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2013-08-12 00:00:00+00:00
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nan
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Rupee Clouds Monsoon Silver Lining on India Inflation
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The rupee’s plunge to a record
threatens to dash the Reserve Bank of India ’s hope that monsoon
rains will boost farm output and help ease the fastest inflation
among the world’s largest emerging markets . India’s consumer-price index rose 9.64 percent in July,
official data showed yesterday, compared with 6.3 percent in
Brazil , 6.5 percent in Russia and 2.7 percent in China . The
interbank overnight call money rate closed at 10.25 percent
yesterday, the highest since March 2012, after the central bank
tightened cash-supply to support the currency. Governor Duvvuri Subbarao said July 30 the monsoon is a
“silver lining” as the slumping rupee kept him from adding to
three cuts in the benchmark repurchase rate this year. The
agriculture ministry forecasts that the grain harvest may climb
to a record. The July-September rainy season, the main source of
irrigation for India’s 235 million farmers, had its best start
since 1994, according to the weather office. “The stark rupee depreciation has pulled the plug on the
monetary-easing cycle,” Radhika Rao, an economist at DBS Bank
Ltd. in Singapore , said in a phone interview. “Global oil
prices and local food-supply disruptions mean there’s unlikely
to be a significant pullback in retail inflation.” Inflation Outlook Rao predicts India’s CPI will quicken to 9.8 percent this
month. Gains in wholesale prices, the RBI’s benchmark inflation
gauge, accelerated to 5 percent last month from 4.86 percent in
June, according to the median of 34 economists in a Bloomberg
survey before data due tomorrow. The RBI last month lowered its growth forecast for Asia ’s
third-largest economy to 5.5 percent from 5.7 percent for the
year ending March 2014 and said that, assuming a normal
distribution of monsoon rains, it will try to ensure a 5 percent
WPI inflation rate at the end of the fiscal year. Analysts estimate that a 10 percent rupee depreciation
boosts inflation by one percentage point, Raghuram Rajan , the
finance ministry’s top adviser who will take over as RBI chief
when Subbarao’s term ends next month, said June 20. The currency
has fallen 10.5 percent in 2013, Asia’s second-worst
performance. Depreciation fuels inflation in a country that imports
about 80 percent of its oil, and DBS Bank’s Rao says an
unchecked decline could compel the monetary authority to raise
lenders’ cash-reserve ratios and even its key repurchase rate . Fuel Costs Brent crude prices have risen 6.7 percent since the end of
June as a political upheaval in Egypt heightened concern that
unrest in the most populous Arab nation will spread, disrupting
regional oil supplies. Energy costs contribute about 15 percent
to India’s wholesale-price index and 9.5 percent to consumer
prices. Food comprises 24 percent of the WPI basket. In an attempt to steady the currency, the RBI last week
added to measures to restrict cash supply. The central bank will
sell 220 billion rupees ($3.6 billion) of cash-management bills
each week, it said on Aug. 8, supplementing steps taken in July
to cap lenders’ access to funds through daily repurchase
auctions, tighter daily cash-reserve ratio balances and higher
emergency funding costs. “In the classic growth-inflation tradeoff, the angle of a
sharply depreciating rupee has made currency management an
imperative,” Sandesh Kirkire, who oversees 377 billion rupees
of assets as chief executive officer at Kotak Mahindra Asset
Management Co. in Mumbai, said in an Aug. 8 e-mail interview.
“A more robust and coordinated policy response is needed to
address the problem.” ‘Evenly Matched’ The rupee, which touched a record low of 61.8050 per dollar
on Aug. 6, weakened 0.3 percent to 61.4250 today, according to
prices from local banks compiled by Bloomberg. The yield on the
benchmark 10-year government bonds rose four basis points, or
0.04 percentage point, to 8.34 percent. Gains in wholesale prices are likely to stay around 4.5
percent to 5 percent as supply and demand are “evenly
matched,” according to Glen Levine, a senior economist at
Moody’s Analytics. “The economy is still growing well below potential, but
supply is limited, especially of food, which supports prices,”
Sydney-based Levine wrote in an Aug. 8 research report. “Rising
agricultural yields will cool food inflation towards the end of
2013.” Output of monsoon-sown grains in India may climb to a
record this year, Tariq Anwar, the junior agriculture minister,
told reporters in New Delhi July 30. Bond risk in India has risen. Government-controlled State
Bank of India (SBIN) ’s credit-default swaps insuring the lenders’ bonds
against non-payment for five years have climbed 96 basis points
from this year’s low of 174 on May 17, according to data
provider CMA. ‘Fragile’ Currencies The rupee is among five “fragile” emerging-market
currencies partly due to relatively high inflation, according to
Morgan Stanley. Price pressures will necessitate further
depreciation to prevent an erosion of external competitiveness,
the investment firm said in an Aug. 5 report. The Brazilian
real, Indonesian rupiah, Turkish lira and the South African rand
are the other four. Global funds cut holdings of Indian debt by $8.4 billion
since the start of June, worsening the currency’s decline, on
concern the U.S. will pare stimulus that fueled demand for
emerging-market assets. The weak rupee leaves India vulnerable
to a current-account deficit, which official data show widened
to an unprecedented 4.8 percent of gross domestic product in the
last fiscal year. “India has fallen victim to a perfect storm,” Nicholas Spiro , managing director at consulting firm Spiro Sovereign
Strategy in London , said in an Aug. 11 research note. The nation
is “caught in a vicious circle in which severe balance of
payments weaknesses, ineffective measures to shore up the
tumbling rupee, a sharp decline in growth and persistent foreign
outflows from its local currency debt market are all feeding on
each other,” he wrote. To contact the reporter on this story:
Jeanette Rodrigues in Mumbai at
jrodrigues26@bloomberg.net To contact the editor responsible for this story:
James Regan at
jregan19@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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CIBC Seeks to Sell Card Portfolio as TD Wins Aimia Deal
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Canadian Imperial Bank of Commerce
is in talks to sell about half its Aerogold credit-card
portfolio to Toronto-Dominion (TD) Bank, the lender that’s taking
over as the main card partner for Aimia (AIM) Inc.’s rewards program. Toronto-Dominion, Canada’s second-largest bank by assets,
agreed to become the primary credit-card partner for Aimia’s
Aeroplan program, the companies said today in a joint statement.
The accord ends a 22-year alliance the Montreal-based loyalty-program operator had with CIBC, the country’s fifth-biggest
bank. Canadian Imperial is in “ongoing active discussions” to
sell about 50 percent of its Aerogold portfolio, primarily
comprised of credit-card only clients, to Toronto-Dominion, CIBC
said in a statement. CIBC would retain Aerogold card accounts of
customers with broader relationships at the bank, the Toronto-based firm said. The three companies said they aim to reach a
deal by Aug. 26. “While there are no guarantees that a deal will be
finalized, the framework for these discussions would see CIBC
retain the right to continue to issue Aerogold credit cards for
at least the next 10 years,” Kevin Dove, a Canadian Imperial
spokesman, said in an e-mailed statement. A sale is a “common sense approach” that should benefit
both CIBC and Toronto-Dominion, John Aiken , a Barclays Plc
analyst in Toronto, said in a note. ‘Fulsome Relationship’ “This should defray some of the retention costs
anticipated to be incurred by CIBC as it can focus on retaining
the customers it has a more fulsome relationship with,” Aiken
said. “For TD, it alleviates some of the risk that current
Aeroplan card holders will move to an alternative platform.” Canadian Imperial rose 2 percent to C$78.47 at 4:09 p.m. in
Toronto and Aimia jumped 4.1 percent to C$15.93. Toronto-Dominion fell 0.3 percent to C$86.41. TD has increased its push into cards through acquisitions,
including its purchase of Bank of America Corp.’s Canadian
MasterCard portfolio in December 2011 and October’s agreement to
buy the $5.9 billion U.S. credit-card holdings of Target Corp. (TGT) Under its agreement with Aimia, TD will offer a variety of
co-branded Aeroplan Visa credit cards that offer miles for
flights and other rewards. The Toronto-based bank said it also
expects to include a card for Canadian small business owners and
U.S. residents. ‘Solid Contribution’ Toronto-Dominion said the Aeroplan arrangement won’t have a
material impact on 2014 earnings, while making a “solid
contribution” in 2015. The bank said it doesn’t expect a
significant change in that outlook as a result of the proposed
deal. Andre-Philippe Hardy, an analyst at Royal Bank of Canada,
said in a note today that the Aerogold portfolio accounts for an
estimated 5 percent to 15 percent of CIBC’s annual earnings. Canadian Imperial didn’t match Toronto-Dominion’s June
conditional agreement with Aimia by an Aug. 9 deadline, saying
the accord wasn’t valid because it failed to comply with Aimia’s
obligation under an existing arrangement. The bank said it
retains the right to pursue legal options if it doesn’t reach a
deal with Toronto-Dominion and Aimia on the portfolio sale. Canadian Imperial’s two-decade partnership with Aimia made
the CIBC Aerogold Visa its most popular card. CIBC buys Aeroplan
miles from Aimia to give to cardholders on purchases, including
flights with Air Canada , the country’s biggest carrier. Aimia,
which owns and manages rewards programs including Nectar in the
U.K. and Italy , counts CIBC as its biggest partner. Air Canada Aeroplan began in 1984 as a promotional tool for business
travelers on Air Canada. CIBC Aerogold Visa was started in 1991,
according to Aimia. The card allows users to collect Aeroplan
points for travel on Air Canada and get goods from retailers. CIBC has been preparing to go it alone with its own card.
CEO Gerald McCaughey, 57, said on a May 30 conference call that
the bank is spending more than C$50 million ($48.6 million) over
four quarters to create an alternative card if the Aimia
agreement isn’t renewed. Canadian Imperial also has its Aventura
Gold Visa card, which it introduced in 2003 to offer lifestyle
and travel rewards with purchases. “CIBC is still faced with the C$50 million expenditure to
develop the new card offering, with additional marketing and
retention costs after the new cards are issued,” Barclays’s
Aiken said. “As well, the lost revenues from the potential
portfolio sale will still weigh on the bottom line.” To contact the reporter on this story:
Doug Alexander in Toronto at
dalexander3@bloomberg.net To contact the editors responsible for this story:
David Scheer at
dscheer@bloomberg.net ;
David Scanlan at
dscanlan@bloomberg.net ;
Christine Harper at
charper@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Martin Currie Reports First Loss in 132 Years on China
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Martin Currie Investment Management
Ltd., an Edinburgh-based fund manager , posted a loss last year
for the first time since it was founded in 1881 after clients
withdrew money amid misconduct at a China fund. The fund manager had a loss of 9.3 million pounds ($14
million) before tax, interest and other items compared with a
profit of 7.7 million pounds in 2011, Martin Currie said in an
e-mailed response to questions today. Revenue fell to 33.8
million pounds from 65.5 million pounds in 2011. Martin Currie was fined about $14 million in 2011 by
finance regulators in the U.S. and the U.K. for manipulating a
client to aid a hedge fund it managed. The firm advised The
China Fund Inc. to invest in its struggling hedge fund with a
“largely illiquid exposure” to a Chinese company, according to
the Securities and Exchange Commission. The scandal resulted in the departure of Chris Ruffle , a
fund manager that U.K. regulators said invested about 15 million
pounds on behalf of one client in an unlisted convertible bond. The firm’s assets under management have dropped to 5.5
billion pounds at the end of July from 10.1 billion pounds in
mid-2011. The company suffered “shrinkage” in its Chinese
business as a result, which added to “legacy issues of
investment performance ” in 2008 and 2009, Chief Executive
Officer Willie Watt said in the e-mail, without elaborating. “While we continued to manage costs carefully in 2012, it
would have been possible to reduce the loss and indeed be
profitable had we taken more aggressive action to control
costs,” Watt said. “However, this would have compromised both
our ability to deliver for our clients and our long-term
strategy.” Martin Currie has returned to profitability in the first
half of this year, and sales are up 50 percent from a year
earlier, according to the CEO. To contact the reporter on this story:
Tim Farrand in Edinburgh at
tfarrand@bloomberg.net To contact the editor responsible for this story:
David Risser at
drisser@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Hang Seng Bank Ex-Chairman Li Quo-Wei Has Died at Age 95
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Lee Quo-wei, the former chairman of Hong Kong’s Hang Seng Bank Ltd. (11) who fended off a bank run, helped peg the local currency to the U.S. dollar and rebuilt the reputation of the city’s stock exchange, has died. He was 95. Lee died on Aug. 10 at Prince of Wales Hospital in the city’s Shatin district, the unit of HSBC Holdings Plc (HSBA) said in an e-mailed statement on behalf of his family yesterday, without giving a cause of death. After joining the lender in 1946, Lee was among those who transformed Hang Seng into the second-largest Hong Kong-based lender from a money-changing shop founded 13 years earlier. Lee helped Hang Seng end a bank run in 1965 with a capital injection from Hongkong & Shanghai Banking Corp., later to become HSBC. Four years later he was part of the team that created the Hang Seng Index (HSI) , the city’s benchmark stock gauge. Lee was appointed executive chairman of Hang Seng Bank in 1983, according to a statement from current Chairman Raymond Ch’ien. He retired in 1998, becoming honorary chairman and later honorary senior adviser, Ch’ien said in the statement. After guiding Hang Seng Bank through the crisis in 1965, Lee helped steer Hong Kong through several periods of financial and political upheaval, receiving the Grand Bauhinia Medal , the city’s highest award, in 1997. Dollar Peg Lee in 1983 assisted Financial Secretary John Bremridge in establishing the city’s linked exchange rate system, which is still in place, the Chinese-language Apple Daily newspaper reported today. A member of Hong Kong’s legislative council and executive council, Lee met with China’s paramount leader Deng Xiaoping in 1984, as China and the U.K. were discussing the return of sovereignty over the city, Apple Daily said. Lee and other business and political leaders expressed Hong Kong people’s concerns that the handover would make them worse off, and were criticized by the mainland’s official Xinhua News Agency for obstructing negotiations, Apple Daily said. He was appointed by the Hong Kong government in 1988 to lead the city’s stock exchange, charged with increasing professionalism and transparency, Fung Bong-yin wrote in his book “A Century of Hong Kong Financial Development.” Lee “contributed greatly to the development of Hong Kong’s banking industry,” Norman Chan , chief executive of the HKMA, the city’s de-facto central bank and banking regulator, said in an e-mailed statement. Joseph Yam , Chan’s predecessor, called Lee his “most respected senior in the financial sector,” the South China Morning Post reported today. Lee is survived by his wife Helen and three children, Annie, George and Wendy; his son Philip predeceased him, according to the statement from his family. To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Australia Needs 299 to Win Fourth Cricket Test Against England
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Australia needs 299 runs to win the
fourth Ashes cricket Test after Ryan Harris took seven wickets
to limit host England to 330 all out at Chester-le-Street. James Anderson was out without scoring to leave England 298
runs ahead just before lunch on day four. Tim Bresnan ’s 45 and
Graeme Swann’s 30 not out helped push England close to a lead of
300 at the end of its innings. Ian Bell topscored with 113 runs
before being bowled by Harris, who took 7-117. The hosts started the day with a 202-run lead as they
seek the draw needed to win the series. Ian Bell resumed on 105 and Bresnan was on four. Bell faced
210 balls and hit 11 boundaries. Yesterday, Australia resumed on 222-5 and added 48 runs to
reach 270 in response to England’s 238, a lead of 32 runs. Stuart Broad finished with 5-71, while Swann and Anderson
took two wickets each yesterday. Australia’s top scorer, Chris
Rogers , was dismissed by Swann on 110, his first Test century. England retained the Ashes trophy with a draw in the third
Test after wins in the first two games of the five-match
contest. The best Australia can now do is draw the series 2-2. To contact the reporter on this story:
Christopher Elser in London at
celser@bloomberg.net To contact the editor responsible for this story:
Peter-Joseph Hegarty at
phegarty@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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U.S. Soybean Crop Seen Smaller as Midwest Rains Reduce Yields
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Soybean production in the U.S., the
world’s biggest producer and shipper, will be smaller than the
government forecast last month after excessive rain in May and
June reduced planted acreage and damaged yields. U.S. farmers will harvest 3.26 billion bushels this year,
compared with 3.42 billion (93.01 million metric tons) estimated
in July and last year’s drought-damaged crop of 3.015 billion,
the U.S. Department of Agriculture said today in a report after
completing its first surveys of farmers and fields. Analysts
surveyed by Bloomberg expected 3.357 billion. Harvested acreage will fall to 76.4 million acres, compared
with 76.9 million estimated in July and up from 76.1 million a
year earlier, the agency said. Yields were forecast at 42.6
bushels an acre compared with 43.7 bushels expected by analysts.
Last month, the government said yields would rise to a record
44.5 bushels, up from 39.6 bushels a year earlier. Reserves on Aug. 31, 2014, will total 220 million bushels,
up from this year’s projection of 125 million, the agency said.
The average estimate of 30 analysts surveyed by Bloomberg was
262 million bushels. Global output in the crop year that begins Oct. 1 will be
281.72 million tons, down from 285.89 million forecast last
month, the USDA said. Worldwide inventories at the end of the
marketing year will be 72.27 million tons, down from 74.12
million predicted in July, the USDA said. Traders expected
reserves to rise to 74.39 million, on average. Through Aug. 9, soybean futures on the Chicago Board of
Trade tumbled 28 percent in the past year to $11.8225 a bushel. To contact the reporter on this story:
Jeff Wilson in Chicago at
jwilson29@bloomberg.net To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Egypt Islamist Warns Against Moves on Pro-Mursi Protest Camp
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A leading Egyptian Islamist said
forcefully breaking up a sit-in by backers of ousted President
Mohamed Mursi could lead to a “massacre,” as an official said
no date has been set for action. “They will not be able to disperse the sit-in at Rabaa al-Adawiya except through a massacre of tens of thousands of
peaceful protesters,” Mohamed El-Beltagy, an official with the
Muslim Brotherhood’s Freedom and Justice Party, told Al
Jazeera’s Egypt channel, speaking of one of two sites in Cairo
where Mursi’s supporters have been camped out. “Instead of
Rabaa al-Adawiya there will be a hundred other squares where
open-ended sit-ins and peaceful resistance to this military coup
will start.” The sit-ins have emerged as a main point of contention in
the standoff between Mursi’s supporters, who vow to stay there
until he is reinstated, and the interim administration backed by
the army, which toppled the elected president on July 3.
Officials have urged protesters to leave and the cabinet has
authorized police to take action, raising fears of violence. Interior Ministry spokesman Hany Abdel Latif said today no
date has been set for a move against the sit-ins. While police
are ready to move, “the state is now exerting its utmost
efforts to end the crisis without a security intervention,” he
said by phone. “We hope that people respond.” Earlier this month, Prime Minister Hazem El Beblawi said
the government’s decision to clear the sit-ins was final and
asked protesters to leave. He made his comments shortly after
the interim presidency said international diplomatic efforts to
help ease the crisis have failed. The government says the sit-ins are a threat to national
security. At least 130 Mursi supporters have already been killed by
security forces since his ouster, which followed mass protests
against his rule. To contact the reporter on this story:
Mariam Fam in Cairo at
mfam1@bloomberg.net To contact the editor responsible for this story:
Andrew J. Barden at
barden@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Michigan Safety Net for Boomers Frays on Bankrupt Detroit
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There’s a made-in- Michigan quality to Art Reyes, a third-generation autoworker with a pension, retiree health benefits and income that enabled him to send three of his four children to college. He’s a product of the old Michigan, which gave birth to organized labor, worker protections and wages that propelled the middle class. That Michigan is almost gone. Now overseeing the nation’s largest municipal bankruptcy in Detroit, the state is at the forefront again, this time playing host to the unraveling of the homemade fabric that cloaked and comforted working families for generations. “I’m literally one of the last at my facility to have a defined pension and health care as a retiree,” said Reyes, 45, a General Motors Co. employee and president of UAW Local 651 in Flint. His unit has 800 members, down from 9,000 when he joined in 1991. Just as the bankruptcy of Detroit, the city that put the nation on wheels a century ago, is a symbol of urban decay, the effort to fix it through cost-cutting measures may set a stricter made-in-Michigan standard for the rest of the U.S. Related: The $1M Check That Sat in a Drawer: How Detroit Went Bust “Other major cities are not too far behind, and they are going to be watching,” said John Mogk, a professor at Wayne State University Law School in Detroit. “This could set the template.” Wild Swings While Michigan has ridden the wild swings of auto-industry fortunes for more than 75 years, it has struggled to recover from the economic swoon that began in 2008. The eighth-largest U.S. state, with 9.9 million people, Michigan was the only one whose population dropped in the last decade. It lost almost 550,000 jobs as unemployment stayed above 10 percent reaching a high of 14.2 percent from December 2008 through October 2011. Bonds from Michigan issuers have lost about 4 percent this year, more than the 3.8 percent drop for the broader $3.7 trillion municipal-debt market, according to Barclays Plc data. Only 11 states have had bigger declines, the data show. Union members made up 26 percent of the workforce in 1989, according to the Bureau of Labor Statistics. The number dropped to 16.6 percent last year, including the loss of 42,000 employees. While the predecessors of Chrysler Group LLC and GM that filed for bankruptcy in 2009 and emerged last year are now profitable, they’ve succeeded with smaller workforces and wage contracts for new hires cut by as much as half. Comeback Kid The auto industry recovery has helped Michigan’s economic growth exceed all states except North Dakota since 2010, according to the Bloomberg Economic Evaluation of States. “We’re the comeback state in the United States ,” Republican Governor Rick Snyder said in a July 26 interview. He also said Michigan wouldn’t bail out Detroit. The comeback involves a redefinition of a state whose identity remains tied to motor vehicles and the union members who build them. The United Automobile Workers was born in Michigan after the historic Flint sit-down strike of 1937. Along with two major transportation arteries leading into Detroit the Edsel Ford and Chrysler freeways is Interstate 696, named after Walter P. Reuther, who led the UAW from 1946 to 1970. Snyder, 54, the former chairman of the computer company Gateway Inc., was elected in 2010. The Republican-controlled legislature gave him the right to appoint emergency financial managers in distressed cities and school districts. That led to his selecting Kevyn Orr in March to oversee the operation of Detroit . Unraveling Net In a move packing a symbolic wallop, Snyder signed into law a measure prohibiting mandatory union dues in government workplaces, making Michigan the nation’s 24th and most unlikely right-to-work state. “Starting in the 1930s, Michigan defined itself as a state that provided security for working people that was unprecedented,” said Kevin Boyle, a Detroit native, history professor and author of “Arc of Justice: A Saga of Race, Civil Rights and Murder in the Jazz Age.” “Now that has unraveled. The question is what replaces that?” said Boyle, a professor at Northwestern University in Evanston, Illinois . Orr said he expects Detroit to emerge from bankruptcy by the fourth quarter of 2014. How the financial solution will affect wages of workers, pensions of retirees and services to 700,000 residents is up to the bankruptcy court . Orr has proposed eliminating defined-benefit pensions for new employees or those with less than 10 years’ service, and moving retirees to federal programs from a more generous city-paid plan. ‘Death Rattle’ Detroit’s population, which peaked at 1.85 million in 1950, has plummeted to about 700,000, according to Census data. Manufacturing jobs fell to fewer than 27,000 in 2011 from about 296,000 in 1950. About 60,000 properties in the city, or 15 percent of all parcels, were barren, and at least 78,000 buildings were vacant, including 38,000 deemed potentially dangerous, Orr said in a report this year. To some, the Detroit bankruptcy filing proves the economic formula that supported the state and its largest city no longer works. “We all suffered through the death rattle of big government, big business and big labor,” said Patrick Anderson, principal and chief executive officer of Anderson Economic Group, in East Lansing, Michigan. “It was a terrifically successful model from about 1920 to 1974. That model hasn’t worked for at least 20 years.” New Road The economic outlook for Michigan is one that will be hampered by a disproportionate share of baby boomers , manufacturing job losses and slow income growth, according to a report from the University of Michigan’s Institute for Research on Labor, Employment and the Economy. “We do appear to be emerging from the tunnel that was the most catastrophic period for the Michigan economy in our lifetime,” the report said, adding a caveat: “We won’t be traveling the same route as before, however, after exiting the tunnel.” Although Boyle said it’s difficult to determine how much Detroit’s emergence from bankruptcy will redefine the city and the state, whatever happens will likely spill beyond Michigan’s borders. “Detroit is such an extreme case,” Boyle said. “But watching from here out, it should provide an indication of the future for an awful lot of Americans.” To contact the reporter on this story: Tim Jones in Chicago at Tjones58@bloomberg.net To contact the editor responsible for this story: William Glasgall at wglasgall@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Facebook’s Sandberg Sells $91 Million in Shares After Surge
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Facebook Inc. (FB) Chief Operating
Officer Sheryl Sandberg sold about $91 million worth of shares
in the social network after the stock topped its $38 initial
public offering price for the first time since May 2012. Sandberg sold 2.37 million Facebook shares on Aug. 7, two
days after Facebook closed at a record high of $39.19, according
to a regulatory filing. With the latest sale she has sold more
than 7 million shares, or about 12 percent of her total, since
the IPO. The holdings include unvested restricted stock units as
of end-2012 and options. “There’s no denying that she has tremendous amounts of
equity skin in the game,” said David Larcker, a professor of
accounting at the Stanford Graduate School of Business in
Stanford, California . “I think it’s prudent for diversification
and other kind of purposes to take advantage of the value that
she has, and put it into alternative things.” Facebook stock has surged 44 percent this year, buoyed by
the company’s increasing success in generating revenue from
advertising on mobile devices. After one of the worst IPOs in a
decade, the world’s largest social network has focused on ads
for smartphones and tablets, and is now projected to reach sales
of more than $16 billion by 2017. The shares fell less than 1
percent to $38.22 at the close in New York today. Sandberg, who joined Facebook in 2008, has periodically
sold stock in the Menlo Park, California-based company since the
IPO last year. Tucker Bounds, a spokesman for Facebook, declined to
comment. In the past year, Sandberg has sold a total of 7.3 million
shares for a total value of $221.5 million, according to
InsiderScore.com, which monitors insider transactions. All of
the sales were completed under trading regulations that allow
executives to cash out a portion of their holdings when stocks
reach predetermined prices. Chief Executive Officer Mark Zuckerberg pledged in
September 2012 that he wouldn’t sell shares for at least a year. To contact the reporters on this story:
Lisa Rapaport in New York at
lrapaport1@bloomberg.net ;
Brian Womack in San Francisco at
bwomack1@bloomberg.net To contact the editor responsible for this story:
Pui-Wing Tam at
ptam13@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Abe Threatens Ministries With Power Shift Rivaling MacArthur
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The bureaucracy that oversaw Japan ’s postwar economic boom and a two-decade stagnation faces the biggest threat to its power since the U.S. occupation as Prime Minister Shinzo Abe seeks to seize control of ministries’ most senior appointments. Chief Cabinet Secretary Yoshihide Suga, 64, is leading the initiative, years after he got an education in civil servants’ sway when they frustrated his move as internal affairs minister to shift revenue between regions. The proposal in debate in the ruling Liberal Democratic Party would give the Cabinet Secretariat oversight of top bureaucrats’ promotions. The plan would open a path to accelerating change as Abe, 58, readies steps from strengthening the military to bringing Japan into the U.S.-led Trans Pacific Partnership trade bloc and paring agriculture regulation. Enacting it could usher an end to promotions influenced by tenure and support from bureaucratic peers in a system cemented over decades when politicians relied on civil servants to nurture exports and dole out public works. “When you want to change the direction of national strategy, it becomes very important to rein in the bureaucracy,” said Kenneth Pyle, a University of Washington professor of Asian studies in Seattle , who has been teaching Japanese history since the 1960s. “Abe realizes that if he’s going to succeed he has to be able to centralize policymaking.” Wielding Power The civil service wields power over the 92.6 trillion yen ($957 billion) budget, from approving construction projects to bestowing foreign aid. Seniority often trumps merit in deciding appointments, said Hiroaki Inatsugu, a professor at Waseda University’s Okuma School of Public Management, who has served on a panel advising Abe on the revamp. Success isn’t certain three similar attempts in the past five years unraveled as officials, along with some lawmakers, pushed back against change. The former ruling Democratic Party of Japan swept into office in 2009 on a platform that included a vow to wrest power from the ministries, only to end up enacting the first legislation to raise the national sales tax since 1997 something long sought by the Finance Ministry . DPJ lawmaker Hirohisa Fujii said in August 2009 it was “outrageous” that bureaucrats had a prime role in crafting the budget. Three years later, his colleague Yoshihiko Noda pushed the consumption-levy increase through parliament after backing the move while finance minister. The step triggered a split in the party and the collapse of Noda’s administration, setting up the December 2012 election that ushered Abe into office as prime minister for the second time. New Legislation “The new legislation will not work unless there is a strong disciplinarian in charge to control it,” said Jun Okumura, senior adviser to the Eurasia Group in Tokyo . “Regardless of that, Abe has been making some very interesting senior appointments to push through his agenda, starting with Bank of Japan governor Haruhiko Kuroda , who was plucked from outside the mainstream,” Jun said. The government dumped the head of Japan Post Holdings Co., a Finance Ministry insider selected days before Abe took office, and replaced him with Taizo Nishimuro, the former chairman and chief executive of Toshiba Corp. (6502) The new head of the Japan Coast Guard is the first chosen from within the ranks, rather than someone from the Transport Ministry. The Health and Welfare Ministry has its first female vice minister, a step in keeping with Abe’s push to put women in 30 percent of leadership positions. Suga’s Book “Bureaucrats will do anything they can to stop something new from happening,” Suga wrote in “A Politician’s Determination Dealing With Bureaucrats,” a book prompted by his ultimately successful battle to let people pay a proportion of their taxes to their home town. Bureaucrats said it would be “hard to define what someone’s home town is,” Suga wrote. Reducing opposition to the reform would aid Abe’s efforts to reshape the nation’s economy, as his administration prepares legislation on industries from health care to agriculture and energy. The bill on appointing the top officials is also planned this year. “Political control of the bureaucracy will strengthen sharply, as incentives for civil servants shift to serving the government, rather than the personnel departments of their own agencies,” Robert Feldman , head of Japan economic research at Morgan Stanley MUFG Securities Co. in Tokyo, wrote in a note to clients last month. Ending Deflation The Abenomics campaign to end 15 years of deflation through monetary easing, stimulus spending and structural change helped drive the Topix index of stocks up about 44 percent since the December election. The yen has fallen about 14 percent against the U.S. dollar in that period, helping exporters’ profits. Abe’s ruling coalition strengthened its position last month by winning a majority in the upper house of the Diet, enabling passage of legislation without opposition support. Abe’s bigger source of concern is now internal dissent something he faces with the civil-service appointment proposal. “Resistance comes from both bureaucrats and lawmakers,” LDP deputy policy chief, Yasuhisa Shiozaki, who has pushed for change since Abe’s first administration in 2006-2007, said in an interview last month. “The details are yet to be decided and there are extremes of opinion on both sides.” Cabinet’s Power Among opponents within the ruling LDP is former Transport Minister Makoto Koga, who says “I don’t think the cabinet should have this power I think each minister should have the right to pick the top officials, as in the past. If you’re not right in the thick of things, you won’t know what abilities a person has and what experience they have built up as a bureaucrat. Will you be able to pick the right person every time?” While criticized for inflexibility and infighting between ministries, Japan’s bureaucrats are generally dedicated, often working through the night to brief ministers, said Inatsugu at Waseda. “It’s not about the money. They could get more in the private sector. It’s seen as a pure way of life,” he said of their motivation. The bureaucracy saw some change during the American occupation led by General Douglas MacArthur, when tests for the civil service were altered “to break the near-monopoly of Tokyo University graduates and to facilitate the entrance of those with more heterogeneous preparation,” political analyst Kazuo Kawai wrote in his 1960 book “Japan’s American Interlude.” New Agency A new agency, the National Personnel Authority , was established to oversee recruitment and training, and set standards for appointments and dismissals. Even so, the bureaucracy “largely maintained its traditional position of importance,” Kawai wrote. During the 1960s economic boom, bureaucrats honed the practice of gyosei shido, or administrative guidance. Ministry for International Trade and Industry staff would give direction to manufacturers, and the Finance Ministry would offer the same to banks, according to Gary Alinson in his 2004 book “Japan’s Postwar History.” MITI also controlled the allocation of foreign exchange and imported technology, according to Alinson. Bureaucratic influence also was cemented through the practice of amakudari, or descending from heaven, when senior career staffers would retire in their 50s to take top posts in public corporations or private businesses, according to “Japan: A Country Study,” published by the Federal Research Division of the U.S. Library of Congress in 1994. Others went into politics, with most of the LDP’s postwar prime ministers until the late 1980s being ex-civil servants, according to the study. Prime Minister Abe’s grandfather Nobusuke Kishi rose through the ranks of the Ministry of Commerce and Industry which became MITI, and is now known as the Ministry of Economy, Trade and Industry before entering politics and serving as prime minister in the late 1950s. This background may offer Abe perspective on how to approach bureaucratic reforms, making him less likely to adopt a directly confrontational stance, Pyle said. Civil-service power has waned in recent decades from its heyday, with the rise of LDP policy groups and repeated efforts by administrations to strengthen the role of politicians. “Bureaucrats can be obstructive, but I don’t think anyone in Japan worries that they hold all the power these days that’s no longer a concern,” said Takeshi Sasaki, a former president of Tokyo University who served on bureaucratic reform panels under Prime Minister Junichiro Koizumi and Abe during his first stint as premier. Top Appointments Even so, the proposal to wrest top appointments away from the ministries may require politicians relying on bureaucrats themselves to write the legislative language for the change. The impact of past reform such as attempting to reduce the sway of the Finance Ministry over the annual budget process through a new panel under the Cabinet Office has been limited, according to political scientist Koichi Nakano . “If the move to centralize appointments under the prime minister’s office were to succeed, it would be the biggest blow to bureaucratic power since the end of the U.S. occupation,” said Nakano, a professor at Sophia University in Tokyo. “This legislation will doubtless also be opposed by all the ministries. I think it will end in compromise.” To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net ; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Snooping Garbage Bins in City of London Ordered to Be Disabled
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The City of London ordered its supplier of space-age trash cans to immediately cease using technology in the bomb-proof bins that collects data from mobile devices of people walking in the capital’s Square Mile. “Data collection even if it is anonymized needs to stop,” the City of London Corp., which acts as the local government authority in the financial district, said today in a statement on its website. The corporation asked supplier Renew to stop collecting data and referred the issue to the Information Commissioner’s Office, an independent body set up by the U.K. government to enforce data privacy. Renew Chief Executive Officer Kaveh Memari said the reaction to the “Orb” technology in the Renew Pod bins is “understandable,” though he defended the technology as merely a “glorified counter” of people. “During our current trials, a limited number of pods have been testing and collecting anonymized and aggregated MAC addresses from the street and sending one report every three minutes concerning total footfall data from the sites,” he said in a statement on the company’s website . “It is very much like a website,” Memari said. “You can tell how many hits you have had and how many repeat visitors, but we cannot tell who, or anything personal about any of the visitors.” Technology in the bins “detects smartphones by proximity, speed, duration and manufacturer,” London-based Renew said in a June press release. “The device has been installed to measure variables in market share between mobile handheld providers within the City’s Square Mile,” it said. Shopping Habits The City’s actions came after the Independent newspaper reported that Renew’s bins are tracking passers-by, intending to study shopping habits in order to target advertising. “Irrespective of what’s technically possible, anything that happens like this on the streets needs to be done carefully, with the backing of an informed public,” the City said in today’s statement . The bins, which have LCD screens with public information and advertising, were first installed in the run-up to the 2012 Olympics. The trash barrels cost 30,000 pounds ($46,500) each to install, according to the Independent. Further development will depend on “people being comfortable with interactive technology,” CEO Memari said. The company will discuss additional advancements publicly, he said. “A lot of what had been extrapolated is capabilities that could be developed and none of which are workable right now,” he said. To contact the reporter on this story: Rachel Savage in London at rsavage10@bloomberg.net To contact the editor responsible for this story: David Risser at drisser@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Samsung Losses to Apple Give IPhone Maker Edge in Talks
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Apple Inc. (AAPL) ’s patent-infringement victory over Samsung Electronics Co. could go far in bolstering its claim of copying and providing an advantage in any settlement between the world’s two top smartphone manufacturers. The U.S. International Trade Commission on Aug. 9 said Samsung infringed two Apple patents and issued an order banning imports of products using the iPhone maker’s multitouch features and headphone jack detection. President Barack Obama ’s administration could overturn the import ban on public policy grounds, as it did Aug. 3 in an order against older iPhones. “These results give Apple a bit of an edge in the settlement negotiations that are going on,” said Susan Kohn Ross , a lawyer with Mitchell Silberberg & Knupp in Los Angeles . “Assuming this order becomes final, the question that arises is how important are these models of phones and other electronic gadgets to the overall portfolio of Samsung products.” The companies are spending hundreds of millions of dollars in legal fees for some sort of victory that gives them the upper hand in a final, negotiated solution. Apple, which initiated the legal fight in 2011, is seeking to limit the Galaxy maker’s increasing share of the U.S. smartphone market, where Apple is No. 1 and Samsung No. 2. “We now have enough court decisions that pretty soon the parties are going to understand their relative strengths against each other and their weaknesses against each other,” said Jeff Lewis of Patterson Belknap Webb & Tyler in New York . Four Continents Apple filed its first patent-infringement case against Samsung in April 2011, saying the Korean company “has chosen to slavishly copy Apple’s innovative technology.” Samsung responded a week later with its own patent claims, and the fight has escalated into a legal battle on four continents with no clear winner and no end in sight, despite negotiations that have included direct talks between chief executives of both companies. At stake is an increased share of a smartphone market that rose 34 percent to $293.9 billion last year, according to data compiled by Bloomberg. At the same time, the average price of a smartphone has plunged to $375 from $450 since the beginning of 2012, IDC estimates. Samsung rose 0.2 percent to 1,232,000 in Seoul, paring this year’s decline to 19 percent. Apple rose 1.3 percent to $460.26 at 9:44 a.m. in New York, and had dropped 15 percent this year before today. “Investors are turning away from legal issues because it hardly has any impact on their businesses any more,” said Marcello Ahn, a Seoul-based analyst at Quad Investment Management. “What they really want to find out is where Samsung and Apple will make cash over the next two years or so.” Innovation Fatigue Cupertino, California-based Apple has claimed that many of the phones running on Google Inc. (GOOG) ’s Android operating system copied unique features of the iPhone, introduced in 2007. Its first suit, in March 2010 against Taiwan’s HTC Corp. (2498) , resulted in a settlement that included a pledge by HTC that it wouldn’t make “cloned” copies of Apple products. In the global marketplace, Android has grown to become the most popular operating system, running 80 percent of the almost 230 million smartphones sold worldwide in the second quarter, compared with Apple’s 14 percent, according to an Aug. 1 report by Boston-based researcher Strategy Analytics . Samsung and Apple both disappointed analysts in their most recent earnings. Samsung missed estimates as market saturation curbed sales growth for its flagship Galaxy S4, and Apple had to rely on sales of its iPhone 4 including versions that were almost blocked last week to top estimates. Finding new, exciting things to add to the phones is getting harder, said Will Stofega , program director at researcher IDC in Framingham, Massachusetts . New Measures “The designs and capabilities of some of these premium devices you’re really scratching your head to find something new,” Stofega said. Samsung, Asia’s biggest technology company, sells about one of every three smartphones in the world. The Suwon, South Korea-based company applauded the decision clearing it of infringing Apple’s design patents, which would have been harder to work around. “Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners,” said Adam Yates , a spokesman for Samsung. “We have already taken measures to ensure that all of our products will continue to be available in the United States .” Samsung’s three biggest markets are China , North America and Europe , Kim Young Chan, a Seoul-based analyst at Shinhan Investment Corp., said in a telephone interview. U.S. Verdict “Samsung’s market share in the U.S. was the lowest among those markets, but it has been on the rise because there were no new products released by Apple during the first half,” Kim said. “When the new models come out in late third quarter or in the fourth quarter, the market rivalry will again intensify, and it won’t be as easy as before for Samsung to extend its market share.” Apple won a $1 billion jury verdict last year in California , though a new trial was ordered to determine damages on about half of the award. Samsung won an ITC import ban against Apple, only to have it vetoed by the Obama administration on public policy grounds regarding patents on fundamental technology that’s used throughout the industry. That veto and Aug. 9 verdict lowered Samsung’s bargaining power and made it even harder to bring Apple back to the negotiation table, SU Intellectual Property patent lawyer Jung Dong Joon said. “The latest two results have pushed Samsung into a far corner despite the more than two-year-long legal fight,” Jung said. “After seeing Samsung being smacked on the face two times straight, it will only help Apple keep its high-handed posture in any negotiation talks.” Apple Bullets For both reputation purposes and settlement negotiations, hindering the other company’s sales is often more important than money. The $1 billion California verdict equals one-seventh of Samsung’s second-quarter profit and less than two weeks’ worth of iPhone sales. Even though Samsung “has successfully convinced consumers that all this business about copying is vastly overdone,” that may not help it in the legal arena considering how the two types of patents are treated, said Carl Howe , an analyst with Boston-based market researcher Yankee Group . “My guess is Apple will amass a lot more bullets before it’s over,” Howe said. “Samsung’s bet is that at the end they’ll have to pay, but, in the meantime, they’ll have amassed a lot of money and mindshare and market share. And that’s why Apple is insisting on import bans.” The Apple ITC case against Samsung is In the Matter of Electronic Digital Media Devices, 337-796, and Samsung’s case is In the Matter of Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, 337-794, both U.S. International Trade Commission (Washington). The Apple appeal is Apple Inc. v. Samsung Electronics Co. (005930) , 13-1129, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California ( San Jose ). To contact the reporters on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net ; Dina Bass in Seattle at dbass2@bloomberg.net To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net ; Michael Tighe at mtighe4@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Commercial Papers Reported: India Money Markets
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Following is a table showing commercial papers
reported by Companies. The data has been provided by the Fixed Income Money
Market & Derivatives Association of India . ISIN Security Mty Avg Px Avg Yld LT Yld Trds Trds(Crs) 12:10 GMT 12-Aug-13
INE001A14IS8 HDFC LTD 4 99.88 11.24 11.00 5 550.00 16AG13
INE523E14JA9 L T FIN LTD 18 99.43 11.58 11.50 6 315.00 30AG13
INE020B14185 RURAL ELEC CORP 353 91.09 10.11 10.13 4 277.00 31JL14
INE001A14IU4 HDFC LTD 11 99.65 11.50 11.50 3 250.00 23AG13
INE514E14ES1 EXIM BANK 7 99.79 11.15 10.75 2 250.00 19AG13
INE148I14AF4 INDIABULL 10 99.69 11.35 11.35 1 150.00 22AG13
INE580B14AE6 GRUH FIN LTD 44 98.66 11.28 11.28 1 145.00 25SP13
INE438A14HM7 APOLLO TYRES 227 93.16 11.81 11.81 1 100.00 27MR14
INE158O14129 IDFC PRIMARY LTD 8 99.75 11.64 11.64 1 100.00 20AG13
INE289B14426 GIC HSG FIN 2 99.93 12.84 12.84 1 100.00 14AG13
INE860H14LQ0 ADITYA BIRLA FIN 4 99.87 11.75 11.75 2 100.00 16AG13
INE114A14857 SAIL 39 98.88 10.63 10.63 1 55.00 20SP13
INE140A14423 PIRAMAL ENTERPR 6 99.80 12.10 12.10 1 50.00 19AG13
INE148I14AG2 INDIABULL 14 99.57 11.35 11.35 1 50.00 26AG13
INE148I14AH0 INDIABULL 16 99.50 11.35 11.35 1 50.00 28AG13
INE091A14261 NIRMA LTD 4 99.88 11.29 11.29 1 50.00 16AG13
INE660A14IW3 SUND MF 17 99.46 11.75 11.75 1 50.00 29AG13
INE691I14AD8 L&T INFRA. 18 99.42 11.75 11.75 1 50.00 30AG13
INE763G14932 ICICI SEC 2 99.93 12.03 12.03 1 50.00 14AG13
INE860H14LV0 ADITYA BIRLA FIN 14 99.55 11.75 11.75 1 50.00 26AG13
INE909H14DG3 TATA MOTORS FIN 130 96.15 11.25 11.25 1 50.00 20DC13
INE301A14934 RAYMOND LTD 8 99.75 11.30 11.30 1 40.00 20AG13
INE233A14BQ6 GODREJ IND 29 99.14 10.91 10.91 1 25.00 10SP13
INE720G14692 JINDAL POWER LTD 8 99.75 11.30 11.30 1 25.00 20AG13
INE532F14LA3 EDELWEISS FIN 16 99.44 12.95 12.95 1 25.00 28AG13
INE055A14811 CENTURY TEX 1 99.97 11.25 11.25 1 25.00 13AG13
INE013A14MY3 RELIANCE CAP 67 97.69 12.88 12.88 1 25.00 18OT13
INE016A14AD5 DABUR INDIA LTD 21 99.34 11.50 11.50 1 25.00 02SP13
INE148I14AR9 INDIABULL 7 99.78 11.35 11.35 1 25.00 19AG13
INE140A14AC5 PIRAMAL ENTERPR 16 99.50 11.50 11.50 1 25.00 28AG13
INE121A14IB0 CHOLA 29 99.12 11.23 11.23 1 25.00 10SP13
INE909H14DO7 TATA MOTORS FIN 8 99.74 11.75 11.75 1 25.00 20AG13
INE916D14OQ3 KOTAK PRIME 162 95.14 11.50 11.50 1 19.00 22JN14
INE523E14JJ0 L T FIN LTD 53 98.29 11.95 11.95 1 10.00 04OT13
INE148I14AU3 INDIABULL 44 98.57 12.05 12.05 1 7.00 25SP13
INE140A14AP7 PIRAMAL ENTERPR 121 96.02 12.50 12.50 1 5.00 11DC13
INE094O14118 DAIMLER FIN 42 98.59 12.46 12.46 1 4.00 23SP13
INE148I14AW9 INDIABULL 22 99.34 11.01 11.01 1 2.00 03SP13
INE540L14264 ALKEM LABS LTD. 46 98.53 11.82 11.82 1 2.00 27SP13
INE597H14AD9 TGS INV & TRADE 42 98.53 12.93 12.93 1 2.00 23SP13
INE804I14EO6 ECL FIN LTD 14 99.53 12.44 12.44 1 1.00 26AG13
INE244L14057 INDIABULLS INFRA 43 98.46 13.30 13.30 1 1.00 24SP13 Contributed via: Bloomberg Publisher WEB Service Provider ID: ab1dfb24914d4eea8b09f48cfb4d0311
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2013-08-12 00:00:00+00:00
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nan
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Holder Mandates Changes to Sentences for Some Drug Charges
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U.S. Attorney General Eric Holder has ordered changes across the Justice Department to eliminate what he called “draconian” mandatory minimum sentences for certain non-violent drug offenders. Holder, in a speech today in San Francisco , laid out proposals to reduce the U.S. prison population. He questioned the effectiveness of the more than 40-year-long “war on drugs” and announced support for bipartisan efforts in Congress and at the state level to move away lengthy sentences in favor of other punishments. “We must face the reality that, as it stands, our system is in too many respects broken,” Holder said at the American Bar Association ’s annual conference. “The course we are on is far from sustainable.” The Justice Department has been working on a review of the U.S. criminal justice system at Holder’s direction since the start of this year. Lawmakers in Congress have sought to identify ways to reduce a prison system that held more than 1.5 million people in 2012 at federal, state and local levels. Speaking in April to the National Action Network, a civil rights advocacy group, Holder contended that mandatory minimum sentences often “breed disrespect for the system and are ultimately counterproductive.” Sidestepping Sentences U.S. prosecutors will now sidestep the statutorily required mandatory minimums by charging low-level, nonviolent offenders “with offenses for which the accompanying sentences are better suited to their individual conduct,” Holder says in his prepared remarks. Senators Richard Durbin of Illinois , the chamber’s No. 2 Democrat, and Mike Lee , a Utah Republican, introduced a bill this month to give federal judges more discretion in sentencing non-violent drug offenders. Senate Judiciary Committee Chairman Patrick Leahy , a Vermont Democrat, and Senator Rand Paul, a Kentucky Republican, in March introduced legislation that would give federal judges increased discretion with all federal crimes subject to mandatory minimum penalties, providing authority to use sentencing flexibility under certain conditions. In the House, lawmakers have put together a task force to investigate and hold hearings on “over-criminalization” in the U.S. and release a report on their findings. Prison Population While the total U.S. prison population declined 1.7 percent in 2012 from 2011, the federal prison population increased by approximately 1,500. Durbin, in a statement today, said that the mandatory minimum laws “played a huge role in the explosion of the U.S. prison population.” In a Senate floor speech last month, Leahy attributed the significant growth of the prison population over the past two decades something that cost more than $80 billion in 2010 in part to the proliferation of mandatory minimum sentences. The federal prison population has grown by almost 800 percent since 1980 and currently stands at more than 219,000. “This one-size-fits-all approach to sentencing never made us safer, but it has cost us plenty,” Leahy said. Holder cited both bills in his remarks today, saying they would “save our country billions of dollars” and he would work with lawmakers to “refine and advance” the legislation. Sequestration Cuts Holder’s focus on federal savings comes as all branches of government are facing pressure from the mandated automatic budget cuts, known as sequestration, that began in March. The Justice Department ’s annual report to the U.S. Sentencing Commission, released in July, pointed to the combined effects that growing prison costs and sequestration would have on the criminal justice system across the U.S., including fewer federal and state partnerships, diversion programs and investigations. “If the current spending trajectory continues and we do not reduce the prison population and prison spending, there will continue to be fewer and fewer prosecutors to bring charges, fewer agents to investigate federal crimes,” Jonathan J. Wroblewski, the director of the Office of Policy and Legislation in the department’s criminal division, said in a July 11 letter to the commission. New Guidelines Holder has directed U.S. Attorney’s offices across the country to develop new guidelines for determining when federal charges should be filed, with a focus on targeting “the most serious offenses” and “the most dangerous criminals.” The Justice Department is in the process of identifying and implementing new diversion programs an effort to find alternatives such as drug treatment and community service designed to halt the flow of individuals into the prison population. Holder is seeking to capitalize on state-level efforts in places such as Kentucky, Texas and Arkansas that regularly vote against Democrats for support and ideas, according to his remarks. The Justice Department will expand the federal compassionate release framework, something that began earlier this year when the Bureau of Prisons changed the criteria for non-violent inmates facing serious medical problems. The framework will now be expanded for elderly inmates who didn’t commit violent crimes and have served significant portions of their sentences. “The bottom line is that, while the aggressive enforcement of federal criminal statutes remains necessary, we cannot simply prosecute or incarcerate our way to becoming a safer nation,” Holder said. To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Merkel Economy Scorecard Shows Steinbrueck Struggle
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German economic figures show the
uphill struggle Peer Steinbrueck faces to unseat Chancellor
Angela Merkel in Sept. 22 elections. Since Merkel succeeded Gerhard Schroeder in 2005,
unemployment has dropped to near a post-reunification low, the
budget deficit has been virtually eliminated and workers have
more money in their pockets. Investors are accepting negative
real returns to lend money to the federal government. All that is serving Merkel’s bid for a third term. Her
Christian Democratic Union bloc leads Steinbrueck’s Social
Democrats by about 17 points in the polls. Even after eight
years of her rule and her decision to bail out struggling euro
nations to keep the 17-nation currency union intact, Germans see
little need for a new leader, says Manfred Guellner, director of
the Berlin-based pollster Forsa. “For the man on the street there’s every reason to feel
good and that of course works always to the benefit of the
incumbent,” Commerzbank AG chief economist Joerg Kraemer said
by telephone. “Real wages are rising and have unlocked consumer
spending.” Germany’s 10-year government bond yield will be 1.76
percent by the last quarter of this year from 3.31 percent in
2005 and 3.38 percent in 2009, according to the weighted average
of 24 forecasts compiled by Bloomberg. The 10-year note now
yields about 1.8 percent. Inflation will remain below 2 percent
through 2014, according to the median of 84 estimates collected
by Bloomberg. Shrinking Deficit Declining borrowing costs, along with spending curbs, have
helped Merkel shrink the budget deficit. The shortfall exceeded
the European Union ceiling in 2005 when it stood at 3.3 percent
of gross domestic product. It fell to 3.1 percent in 2009, even
amid an economic contraction. It’s forecast to drop to 0.2
percent this year according to the median of 32 predictions. “The government has overachieved on some key fiscal
targets,” Fitch Ratings said Aug. 7 when it affirmed Germany ’s
rating at AAA with a stable outlook and said the country’s debt
as a percentage of the economy has peaked. “Germany has all the
ingredients of a declining public debt path.” The country’s unemployment rate will fall to 6.9 percent
this year compared with 8.1 percent in 2009, when Merkel was in
a so-called grand coalition with the Social Democrats, according
to Bloomberg-compiled forecasts. It was 11.7 percent the year
she took over from Schroeder. Merkel’s decision in 2009 to extend labor-cost subsidies to
businesses hit by collapsing orders allowed companies to hold on
to skilled workers and supported a recovery from the deepest
slump since World War II. DAX Gains Germany’s benchmark DAX (DAX) index returned more than 60 percent
since the end of Schroeder’s rule, compared with losses for
France ’s CAC 40 (CAC) and for Italy ’s FTSE MIB (FTSEMIB) gauge. Net wages grew 3.6 percent year-on-year on average per
quarter during Merkel’s current term, compared with 0.3 percent
during Schroeder’s final three years. Hit by a two-year recession in the euro region that curbed
its exports, Germany’s economy will expand 0.3 percent this
year, the Bundesbank said June 7. Germany will grow 1.5 percent
in 2014, in line with its potential, the central bank said. “The economy of Germany is dependent on exports and data
we’ve got from its key markets suggested the country is doing
fine in terms of growth,” said Soeren Moerch, the head of
fixed-income trading at Danske Bank A/S (DANSKE) in Copenhagen. “If data
on growth and sentiment maintains its momentum, Merkel will
probably have a good chance of winning the election.” Rising Confidence German 10-year bonds fell today after the ZEW Center for
European Economic Research said its index of investor and
analyst expectations rose to 42 this month, the highest level
since March. The yield rose 8 basis points to 1.78 percent at
1:35 p.m. in Berlin. Six weeks before the election, support for Merkel’s
Christian Union bloc fell one point to 40 percent, according to
a weekly Forsa poll for Stern magazine and RTL television.
Backing for the SPD rose a percentage point to 23 percent, with
its Green party ally also up a point at 14 percent. Merkel’s
Free Democratic Party coalition partner held at 5 percent while
the Left Party dropped one point to 7 percent. The SPD’s election manifesto calls for a “new social
balance” and says it’s Merkel’s fault that the lesser qualified
face growing risks of poverty. Steinbrueck said in an Aug. 8
speech in Hamburg that he would act quickly to implement a
statutory minimum wage and put a brake on labor leasing. The SPD also aims to raise the top tax rate to 49 percent
from 42 percent progressively from 64,000 euros ($85.357) to
100,000 euros, whereby those earning 100,000 euros or more per
year would pay 49 percent income tax. Tax Plans Merkel’s Christian Union bloc has rejected tax increases
and vowed instead to reduce the effects of “bracket creep”
that occurs when wage gains subject workers to higher tax rates.
It would also leave it to collective bargaining partners to set
minimum wages in their respective sectors and plans to reduce
government debt gradually to 60 percent of GDP from around 82
percent last year. Whereas former SPD chancellor Helmut Schmidt was an
economic expert and Schroeder had the clout of an economic “man
of action,” voters see Steinbrueck as a “financial
technocrat,” said Guellner. “There is no appetite for a change in government because
there is a lack of faith in the SPD’s abilities,” Guellner said
Aug. 9 by telephone. “Steinbrueck isn’t seen as somebody who
could do the job any better than the incumbent chancellor.” To contact the reporter on this story:
Rainer Buergin in Berlin at
rbuergin1@bloomberg.net To contact the editor responsible for this story:
James Hertling at
jhertling@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Jason Dufner’s PGA Championship Win Boosts CBS Ratings by 13%
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Jason Dufner’s victory in the PGA
Championship boosted television ratings in the biggest U.S.
markets by 13 percent for CBS. The CBS Corp. (CBS) unit said yesterday’s telecast drew a 4.4
overnight rating in major markets, compared with 3.9 for Rory
McIlroy’s victory last year in the final major tournament of the
men’s golf season. Top-ranked Tiger Woods and No. 2-ranked Phil Mickelson
played earlier in the day after poor showings in the first three
rounds. Dufner won his first major title by two strokes over Jim
Furyk at Oak Hill Country Club near Rochester, New York. To contact the editor responsible for this story:
Larry Siddons at
lsiddons@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Abe’s Japan Is Blind to Scary Nuclear Reality
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Forget Abenomics. Ignore Shinzo Abe’s efforts to rejuvenate Japan ’s diplomatic and military clout. Look past the quest to rewrite the constitution. History will judge this prime minister by one thing alone: what he did, or didn’t do, to end the worst nuclear crisis since Chernobyl. It’s mind-boggling how disengaged Japan’s leaders have been since their “BP moment” the March 2011 near-meltdown at the Fukushima Dai-Ichi nuclear plant. Abe’s predecessors Naoto Kan and Yoshihiko Noda virtually ignored the radiation leaks and spent fuel rods sitting 135 miles (217 kilometers) from Tokyo. In December, Abe became the third prime minister to pretend all was well at Fukushima after a devastating earthquake and tsunami that flooded the plant. The official line on Fukushima is depressingly familiar: The folks at Greenpeace International are trouble makers bent on scaring Japanese; the alarmists at the World Health Organization should mind their own business; the international news media needs to discover decaffeinated coffee. Nuclear power is clean, safe and most important, now that a weakened yen has driven up energy bills cheap. Reality made an inconvenient reappearance last week. Mounting evidence that radioactive groundwater is gushing into the Pacific Ocean forced Abe to admit that plant owner Tokyo Electric Power Co. Inc. isn’t up to the task of containing the disaster. Under international pressure, he pledged the government would “make sure there is a swift and multifaceted approach in place” to stop the leak. Abe’s Seriousness Pardon me for doubting Abe’s seriousness. It’s not just the sketchiness of the suggested remedy: freezing the ground around Fukushima, a tactic scientists fear will prove inadequate. It’s not the fact that nuclear regulators remain more focused on restarting reactors than on neutralizing the one that’s polluting North Asia. It’s not that no one at Tepco has gone to jail or been shamed. (BP Plc’s former chief executive officer, Tony Hayward , was fired and sued over the 2010 oil spill in the Gulf of Mexico .) Tepco is leaking something far worse and lying through its teeth. Yet it hasn’t been nationalized, and its executives remain in their offices. No, my real worry is that official Japan is still stuck on “how” Fukushima become synonymous with Chernobyl, not “why” it happened or “what” it means for the world. The “how” is the stuff of the gods, according to conventional wisdom. The event Japanese call 3/11 was an act of the heavens that no one could have foreseen. There was no way to plan for it, no way Tepco could have known not to place all of its backup generators in the same place underground, just steps away from the sea in a tsunami-prone nation. This storyline ignores the “why.” Fukushima was a preventable, man-made disaster stemming from the worst conformist tendencies of Japan Inc. Look, if executives got together globally and created a Hall of Shame for the greedy, corrupt and clueless along them, Tepco would deserve its own wing. All Enron Corp. and Bernie Madoff did was manufacture fake profits. Tepco fudged its safety record and put the lives of tens of millions of people at risk. But it takes a village to breed such a corrupt and dangerous system. Tepco got away with its negligence for years because of the cozy ties between power companies and the regulators, bureaucrats and researchers that champion the industry the “nuclear village.” Backed by its connections, money and control of the media, Tepco has brazenly continued to cook its radiation data for the last two and a half years. It matters little that the government is finally commandeering Tepco’s cleanup: The government is Tepco. Dollar Signs Abe’s Liberal Democratic Party is blinded by dollar signs. In May, Abe visited Turkey to help close a $22 billion deal for Japan to build nuclear power plants in that seismically active nation. That kind of cash makes power companies virtually untouchable. And it raises doubts about Tepco’s admission that 300 tons of water laced with strontium and other particles is pouring into the Pacific each day. One can’t help but wonder if the leak is of a much greater magnitude. It’s time for the government to face reality and do six things: decommission Fukushima; invite independent auditors from overseas to assess the magnitude of the damage; admit the surrounding area might not be safe for inhabitants, fishing or farming for decades; scour the world for innovative solutions; break up the nuclear village; and level with the Japanese about cleanup costs that will be in the hundreds of billions of dollars. That brings us to the “what.” Fukushima is a growing embarrassment for Japan on the international stage. Oceans don’t have boundaries. Radioactive traces have been found in bluefin tuna not to mention on secondhand cars and auto parts imported by Russia from Japan. Another earthquake a live possibility could damage Fukushima anew or take out another reactor between now and the 2020 Summer Olympics that Tokyo hopes to host. The world won’t give Japan a pass twice on what would have been a perfectly preventable disaster. Analysts are rating Abe on his success in cleaning up Japan’s finances. Posterity will judge him on whether he cleaned up the mess Tepco and the nuclear village have created. (William Pesek is a Bloomberg View columnist.) To contact the writer of this article: William Pesek in Tokyo at wpesek@bloomberg.net . To contact the editor responsible for this article: Nisid Hajari at nhajari@bloomberg.net .
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2013-08-12 00:00:00+00:00
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nan
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Gatwick Airport July Traffic Figures: Summary
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Following is a summary of the July
traffic figures from Gatwick Airport: To contact the reporter on this story:
Mark Evans in London at mevans8@bloomberg.net To contact the editor responsible for this story:
Marco Babic at mbabic@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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QSC Gains as Commerzbank Sees Change of Strategy On Track
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QSC AG (QSC) rose to a 2 1/2-year high
after Commerzbank AG said the German company’s second-quarter
earnings indicate that a strategy shift to providing information
technology from operating telecommunications is still on track. QSC increased as much as 11 percent to 3.35 euros, the
highest intraday price since January 2011, and traded up 10
percent at 12:58 p.m. in Frankfurt, valuing the company at 412
million euros ($548 million). Volume was almost quadruple the
three-month daily average. Second-quarter earnings , before interest, taxes,
depreciation and amortization rose 6.1 percent from a year
earlier to 19.2 million euros, the Cologne-based company said in
a statement today, reiterating its forecasts for 2013. That beat
the 18.7 million-euro average of six analyst estimates compiled
by Bloomberg. New orders at the direct-sales unit jumped 2.5
times to 30.5 million euros. The figures “indicate sound execution of QSC’s transition
path” to information communications technology, Heike Pauls, a
Frankfurt-based analyst at Commerzbank, said in a report today.
“Taken together with a sound order entry, results seem to
support our view of returning headline growth as of next year”
after revenue fell in the first two quarters of 2013. She
recommends buying the stock, and estimates the share price will
reach 3.40 euros. QSC bought German companies IP Partner AG and INFO AG in
2011 to help with its strategy move to activities including
cloud-computing services. To contact the reporter on this story:
Weixin Zha in Frankfurt at
wzha2@bloomberg.net To contact the editor responsible for this story:
Angela Cullen at
acullen8@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Tepco Doubles Coal Consumption in July After Starting New Units
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Tokyo Electric Power Co. (9501) , Japan ’s
biggest power company by generation capacity, nearly doubled its
coal consumption in July from a year earlier after starting new
units that use the cheaper fuel. The utility, known as Tepco, used 745,000 metric tons of
coal last month, the most since at least April 2003 , the
earliest data available on the company’s website. Crude and fuel
oil consumption fell by about 18 percent and 30 percent,
respectively, the figures show. Tepco has been increasing its use of coal since it began
test operations of two coal-fired units, with a combined
capacity of 1,600 megawatts, in April. All of the company’s 13
nuclear reactors have been shut after the 2011 Fukushima atomic
disaster, forcing it to rely on coal, oil and natural gas to
meet demand. Coal-fired power generation cost 9.5 yen (10 cents) per
kilowatt hour, while liquefied natural gas and oil cost 10.7 yen
and 36 yen, respectively, a government panel said in December
2011. The following table shows Tepco’s consumption and purchases
of fuel oil, crude, LNG and coal for July. Fuel oil and crude
volumes are in kiloliters, while LNG and coal are in tons. To contact the reporter on this story:
Tsuyoshi Inajima in Tokyo at
tinajima@bloomberg.net To contact the editor responsible for this story:
Alexander Kwiatkowski at
akwiatkowsk2@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Soros Said to Support J.C. Penney CEO in Ackman Feud
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J.C. Penney Co. (JCP) investors Soros Fund Management LLC and Glenview Capital Management LLC support Chairman Tom Engibous and Chief Executive Officer Mike Ullman in their battle against Bill Ackman , according to people familiar with the situation. The funds told J.C. Penney they support the current management team after Ackman criticized the executives in letters last week, said the people, who asked not to be identified because the discussions were private. Soros owned about 7.9 percent of J.C. Penney’s stock as of April while Glenview held about 4.3 percent as of March, according to data compiled by Bloomberg. Engibous and Ullman are working to turn around the retailer after sales in its most recent year slid 25 percent to the lowest in more than two decades. Ackman, whose Pershing Square Capital Management LP owns about 18 percent of the company’s shares, asked his fellow J.C. Penney directors last week to expedite the CEO search and later to replace Engibous, saying the board isn’t functioning effectively. Ackman won an ally last week in hedge fund Perry Capital LLC, which disclosed a 7.3 percent stake in J.C. Penney and said it agreed with replacing Ullman and Engibous. J.C. Penney, based in Plano, Texas , rose 2.3 percent to $13.17 yesterday in New York after earlier climbing as much as 4.4 percent. The shares have slid 33 percent this year, compared with an 18 percent gain for the Standard & Poor’s 500 Index. Ullman Return Ullman returned to J.C. Penney at age 66 in April, about a year and a half after being replaced by former Apple Inc. executive Ron Johnson , Ackman’s handpicked choice for the retailer’s top job. Since taking over, Ullman has revived price cutting and brought back merchandise to attract core customers alienated by Johnson’s strategy, which centered on ending discounting and remaking the stores into collections of boutiques. Ullman also shored up J.C. Penney’s cash balance, negotiating a $2.25 billion loan and borrowing $850 million from a revolving credit facility. The board began a search to find a long-term CEO last month, Engibous said in a letter on Aug. 8. Ackman is pushing to find someone by mid-September since there are only a few candidates, a person familiar with the matter said then. Ackman Letter Ackman told board members in his letter that he persuaded former J.C. Penney CEO Allen Questrom to agree to return as chairman if he approves of the department-store chain’s next CEO. In an interview last week, Questrom, 73, called returning as chairman “a long shot” that hinged on directors forming “a positive board and an aggressive board to help solve the problems” and a new CEO with retail experience being hired. Ackman plans to back off the push to replace Ullman, the New York Post reported yesterday, citing people it didn’t name. Ackman declined to comment to Bloomberg News in an e-mail. Kristin Hays, a J.C. Penney spokeswoman, also declined to comment. Soros, which disclosed its stake in J.C. Penney in April, has previously clashed with Ackman. The New York-based firm opposed Ackman’s short on Herbalife Ltd. (HLF) by taking a position of less than 5 percent of that company, a person with knowledge of the purchases said on July 31. Late last year, Soros asked to pull the money it had invested with Ackman’s Pershing Square, a little less than $250 million, because of disappointing returns, according to a person briefed on the matter. The redemptions are staggered over several quarters and will be complete next year. Glenview, based in New York , disclosed its J.C. Penney stake in November. J.C. Penney is scheduled to report second-quarter results, the first full quarter under Ullman, on Aug. 20. Sales may decline about 8 percent to $2.78 billion, according to the average of 18 analysts’ estimates compiled by Bloomberg. The adjusted loss may widen to $1.07 a share, analysts project. To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net ; Beth Jinks in New York at bjinks1@bloomberg.net ; Katherine Burton in New York at kburton@bloomberg.net To contact the editors responsible for this story: Kevin Orland at korland@bloomberg.net ; Jeffrey McCracken at jmccracken3@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Aluminum Stockpiles in Japan Drop to 234,000 Tons in July
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Aluminum stockpiles in Japan
declined 6.3 percent in July, the third straight month of
decrease, trading company Marubeni Corp. said by e-mail today. Inventories held in Yokohama, Nagoya and Osaka ports fell
to 234,000 metric tons at the end of last month from 249,600
tons on June 30, according to Marubeni. A breakdown of stockpiles data follows: To contact the reporter on this story:
Jae Hur in Tokyo at
jhur1@bloomberg.net To contact the editor responsible for this story:
Brett Miller at
bmiller30@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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CIA Says Syria Is No. 1 Threat. What's Obama's Plan?
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The Central Intelligence Agency's number two, Michael Morrell, ranked Syria not Iran's nuclear program, al-Qaeda or China as the top current threat to U.S. national security in an interview with the Wall Street Journal as he retired from office on Friday. What he didn't say was that President Barack Obama has failed to deal with it. Morrell is right to rank Syria so high, even though other security threats are bigger long-term issues for the U.S. to confront. The breaking of Syria into a failed state, and its concomitant sucking-in and spewing-back out of radical jihadis from around the region, is happening fast. This is opening new, potentially bad situations by the month. Morrell's assessment came without comment on U.S. policy, but it supports my own view that Obama's handling of the conflict in Syria will be seen as his largest foreign policy failure, made in part as an overreaction to his predecessor's monumental error in invading Iraq. That isn't to say that Senator John McCain was right in wanting a Libya-style U.S. intervention in Syria from the get-go in 2011, back when President Bashar al-Assad's troops were shooting unarmed pro-democracy protesters in the streets. Syria's civil war wasn't, and isn't, a conflict that the U.S. should try to own. But the Obama administration's resistance to doing anything at all to influence events on the ground inside Syria is likely to come at a future cost. The administration has been reluctant to get involved in any of the events that have unfolded with the turmoil of the Arab Spring uprisings (even in the Libyan case, the U.S. was bounced into action by France). So Syria isn't the exception, it is the rule. This is an understandable response to the massive overreach committed by the administration of George W. Bush in Iraq in 2003. It is also fully supported by most Americans, who have zero interest in any further Middle East entanglements. Still, the U.S. can't pretend to be Belgium: Like it or not, it has big assets and commitments in the Middle East. There were never any good options for the U.S. in Syria, but Obama should have gone with the advice of his chiefs at the Pentagon, the CIA and Department of State last year, when they recommended arming the Free Syrian Army in an effort to build up those factions on the battlefield that were most compatible with U.S. goals. Opponents of arming Syria's rebels like to refer to the Afghanistan precedent, when the U.S. armed the Mujaheddin in their fight against the Soviet military in the 1980s, only to see some of those people and their weapons turn against the U.S., in the form of al-Qaeda. True, but here is another use of the Afghanistan comparison: Al-Qaeda was able to train, develop and organize, because the U.S. simply walked away from Afghanistan after the Soviets were driven out, leaving it to be torn apart by a civil war fueled by neighbors. The country became a failed state and a haven for Islamist radicals, who used it as a launch pad for attacks on the U.S. Eventually, the U.S. was forced to invade, at enormous cost. This is the risk in Syria, a country in a neighborhood far more important to U.S. interests than Afghanistan, given Syria's borders with Iraq, Israel, Jordan, Lebanon and Turkey. Syria also has a greater potential for the misdirection of weapons, both conventional and chemical. Those weapons don't have to come from the U.S.; Assad has plenty of Russian ones to distribute or lose control of, while the radical Islamists have their own sources. By doing nothing when advised to take some risk by arming and building up the Free Syrian Army, the administration left a vacuum that al-Qaeda and its affiliates have willingly filled. The recent U.S. decision to provide small arms is probably too little and too late to have any impact. The window to shape events without having to commit large numbers of troops has probably closed. No one can know whether earlier U.S. action would have made the difference, but U.S. policy has lost the allies it might have had in Syria and, I suspect, opened the door to worse outcomes and a much larger possible U.S. military intervention down the road. (Marc Champion is a Bloomberg View editorial board member. Follow him on Twitter.)
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2013-08-12 00:00:00+00:00
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nan
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Copper Declines as Japan’s Economy Expands Less Than Estimated
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Copper fell after the best weekly
gain in almost 11 months as Japan ’s economy grew less than
expected. Aluminum, zinc and lead declined. Copper for delivery in three months on the London Metal
Exchange dropped as much as 0.8 percent to $7,220 a metric ton
and was at $7,229 at 11:09 a.m. in Seoul . The metal is down 8.9
percent this year. The contract for delivery in September fell
0.5 percent at $3.29 a pound on the Comex in New York . Second-quarter gross domestic product rose an annualized
2.6 percent in Japan, the world’s third-biggest economy, after
gaining 3.8 percent the previous quarter, the Cabinet Office
reported today. That compares with the median estimate of a 3.6
percent gain in a Bloomberg News survey. “The weak Japan GDP number is weighing on the market,”
said Park Jong Beom, a senior trader at Tong Yang Securities Inc.
in Seoul. “The data probably provided some investors with a
good excuse to take profits after the recent rally.” Copper rose 3.9 percent last week as a jump in industrial
output added to signs of economic optimism in China, the biggest
user. Metal for delivery in November rose 0.8 percent to 51,950
yuan ($8,486) a ton on the Shanghai Futures Exchange. On the LME, nickel advanced as tin fell. To contact the reporter on this story:
Sungwoo Park in Seoul at
spark47@bloomberg.net To contact the editor responsible for this story:
Brett Miller at
bmiller30@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Pound Approaches One-Month High Against Euro Amid Growth Signs
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The pound approached the strongest
level in a month against the euro after an industry report
showed British banks boosted mortgage approvals in June, adding
to evidence the recovery is gathering pace. The U.K. currency advanced for a second day against the
common currency before a government report tomorrow that
economists said will show consumer-price inflation stayed above
the Bank of England ’s 2 percent target. The central bank will
release the minutes of this month’s policy meeting on Wednesday.
U.K. government bonds were little changed. “Economic data is pointing in the right direction,” said
Neil Jones , head of European hedge-fund sales at Mizuho Bank
Ltd. in London. “The U.K. recovery will outperform the euro
zone . I expect to see more demand for the pound than I do for
the euro in the weeks and months to come.” The pound appreciated 0.1 percent to 86.01 pence per euro
at 4:42 p.m. London time after advancing to 85.79 on Aug. 7, the
strongest level since July 10. The U.K. currency weakened 0.1
percent to $1.5476. Sterling has gained 0.5 percent in the past month,
according to Bloomberg Correlation-Weighted Indexes that track
10 developed-nation currencies. The euro weakened 0.2 percent,
and the dollar slipped 2.2 percent. The number of U.K. home loans increased 15.7 percent in
June from a year earlier, the Council of Mortgage Lenders said
in an e-mailed report. Mortgages climbed 1.1 percent to 55,400
from the previous month, the Council said. Consumer Prices British consumer prices rose 2.8 percent last month from a
year earlier, after advancing 2.9 percent in June, according to
a Bloomberg survey before the Office for National Statistics
releases the data tomorrow. The number of Britons claiming
jobless benefits fell for a ninth month in July, a separate
Bloomberg survey showed before the report on Wednesday. The benchmark 10-year gilt yield was at 2.47 percent after
increasing to 2.56 percent on Aug. 7, the highest level since
June 25. The price of the 1.75 percent bond maturing in
September 2022 was 94.19. “The underlying trend of economic recovery is seen very
much in place, that’s going to be a negative for gilts this
week,” said Jason Simpson, a U.K. rates strategist at Banco
Santander SA in London. Investors will watch the jobs data and
the minutes of the bank’s latest policy meeting “for any sign
of dissent, hints that some members were unhappy about tying
down interest rates for such an extended period.” Pound Bears Sterling’s advance to a seven-week high last week after
Bank of England Governor Mark Carney reiterated his commitment
to curb inflation is failing to convince companies from Standard
Chartered Plc to Nomura Holdings Inc. that the pound is on the
cusp of a sustained rally against the dollar. The U.K. currency will weaken to $1.41 by year-end,
according to four of the most-pessimistic forecasters in a
Bloomberg survey. The pound strengthened to $1.5574 on Aug. 8,
the highest level since June 19. The central bank released its
Inflation Report on Aug. 7. “People are very excited about an uptick in U.K. growth
that’s at a very early stage, but in the global context growth
is very, very lagging,” Ned Rumpeltin , head of Group of 10
currency strategy at Standard Chartered in London, said in an
Aug. 8 telephone interview. “The natural center of gravity for
the pound against the dollar is lower.” The Bank of England said last week it planned to keep the
benchmark rate at 0.5 percent until the jobless rate falls to 7
percent, something it doesn’t forecast will happen before the
fourth quarter of 2016. Unemployment based on an International
Labour Organization measure was 7.8 percent in the second
quarter, according to a Bloomberg survey before the data is
released on Aug. 14. The Debt Management Office said it may hold at least one
bond sale through banks in the third quarter, according to a
statement on its website. The DMO, which manages debt sales for
the Treasury, said it would be seeking investor views on the
type of security and potential timing of such a transaction. It
will also use its Aug. 19 meeting with investors to gauge demand
for super-long bonds, according to the statement. To contact the reporters on this story:
Lukanyo Mnyanda in Edinburgh at
lmnyanda@bloomberg.net ;
Morgane Lapeyre in London at
mlapeyre@bloomberg.net To contact the editor responsible for this story:
Nicholas Reynolds at
nreynolds2@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Ex-Fernandez Ally Massa Wins Argentina Primary Election
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Former Cabinet Chief Sergio Massa
yesterday beat Cristina Fernandez de Kirchner’s leading
candidate in a primary to choose contenders for October mid-term
congressional elections. Massa, who heads a group of dissident Peronist Party
members, took 35 percent of votes in Buenos Aires , the country’s
most populous province, compared with 30 percent for Martin Insaurralde with 97 percent of voting centers counted, according
to partial results posted on the Interior Ministry ’s website. “Looking ahead to the mid-term elections, Massa’s support
will grow as voters who oppose the government rally behind
him,” Federico Thomsen, a Buenos Aires-based economic and
political analyst with research company E.F. Thomsen, said in a
telephone interview. Fernandez needs to secure two-thirds majorities in both
houses of congress to push through constitutional changes that
would allow her to seek a third term in 2015. Confirmation of
Massa’s popularity would make him a potential presidential
candidate, according to Mariel Fornoni, managing director of
pollster Management & Fit. The election was a “significant blow” for Fernandez and
should be seen as positive for investors, wrote Barclays Plc.
analysts Sebastian Vargas and Alejandro Grisanti in a report
today. Yields of Argentine government dollar bonds due 2015
dropped 22 basis points, or 0.22 percentage point, to 10.75
percent at 2:23 p.m. in Buenos Aires , the lowest since October,
according to data compiled by Bloomberg. “Insecurity, Inflation” “Analyzing the results, we find people support our fight
against insecurity, inflation and taxes that are squeezing
workers and retirees,” Massa told a crowd of supporters in
Tigre last night. “We offer a path to the future and propose to
keep the courts autonomous and respect the constitution to make
sure it isn’t modified in any way.” About 31 million Argentines were obliged by law to vote in
the primaries to choose candidates for 127 seats in the lower
house and 24 in the senate. Massa and Insaurralde are among
those seeking to contest the 35 lower house vacancies for
representatives from Buenos Aires province . Nationwide, Fernandez’s ruling Frente Para la Victoria
party secured 26 percent of the total vote with 98 percent of
votes counted. Fernandez, whose spending on education, highways
and handouts for the poor helped her win re-election in 2011
with 54 percent of votes, is banned by the constitution from
seeking a third consecutive term. ‘Change’ Policies The 26 percent represents the worst national election for
the coalition since 2003, when Fernandez’s late husband and
predecessor Nestor Kirchner took office with 22 percent of the
votes, according to political analyst Rosendo Fraga, who runs
Nueva Mayoria research firm. “The ruling party needs to acknowledge that it needs to
change its policies as they don’t have people’s support,” Fraga
wrote in a statement on his website. “They can’t talk anymore
about that 54 percent for her re-election, it has to assume the
26 percent of these primaries.” Fernandez called on supporters to work harder ahead of the
October election. Her party remains the most voted nationwide,
she said. ‘Intensify’ Efforts “We’ve always worked hard and will continue to do so,”
Fernandez told a crowd of supporters in Buenos Aires last night.
“We’re going to intensify our efforts over the next few
months.” In the city of Buenos Aires, where 13 lower house and three
senate seats will be contested in October, Fernandez’s candidate
Juan Cabandie came in third place with 19 percent of votes,
behind an opposition coalition with 35.6 percent and Sergio
Bergman of City Mayor Mauricio Macri ’s PRO party, who took 28
percent, with almost all votes counted. Massa was elected mayor of Tigre, a sprawling, riverside
municipality on the northern outskirts of the capital, in 2007.
The following year, Fernandez chose him to head her cabinet,
firing him in 2009 in the wake of the ruling coalition’s losses
in mid-term elections. Massa resumed his mayoral duties and was
re-elected in 2011. Massa told business leaders in Buenos Aires on Aug. 7 that
Argentina ’s isolation from international capital markets has
caused it to miss the opportunity to secure cheap financing to
develop South America ’s second-biggest economy. Market Reaction Argentina hasn’t sold debt abroad since defaulting on a
record $95 billion of debt in 2001. The nation’s average
borrowing costs of 13.01 percent, are the highest of 56 emerging
market economies, according to JPMorgan Chase & Co.’s EMBI
Global index. The bond market may react positively to the Massa victory
if he looks poised to present a strong challenge to the
government candidate in 2015 presidential elections, Credit
Suisse Group AG analyst Casey Reckman wrote in an Aug. 6 report. Fernandez said neither she nor her candidates will make
promises they can’t keep ahead of the October election like
completely resolving crime since the government has never lied
to the people. “Our struggle is like David versus Goliath having to deal
with media attacks and giving people answers to their problems
on a daily basis,” Fernandez said. “My responsibility is to
make the country governable.” To contact the reporter on this story:
Eliana Raszewski in Buenos Aires at
eraszewski@bloomberg.net To contact the editor responsible for this story:
Andre Soliani at
asoliani@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Keystone Foes Protest at State Department Over Contractor
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More than 100 Keystone XL pipeline
critics protested outside the State Department for the first
time today, arguing that the government’s analysis of the
project is biased and flawed. The protestors were among 70,000 people who pledged online
to conduct civil disobedience to stop the $5.3 billion pipeline
by TransCanada Corp. (TRP) , according to the environmental group
Credo, which organized the demonstration against the project
from the oil sands of Alberta to refineries along the Gulf of
Mexico . The complaints focused in part on ERM Group Inc., the
contractor hired by the State Department for an environmental
impact statement, and its work on a joint venture that included
TransCanada as a partner. “The State Department just got caught in bed with big oil
in their environmental assessment,” John Sellers, founder of
one of the groups protesting, the Other 98%, said in an
interview at the protest site today. Outside the State Department headquarters, police set up
gates to prevent the collection of 60 grandparents, gardeners
and students who were prepared to be arrested from blocking the
doors. The demonstrators had set a plan with police to block the
doors and get arrested, Sellers said. Instead, with the gates in
place, they remained in front of the building and chanted for an
hour. Then they marched off without any police intervention. Obama, Kerry The State Department is conducting an environmental review
of the project, which will incorporate more than 1.2 million
public comments, Marie Harf, a State Department spokesman, said
at today’s briefing, held after the protesters left. No date has
been set for releasing the final report, she said. “We are doing this in a rigorous, transparent and
efficient manner,” Harf said. “It’s just a process that takes
a little while to incorporate all of the public comments.” The
department must then determine that the project is in the
nation’s interest before the pipeline is built. President Barack Obama has the final say, and before today
the protests focused on the president, raising the issue at
political appearances, fundraisers and on the sidewalk outside
the White House. The protestors today singled out Obama, who is on vacation
in Martha’s Vineyard, Massachusetts, and not Kerry, who is in
Bogota, Colombia . ‘Getting Message’ “More and more, we think Obama’s getting the message,”
Elijah Zarlin, campaign manager for Credo Action, the activist
network funded by a mobile telephone company, said in an
interview. “We know the president is the ultimate decider.” The State Department inspector general’s office is studying
the conflict-of-interest complaints against ERM. Environmental
groups criticized a draft analysis released in March that found
Alberta’s oil sands would be developed with or without Keystone,
meaning the project would have little impact on the climate. Friends of the Earth and The Checks and Balances Project, a
watchdog group, allege the London-based ERM didn’t disclose a
financial tie to TransCanada through its venture with Exxon
Mobil Corp. (XOM) in Irving, Texas , called the Alaska Pipeline
Project. The project , under way since 2009, is developing a
natural gas pipeline . Keystone critics, energized by Obama’s pledge for federal
action on climate speech, were further emboldened by comments in
a July 30 speech in Chattanooga, Tennessee , dismissing the
pipeline as a job creator, an argument made by Republican
supporters. Once completed, the project will create only about
50 permanent jobs, Obama said. “Hey, Obama, liked your speech,” the activists shouted
today. “Now it’s time to practice what you preached.” To contact the reporter on this story:
Mark Drajem in Washington at
mdrajem@bloomberg.net To contact the editor responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Rio Tinto to Decide on Bauxite Expansion Within Year, Cote Says
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Rio Tinto Group, the world’s second-largest mining company, will decide within the next year on
whether to expand its Weipa bauxite mining operation in
Australia to help capture rising demand from China. Bauxite is “the healthiest” of the three products sold by
Rio Tinto Alcan, Jacynthe Cote, chief executive officer of the
company’s aluminum unit, told reporters today after a speech at
the World Mining Congress in Montreal . In addition to mining
bauxite, Rio Tinto Alcan refines alumina and produces aluminum. Australia’s federal government conditionally approved in
May plans to expand mining and extend the life of the 50-year-old project. The Queensland facility last year produced 23.7
million metric tons of metal-grade bauxite, a source of
aluminum, according to the company’s website . Rio began studies
on the development in 2008, a year after the company acquired
bauxite, aluminum and alumina assets as part of its $38 billion
takeover of Canada’s Alcan Inc. “ China imports a great deal of bauxite and output is
constrained,” Cote said. “When we think about the next project
we could seriously take a look at, it’s definitely the expansion
of our Weipa bauxite mine.” Rio Tinto Alcan had sales of $5.29 billion in the first six
months of 2013, equivalent to about 20 percent of the company’s
revenue. Rio Tinto expects to produce 34 million metric tons of
bauxite, 7.3 million metric tons of alumina and 2.5 million
metric tons of aluminum in 2013, it said last week. The price of bauxite imported to China gained about 15
percent this year through the end of June to about $53 a metric
ton, Lloyd O’Carroll, an analyst at Davenport & Co. in Richmond,
Virginia , said in an Aug. 7 report. BHP Billiton Ltd. is the largest mining company. To contact the reporter on this story:
Frederic Tomesco in Montreal at
tomesco@bloomberg.net To contact the editor responsible for this story:
Simon Casey at
scasey4@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Abe Should End the War Over Yasukuni Shrine
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Every year around this time, in the
run-up to the Aug. 15 anniversary of Japan ’s surrender in 1945,
feverish speculation ensues about whether Japan’s top
politicians will visit the Yasukuni Shrine in central Tokyo.
Chinese and South Koreans not to mention many Japanese abhor such visits because the shrine honors the souls of 14
Class A war criminals. Visitors say they have every right to
honor the 2.5 million other Japanese war dead celebrated at
Yasukuni; they compare the shrine to the U.S. war cemetery at
Arlington. This is dangerous nonsense. Yasukuni is ground zero for an
unrepentant view of Japan’s wartime aggression. During World War
II, the shrine served as the “command headquarters” of State
Shinto, a religion that deified the emperor and mobilized
Japanese subjects to fight a holy war at his behest. The private
foundation that runs Yasukuni only added the 14 most
controversial “souls” surreptitiously in 1978. The shrine’s political mission is on blatant display at the
adjacent Yushukan museum, run by the same foundation. There, the
Class A war criminals are portrayed as martyrs. Japan’s war in
China is supposed to have suppressed banditry and terrorism,
while its invasion of the rest of Asia is represented as a war
of liberation from Western colonialism. Missing from the
extensive exhibits are any mentions of the Rape of Nanjing, the
awful experiments conducted by Unit 731 on prisoners of war, or
the suffering endured by tens of thousands of “ comfort women .” Sly Reinterpretation The museum presents a selective and sly reinterpretation of
Japan’s shared history with Asia one that is antithetical to
reconciliation, convinces few Japanese, and offends neighboring
nations that endured the brunt of Japan’s imperial aggression. Politicians who insist that they are only paying tribute to
those who died for their country when they visit Yasukuni are
not telling the truth. If that’s all they wanted to do, they
could walk five minutes down the road to Chidorigafuchi National
Cemetery, which is, like Arlington, Japan’s officially
designated war cemetery. It is telling that Emperor Showa (Hirohito), once the head
priest of State Shinto, confided to an aide that he stopped
visiting Yasukuni after 1978 precisely because the shrine had
been tainted by the presence of the Class A war criminals. This
explicit politicization of the site also explains why his son,
current Emperor Akihito, has maintained the imperial household’s
embargo on visits. Though he has refused to confirm that he won’t visit
Yasukuni this week, Prime Minister Shinzo Abe plans to spend
Aug. 15 with the emperor. Abe aides have used this convenient
excuse to suggest that a visit to the shrine is highly unlikely:
Such a gesture would be a deliberate insult to the imperial
family. Of course, Abe also knows firsthand that Yasukuni visits
are a diplomatic dead end. His mentor, former Prime Minister
Junichiro Koizumi, caused great damage to Japan’s regional
interests by repeatedly going to Yasukuni between 2001 and 2006.
Trying to repair relations with Beijing and Seoul , Abe himself
stayed away from the shrine during his first stint as prime
minister in 2006-2007. He has said he regrets that decision. But he also knows
that his legacy will be determined by his ability to revive
Japan’s dormant economy a task that will not be made any
easier by alienating trade partners China and South Korea. Aside
from stumbling over a question about aggression in Parliament,
Abe has done himself and the nation a service by keeping history not his best subject at arm’s length. Political Points Still, this ad-hoc strategy only keeps the controversy
alive. Will members of Abe’s Cabinet and his party show up at
Yasukuni on the 15th? Will Abe himself go during the Takayama
Matsuri Autumn Festival , or next year? What if a slew of
backbenchers from the ruling Liberal Democratic Party turns up
at the shrine en masse? The damage to Japan’s reputation and
regional standing would likely be the same. There have been sensible suggestions to dis-enshrine the 14
Class A war criminals. But Yasukuni’s head priest says this is
impossible; enshrinement is permanent. Indeed, hosting those souls is a point of pride for the
shrine. Yasukuni is not about dignified homage; it is about
scoring political points and drawing attention to revisionist
history. The only thing that Japan’s modern reactionaries regret
about the war is defeat, and they are still fighting an uphill
battle against Japanese public opinion to justify wartime
Japan’s “noble mission.” No amount of sanitizing will change
that. The only way to end the controversy is to impose a
moratorium on visits to Yasukuni by any serving Cabinet
minister. This idea was first promoted several years ago by
Ambassador Kazuhiko Togo, whose grandfather is one of the Class
A war criminals enshrined there. Officials should honor Japan’s
war dead at the official cemetery at Chidorigafuchi, not at a
privately run propaganda center. Abe’s right-wing views on history are well-known; they
played a role in his abrupt and embarrassing fall from power in
2007. Intimates say that he is searching for redemption. What
better way than to end the controversy over Yasukuni once and
for all? The fact that he comes from the conservative camp would
give any moratorium he declares added force, making it harder
for any future prime minister to reverse the decision. If Abe is
truly looking for a new beginning for himself, and for
Japan’s relations with its neighbors that’s where he should
start. (Jeffrey Kingston is the director of Asian Studies at
Temple University Japan) To contact the writer of this article:
Jeffrey Kingston at Kingston@tuj.temple.edu . To contact the editor responsible for this article:
Nisid Hajari at nhajari@bloomberg.net .
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2013-08-12 00:00:00+00:00
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nan
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Rohani Parries Lawmakers’ Criticism of Iran Cabinet Nominees
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Iran ’s new president, Hassan Rohani, defended his cabinet nominees before parliament, trying to deflect concerns that some have ties to opposition figures who led protests against the regime four years ago. “The people I have nominated are the most qualified, and in line with the policies of the government,” Rohani told lawmakers today in a session aired live on state television. Parliament is reviewing the qualifications of his proposed ministers this week and will hold a vote for each. Rohani, a trained lawyer and cleric, was elected in June on pledges to improve Iran’s economy and world standing, battered by U.S.-led sanctions over the country’s nuclear program. The penalties have accelerated inflation, weakened the national currency and cut Iran’s oil exports, the country’s main source of revenue. Cabinet nominees include former United Nations ambassador Mohammad Javad Zarif, tapped to become foreign minister; Hossein Dehghan, a former commander of the Revolutionary Guard Corps air force, for minister of defense; and Bijan Namdar Zanganeh, chosen to retake his previous position as oil minister. Rohani said he ignored the nominees’ political affiliations, choosing them instead on the basis of their abilities and experience. Several of his 18 nominees served under former presidents Mohammad Khatami and Ali Akbar Hashemi Rafsanjani, whose support helped him to win the election. ‘Strong Allegiance’ All proposed ministers “sympathize” with the Islamic Republic, “have strong allegiance” to Supreme Leader Ayatollah Ali Khamenei and “will do all they can for the country,” said Rohani, who was inaugurated last week. Rohani’s emphasis on the nominees’ loyalty appeared directed at lawmakers who have criticized some of his nominees, including Zanganeh. Legislator Ataollah Hakimi accused some of the president’s Western-educated candidates of ties to the “sedition,” a term some officials use to describe the opposition movement that emerged after the 2009 re-election of Mahmoud Ahmadinejad . The balloting was tainted by allegations of fraud and sparked protests the government quelled with violence, saying the unrest was engineered by Western nations to undermine the Islamic Republic. ‘Old People’ “The pre-election Rohani is different from the post-election one,” Hakimi said. “Do you plan to forget your promises and give away your values to the West?” Another parliamentarian, Ahmad Bakhshayesh, criticized Rohani for using ministers from previous administration rather than nominating promising individuals from a younger generation. “Your government is one of old people,” Bakhshayesh said. About 148 lawmakers signed up today to speak in favor of Rohani’s program and his government, while 18 registered to voice their disagreement, state-run Fars news agency reported. In his address today, Rohani said he will follow a dual track by trying to halt “the negative trend” in Iran’s nuclear diplomacy while at the same time “seeking to diversify economic revenues and improve the allocation of existing ones.” Rohani said one of the priorities of his government is to curb liquidity growth in order to control inflation, which will boost investment and stabilize the economy. The government will push forward with a program of subsidy reforms started under Ahmadinejad, though it will be carried out more efficiently, ensuring that poorer Iranians are adequately compensated for higher food and energy prices, Rohani said. To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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China Southern Airlines July Load Factor: Changes
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Following are year-on-year changes of traffic
and capacity figures for July released by China Southern Airlines Co. To contact the reporter on this story:
Ailing Tan in Singapore at atan193@bloomberg.net To contact the editor responsible for this story:
Marco Babic at mbabic@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Deadly Irish Humor Spikes Doyle’s ‘Commitments’ Update
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“D’yeh do the Facebook thing?” is
the opening question of “The Guts,” Roddy Doyle’s new novel. The dilemmas of social-media relationships form the very-2013 backdrop to this update of “ The Commitments ,” Doyle’s
first book, which shot him to literary stardom in 1987. That
tale about a working-class Dublin band was made into a film in
1991 and will have its debut as a musical at London ’s Palace
Theatre in September. Jimmy Rabbitte, the Irish hustler who shaped the soulful
Commitments, is now 47. He’s still in Barrytown, a fictionalized
version of the north Dublin suburb of Kilbarrack, where Doyle
grew up, and still in the record business. He has strong tastes,
which make him a “music fascist” according to his family. He
has a nice house, a loving wife and four children. None of this makes for a very dramatic read, so Doyle stirs
things up. Jimmy drops the bombshell on page 10: He needs
treatment for bowel cancer. That would be plot enough, but
there’s more. He runs into former band mates, including the still-sexy
singer Imelda Quirke. His son Marvin’s band plays at a rock
festival. He’s learning the trumpet and has a mission to find
old Irish music. The text races along. Jimmy was last seen in “ The Van ” in 1991. Freed from his
1980s time warp, he wrestles with iPads, smartphones and
YouTube. The novel’s going to date as fast as the technology. Rabbitte v. Rabbit Doyle has now written as many novels about the Rabbitte
family as John Updike did about Rabbit Angstrom . He pares his
writing to little more than the dialogue. He hates what James Joyce called “perverted commas” and gives pages of straight
speech like a play script: Will we go for a pint? To celebrate. Grand. Good. Yeah. Jimmy says “grand” all the time, even when he’s suffering
from chemotherapy. We wonder that he really thinks, but all
inner thoughts and descriptions are left off the page, as is the
meticulously detailed backstory. Doyle is 55. This is his midlife crisis book. The key
phrase comes when he writes of a guy wanting to return to his
roots as a punk musician, like “the howling kid inside every
middle-aged man.” It’s also Doyle’s recession book, after setting previous
works in the Irish booms of the past. “Nostalgia’s always big in a recession,” he has one
character remark. The author loves his music as much as Rabbitte
and there are constant references to rock: the Who, the Stooges. “Every half-decent band should have a dead guitarist,”
the musician Outspan says at the end. It’s a bittersweet
comment, because Outspan is sick with an illness likely to be
terminal. The best thing is that Irish humor: deadpan, earnest, often
spot on. As the Commitments would put it, “deadly.” “The Guts” is published by Jonathan Cape in the U.K. (328
pages, 12.99 pounds.) It will be published in the U.S. by Viking
in January. To preorder this book in North America, click here . (Mark Beech writes for Muse, the arts and leisure section
of Bloomberg News. The opinions expressed are his own.) Muse highlights include Jeremy Gerard on theater and Amanda
Gordon ’s Hampton’s Scene. To contact the writer on the story:
Mark Beech in London at mbeech@bloomberg.net or
http://twitter.com/Mark_Beech . To contact the editor responsible for this story:
Manuela Hoelterhoff at
mhoelterhoff@bloomberg.net .
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2013-08-12 00:00:00+00:00
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nan
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Emerging Stocks Rise as China Data Lifts Gold Producers
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Emerging-market stocks rose to a
two-week high as confidence in China’s economy grew and gold
producers lifted South Africa ’s benchmark gauge to a record. The MSCI Emerging Markets Index added 0.7 percent to
957.82, the highest level since July 26. The FTSE/JSE Africa All
Shares Index climbed 1.8 percent as Harmony Gold Mining Co. (HAR)
rallied the most since 2008 amid a jump in the precious metal.
Mining company Vale SA helped drive Brazil ’s Ibovespa to the
highest level in two months. Mexico’s peso reversed an earlier
advance after President Enrique Pena Nietounveiled his plan to
boost private investment in the state-controlled oil industry. Raw-material companies in the emerging-market measure
increased 1.8 percent to lead gains among 10 groups. China ’s
yuan halted a two-day decline on optimism the world’s second-largest economy is stabilizing after data released last week
showed rebounding exports and manufacturing. The nation’s
developers gained as speculation grew that the government will
relax a ban on companies raising funds through share sales. “There’s a general sense that the global deceleration has
abated,” Chad Morganlander, a Florham Park , New Jersey-based
fund manager at Stifel Nicolaus & Co., said in a phone
interview. His firm oversees about $130 billion. “That, coupled
with economic data points that point to stabilization within
China, has put a floor under valuations.” A three-day rally in the MSCI Emerging Markets Index
trimmed this year’s slump to 9.2 percent, compared with a 14
percent surge in the MSCI World Index. The broad measure of
developing nations is trading at 10.1 times estimated earnings,
below the valuation of developed markets of 13.8. Emerging ETF The iShares MSCI Emerging Markets Index exchange-traded
fund added 0.9 percent to $39.73. The Chicago Board Options
Exchange Emerging Markets ETF Volatility Index, a measure of
options prices on the fund and expectations of price swings,
retreated 4.7 percent to 21.74. The Ibovespa rose the most among major equity gauges in the
Americas after Vale rallied for a fourth day. Oil company
Petroleo Brasileiro SA reversed earlier gains that were driven
by better-than-estimated earnings. The real retreated 0.7
percent, snapping a two-day advance. Mexico’s IPC index slid 1.2 percent, led by Alfa SAB (ALFAA) , which
controls the nation’s largest publicly-traded petrochemical
company. The peso depreciated 0.5 percent. South Africa The FTSE/JSE Africa All-Share Index advanced to the highest
level since at least 1995 (JALSH) , led by Harmony, which soared 21
percent. Gold capped the longest rally in four weeks. Russia’s Micex Index (INDEXCF) rose a second day, led by OAO
RusHydro. Benchmark gauges in Turkey and Poland added more than
1 percent, while stocks in Hungary were little changed. The Shanghai Composite Index advanced 2.4 percent, the most
since July 11. China Shenhua Energy Co., the nation’s biggest
coal producer, rallied 6.1 percent and Jiangxi Copper Co. (358) , the
largest copper producer, had its biggest gain in a month. Poly
Real Estate Group Co. soared 5 percent. Indian stocks climbed as Sun Pharmaceutical Industries
Ltd. (SUNP) , India ’s biggest drugmaker, jumped after posting a 56
percent gain in net income before a one-time charge. The rupee
weakened 0.7 percent per dollar. The premium investors demand to own emerging-market debt
over U.S. Treasuries slid 0.06 percentage point to 323 basis
points, according to JPMorgan Chase & Co. To contact the reporters on this story:
Maria Levitov in London at
mlevitov@bloomberg.net ;
Julia Leite in New York at
jleite3@bloomberg.net ;
Jessica Summers in New York at
jsummers17@bloomberg.net To contact the editor responsible for this story:
Tal Barak Harif at
tbarak@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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"Feminine" Values Can Give Tomorrow's Leaders an Edge
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A Pew Center study released in May revealed that working mothers are the sole or primary provider in a record 40 percent of U.S. households. Only a few days before, hedge fund billionaire Paul Tudor-Jones created a stir by remarking at a conference that women will never rival men as traders because babies are a "focus killer". Here we have the dynamics of a new economy colliding with the old establishment like tectonic plates. But as developed nations restructure from manufacturing to knowledge and services, my bet is on the moms, or more specifically, women — and men who can think like them. Survey data my colleague Michael D'Antonio and I gathered from 64,000 people in nationally representative samples in 13 countries — from the Americas and Europe to Asia — point to widespread dissatisfaction with typically "male" ways of doing business and a growing appreciation for the traits, skills and competencies that are perceived as more feminine.
The results, published in our new book The Athena Doctrine , reveal that 57% of people were dissatisfied with the conduct of men in their country, including 79% of Japanese and South Koreans and more than two-thirds of people in Indonesia, Mexico, U.K and the United States. This sentiment is amplified among the millennial generation (young men and women age 18-30) of whom nearly 80%are dissatisfied — most notably in highly masculine societies like Brazil, South Korea, Japan and India. If people have grown cold on male-dominated structures and leadership, they offer a solution: Two-thirds of survey respondents felt that "The world would be a better place if men thought more like women", including 76% of the French and Brazilians and 70%of Germans. Those stats include majorities of men who equate masculine incumbency with income disparity, continuing high levels of unemployment and political gridlock. Curious as to how leaders could "think more like women," we asked half our sample — 32,000 people around the world — to classify 125 different human characteristics as either masculine, feminine or neither, while the other half rated the same words (without gendering) on their importance to leadership, success, morality and happiness. Statistical modeling revealed strong consensus that what people felt was "feminine" they also deemed essential to leading in an increasingly social, interdependent and transparent world. We next visited 18 countries, interviewing over 100 innovative women and men in medicine, politics, education, start-ups, NGOs and other sectors of the economy. Here are two of many examples we came across that show how anyone can lead with a more feminine ethos: Empathy Is Innovation. While leaders spend considerable time and effort trying to envision markets and pushing out innovation, empathy can often generate simple, yet breakthrough ideas. In her years working as an advocate for charities in Britain and abroad, Anna Pearson noticed a pattern: there were many people who wanted to volunteer — but were too busy (or had schedules too varied) to commit to a cause. To bridge the gap between what volunteers could give and what people need, Anna re-imagined volunteering on a very small scale. Her London-based non-profit Spots of Time connects organizations with people who can give an hour or so at a time, and often at a moment's notice. The lesson? Anna trained her empathy not just on beneficiaries of charity but also on volunteers. That kindness and sensitivity to others was the catalyst for creativity. Vulnerability Is Strength. You can't read a business article today without hearing about "learning from failure". (A Google search for the phrase yields 129 million results.) But maybe there'd be less failing if we were willing to admit what we don't know in the first place. In Berlin we met Dr. Ijad Madisch, a Harvard-trained virologist who kept "getting stuck" in his experiments. When he asked his colleagues for help, he was chastised. Big-time scientists were supposed to project an image of supreme competence. Madisch realized that science needed a global community where the work took precedence over egos. So he started ResearchGate , a social network for scientists, which now has some 3 million members across 200 countries. The lesson? By letting down his guard and showing candor and humility, Madisch not only helped himself but also inspired others to join his cause. This advanced research far more rapidly than the old approach of working in cubicles and meeting at conferences. Today's work requires a new leadership paradigm. Look at the list of competencies above and — whether you're a man or a woman — start working on them.
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2013-08-12 00:00:00+00:00
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nan
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BB- TRADING TO RESUME AT 9:30
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BB- TRADING TO RESUME AT 9:30
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2013-08-12 00:00:00+00:00
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nan
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Aldar Retreats for a Second Day After Earnings: Abu Dhabi Mover
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Aldar Properties PJSC (ALDAR) had the
biggest two-day drop since June as Abu Dhabi’s largest developer
reported a drop in revenue and after the stock surged in July. The shares fell 2.1 percent to 2.75 dirhams at the close in
Abu Dhabi today, bringing the two-day retreat to 4.2 percent,
the worst since June 24. Aldar surged 24 percent last month,
almost three times as fast as Abu Dhabi’s benchmark index , which
lost 0.6 percent today. Aldar had a one-time gain of 2.6 billion dirhams ($708
million) from its merger with Sorouh Real Estate Co. as it
posted second-quarter earnings on Aug. 7, the first day markets
in the United Arab Emirates closed for an Islamic holiday. The
company said revenue dropped 73 percent to 1.26 billion dirhams. “It’s a realistic correction based on people realizing
that 2.6 billion dirhams of profits came from the revaluation of
assets post-merger with Sorouh and won’t be a recurring item.”
Mohammed Ali Yasin, managing editor of Abu Dhabi Financial
Service Co., said by phone. Abu Dhabi’s government backed the combination of the two
developers, which are both part of the state’s drive to
diversify its oil-based economy through office and leisure
projects. Aldar received more than $9.8 billion in bailouts from
the government in 2011. One analyst recommends investors sell the shares, while
five say hold and two advise buying the stock, according to data
compiled by Bloomberg. To contact the reporter on this story:
Deena Kamel Yousef in Dubai at
dhussein1@bloomberg.net To contact the editor responsible for this story:
Claudia Maedler at
cmaedler@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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F1 Builder With $10 Billion Debt to Sell Assets: Corporate India
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Jaypee Group, owner of India ’s most
indebted cement maker, plans to sell some of its plants and real
estate in a bid to cut liabilities by about 25 percent. The builder of India’s only Formula One racing track seeks
to reduce debt by 150 billion rupees ($2.5 billion) by selling
its cement plants in southern and western India, some of its
power generation units and property in a year, Suren Jain,
managing director at Jaiprakash Power Ventures Ltd. (JPVL) said in an
interview. The flagship Jaiprakash Associates Ltd. (JPA) has $10
billion of total debt, according to data compiled by Bloomberg. The group’s liabilities increased fivefold in five years as
Chairman Manoj Gaur took on debt to expand the cement maker’s
power, sports and construction businesses. Gaur is selling
assets to cut costs and revive profit, which has fallen for two
straight years, as a central bank engineered cash crunch prompts
lenders to raise interest rates for the first time in two years. “The cash flows from operations won’t be sufficient in the
next one to two years to bring down the debt,” said Anubhav Gupta, an analyst at Kim Eng Securities Pvt. in Mumbai. If the
company had sold a cement plant “12 months back the troubles
might not have been what they are today.” Jaiprakash Associates had a net debt of about 612 billion
rupees, the highest among Asian makers of the construction
material after China National Building Material Co., according
to data compiled by Bloomberg. Worst Performing The Indian company will need 81 billion rupees to service
its debt in the year ending March 31, Ankur Kulshrestha, an
analyst with HDFC Securities Ltd., said in a note to clients on
July 30. Jaiprakash Associates’ shares have dropped 68 percent this
year, making them the worst performing stock in the CNX Nifty
index. They surged 4.5 percent to 32.85 rupees in Mumbai today,
the highest since July 31. The company’s convertible bonds yield 14 percent, said
Hemant Dharnidharka, the Bangalore-based head of credit research
at SJS Markets Ltd. An index tracking eight Indian convertible
debt had an average yield of 4.66 percent on Aug. 9, according
to Barclays Plc. “The higher yield shows that the investors want a higher
return for the comparatively higher risk for the name,”
Dharnidharka said. The group plans to sell about 30 percent of its cement
capacity of 35 million metric tons, Jain said without
elaborating. Gaur is looking to cut debt at Jaiprakash
Associates and its two subsidiaries Jaiprakash Power Ventures
and Jaypee Infratech Ltd. (JPIN) , he said. Enterprise Value Billionaire Kumar Mangalam Birla is in talks to acquire the
Gujarat cement unit of Jaiprakash Associates, three people with
direct knowledge of the matter said in November. Talks with
Birla were revived after it terminated talks with CRH Plc in
October. Jaiprakash Associates has a 4.8 million ton capacity in
Gujarat and a 5 million ton capacity in South India. The company may sell the factories for about $120 a ton of
enterprise value , calculated as a sum of market capitalization,
debt and minority interest minus cash, lower than the asset’s
replacement cost, Ashutosh Narkar, an analyst with HSBC Holdings
Plc in Mumbai wrote in a report to clients on Aug. 2. Jaiprakash Power is in talks to sell some of its hydro
power plants , two people with knowledge of the matter said,
asking not to be identified as the information is private.
Jaiprakash Power generates 1,300 megawatt from hydel plants and
has 500 megawatts of thermal capacity. Jain declined to identify assets the company plans to sell. The company plans to start generating power from a 1,320
megawatt thermal power plant this year and refinance loans for
the unit, which will be “cheaper as the projects would have
started operations,” Jain said. Hockey Team The group also plans to sell about 200 acres of land owned
by Jaypee Infratech for around 10 billion rupees, Jain said. It
sold 300 acres of land for around 15.5 billion rupees, he said.
It is also targeting home sales of around 10 billion rupees each
quarter this financial year. Founder Chairman Jaiprakash Gaur, who started as a civil
contractor, expanded into hotels in 1981 and started producing
cement five years later. In the past five years, Jaiprakash
Associates added 15 subsidiaries from air transport services and
a company to process soya and mustard to managing a hockey team,
according to the company’s annual report . The company has also developed a 5.13-kilometer (3.19-mile)
Formula One track called the Buddh International Race Circuit,
built on the outskirts of India’s capital, New Delhi . The
inaugural race was held in 2011. Formula One Chief Executive Officer Bernie Ecclestone told
the Indo-Asian News Service the race will be dropped from the
2014 calendar and return in early 2015. ‘Retain Faith’ “We retain our faith in the asset portfolio quality,”
HDFC’s Kulshrestha wrote in the report. “But remain cautious
given the tough macro environment. The company will not be able
to meet its funding requirements through operations alone.” Money managers including Birla Sun Life Asset Management
Ltd. and Sundaram Mutual Fund have cut their holdings in the
company, data show. “We are avoiding companies with high debt,” said Jaya Rao Venkatesan, a Chennai-based fund manager at Sundaram Mutual.
“The interest-rate reduction cycle, which we thought will
happen this year, will get delayed. To that extent such
companies will be hard pressed,” particularly during an
economic slowdown, he said. Economy Slows India’s industrial production in June fell for a second
straight month, while the central bank cut its forecast for
Asia ’s third-largest economy to 5.5 percent from 5.7 percent. The Reserve Bank of India raised two rates on July 15 and
has capped cash injections into the banking system and tightened
lenders’ reserve ratios to curb the supply of rupees in a bid to
reverse a slide in the currency. The measures triggered an
unprecedented 223 basis points jump in the three-month interbank
rate in July to 10.75. “Today our leverage looks high because the economy is not
doing well,” Jain said. Jaiprakash Associates’ profit fell 27 percent to 4.6
billion rupees in the year ended March 31 after a 65 percent
drop a year earlier. Interest expense climbed 56 percent to a
record 43.4 billion rupees, data show. For Jaiprakash Associates asset sales “are no longer just
a desirable outcome but a necessity,” said HSBC’s Narkar.
“However, in the current market scenario, potential buyers will
like to squeeze JPA on valuations making it difficult to sell
off.” To contact the reporter on this story:
George Smith Alexander in Mumbai at
galexander11@bloomberg.net To contact the editor responsible for this story:
Philip Lagerkranser at
lagerkranser@bloomberg.net
|
2013-08-12 00:00:00+00:00
|
nan
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BTG’s Lower Bonuses Portend More Bank Cuts on M&A Decline
|
Grupo BTG Pactual (BBTG11) , the Brazilian
investment bank led by billionaire Andre Esteves , is cutting
bonuses amid sliding revenue and the slowest market for mergers
and acquisitions in six years. Provisions for bonuses, which are paid to all employees of
the Sao Paulo-based bank, fell 31 percent to 426 million reais
($188 million) in the first half of 2013 from a year earlier,
the company said in a statement last week. They dropped 45
percent in the second quarter from the first. BTG, Brazil ’s biggest M&A adviser, predicted in January
that merger volume would surge as much as 40 percent this year.
Instead, takeovers through July plunged to the lowest level
since 2007 as the outlook for economic growth worsened. Goldman
Sachs Group Inc., UBS AG and Barclays Plc have responded with
staff reductions in Brazil, and more lenders may follow BTG in
lowering bonuses, according to Renata Fabrini, a partner at
executive-search firm Fesa. “When one bank starts to pay less, the others tend to
follow, because they aren’t afraid anymore of losing executives
to the competition,” Fabrini said in an interview from Sao
Paulo . BTG’s revenue fell 17 percent in the first half to 2.7
billion reais. The revenue figure BTG uses to calculate bonuses
declined 46 percent from the first quarter to the second, when
the bank lost 106 million reais on proprietary trading and 149
million reais on real estate investments, according to last
week’s statement. Revenue Link BTG’s bonuses, which get paid in a lump sum at the start of
the year, are “highly correlated to revenue,” Fabrini said. The company declined to comment on bonuses. Shares rose 1.8
percent to 28.55 reais at 5:06 p.m. in Sao Paulo. Investment-banking fees industrywide in Brazil dropped 13
percent this year through July from a year earlier, to $506
million, the lowest since 2009, according to London-based
research company Dealogic. At BTG, investment-banking revenue in
Brazil fell 39 percent to $70 million, the data show. Business slowed amid speculation the U.S. Federal Reserve
would trim its $85 billion monthly bond-buying program and as
Eike Batista ’s commodities empire collapsed, contributing to a
decline in Brazilian shares and M&A volume. The benchmark
Ibovespa (IBOV) index has lost 18 percent since the start of 2013. “Higher volatility in the markets is reducing returns for
Brazilian corporate and investment banks, and they’re increasing
the focus on cost reduction and efficiency,” said Ricardo
Amatto, a partner at headhunter firm Amrop Panelli Motta Cabrera
in Sao Paulo. ROE Decline BTG’s annualized return on equity, a gauge of
profitability, fell to 17 percent in the first half from almost
31 percent last year. The firm’s revenue from investment banking rose 56 percent
to 279 million reais in the first half of 2013 even with the
slowdown in Brazil, as international acquisitions completed
since last year added to the total. The bank concluded its
takeover of Bolsa y Renta SA, Colombia ’s biggest brokerage by
trading volume, in December, and acquired Celfin Capital SA,
Chile ’s biggest brokerage, in November. BTG held on to its top ranking among M&A advisers in the
first half of 2013, data compiled by Bloomberg show. The bank
ceded the No. 1 position on Brazil investment-banking fees to
Itau BBA through July, the wholesale arm of Itau Unibanco
Holding SA, according to Dealogic. Sao Paulo-based Itau, the
biggest Latin American bank by market value, generated $81
million of fees, up 8 percent, Dealogic said. Credit Suisse Group AG ranked third with $60 million, and
Banco Bradesco BBI SA was fourth, with $51 million. Officials at
the banks declined to comment on bonuses. Bonus Gap U.S. and European banks have been shrinking bonuses since
the 2008 financial crisis and were paying less to executives
than their local competitors in Brazil, Fesa’s Fabrini said.
That gap may narrow this year because U.S. banking profits are
rising, she said, adding that it’s “too early to say.” Even with the drop in bonus expenses, BTG’s cost-to-income
ratio, which measures total revenue and operating expenses, was
50 percent last quarter, still above the 40 percent average for
the past two years, Mario Pierry , an analyst at Deutsche Bank
AG, said in a report. BTG’s management has said several “cost-optimization initiatives are under way following its recent
acquisitions,” according to Pierry. ‘Value Destruction’ BTG eliminated about 60 people from Celfin last November,
leaving the firm it acquired with about 600 employees, a person
with direct knowledge of the matter said at the time. The “value destruction” in emerging markets and the
“flight to quality” from international investors will probably
keep bonuses falling at Brazilian banks, according to Amatto at
Amrop. That’s what BTG is preparing for, Esteves, the bank’s chief
executive officer, said on a conference call last week with
analysts. “We reduced our risk exposure in general,” Esteves, 45,
said. “We increased our liquidity to confront a more difficult
environment, to be prepared for opportunities that appear in
moments of crisis.” To contact the reporter on this story:
Cristiane Lucchesi in Sao Paulo at
clucchesi5@bloomberg.net To contact the editors responsible for this story:
David Scheer at
dscheer@bloomberg.net ;
Christine Harper at
charper@bloomberg.net
|
2013-08-12 00:00:00+00:00
|
nan
|
Washington Plans $99 Million Sale for Cop Museum: Muni Deals
|
The District of Columbia plans to
sell $99.4 million of revenue bonds to build a museum dedicated
to U.S. law enforcement that will include artifacts such as Pat
Garret’s badge and Al Capone ’s bullet-proof vest. The 57,000-square-foot museum will be built in the
Judiciary Square section of Washington , across from the National
Law Enforcement Officers Memorial. The tax-exempt debt, with a
final maturity of July 2048, will be repaid through law-enforcement and corporate donations, merchandise sales and
federal grants, according to offering documents. “We expect a high interest level,” said Craig Floyd,
chief executive officer of the National Law Enforcement Officers
Memorial Fund. “We’ve already had a number of interest calls
about the deal.” The museum, expected to open in January 2016, will be
mostly underground. It will feature interactive exhibits and a
collection of historical and contemporary artifacts that will
tell the story of American law enforcement , said Steve
Groeninger, a spokesman for the fund. Among the exhibits will be
the badge and gun of Garret, the Old West lawman who killed
Billy the Kid in 1881. Washington’s debt falls into the category known as
industrial-development bonds. Local agencies sell the securities
for companies, hospitals and nonprofit organizations, whose
credit backs the obligations. The bonds have lost 4.2 percent in
2013, more than the 3.8 percent for the broader municipal
market, Barclays Plc data show. Industrial development revenue bonds have accounted for the
most defaults in the $3.7 trillion municipal market, according
to Federal Reserve data. Washington last came to market in June, data compiled by
Bloomberg show. The negotiated deal isn’t backed by insurance, and the
bonds aren’t rated. To contact the reporter on this story:
Emily Freeman in New York at
efreeman14@bloomberg.net To contact the editor responsible for this story:
Stephen Merelman at
smerelman@bloomberg.net
|
2013-08-12 00:00:00+00:00
|
nan
|
USDA Boxed Beef Cutout Closing Prices for August 12
|
August 12 (Bloomberg) This table details boxed beef cutout
prices supplied daily by the U.S. Department of Agriculture .
Prices and loads traded are as of 3:00 p.m. U.S. central time. Prices are determined from cuts in dollars a hundredweight and
vary between higher-quality choice cuts and select beef cuts for sale
f.o.b. Omaha, Nebraska . CHOICE SELECT 600-900 600-900 -
Current Cutout Values: 190.28 182.85
Change from prior day: 1.29 0.85 -
Choice/Select spread: 7.43 Total Load Count (Cuts, Trimmings, Grids): 182 -
COMPOSITE PRIMAL VALUES
Primal Rib 295.62 273.92
Primal Chuck 160.58 157.42
Primal Round 160.66 160.03
Primal Loin 246.35 229.49
Primal Brisket 138.90 132.91
Primal Short Plate 141.04 142.64
Primal Flank 122.63 118.41 LOAD COUNT AND CUTOUT VALUE SUMMARY FOR PRIOR 5 DAYS CHOICE SELECT
Date Choice Select Trim Grinds Total 600-900 600-900
08/09 60 62 9 22 153 188.99 182.00
08/08 79 64 9 38 190 188.31 182.05
08/07 85 73 15 39 212 188.66 181.67
08/06 73 45 1 24 144 187.17 180.90
08/05 58 38 6 22 123 186.46 180.54 Current 5 Day Simple Average: 187.92 181.43 NATIONAL BOXED BEEF CUTS - NEGOTIATED SALES FOB Plant basis negotiated sales
for delivery within 0-21 day period. Prior days sales after 1:30pm are included. CURRENT VOLUME - (one load equals 40,000 pounds) Choice Cuts 91.88 loads 3,675,205 pounds
Select Cuts 33.87 loads 1,354,906 pounds
Trimmings 21.28 loads 851,372 pounds
Ground Beef 34.55 load 1,381,914 pounds -
Choice Cuts, Fat Limitations 1-6 (IM) = Individual Muscle
IMPS/FL Sub-Primal # of Total Price Weighted rades Pounds Range Average -
109E 1 Rib, ribeye, lip-on, bn-in 32 224,200 549.38 602.00 558.05
112A 3 Rib, ribeye, bnls, light 14 24,497 597.28 651.00 619.10
112A 3 Rib, ribeye, bnls, heavy 33 107,768 575.00 650.00 610.50
113C 1 Chuck, semi-bnls, neck/off 5 70,992 188.00 212.00 191.19
114 1 Chuck, shoulder clod 10 71,563 180.74 201.00 188.92
114A 3 Chuck, shoulder clod, trmd 27 143,076 195.94 211.00 201.17
114D 3 Chuck, clod, top blade 13 47,588 264.00 293.00 276.24
114E 3 Chuck, clod, arm roast 26 275,284 224.00 262.06 226.18
114F 5 Chuck, clod tender (IM) 8 10,496 415.19 443.00 419.11
115 1 Chuck, 2-piece, boneless
116A 3 Chuck, roll, lxl, neck/off 51 308,736 220.00 243.00 234.53
116B 1 Chuck, chuck tender (IM) 19 42,925 208.00 220.00 214.86 3 Chuck roll, retail ready
120 1 Brisket, deckle-off, bnls 25 99,330 195.00 215.00 202.53
120A 3 Brisket, point/off, bnls 20 41,960 350.00 389.00 354.61
123A 3 Short Plate, short rib 33 88,884 421.00 466.00 434.07
130 4 Chuck, short rib 16 22,848 305.00 345.00 329.21
160 1 Round, bone-in
161 1 Round, boneless 5 29,865 201.00 207.00 202.92 3 Round, bnls/peeled heel-out
167A 4 Round, knuckle, peeled 47 210,313 211.70 234.90 226.31
168 1 Round, top inside round 12 50,908 194.00 213.67 196.80
168 3 Round, top inside round 22 155,794 200.00 225.00 209.51
169 5 Round, top inside, denuded 30 111,964 234.00 248.00 238.89 3 Round, top inside, side off
170 1 Round, bottom gooseneck
171B 3 Round, outside round 53 308,730 200.00 229.60 208.21
171C 3 Round, eye of round (IM) 49 180,110 195.74 226.00 208.34
174 1 Loin, short loin, 2x3
174 3 Loin, short loin, 0x1 31 191,579 440.00 509.50 457.95
175 3 Loin, strip loin, 1x1
180 1 Loin, strip, bnls, heavy 1 Loin, strip loin bnls. 1x1 9 8,920 415.00 448.93 415.55
180 3 Loin, strip, bnls, 0x1 46 149,256 468.00 521.00 494.80
184 1 Loin, top butt, bnls, heavy 8 13,281 295.00 309.50 297.15
184 3 Loin, top butt, boneless 40 180,539 315.00 335.80 326.57
185A 4 Loin, bottom sirloin, flap 15 55,722 326.00 356.00 337.67
185B 1 Loin, ball-tip, bnls, heavy 18 66,356 198.00 233.00 204.62
185C 1 Loin, sirloin, tri-tip (IM) 5 2,440 243.50 264.99 244.83
185D 4 Loin, tri-tip, pld (IM) 25 107,140 318.00 359.00 325.18
189A 4 Loin, tndrloin, trmd, heavy 31 53,240 884.00 951.89 907.46
191A 4 Loin, butt tender, trimmed 11 12,393 839.00 950.01 861.42
193 4 Flank, flank steak (IM) 20 12,936 450.00 485.00 470.66 -
Select Cuts, Fat Limitations 1-6 (IM) = Individual Muscle
IMPS/FL Sub-Primal # of Total Price Weighted Trades Pounds Range Average -
109E 1 Rib, ribeye, lip-on, bn-in 11 46,697 496.00 533.00 510.98
112A 3 Rib, ribeye, bnls, light 9 60,879 547.00 585.00 571.09
112A 3 Rib, ribeye, bnls, heavy 21 56,873 541.41 601.00 571.61
113C 1 Chuck, semi-bnls, neck/off
114 1 Chuck, shoulder clod 10 28,941 180.74 198.00 189.65
114A 3 Chuck, shoulder clod, trmd 8 54,520 193.85 208.00 195.71
114D 3 Chuck, clod, top blade
114E 3 Chuck, clod, arm roast
114F 5 Chuck, clod tender (IM) 5 3,690 340.00 370.00 354.88
115 1 Chuck, 2-piece, boneless
116A 3 Chuck, roll, lxl, neck/off 23 272,145 221.66 242.00 226.85
116B 1 Chuck, chuck tender (IM) 6 38,650 206.00 220.00 209.69 3 Chuck roll, retail ready 0 0
120 1 Brisket, deckle-off, bnls 8 38,847 195.29 221.66 200.71
120A 3 Brisket, point/off, bnls
123A 3 Short Plate, short rib 8 8,600 395.94 461.00 421.30
130 4 Chuck, short rib 8 21,200 305.00 340.00 316.48
160 1 Round, bone-in 0 0
161 1 Round, boneless 0 0 3 Round, bnls/peeled heel-out 0 0
167A 4 Round, knuckle, peeled 4 9,380 205.00 227.00 221.87
168 1 Round, top inside round 11 106,888 194.00 208.97 196.06
168 3 Round, top inside round 8 25,427 206.00 223.00 216.78
169 5 Round, top inside, denuded 3 Round, top inside, side off 0 0
170 1 Round, bottom gooseneck
171B 3 Round, outside round 5 20,089 205.63 222.50 208.04
171C 3 Round, eye of round (IM) 8 18,713 207.39 220.00 210.82
174 1 Loin, short loin, 2x3
174 3 Loin, short loin, 0x1 13 9,473 432.34 475.00 444.87
175 3 Loin, strip loin, 1x1 0 0
180 1 Loin, strip, bnls, heavy 0 0 1 Loin, strip loin bnls. 1x1
180 3 Loin, strip, bnls, 0x1 14 26,901 421.98 468.00 430.09
184 1 Loin, top butt, bnls, heavy 6 12,197 242.70 257.00 246.45
184 3 Loin, top butt, boneless 16 44,609 249.10 270.00 261.86
185A 4 Loin, bottom sirloin, flap 6 39,612 325.59 340.00 327.91
185B 1 Loin, ball-tip, bnls, heavy 9 117,196 200.65 215.00 207.09
185C 1 Loin, sirloin, tri-tip (IM) 5 4,209 235.00 250.00 247.82
185D 4 Loin, tri-tip, pld (IM)
189A 4 Loin, tndrloin, trmd, heavy 7 15,752 853.10 881.00 868.88
191A 4 Loin, butt tender, trimmed 8 4,612 820.00 867.00 826.70
193 4 Flank, flank steak (IM) 9 37,757 433.79 470.00 437.79 -
CHOICE, SELECT & UNGRADED CUTS FatLimitations 1-6 (IM) = Individual Muscle -
124 4 Rib, Back Ribs, Fresh
124 4 Rib, Back Ribs, Frozen 8 14,402 96.00 119.61 115.97
121D 4 Plate, Inside Skirt (IM) 23 45,630 364.70 405.00 379.72
121C 4 Plate, Outside Skirt (IM) 14 23,589 398.53 440.00 408.83
121E 6 Outside Skirt, pld (IM) 11 30,804 510.00 563.00 522.15 Cap, Wedge Meat & (IM) Lean 33 97,435 230.00 253.00 235.21 Pectoral Meat 18 33,931 228.74 265.50 244.86 -
GB - STEER/HEIFER SOURCE - 10 Pound hub Basis - Coarse and Fine Grind -
Ground Beef 73% 27 290,023 158.98 180.00 172.41
Ground Beef 75%
Ground Beef 81% 24 248,250 174.00 204.00 182.05
Ground Beef 85%
Ground Beef 90% 0 0
Ground Beef 93%
Ground Beef Chuck 80% 19 281,597 183.60 209.00 192.04
Ground Beef Round 85% 5 33,601 213.05 220.00 215.41
Ground Beef Sirloin 90% 0 0 -
BLENDED GB - STEER/HEIFER/COW SOURCE- 10 Pound Chub Basis - Coarse & Fine Grind -
Blended Ground Beef 73%
Blended Ground Beef 75% 0 0
Blended Ground Beef 81% 16 391,816 184.10 208.00 207.48
Blended Ground Beef 85%
Blended Ground Beef 90%
Blended Ground Beef 93%
Blended Ground Beef Chuck 80%
Blended Ground Beef Round 85%
Blended Ground Beef Sirloin 90% 0 0 BEEF TRIMMINGS - STEER/HEIFER SOURCE - Fresh Combos & Frozen Boxed Fresh 50% lean trimmings 33 851,372 102.00 113.00 109.18
Frozen 50% lean trimmings 0 0 FAT LIMITATIONS (FL) DESCRIPTION
Maximum Average Fat Thickness Maximum Fat at any point
1. 3/4" (19mm) 1.0"
2. 1/4" (6mm) 1/2"
3. 1/8" (3mm) 1/4"
4. Practically free (75% surface lean exposed) 1/8"
5. Peeled/Denuded 1/8"
6. Peeled/Denuded, surface membrane removed 1/8" Items that have no entries indicate there were trades but not reportable
because they did not meet the daily 3/70/20 guideline. Please refer to weekly
LM_XB459 as the item may qualify. A cutout value is an average of the prices tallied for cuts of beef
from cattle carcasses weighing 550-850 pounds. Cutout values are
separated into three main product types. Fabricated loads are beef cuts
taken from an animal's ribs, chuck, round, loin, brisket, short plate
and flank; 50 percent loads are 50 percent lean beef trimmings. Ground
loads may contain 73, 75, or 80 percent ground beef. A typical
refrigerated truckload carries 40,000 pounds. Choice 1-3 grade is a better grade than Select 1-3, partly because
Choice cuts have more fat, or marbling, than Select cuts. Grade quality is determined using a 1-5 yield grade scale. A rating
of 1 is the highest ratio of muscle to fat, while 5 is the lowest.
Marbling is an important flavor factor.
|
2013-08-12 00:00:00+00:00
|
nan
|
BRF Said to Names Galeazzi as CEO in Diniz’s First Staff Shakeup
|
BRF SA (BRFS3) , the world’s largest meat
processor by market value, plans to appoint Claudio Galeazzi as
chief executive officer in billionaire Abilio Diniz’s first
management change since becoming chairman in April. Galeazzi, a former CEO of the Cia. Brasileira de
Distribuicao Grupo Pao de Acucar supermarket chain founded by
Diniz, will replace Jose Antonio Fay, according to a person with
direct knowledge of the matter who can’t be named because the
changes aren’t public. Jose Eduardo Cabral, BRF’s vice-president
for the domestic market, and Wilson Newton de Mello Neto, vice-president of institutional affairs, are leaving the company, the
person said. Diniz, 76, is seeking to cut costs and lead the company’s
international expansion since taking over as chairman on April
9. BRF rose 1.2 percent to 51.10 reais at 12:51 p.m. in Sao
Paulo , heading to its highest close since the start of trading
in 1997. Fay, at the helm since October 2008, will work with
Galeazzi until the end of the year, the person said. BRF’s press
office declined to comment on the management chances. To contact the reporter on this story:
Lucia Kassai in Sao Paulo at
lkassai@bloomberg.net To contact the editor responsible for this story:
James Attwood at
jattwood3@bloomberg.net
|
2013-08-12 00:00:00+00:00
|
nan
|
Christie Won’t Renominate N.J. Supreme Court Justice Hoens
|
New Jersey Governor Chris Christie
said he won’t nominate state Supreme Court Justice Helen Hoens
for a new term because he expected Democratic lawmakers to deny
tenure to the Republican jurist. Christie appointed Faustino Fernandez-Vina, 61, who he said
is a fellow Republican, to take Hoens’s place on the bench.
Hoens, 59, who was nominated by former Democratic Governor Jon Corzine , has served since 2006. Her term ends in October, a
month before Christie faces re-election. Nominations to New Jersey’s highest court require Senate
confirmation. Democrats, who control both legislative houses,
have resisted Christie’s effort to reshape the bench. The Senate
Judiciary Committee refused to approve two of his Republican
nominees: Bruce Harris, who is black and openly gay; and Phillip Kwon, who would have been the first Asian justice. “Let me be clear: Helen Hoens deserved renomination; she
deserved tenure,” Christie, 50, said today at a press briefing
in Trenton. “Given the political situation in this state at the
moment caused by the majority in the Senate, I was not in a
position to offer to her the opportunity to be renominated.” Senate Grilling Christie said that if he renominated Hoens, he would be
“ignoring the reality of what’s been happening for the past
three-and-a-half years.” Committee members had grilled Kwon
about his family’s liquor business and Harris on his same-sex
marriage philosophy before rejecting both. “I was not going to let her loose to the animals,” he
said of Hoens. “I was not going to allow another person to be
subjected to the awful treatment that was given to both Phil
Kwon and Bruce Harris .” Hoens, in a statement, said she was saddened to leave
“this extraordinary professional calling.” Ralph Lamparello,
president of the state Bar Association, said in a statement that
Hoens didn’t “deserve to be treated as a political pawn in the
battle between the governor and the legislature over our
courts.” New Jersey’s highest court is composed of seven members. At
the end of an initial seven-year term, the governor may nominate
a member for tenure, which allows them to serve until mandatory
retirement at 70. Court Standoff Christie has accused the court of legislating, rather than
ruling, on issues affecting state spending. He has cited
examples such as the Abbott v. Burke school-funding cases and
Mount Laurel affordable-housing rulings. “Even before I officially became governor I made clear it
was my intention to reshape the court,” he said today. “It’s
my belief that the New Jersey Supreme Court has repeatedly
strayed from its purview and overstepped its role.” Christie in 2010 denied reappointment to John Wallace , the
court’s only black justice. That sparked a standoff with
Democrats that lasted a year and delayed hearings on Anne Murray Patterson, Christie’s Republican nominee. The governor and
Senate President Stephen Sweeney later agreed to let Patterson
replace Justice Roberto Rivera Soto, who retired in September
2011. The court is operating with five permanent members; Chief
Justice Stuart Rabner, a Democrat; Barry Albin, a Democrat;
Jaynee Lavecchia, who Christie has characterized as an
independent and Democrats have said is a Republican; Patterson
and Hoens. Christie said the “court is being damaged” by a
group of acting judges appointed by Rabner. He likened them to
temporary helpers acting beyond New Jersey’s constitutional
process for confirmation. Hardball Move The governor said he made his decision not to reappoint
Hoens based on remarks made by Senator Raymond Lesniak, a
Democrat from Elizabeth who is vice-chairman of the judiciary
panel. Lesniak told the Star-Ledger on July 21 that Christie
“plays hardball” with the nominees, and Democrats should
reject Hoens as a hardball tactic of their own. “Justice Hoens deserved to leave with her professional
reputation intact,” Christie said. “Given everything they’ve
done before and the very bold and arrogant announcement by
Senator Lesniak, I had to take them at their word. I had no
choice but to do that.” Lesniak, reached by telephone after the governor’s remarks,
said Christie “gives me too much credit” for orchestrating the
outcome of nominations. “It really is up to the Senate president and the other
members on the committee to make the determination,” he said.
He declined to speculate on how Fernandez-Vina will fare, saying
the committee must review his credentials. Nominees Rejected Lawmakers had unanimously backed Fernandez-Vina’s Superior
Court assignment, the governor said, and would have “no reason
to delay” this nomination. “No one can question his skill, experience and
competence,” Christie said. The Senate committee voted against Kwon after Democrats
questioned a $160,000 payment his family made to settle a U.S.
civil lawsuit over cash deposits from their liquor store. The
panel voted against Harris’s nomination after he said that while
he was an advocate of gay marriage, he would remove himself from
the issue if it came before the court. Christie offered the names of two more justices in
December, calling the nominations of Superior Court Judge David
Bauman, a Republican, and Board of Public Utilities President
Robert Hanna, an independent, a “political compromise.” The
Senate hasn’t scheduled hearings to consider the nominations. Fernandez-Vina was born in Cuba and was appointed to be a
judge in 2004 by former Governor James McGreevey, a Democrat. A
resident of Barrington in Camden County, he is a Rutgers Law
School graduate. The Senate unanimously voted in 2011 to give
him lifetime tenure on a lower court, Christie said. Fernandez-Vina said he was “humbled and honored” by the
nomination. Christie said the nominee wouldn’t discuss judicial
philosophy with reporters and will make his remarks when he goes
before the Senate committee. To contact the reporter on this story:
Terrence Dopp in Trenton at
tdopp@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Hedge Funds Boost Brent Crude Net-Longs to Two-Week High
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Hedge funds and other money managers
raised bullish bets on Brent crude to the highest level in two
weeks, according to data from ICE Futures Europe . Speculative bets that prices will rise, in futures and
options combined, outnumbered short positions by 188,789 lots in
the week ended Aug. 6, the London-based exchange said today in
its weekly Commitments of Traders report. The increase of 7,454
contracts brings net-longs, which fell the previous week, to
their highest since July 23. Bearish positions by producers , merchants, processors and
users of Brent outnumbered bullish positions by 394,676, an
increase of 4.1 percent that brings their net-short position to
the largest since July 16. Brent advanced 1.2 percent in the week to Aug. 6 to $108.18
a barrel and traded at $106.20 as of 12 p.m. local time. ICE publishes, usually each Monday, aggregate numbers for
long and short positions for speculators and institutional
investors, as well as commercial companies that buy or sell
futures to protect against price moves. Analysts and investors
follow changes in speculators’ positions because such
transactions can reflect an expectation of a change in prices. Swaps dealers bolstered net-long positions for the first
time in five weeks, by 1 percent to 232,355. In the previous
week their net-long position had slumped to the lowest since
April 23. Money managers’ net-long bets on European gasoil futures
fell for a second week, slipping by 4.1 percent to 59,050
contracts in their biggest drop since June 25. To contact the reporter on this story:
Grant Smith in London at
gsmith52@bloomberg.net To contact the editor responsible for this story:
Stephen Voss at
sev@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Smisek Says Airline M&A `Very Good' for Industry: Charlie Rose
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United Continental Holdings Inc.
Chief Executive Officer Jeff Smisek talks with Charlie Rose
about the merger of
of United Airlines parent UAL Corp. and Continental Airlines
Inc., the airline industry, and U.S. transportation policy.
("Charlie Rose" airs weeknights on PBS and Bloomberg
Television. Source: Charlie Rose) Running Time: 28:26
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2013-08-12 00:00:00+00:00
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nan
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Dementia Risk Factors May Begin as Early as Adolescence
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A person’s chance of getting dementia before age 65 may develop as early as adolescence, according to a study that suggests teens with high blood pressure or who drink excessively are at risk. Other risk factors for dementia include stroke, use of antipsychotics, father’s dementia, drug intoxication, as well as short stature and low cognitive function, according to a study of Swedish men published by the journal JAMA Internal Medicine . The finding bolsters research efforts that have begun to look at healthy people to discover who may be at risk for dementia in the future. The study released yesterday also suggests that late-life illness can be foreshadowed in youth. “The idea of lifelong factors playing a role, that activities and behaviors at an early age matter, seems intuitive,” Heather Snyder, the director of medical and scientific operations for the Alzheimer’s Association , said in a telephone interview. “There may be other types of public health interventions that can be incorporated” in dementia prevention, she said. The study also helps confirm some risk factors discovered in previous research. Having a close family member who suffers from dementia, low cognitive function and alcohol abuse are known to increase the risk of Alzheimer’s disease and dementia, said Snyder, who wasn’t involved in the study. Earlier Hints Previous research has seen hints that physical activity and mental stimulation were protective against dementia, she said. The idea that heart health also plays a role has been suggested by earlier studies as well. More than 5 million people in the U.S. have Alzheimer’s, a progressive disease that erodes a patient’s memory, thinking and ability to carry out simple tasks. The cause of the illness is unknown and there is no known cure. Alzheimer’s disease is the most common form of dementia, which may affect 65.7 million people worldwide by 2030, the World Health Organization has estimated. In the research released yesterday, Swedish scientists followed more than 480,000 men conscripted for military service from September 1969 to December 1979. The men were 18 years old, on average, at first examination. Over the course of 37 years, 487 of the men developed dementia. The study finding suggests that some noninherited factors, like high blood pressure, may worsen other processes that cause early-onset dementia, according to an editorial written by Deborah Levine , an assistant professor at the University of Michigan Health System. The study is limited because it didn’t include women, and it may not have measured all the factors that play a role in the disease. The data sources used by the researchers also may understate the amount of information on other, later-in-life risks. To contact the reporter on this story: Elizabeth Lopatto in San Francisco at elopatto@bloomberg.net To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Getting the Liability Out of Lead Paint
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Should we be able to sue the manufacturers of lead paint for the harms it has caused? Lead is very bad for you, as Kevin Drum has amply documented . It causes all sorts of neurological problems, particularly if ingested by children, and may have been behind the great midcentury crime wave that rocked the Western world. It’s a very good thing that we took lead out of the atmosphere and the paint that decks our walls. Unfortunately, a good bit of lead paint is still hanging around. And then there are the people who were damaged by lead paint as youngsters. I myself dimly recall chewing on a sweet-tasting paint chip while my mother was DIY-ing our apartment in the 1970s (insert all the obvious jokes here). Should I be able to sue over the exposure? Lilly Fowler, writing at Mother Jones , chronicles the difficulties that state and local governments have faced in suing the manufacturers of lead paint. Even with quotes cherry-picked to make paint manufacturers sound awful, however, the case seems weak. The plaintiffs argue that the companies knew lead was toxic as early as 1900, but the quotations in question clearly refer to large quantities employed in industrial settings, not tiny quantities trapped in the paint on your walls; we lacked the analytical and epidemiological tools in the early 20th century to detect small, widespread effects. By the time the quotes show executives in the record actually discussing the harms from lead-based paint, these sorts of paints were already being phased out, which is why lead paint problems are mostly limited to badly maintained homes built before 1950. Besides, there’s what litigation experts call an “empty chair” problem: There’s no way to know whose paint color is on your walls from 70 years ago. The cases are modeled on the asbestos litigation torrent of the 1970s through 1990s, but pinpointing the harm from lead paint is much harder. Asbestosis and mesothelioma are pretty much exclusively linked to asbestos exposure; if you get them, you know who to blame. But there’s no way to say how much higher your IQ, or stronger your impulse control, would have been without the lead paint. Even absent these problems, the question would remain: Should you be able to sue a manufacturer under today’s laws for products that were manufactured 75 years ago, with less knowledge about effects and very different liability laws? When Sherwin-Williams and DuPont and all the other companies were manufacturing these products in the first half of the 20th century, liability law was very, very different. In " The Rule of Lawyers ," Walter Olson lists the changes in product liability law that took place in midcentury, as people began to view the courts not just as a means for narrow redress, but also as a venue in which cosmic injustices might be righted: We’ll leave the discussion of whether U.S. liability law is soundly premised for another day. For today, we have another question: Should you be able to sue a manufacturer under the current standards for products that were manufactured under earlier, quite different standards? Recall that most of the paint that concerns us is in houses built before 1950. When they made lead paint, they had no “duty to warn,” even if we could show that they knew lead in paint was hazardous. If the stuff contained what you said it contained, and did basically what you said it did, you were fulfilling all your obligations under the law. Should you face penalties for doing something that the law allowed? It’s not as if we can punish the people who decided to make paint with lead in it; they are long dead, or perhaps, if they were unusually healthy, in nursing homes. Nor can going after them serve as much deterrence: “Don’t do something that you don’t necessarily know is hazardous, but which might later become illegal or liable under laws that don’t yet exist” does not seem like a very useful threat. We can, perhaps, compensate the victims but recall, too, that lead paint only becomes a problem when a property isn’t well maintained, which is why it mostly affects poor kids. Lead paint is not dangerous when it is sitting sedately on your wall; it becomes a danger when it gets old and flakes off, and then either gets eaten or pulverized into a fine powder that goes airborne. Your house needs to be pretty dilapidated (or your mother needs to be chipping off five decades of slopped-on paint) for the stuff to become a problem. Why should Sherwin-Williams pay because you (or your landlord) have allowed a product they manufactured 70 years ago to degenerate into a dangerous state? Merely because they have deep pockets? This is not a brief for the manufacturers of lead paint. I am very much in favor of laws against lead paint; we shouldn’t be painting hazardous stuff on our walls that could irreparably damage the kids of the future. I am also in favor of paying for lead paint abatement if families can’t afford to do it themselves. But trying to get today’s paint companies to cough up for the unfortunate error of decades long past seems like a bridge too far. Opening up potentially unlimited liability doesn’t make manufacturers extra careful; it actually erodes the deterrent effect of liability law. If I can’t know whether what I’m doing is legit, or not, then why bother to guard against the things that are currently verboten? The law should change, when it has to. But it shouldn't become unpredictable. People, and companies, need to be able to know whether what they’re doing is potentially illegal, or the grounds for a lawsuit. If they can’t know this, they can’t plan for the future … which is to say, they can’t invest in making the world a better place.
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2013-08-12 00:00:00+00:00
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nan
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LDK Solar Expects a Return to Profit After EU Trade Deal
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LDK Solar Co. (LDK) , the Chinese solar-panel maker that’s reported eight straight quarterly losses,
expects to return to profit this year on domestic demand and as
a tariff deal promises better sales in Europe . The company, which is scheduled to report second-quarter
earnings on Aug. 14, started generating positive cash flows from
selling wafers used in solar cells in June, President Tong Xingxue said in an interview at his Xinyu office. “This is the first time in two years we witnessed obvious
improvement,” he said. “The market is steadily rising and our
demand has exceeded supply. The basic barrier to Europe has been
overcome” and the domestic market is taking off, he said. LDK’s debt rose to $2.9 billion as of the end of the first
quarter after a supply surplus drove a 20 percent drop in module
prices last year. Sales are set to improve after European Union
and Chinese negotiators struck an agreement last month to curb
EU imports of solar panels in exchange for exempting the
shipments from punitive tariffs. “The oversupply is easing in 2013 and some top solar
manufacturers can even make profits in the second half,” Lian Rui, an analyst at NPD Solarbuzz in Beijing, said by phone. The solar market is becoming more diversified, with demand
seen in Japan， China ，Europe and Australia, and emerging markets
including Africa，the Middle East and Thailand , Tong said in the
Aug. 8 interview. “LDK will have half of its market in China，with the rest
abroad,” Tong said. He expects module prices to increase in the
second half. LDK’s wafer production is operating at almost full capacity
of 4.5 gigawatts from about 30 percent capacity at the beginning
of the year, Tong said. The company has kept almost no inventory
for the last two quarters, he said. LDK plans to revive production at its polysilicon plants
once prices reach at least 140 yuan ($23) a kilogram from about
120 yuan now，Tong said. The company also plans to develop 600 megawatts of solar
farms this year once it secures buyers, Tong said. To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at
fshen11@bloomberg.net To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Apple Said to Prepare Holiday Refresh of IPhones to IPads
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Apple Inc. (AAPL) plans to introduce new versions of the iPhone and iPad in time for the holiday shopping season, seeking to entice shoppers who delayed purchases amid a dearth of new models so far this year. The new iPhone will be unveiled at a Sept. 10 event, according to a person with knowledge of the plans who asked not to be named because the timing isn’t public. Updated iPad models, including an iPad with a thinner body design and an iPad mini with a high-resolution screen will be unveiled later, two people said. Software for the devices, as well as for Mac computers, will also be revamped, Apple said in June. The updates will enable Apple to present a refreshed lineup of its top-selling products to consumers ahead of the year-end holiday shopping season . The iPhone and iPad accounted for almost 70 percent of the company’s sales last quarter. The releases come at a critical time for Apple, whose stock has slumped by a third from a record in September amid slowing profit growth and a scarcity of new products. “To drive growth you need to have that next iPhone and iPad refreshed,” said Brian Marshall , an analyst at ISI Group in San Francisco . He said Apple will probably introduce a less expensive iPhone next month to appeal to budget-conscious customers, especially those in developing markets outside of the U.S. and Europe. Apple Chief Executive Officer Tim Cook has said the company will introduce new products starting in the fall and “across 2014.” Trudy Muller , a spokeswoman for Cupertino, California-based Apple, declined to comment. iPad Upgrades After popularizing the use of touch-screen smartphones and tablets, the company is battling rivals such as Samsung Electronics Co. (005930) , Google Inc. (GOOG) and Asustek Computer Inc. (2357) The planned new full-size iPad, with a 9.7-inch screen, will have a body that more closely resembles the current iPad mini, with a thinner bezel than the current version, said the people. It will be the first redesign since March 2012, when Apple introduced a high-resolution iPad with the current shape. The iPad mini being sold now, with a 7.9-inch screen, doesn’t have the same high-definition display featured on the iPhone and larger iPad. Apple’s share of the tablet market slid to 32 percent in the second quarter, from 60 percent a year earlier, according to market-research firm IDC. Tablet shipments are slowing in anticipation of new models from the company, IDC said last week. Software Revamp Apple rose 4.8 percent to $489.57 at the close in New York , paring the stock’s decline for the year to 8 percent. The Wall Street Journal previously reported about the iPad design changes. AllThingsD said Apple would debut an iPhone on Sept. 10. The new iPhones and iPads will also feature an overhaul of the company’s mobile operating system, iOS 7, which includes changes to e-mail, calendar and other applications, as well as new color schemes and icon designs. Carl Howe , an analyst at Yankee Group , predicts Apple will garner record sales of the products during the holiday quarter. Other companies tend to move their releases to avoid being overshadowed by Apple, he said. “This makes it so all eyes are on Apple, and that’s exactly what Apple loves,” said Ramon Llamas , an analyst at IDC. He said Apple will see a big spike in sales after the products debut, during a boom lasting about six months. To contact the reporters on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net ; Adam Satariano in San Francisco at asatariano1@bloomberg.net To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Prudential Jumps to Record as Profit Beats Forecasts on Asia
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Prudential Plc (PRU) surged to a record in
London trading after the U.K.’s biggest insurer by market value
reported first-half profit that beat analyst estimates, buoyed
by rising sales in Asia and a jump in U.S. earnings. Operating profit climbed 22 percent to 1.42 billion pounds
($2.2 billion) in the first six months, the London-based insurer
said in a statement today. That beat the 1.3 billion-pound
estimate of 17 analysts provided by the company. The stock
surged to the highest since at least 1988 as the firm raised its
dividend and posted record profit for its fund management unit. “There is still plenty of potential in that share price,”
Chief Executive Officer Tidjane Thiam said on a conference call
with reporters from London . Today’s results “provide further
evidence of our ability to deliver both earnings growth and
cash. We look forward to the rest of the year with confidence.” The stock, which has more than doubled since Thiam became
CEO in October 2009, advanced 4.1 percent to 1,232 pence in
London. That’s bringing gains this year to 42 percent, compared
with a 23 percent increase for the FTSE 350 Insurance Index. Record Sales Thiam, 51, said the insurer has achieved four of the six
2013 objectives that were set out in 2010, and remains on track
to achieve the last two, which include doubling Asia’s 2009
operating profit by year end. Asia reported a 18 percent jump in
the first half, with seven of its units in the region posting
record sales in the second quarter. Asia remains a “significant driver” of earnings for the
company, according to Thiam, given the rebalancing of global
economic growth toward the region and low penetration rate of
insurance policies in countries such as the Philippines and
Vietnam . The CEO said the insurer is close to completing the
reorganization of is Asia business into one single legal entity,
potentially making it easier to sell in the future. “Rebalancing is under way of the world economy, it’s rapid
and substantial,” Thiam told reporters. “One of our successes
as a group has been an early recognition of this.” New business profit, or NBP, in Asia jumped 20 percent to
659 million pounds from a year ago. Sales of life insurance
products rose 42 percent in China , 38 percent in the Philippines
and Korea and 28 percent in Vietnam, the company said. ‘Strong Results’ It was “a characteristically strong set of results from
Prudential, with continued strong growth in operating profits
from the major growth engines” of Asia, the U.S. and asset
management, Christopher Esson, a London-based analyst at Credit
Suisse Group AG with an outperform rating on the stock, wrote in
a note. “With NBP remaining on a strong trajectory in Asia,
forward momentum is likely to remain robust.” Operating profit from Jackson National Life, Prudential’s
U.S. business, jumped 32 percent to 582 million pounds in the
first half, helped by sales of Elite Access, a variable annuity
product. Thiam said the company will benefit from the retirement
of America’s 77 million baby boomers, adding that he remains
“open minded” to the future of the U.S. division including a
potential sale. In the U.K., Prudential’s fund management arm M&G increased
operating profit 17 percent to a record 204 million pounds as
the business reported net inflows of 4.8 billion pounds, boosted
by increased sales in continental Europe. Prudential raised its interim dividend 16 percent to 9.73
pence a share. To contact the reporter on this story:
Sarah Jones in London at
sjones35@bloomberg.net To contact the editor responsible for this story:
Edward Evans at
eevans3@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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AIMCo Says Fund Would Consider Investing in BlackBerry
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Alberta Investment Management Corp.,
which manages pension funds for the western Canadian province,
would consider an investment in BlackBerry Ltd. (BB) if the
smartphone maker went private. “It’s early days,” AIMCo Chief Executive Officer Leo De Bever said today in a telephone interview. “No one has
approached us with anything that is baked.” If BlackBerry went private and AIMCo was approached by a
lead investor, the Edmonton-based firm would consider it, he
said. The fund manager had assets of C$68.6 billion ($66.6
billion) at the end of last year. Mark Wiseman , CEO of Canada Pension Plan Investment Board,
the second-largest pension fund manager in the country, said in
an interview Aug. 9 he would weigh an investment in BlackBerry
should the company decide to go private. To contact the reporter on this story:
Katia Dmitrieva in Toronto at
edmitrieva1@bloomberg.net To contact the editor responsible for this story:
David Scanlan at
dscanlan@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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Baum's View on Money
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Welcome to the new week. Here are some of the articles and opinion pieces I found interesting since you last heard from me. Where's the front-page profile of Janet Yellen ? New York Times' readers were greeted Sunday with a front-page, above-the-fold profile of Larry Summers, whom President Obama is considering for the post of Federal Reserve chairman. The article traced Summers's career and millions earned since he was booted from the presidency of Harvard University in 2006. Considering both the placement and timing (Obama has said he will announce his nominee this fall) of the article, I can't help but wonder if there wasn't some kind "forward guidance" involved from a not-so-invisible hand. Before you could say "price/rent ratio" The prices of single-family homes went from cheap to expensive, according to this ratio, in a span of 2 1/2 years. Investors have been snapping up homes for cash and are renting them out. Yes, houses are still affordable, but with nationwide prices up 12 percent in the past year, "the recent brief era of cheap prices is over," according to the Wall Street Journal. It's hard to believe that before 1997, housing prices rose in line with the consumer price index. No double-digit ups and downs from one year to the next. Amazing what government incentives, in the form of favored tax treatment, can do. Paul Krugman buries Milton Friedman For days, Paul Krugman has been burying Milton Friedman on his blog. Keynes is back, Hayek is back, but a few decades from now Friedman will be regarded as "little more than an extended footnote," Krugman wrote on Aug. 8. In today's column, Krugman resuscitates Friedman, who believed government action was necessary to prevent depressions, but only enough to lance his real target: the Republican extremists who would do away with the central bank. Tyler Cowen revives him. And provides lots of interesting links to Friedman in his own words on subjects such as the key lender-of-last-resort role for a central bank to prevent a banking panic. Sometimes Krugman's filter can be, shall we say, a bit cloudy? Cracked glass and broken chairs Regular readers are familiar with Frederic Bastiat's parable of the broken window. Now comes Don Boudreaux, professor of economics at George Mason University and a senior fellow at the university's Mercatus Center, with a broken chair. In this case, the chair is an expedient source of firewood compared with schlepping out to the woodpile on a snowy night. It's a short-sighted decision that implies future sacrifice. I bet you can figure out where this is going. (Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)
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2013-08-12 00:00:00+00:00
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nan
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Derivatives Margin Losses Could Help Save CCPs, Regulators Say
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Derivatives traders should be
prepared to lose the initial margin they post at clearinghouses
if it’s needed to prevent a financial crisis, global markets
regulators said. The “margin is likely to constitute a very large pool of
assets which would, if it can be used, provide a high degree of
loss-absorbency” to help stabilize a central counterparty, or
CCP, the International Organization of Securities Commissions
and the Committee on Payment and Settlement Systems said in a
joint report published today. The Group of 20 nations has ordered a global overhaul of
rules governing derivatives contracts, mandating the use of CCPs
by traders. Regulators have sought tougher rules for over-the-counter derivatives since the collapse of Lehman Brothers
Holdings Inc. and the rescue of American International Group
Inc., two of the largest traders of credit-default swaps. “Resolution of firms from other financial sectors has
lagged behind the progress made in relation to banks,” Mark Carney , governor of the Bank of England and chairman of the
Financial Stability Board, said in an e-mailed statement. The
guidelines will “ensure that greater reliance on CCPs does not
result in a new category of too-big-to-fail institution.” Clearinghouses such as London’s LCH.Clearnet Ltd. and Eurex
Clearing AG operate as central counterparties for every buy and
sell order executed by their members, who are required to post
collateral, reducing the risk that a trader defaults on a deal. Madrid-based Iosco brings together national market
regulators from more than 100 countries to coordinate rules and
share information. The CPSS, which is part of the Basel,
Switzerland-based Bank of International Settlements, is made up
of central bankers from developed and emerging economies and
sets standards for payment, clearing and settlement systems. The group today also proposed guidelines on financial
regulators’ access to data at trade repositories , as well as a
progress report on how national supervisors are implementing
rules to safeguard clearinghouses against a financial crisis. To contact the reporter on this story:
Ben Moshinsky in London at
bmoshinsky@bloomberg.net To contact the editor responsible for this story:
Lindsay Fortado at
lfortado@bloomberg.net
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2013-08-12 00:00:00+00:00
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nan
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China Urbanization to Hit Roadblocks Amid Local Opposition
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China ’s plan to encourage hundreds
of millions of rural residents to settle in cities to boost
growth faces opposition from local governments, according to Li
Tie, an official with the nation’s top economic planning agency. Officials, researchers and company executives highlighted
challenges at an urbanization forum in Beijing on Aug. 10. They
cited the strain on local-government finances, the dangers of
overbuilding and the cost of scrapping the hukou, or residence
permit, system that denies migrants the welfare, health and
education benefits of city dwellers. Premier Li Keqiang has championed urbanization as a “huge
engine” for growth as he seeks to shift the world’s second-largest economy toward a model that relies on consumption rather
than investment and exports. As policy makers draft plans for
the new leadership’s reform agenda ahead of a key Communist
Party meeting later this year, Li is grappling with vested
interests that could stymie some of his plans. “Nobody wants such a big group of migrants to be their
neighbors and share their so-called civilized space. This is a
conflict of interest,” Li, director-general of the China Center
for Urban Development under the National Development and Reform
Commission, said at the forum. “We are facing rejection from
the hearts of so many mayors and city elites who have enough
ability to influence decision making.” Stocks Climb The Shanghai Composite Index rose 1.3 percent as of 12:06
p.m. local time today amid optimism that government measures
will arrest an economic slowdown. The South China Morning Post reported today that
Agricultural Bank of China signed an agreement with the Shanghai
city government for a 250 billion yuan ($41 billion) loan that
will help to fund developments including a free-trade zone and a
Disneyland. Nomura Holdings Inc. cited the reported deal as a
sign of the government’s willingness to support growth. Li Keqiang is banking on more than 260 million migrant
workers and their families becoming permanent urban residents to
boost consumption and sustain growth at his bottom line of 7
percent a year, as the government restructures an economy that’s
expanded at an average 10.2 percent a year over the last two
decades. Gross domestic product may rise 7.5 percent this year,
according to the median estimate in a Bloomberg News survey of
55 economists last month, the least in 23 years. The World Bank
estimates annual GDP growth will slow to an average 7 percent in
the five years through 2020 and 5.9 percent through 2025. Boosting Consumption Speaking at his first news conference after becoming
premier in March, Li said, “Urbanization will usher in a huge
amount of consumption and investment demand, increase job
opportunities, create wealth for farmers, and bring benefits to
the people.” HSBC Holdings Plc estimated in an October report that the
movement of 10 million rural residents to become urban residents
every year for the next 20-30 years would create more than 100
billion yuan ($16.3 billion) a year in additional consumer
spending. Policy makers, planners and government advisers are
drafting proposals on how to implement Li’s urbanization vision
that will be presented to the Communist Party’s top leaders at a
meeting later this year. The event, known as the third plenum,
may decide on economic and social reforms after a once-a-decade
leadership transition that was completed in March. “Urbanization isn’t only about changing people’s
residency, it’s about their overall development and an
improvement in the quality of their lives,” Li Lianzhong, head
of the economy bureau at the Policy Research Center of the
Communist Party Central Committee, said at the Aug. 10 forum.
Ending the hukou system and replacing it with identity cards
will signal the “victory of reforms,” he said. Welfare Costs One of the thorniest issues facing policy makers is who
pays for urbanization - the cost of the physical infrastructure
and the recurring annual spending on providing millions of new
urbanites with health care, welfare and education services. In a report last month, HSBC estimated the total fiscal
cost for local and central governments on public housing and
children’s education would be 6.24 trillion yuan for 260 million
migrant workers in cities, equivalent to 53 percent of China’s
national fiscal revenue in 2012. Local authorities are barred from directly selling bonds or
borrowing from banks and can’t run budget deficits. To raise
money to fund spending they set up thousands of financing
vehicles, racking up debts that Fitch Ratings Ltd. said in April
increase risks to the country’s financial stability. Too Expensive Mao Daqing, executive vice president of China Vanke Co. (000002) ,
the biggest developer by market value traded on the country’s
stock exchanges, told the forum some local governments may be
hard pressed to pay for urbanization. Taking Beijing as an example, Mao said that assuming
700,000 people moved into the city each year, it could cost the
local government at least an extra 77 billion yuan a year in
urbanization-related spending, equivalent to doubling its annual
land sales or a 25 percent increase in tax revenue. “This is totally beyond the affordability of a local
government, Beijing can’t afford it,” Mao said. He also
questioned whether China needs more cities when most migration
has been to the 70 biggest conurbations. “These big cities interest people because they have more
job opportunities, education opportunities and medical
resources,” Mao said. “Those other 610 cities can’t attract
people even though they already exist,” he said, adding “it
indicates some of those 610 cities have problems or can’t
survive.” Urban Shift More people lived in China’s towns and cities than in rural
areas for the first time in the country’s history in 2011,
government data show, with 691 million living in urban areas
compared with 657 million in the countryside. The urbanization
rate will rise to about two-thirds by 2030, meaning about 13
million more people will move to cities every year, the World
Bank estimates. While the urbanization ratio includes small towns, they
often have worse living conditions, infrastructure and public
services, Zhao Hui, director of the Village and Town
Construction Department at the Ministry of Housing and Urban-Rural Development , said at the forum. The country needs to do a better job of establishing
smaller conurbations as these tend to cost less to develop, are
more energy efficient and environment-friendly, and hence more
supportive of sustainable development, Zhao said. Separately, a deputy director of the China Center for Urban
Development, Qiao Runling, warned that reckless expansion of
cities in China has left many of them empty, the official Xinhua
News Agency reported Aug. 10. “China now has an oversupply of cities, given the number
of new urban districts that we have,” the report quoted Qiao as
saying at a forum held in southern Jiangxi province last week.
The issue is especially serious in small and medium-sized cities
in central and western regions, Qiao said. To contact Bloomberg News staff for this story:
Hu Shen in Beijing at
hshen33@bloomberg.net ;
Daryl Loo in Beijing at
dloo7@bloomberg.net To contact the editor responsible for this story:
Paul Panckhurst at
ppanckhurst@bloomberg.net
|
2013-08-12 00:00:00+00:00
|
nan
|
Deutsche Bank Said to Face Bafin Call Over Libor Rigging
|
Deutsche Bank AG (DBK) may be told as soon
as this month by the German financial regulator to improve its
controls to prevent a repeat of attempts to manipulate benchmark
interest rates, according to a person familiar with the matter. Bafin is finalizing its first report into the rigging of
Libor and similar benchmarks and will submit it to the
Frankfurt-based lender as soon as this month, said the person,
who asked not to be identified because the review isn’t public.
Bafin will present its findings to Deutsche Bank management,
telling them to adhere to standards set by the regulator, the
person said. The report is part of a broader investigation by Bafin into
allegations that traders at Deutsche Bank tried to manipulate
rates. Under its rules, Bafin cannot publish the findings or
disclose actions it takes on individual banks without the
lender’s consent. The regulator will oversee how the measures
are implemented. The move may bring the bank closer to facing fines from
U.S., U.K. and EU regulators, who are waiting on the German
watchdog to finish their reviews. Barclays Plc (BARC) , UBS AG (UBSN) and Royal
Bank of Scotland Group Plc have paid a total of about $2.5
billion in fines for colluding to rig benchmark interest rates
for profit or to mask their true cost of borrowing. Trader Oversight Bafin is in the final stages of reviewing the report,
compiled by the Bundesbank, Germany ’s central bank, on whether
Deutsche Bank’s systems and controls failed to prevent traders
from trying to manipulate rates to benefit their own trades, the
person said. The Bundesbank investigators looked at who at the
bank had oversight of the traders reporting rates, whether rate
reporting procedures required two people to look at submissions,
and how transparent the processes were, according to the person. Deutsche Bank shares gained 0.4 percent closing at 34.30
euros in Frankfurt . Bafin’s press office declined to comment. Christian Streckert, a spokesman for Deutsche Bank,
declined to comment on the report. He said the bank is
cooperating with regulatory investigations and conducting its
own review into the allegations. “As per the current status of investigations, we can say
that no current or former member of the management board had any
inappropriate involvement in the interbank offered rates matters
under review,” Streckert said. The bank “has also found that
certain employees, acting on their own initiative, engaged in
conduct that falls short of the bank’s standards, and action has
been taken accordingly.” Bafin has also commissioned an auditor to look into
possible wrongdoing by Deutsche Bank staff and management. That
inquiry, testing findings of the lender’s own internal
investigation, is ongoing and will yield a separate report, the
person said. To contact the reporter on this story:
Karin Matussek in Berlin at
kmatussek@bloomberg.net To contact the editor responsible for this story:
Lindsay Fortado at
lfortado@bloomberg.net
|
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