ltd. , a broker.
This crack spread, a measure of processing profit, was the
widest since April 15 last year. Gasoil swaps for September
climbed $1.60, or 1.2 percent, to $133.10 a barrel, PVM said.
Prices gained for the fourth time in five days. Naphtha swaps for September lost 50 cents to $969.75 a
metric ton, according to PVM. The petrochemical and gasoline
feedstock snapped a two-day rising streak. Naphtha’s premium to
London-traded Brent crude futures decreased $12.18 to $102.29 a
ton, according to data compiled by Bloomberg. The difference is
also known as the crack spread. BASE METALS Copper is set to gain in New York on speculation that
policy makers from the U.S. to China , the biggest users, will
take more measures to stimulate growth, boosting demand for raw
materials. PRECIOUS METALS Gold jumped to a four-month high on speculation that
central banks from the U.S. to China will act to spur economic
growth and as investment holdings expanded to a record. Silver
rose for a sixth day, the best run since January. Immediate-delivery gold rose as much as 0.4 percent to
$1,676.90 an ounce, the most expensive since April 13, and was
at $1,674.45 at 2:23 p.m. in Singapore. Prices climbed 3.4
percent last week, the biggest gain since Jan. 27. December-
delivery bullion advanced as much as 0.4 percent to $1,679.30 an
ounce on the Comex in New York, the highest since April 12. Spot silver rose as much as 1.6 percent to $31.265 an
ounce, the highest level since May 1, and was last at $30.995. GRAINS, OILSEEDS, SOFT COMMODITIES Soybeans rallied to a record as the worst U.S. drought in
half a century hurt production in the world’s largest grower
while export demand increased. Corn and wheat climbed. The contract for November delivery gained as much as 1.7
percent to $17.605 a bushel on the Chicago Board of Trade, and
was at $17.5775 at 1:25 p.m. in Singapore. Most-active prices
have advanced 46 percent this year. Corn for December delivery rose as much as 1.2 percent to
$8.18 a bushel, and traded at $8.1625. The most-active price,
which has climbed 26 percent this year, reached a record $8.49 a
bushel on Aug. 10. December-delivery wheat advanced as much as 1.2 percent to
$8.9925 a bushel, and was at $8.9625. The price has gained 37
percent this year. Palm oil jumped to the highest level in six weeks on
speculation the worst U.S. drought in half a century will trim
soybean supplies, boosting demand for the tropical oil from
Malaysia , the second largest grower. The November-delivery contract gained as much as 1.7
percent to 3,122 ringgit ($1,004) a metric ton on the Malaysia
Derivatives Exchange, the highest level for the most-active
contract since July 17, and ended the morning session at 3,112
ringgit. Most-active prices rose 3.6 percent last week. Rubber rallied to a three-week high on speculation policy
makers from the U.S. to China, the biggest user, will add
measures to stimulate growth, boosting demand for the commodity
used in tires and gloves. January-delivery rubber surged 3.3 percent to end at 228.6
yen a kilogram ($2,904 a metric ton) on the Tokyo Commodity
Exchange, the highest price for the most-active contract since
Aug. 2. Futures have declined 13 percent this year. To contact the reporter on this story:
Christian Schmollinger in Singapore at
[email protected] To contact the editor responsible for this story:
Alexander Kwiatkowski at
[email protected] | 2012 | crude-rises-on-storm-fire-gold-increases-commodities-at-close |
Oil Options Rise as Futures Sink on Isaac Plant Closures | By Barbara Powell | 2012-08-27T20:25:04Z | http://www.bloomberg.com/news/2012-08-27/oil-options-rise-as-futures-sink-on-isaac-plant-closures.html | 8 | 27 | 29e6e52e3e9c291a2ba3951de5a13bc280b33f94 | Volatility on near-term crude
options rose as futures fell as refineries closed in advance of
Tropical Storm Isaac, curbing oil demand. Implied volatility for options expiring in October, a
measure of expected price swings in futures and a gauge of
options prices, was 28.8 at 3:40 p.m. in New York , up from 27.9
percent Aug. 24. Bets that prices would fall accounted for 53
percent of electronic trading today. Crude oil for October delivery fell 68 cents, or 0.7
percent, to $95.47 a gallon on the Nymex. It was the third
consecutive decline. Isaac may go ashore early Aug. 29 south of New Orleans as a
hurricane, according to the National Hurricane Center. The most active options in electronic trading today were
October $115 calls, which slipped 5 cents to 8 cents a barrel at
3:47 p.m. with 2,125 lots trading. October $90 puts were the
second-most active options, with 1,634 lots changing hands as
they rose 4 cents to 75 cents a barrel. One contract covers
1,000 barrels of crude. The exchange distributes real-time data for electronic
trading and releases information the next business day on floor
trading, where the bulk of options trading occurs. Previous Session In the previous session, bullish bets accounted for 54
percent of contracts traded. December $130 calls were the most actively traded options
Aug. 24, with 5,285 lots changing hands. They rose 1 cent to 38
cents a barrel. October $110 calls were unchanged at 23 cents on
volume of 4,875. Open interest was highest for December $100 calls with
45,295 contracts. Next were December $80 puts with 43,703 lots
and December $120 calls with 41,445. To contact the editor responsible for this story:
Dan Stets at
[email protected] | 2012 | oil-options-rise-as-futures-sink-on-isaac-plant-closures |
Worst Month for Treasuries Since 2010 Lures Buyers | By Liz Capo McCormick | 2012-08-27T18:22:08Z | http://www.bloomberg.com/news/2012-08-27/worst-month-for-treasuries-since-2010-lures-buyers.html | 8 | 27 | 1cca53c6c996441e824028c3d45ddc30 | Investors from London to Tokyo to
Pittsburgh are plowing money back into Treasuries after the
biggest decline in 19 months, betting that even an improving
global economy won’t ignite a bear market in bonds. Hedge funds and large speculators raised bullish positions
in 10-year Treasury note contracts this month to the highest
since March 2008. Yields, which surged to 1.86 percent Aug. 21,
sparking the worst investor losses for a four-week period since
December 2010, will be little changed by year-end, according to
the median forecast of 81 strategists surveyed by Bloomberg. While employment and retail sales rose last month, U.S.
economic growth the next two years will remain below the 3.2
percent annual average since 1948, according to Bloomberg
surveys. Subdued inflation, Europe’s debt turmoil, mandated U.S.
spending cuts and tax increases after the presidential election,
as well as possible Federal Reserve purchases next month are all
boosting the allure of bonds. “We are still in a deflationary, low-growth environment,”
Fredrik Nerbrand, global head of asset allocation at London-
based HSBC Holdings Plc, said in a telephone interview Aug. 21.
“In that environment, Treasuries provide you with stability and
a return of capital.” HSBC increased the allocation of Treasuries to 13 percent
of its model portfolio this month from 10 percent and are buying
debt with a five-year maturity. Holdings Increased Money managers overseeing about $120 billion raised their
holdings of Treasuries this month to 27.6 percent, the highest
since 2007 and up from 23.4 percent in April, a Stone & McCarthy
Research Associates survey shows. They also kept their duration ,
a reflection of how long the debt they own will be outstanding,
at 100.3 percent of what is contained in benchmark indexes in
the week ended Aug. 21, the highest level since October 2010. The options market’s expectations for the pace of swings in
yields remains close to a five-year low reached last month.
Normalized volatility on three-month options for U.S. 10-year
interest-rate swaps , called 3m10y swaptions, was 77.715 basis
points at the end of last week, down from last year’s high of
124.5 basis points in November and back approaching the 71.8
basis points reached on July 23, which was the lowest since June
2007. Two months after the collapse of Lehman Brothers Holdings
Inc. in September 2008, the measure surged to a record high of
221.8 basis points. Yields Surge Treasury yields rose to 1.86 percent on Aug. 21 from a
record low 1.379 percent July 25, translating into losses for
investors of 1.6 percent, the most over a four-week period since
December 2010, Bank of America Merrill Lynch indexes show. Yields on 10-year Treasury notes fell 12 basis points last
week to 1.69 percent. The benchmark 1.625 percent security due
August 2022 rose 1 4/32 week, or $11.25 per $1,000 face amount,
to 99 13/32. The gains trimmed this month’s losses in 10-year
notes to 1.3 percent from 2.51 percent on Aug. 17. The yield was 1.64 percent at 2:21 p.m. in New York. The rise in Treasury yields earlier this month “was viewed
as a buying opportunity by some survey participants,” John
Canavan, a fixed-income strategist at Princeton, New Jersey-
based Stone & McCarthy, said in an interview on Aug. 20. Benchmark 10-year Treasuries will yield 1.60 percent by the
end of September, below June’s projection of 1.90 percent,
median estimates in Bloomberg surveys show. The year-end
forecast fell to 1.65 percent from 2.1 percent. Stimulus Chance Last week’s slide in yields followed the release of minutes
from the July 31-Aug. 1 meeting of the Federal Open Market
Committee , which signaled policy makers are ready to add to
record stimulus unless they are convinced the recovery is
accelerating. The Fed will be “aggressive” and there’s a 50 percent
chance it will act next month, Rick Rieder, chief investment
officer of fundamental fixed-income at BlackRock Inc., said Aug.
23 on Bloomberg Television’s “In the Loop” with Deirdre
Bolton . BlackRock, based in New York, oversees $3.56 trillion,
making it the world’s largest money manager. That means the Fed may add a third round of bond purchases,
or quantitative easing, to the $2.3 trillion its bought since
2008. In a letter dated Aug. 22 to California Republican Darrell
Issa , the chairman of the House Oversight and Government Reform
Committee, Bernanke repeated the statement from the FOMC meeting
that the Fed will provide “additional accommodation as
needed.” ‘False Dawn’ He has an opportunity to expand on his views in an Aug. 31
speech at the Kansas City Fed’s annual economic symposium in
Jackson Hole, Wyoming. “It’s fairly clear that their finger is really on the
trigger of doing QE3,” Franco Castagliuolo, co-manager of the
$5.5 billion Fidelity Government Income Fund, said in a Aug. 22
interview. “Whenever the economic data has surprised on the up-
side it has turned out to be a false dawn.” Boston-based
Fidelity Investments manages $1.5 trillion. The U.S. economy will probably tip into recession next year
if lawmakers and President Barack Obama can’t break an impasse
over the federal budget, and if the George W. Bush-era tax cuts
expire, according to a report by the nonpartisan Congressional
Budget Office published on Aug. 22. The budget deficit will reach $1.1 trillion this year,
according to the CBO. That would be down from last year’s $1.3
trillion, in part because tax revenue has risen by almost 6
percent and spending is down by about 1 percent this year. Fiscal Cliff This so-called fiscal cliff would cause economic output to
shrink next year by 0.5 percent and joblessness would climb to
about 9 percent from 8.3 percent if mandated spending cuts of
$1.2 trillion over a decade start Jan. 1, the CBO said. “I don’t expect yields to go higher,” Hajime Nagata, a
bond investor in Tokyo at Diam Co., said in an Aug. 21
interview. Economic gains will “be temporary because of the
fiscal cliff,” said Nagata, who added to his Treasury holdings
this month. Diam, a unit of Dai-Ichi Life Insurance Co., Japan’s
second-biggest life insurer, manages about $130 billion. Fed stimulus will trigger faster inflation and threaten
returns for fixed investments, said Tim Price , a money manager
who helps oversee more than $1.5 billion at PFP Group LLP, an
asset-management firm based in London. Treasury 10-year yields of even 2 percent don’t compensate
for that risk, he said in a telephone interview on Aug. 21. “The inevitable outcome has to be an inflationary one,
maybe not today or tomorrow,” said Price, who is avoiding
Treasuries, gilts and bunds, favoring debt of nations such as
Qatar and Singapore. Inflation Goal Inflation has held about the central bank’s goal of 2
percent in the two years since Bernanke first suggested he would
use asset purchases to boost growth. Consumer prices in the U.S. were unchanged in July for a
second month, with the gain in the index of 1.4 percent over the
past 12 months marking the smallest year-to-year increase since
November 2010, the Labor Department reported on Aug. 15 in
Washington. The core measure, which excludes volatile food and
fuel costs, rose 2.1 percent in the 12 months through July. Gross domestic product is forecast to expand 2.15 percent
this year, according to the median estimate of economists
surveyed by Bloomberg News . While that’s up from 1.8 percent in
2011, it’s below the average of 3.1 percent in 2004 through
2006, before the start of the worst financial crisis since the
Great Depression. No Pressure “The U.S. will have continued slow growth in the
neighborhood of about 2 percent,” James Kochan , chief fixed-
income strategist in Menomonee Falls, Wisconsin, at Wells Fargo
Funds Management LLC, which manages $202 billion, said in an
Aug. 22 telephone interview. “You are not going to see
significant pressure on interest rates anytime soon.” The Fed has kept its benchmark interest rate for overnight
loans between banks in a range of zero to 0.25 percent since
December of 2008 and says it expects to keep them low until at
least late 2014. That’s because even as some data has improved, including an
addition of 163,000 new workers to the labor force in July, the
unemployment rate at 8.3 percent has held above 8 percent since
February 2009. Initial jobless claims rose by 4,000 for a second
week to reach a one-month high of 372,000 in the period ended
Aug. 18, the Labor Department reported Aug. 22. Hedge funds and other large speculators placed 97,540 more
contracts betting 10-year Treasury note prices will rise than
that they will fall in the week ending Aug. 21, according to
U.S. Commodity Futures Trading Commission data. Net Longs Net-long positions rose by 65,204 contracts, or 202
percent, from a week earlier, the Washington-based commission
said in its Commitments of Traders report Aug. 24. “You should not be selling Treasuries and looking for
yields to climb significantly higher,” said Mark Dowding, a
fixed-income portfolio manager at BlueBay Asset Management in
London, which oversees $41 billion in assets, during an
interview on Aug. 21. Political risks remain in the U.S. and Europe. Republican presidential candidate Mitt Romney said last
week that he wouldn’t appoint Bernanke to a third term, while
his running mate, House Budget Committee Chairman Paul Ryan of
Wisconsin, said on Aug. 23 that he doesn’t want the Fed to
provide additional stimulus. The Republican convention, which was set to begin in Tampa,
Florida, today, has been delayed by a day beause of Tropical
Storm Isaac. Democrats will re-nominate Obama and Vice President
Joseph Biden next week in Charlotte, North Carolina . ‘Trouble Ahead’ “There is some trouble ahead,” said Joseph Balestrino , a
money manager who helps oversee $49 billion of bonds at the
Pittsburgh-based mutual-fund company Federated Investors Inc. in
a Bloomberg TV interview last week. “The economy has underwhelmed, domestically and
internationally,” Balestrino, the firm’s chief fixed-income
market strategist, said in an interview with Alix Steel on
Bloomberg Television’s “In the Loop” on Aug. 21. “You take
cover for a while. I don’t mind buying Treasuries at 1.8 percent
on the 10-year.” 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 | worst-month-for-treasuries-since-2010-lures-buyers |
Storm Imperils Romney’s Moment With Split-Screen TV Shots | By Julie Hirschfeld Davis and Michael C. Bender | 2012-08-27T17:59:31Z | http://www.bloomberg.com/news/2012-08-27/storm-imperils-romney-s-moment-with-split-screen-tv-shots.html | 8 | 27 | acb9f7b5c5cb427a905aac7b3a589847 | Tropical Storm Isaac, which is menacing the U.S. Gulf Coast , is threatening to drown out the Republican National Convention and eclipse Mitt Romney’s debut as his party’s nominee. That would be especially true if Isaac gathers strength and makes a devastating landfall by destroying homes and threatening lives, both of which could afford President Barack Obama the opportunity to assume the mantle of first-responder and consoler-in-chief. It would also cut into Romney’s time before the television cameras. Fox News anchor Shepard Smith left Tampa yesterday for New Orleans , where Isaac might make landfall on Aug. 29. “When you see the storm hitting in the Gulf right as you’re nominating your candidate for president, rightly, it’s going to draw the nation’s attention away, and so it’s going to be very hard to compete with that,” Republican strategist Alex Castellanos said in an interview. “If the nation is hurting, it can be a bit unseemly to be celebrating a political accomplishment of picking a nominee,” he said. The day after Republican Party officials announced they would scrap Monday’s official schedule because of Isaac, they joined Romney campaign advisers in downplaying the chances that the storm could dilute the narrative they plan to present on the stage at the Tampa Bay Times Forum. Safety First “Our primary concern is not just the safety of the folks here but the folks around the country. But, that said, there are millions of Americans that are tuning in because they want to hear from and about Mitt Romney ,” said Sean Spicer, the party’s communications director. “They’re looking forward to this and so are we.” Russ Schriefer, a senior Romney strategist, told reporters on a conference call yesterday that despite the weather, the key messages will still come through, including today’s planned theme of, “President Obama’s failed leadership, not serving the American people.” Romney is spending the day in New Hampshire , practicing his convention address. He expressed concern today for those affected by the storm. “Our thoughts are with the people that are in the storm’s path and hope that they’re spared any major destruction,” Romney said, as he walked into Brewster Academy, a private high school with a 500-seat stadium. When asked if he would consider canceling the convention, Romney left little doubt that the event would continue: “Got a great convention ahead,” he said. Just Tuning In Still, the storm is threatening to eat into the already limited hours of free television time dedicated to Romney’s elevation at a moment when many Americans traditionally are just tuning in to the presidential contest. Instead of three solid nights of convention coverage, viewers may be treated to a steady stream of images of wind-lashed palm trees, torrential rains and rising waters. Sam Feist, the Washington bureau chief for CNN , said while the cable network hasn’t shifted any staff covering the convention out of Tampa for storm coverage, it plans to juxtapose the weather story with the political one. “You’ll see us mixing both stories together, because they’re both connected, and you’ll see us covering both,” Feist said in an interview. “We certainly can walk and chew gum at the same time.” Other television networks may redeploy reporters from the party in Tampa to potential strikes in Louisiana and Mississippi . Fox was planning to position five reporters along the Gulf Coast, including at least one who was assigned to convention coverage in Tampa, according to a network spokeswoman. ‘Moment-by-Moment’ NBC was considering moving reporters away from the convention to better cover the storm. “It’s a moment-by-moment decision,” said spokeswoman Erika Masonhall. Messages on Twitter about the tropical storm were outnumbering Republican National Convention-related missives 20- to-1 yesterday, said Adam Sharp, the social networking service’s Washington-based manager of government and political partnerships who has set up shop at the convention site. There were some power outages in South Florida , where Florida Keys residents were bracing for winds of up to 65 mph, Florida Division of Emergency Management Director Bryan Koon said. Florida Governor Rick Scott urged delegates staying along the beach in Tampa Bay to remain in their hotels today because of potential bridge closures and roads flooding. Tampa was expected to get about six inches of rain today, winds of about 40 mph and storm surges of about three feet, Koon said. Obama returned from Camp David yesterday and had no public events scheduled for today, though he was set to begin a two-day college tour on Tuesday in Iowa and Colorado reaching out to younger voters. White House Even as aides cautioned they weren’t looking to politicize Isaac, the White House managed to work a mention of the rained- on party into its official readout of Obama’s storm briefing today. Obama, according to the briefing, told Scott, “to let him know if there are any unmet needs or additional resources the administration could provide, including in support of efforts to ensure the safety of those visiting the state for the Republican National Convention.” Democratic strategists said there was an opportunity to showcase presidential leadership and provide a contrast with Romney. “While this does not seem to be a crisis yet, the lesson of Katrina is not lost on anyone,” said Steve Elmendorf , a strategist for the party. “Natural disasters are an important time for any political leader to take charge and show concern and action.” 2008 Cancellation It’s not the first time Republicans have had to reshuffle their convention plans because nature intervened. Four years ago, the first night of the party convention in St. Paul , Minnesota , was canceled by Republican officials worried that a gathering storm, Hurricane Gustav, might remind voters of the botched response to Hurricane Katrina three years before. The 2008 convention “worked out very well and, frankly, I think the same thing will happen here,” said Steve Duprey, a New Hampshire Republican national committeeman who advised Senator John McCain of Arizona , who accepted the nomination at the Minnesota convention. “They’ll have to condense the message, so some of your outlying speakers may get canceled.” It’s been 40 years since Republicans held a national convention in Florida, and some now wonder how long it will be before the party returns. While many delegates are still planning to head to Tampa, Gulf Coast governors can’t all say the same: Scott canceled three days of his convention activities; Louisiana’s Bobby Jindal is reconsidering his plans; and Mississippi’s Phil Bryant stayed home. To contact the reporters on this story: Julie Hirschfeld Davis in Tampa, Florida at [email protected] ; Michael C. Bender in Tampa, Florida at [email protected] To contact the editor responsible for this story: Jeanne Cummings at [email protected] | 2012 | storm-imperils-romney-s-moment-with-split-screen-tv-shots |
RBC Sells Largest Structured Note Linked to Rates in One Year | By Kevin Dugan | 2012-08-27T17:39:53Z | http://www.bloomberg.com/news/2012-08-27/rbc-sells-largest-structured-note-linked-to-rates-in-one-year.html | 8 | 27 | 03438b9f8a88861c19ea0a680519bf00ad6aea34 | Royal Bank of Canada sold $200
million of three-year, fixed-to-floating rate securities, the
largest U.S. structured note linked to interest rates in a year. The note, issued Aug. 22, yields 0.935 percent interest for
the first year, then pays 0.43 percent more than the three-month
London interbank offered rate with a minimum payment of 0.55
percent, according to a prospectus filed with the U.S.
Securities and Exchange Commission. That’s the biggest structured note tied to rates since
Morgan Stanley issued $200 million of four-year securities, also
tied to Libor, on Aug. 26, 2011. The sale gives RBC $370.9 million in rate-linked issuance
this year, more than double the total for the same period in
2011. The largest Canadian bank by assets is the only issuer to
increase sales of the notes in the U.S. this year, as the
Federal Reserve keeps interest rates near historic lows for a
fourth year. RBC has the highest credit rating of the top ten U.S.
structured note issuers. Morgan Stanley, whose rating was
dropped to three levels above junk by Moody’s Investors Service
on June 21, has sold 74 percent fewer rate-linked securities
this year after issuing the most last year. To contact the reporter on this story:
Kevin Dugan in New York at
[email protected] To contact the editor responsible for this story:
Shannon D. Harrington at
[email protected] | 2012 | rbc-sells-largest-structured-note-linked-to-rates-in-one-year |
Vietnam’s One-Year Bonds Fall on Debt Supply, Higher Money Rates | By Bloomberg News | 2012-08-27T09:04:25Z | http://www.bloomberg.com/news/2012-08-27/vietnam-s-one-year-bonds-fall-on-debt-supply-higher-money-rates.html | 8 | 27 | c25e7bdc11094d806881b99271ee52d01d0edd15 | Vietnam ’s one-year bonds fell for a
sixth day, pushing the yield to a one-month high, on speculation
demand for existing securities will weaken as the government
sells new debt. The dong was little changed. The State Treasury will offer 5 trillion dong ($240
million) of notes on Aug. 29 and Bank for Social Policies will
offer 2.5 trillion dong of debt on Aug. 31, according to the
Hanoi Stock Exchange. Vietnam’s overnight money-market rate more
than quadrupled this month as banks hoarded cash to meet
customer withdrawals after Nguyen Duc Kien, co-founder of Asia
Commercial Bank, was arrested on Aug. 20. The rate was at 6.03
percent today, compared with 1.47 percent at the end of July. “Supply of government bonds continues to be abundant,”
analysts at Bank for Investment & Development of Vietnam,
including Hanoi-based Hoang Nu Ngoc Thuy and Nguyen Thu Linh,
wrote in a research note today. “Borrowing costs, which will
probably stay high, and unstable market sentiment ” will deter
investors, they wrote. The yield on the one-year notes gained two basis points, or
0.02 percentage point, to 8.90 percent, the highest level since
July 27, according to a daily fixing from banks compiled by
Bloomberg. The dong gained 0.1 percent to 20,865 per dollar as of 4:03
p.m. in Hanoi, according to data compiled by Bloomberg. The
State Bank of Vietnam set the currency’s reference rate at
20,828, unchanged since Dec. 26, according to its website. The
dong is allowed to trade as much as 1 percent on either side of
the rate. To contact Bloomberg News staff for this story:
Diep Ngoc Pham in Hanoi at
[email protected] To contact the editor responsible for this story:
James Regan at
[email protected] | 2012 | vietnam-s-one-year-bonds-fall-on-debt-supply-higher-money-rates |
Refinery Blast Casts Shadow Over Hugo Chavez’s Re-election Bid | By Charlie Devereux | 2012-08-27T18:22:04Z | http://www.bloomberg.com/news/2012-08-27/refinery-blast-casts-shadow-over-hugo-chavez-s-re-election-bid.html | 8 | 27 | 6fc89bbfccf04ef9a6da2bee428750b9 | An explosion at Venezuela’s largest
refinery that killed at least 48 people and injured dozens on
Aug. 25 is threatening to cast a shadow over President Hugo Chavez ’s re-election bid. The blast and ongoing fire at Amuay, 240 miles west of the
capital, Caracas, adds to a number of events in recent weeks
that have fueled concern over mismanagement, including a
collapsed bridge connecting Caracas with the east of the
country, deadly prison riots and protests by state workers over
collective contracts. Chavez will need to divert blame from a poor refinery
maintenance record to avoid political fallout ahead of the Oct.
7 vote, said Luis Vicente Leon, president of Caracas-based
polling firm Datanalisis. The self-declared socialist, who is
seeking to extend almost 14 years in power with another six-year
term, trailed his opponent, Henrique Capriles Radonski, for the
first time in a Consultores 21 poll earlier this month. “What’s risky for Chavez in terms of the campaign is that
all of these events accumulate in the minds of voters,” Leon
said in a phone interview. “One event can trigger off the
perception that the government has lost control of the
country.” Capriles had 47.7 percent of support against 45.9 percent
for Chavez in a poll taken two weeks ago, Consultores 21 Vice
President Saul Cabrera said Aug. 24. The survey of 1,000 people
had a margin of error of 3.2 percentage points, he said. In a separate poll of 1,288 people by Datanalisis between
July 16 and Aug. 9, Chavez had 46.8 percent support compared
with 34.2 percent for Capriles. The survey had a margin of error
of 2.73 percentage points. National Guard The explosion two days ago occurred after a gas cloud
erupted into a ball of flames that engulfed a National Guard
post as well as homes and shops in front of the refining
complex. Chavez said he ordered an investigation into the causes
and said they won’t discard any hypotheses. The blast is among the world’s deadliest at an oil
refinery. Fifteen workers were killed at BP Plc’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. The National Guard members stationed at the refinery bore
the brunt of the deaths, including 18 troops and 15 family
members, according to Vice President Elias Jaua. The official death toll may rise further after El Universal
reported that two burn victims who were flown to a hospital in
nearby Zulia state died yesterday. No Negligence Chavez, who visited the site of the explosion yesterday,
ruled out negligence as a cause and described as “impossible”
reports that the gas leak had begun hours before the explosion
and that state-owned oil producer Petroleos de Venezuela SA had
failed to respond. 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. The accident follows several events that have shone a
spotlight on defects in Venezuela ’s infrastructure. A bridge on
the main highway connecting Caracas to the eastern part of the
oil-producing country collapsed Aug. 15, restricting transit to
cities including Puerto La Cruz. Four days later a prison riot at the Yare I prison in
Miranda state killed 25 people after a confrontation between two
armed groups. Capriles today called for a “serious, responsible”
enquiry into the causes of the accident and highlighted the
collapsed bridge and the prison riots as evidence of government
negligence. ‘Country of Accidents’ “A country of accidents isn’t the path Venezuelans want to
take,” Capriles said in comments broadcast on Globovision.
“There needs to be a serious investigation that honors the
victims.” Chavez could use the explosion to his advantage, said
Carlos Romero, a political analyst at the Universidad Central de
Venezuela. “The president wants to convert this tragedy into a heroic
narrative, obfuscating the principle problem which is the causes
of why this happened,” he said. While Chavez’s popularity has fallen in recent years he
still retains strong support and many people are prepared to
forgive events as long as they continue to benefit from social
programs such as subsidized food markets and health clinics in
poor neighborhoods, said Gregory Weeks, director of Latin
American studies at the University of North Carolina in
Charlotte . Still, Capriles may be able to capitalize on Chavez’s poor
record in maintaining the country’s infrastructure, Weeks said. “What Capriles needs to do is to create a narrative that
connects all these things together that shows why this
government needs to be defeated,” he said. To contact the reporter on this story:
Charlie Devereux in Caracas at
[email protected] . To contact the editor responsible for this story:
Joshua Goodman at
[email protected] . | 2012 | refinery-blast-casts-shadow-over-hugo-chavez-s-re-election-bid |
Christie’s Biggest Fight May Be Weight as Job Strains Willpower | By Elise Young | 2012-08-27T04:01:00Z | http://www.bloomberg.com/news/2012-08-27/christie-s-biggest-fight-may-be-weight-as-job-strains-willpower.html
New Jersey Governor Chris Christie
has won concessions from the state’s public-employee unions.
He’s stopped the Democratic-controlled Legislature from raising
taxes. He’s put hecklers in their place. The first-term Republican has yet to win one of his biggest
battles: shedding weight. Christie, who turns 50 on Sept. 6 and will give the keynote
speech at this week's Republican National Convention , told
Oprah Winfrey in January that he was working with a dietitian
and exercising four days a week. Since that interview, he shows
no signs of slimming down. “He’s gotten a bit heavier,” said John Catsimatidis , the
billionaire supermarket tycoon who has raised tens of thousands
of dollars for Christie. About a year after spurning a run for president | 8 | 27 | c13fac47a3af4417843674e2c84adc31 | said Jennifer Duffy , a senior editor of the nonpartisan Cook
Political Report in Washington. “If you put somebody in a position of great responsibility
then their health is always going to be the subject of some
concern and curiosity,” Duffy said. “If they weren’t talking
about weight they’d be talking about his sometimes over-the-top
way of speaking.” To contact the reporter on this story:
Elise Young in Trenton at
[email protected] To contact the editor responsible for this story:
Stephen Merelman at
[email protected] | 2012 | christie-s-biggest-fight-may-be-weight-as-job-strains-willpower |
Euro Strengthens Against Most Counterparts on Crisis Plan | By Joseph Ciolli | 2012-08-27T21:03:40Z | http://www.bloomberg.com/news/2012-08-27/euro-remains-lower-before-german-business-confidence-data.html | 8 | 27 | 5b5a0dcd040244d7a473fd8863903d64 | The euro gained against the majority
of its most-traded peers as investors speculated that European
leaders will make progress on measures to stem the region’s
sovereign-debt crisis. The 17-nation currency traded near a seven-week high
against the dollar after German business confidence fell less
than some economists forecast and as German Finance Minister
Wolfgang Schaeuble said Germany and France will create a working
group to enhance the region’s monetary union. European Central
Bank President Mario Draghi said on Aug. 2 the bank may buy
bonds to aid the bloc’s recovery even as Germany’s Bundesbank
has opposed such purchases. Sweden’s krona appreciated after
retail sales increased more than forecast. “The ideal situation would be for a compromise position
between the Bundesbank and the ECB,” Nick Bennenbroek , head of
currency strategy at Wells Fargo & Co . in New York , said in an
interview on Bloomberg Television’s “Lunch Money” with Sara Eisen. “One way or another, these bond purchases are going to
come through.” The euro declined 0.1 percent to $1.2499 at 5 p.m. in New
York after climbing to $1.2590 on Aug. 23, the strongest level
since July 4. The common currency was little changed at 98.43
yen after advancing to 99.18 yen on Aug. 21, the highest since
July 5. The dollar added 0.1 percent to 78.74 yen. U.K. financial markets were shut today in observance of the
Summer Bank Holiday. The euro has strengthened 0.3 percent in the past month
among the 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes. The yen declined 1.7 percent and
the dollar fell 1.3 percent. Sweden ’s krona led gainers, rising
3.1 percent, while the Australian dollar fell 2.5 percent to
pace decliners. Krona, Loonie The krona rose against all but one of its 16 major
counterparts as retail sales climbed an annual 2.4 percent in
July from a revised 1 percent the previous month, Statistics
Sweden said. The krona has appreciated 8.4 percent against the
euro this year as overseas investors sought safer assets. The Swedish currency rose 0.1 percent to 6.5983 per dollar
after appreciating to 6.5662, the strongest since Feb. 29. It
gained 0.2 percent to 8.2463 versus the euro. Canada’s dollar strengthened for a second day against its
U.S. counterpart and rose against a majority of its most-traded
peers amid sharper appetite for higher-yielding assets. The
currency, nicknamed the loonie, rose 0.2 percent to 99.07 cents
per U.S. dollar . ‘Structural’ Solutions Australia’s dollar touched its lowest level in a month,
extending a two-week decline, as concern global growth is waning
curbed demand for higher-yielding assets. The Aussie fell
against most of its major peers, declining 0.3 percent to
$1.0369. The Australian currency may extend losses to $1.017 if it
declines below so-called support at $1.3042, according to
Skandinaviska Enskilda Banken AB (SEBA) , citing trading patterns. The euro fluctuated against the dollar after Schaeuble said
the working group will prepare solutions in the areas of banking
union and a strengthening of a fiscal union and monetary union.
He spoke after meeting with French Economy and Finance Minister
Pierre Moscovici in Berlin. Moscovici said the two states will
work on “structural” solutions. German Chancellor Angela Merkel told officials in her
coalition calling for a Greek exit from the euro to “weigh
their words” as she signaled a renewed determination to keep
the single currency intact. ‘Decent Read’ The Ifo institute in Munich said its business climate
index , based on a survey of 7,000 executives, dropped to 102.3
from a revised 103.2 in July. The lowest prediction in a
Bloomberg News survey of 37 economists was for a decline to 101. “Some in the market had expected a much worse report, and
that’s why the euro gained some ground,” said Peter Rosenstreich, chief currency analyst at Swissquote Bank SA in
Geneva. “The key number may be softer than expected, but it’s
still a decent read, and is consistent with the economy that
remains resilient. It’s not an absolute collapse.” The euro will fall toward $1.20 over the next three months,
Gareth Berry , foreign-exchange strategist at UBS AG, said in
Bloomberg Television interview on “The Pulse” with Caroline
Hyde. The median estimate for economists surveyed by Bloomberg
News is for the euro to drop to $1.21 by year end. Draghi, Bernanke Draghi may provide hints on future policy when he speaks at
the Federal Reserve ’s annual symposium in Jackson Hole , Wyoming,
on Sept. 1. Fed Chairman Ben S. Bernanke will deliver a speech
there on Aug. 31. “There is scope for further action by the Federal Reserve
to ease financial conditions and strengthen the recovery,”
Bernanke wrote in a letter dated Aug. 22 to California
Republican Darrell Issa , chairman of the House Oversight and
Government Reform Committee. Bernanke probably won’t use his speech at Jackson Hole to
suggest a third round of bond buying, according to economists
including Michael Feroli , chief economist at JPMorgan Chase &
Co. in New York, and James O’Sullivan , chief U.S. economist for
High Frequency Economics in Valhalla, New York. Members of the Federal Open Market Committee , who meet next
on Sept. 12-13, are closely monitoring unemployment and other
data and have been divided about whether to spur expansion. “There’s nothing really to shock the market,” Dan Dorrow,
head of research in Stamford, Connecticut, at Faros Trading LLC,
said in a telephone interview. “We’re just going to have to
wait for the upcoming comments from Draghi and the FOMC.” Euro Shorts Futures traders cut bets the euro will weaken against the
dollar, figures from the Washington-based Commodity Futures
Trading Commission showed. The difference in the number of
wagers by hedge funds and other large speculators on a decline
in the European currency compared with those on a gain was
123,932 on Aug. 21, down from 137,810 a week earlier. “The decrease in euro shorts indicates substantial
expectations for some form of U.S. monetary easing,” said
Makoto Noji, a foreign-exchange strategist at SMBC Nikko
Securities Inc. in Tokyo. Hedge funds and large speculators are abandoning bets on a
stronger dollar at the fastest pace ever amid growing confidence
in the global economy. Futures contracts favoring gains in the U.S. currency
surged to the most on record in June as growth faltered and
investors retreated from risky assets. Now, hedge funds are
reversing those bets as central banks from China to the U.S. vow
to stimulate their economies, prompting money managers to seek
higher returns from Sweden to Australia. Traders have less need for the relative safety of assets
denominated in dollars as the cost of insuring sovereign bonds
for Group of 10 and other nations tumbles to the lowest level in
a year and stocks reach the highest since 2008. To contact the reporter on this story:
Joseph Ciolli in New York at
[email protected] To contact the editor responsible for this story:
Dave Liedtka at
[email protected] | 2012 | euro-remains-lower-before-german-business-confidence-data |
Asia Currencies Decline as Europe Concerns Offset Stimulus Bets | By Jiyeun Lee | 2012-08-27T09:22:41Z | http://www.bloomberg.com/news/2012-08-27/asia-currencies-decline-as-europe-concerns-offset-stimulus-bets.html | 8 | 27 | b7c70d275facbb75a83423c836a99f40525cff78 | Malaysia’s ringgit and the Indian
rupee led declines among Asian currencies as Europe ’s lack of
progress in resolving its debt crisis made investors wary of
riskier bets, cooling demand for emerging-market assets. German Vice Chancellor Philipp Roesler said there can be no
more aid for Greece if reforms aren’t carried out, while
Bundesbank President Jens Weidmann said sovereign bond purchases
by the European Central Bank won’t help solve the region’s
crisis. Federal Reserve Chairman Ben S. Bernanke said in a
letter dated Aug. 22 to California Republican Darrell Issa that
the central bank has scope for further action to boost the
economy. Bernanke gives a speech on Aug. 31 in Jackson Hole,
Wyoming, where he may clarify the potential for stimulus. “I think there will be no clear resolution on Greece,
which will continue to weigh on sentiment,” Thomas Harr , head
of Asia local markets strategy at Standard Chartered Plc in
Singapore, said in emailed comments to Bloomberg News .
“Bernanke will be dovish, but that is already in the price.” The ringgit weakened 0.3 percent to 3.1100 per dollar in
Kuala Lumpur, according to data compiled by Bloomberg. The rupee
weakened 0.3 percent to 55.635 while the won fell 0.1 percent to
1,135.40, paring earlier losses as Moody’s Investors Service
raised the nation’s debt rating one step to Aa3. The Bloomberg-
JPMorgan Asia Dollar Index was headed for its lowest close in a
week. Export Outlook The yuan weakened for a third day, falling 0.04 percent to
6.3568, as the central bank lowered the currency’s fixing by the
most in three weeks and the government urged greater support for
exporters. China needs targeted measures to promote steady exports and
there are many “negative factors that will affect stable
economic operations in the second half,” the official Xinhua
News Agency reported on Aug. 25, citing Premier Wen Jiabao
during an inspection tour in Guangdong. The People’s Bank of
China lowered the yuan’s reference rate by 0.14 percent, the
most since Aug. 2, to 6.3392 per dollar. “Wen’s remarks signal the exports outlook remains weak,
which weighs on the yuan,” said Banny Lam, chief economist at
CCB International Securities in Hong Kong . “The yuan won’t
return to an appreciation trend this year.” Elsewhere, Indonesia’s rupiah and Taiwan’s dollar
strengthened 0.1 percent to 9,523 and NT$29.980, respectively.
Thailand’s baht and the Singapore dollar dropped 0.1 percent to
31.26 and S$1.2514, respectively. Vietnam’s dong appreciated 0.1
percent to 20,865. Financial markets in the Philippines are
closed today for a holiday. To contact the reporter on this story:
Jiyeun Lee in Seoul at
[email protected] To contact the editor responsible for this story:
James Regan at
[email protected] | 2012 | asia-currencies-decline-as-europe-concerns-offset-stimulus-bets |
France Urges Syrian Rebels to Form Post-Assad Government | By Dana El Baltaji and Mark Deen | 2012-08-28T06:38:11Z | http://www.bloomberg.com/news/2012-08-27/syrian-helicopter-shot-down-in-damascus-after-244-killed.html | 8 | 27 | 276dc270fe1c4ec7a7e1cc6ec0ddbba8 | France called on the Syrian
opposition to form a provisional government in anticipation of
the fall of President Bashar al-Assad as fighting intensified in
and around the capital. Syrian government forces killed 231 people across the
country yesterday including 148 in Damascus and its suburbs, the
opposition Local Coordination Committees said in an e-mailed
statement. Syrian rebels said yesterday they shot down a
helicopter and a MiG-21 warplane. Syrian military jets bombed
the Damascus neighborhoods of Qadam, Assali and Tadhamon
overnight, Al Arabiya television reported, citing activists. Western nations are pressing the Syrian opposition to be
ready to fill the void if Assad’s rule collapses. French
President Francois Hollande said yesterday that he favors
establishing liberated zones in Syria and that the opposition
should form a transitional government. “France asks the Syrian opposition to constitute a
provisional government that is inclusive, representative, that
can become the legitimate representative of the new Syria,”
Hollande said in a speech in Paris to his nation’s ambassadors.
“France would recognize the provisional government once it has
been formed.” In Washington , State Department spokeswoman Victoria Nuland
didn’t endorse the French call for a provisional government. She
said it is up to the Syrian opposition to decide when it is
ready to take that step and called for any such development to
be “based on a solid, democratic plan” that reflects the
interests of a “broad cross-section” of Syrians. Falling Plane The Syrian Revolution General Commission’s website said
yesterday that rebels shot down a government helicopter over
Damascus. While the crash was confirmed by state television, the
broadcaster gave no details. The BBC and Al Arabiya showed video
of an aircraft falling to the ground in flames. The rebel Free Syrian Army said it shot down a MiG-21 jet
fighter yesterday over Idlib province, Al Jazeera television
reported, citing rebels of the al-Haq brigade. There was no
independent confirmation of the rebel group’s claim, posted on
its Facebook page, that it captured the pilot. Assad’s forces have used helicopter gunships, warplanes and
artillery in a bid to push anti-government fighters out of
Damascus and Aleppo, the country’s most populous city. ‘Bad to Worse’ Egyptian security forces have arrested a Syrian national
who threatened to blow up the Arab League’s headquarters in
Cairo, Egypt ’s official Middle East News Agency said. The man
said his car, parked in front of the league’s office, was laden
with explosives and threatened to detonate them if the group
doesn’t condemn Assad, the news agency said. The man had
recently been told his parents were killed in Syria during a
battle between government and opposition forces, MENA said. The situation in Syria is going from “bad to worse,” Arab
League Secretary-General Nabil el-Arabi was cited as saying Aug.
26 by MENA. The bloodiest day since the uprising began 17 months ago
was Aug. 25, when 440 people were reported dead by the
opposition Local Coordination Committees. More than 23,000 lives
have been lost during the uprising, the U.K.-based Syrian
Observatory for Human Rights estimates. The Syrian Observatory and the LCC, a network of activists
within the country, are among several groups opposed to Assad’s
government that offer casualty numbers that can’t be
independently verified. Assad vowed Aug. 26 to defeat the rebels “no matter the
cost” and reiterated his assertion that a “foreign plot” was
behind the violence, according to the state-run Syrian Arab News
Agency . Assad and most top officials come from the Alawite sect,
affiliated with Shiite Islam, while the majority of Syria’s
population and many leaders of the armed uprising are Sunni. The number of refugees who have fled Syria has exceeded
202,000, the United Nations High Commissioner for Refugees said
on Aug. 24. Registered refugees included 61,000 in Jordan ,
51,000 in Lebanon, 16,000 in Iraq and 74,000 in Turkey , it said,
though many other Syrians fled without registering. To contact the reporters on this story:
Dana El Baltaji in Dubai at
[email protected] ;
Mark Deen in Paris at
[email protected] To contact the editor responsible for this story:
Andrew J. Barden at
[email protected] | 2012 | syrian-helicopter-shot-down-in-damascus-after-244-killed |
Swedish Wind Power May Slow on Price, Subsidy, Association Says | By Torsten Fagerholm | 2012-08-27T09:00:43Z | http://www.bloomberg.com/news/2012-08-27/swedish-wind-power-may-slow-on-price-subsidy-association-says.html | 8 | 27 | 79e2d316c589961a74891c6ee7c13bdf61f7ffd7 | Electricity prices and subsidies at
current levels in Sweden may slow growth in wind power unless
decision-makers boost targets, according to the Swedish Wind
Energy Association. The nation needs to raise its political objectives for
installing new wind power “if we are to avoid a steep slowdown
in the construction of turbine capacity,” Annika Helker
Lundstroem, the association’s managing director, said in an e-
mail last week. “Currently, low power prices and electricity-
certificate subsidies offer no room for raising targets.” The association will update its forecast for growth in wind
power in October. Sweden’s Energy Agency, Energimyndigheten,
scaled back its outlook for wind-power production this year by
0.7 terawatt-hours to 7.1 terawatt-hours, it said Aug. 14 in a
report submitted to the government. The estimate for 2013 was
reduced to 8.1 terawatt-hours from a March forecast of 9
terawatt-hours, it said. “Prices are low right now both for power and for
electricity certificates, which creates challenges for some
projects, though different companies are affected to highly
varying degrees,” Lundstroem said. The Swedish government aims to raise annual wind-power
output to 30 terawatt-hours by 2020, while the Energy Agency
still expects a yearly increase rate of 2 terawatt-hours from
2014 through 2020, supported by subsidies paid to producers by
consumers via their monthly electricity bills, she said. The average price for the electricity-certificate subsidy
for the past twelve months has been 199 kroner ($30) per
megawatt-hour, according to data on grid operator Svenska
Kraftnaet’s website . The Nordic power contract for 2013 was at 39.50 euros
($49.46) a megawatt-hour on Nasdaq OMX Inc.’s energy exchange in
Oslo today. To contact the reporter on this story:
Torsten Fagerholm in Helsinki at
[email protected] To contact the editor responsible for this story:
Lars Paulsson at
[email protected] | 2012 | swedish-wind-power-may-slow-on-price-subsidy-association-says |
FAA to Study Smartphone Use While In-Flight Calls Banned | By Todd Shields | 2012-08-27T21:11:28Z | http://www.bloomberg.com/news/2012-08-27/faa-to-study-smartphone-use-while-in-flight-calls-banned.html | 8 | 27 | 043e09b28923f8a90f8a125b0deb73a6d4711fb2 | The Federal Aviation Administration
said it will study whether to allow more widespread use of
smartphones and other portable electronic devices during
flights, while ruling out voice calls. A government-industry group will be formed to review
current policies, testing methods and technological standards
and will make recommendations to the FAA, the agency said today
in a news release. “We’re looking for information to help air carriers and
operators decide if they can allow more widespread use of
electronic devices in today’s aircraft,” Michael Huerta, acting
FAA administrator, said in the release. The working group is to be established in the coming months
and will meet for six months before making recommendations. The
group won’t consider allowing the use of mobile phones for voice
communications during flight, the agency said. Many airlines offer Wi-Fi signals when planes are cruising,
and new policies could let business travelers work as aircraft
ascend and descend, adding about 40 minutes to their productive
time, Kevin Mitchell , chairman of the Business Travel Coalition,
a trade group for corporate travel managers, said in an
interview. “It’s a good thing,” said Mitchell, whose trade group is
based in Radnor, Pennsylvania . “The pilots use iPads during
taxi and takeoff, so why shouldn’t we see if passengers can?” Safety First FAA regulations require airlines to determine that radio-
frequency interference from electronic devices won’t affect a
plane’s avionics before allowing them to be used during certain
phases of flight, testing few have been willing to do. “The safety of our passengers and crews remains our top
priority and our members will work cooperatively with the FAA on
opportunities to evaluate personal electronic devices to ensure
customers can use these products safely during flight,” Steve Lott , a spokesman for Airlines for America, said in an e-mail.
Members of the Washington-based trade group include AMR Corp.’s
American Airlines, Delta Air Lines Inc. and United Continental
Holdings Inc. Federal Communications Commission rules prohibit airborne
use of phones to protect wireless devices on the ground, and the
FAA regulates use of mobile devices to prevent interference with
aircraft navigation and communications systems, according to the
FCC’s website. “This is an issue of consumer interest,” Transportation
Secretary Ray LaHood, who supervises the FAA, said in the
release. “We must set appropriate standards as we help the
industry consider when passengers can use the latest
technologies safely during a flight.” To contact the reporter on this story:
Todd Shields in Washington at
[email protected] ; To contact the editor responsible for this story:
Bernard Kohn at
[email protected] | 2012 | faa-to-study-smartphone-use-while-in-flight-calls-banned |
Korea’s Rating Raised by Moody’s on Resilience to Shocks | By Paul Panckhurst and Cynthia Kim | 2012-08-27T06:15:08Z | http://www.bloomberg.com/news/2012-08-27/south-korea-s-rating-raised-by-moody-s-on-resilience-to-shocks.html
South Korea ’s sovereign debt rating
was raised by Moody’s Investors Service to a par with Japan’s
after Asia’s fourth-largest economy strengthened its resilience
to crises. “Korea’s strong fiscal fundamentals enable a relatively
large degree of policy space to cope with contingent domestic
risks and external shocks,” Moody’s said in a statement today.
The company elevated South Korea one step to Aa3, the fourth-
highest ranking and one also shared with China . The upgrade is a vote of confidence in President Lee Myung Bak ’s efforts to strengthen the nation’s ability to cope with
financial turbulence even as his popularity wanes ahead of the
end of a five-year term. The move also reflects South Korea’s
fiscal discipline, with government debt at 33 percent of gross
domestic product, against 108 percent for advanced economies as
a whole, according to the International Monetary Fund . “The fiscal situation is the strongest aspect of Korea’s
economy,” said Lim Ji Won, an economist at JPMorgan Chase & Co.
in Seoul. “A lot depends on how the government deals with the
aging problem in the longer term, but in the next few years the
fiscal situation will be relatively strong.” Like Japan, South Korea’s population is aging after its
birth-rate declined, potentially imposing a higher pension-cost
burden on the economy as fewer workers support greater numbers
of retirees. Bond Yields South Korean sovereign credit default swaps fell two basis
points to 104 basis points as of 1:52 p.m. in Seoul, according
to prices from Royal Bank of Scotland Group Plc. The gauge has
declined from 117 basis points at the start of the month,
according to data provider CMA. The yield on 3.25 percent government notes due in June 2015
declined two basis points to 2.82 percent, the lowest since Aug.
10, Korea Exchange Inc. prices show. Bond-market history indicates that the utility of sovereign
ratings may be limited. Almost half the time, yields on
government bonds fall when a rating action by S&P and Moody’s
Investors Service suggests they should climb, according to data
compiled by Bloomberg on 314 upgrades, downgrades and outlook
changes going back as far as the 1970s. After S&P stripped France and the U.S. of AAA grades,
interest rates paid by the countries to finance their deficits
dropped rather than rose. Fitch, S&P Fitch Ratings has South Korea at A+ for its
foreign-currency, long-term debt, the fifth-highest rating.
Standard & Poor’s ranks the nation one level lower, at A. Export competitiveness will help the nation to rebound from
a slowdown as global growth recovers, Moody’s said. The nation’s
banks have been strengthened by improved regulation and a
reduction in reliance on short-term external financing, it said. The risk of a collapse in North Korea during the transition
to a new leadership “is diminishing,” Moody’s also said today.
Kim Jong Un in December became the third generation in his
family to lead the North since its formation after World War II,
with little public sign of resistance to the succession. “The North Korean risk is and will always be there, but it
seems the risk is increasingly known and stabilized,” said
Kim Yong Hyun, a professor of North Korean studies at Dongguk
University . Any eventual reunification with North Korea, which has
relied on foreign aid to feed itself, could pose a fiscal hit to
the South, Lim said. Emerging Economies Today’s move by Moody’s underscores an appeal to the
country that Goldman Sachs Group Inc. has highlighted as an
alternative to investing in the so-called BRIC nations. Jim O’Neill , chairman of Goldman Sachs Asset Management,
who coined the term BRIC for Brazil, Russia, India and China, is
using MIST for Mexico, Indonesia , South Korea and Turkey | 8 | 27 | 84aeb080fe1d4f0885822ccdc84475c1 | markets . South Korea “happens to be the only populated country that
in my lifetime has transformed its income from that of an
African country to being that of a G-7 country,” O’Neill said
before today’s announcement. “It’s an example that all these
other countries can learn from.” Lee, 70, made strengthening the international financial
safety net a priority of South Korea’s leadership of the Group
of 20 nations during its tenure in 2010. He has also overseen an
expansion in currency swaps agreements with Japan and China in
recent years. A former chief executive officer of Hyundai Engineering &
Construction Co., Lee has seen support slide since his 2007
victory after failure to deliver on a campaign pledge to boost
wage growth and an aborted effort to enact a second round of tax
cuts in three years for the chaebol, as the nation’s industrial
groups are known. He’s constitutionally barred from seeking re-
election. To contact the reporters on this story:
Paul Panckhurst in Beijing at
[email protected] ;
Cynthia Kim in Seoul at
[email protected] To contact the editor responsible for this story:
Paul Panckhurst at
[email protected] | 2012 | south-korea-s-rating-raised-by-moody-s-on-resilience-to-shocks |
Virgin Australia Returns to Profit as Qantas Flyers Lured | By David Fickling | 2012-08-28T00:36:06Z | http://www.bloomberg.com/news/2012-08-27/virgin-australia-returns-to-profit-as-qantas-flyers-lured.html | 8 | 27 | 2b9492f7e97e463c9f2a8861a5562caf | Virgin Australia Holdings Ltd. (VAH) , the
country’s second-largest airline, posted full-year profit that
missed analyst estimates as surging costs curbed benefits of
increased sales to corporate customers. Net income was A$23 million ($24 million) in the 12 months
ended June 30 after a loss of A$68 million a year earlier, the
Brisbane-based carrier said in a statement today. That missed
the A$47 million average of 10 analyst estimates compiled by
Bloomberg. The shares slumped the most in almost five months. Operating costs increased 16 percent to A$3.81 billion as
the airline paid more for fuel, staff and airport charges and
added more seats on domestic routes. The increased spending
limited the benefit of a 4.3 percent rise in passenger numbers
as the company won business class clients from Qantas Airways
Ltd. (QAN) and entered tie-ups with carriers including Singapore
Airlines Ltd. (SIA) and Etihad Airways PJSC. “The cost base is going up and the challenge for Virgin is
to ensure their revenues rise well in excess of their costs,”
Russell Shaw , an analyst at Macquarie Group Ltd. in Sydney, said
by phone before the results. The shares fell 5.2 percent to 45.5 Australian cents as of
10:31 a.m., the biggest decline since April 3. The slide pared
this year’s gain to 60 percent compared with a 7.4 percent
advance for the benchmark S&P/ASX 200 index. Qantas has slumped
19 percent in 2012. Virgin Australia’s shareholders include Richard Branson’s
Virgin Group, Etihad and Air New Zealand Ltd. Sales Rise Sales rose 20 percent to A$3.91 billion as the company
extended its international reach and added new premium services
as it sheds its budget roots. Competition from the airline
contributed to Qantas reporting its first loss in at least 17
years last week. Virgin’s move to add business class flights has ended an
effective monopoly on the segment enjoyed by Qantas since the
collapse of Ansett Australia in 2001, and the larger carrier has
been adding extra seats to defend a 65 percent share of the
Australian market which it considers optimal. “We have changed the competitive landscape in Australian
aviation,” John Borghetti, Virgin Australia’s chief executive
officer, said in a statement. Virgin said it had met a goal set last year of about
doubling its share of Australia’s corporate travel market to 20
percent as it shed its former lower-cost image and name. That
level was a “tipping point which we believe effectively creates
a new competitive norm”, Borghetti said. Premium Airfares Virgin has “ticked all the boxes,” Macquarie’s Shaw said.
“The next 12 months will be about bedding down what they’ve
achieved.” The carrier’s push to meet this target and increase the
frequency of its flights contributed to premium airfares
slumping to their lowest levels in a decade in July, based on a
government index. The airline’s capacity on domestic flights rose 9.6 percent
from a year earlier during the year. The move from a low-cost to
a full-service carrier model meant that group yields, a measure
of ticket prices, rose 12 percent. Virgin didn’t give any forecast for the current year
“given the uncertain economic environment,” the company said. Capacity will rise by between 8 percent and 9 percent by
the end of December. Qantas said Aug. 23 it would add as much as
11 percent to its domestic capacity by the end of December from
a year earlier. To contact the reporter on this story:
David Fickling in Sydney at
[email protected] To contact the editor responsible for this story:
Neil Denslow at
[email protected] | 2012 | virgin-australia-returns-to-profit-as-qantas-flyers-lured |
Evans Calls for Open-Ended Fed Purchases of Securities | By Steve Matthews and Eleni Himaras | 2012-08-27T14:32:11Z | http://www.bloomberg.com/news/2012-08-27/evans-calls-for-open-ended-fed-purchases-of-securities.html | 8 | 27 | 7fb40c1402d542069716c10ed58608f7 | Federal Reserve Bank of Chicago
President Charles Evans urged the central bank to begin a third
round of bond purchases and to persist with the 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.” Evans, among the central bank’s most vocal advocates for
increasing record accommodation, joined Boston Fed leader Eric Rosengren and San Francisco’s John Williams in urging an “open-
ended” bond buying. Many policy makers said additional stimulus
would probably be needed “fairly soon” without evidence of a
“substantial and sustainable” pickup in the economy, according
to minutes of their July 31-Aug. 1 meeting released last week. Chairman Ben S. Bernanke , who last month said a third
asset-purchase program was an option, has an opportunity to
update his policy outlook on Aug. 31 in a speech to the Kansas
City Fed’s annual symposium at Jackson Hole , Wyoming . Evans
doesn’t vote this year on the Federal Open Market Committee . “It is time to take even stronger steps, such as the
purchase of more mortgage-backed securities, to increase the
degree of monetary support for the recovery,” Evans said at an
event hosted by Market News International. Once “momentum was
confidently established, the Fed could stop adding to our
balance sheet but keep the funds rate at zero,” he said. Two Rounds 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. Evans said the asset purchases have been effective in
keeping long-term U.S. interest rates low. He’d like to see the
Fed start another round of purchases as soon as possible, he
said in response to audience questions. The Standard & Poor’s 500 Index was little changed at
1,410.76 at 10:23 a.m. New York time, while the yield on the 10-
year Treasury note declined three basis points, or 0.03
percentage point, to 1.66 percent. ‘Tepid’ Recovery The Chicago Fed leader described the U.S. recovery since
2009 as “tepid” and said 2013 growth may be “only moderately
higher” than this year, with “significant risks” because of
the European debt crisis and turmoil over fiscal policy in the
U.S. The political debate over the “fiscal cliff” could cause
households and businesses to put spending on hold, he said. Those concerns “raise the specter of an even more
worrisome outcome,” Evans said. “At the moment economic growth
is not much above stall speed. Another negative shock could send
the economy into recession. And if a recessionary dynamic takes
hold, it would be especially difficult to regain momentum.” Evans also repeated his view that the Fed shouldn’t raise
rates until the unemployment rate falls below 7 percent or
inflation rises above 3 percent. Other Fed presidents voiced skepticism last week about the
desirability of additional monetary stimulus. Atlanta Fed
President Dennis Lockhart said there are risks to moving “too
aggressively” on problems that can only be fixed by fiscal
policy, while St. Louis Fed President James Bullard said he
opposed new action with the economy showing signs of picking up. U.S. economic data has been mostly better than expected
since the Aug. 1 FOMC meeting with government data showing
163,000 jobs added by employers in July, the most in five
months, and retail sales rising after three months of decline. Evans, 54, was the only member of the FOMC last year to
cast a dissenting vote in favor of more accommodation. He became
the president of the Chicago Fed in 2007. To contact the reporters on this story:
Steve Matthews in Atlanta at
[email protected] ;
Eleni Himaras in Hong Kong at
[email protected] To contact the editor responsible for this story:
Christopher Wellisz at
[email protected] | 2012 | evans-calls-for-open-ended-fed-purchases-of-securities |
Pacific Rubiales Awards $100 Million Desalination Plant to RWL | By Justin Doom | 2012-08-27T18:42:17Z | http://www.bloomberg.com/news/2012-08-27/pacific-rubiales-awards-100-million-desalination-plant-to-rwl.html | 8 | 27 | aca572a0c38c1129941501cd9f11984019a03976 | Pacific Rubiales Energy Corp. (PRE) , which
operates Colombia’s largest oil field, awarded a $100 million
contract to RWL Water Group to design and build a water-
desalination plant. The plant will produce 500,000 water barrels a day at a
Pacific Rubiales oil field in central Colombia’s Meta
department, according to a statement today from New York-based
RWL. The plant will treat water that’s a byproduct of petroleum
extraction and is currently disposed of by injecting it into the
ground. The purified water will be used to grow trees and will
help the Bogota-based oil company meet environmental discharge
requirements, according to the statement. RWL is “providing an innovative, lower cost and
sustainable alternative to manage water production from our
Rubiales oil field, as well as establishing a new green industry
that benefits the region,” Pacific Rubiales Chief Executive
Officer Ronald Pantin said in 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 | pacific-rubiales-awards-100-million-desalination-plant-to-rw |
China Commerce Chamber Urges Solar Detente Amid Trade Dispute | By Bloomberg News | 2012-08-27T09:32:59Z | http://www.bloomberg.com/news/2012-08-27/china-commerce-chamber-urges-solar-detente-amid-trade-dispute.html | 8 | 27 | 3f98a9d65ef83961e4af4daa8bece245b87eafbf | The Chinese chamber of commerce that
monitors trade in solar-energy products called for collaboration
between the Asian nation and the European Union as trade
conflicts escalated. “It’s time for the solar industry to push new cooperation
among countries using their comparative advantages,” Wang
Guiqing, vice president of the China Chamber of Commerce for
Import and Export of Machinery and Electronic Products , said
today at a briefing in Beijing. “China and Europe will
definitely work together; the earlier talks start the better.” Solarworld AG (SWV) , Germany ’s largest solar-panel maker, last
month led a group of manufacturers in requesting the European
Commission investigate whether Chinese rivals dumped products at
a loss on regional markets. China’s Ministry of Commerce is also
looking into a request to start anti-dumping and anti-subsidy
investigations on polysilicon bought from the EU, the official
Xinhua News Agency reported Aug. 17, citing people it didn’t
identify. Wang didn’t specify what kind of cooperation is involved. To contact the reporter on this story:
Feifei Shen in Beijing at
[email protected] To contact the editors responsible for this story:
Reed Landberg at
[email protected] | 2012 | china-commerce-chamber-urges-solar-detente-amid-trade-dispute |
Twitter Seeks Court Order to Say Users Can Fight Subpoena | By Tiffany Kary | 2012-08-27T21:24:20Z | http://www.bloomberg.com/news/2012-08-27/twitter-seeks-court-order-to-say-users-can-fight-subpoena.html
Twitter Inc. challenged a judge’s
order that it turn over to prosecutors information about an
Occupy Wall Street protester’s posts, saying it will seek a
ruling allowing users to fight subpoenas directed at the company. New York state Supreme Court Justice Matthew A. Sciarrino
Jr. denied Twitter’s request to block a subpoena by Manhattan
District Attorney Cyrus Vance Jr., holding in a June 30 decision
that the real-time short-messaging service must turn over posts
written by protester Malcolm Harris, who was arrested after a
protest on the Brooklyn Bridge, from Sept. 15 to Dec. 30. “Twitter users own their tweets,” Twitter’s legal counsel
Ben Lee said today in an e-mailed statement. “They have a right
to fight invalid government requests.” The case may determine whether Twitter faces the burden of
responding to subpoenas on behalf of its users, the San
Francisco-based company has said. The American Civil Liberties
Union said in a May 31 filing in the case that the outcome may
have national implications as law enforcement becomes more
aggressive in seeking information posted on the Internet. Twitter “provides a voice for liberty around the globe,”
from political movements in the Middle East to Chinese citizens
seeking to evade state barriers on communication, the company
said in court papers filed today in Manhattan. The U.S. State
department has also sought the company’s assistance to help
Iranians communicate about election issues, Twitter said. Standard Policy Twitter’s standard policy is to let users know if their
information has been subpoenaed, giving them an opportunity to
fight it, lawyers for the company wrote. Joan Vollero, a spokeswoman for Vance, declined to comment
on the appeal. Vance’s office has said in court papers that the
subpoena doesn’t violate the Constitution because Harris can’t
have “a reasonable expectation of privacy in information he
publicly and intentionally broadcast to the world.” Twitter signed an agreement with the Library of Congress in
2010 that would have every public “tweet” archived, according
to court papers filed by Vance. The subpoena by Vance’s office seeks Harris’s past Twitter
posts and user information linked to his “@destructuremal”
account. Harris was arrested with about 700 protesters on the
Brooklyn Bridge on Oct. 1, according to court filings. Occupy
Wall Street protestors seek to draw attention to unemployment,
financial inequality and wrongdoing in the banking industry. Martin Stolar, an attorney with the National Lawyers Guild
who had filed the request to invalidate the subpoena on behalf
of Harris, called it “unusual” for Twitter to be involved in
such a case. There was no indication Harris had a conspiratorial
role or did anything out of the ordinary, Stolar has said. Information Sought The information sought covers about 3 1/2 months, including
Harris’s arrest date, as well as Internet Protocol addresses
corresponding to each post | 8 | 27 | 88aba5236fe74647a20603b8e172fdae | prosecutors to see Harris’s location at the time the posts were
sent. Twitter said users have three legal grounds to block
subpoenas directed at the company: Under New York law, a
proprietary interest in the subject matter of a subpoena gives a
third party such rights; the Stored Communications Act, which
governs disclosure from Internet service providers ; and the U.S.
Constitution. The case is People of the State of New York v. Harris, 11-
80152, Supreme Court of the State of New York (Manhattan). To contact the reporter on this story:
Tiffany Kary in New York at
[email protected] To contact the editor responsible for this story:
Stephen Farr at
[email protected] | 2012 | witter-seeks-court-order-to-say-users-can-fight-subpoena |
Saudi Arabia Seizes Weapons, Bullets in Border Arrests, SPA Says | By Glen Carey | 2012-08-27T12:54:55Z | http://www.bloomberg.com/news/2012-08-27/saudi-arabia-seizes-weapons-bullets-in-border-arrests-spa-says.html | 8 | 27 | d11a2a22e5337b68faa12d35559a40f29604dd82 | Saudi Arabian authorities seized
nine Kalashnikov semi-automatic rifles, 79 pistols and
ammunition when they arrested two men trying to enter the
country from Yemen, the Saudi Press Agency said, citing Colonel
Abdullah al-Hamrani, Information Spokesman at the Border Guards
in Asir. 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-seizes-weapons-bullets-in-border-arrests-spa-says |
Fly MedicAirlines | By Josh Barro | 2012-08-27T16:21:00Z | http://www.bloomberg.com/news/2012-08-27/fly-medicairlines.html
The other day, I was on a flight that was supposed to have meal service. However, delays had led to the plane not being catered, and so the gate agent gave me a meal voucher, valid for up to $13 at the various restaurants in the terminal. I picked up a turkey sandwich and a candy bar; it being an airport, that purchase came to $12.74. Now, imagine that the airline I was flying | 8 | 27 | a09bd4ffdd4c4797f293df7ab2a90ad6cb934f44 | 2012 | fly-medicairlines |
|
Google Says Most Claims in Samsung Case Not About Android | By Brian Womack | 2012-08-27T19:49:17Z | http://www.bloomberg.com/news/2012-08-27/google-says-most-claims-in-samsung-case-not-related-to-android.html
Google Inc. (GOOG) , responding to a jury verdict that found its partner Samsung Electronics Co. infringed Apple Inc. (AAPL) patents, said most of the claims “don’t relate to the core Android” software used in mobile devices. “The court of appeals will review both infringement and the validity of the patent claims,” Mountain View , California- based Google said in an e-mailed statement yesterday. “Most of these don’t relate to the core Android operating system, and several are being re-examined by the U.S. Patent Office.” Google, owner of the world’s largest Web search engine, lets mobile-phone manufacturers weave its Android operating system into their handsets at no charge. It suffered a setback on Aug. 24, when a California jury said Samsung, the biggest user of Android, infringed Apple patents. “This verdict is a major victory for Apple vis a vis the Android ecosystem,” said Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co., in a research report today. “That said, we don’t think it is a game-changing loss for Android.” Google shares declined 1.4 percent to $669.22 at the close in New York . The stock has gained 3.6 percent this year. The ruling is “likely to embolden Apple’s legal strategy,” Sacconaghi said. Litigation playing out in several countries may ultimately lead to Android phone makers paying royalties to Apple of $3 to $25 per handset or “forced work- arounds on violated patents, some of which could modestly change the look and feel of competing products.” In a court filing today, Apple sought a ban on eight models of Samsung’s smartphones, including several of its Galaxy S devices. Android Market Android’s share among smartphone platforms rose to 64 percent in the second quarter from 43 percent in the same period a year earlier, according to Stamford , Connecticut-based researcher Gartner Inc. Apple’s software had a 19 percent share, up less than a percent from the previous year. “The mobile industry is moving fast and all players | 8 | 27 | 22599213f32ec5300c7d74f614127aa5edccebcf | 2012 | google-says-most-claims-in-samsung-case-not-related-to-android |
|
South African Yields Rise on Mine Violence as Rand Reverses Fall | By Stephen Gunnion | 2012-08-27T15:59:07Z | http://www.bloomberg.com/news/2012-08-27/rand-worst-performer-as-mine-violence-clouds-sovereign-ratings.html | 8 | 27 | 815b9cbe4bdd36ed65706d554e6990e618c020c6 | South African bond yields rose for a
second day on concern that recent violence at platinum mines may
weigh on the nation’s credit ratings. Yields on the nation’s 13.5 percent bonds due September
2015 advanced one basis point, or 0.01 percentage point, to 5.58
percent by 4:44 p.m. in Johannesburg, the highest in a week
after jumping 10 basis points Aug. 24. The rand strengthened
less than 0.1 to 8.3951 per dollar, reversing an earlier 0.4
percent decline. The currency slid 2.4 percent last week. Protests at a Lonmin Plc (LMI) platinum mine which left 44 dead
and sparked wage protests at other mines highlight structural
problems that may weaken South Africa’s credit rating, Fitch
Ratings said in a statement on Aug. 24. Mining accounts for 8.8
percent of the country’s gross domestic product and generates
jobs for about 1 million of the nation’s 51 million people,
according to the South African Chamber of Mines. “The mine violence continues to take its toll,” John Cairns and Josina Solomons, currency strategists at Rand
Merchant Bank in Johannesburg, said in e-mailed comments. “It
remains a news story around the world, the latest angle being
that it’s a threat to the country’s sovereign ratings.” Fitch, Standard & Poor’s and Moody’s Investors Service have
cut their outlook for South African credit to negative from
stable since November, citing unsustainable spending and
political stability in Africa’s largest economy. The ruling
African National Congress holds leadership elections in
December. “Continuing political uncertainty regarding ANC leadership
as well as spreading labor unrest have dented South Africa’s
prospects as a competitive investment destination for emerging
markets fund allocations,” Ian Cruickshanks, head of treasury
strategic research at Johannesburg-based Nedbank Group Ltd. (NED) , and
colleagues wrote in a report today. To contact the reporter on this story:
Stephen Gunnion in Johannesburg at
[email protected] To contact the editor responsible for this story:
Vernon Wessels at
[email protected] | 2012 | rand-worst-performer-as-mine-violence-clouds-sovereign-ratings |
Bank Rossii Placing Inflation Hopes on WTO, Alfa Says | By Scott Rose | 2012-08-27T13:22:11Z | http://www.bloomberg.com/news/2012-08-27/bank-rossii-placing-inflation-hopes-on-wto-alfa-says.html | 8 | 27 | 78bacddba11ed384ef32f8c7ff6030e381865974 | Russia’s central bank assumed a
“risky” stance by counting on the country’s accession to the
World Trade Organization and the reduction of import tariffs to
hold inflation within the target range, according to Alfa Bank . “WTO entry, leading to a cut in import duties starting at
the end of August, appears to be the core reason for the central
bank’s optimism,” Natalia Orlova and Dmitry Dolgin, analysts in
Moscow for the country’s biggest private lender, said in a
research note today. “September price growth would need to
shift to deflation to confirm the WTO’s positive impact on the
inflation trend, which we see as unlikely.” Bank Rossii is trying to deliver a second year of record-
low inflation by holding the rate at 5 percent to 6 percent
after capping price growth at 6.1 percent in 2011. Russia became
the 156th member of the Geneva-based trade arbiter on Aug. 22
after completing almost two decades of negotiations. Policy makers have refrained from raising interest rates,
even as inflation started to accelerate in June because of
rising grain prices and increases to utilities tariffs in July.
The central bank is held “hostage” by the financial industry’s
exposure to its funding, according to Alfa. “An active increase in central bank refinancing support in
June-July signals that bank funding is a higher priority than
inflation,” Orlova and Dolgin said. Its “active role in
funding the banking system is partly in conflict with its
approach of inflation targeting.” Economy Minister Andrei Belousov’s forecast that inflation
will reach 7 percent is “confusing for the market and damaging
for the central bank’s inflation-target ambitions,” according
to Alfa. Policy makers are losing credibility by remaining
silent on the diverging estimates, Orlova and Dolgin said. “Even if the central bank’s target is not met, we believe
the key is to communicate the reasons and a plan of action to
the market,” they said. “The next policy rate meeting offers
an ideal opportunity to signal the deterioration of the
inflationary trend even if the central bank would still prefer
to keep interest rates unchanged.” 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 | bank-rossii-placing-inflation-hopes-on-wto-alfa-says |
Arctic Ice Cap Melts to Record Low ‘Like a Giant Slushy’ | By Justin Doom | 2012-08-27T21:20:51Z | http://www.bloomberg.com/news/2012-08-27/arctic-ice-cap-melts-to-record-low-like-a-giant-slushy-.html
The Arctic Ocean ’s ice cover has
plummeted to a record low, and with as many as three weeks left
in the annual melt season, may continue to shrink. The area covered by ice declined to 4.10 million square
kilometers (1.58 million square miles), the average of five
consecutive days through yesterday, according to data compiled
by the U.S. National Snow and Ice Data Center in Boulder,
Colorado . The previous low was 4.17 million square kilometers in
September 2007, based on satellite records dating to 1979. The ice cap is shrinking at a record pace this year, one of
the most visible signs of climate change , according to Walt Meier, a research scientist at the NSIDC. It shrank about 17
percent in the past 11 days. Ice coverage for the five days
ending Aug. 15 was 4.93 million square kilometers. “We’ve lost over a million square kilometers in the last
few weeks,” Meier said today on a conference call. “I would
definitely bet we’d go below 4 million square kilometers in the
next few days and that’s never been seen before in our satellite
records.” The average annual minimum area from 1979 to 2010 was 6.29
million square kilometers. Arctic temperatures from June through
mid-August were 2 degrees Celsius (3.6 degrees Fahrenheit) to 3
degrees Celsius warmer than in a typical year. “It used to be that the Arctic ice cover was a huge block
of ice | 8 | 27 | d644412ec8d8f8ffe1ad4a53de13925173f643d7 | crushed ice,” he said. “Parts of the Arctic have become like a
giant slushy.” Sea ice melts every summer and typically starts to freeze
again in September. The NSIDC uses five-day averages when
calculating measurements to account for day-to-day anomalies.
Oceans with less ice reflect less sunlight, exacerbating rising
temperatures. “The ice cover gets more and more vulnerable to these
extreme conditions,” Meier said. “The Arctic has become like a
fighter with a glass jaw.” 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 | arctic-ice-cap-melts-to-record-low-like-a-giant-slushy- |
Dollar Loses Hedge Fund Bulls as Risk Drops at G-10 Nations | By Lukanyo Mnyanda, Liz Capo McCormick and Joseph Ciolli | 2012-08-27T18:26:46Z | http://www.bloomberg.com/news/2012-08-27/dollar-loses-hedge-fund-bulls-as-risk-drops-among-g-10-nations.html | 8 | 27 | 3e0c283a091d4f738d07512fa2d792a0 | Hedge funds and large speculators
are abandoning bets on a stronger dollar at the fastest pace
ever amid growing confidence in the global economy. Futures contracts favoring gains in the U.S. currency
surged to the most on record in June as growth faltered and
investors retreated from risky assets. Now, hedge funds are
reversing those bets as central banks from China to the U.S. vow
to stimulate their economies, prompting money managers to seek
higher returns from Sweden to Australia. Traders have less need for the relative safety of assets
denominated in dollars as the cost of insuring sovereign bonds
for Group of 10 and other nations tumbles to the lowest level in
a year and stocks reach the highest since 2008. Sweden’s krona,
backed by interest rates about six times those in the U.S., rose
more than any other major currency in the past month. The dollar
and the yen, havens in periods of turmoil, weakened the most. “We are seeing a recovery of risk appetite in financial
markets across the board including foreign exchange,” Ulrich Leuchtmann , head of currency strategy at Commerzbank AG in
Frankfurt , said on Aug. 21. “People will try to diversify away
from the dollar into currencies that have strong fundamentals
like the Australian dollar and the Scandinavian currencies.” Dollar Swings The Dollar Index (DXY) , which tracks the greenback against the
euro, yen, pound, Canadian dollar, krona and Swiss franc, surged
16 percent from last year’s low in May of 72.696 to this year’s
peak of 84.1 on July 24. It has since slipped 3 percent since
then to 81.61 at 2:24 p.m. in New York. The U.S. currency fell 1.4 percent last week against the
euro to $1.2512 and depreciated 1.1 percent to 78.67 yen. It was
little changed today at $1.2511 per euro and 78.70 yen. Net bets that the world’s reserve currency will weaken
against eight major peers increased to 131,512 contracts as of
Aug. 21, data from the Commodity Futures Trading Commission
show. That compares with about 311,000 contracts betting on an
advance on June 5, the biggest reversal on record. The data tracks positions in the dollar against the euro,
yen, pound, Australian dollar, Canadian dollar, New Zealand
dollar, Swiss franc and Mexican peso. The median estimate of more than 50 forecasters is for the
dollar to appreciate to $1.21 per euro by year-end. The U.S.
currency will be little changed versus the yen, according to
separate analyst predictions compiled by Bloomberg. Stimulus Expectations Rather than reflecting less optimism about the U.S., the
shift in the futures contracts may show growing expectations
that the Federal Reserve will increase efforts to stimulate the
economy by pumping more cash into the banking system through
purchases of bonds, known as quantitative easing, or QE. Chairman Ben S. Bernanke said there’s “scope for further
action by the Federal Reserve to ease financial conditions and
strengthen the recovery” in a letter dated Aug. 22 to
California Republican Darrell Issa , the chairman of the House
Oversight and Government Reform Committee. The Dollar Index slumped as much as 19 percent to 72.696
from 89.624 as the Fed printed currency to buy $2.3 trillion of
mortgage and Treasury debt in two rounds of QE from December
2008 to June 2011. The dollar’s recent decline also illustrates that the rest
of the world is getting safer. The average cost of credit-
default swaps insuring the debt of about 50 nations tracked by
Bloomberg fell to 160 basis points, or 1.6 percentage points, on
Aug. 24 from as high as 250 basis points in November. Spanish Swaps Swaps tied to Spain dropped to 445 basis points this month
from a record 647 on July 25, and those for Italy declined to
394 from this year’s high of 580 on June 1. Contracts on China fell the lowest in five months, while
the U.S. slid to levels not seen since May, and Germany touched
a 13-month low. The swaps rise when perceptions of
creditworthiness deteriorate and fall when they improve. People’s Bank of China Governor Zhou Xiaochuan said on Aug.
22 that adjustments to interest rates and banks’ reserve
requirements were still possible, leaving the door open for
further monetary stimulus. On an inspection of Guangdong province , Chinese Premier Wen Jiabao called for measures to promote export growth to help meet
the country’s annual economic targets, the official Xinhua News
Agency reported Aug. 25. Draghi Pledge Sentiment toward Europe improved after European Central
Bank President Mario Draghi vowed on July 26 to do “whatever it
takes” to defend the euro, helping to stem a slide that pushed
the 17-nation currency down about 6 percent since late March
against its major counterparts as the region’s sovereign crisis
intensified. Draghi’s comments came after Spain and Cyprus
joined Greece, Ireland and Portugal in seeking bailouts. “The difficulties of Europe created one of the supports
for the dollar early on in the year,” Brian Kim, a currency
strategist in Stamford, Connecticut, at Royal Bank of Scotland
Group Plc, said in an Aug. 23 telephone interview. “You had the
safe-haven demand. You could now see some short-term further
dollar weakness if Draghi and European government officials get
their act together.” Since Draghi’s comments, the krona has gained 4 percent
against the dollar, the Norwegian krone rose 3.1 percent and the
Canadian currency appreciated 1.9 percent. Buying Bonds While expectations for a stronger dollar are declining in
the futures market, investors are moving back into U.S.
government bonds after a selloff last month, a sign they
anticipate growth will remain subdued. The median estimate of
more than 70 economists surveyed by Bloomberg is for gross
domestic product to expand 2.15 percent this year. Speculators raised bullish positions in 10-year Treasury
note contracts this month to the highest since March 2008 as
yields surged to 1.86 percent Aug. 21, amid the worst losses for
a four-week period since December 2010. The dollar may gain support after Germany’s Bundesbank
signaled opposition to Draghi’s proposal to buy European bonds
and contain borrowing costs. The U.S. currency snapped a four-
day decline against the euro on Aug. 24 after two ECB officials
said the plan may be held up until a German ruling on the
legality of Europe’s permanent bailout fund. The people spoke on
condition of anonymity because the deliberations aren’t public. Gains Seen “A lot of what has happened in the past couple of weeks is
just based on hope and rhetoric about the ECB, and the markets
will become doubtful once again,” Derek Halpenny , the European
head of global markets research at Bank of Tokyo-Mitsubishi UFJ
Ltd. in London, said in an Aug. 24 interview. Halpenny sees the U.S. currency appreciating to about $1.18
per euro by February. “The story is still one of dollar
strength and certainly we think QE3 is not going to have the
same effect. The focus is still going to be on Europe, and
there’s still scope for disappointment,” he said. During the first seven months of the year the dollar rose
5.3 percent versus the euro and 1 percent against the krone,
boosted by dimming prospects for the global economy. Spanish
Prime Minister Mariano Rajoy said March 2 the country would miss
its budget deficit target. The nation later sought as much as
100 billion euros in European rescue loans for its banks. Embracing Risk Working against the dollar are some of the lowest interest
rates in the developed world. The Fed’s target rate for
overnight loans between banks has been in a range of zero to
0.25 percent since December 2008. Benchmark interest rates in
Australia, New Zealand and Sweden are 3.5 percent, 2.5 percent
and 1.5 percent respectively. At the same time, signs of strength in the U.S. economy are
encouraging investors to wade into riskier assets and
diminishing speculation the Fed will need to do QE3. The Labor Department said on Aug. 3 that employment rose by
163,000 in July. The median estimate of 89 economists surveyed
by Bloomberg was for an increase of 100,000. A report from the
Commerce Department on Aug. 14 showed that retail sales rose 0.8
percent in July, the most since February. The Citigroup Economic Surprise Index (SPX) for the Group of 10
countries, which measures how much data is beating or trailing
the median forecasts of analysts, climbed to a three-month high
of minus 26.8 on Aug. 24, after sliding to this year’s low of
minus 56.2 on June 26. ‘Improved Sentiment’ The Standard & Poor’s 500 Index of stocks reached a four-
year high of 1,426.68 on Aug. 21. While output in the euro zone will shrink this year,
developed economies including the U.S., New Zealand and Norway
will expand, according to economist estimates compiled by
Bloomberg. Japan’s gross domestic product is forecast to grow
2.5 percent in 2012, while Australia’s will climb 3.6 percent,
separate analyst predictions show. “Better economic data, particularly from the U.S., and the
hope that something will be done by the ECB has improved
sentiment and removed some of the safe-haven flows from the
dollar,” Ken Dickson, an investment director of currencies at
Edinburgh-based Standard Life Investments, which manages $257
billion, said on Aug. 21 in a telephone interview. “We’ve seen
some of this haven demand removed from the dollar.” To contact the reporters on this story:
Lukanyo Mnyanda in Edinburgh at
[email protected] ;
Liz Capo McCormick in New York at
[email protected] ;
Joseph Ciolli in New York at
[email protected] To contact the editors responsible for this story:
Dave Liedtka at
[email protected] ;
Paul Dobson at
[email protected] | 2012 | dollar-loses-hedge-fund-bulls-as-risk-drops-among-g-10-nations |
Shell Seeks to Extend ’12 Oil-Drilling Time in U.S. Chukchi Sea | By Katarzyna Klimasinska | 2012-08-27T16:14:04Z | http://www.bloomberg.com/news/2012-08-27/shell-seeks-to-extend-12-oil-drilling-time-in-u-s-chukchi-sea.html
Royal Dutch Shell Plc (RDSA) is seeking
additional drilling time in the Chukchi Sea off Alaska as delays
have cost the company about two months of exploration this year. Shell has spent $4.5 billion to obtain drilling rights,
purchase equipment and procure permits from various federal
agencies in pursuit of an underwater supply of oil estimated at
more than 20 billion barrels. While the company initially planned to begin in July, ice
that remained longer than usual and Coast Guard concerns with a
spill-containment barge, the Arctic Challenger, delayed the
start and caused Shell to cut the number of wells planned for
this year from five to one or two. Shell is still waiting for clearance to begin drilling. It
filed a request with the U.S. Interior Department at the end of
last week for about two weeks more to drill once it gets under
way, Kelly op de Weegh, a Shell spokeswoman, said by phone
today. “Ice forecast is indicating just under two more weeks of
open water,” she said. “Because we could remain in the open
water longer, it could also potentially allow us to drill even
in the hydrocarbons zone past the Sept. 24 date.” Drilling was to end by Sept. 24 in the Chukchi Sea , and
Oct. 31 in the Beaufort Sea | 8 | 27 | 9a5a8e6b18b521bc43dbb165847c47f3b84e65b2 | sea floor, before the Hague-based company gets the final permit
to drill, op de Weegh said. Drillships Kulluk and Noble Discoverer departed from Dutch
Harbor, Alaska, to the exploration sites earlier this month and
are expected to arrive around Sept. 3, she said. The Interior Department didn’t reply to emails and phone
calls seeking comments. To contact the reporter on this story:
Katarzyna Klimasinska in Washington at
[email protected] To contact the editor responsible for this story:
Jon Morgan at
[email protected] | 2012 | shell-seeks-to-extend-12-oil-drilling-time-in-u-s-chukchi-sea |
Natural Gas Rises From Two-Month Low as Storm Isaac Shuts Output | By Ann Koh | 2012-08-27T03:35:03Z | http://www.bloomberg.com/news/2012-08-27/natural-gas-rises-from-two-month-low-as-storm-isaac-shuts-output.html | 8 | 27 | f780fe0967d09a4b81808f785ea9605e9755c4df | Natural gas rose from the lowest
level in two months in New York as Tropical Storm Isaac shut
production in the Gulf of Mexico. Futures advanced as much as 2.4 percent after Isaac moved
into the southeast Gulf and was forecast to strengthen into a
hurricane. Offshore operators evacuated platforms and rigs in
the storm’s path, shutting in about 8.2 percent of the region’s
gas production and 24 percent of its oil output, the Bureau of
Safety and Environmental Enforcement said yesterday . Gas for September delivery increased as much as 6.6 cents
to $2.768 per million British thermal units on the New York
Mercantile Exchange and was at $2.754 at 10:34 a.m. Singapore
time. Prices fell 10 cents to $2.702 per million Btu on Aug. 24,
the lowest settlement since June 25. Isaac is expected to move over the eastern part of the Gulf
of Mexico today before approaching the northern Gulf Coast
tomorrow, the U.S. National Hurricane Center said in an advisory
released just before 8 p.m. New York time yesterday. 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 | natural-gas-rises-from-two-month-low-as-storm-isaac-shuts-outpu |
Gazprom to Halt Yamal-Europe Gas Link Tomorrow for Repairs | By Jake Rudnitsky | 2012-08-27T13:26:01Z | http://www.bloomberg.com/news/2012-08-27/gazprom-to-suspend-yamal-europe-gas-pipeline-aug-28-correct-.html | 8 | 27 | fec7b2d32a718666b881f0efb9e9d0f236cdadc2 | OAO Gazprom (GAZP) said it will halt
natural-gas shipments via the Yamal-Europe pipeline starting
tomorrow for 40 hours as part of planned maintenance. During the repairs, Russia ’s gas exporter will increase
shipments of the fuel via Nord Stream , its pipeline direct to
Germany under the Baltic Sea , the Moscow-based company said in
an e-mailed statement today. The repairs will be made to sections of the pipe in Russia
and Poland simultaneously and were approved by all interested
parties in late 2011, according to the statement. The Nord Stream venture with EON AG and Wintershall AG
began fuel shipments to the European Union in November last year
and plans to double capacity after a second line is opened by
the end of this year. GDF Suez (GSZ) SA and Nederlandse Gasunie NV are
also partners in the pipeline. To contact the reporter on this story:
Jake Rudnitsky in Moscow at
[email protected] To contact the editor responsible for this story:
Stephen Voss at
[email protected] | 2012 | gazprom-to-suspend-yamal-europe-gas-pipeline-aug-28-correct- |
Chinese, Malaysian Firms Win Iraq Water, Sewage Contracts | By Khalid Al-Ansary | 2012-08-27T12:31:50Z | http://www.bloomberg.com/news/2012-08-27/chinese-malaysian-firms-win-iraq-water-sewage-contracts.html | 8 | 27 | a8a9e6d46c8fee125b1259bd70552b6db29319e9 | Iraq signed two contracts with Ho
Hup Construction Co. (HO) Bhd of Malaysia and China National Electric
Engineering Co. Ltd. valued at a total of 161 billion dinars
($138 million) for water and sewage projects, Jasim Mohammad
Salim, a spokesman of the Ministry of Municipalities and Public
Works, said by phone in Baghdad yesterday. To contact the reporter on this story:
Khalid Al-Ansary in Baghdad through the Dubai newsroom at
[email protected] To contact the editor responsible for this story:
Stephen Voss at
[email protected] | 2012 | chinese-malaysian-firms-win-iraq-water-sewage-contracts |
HSH Nordbank Sues Golman Sachs Over Mortgage Securities | By Chris Dolmetsch | 2012-08-27T16:44:41Z | http://www.bloomberg.com/news/2012-08-27/goldman-sachs-sued-by-hsh-nordbank-over-mortgage-securities.html | 8 | 27 | 388793c271d16958c3c31a713379fb98f5ec2f37 | HSH Nordbank AG, a German regional
lender bailed out during the financial crisis, sued Goldman
Sachs Group Inc. (GS) and Morgan Stanley (MS) over more than $634 million
in residential mortgage-backed securities. HSH Nordbank accused Goldman Sachs and Morgan Stanley, both
based in New York , of making “material misrepresentations and
omissions” about the underwriting standards used to issue
mortgage loans that were pooled together into the securities,
according to documents filed Aug. 24 in New York State Supreme
Court in Manhattan. Goldman Sachs declined to comment on the lawsuit, Tiffany Galvin, a company spokeswoman, said in a telephone interview.
Lauren Onis, a spokeswoman for Morgan Stanley, declined to
comment on the lawsuit immediately in a telephone interview. HSH Nordbank sued Goldman Sachs over $110 million in
mortgage securities and Morgan Stanley over $524 million of the
investments, according court papers. Pools of home loans securitized into bonds were a central
part of the housing bubble that helped send the U.S. into the
biggest recession since the 1930s. The housing market collapsed,
and the crisis swept up lenders and investment banks as the
market for the securities evaporated. HSH Nordbank, based in Hamburg, is one of a group of
regional German lenders sued in state court in Manhattan over
mortgage-backed securities during the past year. Other banks
sued by HSH Nordbank include UBS AG and Barclays Plc. The new cases are HSH Nordbank AG v. Morgan Stanley,
652988/2012, and HSH Nordbank AG v. Goldman Sachs Group Inc.,
652991/2012, New York State Supreme Court, New York County,
(Manhattan). 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 | goldman-sachs-sued-by-hsh-nordbank-over-mortgage-securities |
Swedish, Finnish Atomic Reactors Operating at 73% Today | By Torsten Fagerholm | 2012-08-27T05:57:03Z | http://www.bloomberg.com/news/2012-08-27/swedish-finnish-atomic-reactors-operating-at-73-today-table-.html | 8 | 27 | a9d5df1e753d79f5e6d077c1a1cec15a232b7b41 | Fourteen Nordic nuclear reactors run
by Vattenfall AB, EON AG, Fortum Oyj (FUM1V) and Teollisuuden Voima Oyj
are producing at a combined capacity of 73 percent, up 3
percentage points from Aug. 24, according to data from company
websites and calculations by Bloomberg. Forsmark-1, Oskarshamn-1 and Ringhals-4 in Sweden and
Loviisa-1 in Finland are out of service for maintenance or
repairs. The remaining 10 are online. EON AG will do tests at its 1,400-megawatt Oskarshamn-3
reactor starting tomorrow, with production falling as low as 200
megawatts, the company said in a filing via the Nord Pool Spot
AS exchange on Aug. 24. A test on the turbine on Aug. 30 will
cut output completely, with full production expected the next
day, EON said. The company also plans tests on Sept. 3, Sept. 6 and Sept.
21, it said. The table below lists all units and their utilization rates
based on latest available data. It shows current output and
installed capacity in megawatts and utilization in percent.
*Data for Loviisa reactors were not available on Fortum’s
website. Figures are an estimate based on real-time production
from transmission system operator Fingrid Oyj. To contact the reporter on this story:
Torsten Fagerholm in Helsinki at
[email protected] To contact the editor responsible for this story:
Lars Paulsson at
[email protected] | 2012 | swedish-finnish-atomic-reactors-operating-at-73-today-table- |
Myanmar Leader Shuffles Cabinet to Strengthen Reforms | By Daniel Ten Kate | 2012-08-27T18:14:22Z | http://www.bloomberg.com/news/2012-08-27/myanmar-leader-shuffles-cabinet-to-strengthen-reforms.html | 8 | 27 | 3fa153e992b548c18850952c284221a0 | Myanmar’s President Thein Sein
replaced nine cabinet members in the largest shake up of his
administration since embarking on political reforms after taking
power last year. Thein Sein replaced ministers responsible for information
and economic development, finance, industry and railways, and
will transfer oversight of those ministries to the office of the
president, according to a statement on his official website. Democratic reforms since Thein Sein took power last year
have prompted Western nations to ease sanctions and galvanized
lawmakers to focus on economic growth after about five decades
of military rule left Myanmar disconnected from the global
financial system. The president, who has freed political
prisoners, allowed greater media freedom and held peace talks
with rebels, is seeking to create jobs before elections in 2015. “It shows very clearly a strengthening of the president’s
reformist agenda,” Thant Myint-U, an author of two books on
Myanmar, said yesterday by phone from Bangkok. “It’s also
notable that a lot of the reshuffle has been around economic
positions. That shows the focus the president has on reforming
the economy.” Myanmar dismantled a fixed exchange-rate in April and
parliamentarians are revamping laws to attract investors to the
country of 64 million people, attracting companies such as Coca-
Cola Co. (KO) and Visa Inc. The nation’s economy may grow as much as
8 percent a year over the next decade as inflation remains low
and the government increases trade ties with neighbors China and
India , the Asian Development Bank said in an Aug. 20 report. ‘Upbeat’ Outlook The near-term outlook for the economy, which is 1/10th the
size of neighboring Thailand , is “relatively upbeat” because
of higher foreign investment and commodity sales, the ADB said.
Annual growth of 8 percent may triple per capita gross domestic
product to $3,000 by 2030, it said. Myanmar’s per capita gross
domestic product is less than 10 percent that of neighboring
Thailand, according to International Monetary Fund estimates. President Barack Obama last month authorized U.S. companies
to invest in Myanmar for the first time in about 15 years. Thein
Sein met Secretary of State Hillary Clinton at a July 13
business forum in Phnom Penh that included representatives from
Google Inc., Goldman Sachs Group Inc. (GS) , Boeing Co. and General
Motors Co. ‘Good Sign’ Key ministers who have worked closely with Thein Sein have
been moved into his office, said Thant Myint-U, a former United
Nations official whose grandfather, U Thant, was UN Secretary-
General from 1961 to 1971. It’s also a “good sign” that many
key deputy-minister positions have been filled by technocrats
and academics, he said. Thein Sein replaced Finance Minister Hla Tun, Industry
Minister Soe Thein, Railays Minister Aung Min and Minister for
Economic Planning Tin Naing Thein, according to the statement on
his website, which didn’t name all of the successors. Aung Kyi, the former labor minister, will head the
information ministry, replacing Kyaw Hsan, who will be moved to
the ministry for co-operatives, according to the statement. Ohn
Myint, the former minister for livestock, fisheries and
cooperatives, will oversee livestock and fisheries only. Winston Set Aung, an adviser to the president, will become
a deputy minister for economic planning. “The fact that four ministries that are key to reforms are
becoming key posts in the presidential office is a positive sign
for the country’s democratic transition,” Min Thu, a lawmaker
from former political prisoner Aung San Suu Kyi ’s National
League for Democracy, said late yesterday by phone. “We also
welcome Aung Kyi who has become a minister of information, since
he has dealt with Daw Aung San Suu Kyi as a liaison minister
during the military regime and has good experience dealing with
the public.” Suu Kyi was elected to parliament in May after spending 15
years under house arrest, prompting the U.S. and European Union
to ease sanctions as the country transitions to democracy. To contact the reporter on this story:
Daniel Ten Kate in Bangkok at
[email protected] To contact the editor responsible for this story:
Peter Hirschberg at
[email protected] | 2012 | yanmar-leader-shuffles-cabinet-to-strengthen-reforms |
Ukraine to Sell $1 Billion in Eurobonds Maturing in 2014 | By Kateryna Choursina | 2012-08-27T13:51:29Z | http://www.bloomberg.com/news/2012-08-27/ukraine-to-sell-1-billion-in-eurobonds-maturing-in-2014-1-.html | 8 | 27 | 5bde964caa83d84d3e7e4108b76ec4c2497e102a | Ukraine will sell $1 billion worth
of Eurobonds that mature in 2014 to refinance part of a $2
billion loan from Russia’s second-biggest lender VTB Group. The bonds will have an annual coupon of 7.95 percent, the
Kiev-based Cabinet said on its website today. The Eastern European nation received a $2 billion six-month
loan from VTB Group in 2010 and extended it three times. The
loan had interest rate of 6.7 percent. Another $1 billion was
repaid to VTB in June, according to the country’s Finance
Ministry . Ukraine seeks to keep its budget deficit at 1.7
percent of gross domestic product this year. 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 | ukraine-to-sell-1-billion-in-eurobonds-maturing-in-2014-1- |
Nobody's Forcing Anybody to Disclose CO2 Emissions: Steer | By Eric Roston | 2012-08-27T15:01:37Z | http://www.bloomberg.com/news/2012-08-27/nobody-s-forcing-anybody-to-disclose-co2-emissions-steer.html
Resources are all the rage. With the world population headed toward 9 billion
people by 2050, from 7 billion today, companies and governments are eager to
ensure they have access to strategic and industrial materials, now and for all
time. The problem is that resources are becoming more expensive as the global
middle class expands and is able to buy more stuff. The Goldman Sachs
Commodities Index (now the Standard & Poor's GSCI) has risen by about 3.5 times
between early 1991, when it launched, and today (It closed at 670.51 on Friday).
Greater competition for fewer resources doesn't mean that everything is at risk
of running out next week, or even " peaking ." If these trends continue, it does
mean that prices are likely to continue their ascent in the long term. Global companies find themselves increasingly in dialog with civil-society
organizations focused on the resource race. The World Resources Institute (WRI),
a research organization based in Washington, DC, this year observes its 30th
anniversary. And last week, it installed its third president, Andrew Steer, a
U.K. economist who joins WRI after serving as Special Envoy for Climate Change
at the World Bank. We spoke by phone last week about resource scarcity and
climate change. Q: Most of us were brought up secure in the knowledge that businesses and
nongovernmental organizations are natural enemies in the wild. What’s driving
companies into dialog with NGOs, and vice versa? A: We are seeing a
tightening up | 8 | 27 | 121074f36bac4256a5f769801b930a54 | pressure comes from those who hold large sums of money, and are deciding whether
to entrust that money to corporations. Anybody who says the private sector, or
the financial sector, doesn't really worry about climate change might ask, then
why is it than that two-thirds of the S&P 500 is disclosing their carbon
emissions? They're disclosing it because it's good business for them. Q: What are you reading? A: I'm reading a wonderful book at the
moment called At Home , written by a guy named Bill Bryson . The other
book I'm reading is about the Federalist debates, Founding Rivals . For
a non-American, it's really important that we understand what is really
underlying the politics in this country. I think it’s impossible to understand
it, unless one reads where this all came from. For a European in particular,
it's rather unintuitive why the political dialogue in this country is the way it
is. Click here to register for the Carbon Disclosure Project's Sept. 12
online Global Climate Change Forum. Visit www.bloomberg.com/sustainability for the latest from Bloomberg News
about energy, natural resources and global business. | 2012 | nobody-s-forcing-anybody-to-disclose-co2-emissions-steer |
KB, Korean Banks Rise on Moody’s Sovereign Upgrade: Seoul Mover | By Seonjin Cha | 2012-08-27T06:18:49Z | http://www.bloomberg.com/news/2012-08-27/kb-korean-banks-rise-on-moody-s-sovereign-upgrade-seoul-mover.html | 8 | 27 | e8e9051ba60e95bc7769137b16263e99f66e489e | KB Financial Group Inc. (105560) , owner of
South Korea’s largest bank, led gains among financial stocks in
Seoul after Moody’s Investors Service raised the nation’s
sovereign-debt rating. KB Financial climbed 3.7 percent, the biggest gain since
July 3, at the close of trading on the Korea Exchange. Woori
Finance Holdings Co. (053000) , South Korea’s biggest financial group by
assets, gained 4.1 percent and Shinhan Financial Group Co. added
2.6 percent. The benchmark Kospi index dropped 0.1 percent. South Korea’s sovereign debt rating was raised one step to
to Aa3 by Moody’s, putting it on a par with Japan , after Asia ’s
fourth-largest economy strengthened its resilience to shocks and
the risk of a North Korean collapse receded. “The sovereign ratings upgrade will help lower banks’
funding costs,” Koo Kyung Hwe, a Seoul-based analyst at Hyundai
Securities Co. said by phone. “It also improves investor
sentiment for the banking sector because it reassures people of
the healthiness of South Korea’s economy.” The nation’s strong fiscal fundamentals enable a relatively
large degree of policy space to cope with domestic risks and
external shocks, according to Moody’s statement today. The
country’s macro-prudential regulatory measures and improved risk
management also reduced banks’ external vulnerability, the
ratings company said. To contact the reporter on this story:
Seonjin Cha in Seoul at
[email protected] To contact the editor responsible for this story:
Chitra Somayaji at
[email protected] | 2012 | kb-korean-banks-rise-on-moody-s-sovereign-upgrade-seoul-mover |
German 10-Year Bonds Stay Higher After Business Confidence Drops | By Lukanyo Mnyanda | 2012-08-27T08:09:53Z | http://www.bloomberg.com/news/2012-08-27/german-10-year-bonds-stay-higher-after-business-confidence-drops.html | 8 | 27 | 4f993c0c4a671bedb61874d9eed65c5926e6f01c | German 10-year bonds stayed higher
after a report showed business confidence fell for a fourth
consecutive month. The yield on the 10-year bund decreased one basis point to
1.35 percent at 9.04 a.m. London time. The two-year note yield
was at minus 0.007 percent. The Ifo institute in Munich said its business climate
index, based on a survey of 7,000 executives, dropped to 102.3
in August from 103.2 in July. That’s the lowest reading since
March 2010. Economists predicted a decline to 102.7, according
to the median of 37 forecasts in a Bloomberg News survey. To contact the reporter on this story:
Lukanyo Mnyanda in Edinburgh at
[email protected] To contact the editor responsible for this story:
Nicholas Reynolds at
[email protected] | 2012 | german-10-year-bonds-stay-higher-after-business-confidence-drops |
Fed Says Credit Quality of Large Loans Improves for 2012 | By Craig Torres | 2012-08-27T16:20:36Z | http://www.bloomberg.com/news/2012-08-27/fed-says-credit-quality-of-large-loans-improves-for-third-year.html
The quality of large loans in the
portfolios of federally supervised banks improved for the third
year in 2012, with problem credits falling 8.1 percent to $295
billion, according to the Federal Reserve . “Despite this progress, poorly underwritten loans
originated in 2006 and 2007 continued to adversely affect” bank
portfolios, the Fed, the Office of the Comptroller of the
Currency and the Federal Deposit Insurance Corp. said in their
annual review of loans of $20 million or more shared by three or
more banks known as shared national credits. The regulators said total shared national credit loans
outstanding rose $125 billion to $1.24 trillion, an increase of
11.2 percent. So-called criticized assets | 8 | 27 | 44d89481fdaa417ba9e4acb4c25f1c0a | percent of the portfolio, compared with 12.7 percent last year.
The regulators analyzed data submitted by financial institutions
as of Dec. 31 and March 31. U.S. regulators failed last decade to avert an asset-price
bubble in housing caused partly by lax lending standards. Rising
mortgage defaults led to a financial crisis and taxpayer-funded
rescues of the nation’s largest banks beginning in 2008. The
U.S. economy plunged into the worst recession since the Great
Depression from December 2007 to June 2009. Congress tightened oversight of banks, overall financial
stability and consumer protections by passing the Dodd-Frank Act
in 2010. The Fed, led by Governor Daniel Tarullo , has raised
capital standards for the largest banks, subjected them to
annual stress tests and is boosting scrutiny of their lending
and trading practices. That’s helped tighten credit conditions
for all but the highest-quality borrowers at a time when the
economy is posting only moderate growth. Growth ‘Headwinds’ Fed Chairman Ben S. Bernanke told lawmakers in his semi-
annual testimony last month that the recovery “continues to be
held back by a number of other headwinds, including still-tight
borrowing conditions for some businesses and households.” While the credit quality of bank assets is improving, the
regulators said troubled assets “remain elevated.” “Reasons for improvement in credit quality included better
operating performance among borrowers, debt restructurings,
bankruptcy resolutions and ongoing access to bond and equity
markets,” the regulators said. Improving credit quality has helped lift bank stocks. The
KBW Bank Index, which tracks the shares of 24 large banks, has
risen 20 percent this year compared with a 12.5 percent gain for
the Standard and Poor’s 500 Index. Housing Slump “If you look at bank loan losses, they have come down for
eight or nine consecutive quarters,” said Jason Goldberg , a
senior analyst at Barclays Capital Inc. in New York . “Real
estate still has a ways to go.” The regulators said that media and telecommunications
companies led other industry groups in the volume of criticized
loans with $66 billion. Finance and insurance companies were
second with $34 billion. Nonbank financial companies such as securitization pools,
hedge funds , insurance companies and pension funds owned the
largest share of substandard credits, the regulators said. Refinancing risk eased, the agencies said, with 37.1
percent of shared national credits maturing over the next three
years, compared with 63.4 percent in the 2011 review. The 2012 review included an analysis of 110 large leveraged
finance borrowers, the report said. Federal regulators
criticized leveraged loan standards in March this year and said
they were revising supervisory guidance on the products. “The review again identified an excessive level of risk
associated with this subset of the portfolio,” the shared
national credit review report said. The U.S. banking agencies’ sample reviewed $811 billion of
the $2.79 trillion credit commitments in the portfolio. To contact the reporter on this story:
Craig Torres in Washington at
[email protected] ; To contact the editor responsible for this story: Christopher
Wellisz at [email protected] | 2012 | fed-says-credit-quality-of-large-loans-improves-for-third-year |
Yahoo Says Lockerz’s CEO Savitt to Join as Marketing Chief | By Brian Womack | 2012-08-28T20:10:58Z | http://www.bloomberg.com/news/2012-08-27/yahoo-says-lockerz-ceo-savitt-to-join-as-chief-marketing-officer.html
Yahoo! Inc. (YHOO) , owner of the largest
U.S. Web portal, named Kathy Savitt, founder of social-commerce
startup Lockerz Inc. and a former executive at American Eagle
Outfitters Inc. (AEO) , as chief marketing officer. Savitt will leave as chief executive officer of Lockerz to
join Yahoo next month, reporting to Chief Executive Officer
Marissa Mayer, who arrived in July from Google Inc. Savitt
previously was marketing chief at teen-apparel chain American
Eagle and worked at Amazon.com Inc., Yahoo said in a statement
yesterday. Mayer | 8 | 27 | be6cefb168d03921ad91e81eae8671d5f249bc5d | people and seeking fresh ways to bolster growth as rivals
Facebook Inc. (FB) and Google gain ground with Internet users and
advertisers. The company has posted three straight years of
revenue declines amid turnover in the executive ranks. “We are very excited to welcome Kathy to Yahoo,” Mayer
said in the statement. “Her extensive experience in building
and refining well-loved consumer brands like Amazon, American
Eagle Outfitters and Lockerz will be incredibly valuable as we
define Yahoo’s future.” Yahoo, based in Sunnyvale, California, fell less than 1
percent to $14.72 at the close in New York. The shares have
declined 8.7 percent this year. After she joins Yahoo, Savitt will become chairman of
Lockerz’s board, and Chief Operating Officer Mark Stabingas will
become CEO, the Seattle-based startup said in an e-mailed
statement. The company’s investors include Kleiner Perkins
Caufield & Byers and Liberty Media Corp. To contact the reporter on this story:
Brian Womack in San Francisco at
[email protected] To contact the editor responsible for this story:
Tom Giles at
[email protected] | 2012 | yahoo-says-lockerz-ceo-savitt-to-join-as-chief-marketing-officer |
Redford, Affleck, Spike Lee Head for Venice Red Carpet | By Farah Nayeri | 2012-08-27T23:00:01Z | http://www.bloomberg.com/news/2012-08-27/redford-affleck-spike-lee-head-for-venice-red-carpet-preview.html
An erotic thriller by “Scarface”
director Brian De Palma and a Spike Lee documentary about the
making of Michael Jackson ’s “Bad” album are to get red-carpet
rollouts at the Venice Film Festival, which starts tomorrow. De Palma’s “Passion” (a remake of a French movie titled
“Love Crime” and starring Kristin Scott Thomas) casts Rachel McAdams as a domineering executive. She robs an idea from
underling Noomi Rapace (“The Girl With the Dragon Tattoo”) and
suffers lethal consequences. It’s one of 18 movies competing for
the Golden Lion trophy at the world’s oldest film festival. Lee’s out-of-competition “Bad 25” premieres on Aug. 31.
That’s 25 years to the day after the 1987 release of the “Bad”
album, which instantly surged to the No. 1 spot in world charts.
The CD is also being re-released in a deluxe edition next month. “I’m more than just a huge fan of Michael Jackson,” Lee
said in a news release, “and having had the chance to actually
know him and work with him, I deeply care about his legacy.” This year’s nine-person jury is steered by “Heat”
director Michael Mann . Fellow jurors include performance artist
Marina Abramovic , actresses Samantha Morton and Laetitia Casta,
and “Gomorrah” director Matteo Garrone. Another U.S. contender for the Golden Lion is “To the
Wonder” by Terrence Malick, whose “The Tree of Life” clinched
the Palme d’Or at the Cannes Film Festival in 2011. It’s about a
man who hooks up with a woman from his Oklahoma hometown after
his marriage to a European breaks down. The movie stars Ben Affleck , Javier Bardem and McAdams, in her second Venice role. Hoffman, Phoenix Philip Seymour Hoffman and Joaquin Phoenix are the leads in
“The Master” by Paul Thomas Anderson, whose “There Will Be
Blood” won two Academy Awards. His new film is the story of a
Navy veteran who gets drawn into a cult around a man known to
his followers as The Master. Robert Redford directs and stars in another thriller: out-
of-competition “The Company You Keep,” co-starring Shia
LaBeouf and Julie Christie. It’s about a former activist from
the revolutionary Weather Underground movement whose identity is
uncovered by a reporter. The festival’s opening movie is Mira Nair’s “The Reluctant
Fundamentalist,” with Riz Ahmed, Kate Hudson and Kiefer Sutherland . Venice this year ends with a title starring Gerard Depardieu: “L’Homme Qui Rit” (“The Man Who Laughs”),
directed by Jean-Pierre Ameris. Actors Zac Efron and Dennis Quaid star in the in-
competition title “At Any Price,” directed by Iranian-American
Ramin Bahrani. The Venice Festival was started in August 1932 by Mussolini
on Lido island | 8 | 27 | 831378b5c29447a591d9d53ab522b788 | dubbed the First Exposition of Cinematic Art. Two years later,
Mussolini transformed it into a permanent event. Muse highlights include Amanda Gordon’s Scene Last Night
and Jeremy Gerard on theater. To contact the writer on the story:
Farah Nayeri at [email protected] . To contact the editor responsible for this story:
Manuela Hoelterhoff at
[email protected] . | 2012 | redford-affleck-spike-lee-head-for-venice-red-carpet-preview |
Rich Are Admirable Greedy People Paying Too Few Taxes | By Frank Bass | 2012-08-27T18:07:11Z | http://www.bloomberg.com/news/2012-08-27/rich-are-admirable-greedy-people-paying-too-few-taxes.html | 8 | 27 | e0115e49e9f041a1aea1eb43d7a3af40 | Americans admire the rich. They just don’t like them very much. A Pew Research Center survey shows an overwhelming majority of people have high regard for those they consider wealthy, with almost half saying they’re smarter and harder workers. At the same time, a majority says the wealthy are greedy and pay too little in taxes. One-third say they’re dishonest. More than six in 10 Americans say the Republican Party , which is holding its national convention this week, favors the wealthy, according to the poll released today. The findings underscore the complicated feelings Americans have about wealth, as well as a troubling political issue for Republican presidential candidate Mitt Romney , who has an estimated wealth of as much as $250 million. More than 70 percent of Americans say Romney’s policies would help the wealthy more than anyone else. “There’s some good news in here” for Romney, Kim Parker, the study’s author and a senior researcher with the Washington- based Pew Social & Demographic Trends Project, said in a telephone interview. “Americans do admire wealthy people who worked hard. But a potential problem is that people said his policies would benefit wealthy people more than the middle-class or lower-income people.” Republicans and Democrats have different views of the rich, said Jacob S. Hacker, director of the Institution for Social and Policy Studies at Yale University . “There’s a pretty stark partisan divide,” he said. Wealthy Undertaxed Americans say a $150,000 annual salary would be enough to make a four-person family rich, the poll found. People surveyed in the Northeast and suburban communities put the amount at $200,000, while those questioned in rural areas say a family making more than $125,000 could be considered wealthy. Nationwide, the median household income is $51,914. Fifty-eight percent of people surveyed by Pew say the wealthy don’t pay enough taxes, including 52 percent of households that identify themselves as upper or upper-middle class. The poll of 2,508 adults, conducted July 16-26, has a 2.8 percent margin of error. President Barack Obama favors increasing tax rates on households making more than $250,000 a year. The Republican- controlled House of Representatives opposes the boost. Republican leaders are threatening to block any deal that would increase taxes, as well as to delay across-the-board federal spending cuts and decrease the amount of time that laid-off workers could collect unemployment insurance. Greedy Rich Fifty-five percent of people polled by Pew say rich people are more likely to be greedy, including 65 percent of Democrats and 42 percent of Republicans. Thirty-four percent say wealthy people are less honest, with only 18 percent of Republicans and 8 percent of Democrats considering the rich to be more honest than other people. Hacker, co-author of “Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class,” said the 2012 presidential contest has the potential to be the most economically centered since the Great Depression. “This election is much more focused on the gap between the rich and the rest than any I’ve been alive for,” he said. “We’ve got a perfect storm of factors leading to a discussion about the middle class and taxes, especially.” Hard Work Admired Even so, Pew said Americans generally admire wealthy people who made money through hard work. Ninety-two percent of people who described themselves as middle-class and 84 percent of lower-income people say they admire rich people, pollsters said. Almost half of all Republicans say wealthy people are smarter than other Americans. Only 38 percent of Democrats say the rich are smarter than middle- or lower-income people. Half of survey respondents say there isn’t a relationship between income and intelligence. Opinions also split along partisan lines when it comes to the amount of work required to make a lot of money. Fifty-five percent of Republican-leaning respondents say rich people worked harder than others, while 33 percent of Democrats agree. Wealthy people say they’re much more satisfied with life than do lower- or middle-income households. The survey reports that 62 percent of rich people say they’ve become more financially secure during the past decade. Only 44 percent of middle-class families and 29 percent of poor people agree. Stress Free More than 40 percent of higher-income people say they’re happy with their jobs and their lives, compared with about 30 percent of middle-income families and 20 percent of poor households. One-third of the wealthy say they never or seldom experience stress. Only 23 percent of middle-class people and 13 percent of poor families report a lack of stress. “The rich just seem to be experiencing life in a different way from the middle class and lower-income people,” Parker says. “It’s striking, particularly in these times. They just seem immune from a lot of things.” To contact the reporter on this story: Frank Bass in New York at fbass1@bloomberg. To contact the editors responsible for this story: Flynn McRoberts in Chicago at [email protected] ; Mark McQuillan in Washington at [email protected] . | 2012 | rich-are-admirable-greedy-people-paying-too-few-taxes |
Indonesia Stock Trading Delayed as Members Unable to Connect | By Berni Moestafa and Greg Ahlstrand | 2012-08-27T08:12:25Z | http://www.bloomberg.com/news/2012-08-27/indonesian-stock-trading-delayed-as-members-unable-to-connect.html | 8 | 27 | 11096d225f184a93a03dbb7a5647d2ed | The Indonesian stock exchange
delayed trading after almost a third of its members failed to
connect to the bourse’s system. Trading resumed about 1:30 p.m.
according to Samsul Hidayat, the bourse’s director of trading
and membership. Only 84 of 114 bourse members were able to connect this
morning, Uriep Budhi Prasetyo, director of surveillance and
compliance, said by phone today. Bourse members have a seat on
the exchange and can trade directly. Hidayat said by phone that
he was in a meeting with his team to review what happened. The
benchmark Jakarta Composite Index (JCI) rose less than 0.1 percent to
4,147.33 as of 3:03 p.m. local time. The exchange experienced an hour-long disruption in April
2009 when a cable used for sending transaction data
malfunctioned after a buy order overran its capacity, the bourse
said at the time. In October 2008, the bourse halted trading for
three days following a 10 percent plunge in the key stock index . “It creates a reputation problem,” Siswa Rizali, who
helps manage about $367 million at PT Andalan Artha Advisindo
Sekuritas, said by phone from Jakarta. “It happened before. The
stock exchange has to convince people that they have the
capability to provide smooth transactions.” The disruption won’t deter foreign investors lured by the
Indonesia ’s economic growth, Samsung Asset Management Co.’s Alan Richardson said. Overseas funds bought a net $935.2 million of
Indonesian equities this year to Aug. 24, on course for three
straight years of purchases, data compiled by Bloomberg show.
Foreign investors sold $21.3 million of shares on Aug. 24,
snapping nine days of buying, the data showed. Attractive Growth “It’s a temporary glitch,” Richardson, a Singapore-based
fund manager who helps oversee $82 billion, said by phone. “It
won’t scare foreign investors away. Investors are attracted by 6
percent to 7 percent gross domestic product growth which is
expected to sustain next year, and 20 percent corporate earnings
growth.” The Jakarta Composite Index has tripled since the end of
2008, driven by the nation’s economic prospects. The stock gauge
gained 8.4 percent this year, compared with the MSCI Emerging
Markets Index’s 5 increase. The Indonesian index trades for 14.9
times estimated profit , compared with its three-year average of
13.6, data compiled by Bloomberg show. The government plans to increase capital spending by 15
percent next year to boost infrastructure and support growth,
President Susilo Bambang Yudhoyono said in his annual budget
address on Aug. 16. Economic growth is forecast to accelerate to
6.8 percent in 2013 from an estimated 6.3 percent to 6.5 percent
this year, he said. To contact the reporters on this story:
Berni Moestafa in Jakarta at
[email protected] ;
Greg Ahlstrand in Jakarta at
[email protected] To contact the editor responsible for this story:
Darren Boey at [email protected] | 2012 | indonesian-stock-trading-delayed-as-members-unable-to-connec |
Ghavami’s Rigged Bids Betrayed Muni Issuers, U.S. Says | By David McLaughlin and Christie Smythe | 2012-08-27T21:37:29Z | http://www.bloomberg.com/news/2012-08-27/ghavami-s-rigged-bids-betrayed-muni-issuers-u-s-says.html | 8 | 27 | 57a1b93098844de2af34fd65a80fcd70 | Ex- UBS AG (UBSN) managing director Peter Ghavami and two former colleagues lied and cheated to rig bids
for city and state finance deals, a federal prosecutor said in
closing arguments at their criminal trial. Ghavami and former co-workers Gary Heinz and Michael Welty
defrauded municipal-bond issuers by manipulating the competitive
bidding process for investment transactions, the prosecutor,
John Van Lonkhuyzen, told jurors today in federal court in
Manhattan . States, cities and other issuers of tax-exempt municipal
bonds must use competitive bidding to select firms that will
invest proceeds of the securities, according to a six-count
indictment in the case. Ghavami and his co-defendants are
accused of circumventing that process. “They lied, they cheated, they stole,” Van Lonkhuyzen
said. The three defendants “were greedy, were deceitful and
betrayed dozens of municipalities.” From August 2001 to at least July 2002, the defendants
colluded with conspirators at banks and at least one brokerage
firm to learn about other bids before submission deadlines,
according to an indictment. They also conspired to commit wire
fraud from March 2001 to November 2004, prosecutors said. $700 Million UBS, Bank of America Corp. , JPMorgan Chase & Co. (JPM) , Wells
Fargo & Co. (WFC) and GE Funding Capital Market Services, a former
General Electric Co. unit, have paid more than $700 million to
settle U.S. claims over the scheme. As many as 13 individuals
have pleaded guilty to criminal charges. Ghavami, a Belgian citizen, was co-head of the municipal
bond reinvestment and derivatives group at Zurich-based UBS from
about January 2001 to March 2004, with Heinz and Welty reporting
to him, according to prosecutors. Ghavami’s attorney, Charles Stillman , argued during his
closing argument that the government had “not come close” to
proving its case. Ghavami was a “diligent, successful employee
who carried out his work in good faith,” he said. Cooperating
witnesses who testified in the trial should be disregarded as
untrustworthy, Stillman told jurors. “The tapes offer a picture of Peter Ghavami acting within
the rules entirely in good faith to do his job,” he said about
recordings used by the government. Closing arguments are scheduled to continue tomorrow. During the trial, which began July 30 before U.S. District
Judge Kimba Wood, prosecutors sought to show that the defendants
rigged auctions by talking to competitors and by paying
kickbacks to brokerage firm CDR Financial Products Inc. Ghavami and co-conspirators often attempted to deliberately
lose auctions rather than win them, according to the indictment.
Mark Zaino, a former UBS employee, testified for the prosecution
that the group sometimes excluded aggressive bidders, solicited
intentional losing bids and gave information to favored bidders
to rig outcomes. Took Payments A former CDR employee, Douglas Goldberg, told the jury that
the brokerage firm took payments from UBS’s municipal
derivatives group 10 to 15 times in return for helping to rig
municipal finance bids. Goldberg and Zaino both pleaded guilty to three criminal
counts in 2010. Each faces a possible sentence of 35 years in
prison. They testified under cooperation agreements with the
government. Defense lawyers called Zaino a “snake” in opening
statements. Marc Mukasey , a lawyer for Heinz, told jurors that
there were “plenty of sound, legitimate, honest business
reasons,” for firms to bid on deals they didn’t want to win. The case is U.S. v. Ghavami, 10-cr-1217, U.S. District
Court, Southern District of New York (Manhattan). To contact the reporters on this story:
David McLaughlin in New York at
[email protected] ;
Christie Smythe in New York at
[email protected] To contact the editor responsible for this story:
Michael Hytha at [email protected] | 2012 | ghavami-s-rigged-bids-betrayed-muni-issuers-u-s-says |