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Bernanke defends bond buys, citing at-risk economy
JEANNINE AVERSA - AP - Sun Dec 05, 7:39PM CST
WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke is stepping up his defense of the Fed's $600 billion Treasury bond-purchase plan, saying the economy is still struggling to become "self-sustaining" without government help.
In a taped interview with CBS' "60 Minutes" that aired Sunday night, Bernanke also argued that Congress shouldn't cut spending or boost taxes given how fragile the economy remains.
The Fed chairman said he thinks another recession is unlikely. But he warned that the economy could suffer a slowdown if persistently high unemployment dampens consumer spending.
The interview is part of a broad counteroffensive Bernanke has been waging against critics of the bond purchase plan the Fed announced Nov. 3. The purchases are intended to lower long-term interest rates, lift stock prices and encourage more spending to boost the economy.
Critics, from Republicans in Congress to some officials within the Fed, say they fear the Fed's intervention could spur inflation and speculative buying on Wall Street while doing little to aid the economy.
On other issues in the "60 Minutes" interview, Bernanke:
— Argued that unemployment would have been far higher — "something like it was in the Depression, 25 percent" — had the Fed not provided extraordinary aid to Wall Street firms, banks and other companies to ease a credit crisis.
— Said it could take four or five more years for unemployment, now at 9.8 percent, to fall to a historically normal 5 percent or 6 percent.
— Reiterated that the Fed is prepared to buy even more than $600 billion in Treasury bonds over the next eight months, should it decide the economy needs the fuel of even lower interest rates.
— Argued that the risk of inflation is overblown. Bernanke said he's "100 percent" confident the Fed will be able to ward off inflation, when the time is right, by raising interest rates and unwinding its stimulative programs.
— Called the risk of deflation — a prolonged drop in prices, wages and the values of homes and stocks — "pretty low." He said the likelihood would have been greater if the Fed weren't maintaining super-low interest rates.
— Urged Congress to improve the nation's tax code "by closing loopholes and lowering rates" for individuals and companies. He said doing so would create greater incentives for people to invest.
In material from the interview that didn't make CBS' broadcast but was later posted online in video form, Bernanke reiterated his view that an artificially low Chinese currency is "bad for the American economy because it hurts our trade."
It isn't helpful for China, either, he said, because it makes it harder for Beijing's policymakers to keep China's economy and inflation from overheating.
Critics who fear the Fed's bond purchases are raising the risk of inflation have complained that the purchases mean the Fed is, in effect, printing more money. In the interview, Bernanke called that a "myth." He insisted the Fed isn't printing money when it buys Treasurys and said the program won't expand the amount of money in circulation in a "significant way."
Lou Crandall, chief economist at Wrightson ICAP, said Bernanke is right that the Fed's purchases won't significantly change the amount of money circulating in the economy. That's mainly because banks aren't lending most of the money they already hold in reserve. When the Fed buys Treasurys, it increases the reserves in the banking system. For those reserves to actually "create" money, the banks would have to lend it.
Still, Crandall suggested that the bond-buying program creates the appearance of printing money, something that could put the central bank's credibility at stake.
Bernanke's appearance Sunday night is part of a public-relations blitz he's mounted since the Fed announced the program Nov. 3. In private and public appearances, Bernanke has sought to explain and defend the program to ordinary Americans, investors and lawmakers on Capitol Hill.
His efforts have included an Op-Ed article in The Washington Post and discussions with students in Jacksonville, Fla., economists in Jekyll Island, Ga., business people in Columbus, Ohio, central bankers in Europe and members of the Senate Banking Committee.
Criticism has come from both home and abroad. Officials in China, Germany, Brazil and other countries have argued that the Fed's plan is a scheme to give U.S. exporters a competitive edge by keeping the value of the dollar weak. A weak dollar makes U.S. goods cheaper abroad and foreign goods more expensive in the U.S.
It's rare for a sitting Fed chairman to grant an interview, whether for broadcast or print. But this was Bernanke's second appearance on "60 Minutes." His first was in March 2009. At the time, he was facing anger over Wall Street bailouts and rising anxiety about the economy.
In the interview that aired Sunday, Bernanke pointed out that the economy is growing at an annual pace of around 2.5 percent — far too slow to reduce unemployment. For a self-sustaining recovery, consumers and businesses would need to spend more, so the economy could grow faster.
Bernanke has said he hopes the Fed's bond-buying program will help lift stock prices. In part, that's because lower yields on bonds would cause some people to shift money into stocks.
Higher stock prices would boost the wealth and confidence of individuals and businesses. Spending would rise, lifting incomes, profits and economic growth. Bernanke has referred to this as a "virtuous cycle."
But when asked in the interview whether the recovery is self-sustaining, Bernanke responded: "It may not be. It's very close to the border."
Given the economy's still-weak growth, he said: "We're not very far from the level where the economy is not self-sustaining."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Genentech: positive results from cancer drug study
AP - Sun Dec 05, 4:57PM CST
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SOUTH SAN FRANCISCO, Calif. (AP) — Genentech Inc., now part of Swiss drug developer Roche, and Biogen Idec Inc. on Sunday announced positive results from the late-stage study of cancer drug Rituxan in patients with advanced type of non-Hodgkin's lymphoma.
The study examined patients with follicular lymphoma, a cancer of the blood. None of the patients in the study were yet to show symptoms of the disease.
Treatment for these patients usually does not begin until specific symptoms occur or their disease worsens. This study, however, showed that immediate use of Rituxan, followed by continued use of the drug, delayed the need for chemotherapy or radiotherapy and decreased the risk of the disease worsening, compared to standard "watchful waiting" approach.
Previous studies hadn't shown any meaningful benefits to early treatment.
An estimated 65,540 people in the US were diagnosed with non-Hodgkin's lymphoma this year, and follicular lymphoma accounts for about 15 to 20 percent of those cases. The disease can occur at any time during adulthood, though people are typically diagnosed during their 50s and 60s.
The data were featured Sunday at the 52nd Annual Meeting of the American Society of Hematology in Orlando, Fla.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Sempra opens Nevada photovoltaic plant
AP - Sun Dec 05, 4:42PM CST
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LAS VEGAS (AP) — The largest photovoltaic power plant in the U.S has started operating.
Sempra Generation, a subsidiary of San Diego-based power plant operator Sempra Energy, turned the switch on the 48-megawatt Copper Mountain solar facility in Boulder City, Nev., a week ago.
The company says the Nevada plant can generate enough electricity — when the sun is shining — to power about 14,000 homes.
The energy is being sold to Pacific Gas & Electric in California.
Other companies have larger solar power plants under development, but they use different solar technology.
___
Information from: Las Vegas Sun, http://www.lasvegassun.com
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
GOP, Dems nearing deal on taxes, jobless benefits
JIM KUHNHENN - AP - Mon Dec 06, 2:08AM CST
UPDATES: Some figures were changed due to rounding; graphic shows tax scenarios for selected salaries under current rates and if rates expire
WASHINGTON (AP) — An outline of a bipartisan economic package is emerging that would temporarily extend the Bush-era tax rates for all taxpayers, while extending jobless benefits for millions of Americans.
Differences remained over details, including White House demands for middle- and low-income tax credits. But Republicans and Democrats appeared to come together Sunday, raising the possibility of a deal in Congress by the end of the week.
Some Democrats continued to object to extending current tax rates for high earners.
But without action, lawmakers face the prospect of delivering a tax hike to all taxpayers at the end of the year, when the current rates expire and revert to higher pre-2001 and 2003 levels.
Negotiations between the Obama administration and a bipartisan group of lawmakers centered on a two-year extension of current rates.
At the same time, a jump in the unemployment rate to 9.8 percent is putting pressure on Republicans to accede to President Barack Obama's demand that Congress extend unemployment insurance for a year. GOP congressional leaders had opposed an extension of benefits without cuts elsewhere in the federal budget.
"I think most folks believe the recipe would include at least an extension of unemployment benefits for those who are unemployed and an extension of all of the tax rates for all Americans for some period of time," said Sen. Jon Kyl of Arizona, the Senate's Republican negotiator in the talks.
"Without unemployment benefits being extended, personally, this is a nonstarter," said Sen. Dick Durbin of Illinois, the second-ranking member of the Senate Democratic leadership.
Republicans have insisted that any extension of jobless aid be paid for with cuts elsewhere in the federal budget. The White House opposes that, saying such cuts are economically damaging during a weak recovery.
Sen. Orrin Hatch, R-Utah, said Republicans would probably cede that point to the Democrats.
"Let's take care of the unemployment compensation even if it isn't ... backed up by real finances," Hatch said. "We've got to do it. So let's do it. But that ought to be it."
About 2 million unemployed workers will run out of benefits this month if they are not renewed, and the administration estimates 7 million will be affected if the payments are not extended for a year.
Senate Republican leader Mitch McConnell on Sunday said discussions are still under way on a variety of unresolved issues.
The White House wants to include renewal of several other tax provisions that are expiring. These were initially included in the 2009 economic stimulus bill and include a tax credit for lower- and middle-class wage earners, even if they don't make enough to pay federal income taxes, breaks to offset college tuition and breaks for companies that hire the unemployed.
Any deal would require the approval of the House and Senate, and the president's signature. Obama told Democratic congressional leaders Saturday that he would oppose any extension of tax rates that did not include jobless benefits and other assistance his administration was seeking.
The short-term tax and spending debate is unfolding even as Congress and the Obama administration confront growing anxieties over the federal government's growing deficits.
A presidential commission studying the deficit identified austere measures last week to cut $4 trillion from the federal budget over the next decade.
The movement toward a possible compromise came after Republicans blocked Democratic efforts in the Senate Saturday to extend the current tax rates on all but the highest income levels. Republicans prefer extending all the tax rates permanently, but that cannot win legislative approval either. Even if it did, Obama would be sure to veto.
As part of a compromise, the Obama administration prefers a two-year extension of the tax rates. Officials say a one-year extension would place Congress and the president in the midst of a similar debate in a mere six months. A three-year extension, officials say, would cost too much and lose support from liberals.
For Obama, the deal would mean relinquishing, at least for now, his long-held view that only middle-class voters should continue to benefit from Bush-era tax cuts. And Democrats, while resigned to a deal, were not eager to embrace one.
Durbin and Kyl spoke Sunday on CBS' "Face the Nation," while Hatch appeared on CNN's "State of the Union" and McConnell on NBC's "Meet the Press."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Celgene: combo therapy slows cancer progression
AP - Sun Dec 05, 3:49PM CST
NEW YORK (AP) — Celgene International Sàrl said a late-stage study of its cancer drug Revlimid and the chemotherapy mainstay dexamethasone revealed a combined therapy of the drugs slowed the progression of symptoms in patients with blood cancer.
The company said late Saturday the study observed patients with smoldering multiple myeloma, a slow-growing and rare form of cancer in plasma cells.
Patients were treated with the drugs for nine four-week cycles and then continued treatment with a lower dose of Revlimid until progression. The results showed an overall response rate of 75 percent. For the patients who completed the initial nine treatment cycles, the overall response rate was 91 percent.
After a follow-up (an average of 16 months later), 3 percent of patients had developed symptoms, while 18 percent of patients developed active myeloma in the observation arm. Eleven out of these 21 patients also developed bone lesions.
The average time to symptomatic myeloma was 25 months in patients in the observation arm and has not yet been reached for patients who received the combination of drugs.
About 7 percent of patients reported loss or lack of strength after the treatment. Others reported diarrhea, infection, anaemia and skin rashes. The company said one patient discontinued treatment because of adverse events.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Facebooks new facelift plays up photos, friends
BARBARA ORTUTAY - AP - Sun Dec 05, 8:17PM CST
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NEW YORK (AP) — Facebook is redesigning the profile pages of its 500 million-plus users to make it more of a reflection of their real lives and emphasize one of the site's most popular features, photos.
Facebook said in a blog post Sunday the changes are meant to make it easier for users to tell their story — who they are, where they work, their life philosophy and the most important people in their lives. The changes place a bigger emphasis on visuals, from photos to images of users' interests.
A new biography section includes not just who you are and where you live but a set of the most recent photos that your friends have "tagged" you in. Previously users had to click on a tab to see the latest photos on a profile. Users can also feature important friends in their profile, while previously only random selection appeared. And in addition to listing their job, users can now add the projects they worked on. It's all a move toward curating a more complete picture of a person, something that will likely appeal to Facebook's advertisers. The company did not make any changes to its privacy policy as part of the redesign.
Facebook unveiled the changes ahead of an appearance on 60 Minutes by CEO Mark Zuckerberg Sunday evening. Zuckerberg, 26, talked about the profile page redesign, Facebook's hard-working culture of all-night coding sessions, as well as his take on "The Social Network," the movie about Facebook's beginning that doesn't cast him in a very flattering light.
"I think that they got every single T-shirt that they had the Mark Zuckerberg character wearing right. I think I actually own those T-shirts," Zuckerberg told 60 Minutes' Lesley Stahl in the interview.
"But I mean, there are hugely basic things that they got wrong, too," he added. "(They) made it seem like my whole motivation for building Facebook was so I could get girls, right? And they completely left out the fact that my girlfriend, I've been dating since before I started Facebook."
Asked about a Facebook IPO, Zuckerberg said "You know, maybe."
"A lot of people who I think build start-ups or companies think that selling the company or going public is this endpoint," he said. "Right, it's like you win when you go public. And that's just not how I see it."
On Facebook, even small changes to users' home pages tend to meet with protests from a small but vocal fraction of users who want things to stay the way they are. In an attempt to pre-empt this, Facebook is rolling out the changes slowly, letting users — for the time being — decide whether they want to display the new profile layout or the old one. The new layout will be available to all users by early next year, the company said.
The latest changes come as Facebook intensifies its competition with online search leader Google Inc. as the primary destination for anyone using the Internet. The changes streamline users profile pages so it's easier to see the things that matter the most, rather than a chronological stream of the latest wall posts, links and photos they posted. Users can also see how their Facebook lives intertwine with their friends by clicking on a "See Friendship" link on the top right hand page of their friends' profiles.
"You can see all the things that you have in common with that person," Zuckerberg said. "And it's just like, it gives you this amazing connection with that person in a way that the current version of the profile that we have today just doesn't do."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Conn. union ratifies Pratt Whitney contract
AP - Sun Dec 05, 3:12PM CST
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WALLINGFORD, Conn. (AP) — Machinists overwhelmingly ratified a new contract Sunday with jet engine maker Pratt & Whitney that allows the company to shut two plants it has targeted for more than a year while preserving jobs insisted on by the union.
Workers voted 2,609-198 to accept the pact with the subsidiary of United Technologies Corp., ending a battle that began in September 2009 when the company announced it would shut its engine repair plants. Earlier in the week, angry workers massed at a union rally, wearing stickers that said "strike," signaling their readiness to walk if the company insisted on deep job cuts.
The three-year contract allows the company to close its plants in Cheshire and East Hartford and shift hundreds of jobs to Columbus, Ga., Singapore and Japan. Workers will be induced to retire with a $20,000 buyout package and other workers will be transferred to Pratt & Whitney's two remaining plants in Connecticut. The East Hartford-based company also will add 75 jobs to handle military orders for the F-135 engine.
James Parent, chief negotiator at the International Association of Machinists in Connecticut, said the contract protects union members.
"We were unable to save the plants, but in our opinion the language will save the workers," he said.
Pratt & Whitney called it a "very good contract" that gives it flexibility to run its business.
Employees will receive a 3 percent wage increase immediately and 2.5 percent increases in December 2011 and December 2012. Employees also will receive a one-time $2,000 ratification bonus and a pension increase.
The company won its key demand to close the two plants, which it expects to do over the next year. It insisted on the shutdowns to cut costs as it faces fierce competition.
The two sides agreed to a voluntary buyout for up to 500 employees who will receive a one-time $20,000 payment, severance of one-week's pay for each year of service and medical insurance for a year.
Pratt & Whitney said it will reassign employees affected by the closings and promised not to lay off those who cannot be placed elsewhere before July 1, 2011.
The battle over job security has been raging for years. Pratt & Whitney's 3,700 employees has fallen by 2,000 over 10 years as the company sliced employment to reduce costs.
In the most recent fight, the Machinists accused the company of failing to make all reasonable efforts to keep jobs in Connecticut as required by the previous contract. The union won in federal court to block the company's move to shut the plants. But workers knew from the start they would have to fight all over again to negotiate job security provisions in the new contract.
George Cowles, a mechanic at the Cheshire plant, said he was surprised at the contract terms and voted to accept the agreement.
"It was a lot better than I thought," he said. "It's a big, big burden off our shoulders. It's been over a year since we've had this big cloud over our heads."
Mark Bernier, a jet engine mechanic at Cheshire, said the contract fell short and he voted against it.
"It's been an ongoing issue since the early 90s when we took concessions for the company," he said. "We took a wage freeze and they never gave us the concessions back that we made for them to keep the work in Connecticut."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Economy is making steady gains despite weak hiring
PAUL WISEMAN - AP - Sun Dec 05, 11:34PM CST
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WASHINGTON (AP) — The economy is starting to fire on almost every cylinder these days but the one that matters most: Job creation.
Factories are busier. Incomes are rising. Autos are selling. The holiday shopping season is shaping up as the best in four years. Stock prices are surging.
And many analysts are raising their forecasts for the economy's growth. Goldman Sachs, for instance, just revised its gloomy prediction of a 2 percent increase in gross domestic product in 2011 to 2.7 percent and forecast 3.6 percent growth for 2012.
"The upward momentum has more traction this time," says James O'Sullivan, chief economist at MF Global.
If only every major pillar of the economy were faring so well.
Despite weeks of brighter economic news, employers still aren't hiring freely. The economy added a net total of just 39,000 jobs in November, the government said Friday.
That's far too few even to stabilize the unemployment rate, which rose from 9.6 percent in October to 9.8 percent last month. Unemployment is widely expected to stay above 9 percent through next year, in part because of the still-depressed real estate industry.
Job creation ultimately drives the economy, and it remains the most significant weak link.
The meager job gains for November confounded economists. They'd expected net job growth to reach 145,000 and for the unemployment rate to stay at 9.6 percent.
Some economists dismissed the November data as a technical fluke, a result of the government's difficulty in adjusting the figures for seasonal factors. They think the number will be revised up later.
Others saw the jobs report as a reminder that the economy is still struggling to emerge from an epic financial crisis that choked off credit, stifled spending and escalated a "normal" recession into the worst in 70 years. The depth of the financial crisis means the recovery will proceed more slowly than many had hoped or expected, they say.
"The fits and starts are not surprising," says Jack Kleinhenz, chief economist at the National Retail Federation. "We've had a unique recession and therefore a unique recovery."
In the view of most economists, the direction of the overall economy remains positive — even if its pace feels agonizingly slow. The latest unemployment report was a setback, but likely a temporary one, they say.
"Which are you going to believe," O'Sullivan asks, "one month of payrolls or all the other data?"
Among the encouraging signs:
__ Consumers, whose spending fuels about 70 percent of the economy, are regaining confidence. The Conference Board's index of consumer confidence rose in November to the highest level since June as consumers expressed more optimism about business conditions and jobs. Consumers are suffering "austerity fatigue," says Scott Minerd of Guggenheim Partners. They're ready to replace old clothes, old appliances, old cars.
— Family finances have improved. Personal income surged 0.5 percent in October. That put cash in shoppers' wallets for the holiday shopping season. Households cut their debts to 122 percent of annual disposable income in the April-June quarter, according to Haver Analytics. That was the lowest debt level since the end of 2004.
__The holiday shopping season got off to a buoyant start. The National Retail Federation expects holiday retail sales to rise 2.3 percent this year, the best performance since 2006. One reason: Stock prices have surged. A 14 percent rally in the Dow Jones industrial average since late August has made households feel wealthier, Kleinhenz says.
__ Credit is starting to flow again. Banks have eased credit standards since July, making it easier for businesses to borrow, the Federal Reserve reports. Lending to businesses rose from July through September for the first quarterly increase in two years, according to the Federal Deposit Insurance Corp.
__ Businesses are reporting solid profits and stockpiling cash. Corporate earnings rose nearly 28 percent in the third quarter from a year earlier, the government says. And companies amassed a record $1.84 trillion in cash as of June 30, according to the Federal Reserve. That was 18 percent more than a year earlier. Eventually, companies will use some of that money to hire and expand, which should help stimulate the economy.
That would help the economy maintain its recent momentum. The economy had begun flashing signs of strength late last year, only to falter in the spring and summer this year. The latest evidence could signal a resurgent economy that's gaining traction.
Even as unemployment remains at a crisis level, some encouraging signs about hiring have emerged: The private sector has added jobs for 11 straight months. The overall number each month hasn't looked so good because of job cuts by financially ailing state and local governments.
Small businesses appear to be a particular bright spot. A report by the staffing firm Automatic Data Processing found that businesses with fewer than 500 employees have added 390,000 jobs this year, including 91,000 in November.
"The virtuous cycle of more jobs creating more income creating more spending creating more jobs is still turning," says Jerry Webman, chief economist for Oppenheimer Funds.
Not quite fast enough, though. Unemployment could soon rise above November's 9.8 percent rate, especially if an improving economy causes more out-of-work people who aren't looking for jobs to start. People out of work aren't counted as unemployed unless they're looking for a job. Typically during a recession, some of the unemployed become discouraged and stop looking.
One industry where they may not find a job for a while is real estate. Since the industry bubble burst three years ago, about 2.8 million real estate-related jobs have vanished. Until those people — ranging from builders, architects and appraisers to lenders and furniture sellers — find new work, the unemployment rate isn't likely to dip much below 8 percent, economists say.
Real estate in many areas remains depressed. Home prices are being weighed down by sluggish demand, high foreclosures and a huge overhang of unsold houses. Many would-be buyers fear prices may fall further. Some also can't sell their home to upgrade to a larger one because they've lost equity or they can't find prospective buyers.
Federal Reserve Chairman Ben Bernanke sketched a cautionary picture of the economy in an interview with CBS' "60 Minutes" that aired Sunday night. Bernanke said the economy is still struggling to become "self-sustaining" without government help.
He said a slowdown could occur if high unemployment dampens consumer spending. And he said it could take up to five more years for unemployment to fall to a historically normal 5 percent or 6 percent.
The economy isn't likely to get any new help from Washington. Lawmakers in a lame-duck session of Congress appear headed for an agreement on legislation that would combine an extension of tax cuts with a renewal of benefits for the long-term unemployed. But no new stimulus spending is likely.
Benefits for the long-term unemployed expired Nov. 30. Two million unemployed people will lose their benefits by year's end unless Congress acts to extend them. The benefits can last for up to a record 99 weeks: 26 weeks of regular benefits from the states, plus up to 73 weeks of federal aid in states with high unemployment rates.
Some economists also favor a one-year suspension of taxes on workers and employers for Social Security and government health care. Yet prospects for such a proposal are dim.
Even so, O'Sullivan and other economists are convinced that signs the economy is strengthening, however slowly, outweigh the discouraging jobs report the government issued Friday.
"The financial system has been recovering, with the credit crunch thawing," he says. "Businesses have already stepped up investment in equipment and software sharply and employment growth modestly . We believe the pluses will ultimately dominate."
Yet even he thinks unemployment will remain the economy's Achilles' heel: Like many economists, O'Sullivan foresees unemployment of at least 9 percent until well into next year.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Visited porn? Web browser flaw secretly bares all
JORDAN ROBERTSON - AP - Sun Dec 05, 3:14PM CST
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SAN FRANCISCO (AP) — Dozens of websites have been secretly harvesting lists of places that their users previously visited online, everything from news articles to bank sites to pornography, a team of computer scientists found.
The information is valuable for con artists to learn more about their targets and send them personalized attacks. It also allows e-commerce companies to adjust ads or prices — for instance, if the site knows you've just come from a competitor that is offering a lower price.
Although passwords aren't at risk, in harvesting a detailed list of where you've been online, sites can create thorough profiles on its users.
The technique the University of California, San Diego researchers investigated is called "history sniffing" and is a result of the way browsers interact with websites and record where they've been. A few lines of programming code are all a site needs to pull it off.
Although security experts have known for nearly a decade that such snooping is possible, the latest findings offer some of the first public evidence of sites exploiting the problem. Current versions of the Firefox and Internet Explorer browsers still allow this, as do older versions of Chrome and Safari, the researchers said.
The report adds to growing worry about surreptitious surveillance by Internet companies and comes as federal regulators in the U.S. are proposing a "Do Not Track" tool that would prevent advertisers from following consumers around online to sell them more products.
The researchers found 46 sites, ranging from smutty to staid, that tried to pry loose their visitors browsing histories using this technique, sometimes with homegrown tracking code. Nearly half of the 46 sites, including financial research site Morningstar.com and news site Newsmax.com, used an ad-targeting company, Interclick, which says its code was responsible for the tracking.
Interclick said the tracking was part of an eight-month experiment that the sites weren't aware of. The New York company said it stopped using the technique in October because it wasn't successful in helping match advertisers to groups of Internet users. Interclick emphasized that it didn't store the browser histories.
Morningstar said it ended its relationship with Interclick when it found out about the program, and NewsMax said it didn't know that history sniffing had been used on its users until The Associated Press called. NewsMax said it is investigating.
The researchers studied far more sites — a total of the world's 50,000 most popular sites — and said many more behaved suspiciously, but couldn't be proven to use history sniffing. Nearly 500 of the sites studied had characteristics that suggested they could infer browsers' histories, and more than 60 transferred browser histories to the network. But the researchers said they could only prove that 46 had done actual "history hijacking."
"Browser vendors should have fixed this a long time ago," said Jeremiah Grossman, an Internet security expert at WhiteHat Security Inc., which wasn't involved in the study. "It's more evidence that we not only needed the fix, but that people really should upgrade their browsers. Most people wouldn't know this is possible."
The latest versions of Google Inc.'s Chrome and Apple Inc.'s Safari have automatic protections for this kind of snooping, researchers said. Mozilla Corp. said the next version of Firefox will have the same feature, adding that a workaround exists for some older versions as well.
Microsoft Corp. noted that Internet Explorer users can enable a private browsing mode that prevents the browser from logging the user's history, which prevents this kind of spying. But private browsing also strips away important benefits of the browser knowing its own history, such as displaying Google links you've visited in different colors than those you haven't.
"It's surprising, the lifetime that this fundamental a privacy violation can stick around," said Hovav Shacham, an assistant professor of computer science and engineering at UC San Diego and one of the paper's authors.
Internet companies are obsessed with tracking users' behavior so they can target their ads better. Uproar has prompted the Federal Trade Commission to propose rules that would limit advertisers' ability to track Internet users to show them advertisements. The "Do Not Track" tool the commission is proposing could eventually take the form of a browser setting that tells advertisers which visitors are off limits; such a setting, though, wouldn't necessarily block history sniffing.
History sniffing is essentially a side-by-side comparison of Web pages you've already visited with Web pages that a particular site wants to see if you've visited. If there's a match, users likely would never know, but the site administrators would learn a lot about their audiences.
For instance, a popular porn site was checking its visitors' histories to see if they'd visited 23 other pornography sites, and the code used on the Morningstar and NewsMax.com sites looked for matches against 48 specific Web pages, all related to Ford automobiles.
Sites can carry on this kind of inspection very quickly. Grossman said modern programs can check as many as 20,000 Internet addresses per second.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Survey: Gas prices jump nearly 4 cents in 2 weeks
AP - Sun Dec 05, 1:10PM CST
CAMARILLO, Calif. (AP) — A new survey finds the average price of regular gasoline in the United States has jumped 3.92 cents in the last two weeks.
The Lundberg Survey of fuel prices released Sunday says the price of a gallon of regular is $2.91.
Analyst Trilby Lundberg says the average price for a gallon of mid-grade was $3.05, and premium was at $3.16.
Denver had the lowest average price among cities surveyed at $2.61 a gallon for regular. Long Island, NY, was highest among surveyed areas at $3.21.
Diesel was at $3.23, up about a half cent.
In California, the average price for a gallon of regular was $3.14, up about a penny.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
More nations may pledge carbon limits at UN talks
ARTHUR MAX - AP - Mon Dec 06, 2:26AM CST
Members of the group World Wildlife Fund stand around an image of the earth made of candles as they protest against the United Nations Climate Change Conference in Cancun, Mexico, Sunday Dec. 5,...
CANCUN, Mexico (AP) — More countries are expected this week to pledge specific actions to limit carbon emissions over the next decade, in what would be "very good news" for arduous negotiations on a climate change agreement, says host country Mexico.
On Monday, newly arrived government ministers begin applying political weight to talks being held in Cancun, as the 193-nation U.N. climate conference moves into its decisive final week.
The meeting hopes to restore credibility to the talks after the last summit in Copenhagen a year ago, which failed to agree on any binding measures to rein in emissions of global-warming gases. A nonbinding political document, the Copenhagen Accord, outlined important compromises among key players, including the United States and China, but its adoption was blocked by a handful of dissident nations.
In subsequent months, however, 140 countries declared their endorsement of the accord, and 85 of them made specific pledges for reducing carbon emissions, or at least limited their growth, by 2020.
Mexico's deputy foreign minister, Juan Manuel Gomez Robledo, said more countries had said in private consultations that they intended to add their pledges to the list of 85. Some countries that already have submitted pledges may take "additional measures," he said. He declined to name any country, but said they included both industrial and developing nations.
"There has been a clear message from some parties, and that would certainly be very good news," he told reporters on Sunday.
The Cancun talks seek to produce decisions on establishing a "green fund" to help poorer nations rein in greenhouse gases and to adapt their economies and infrastructure to a changing climate; an agreement making it easier for developing nations to obtain patented green technology from advanced nations; and pinning down more elements of a system for compensating developing countries for protecting their forests.
What will not be resolved at Cancun is the core dispute in the climate talks: fixing legally binding targets for nations to reduce greenhouse gases emitted by industry, vehicles and agriculture.
The pledges in the Copenhagen Accord are purely voluntary, and are insufficient to meet the goal scientists have set to limit the average global temperature to 2 degrees Celsius (3.8 Fahrenheit) above what it was before the industrial age began.
Gomez Robledo said the side issues of funding, technology and forestry "are almost ripe," and negotiators will work on disputed details over the next five days.
The conference president, Mexican Foreign Secretary Patricia Espinosa, told the delegations Sunday she had assigned teams of two ministers, one each from a wealthy and developing country, to focus on specific issues and give political guidance to the negotiators.
The most troublesome issue — and one that could still undermine even the limited ambition envisioned for Cancun — was whether industrial countries would agree to further emissions cuts as spelled out in the 1997 Kyoto Protocol.
Under Kyoto, 37 nations and the European Union agreed to cut greenhouse gases by a total 5.2 percent by 2012. Those countries are on target to meet their obligations, but some of them have balked about accepting more mandatory cuts after 2012.
Japan caused an uproar last week when it flatly said it will refuse to go along, as long as all major emitting countries have similar obligations. The United States was assigned a reduction target, but it rejected the treaty. Developing countries, including China India were excluded from Kyoto's strictures.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
UAE CBank head: No dollar de-pegging planned
AP - 29 mins ago
ABU DHABI, United Arab Emirates (AP) — The governor of the United Arab Emirates' central bank says the country has no plans to stop pegging its currency to the U.S. dollar.
Sultan Nasser Al Suwaidi also said Monday the federation of seven semiautonomous city-states is still not planning the Gulf Cooperation Council in setting up a unified currency. He spoke on the sidelines of a GCC summit meeting in the UAE's federal capital.
Al Suwaidi said the "UAE stance remains unchanged."
The UAE and Oman have both said they will not join the other four Gulf Arab nations in plans to set up a unified currency, a step seems as key to bringing the economies of the oil-rich region closer.
Most of the GCC nations peg their currencies to the dollar.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Euro falls against dollar as debt crisis lingers
AP - 1 hr 6 mins ago
BERLIN (AP) — The euro is losing strength again against the dollar as eurozone finance ministers gather to find ways to fight the debt crisis and stabilize the common currency.
The 16-nation euro bought $1.3289 in morning European trading Monday, down from $1.3387 at the end of the day Friday in New York. The common currency was as high as $1.3421 in the session before retreating.
The British pound is down to $1.5693 from $1.5741 on Friday, while the dollar slipped to 82.66 Japanese yen from 82.90 in New York.
The euro fell about 10 percent in November as traders nervous about a deepening European debt crisis sold off the shared currency. It gained back some ground last week on disappointing economic news from the U.S. and reassurances from the ECB.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Eurozone officials call for pan-European bonds
GABRIELE STEINHAUSER - AP - 1 hr 10 mins ago
FILE - In this Sunday, Nov. 28, 2010 file photo, From left, European Commissioner for Economy Olli Rehn, Belgian Finance Minister Didier Reynders, Luxembourg's Finance Minister Jean Claude Juncker...
BRUSSELS (AP) — The creation of new pan-European bonds would boost much-needed confidence in the euro, two top European officials said Monday, as finance ministers gathered in Brussels to find ways to fight the debt crisis.
The head of the group of 16 countries that use the euro, Jean-Claude Juncker, and Italian Finance Minister Giulio Tremonti said the European Union should issue its own bonds to help countries that run into financial trouble.
In an editorial in the Financial Times, Juncker and Tremonti wrote that pan-European bonds could stabilize government debt markets once the euro750 billion ($1 trillion) bailout fund runs out in 2013.
Eurozone finance ministers will likely debate the idea on Monday as they also consider increasing the size of the bailout fund and flesh out a so-called European Stability Mechanism — new rules for bailouts that are meant to force losses on private investors in some cases.
Juncker and Tremonti say a European Debt Agency could eventually issue bonds worth up to 40 percent of EU economic output.
However, the proposal is set to face opposition from Germany, Europe's largest economy, which has ruled out European bonds amid fears they would push up its borrowing costs.
Investors fear that the debt load in fiscally weak countries, particularly Portugal but also Spain and Italy, could require more rescue efforts. The search is on for ways to convince markets that the region will be able to lower its debts and sustain growth.
One solution might be to restructure those countries' debts now and allow them to get their economies in order under humane circumstances, said Simon Tilford, chief economist at the Centre for European Reform, a London-based thing tank.
Such a simultaneous shock-and-awe move, Tilford said, might stop contagion and take pressure of Italy and Spain.
"By going halfway, you're making everything worse," said Tilford.
To avoid defaults altogether, another option would be to flood a new emergency loan fund with cash to stabilize the eurozone with brute financial muscle.
Mere government guarantees like the ones that hold up the current bailout fund wouldn't be enough, said Gilles Moec, an analyst at Deutsche Bank in London. "It will be about creating a regular flow of permanent funding to this facility."
Money could come from a pan-European tax or special bonds issued for the entire eurozone, experts say. But such a step toward fiscal union is set to face firm opposition from the bloc's richer members, particularly Germany, which frown at regularly transferring funds to weaker nations.
Others see an even stronger role for the new facility.
"It should be able to do just about anything, including buying up government bonds," said Stefano Micossi, director general of Italian business association and think tank Assonime. The new mechanism should get unlimited access to central bank credit to stabilize bond prices, said Micossi. "One trillion, 2 trillion, you name it."
At some point, experts warn, a support system for the eurozone's weaker members might even be necessary, since the low borrowing costs they enjoyed in the healthy days of the currency union are likely gone forever.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Ericsson chairman Michael Treschow to resign
AP - 1 hr 44 mins ago
STOCKHOLM (AP) — Swedish wireless equipment company L.M. Ericsson AB says its chairman Michael Treschow will leave his position within the next two years.
The company says a nomination committee appointed by its largest owners will propose a new chairman to the annual general meeting in 2011 or 2012.
Treschow, 67, has been the chairman of Ericsson since 2002 and helped appoint chief executives Carl-Henric Svanberg in 2003 and Hans Vestberg in 2009.
In a statement Monday, he said Ericsson's strong market and financial position means "it is now the right time to hand over to a successor."
Shares in Ericsson fell by 0.8 percent to 74.05 kronor ($10.9) in early Stockholm trading.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Cathay Pacific hopeful pay dispute can be settled
AP - 1 hr 16 mins ago
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HONG KONG (AP) — Cathay Pacific Airways Ltd.'s incoming chief executive said Monday he's hopeful a pay dispute with pilots will be settled to avoid disruption during the busy Christmas season.
John Slosar said he's optimistic the airline and pilots will be able to reach a deal in pay talks scheduled to start on Dec. 13.
Pilots at Hong Kong's biggest airline voted last week to give union leaders the authority to declare a work-to-rule if the two sides don't make any progress in the talks.
"We're reasonably optimistic about reaching a settlement that both sides are happy with," Slosar told reporters.
Slosar said he's optimistic there won't be any disruption during the holidays.
Almost all of about 1,400 pilots who voted were in favor of allowing union leaders to decide on whether "contract compliance" is necessary.
If they decide it is needed, they will ask pilots not to carry out duties beyond what is required in their contracts, such as working overtime or on their days off because of a shortage of pilots.
The airline said Slosar, who is currently chief operating officer, will replace 55-year-old Tony Tyler as CEO when he departs on March 31.
A replacement for Slosar, 54, has not been announced.
Cathay said on Friday that Tyler will leave the airline to become the chief executive of the International Air Transport Association.
Tyler will begin his new job in July at the Geneva-based association, which represents some 230 of the world's biggest international airlines.
The airline also announced Monday that it will be adding two new routes in 2011. Starting in June, it will start flying four times a week from its Hong Kong base to Abu Dhabi in the United Arab Emirates. In September, it will add a daily flight to Chicago.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
UK new car sales remain weak in November
AP - 1 hr 55 mins ago
LONDON (AP) — A survey shows new car sales in Britain were down by 11.5 percent in November compared with a year earlier, the fifth straight month of declines.
Still, the Society of Motor Manufacturers and Traders said Monday that sales of nearly 140,000 units were better than forecast.
November's figures leave new car sales just 3.4 percent ahead of last year's 11-month total.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Qatar buys stake in Hochtief, complicating ACS bid
JUERGEN BAETZ - AP - 14 mins ago
FILE - The Nov. 8, 2010 file photo shows a worker of German construction company Hochtief at a construction site in Duesseldorf. western Germany. Germany's largest builder Hochtief AG said Monday,...
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BERLIN (AP) — Qatar's investment company has agreed to buy a 9.1 percent stake in Germany's largest builder Hochtief AG for euro400 million ($530 million) — complicating an unfriendly takeover bid from Spanish construction firm ACS.
Hochtief said Monday its board decided to directly issue new shares that will be bought by the state-backed Qatar Holding LLC at a price of euro57.114 per share, close to the current stock value.
The move comes as a blow to ACS, Hochtief's major shareholder and suitor, which will see its near 30 percent stake diluted and possibly face tougher resistance to its takeover bid.
Hochtief said it has agreed with the Qatar holding "to intensify the existing cooperation and to explore further areas for strategic cooperation."
Investors cheered the news and Hochtief's shares in morning trading were up by 2.7 percent to euro61.74 in Frankfurt.
Hochtief has opposed ACS' approach, saying it does not add any value for shareholders, and hundreds of its employees took to the streets in Berlin in October in protest.
ACS, which is run by football team Real Madrid's president Florentino Perez, is the largest shareholder in Hochtief. Its takeover bid seemed almost done last week after Germany's financial market regulator cleared the offer on Monday and ACS formally published its euro2.7 billion takeover bid Wednesday.
The ACS bid was not mentioned in Hochtief's statement on Monday.
When discussing future cooperation with Qatar, Hochtief stressed its already strong presence in the sheikdom, where it employs some 5,000 people through subsidiaries and is involved in several large infrastructure projects.
Hochtief's interests outside Germany include U.S. unit Turner Construction Co. and a majority holding in Australia's Leighton Group. The company is based in Essen and has some 70,000 employees.
The natural gas-rich Gulf Emirate Qatar, which was awarded the 2022 Football World Cup last week, is to invest billions for major infrastructure projects, among them sports venues and a railway network.
Hochtief in April also formed a joint venture with a state-backed Qatar real estate development company and is to build a city for some 200,000 inhabitants from scratch. The new city, Lusail, is also meant to be a host city of the 2022 World Cup.
The sheikdom is not an unfamiliar investor to German companies, and government officials here repeatedly praised them for being solid long-term investors.
In another takeover battle, Qatar jumped in last year to acquire a 17 percent voting stake in Germany's Volkswagen AG as mounting debt forced Porsche to give up its takeover bid for the much larger Volkswagen group. Qatar is now Volkswagen's third-biggest shareholder.
Also last year, an investment firm owned by Qatar's sovereign wealth fund, the Qatari Diar Real Estate Investment Company, signed a $26 billion deal with German national railway operator Deutsche Bahn AG to build a railroad network from scratch — a key part of the sheikdom's expansion plans.
German chancellor Angela Merkel in September said Qatar was welcome as an investor in Germany, adding "the cooperation of Qatar and the Volkswagen AG is an outstanding example for that."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Moodys downgrades Hungarian government debt
AP - 2 hrs 26 mins ago
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BUDAPEST, Hungary (AP) — Credit ratings agency Moody's has downgraded Hungary's government bonds by two notches, citing worries about public finance policies and exposure to foreign financial shocks, such as the European debt crisis.
Moody's Investor Service said Monday it had cut the rating to Baa3 from Baa1 and kept its outlook as negative, meaning more downgrades are possible in the coming three months.
"The government's (financial) strategy largely relies on temporary measures rather than sustainable fiscal consolidation policies," said Dietmar Hornung, Moody's' senior credit officer and lead analyst for Hungary.
The agency has also cut Hungary's rating for foreign-currency debt and bank deposits.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
UK money printer De La Rue confirms takeover bid
AP - 2 hrs 36 mins ago
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LONDON (AP) — British money printer De La Rue PLC said Monday it has received a "highly preliminary and opportunistic" takeover approach, causing its shares to jump higher.
De La Rue's announcement on Monday did not name the prospective bidder, but published reports have identified it as the French company Oberthur Technologies Group. The Financial Times said the approach valued De La Rue at more than 750 million pounds ($1.2 billion).
De La Rue shares shot up 29 percent to 834 pence in early trading on the London Stock Exchange. "There is no certainty that this highly preliminary approach will lead to an offer," De La Rue said in an announcement to the London Stock Exchange.
Analysts at Panmure Gordon said the offer reported in the media "represents a fair level given our ongoing concerns regarding reputational damage."
Shares in De La Rue, which prints money for more than 150 countries, have fallen by about a third since July, when it disclosed problems with paper production.
"It was found that some of the many detailed specification parameters on the supply of some paper had fallen marginally short of specification," the company had said in a Nov. 23 trading update.
"It was also established that some of the group's employees had deliberately falsified certain paper specification test certificates."
However, the company says the security features of the paper had not been compromised.
In the November update, De La Rue said operating profit in the six months to Sept. 25 had fallen by more than half compared to a year earlier to 23.8 million pounds, and revenue was down 17 percent.
"We have suspected for some time that any interest in De La Rue would only come from a competitor given the problems any private equity firm would face in due diligence given the nature of the business," said Panmure Gordon analysts Mike Allen and Paul Jones.
"Despite the market position and scarcity of the asset we believe it unlikely this will become a bidding war," the added.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Mazda CEO: Relationship with Ford still strong
TOMOKO A. HOSAKA - AP - 2 hrs 18 mins ago
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TOKYO (AP) — Japanese automaker Mazda remains committed to its 30-year-old technical and strategic alliance with Ford although the US company is no longer its top shareholder, Mazda's chief said Monday.
Ford cut its stake in Mazda from 11 percent to 3.5 percent last month, marking a symbolic shift in a longtime U.S.-Japan auto alliance.
Mazda Motor Corp. President and Chief Executive Takashi Yamanouchi said the two companies will continue to cooperate through joint ventures and technology exchange, and Mazda has no plans to find a new equity partner.
"I think it's natural for people to think that Ford is moving away from Mazda, but I also want to draw attention to the fact that they still decided to retain a 3.5 percent stake in Mazda," Yamanouchi said at the Foreign Correspondents' Club of Japan.
The Dearborn, Mich.-based automaker became Mazda's biggest shareholder in 1979 when the Japanese car maker was near collapse. It raised its stake to 33.4 percent in 1996, but reduced that to 13 percent in 2008. It had declined to about 11 percent more recently.
In addition to helping Mazda avert bankruptcy, the Hiroshima-based automaker benefited from Ford's expertise in marketing, sales and financing, Yamanouchi said. Meanwhile, Mazda helped Ford executives with manufacturing and quality control, he added.
"We've learned a lot from each other," he said.
They share basic parts for autos called platforms and jointly operate plants in Asia and other regions, including a money-losing factory in Flat Rock, Mich.
The plant, which makes Ford Mustangs and the Mazda 6, has the capacity to produce 240,000 vehicles a year. But it is severely underutilized, operating one shift a day instead of two because of lackluster demand at both companies.
"So you can imagine with one shift, it's very difficult to recover fixed costs," Yamanouchi said. "As a result, the operation is unprofitable. Right now we are discussing with Ford how to fix this situation."
For its part, Mazda is banking its future on its next-generation gasoline and diesel engines that feature markedly improved fuel efficiency. The technology will make its debut next year in the Mazda Demio, which can reach 30 kilometers per liter (75 miles per gallon), the company says.
In contrast to bigger rivals such as Toyota Motor Corp. and Nissan Motor Co., Mazda is embracing a slower approach when it comes to hybrid and electric cars.
Forecasts have projected that in 2020, electric vehicles will only comprise 5 percent of the car market, Yamanouchi said.
"We've assumed that even at the time, a majority of vehicles will still have internal combustion engines," he said.
In what the company refers to as a "building block strategy," Mazda will focus first on maximizing efficiency in gasoline-powered engines and then gradually incorporate electric components. Its goal is to improve average fuel economy by 30 percent across its entire global lineup by March 2016.
In 2013, it will introduce a gasoline-electric hybrid using technology licensed from Toyota. Electric vehicles and plug-in hybrids may also be in Mazda's future, Yamanouchi said.
Mazda, whose models include the Miata roadster and RX-8 sportscar, is a relatively small player in the intensely competitive auto industry, producing 1.2 million vehicles a year. It holds a 5 percent market share in Japan and a 2 percent share in the U.S.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Carbon credit programs fail without climate bill
JAMES MacPHERSON - AP - Mon Dec 06, 2:20AM CST
BISMARCK, N.D. (AP) — A national program that paid farmers millions of dollars for reducing greenhouse gasses has fizzled amid uncertainty about U.S. climate legislation, stopped paying dividends and will no longer taken enrollment after this year, the president of the group running it said.
The North Dakota Farmers Union awarded farmers carbon dioxide credits for using techniques that reduced emissions of carbon and other gasses tied to global warming and distributed the proceeds when those credits were sold to businesses, cities and others. About 3,900 farmers and ranchers from 40 states have earned about $7.4 million through the program since it started in 2006.
But carbon credits that fetched up to $7 a metric ton a few years ago are now nearly worthless, said Robert Carlson, president of the North Dakota Farmers Union. The group has 6 million tons worth of credits that have gone unsold, and while it will continue to try to sell those, no new credits will be issued after this year, Carlson said.
The program based in Jamestown is the largest of about a dozen similar carbon credit programs nationwide that cater solely to farmers and ranchers. Those other programs are facing the same difficulties, said Roger Johnson, president of the National Farmers Union in Washington and a former North Dakota agriculture commissioner.
The credits would have had value if Congress had passed so-called cap-and-trade climate legislation. A bill that would have limited greenhouse gas emissions but let companies and others offset their pollution by buying carbon credits passed the Democrat-controlled House last year but has languished in the Senate. Republicans have derided the bill, which had strong support from Democratic President Barack Obama, as "cap-and-tax" because they said it would increase the cost of energy.
"The high point of the prices coincided at the time of the presidential primaries and the economy was strong," Johnson said. "Pretty much everyone thought there would be some sort of cap-and-trade legislation because of support from Obama and McCain.
"But then came the collapse in the economy and support for legislation died, and it all happened kind of at the same time."
The North Dakota-based program had pooled farmers' carbon credits for sale on the Chicago Climate Exchange, a private agency that trades greenhouse gases and other pollutants just as other exchanges trade such commodities as crops and livestock.
Farmers, ranchers and landowners earned credits by growing grasses and trees or using no-till farming practices, in which seeds are injected into the soil to reduce the amount of dirt turned over and carbon released. Livestock producers could participate by installing systems to capture methane from manure.
Ten million tons of carbon dioxide have been sequestered under the program since it started — the equivalent of carbon emissions from about 2 million cars, Carlson said.
Wayde Schafer, a North Dakota spokesman for the Sierra Club, said the carbon credit program had promise.
"It was a good idea. It does reduce CO2 in the air, and it does benefit farmers," Schafer said. "But national cap-and-trade legislation probably won't see the light of day, though it still could work with regional cooperation among state and government entities."
It would take a cap-and-trade bill for the credits to regain their value.
"These (carbon credit programs) started because there was a presumption there would be a value on carbon and there would be legislation aimed at reducing greenhouse gasses," Johnson said. "Carbon really has no value now."
Terry Ulrich, who raises cattle and crops near Ashley in south central North Dakota, said he pocketed about $6,000 during the first three years of the program for employing no-till farming techniques on about 2,000 acres of his land. But it's been about two years since he received a dividend from the program, he said.
"I thought it was good for no-till farming, but the price has gone to pot, the market is almost zero and legislation doesn't look promising," Ulrich said.
Without incentives, some farmers will go back to less environmentally friendly farming practices, he said.
"The contract will be broken now, and we can all do what we want to do," Ulrich said. "But I'll still no-till the land, absolutely. That, I'm sold on."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
So how would you kick-start the economy?
The Associated Press - AP - Mon Dec 06, 2:09AM CST
Henry Ford Anderson, 62, of Detroit, Thursday, Nov. 11, 2010. Anderson, 62, is a retired auto industry worker — for Chrysler — who commented from a dog-racing track in Wheeling, W.Va., saying...
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The Associated Press asked people around the country to share their ideas on jump-starting the economy. Some responses:
More stimulus: Carolyn Morrison is a Wake County, N.C., school board member who has spent more than 45 years in education. The public school she attended as a child in Lumberton, N.C., was built by President Franklin Roosevelt's Depression-era Works Progress Administration. She wants more spending like that.
"Thinking back to Roosevelt and other presidents who faced this problem, I guess the stimulus package would be the closest to giving jobs as anything."
___
Amen to that: John Jennings, 56, of Charlotte, N.C., runs a nonprofit group that houses up to 18 ex-convicts re-entering society. He, too, wants another stimulus package.
"I understand the deficit, and I know we're trillions of dollars in debt and all that. But I feel like the only way we're going be able to come out of this is to invest into it."
___
Fairer pay: Jermaine Wilkinson, 32, of Mauldin, S.C., is an operations engineer at Lockheed Martin in Greenville, S.C., where the company refurbishes Navy aircraft. He says the government should make companies narrow the gap between pay for CEOs and average workers.
"Companies are saving money, but the money they're saving is going into the CEO's pocket or the upper management, board of directors, those type of people. If you start putting those savings into the ones who are actually doing the work. ... I believe they'll go out and spend money. They won't be hesitant."
___
Renew infrastructure: Ross Capon, executive director of the National Association of Railroad Passengers, says infrastructure projects make the U.S. more competitive in the future and create jobs now. He points to the aging Lincoln and Holland traffic tunnels connecting New York and New Jersey as examples of needed renewal.
"We're living off our grandfathers' investments. The whole issue of neglect of infrastructure is a serious problem. It's not limited to transportation."
___
Keep jobs here: If there's any doubt autoworking is in his blood, the proof is in his name. Henry Ford Anderson, 62, is a retired auto industry worker — for Chrysler — who commented from a dog-racing track in Wheeling, W.Va. He wants the government to control outsourcing.
"We can always create jobs. Technical jobs are created every day, but where do they go when you create them? We have to bring them back. The president has to tell all of the Fortune 500 to stop holding the economy down. Just look at how they are getting rich. He has to clamp down on them, but he's in a no-win situation because all they will do is take the jobs to another country."
___
Going global: Paul Hanrahan, chairman of AES Corp., a power company based in Arlington, Va., with operations in 30 countries and 40 percent of its revenue from the U.S., says international business is key to U.S. growth.
"The way we create jobs is by taking advantage of expanding markets. Where we expand into a new market, there are jobs created in the U.S. I think we need to keep that in mind, that investment overseas is also something that benefits U.S. companies."
___
Tax holiday: Mark Zandi, chief economist at Moody's Analytics, says that if the economy looked like it was going to slip into another recession, Congress should exempt employers from the payroll tax for three months, among other steps. Small businesses are usually the engine of hiring during recoveries but not, so far, this time. A tax holiday would temporarily lower the cost of hiring and serve as an incentive to companies of all size, he says.
"Hopefully, that would convince people to get off the dime and hire people and get the recovery moving," Zandi said. "The key impediment to the economy is businesses' reluctance to hire."
___
Tax cuts: Brian Bethune, economist at IHS Global Insight, proposes extending the Bush-era tax cuts for everyone, making them permanent for people of lower and middle income and phasing them out for the wealthy after a year or two. Like Zandi, he thinks the recovery is too fragile now to let taxes go up on anyone. Not that tax cuts would solve everything.
"There is no big silver bullet."
A compromise has been slowly taking shape in Washington that would extend the tax cuts temporarily for all income groups, perhaps for three years.
___
Amen to tax cuts: Fabrizio Santoro, 37, a real estate investor from Miami Beach, Fla., said lower capital gains and other taxes are the way to spur employment and growth. "The only way to kick-start the economy is through businesses. And you've got to entice businessmen to do business. It all comes down to taxes."
___
Stay on course: Ann Fields, 48, of Dallas, writes novels, magazine articles and freelance pieces, and founded a group for African-American writers. Self-employed, she counsels patience.
"I don't think people realize how close we came to a depression. I think the steps the president and Congress took averted that. I'm willing to be patient. I know change doesn't happen overnight. As long as they provide the small business support they've been talking about recently, I'm good."
She added, chuckling, I won't move to Canada."
___
Contributing to this report were AP writers Jeannine Aversa and Joan Lowy in Washington; Linda Stewart Ball in Dallas; Emery P. Dalesio in Raleigh, N.C.; Ben Dobbin in Rochester, N.Y.; Matt Sedensky in Miami; Erica Werner in Mumbai, India; and Corey Williams in Detroit.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
American voices on making the economy move
CALVIN WOODWARD - AP - Mon Dec 06, 2:09AM CST
Henry Ford Anderson, 62, of Detroit, Thursday, Nov. 11, 2010. Anderson, 62, is a retired auto industry worker — for Chrysler — who commented from a dog-racing track in Wheeling, W.Va., saying...
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HON 51.45 +0.26 +0.51%
PEP 65.17 -0.03 -0.05%
WASHINGTON (AP) — It seems Washington is all ears these days.
President Barack Obama says he'll take a great idea to fix the economy anywhere he hears it. The Republican leaders in Congress can't say enough how determined they are to "listen to the American people."
OK. Here goes.
We want less debt, lower taxes, more trade, less trade, "less talk and more walk," a brand new New Deal, a private sector renaissance, money for trains and roads, easier credit, a clampdown on CEO pay, more immigration, less immigration, government off our backs, a safer safety net, cheaper health care, the dismantling of Obamacare — and how about some energy derived from burning algae?
Plus a new tone in Washington.
All in a New York minute.
The Associated Press asked people across the country to serve up their ideas to set the economy straight, a challenge underscored Friday when the jobless rate climbed to 9.8 percent, topping 9 percent for a record 19 straight months. They answered in a cacophony of voices, from the corporate office to the cafe.
America is not just a tea party. It's a coffee shop in Texas, too. It's a union hall in New York and it's Silicon Valley in California.
___
TALENT MAGNET
In Menlo Park, Calif., venture capitalist Marc Andreessen, an online pioneer who co-founded Netscape Communications, said the "single biggest thing we could do to accelerate the economy by far is to increase immigration."
"We have this bizarre paradox," he says, "where we have the world's best research universities, we have the smartest people who come from all over the world to come to study. They end up getting degrees in computer science, electrical engineering and chemical engineering and then we kick them out of the country. It's just absolutely crazy.
"If they were able to stay here to work for other companies and start other companies, we would have so much more economic growth. It would be just amazing. What we are doing now is just completely self-destructive."
The U.S. offers 65,000 visas a year for foreigners with advanced skills sought by U.S. companies, plus 20,000 visas for people who graduate from U.S. schools with a master's or higher in certain fields. Some companies complain the visas are not granted quickly enough.
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COFFEE PARTIER
If the U.S. goes begging for brainiacs, that means plenty of opportunity for people such as Ulises Aranda, 24, of the Dallas suburb of Farmers Branch. He graduated with a master's in mechanical engineering in May and had no shortage of job offers. He chose to work for his father's engineering construction firm. To him, the economy will grow if students pick the right fields and buckle down.
"There's plenty of jobs out there for engineering and science majors," he said from the patio of Dunn Bros Coffee. "But people aren't really graduating with those degrees. I spent my six years in college, working hard. I busted my butt and had no social life. Now I have a job."
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CREDIT CRUNCH
Larry Karel, 71, of Aventura, Fla., owns a company that produces furniture shows around the country. He says the small businesses that exhibit at his shows are starved for loans.
"I never heard of so many companies that are putting their exhibit fee on a credit card," he said. Without loans, businesses can't create jobs and people can't buy — and furnish — new homes. "It's a vicious circle."
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DOWN WITH FREE TRADE
"I'm not a die-hard Democrat, die-hard Republican — I'm a 'what-are-you-going-to-do?' die-hard," said Michael Walker, 54, of Corning, N.Y. He has taken a temporary leave as a production worker at Corning Inc., the world's biggest maker of glass for flat-screen televisions, to work for the union.
He says free-trade practices and outsourcing have devastated manufacturing, and the ripple effects now are touching the public sector. Both political parties, he said, "acknowledge they understand what's wrong but none of them want to do anything with it."
More than half of Corning's 24,500-strong payroll is now based outside the United States, he said. Walker sees economic decline affecting teachers, municipal workers and other public servants like never before.
"They've never quite understood this whole battle we've had in the private sector because they've never ever been affected by a real downturn in the economy. You're having communities and states looking at denying benefits to community employees and state employees because you've eroded the tax base to a point where nobody can sustain themselves."
That opinion is echoed in the North Carolina foothills of the Appalachian Mountains, where Scott Miller, 50, chief business recruiter for struggling Catawba County, wishes U.S.-made products could be given a strong tax advantage.
"If you're going to expect jobs to be in America, you should buy American. Every consumer, in their purchasing habits, affects their own job. I know that's a little more difficult, probably, to buy a shirt that's made right here, but do your best."
___
UP WITH TRADE
Honeywell is a $34 billion company with 130,000 workers, half outside the U.S. It makes jet engines, the cockpit on the space shuttle, home thermostats, equipment for refineries and much more. The AP asked Dave Cote, chairman and chief executive, for ideas to expand the U.S. economy when he was traveling with Obama in India, where the New Jersey-based company employs 11,000.
Trade works for both sides, Cote said. "The thing I can point to is that since the Phoenicians, 3,000 or 4,000 years ago, it works."
"As you grow everywhere," he said. "you start to add jobs. In the U.S., for example, we've been adding employment over these last few months — things have turned and we've actually started adding at the same time that we're growing globally.
"So this is not a zero-sum game, and it's a tougher concept to get across, but, God, it's the truth."
Yet Cote sees something even more important for the government to do than to encourage the free flow of commerce. It relates to his work on Obama's bipartisan deficit commission, which produced a report Friday recommending $4 trillion in budget savings over a decade by curbing Social Security, raising taxes and deeply cutting spending.
"That debt problem needs to be solved or the seeds of the next recession have already been planted," he told AP. "If that doesn't get sorted out, then almost nothing else we do is going to matter."
He said: "People want to point to stimulus spending, Bush tax cuts, or Obamacare and blame that — and those are all sideshows."
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INNOVATION NATION
In Durham, N.C., Bill Brown co-founded 8 Rivers Capital, a private equity firm supporting a lab that is designing and testing systems to make renewable energy from the burning of algae. The government has put money into the project.
"The private sector has some things that would truly change the economy," he says. "Yet it needs government support right now."
Brown says that when President Ronald Reagan successfully pushed for a higher investment tax credit and hefty upfront depreciation allowances in the early 1980s, leading-edge businesses took off.
"Without fostering this sort of innovation, we don't have a hope of using the productivity engine to get out of our current economic rut."
___
CALL A MEETING
Indra Nooyi is chairman and CEO of PepsiCo., the New York-based multinational beverage and food company employing 110,000 in the U.S. The Indian-born executive is one of the most powerful women in business.
"My dream would be that the president convenes existing or retired CEOs and says, 'Go to work and figure out how we prepare a long-term plan for the country so we can grow the country's manufacturing base,'" she said.
"I think as a country we have to sit down and talk about the sectors that we want to create in the United States over the next 20-30 years — I mean, almost a business plan for the country — and then figure out how we're going to plan, fully invest behind these sectors, so that we can actually get manufacturing jobs back to the United States and keep a base of employment going well into the future."
___
MORE WALK
Bearded, blue-eyed and lean, Dallas barista Adam Gaynier, 24, says it will take more than meetings to make people believe in their economic future again. "Less talk and more walk," is what he wants from government.
"You've got to back up what you're saying with physical change that we can see. American people don't care about what we don't see. We care about the stuff we deal with on a day to day basis, buying groceries, having enough money to put gas in the car, the price of gas going up."
But words and meetings matter to Mark Peters, 53, who founded Piedmont Carolina Nursery in Colfax, N.C., in 1982, right after college. He employs 28 people. A registered independent, Peters says the economy would get a real lift if people were convinced that Obama and congressional Republicans were committed to working together.
From that, he says, a real plan to grow the economy could be found.
"More than anything right now, it's just having that confidence that everything's OK, and I'm not going to lose my job, and I'm going to be able to pay my bills."
___
Contributing to this report were AP writers Linda Stewart Ball in Dallas; Emery P. Dalesio in Raleigh, N.C.; Ben Dobbin in Rochester, N.Y.; Matt Sedensky in Miami; Michael Liedtke in San Francisco; Erica Werner in Mumbai, India; Suzanne Gamboa in Washington; and Corey Williams in Detroit.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
UK money printer De La Rue confirms takeover bid
AP - Mon Dec 06, 1:52AM CST
LONDON (AP) — British money printer De La Rue has confirmed that it has received what it calls a highly speculative and opportunistic takeover approach.
De La Rue's announcement on Monday did not name the prospective bidder, but published reports have identified it as the French company Oberthur Technologies.
The Financial Times said the approach valued De La Rue at more than 750 million pounds ($1.2 billion).
Shares in De La Rue, which prints money for more than 150 countires, have fallen by about a third since mid-year when it disclosed problems with paper production.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
SAfrican newspaper debuts denying its ANC agent
AP - Mon Dec 06, 1:14AM CST
JOHANNESBURG (AP) — A South African newspaper debuted Monday with denials it is a mouthpiece of the governing African National Congress.
The New Age owners are seen as close to President Jacob Zuma. In a front-page note to readers Monday, editor Henry Jeffreys said his paper will, "generally, support the government of the day" but would expose bad government.
The paper arrives amid debate in South Africa about what are seen as attempts by the ANC to muzzle the press, including creating a tribunal controlled by politicians with as-yet undefined powers to punish journalists for infractions that also are unclear. New Age editor Jeffreys says he opposes the tribunal as well as a proposed secrets law that could jail reporters for publishing classified information.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
CEO of Australias Fairfax Media resigns
AP - Mon Dec 06, 12:05AM CST
SYDNEY (AP) — The chief executive of Fairfax Media Ltd. has resigned, the Australian-based company said Monday.
Fairfax chairman Roger Corbett said in a statement that Brian McCarthy could not make the three- to five-year commitment that the company had asked for while it implements a new strategic plan.
"We agreed that now, at the beginning of the implementation of the plan, it was the appropriate time for the leadership change," Corbett said.
McCarthy's resignation was effective immediately.
Non-executive director Greg Hywood was named acting chief executive while a global search is conducted.
McCarthy said in the statement that he had been with Rural Press and then Fairfax for 34 years and would take a break before pursuing new business opportunities.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Europes struggles make blue chip stocks cheap
DAVID K. RANDALL - AP - Sun Dec 05, 11:34PM CST
Related Stocks
GE - General Electric Company
Sym Last Chg Pct
GE 16.78 +0.10 +0.60%
TOT 51.34 +0.96 +1.91%
BP 41.49 +0.17 +0.41%
BP..LS 435.250 -6.200 -1.40%
NEW YORK (AP) — This is a good time to make money off of someone else's misfortune.
One of the best, but rarely followed, rules of investing is to buy when things look bleak. Blue chip stocks in the euro zone are down 5.5 percent since it became clear in mid-April that Greece needed help to prevent it from defaulting on its debt. Some economists speculate that the bailouts of Greece and Ireland mean that the euro won't last much longer.
Investors are waiting to see whether the European Central Bank takes additional steps this week to prevent Europe's financial crisis from spreading to Spain and Italy. That uncertainty has created stock bargains. You may not find the same parade of once-in-a-lifetime deals as during the 2008-2009 financial crisis when General Electric Co. traded as low as $7.06 (it closed at $16.78 on Friday). But the broad retreat from anything associated with Europe means that there are easy pickings.
Take French oil giant Total SA. It has fallen 21 percent this year and is trading at a price-earnings ratio of only 8.3. "The company has become incredibly inexpensive," says Cody Dick, an analyst with Dreyfus Worldwide Growth, a $430 million mutual fund that is buying Total. "When you look at the stock compared to its peers it's been unjustifiably discounted."
At $51.34, the stock costs about what it did during the financial crisis in October 2008. It comes with a dividend yield of 4.9 percent. Competitor BP PLC, meanwhile, doesn't offer a dividend.
Though Total has its headquarters in France, its revenues are global. It drills for oil around the world and can expand regardless of the weak European economy.
Like a parachute strapped onto the back of a runner, concerns that Europe's problems will spread have held back stocks that should have performed better. Britain's Diageo, the world's largest booze company and parent of brands like Johnnie Walker, Jose Cuervo and Guinness, rose 4.3 percent this year.
That is less than half the gain of the broad U.S. stock market, which rose 9.8 percent this year as retail spending increased. The U.S. also happens to be Diageo's most profitable market. Its operating margins here top 35 percent, well above the 20 percent operating margin it averages globally. It recently lowered its prices on its premium brands, which should send sales higher.
Diageo costs $72.67, which is about the same price it did in October 2008. The company is reasonably priced at a 17.5 price-earnings ratio and offers a 4.1 percent dividend yield. That's more than the 3 percent yield offered by a 10-year Treasury bond.
If buying alcohol companies rubs you the wrong way, then you can find a bargain with a staid phone operator. Concerns that Spain will be the next country to need a bailout have pushed the country's stock market down 10 percent over the last month. Telefonica S.A. is down 14 percent over the same time. It costs $69.45 and trades at an 8.8 price-earnings ratio.
While the company operates phone lines and cellular phone networks in Spain, more than 60 percent of its customers live in expanding markets in Latin America. Telefonica is also the second largest wireless company in the United Kingdom and has a large number of customers in Germany and the Czech Republic.
Investors aren't buying Telefonica because they are too fixated on Spain's problems, says Jim Moffett, who manages the $6.9 billion Scout International Fund.
His description of the company could apply to other European blue chips.
"There is more growth there than the market is giving them credit for," he says. "We like them not because they're Spanish but in spite of the fact that they're Spanish. It's a good company in a troubled country."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Iraq: Oil exports from Kurdish region to resume
AP - 13 mins ago
BAGHDAD (AP) — Iraq's oil minister says crude oil exports will resume early next year from the self-ruled Kurdish region.
Oil Minister Hussain al-Shahristani told reporters Monday that the Kurdish government has committed to exporting 150,000 barrels daily by next year. No exact date was given.
Exports from the north had been halted a few months after they resumed in June 2009 amid a disagreement between the Baghdad government and Kurdish officials over payments. The Kurds have sought greater control over oil in their crude-rich region while Baghdad has argued that the oil is a national resource, under the central government's control.
Iraq plans to export 2.25 million barrels a day next year, up from current exports of about 1.9 million barrels daily.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Weekly Watchlist
By Blain on Mon Dec 6th, 2010 12:47:23 AM
Another new feature here for the blog, I am going to start posting on Sundays a watchlist for the week in advance. Tonight I didn’t have time to break these down into sub lists (ie breakouts, runners, etc.) so here are the stocks in one big list that I am keeping an eye on heading into this week:
PCLN, MSB, GMO, AGCO, LNN, DE, CNH, CPX, TTM, FFIV, AKAM, PUDA, SIG, FOSL, SLW, NGD, SQM, CF, EZCH, RVBD, NTGR, N, CRM, SNCR, SLH, LPSN, VOCS, IL, LZ, PPO, APKT, TDC, CML, JOYG, BIDU, ACOM, SINA, MIPS, SPRD, NVDA, HOLI, GPOR, AREX, BEXP, ATML, TQNT, SBUX, GMAN, TIBX, CSTR, RLD, CNK, OPEN, MCRS, ASYS, ST, FINL, HSFT, IBM, IIVI, AMZN, SFLY, VMW, SHOO, DECK, SAM, UA, EZPW, FCFS, GSM, RURL, PAY, FNSR, AAPL, HIBB
The market is very resilient and closed the week on a high note with both the NASDAQ and S&P 500 sitting just below their 52-week highs. The only concern I saw was that the volume was declining each consecutive day making it reversal prone. Should be an interesting week.
Fed Chairman Bernanke On 60 Minutes
The Economy Fed Chairman Bernanke On The Economy
Fed Chairman Ben Bernanke discusses pressing economic issues, including unemployment, the deficit and the Fed’s controversial $600 billion U.S. Treasury Bill purchase. Scott Pelley reports.
Agnico-Eagle Mines Should Be Ready to Fly
Although Agnico-Eagle Mines Limited (AEM) has climbed steadily since August and we still expect to see AEM trading at $100+, it remains a bit of a puzzle to us that the old bird isn’t trading much higher than it is. A number of our peers are expecting the miners to take off as the earnings, turnover and profits, based on much higher gold prices can no longer be ignored. Well, we hope that they are correct as Agnico forms a major part of our portfolio.
However, this is not the 1980’s and there are many other ways to get involved in this market as we all know. Still, back to the chart where we can see that the volume is dropping off a tad, but the crossover on the MACD is a positive sign for AEM, so we will hold and observe for now.
Agnico-Eagle is a Canadian-based gold producer with operations in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the U.S. [The] LaRonde mine is Canada’s largest operating gold mine in terms of reserves. Agnico-Eagle has full exposure to higher gold prices consistent with its policy of no-forward gold sales. It has paid a cash dividend for 28 consecutive years.
Agnico remains one of our favorite companies and forms a large part of our core holdings with the Silver Wheaton Corporation (SLW) being the largest single investment that we hold.
Agnico-Eagle has now developed five new mines in three years, increased gold production by more than 300%. The company appears to be well set up to continue to grow output through internal development of current projects and ongoing exploration activities. There is also the potential of acquisitions, joint ventures and partnerships to add a little spice to Agnico’s progress. The target for 2010 is still 1.0 million ozs.
Agnico-Eagle Mines Limited trades on the NYSE under the ticker symbol of AEM and on the Toronto Stock Exchange under the symbol of AEM.TO.
Agnico-Eagle has a market capitalization of $13.98 billion, a 52-week trading range of $49.64 - $84.21, a rather high P/E ratio of 46.69 on volume of 1-2 million shares traded per day.
Nice Ride: Lamborghini Gallardo LP 570-4 Spyder
Via Classic Driver, we see this wicked set of wheels, in a version called “Performante:”
Lamborghini has announced a new, open-top, high-performance version of its Gallardo supercar, the LP 570-4 Spyder Performante. Thanks to the extensive use of carbonfibre, the new V10 sportscar has a dry weight of just 1485kg – which helps the 5.2-litre, 570HP engine to catapult the car to 62mph in 3.9 seconds. Top speed is 201 mph.
EOG: A Large Cap Leader in New Horizontal Oil Plays
A one-day drop in stock price of 9% presents opportunity, we believe, in Contrarian Buy-recommended EOG Resources (EOG) at a McDep Ratio of 0.78. Reduced natural gas drilling and delays in oil well completions caused the company to lower its growth forecast. The new forecast matches the more cautious projection we had been using. Moreover, third quarter results [see transcript] released late November 2 matched our expectations from four months ago for total unlevered cash flow (Ebitda). More importantly, delays for the next year do not cause us to change our NPV of $120 a share.
A shortage of fracturing service that has intensified in the past quarter accelerates an industry shift to higher profit oil drilling from lower profit natural gas drilling. Well-positioned for that transition, EOG is a large cap leader in new horizontal oil plays including the South Texas Eagle Ford and the North Dakota Bakken. Those two areas offer a combined 1.3 billion barrels of unproven resource potential much of which management expects to prove in the next several years.
The main risk may be timing with EOG stock in an apparent downtrend as it trades below its 200-day average of $99. Yet, low financial risk, signaled by a 0.14 ratio of debt to present value, combined with low McDep Ratio and capable management overcome short-term stock price concern in our opinion.
Originally published on November 4. 2010.
Gold Prices Should Stay High for Years to Come
It's about time the contrarians realize that the world has changed.
Gold continues to climb, closing at over $1400/oz this past Friday. And the word on the street is that this run is far from over.
Gold imports into China have soared this year, turning the country, already the largest bullion miner, into a major overseas buyer for the first time in recent history. China's hunger for gold (see Where the Billionaires Invest) shot gold prices to new levels this past week when the Shanghai Gold Exchange said that China's gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year.
But despite record nominal gold prices, gold miners just can't keep up with the demand. And that's not a bad thing for us junior precious metals investors.
Time to Shine
It means that due to the demand of gold, and the limited available supply of low cost gold mining, prices should remain high for years to come - regardless of strong economic numbers (see The Next Big Boom.)
Back when gold fell to the low levels between 1997 and 2001, gold miners had to mine ore with the highest grades just to stay alive. During this time, many of them shut down. But things have changed.
With record high prices, gold miners are shining brighter than ever and are gradually mining lower grade ore. But mining lower grade ore not only means lower output, but higher costs as well. In the past five years, the average recovered grade has declined a whopping 30% - dropping from 1.8 grams per ton down to 1.3 grams per ton.
To add more fuel to gold prices, twice as much ore has to be found just to replace the gold being produced at current grades. The replacement ore being found are now averaging only 0.60 grams per ton. That means that what used to be considered wasted rock, are now being reevaluated as actual gold reserves.
It's no wonder the the junior gold market is flying and the dollars being spent on drilling and exploration are starting to skyrocket. If you take a look at this past year, drilling amongst the gold junior explorers has been hitting incredible numbers leading to incredible gains in share prices as budgets and financings for drill programs increases.
The Juniors Dominate
Just this past week, Evolving Gold (EVOGF.PK) hit 405.4 Meters at 1.31 gpt (grams per tonne) sending its stock up over 17% on the day. But even the previously stagnant penny stocks have seen tremendous climbs in share prices.
The list of juniors hitting big numbers and making incredible gains in the past months has been tremendous. The days of the junior mining explorers soaring on drill results are back. For months, we have talked about how the small cap market, in particular the junior miners, are going to make a big splash and create a lot of wealth for investors.
Both the S&P Midcap 400 and Smallcap 600 climbed to new highs this week, outpacing the performance of the larger S&P 500 by over 10%, which remains below its November closing high. Hedge funds and institutions are beginning to diversify their money into riskier, more profitable plays (see Doubling Down for the Big Bang.)
The Hottest Gold Plays
Africa remains one of the most productive and promising gold mining continents in the world.
Barrick Gold's (NYSE: ABX) African Barrick spin off, for example, has major plans in Africa - particularly in Tanzania, where Canaco Resources (CANWF.PK) has hit some strong grades. African Barrick already has four producing gold mines in Tanzania with tens of millions of ounces in resources.
Tanzania is one of the hottest gold exploration plays right now. With the African Barrick spin off earlier this year by Barrick Gold, things may just be heating up. Junior companies exploring in Tanzania have now turned into a target for many investors, as African Barrick's focus remains in Tanzania.
Other companies exploring in Africa have been hitting high grades and climbing significantly in share price. African Gold Group, Canaco Resources, Sunridge Gold (SGCNF.PK), and Great Quest Metals (GQMLF.PK) have all climbed to record highs this year and many of them are up well over 100%.
Canaco Resources, for example, traded as low as $0.36 earlier in the year but closed this Friday at $4.75! That's a gain of over 1200%! If you would have invested only $10,000, you could have made a return of $120,000 in less than a year based on those numbers.
See why do we love the juniors?
Of course, not every company has that potential and not everyone with great drill results will turn into a mine. But it goes to show you that drill results from these juniors can give you a serious return on your investment if timed the right way.
Disclosure: We do not own any shares in the companies mentioned
Positive Seasonal Pattern Stocks on Sunday the 5th of December 2010
Seasonal Patterns found for the following stocks:
Collegiate Funding Svcs Inc (CFSI) over the next 9 trading days. Look at the seasonal patterns for Collegiate Funding Svcs Inc in context.
Corvel Corp (CRVL) over the next 9 trading days. Look at the seasonal patterns for Corvel Corp in context.
Capital Southwest Corp (CSWC) over the next 7 trading days. Look at the seasonal patterns for Capital Southwest Corp in context.
Animus Cp (PUMP) over the next 10 trading days. Look at the seasonal patterns for Animus Cp in context.
Rigel Pharmaceuticals Inc (RIGL) over the next 7 trading days. Look at the seasonal patterns for Rigel Pharmaceuticals Inc in context.
Net 1 UEPS Technologies New (UEPS) over the next 9 trading days. Look at the seasonal patterns for Net 1 UEPS Technologies New in context.
iShares MSCI Israel Capped Investable Market Index Fund ETF (EIS) over the next 8 trading days. Look at the seasonal patterns for iShares MSCI Israel Capped Investable Market Index Fund ETF in context.
BIS.TC (BIS.TC) over the next 10 trading days. Look at the seasonal patterns for BIS.TC in context.
Smtc Mfg Cp Of Cda Exchangeable (SMX) over the next 9 trading days. Look at the seasonal patterns for Smtc Mfg Cp Of Cda Exchangeable in context.
Union Bankshares Inc (UNB) over the next 9 trading days. Look at the seasonal patterns for Union Bankshares Inc in context.
Midsouth Bancorp (MSL) over the next 9 trading days. Look at the seasonal patterns for Midsouth Bancorp in context.
El Paso Energy Capital Trust I 4.75% Trust Convertible Preferred Securities (EP1C) over the next 4 trading days. Look at the seasonal patterns for El Paso Energy Capital Trust I 4.75% Trust Convertible Preferred Securities in context.
GFN.U (GFN.U) over the next 10 trading days. Look at the seasonal patterns for GFN.U in context.
Northern Tiger Resources Inc (NTR) over the next 4 trading days. Look at the seasonal patterns for Northern Tiger Resources Inc in context.
HKZ.TC (HKZ.TC) over the next 5 trading days. Look at the seasonal patterns for HKZ.TC in context.
PowerShares Active Low Duration Portfolio ETF (PLK) over the next 9 trading days. Look at the seasonal patterns for PowerShares Active Low Duration Portfolio ETF in context.
XPT.EU (XPT.EU) over the next 2 trading days. Look at the seasonal patterns for XPT.EU in context.
Energy Services Acquisition Corp (ESA.U) over the next 10 trading days. Look at the seasonal patterns for Energy Services Acquisition Corp in context.
MidAmerica Apartment Communities Inc. 9 1/4 % Series F Cumulative Redeemable P (MAA.P.F) over the next 10 trading days. Look at the seasonal patterns for MidAmerica Apartment Communities Inc. 9 1/4 % Series F Cumulative Redeemable P in context.
The Gabelli Global Goldn Natural Resources & Income Trust (GGN-A) over the next 6 trading days. Look at the seasonal patterns for The Gabelli Global Goldn Natural Resources & Income Trust in context.
PowerShares Global Gold & Precious Metals Portfolio ETF (PSAU) over the next 8 trading days. Look at the seasonal patterns for PowerShares Global Gold & Precious Metals Portfolio ETF in context.
Wisdom Tree Dreyfus Indian Rupee ETF (ICN) over the next 9 trading days. Look at the seasonal patterns for Wisdom Tree Dreyfus Indian Rupee ETF in context.
Greif Brothers Corp Class B (GEF-B) over the next 7 trading days. Look at the seasonal patterns for Greif Brothers Corp Class B in context.
Nets Tokyo Reit Idx (JRE) over the next 8 trading days. Look at the seasonal patterns for Nets Tokyo Reit Idx in context.
RevenueShares Financials Sector Fund ETF (RWW) over the next 2 trading days. Look at the seasonal patterns for RevenueShares Financials Sector Fund ETF in context.
ProShares Ultra Yen (YCL) over the next 8 trading days. Look at the seasonal patterns for ProShares Ultra Yen in context.
Liberty Media Corporation (LMDIB) over the next 8 trading days. Look at the seasonal patterns for Liberty Media Corporation in context.
ProShares Ultra Euro (ULE) over the next 8 trading days. Look at the seasonal patterns for ProShares Ultra Euro in context.
Wisdom Tree Dreyfus Euro ETF (EU) over the next 8 trading days. Look at the seasonal patterns for Wisdom Tree Dreyfus Euro ETF in context.
Nets Ta-25 Index Fd (TAV) over the next 9 trading days. Look at the seasonal patterns for Nets Ta-25 Index Fd in context.
SPDR DB International Government Inflation-Protected Bond ETF (WIP) over the next 8 trading days. Look at the seasonal patterns for SPDR DB International Government Inflation-Protected Bond ETF in context.
Great Florida Bank (GFLB) over the next 8 trading days. Look at the seasonal patterns for Great Florida Bank in context.
Liberty Media Corporation (LMDIA) over the next 8 trading days. Look at the seasonal patterns for Liberty Media Corporation in context.
Titan Machinery Inc (TITN) over the next 5 trading days. Look at the seasonal patterns for Titan Machinery Inc in context.
iPath EUR/USD Exchange Rate ETN (ERO) over the next 8 trading days. Look at the seasonal patterns for iPath EUR/USD Exchange Rate ETN in context.
Triple-S Management Corporation (GTS) over the next 8 trading days. Look at the seasonal patterns for Triple-S Management Corporation in context.
Market Vectors Coal ETF (KOL) over the next 8 trading days. Look at the seasonal patterns for Market Vectors Coal ETF in context.
iPath Dow Jones-UBS Cocoa Total Return Sub-Index ETN (NIB) over the next 9 trading days. Look at the seasonal patterns for iPath Dow Jones-UBS Cocoa Total Return Sub-Index ETN in context.
PowerShares Active Mega-Cap Portfolio ETF (PMA) over the next 4 trading days. Look at the seasonal patterns for PowerShares Active Mega-Cap Portfolio ETF in context.
Polypore International Inc. (PPO) over the next 10 trading days. Look at the seasonal patterns for Polypore International Inc. in context.
Sims Metal Management Limited (SMS) over the next 7 trading days. Look at the seasonal patterns for Sims Metal Management Limited in context.
iShares MSCI Thailand Investable Market Index Fund ETF (THD) over the next 7 trading days. Look at the seasonal patterns for iShares MSCI Thailand Investable Market Index Fund ETF in context.
Market Vectors Dbl Long Euro (URR) over the next 8 trading days. Look at the seasonal patterns for Market Vectors Dbl Long Euro in context.
SIG Coal Producers Index (SCP–X) over the next 8 trading days. Look at the seasonal patterns for SIG Coal Producers Index in context.
AMERICAN CENTURY INTERNATIONAL BOND FUND R CLASS (AIBRX) over the next 8 trading days. Look at the seasonal patterns for AMERICAN CENTURY INTERNATIONAL BOND FUND R CLASS in context.
AMERICAN CENTURY INTERNATIONAL BOND FUND B CLASS (AIQBX) over the next 8 trading days. Look at the seasonal patterns for AMERICAN CENTURY INTERNATIONAL BOND FUND B CLASS in context.
AMERICAN CENTURY INTERNATIONAL BOND FUND C CLASS (AIQCX) over the next 8 trading days. Look at the seasonal patterns for AMERICAN CENTURY INTERNATIONAL BOND FUND C CLASS in context.
AMERICAN FUNDS SHORT-TERM BOND OF AMERICA, INC. CL (ASBAX) over the next 9 trading days. Look at the seasonal patterns for AMERICAN FUNDS SHORT-TERM BOND OF AMERICA, INC. CL in context.
AMERICAN FUNDS SHORT-TERM BOND FUND OF AMERICA, IN (ASBCX) over the next 9 trading days. Look at the seasonal patterns for AMERICAN FUNDS SHORT-TERM BOND FUND OF AMERICA, IN in context.
CAPITAL WORLD BOND FUND., CLASS F-2 SHS (BFWFX) over the next 8 trading days. Look at the seasonal patterns for CAPITAL WORLD BOND FUND., CLASS F-2 SHS in context.
COLUMBIA SHORT-INTERMEDIATE BOND FUND CLASS A (CHOAX) over the next 9 trading days. Look at the seasonal patterns for COLUMBIA SHORT-INTERMEDIATE BOND FUND CLASS A in context.
COLUMBIA SHORT-INTERMEDIATE BOND FUND CLASS C (CHOCX) over the next 9 trading days. Look at the seasonal patterns for COLUMBIA SHORT-INTERMEDIATE BOND FUND CLASS C in context.
COLUMBIA BOND FUND CLASS A (CNDAX) over the next 9 trading days. Look at the seasonal patterns for COLUMBIA BOND FUND CLASS A in context.
COLUMBIA BOND FUND CLASS C (CNDCX) over the next 9 trading days. Look at the seasonal patterns for COLUMBIA BOND FUND CLASS C in context.
CALAMOS TOTAL RETURN BOND FD – CL A (CTRAX) over the next 8 trading days. Look at the seasonal patterns for CALAMOS TOTAL RETURN BOND FD – CL A in context.
CALAMOS TOTAL RETURN BOND FD – CL C (CTRCX) over the next 8 trading days. Look at the seasonal patterns for CALAMOS TOTAL RETURN BOND FD – CL C in context.
CALAMOS TOTAL RETURN BOND FD – CL R (CTRRX) over the next 8 trading days. Look at the seasonal patterns for CALAMOS TOTAL RETURN BOND FD – CL R in context.
CALAMOS TOTAL RETURN BOND FD – CL B (CTXBX) over the next 8 trading days. Look at the seasonal patterns for CALAMOS TOTAL RETURN BOND FD – CL B in context.
DFA SELECTIVELY HEDGED GLOBAL FIXED INCOME PTF (DFSHX) over the next 8 trading days. Look at the seasonal patterns for DFA SELECTIVELY HEDGED GLOBAL FIXED INCOME PTF in context.
DIREXION MONTHLY COMMODITY BULL FUND 2X FUND (DXCLX) over the next 7 trading days. Look at the seasonal patterns for DIREXION MONTHLY COMMODITY BULL FUND 2X FUND in context.
EATON VANCE INTERNATIONAL INCOME FD CL A (EAIIX) over the next 8 trading days. Look at the seasonal patterns for EATON VANCE INTERNATIONAL INCOME FD CL A in context.
FEDERATED BOND FUND CLASS IS (FDBIX) over the next 10 trading days. Look at the seasonal patterns for FEDERATED BOND FUND CLASS IS in context.
FORWARD INTERNATIONAL FIXED INCOME FUND CLASS C (FFXCX) over the next 8 trading days. Look at the seasonal patterns for FORWARD INTERNATIONAL FIXED INCOME FUND CLASS C in context.
FORWARD INTERNATIONAL FIXED INCOME FUND INSTI CLAS (FFXIX) over the next 8 trading days. Look at the seasonal patterns for FORWARD INTERNATIONAL FIXED INCOME FUND INSTI CLAS in context.
FORWARD INTERNATIONAL FIXED INCOME FUND INVESTOR C (FFXRX) over the next 8 trading days. Look at the seasonal patterns for FORWARD INTERNATIONAL FIXED INCOME FUND INVESTOR C in context.
FFTW FDS INTERNATIONAL PORTFOLIO INVESTOR CLASS (FNIFX) over the next 8 trading days. Look at the seasonal patterns for FFTW FDS INTERNATIONAL PORTFOLIO INVESTOR CLASS in context.
GE FIXED INCOME FUND CL R (GEFRX) over the next 9 trading days. Look at the seasonal patterns for GE FIXED INCOME FUND CL R in context.
GE INVESTMENT INCOME FD (GEIMX) over the next 9 trading days. Look at the seasonal patterns for GE INVESTMENT INCOME FD in context.
GE INVESTMENTS INCOME FUND CLASS 4 (GEVIX) over the next 10 trading days. Look at the seasonal patterns for GE INVESTMENTS INCOME FUND CLASS 4 in context.
GOLDMAN SACHS CORE PLUS FIXED INCOME FUND CLASS B (GSFBX) over the next 9 trading days. Look at the seasonal patterns for GOLDMAN SACHS CORE PLUS FIXED INCOME FUND CLASS B in context.
GOLDMAN SACHS CORE PLUS FIXED INC FD CL R (GSNRX) over the next 9 trading days. Look at the seasonal patterns for GOLDMAN SACHS CORE PLUS FIXED INC FD CL R in context.
GOLDMAN SACHS CORE PLUS FIXED INCOME FUND SERVICE (GSNSX) over the next 9 trading days. Look at the seasonal patterns for GOLDMAN SACHS CORE PLUS FIXED INCOME FUND SERVICE in context.
GOLDMAN SACHS CORE PLUS FIXED INC FD CL IR (GSNTX) over the next 9 trading days. Look at the seasonal patterns for GOLDMAN SACHS CORE PLUS FIXED INC FD CL IR in context.
AMERICAN FDS GLOBAL BOND HLS FUND CLASS IB (HVDBX) over the next 8 trading days. Look at the seasonal patterns for AMERICAN FDS GLOBAL BOND HLS FUND CLASS IB in context.
ING GLOBAL BOND FUND O (IGBOX) over the next 8 trading days. Look at the seasonal patterns for ING GLOBAL BOND FUND O in context.
ING PIMCO TOTAL RETURN BOND PFT CL I (IPCBX) over the next 10 trading days. Look at the seasonal patterns for ING PIMCO TOTAL RETURN BOND PFT CL I in context.
ING SPORTS INTERNATIONAL FIXED INCOME FUND (ISCFX) over the next 9 trading days. Look at the seasonal patterns for ING SPORTS INTERNATIONAL FIXED INCOME FUND in context.
Lehman Brothers Core Bond Class (LBIAX) over the next 9 trading days. Look at the seasonal patterns for Lehman Brothers Core Bond Class in context.
Lehman Brothers Core Bond Class (LBICX) over the next 9 trading days. Look at the seasonal patterns for Lehman Brothers Core Bond Class in context.
Lehman Brothers Core Plus Bond (LBPAX) over the next 9 trading days. Look at the seasonal patterns for Lehman Brothers Core Plus Bond in context.
Lehman Brothers Core Plus Bond (LBPCX) over the next 9 trading days. Look at the seasonal patterns for Lehman Brothers Core Plus Bond in context.
Lehman Brothers Core Plus Bond (LBPIX) over the next 9 trading days. Look at the seasonal patterns for Lehman Brothers Core Plus Bond in context.
LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL A (LDMAX) over the next 9 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL A in context.
LORD ABBETT DEVELOPING LOCAL MARKETS FUND – CL B (LDMBX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MARKETS FUND – CL B in context.
LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL C (LDMCX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL C in context.
LORD ABBETT DEVELOPING LOCAL MKTS FD – CL F (LDMFX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MKTS FD – CL F in context.
LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL P (LDMPX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MARKETS FD – CL P in context.
LORD ABBETT DEVELOPING LOCAL MKTS FD – CL R2 (LDMQX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MKTS FD – CL R2 in context.
LORD ABBETT DEVELOPING LOCAL MKTS FD – CL R3 (LDMRX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MKTS FD – CL R3 in context.
LORD ABBETT DEVELOPING LOCAL MARKETS FD CL I (LDMYX) over the next 8 trading days. Look at the seasonal patterns for LORD ABBETT DEVELOPING LOCAL MARKETS FD CL I in context.
LAUDUS MONDRIAN INTERNATIONAL FIXED INCM FD INSTI (LIFNX) over the next 7 trading days. Look at the seasonal patterns for LAUDUS MONDRIAN INTERNATIONAL FIXED INCM FD INSTI in context.
LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS A (LSIAX) over the next 8 trading days. Look at the seasonal patterns for LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS A in context.
LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS C (LSICX) over the next 8 trading days. Look at the seasonal patterns for LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS C in context.
LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS Y (LSIYX) over the next 8 trading days. Look at the seasonal patterns for LOOMIS SAYLES INTERNATIONAL BOND FUND CLASS Y in context.
MERK ASIAN CURRENCY FUND INV SHS (MEAFX) over the next 8 trading days. Look at the seasonal patterns for MERK ASIAN CURRENCY FUND INV SHS in context.
MORGAN STANLEY INSTI FD TR, INVESTMENT GRADE FIXED (MGILX) over the next 9 trading days. Look at the seasonal patterns for MORGAN STANLEY INSTI FD TR, INVESTMENT GRADE FIXED in context.
Morgan Stanley Insti Fd Tr Int (MIFLX) over the next 8 trading days. Look at the seasonal patterns for Morgan Stanley Insti Fd Tr Int in context.
Morgan Stanley Insti Fd Tr Int (MITAX) over the next 8 trading days. Look at the seasonal patterns for Morgan Stanley Insti Fd Tr Int in context.
BLACKROCK TOTAL RETURN FUND CLASS B (MJHQX) over the next 10 trading days. Look at the seasonal patterns for BLACKROCK TOTAL RETURN FUND CLASS B in context.
MORGAN STANLEY INSTI FD TR, LIMITED DURATION PTF C (MLDAX) over the next 9 trading days. Look at the seasonal patterns for MORGAN STANLEY INSTI FD TR, LIMITED DURATION PTF C in context.
MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS A (MMNAX) over the next 8 trading days. Look at the seasonal patterns for MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS A in context.
MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS L (MMNLX) over the next 8 trading days. Look at the seasonal patterns for MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS L in context.
Massmutual Premier Internationa (MMNNX) over the next 8 trading days. Look at the seasonal patterns for Massmutual Premier Internationa in context.
MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS S (MMNSX) over the next 8 trading days. Look at the seasonal patterns for MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS S in context.
MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS Y (MMNYX) over the next 8 trading days. Look at the seasonal patterns for MASSMUTUAL PREMIER INTERNATIONAL BOND FUND CLASS Y in context.
BLACKROCK TOTAL RETURN FUND BLACKROCK CLASS (MPHQX) over the next 10 trading days. Look at the seasonal patterns for BLACKROCK TOTAL RETURN FUND BLACKROCK CLASS in context.
MORGAN STANLEY INSTI FDS, INVESTMENT GRADE FIXED I (MSGHX) over the next 9 trading days. Look at the seasonal patterns for MORGAN STANLEY INSTI FDS, INVESTMENT GRADE FIXED I in context.
BLACKROCK TOTAL RETURN FUND SERVICE CLASS (MSHQX) over the next 10 trading days. Look at the seasonal patterns for BLACKROCK TOTAL RETURN FUND SERVICE CLASS in context.
Morgan Stanley Insti Fds Inter (MSIHX) over the next 8 trading days. Look at the seasonal patterns for Morgan Stanley Insti Fds Inter in context.
NUVEEN ENHANCED MULTI-STRATEGY INCOME MANAGED ACCO (NEMPX) over the next 10 trading days. Look at the seasonal patterns for NUVEEN ENHANCED MULTI-STRATEGY INCOME MANAGED ACCO in context.
PIMCO UNCONSTRAINED BOND FUND, INST CL (PFIUX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND, INST CL in context.
PIONEER GLOBAL AGGREGATE BOND FD – CL A (PGABX) over the next 8 trading days. Look at the seasonal patterns for PIONEER GLOBAL AGGREGATE BOND FD – CL A in context.
PIONEER GLOBAL AGGREGATE BOND FD – CL C (PGCBX) over the next 8 trading days. Look at the seasonal patterns for PIONEER GLOBAL AGGREGATE BOND FD – CL C in context.
PIONEER GLOBAL AGGREGATE BOND FD -CL Y (PGYBX) over the next 8 trading days. Look at the seasonal patterns for PIONEER GLOBAL AGGREGATE BOND FD -CL Y in context.
PMC CORE FIXED INCOME FUND (PMFIX) over the next 9 trading days. Look at the seasonal patterns for PMC CORE FIXED INCOME FUND in context.
Pnc Fds Total Return Bond Fund (PRATX) over the next 9 trading days. Look at the seasonal patterns for Pnc Fds Total Return Bond Fund in context.
Pnc Fds Total Return Bond Fund (PTCRX) over the next 9 trading days. Look at the seasonal patterns for Pnc Fds Total Return Bond Fund in context.
Pnc Fds Total Return Bond Fund (PTIRX) over the next 9 trading days. Look at the seasonal patterns for Pnc Fds Total Return Bond Fund in context.
PIMCO UNCONSTRAINED BOND FUND CLASS A (PUBAX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND CLASS A in context.
PIMCO UNCONSTRAINED BOND FUND CL C (PUBCX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND CL C in context.
PIMCO UNCONSTRAINED BOND FUND CLASS D (PUBDX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND CLASS D in context.
PIMCO UNCONSTRAINED BOND FUND CL R (PUBRX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND CL R in context.
PIMCO UNCONSTRAINED BOND FUND, P CL (PUCPX) over the next 8 trading days. Look at the seasonal patterns for PIMCO UNCONSTRAINED BOND FUND, P CL in context.
RUSSELL INVESTMENT GRADE BOND FUND CLASS C (RFACX) over the next 10 trading days. Look at the seasonal patterns for RUSSELL INVESTMENT GRADE BOND FUND CLASS C in context.
RUSSELL INVESTMENT GRADE BOND FUND CLASS S (RFATX) over the next 10 trading days. Look at the seasonal patterns for RUSSELL INVESTMENT GRADE BOND FUND CLASS S in context.
RIVERSOURCE GLOBAL BOND CL R4 (RGBRX) over the next 7 trading days. Look at the seasonal patterns for RIVERSOURCE GLOBAL BOND CL R4 in context.
RS INVESTMENT QUALITY BOND FUND CL B (RIQBX) over the next 9 trading days. Look at the seasonal patterns for RS INVESTMENT QUALITY BOND FUND CL B in context.
RS INVESTMENT QUALITY BOND FUND CL C (RIQCX) over the next 9 trading days. Look at the seasonal patterns for RS INVESTMENT QUALITY BOND FUND CL C in context.
RS INVESTMENT QUALITY BOND FUND CL K (RIQKX) over the next 9 trading days. Look at the seasonal patterns for RS INVESTMENT QUALITY BOND FUND CL K in context.
T. ROWE PRICE INSTITUTIONAL INTERNATIONAL BOND FUN (RPIIX) over the next 7 trading days. Look at the seasonal patterns for T. ROWE PRICE INSTITUTIONAL INTERNATIONAL BOND FUN in context.
RIVERSOURCE PRECIOUS METALS & MINING FD CLASS C (RPMCX) over the next 7 trading days. Look at the seasonal patterns for RIVERSOURCE PRECIOUS METALS & MINING FD CLASS C in context.
SHORT-TERM BOND FUND OF AMERICA, INC., CLASS F-2 S (SBFFX) over the next 8 trading days. Look at the seasonal patterns for SHORT-TERM BOND FUND OF AMERICA, INC., CLASS F-2 S in context.
SSGA BOND MARKET CLASS R (SBMRX) over the next 7 trading days. Look at the seasonal patterns for SSGA BOND MARKET CLASS R in context.
SCHWAB MONTHLY INCOME FUND MAXIMUM PAYOUT (SWLRX) over the next 7 trading days. Look at the seasonal patterns for SCHWAB MONTHLY INCOME FUND MAXIMUM PAYOUT in context.
VICTORY CORE BOND FUND CLASS I SHARES (VCBIX) over the next 8 trading days. Look at the seasonal patterns for VICTORY CORE BOND FUND CLASS I SHARES in context.
WESTCORE PLUS BOND FUND INSTI CLASS (WIIBX) over the next 8 trading days. Look at the seasonal patterns for WESTCORE PLUS BOND FUND INSTI CLASS in context.
WELLS FARGO ADVANTAGE FD INCOME PLUS INSTI CLASS (WIPIX) over the next 8 trading days. Look at the seasonal patterns for WELLS FARGO ADVANTAGE FD INCOME PLUS INSTI CLASS in context.
WELLS FARGO ADVANTAGE FD INCOME PLUS INVESTOR CLAS (WIPNX) over the next 8 trading days. Look at the seasonal patterns for WELLS FARGO ADVANTAGE FD INCOME PLUS INVESTOR CLAS in context.
DELAWARE ENHANCED GLOBAL DIVIDEND & INCOME (XDEWX) over the next 10 trading days. Look at the seasonal patterns for DELAWARE ENHANCED GLOBAL DIVIDEND & INCOME in context.
THE KOREA FUND INC (XKFDX) over the next 10 trading days. Look at the seasonal patterns for THE KOREA FUND INC in context.
KAYNE ANDERSON ENERGY TOTAL RETURN FUND (XKYEX) over the next 10 trading days. Look at the seasonal patterns for KAYNE ANDERSON ENERGY TOTAL RETURN FUND in context.
KAYNE ANDERSON MLP INVESTMENT COMPANY (XKYNX) over the next 9 trading days. Look at the seasonal patterns for KAYNE ANDERSON MLP INVESTMENT COMPANY in context.
Alexandria Real Est (AREEP) over the next 8 trading days. Look at the seasonal patterns for Alexandria Real Est in context.
Etf Metal Pm Basket (EMALF) over the next 8 trading days. Look at the seasonal patterns for Etf Metal Pm Basket in context.
Emerging Media Holdi (EMDH) over the next 7 trading days. Look at the seasonal patterns for Emerging Media Holdi in context.
Ishares Msci Eafe In (IUNTF) over the next 7 trading days. Look at the seasonal patterns for Ishares Msci Eafe In in context.
MITSUI SUMITOMO INSU (MSIGY) over the next 8 trading days. Look at the seasonal patterns for MITSUI SUMITOMO INSU in context.
Pacific & Western Credit Corp (PWESF) over the next 10 trading days. Look at the seasonal patterns for Pacific & Western Credit Corp in context.
Tullow Oil Plc Adr (TUWLY) over the next 8 trading days. Look at the seasonal patterns for Tullow Oil Plc Adr in context.
Buffer Notes S& P 500 (BPD) over the next 8 trading days. Look at the seasonal patterns for Buffer Notes S& P 500 in context.
DJ US BREWERS (DSDB) over the next 7 trading days. Look at the seasonal patterns for DJ US BREWERS in context.
Acerinox Sa Adr (ANIOY) over the next 7 trading days. Look at the seasonal patterns for Acerinox Sa Adr in context.
Bayerische Motoren W (BAMXY) over the next 7 trading days. Look at the seasonal patterns for Bayerische Motoren W in context.
Carrefour S A (CRERY) over the next 9 trading days. Look at the seasonal patterns for Carrefour S A in context.
Deutsche Boerse Ag (DBOEY) over the next 9 trading days. Look at the seasonal patterns for Deutsche Boerse Ag in context.
Ibi Income Fd (IBIBF) over the next 9 trading days. Look at the seasonal patterns for Ibi Income Fd in context.
Israel Chemicals Lim (ISCHY) over the next 8 trading days. Look at the seasonal patterns for Israel Chemicals Lim in context.
Julius Baer Holding Ag (JBHGY) over the next 8 trading days. Look at the seasonal patterns for Julius Baer Holding Ag in context.
Lonza Group Ag (LZAGY) over the next 10 trading days. Look at the seasonal patterns for Lonza Group Ag in context.
Nobel Biocare Holdin (NBHGY) over the next 8 trading days. Look at the seasonal patterns for Nobel Biocare Holdin in context.
CALVERT LARGE CAP VALUE FUND CLASS A (CLVAX) over the next 7 trading days. Look at the seasonal patterns for CALVERT LARGE CAP VALUE FUND CLASS A in context.
CALVERT LARGE CAP VALUE FUND CLASS C (CLVCX) over the next 7 trading days. Look at the seasonal patterns for CALVERT LARGE CAP VALUE FUND CLASS C in context.
CALVERT LARGE CAP VALUE FUND CLASS Y (CLVYX) over the next 7 trading days. Look at the seasonal patterns for CALVERT LARGE CAP VALUE FUND CLASS Y in context.
PAS INTERNATIONAL FUND OF FUNDS (FILFX) over the next 6 trading days. Look at the seasonal patterns for PAS INTERNATIONAL FUND OF FUNDS in context.
PAS INTERNATIONAL FIDELITY FUND OF FUNDS (FUSIX) over the next 7 trading days. Look at the seasonal patterns for PAS INTERNATIONAL FIDELITY FUND OF FUNDS in context.
GAMCO INTERNATIONAL GROWTH FD, INC CL I (GIIGX) over the next 8 trading days. Look at the seasonal patterns for GAMCO INTERNATIONAL GROWTH FD, INC CL I in context.
LEGG MASON GLOBAL OPPORTUNITIES BOND FUND CLASS IS (GOBSX) over the next 9 trading days. Look at the seasonal patterns for LEGG MASON GLOBAL OPPORTUNITIES BOND FUND CLASS IS in context.
MFS EMERGING MARKETS DEBT FUND CLASS R1 (MEDDX) over the next 10 trading days. Look at the seasonal patterns for MFS EMERGING MARKETS DEBT FUND CLASS R1 in context.
MFS EMERGING MARKETS DEBT FUND CLASS R2 (MEDEX) over the next 10 trading days. Look at the seasonal patterns for MFS EMERGING MARKETS DEBT FUND CLASS R2 in context.
MFS EMERGING MARKETS DEBT FUND CLASS R3 (MEDFX) over the next 10 trading days. Look at the seasonal patterns for MFS EMERGING MARKETS DEBT FUND CLASS R3 in context.
MFS EMERGING MARKETS DEBT FUND CLASS R4 (MEDGX) over the next 10 trading days. Look at the seasonal patterns for MFS EMERGING MARKETS DEBT FUND CLASS R4 in context.
VICTORY INTERNATIONAL FUND CLASS C SHS (VICFX) over the next 6 trading days. Look at the seasonal patterns for VICTORY INTERNATIONAL FUND CLASS C SHS in context.
PHLX Swiss Franc U.S. Dollar Settled Currency Options Index (XDS.X) over the next 8 trading days. Look at the seasonal patterns for PHLX Swiss Franc U.S. Dollar Settled Currency Options Index in context.
PHLX Euro U.S. Dollar Settled Currency Options Index (XDE.X) over the next 8 trading days. Look at the seasonal patterns for PHLX Euro U.S. Dollar Settled Currency Options Index in context.
Sampo Oyj Unsp Adr (SAXPY) over the next 5 trading days. Look at the seasonal patterns for Sampo Oyj Unsp Adr in context.
Singapore Dollar / Hong Kong Dollar (SGDHKD) over the next 8 trading days. Look at the seasonal patterns for Singapore Dollar / Hong Kong Dollar in context.
Liberty Media Corporation (LSTZA) over the next 8 trading days. Look at the seasonal patterns for Liberty Media Corporation in context.
Liberty Media Corporation (LSTZB) over the next 8 trading days. Look at the seasonal patterns for Liberty Media Corporation in context.
Storebrand Asa Nk 5 (SREDF) over the next 6 trading days. Look at the seasonal patterns for Storebrand Asa Nk 5 in context.
U.S. dollar recoups some recent losses
By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) — The U.S. dollar edged higher in Asia’s afternoon trading Monday, poised to recoup at least some of the hefty losses it suffered Friday against its currency rivals on the heels of disappointing U.S. employment data.
The dollar index (DXY 79.87, +0.50, +0.63%) , which measures the performance of the greenback against a basket of other major currencies, climbed to 79.530 from 79.377 late in North American trading Friday after the jobs report. See Friday’s currencies story.
The euro (EURUSD 1.3264, -0.0115, -0.8595%) weakened against the dollar, falling to $1.3345 versus $1.3411 late Friday, while the greenback (USDYEN 82.8400, +0.2200, +0.2663%) bought 82.90 yen, up from ¥82.53 Friday. See real-time currency quotes and tools.
On Friday, the U.S. Labor Department reported that the nation’s unemployment rate rose to 9.8% in November from 9.6% in October, defying expectations for an unchanged reading. Read more about the jobs report.
“The weak nonfarm payrolls data on Friday were a not so gentle reminder that while the EUR has its fair share of problems with the peripheral eurozone sovereign debt, anemic growth and the [Federal Open Market Committee’s second round of quantitative easing] are significant negatives for the USD,” said David Forrester, a foreign exchange strategist at Barclays Capital said in a note to clients.
And indeed, Fed Chairman Ben Bernanke said Sunday on “60 Minutes” that the Fed could commit more money beyond the $600 billion in asset purchases announced last month to provide a further boost to the economy. Read more about Bernanke’s comments.
Myra P. Saefong is MarketWatch's assistant global markets editor, based in Tokyo.
Bernanke Says More Fed Purchases ‘Certainly Possible’
(Updates with Treasuries in sixth paragraph, Goldman comments in 12th.)
Dec. 6 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the economy is barely expanding at a sustainable pace and that it’s possible the Fed may expand bond purchases beyond the $600 billion announced last month to spur growth.
“We’re not very far from the level where the economy is not self-sustaining,” Bernanke said in an interview broadcast yesterday by CBS Corp.’s “60 Minutes” program. “It’s very close to the border. It takes about 2.5 percent growth just to keep unemployment stable and that’s about what we’re getting.”
Bernanke, in a rare appearance on a nationally broadcast news program, defended the Fed’s efforts to prop up a recovery so weak that only 39,000 jobs were created in November. The unemployment rate last month rose to 9.8 percent, the highest level since April, the Labor Department said on Dec. 3, three days after the Bernanke interview was taped. Republican lawmakers have said the Fed’s policy of “quantitative easing” may do little to help unemployment and may fuel inflation.
“At the rate we’re going, it could be four, five years before we are back to a more normal unemployment rate” of about 5 percent to 6 percent, Bernanke said. The purchase of more bonds than planned is “certainly possible,” said Bernanke, 56. “It depends on the efficacy of the program” and the outlook for inflation and the economy.
Bernanke said a return to a recession “doesn’t seem likely” because sectors of the economy such as housing can’t become much more depressed. Still, a long period of high unemployment could damage confidence and is “the primary source of risk that we might have another slowdown in the economy.”
Treasuries, Dollar
Treasuries rose, pushing yields down from a four-month high after the remarks were published, with yields on 10-year notes falling 7 basis points to 2.94 percent at 9:11 a.m. in London, according to BGCantor Market Data. The dollar advanced 0.8 percent to $1.3301 per euro.
The Fed’s decision to undertake new bond purchases sparked a political backlash in Washington. The program, known as quantitative easing, has been criticized by officials in countries including China and Germany. Policy makers in emerging markets expressed concern it would drive down the dollar and cause a surge of capital abroad that created asset-price bubbles.
“Bernanke is defending his decisions to a mass American audience” on the CBS program, said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. “He is not giving way to criticism, whether it is domestic or international,” he said, adding that “it’s another reminder that the dollar is a side effect of quantitative easing and not a top factor in the Fed’s view.”
China Criticism
Bernanke in the interview reiterated U.S. complaints that China’s policy of limiting gains in its exchange rate is hurting the U.S. economy.
“Keeping the Chinese currency too low is bad for the American economy because it hurts our trade,” the chairman said in excerpts of the interview posted on the CBS News website. “It’s bad for other emerging market economies. It’s bad for China because among other things it means China can’t have its own independent monetary policy.”
Sarah Palin, the 2008 vice-presidential candidate who has said she’s considering a run for president in 2012, wrote in a Nov. 18 letter to the Wall Street Journal that “It’s time for us to ‘refudiate’ the notion that this dangerous experiment in printing $600 billion out of thin air, with nothing to back it up, will magically fix economic problems.”
Employment Mandate
Asia’s policy makers would be more likely to impose “soft” capital-control measures should the U.S. expand its bond-purchase program and increase the risk of fund flows into the region, according to Goldman Sachs Group Inc.
“Key policy makers in Asia are on edge,” Michael Buchanan, chief Asia Pacific economist at Goldman Sachs, said in a press briefing in Hong Kong today. Further quantitative easing in the U.S. “would increase the chance of soft capital controls being imposed in many countries around the region,” he said.
Two U.S. Republicans, Tennessee Senator Bob Corker and Indiana Representative Mike Pence, last month proposed removing the Fed’s maximum employment mandate to focus the central bank on stable prices alone. Corker plans to introduce such legislation next year.
‘Overstated’ Fears
Bernanke said fears of inflation are “overstated” and that keeping inflation under control isn’t a diminished priority for the Fed.
The rate of inflation has slowed this year, with the personal consumption expenditures index, excluding food and energy, rising at a 0.9 percent annual pace in October, the slowest in 50 years. Including all items, the index increased 1.3 percent.
Without action by the central bank, the economy might have tipped into a period of deflation, or a prolonged drop in prices, Bernanke said.
“Because the Fed is acting, I would say the risk is pretty low” of deflation, Bernanke said. “But if the Fed did not act, then given how much inflation has come down since the beginning of the recession, I think it would be a more serious concern.”
Bernanke said he is “100 percent” confident that, when necessary, the central bank can control inflation and reverse its accommodative monetary policy.
Targeting Inflation
“We’ve been very, very clear that we will not allow inflation to rise above 2 percent,” he said.
“We could raise interest rates in 15 minutes if we have to,” he said. “So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time.”
“That time is not now,” he said.
The Fed’s policy of purchasing Treasury securities shouldn’t be considered simply printing money, Bernanke said.
“The amount of currency in circulation is not changing,” he said. “The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.”
The Fed has increased its balance sheet by expanding excess reserves at banks. The Fed reports two measures of the money supply. M1 includes all currency held by consumers and companies for spending, money held in checking accounts and travelers checks. M1 has risen 6.9 percent in the past year, compared to a 4.3 percent average increase since 2000, the Fed said last week.
Policy ‘Trick’
“By lowering interest rates, we hope to stimulate the economy to grow faster,” Bernanke said. “The trick is to find the appropriate moment when to begin to unwind this policy.”
Longer-term interest rates, which had been falling since April as the economy slowed and speculation increased that the Fed would have to do more, have risen since the Fed’s Nov. 3 announcement of the bond purchases.
The yield on the 10-year Treasury note has increased 44 basis points since Nov. 3 to 3.01 percent on Dec. 3, while the 30-year Treasury yield has risen 27 basis points to 4.31 percent. A basis point is 0.01 percentage point.
Bernanke gave his first televised interview as Fed chief on “60 Minutes” on March 15, 2009, near the lowest point for the stock market in more than a decade. He said then that “green shoots” were beginning to appear in financial markets. On March 9 of that year, the Standard & Poor’s 500 closed at 676.53, the lowest level since 1996.
Communication Policy
Bernanke’s interview comes as Fed officials are undertaking their broadest review of public communications in three years. Janet Yellen, the Fed’s vice chairman, is chairing a subcommittee to ensure the public is “well informed about monetary policy issues.”
Yesterday’s “60 Minutes” interview was taped in Columbus, Ohio, during a visit in which Bernanke joined in a panel discussion at the Ohio State University campus with business leaders, including Alan Mulally, president and chief executive officer of Ford Motor Co. The gathering was part of a series of public appearances and question-and-answer sessions by Bernanke this year.
Bernanke appeared in a June question-and-answer session with Sam Donaldson, the ABC News journalist, in Washington. In May 2010, Bernanke toured a Philadelphia shipyard and a Tasty Baking Co. factory in a part of the city that is being redeveloped. Bernanke also answered questions from college students in Providence, Rhode Island, in October and in Jacksonville, Florida, in November.
“This is just another way to try to get our messages out and try to talk effectively about monetary policy,” St. Louis Fed President James Bullard said in a Dec. 3 interview on C-Span television’s “Newsmakers” program broadcast yesterday.
“Since we’re in such an unusual situation, it looks like we’re going to be here for a while, we probably need to think about ways to more effectively communicate,” Bullard said.
--With assistance from Shamim Adam in Singapore and Scott Hamilton in London. Editors: James Tyson, Mark Rohner
To contact the reporter on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Madoff Trustee Sues HSBC for $9 Billion in US Court
The lawyer searching the globe to recover money for defrauded investors of convicted swindler Bernard Madoff sued HSBC for $9 billion on Sunday, accusing the bank of enabling the largest financial fraud in history.
Court-appointed trustee Irving Picard accused HSBC [HSBA.L 661.8 -4.00 (-0.6%)] of aiding the Madoff fraud "through the creation, marketing and support of an international network of a dozen feeder funds based in Europe, the Caribbean, and Central America," a statement by Picard said.
The lawsuit in U.S. Bankruptcy Court in New York also identifies "feeder funds", management companies and service providers of those funds. They include Sonja Kohn, Genevalor, Mario Benbassat and his sons, Albert and Stephane, Bank Medici and UniCredit.
HSBC spokesman Patrick McGuinness declined to comment. HSBC shares were up 0.7 percent in early Hong Kong trading on Monday, in a broader market [.HSI 23237.69 -82.83 (-0.36%)] that was up 0.9 percent.
Madoff, 72, is serving a 150-year prison sentence after pleading guilty in March 2009 to running a decades long investment fraud of up to $65 billion, an unprecedented scheme that shook investor confidence in market regulators. Thousands of investors, large and small, lost money worldwide.
Sunday's lawsuit seeks to recover at least $9 billion "based on theories of contribution to Madoff's scheme; aiding and abetting Madoff's fraud; unjust enrichment in the form of millions of dollars; and over $2.3 billion in fraudulent transfers," the trustee said.
The lawsuit contains 24 counts of alleged financial fraud and misconduct by HSBC.
It said that HSBC twice retained KPMG to identify concerns with the Madoff firm and KPMG twice reported serious risks already known to HSBC.
Red Flags
The trustee, appointed to recoup investor money lost to Madoff, on Thursday sued JPMorgan Chase & Co [JPM 39.61 0.30 (+0.76%) ] for $6.4 billion, accusing his primary banker of ignoring warning signs of his massive fraud. He had previously sued Swiss bank UBS [UBS 16.13 0.23 (+1.45%) ] for $2 billion.
Picard's complaint against HSBC and the other defendants also said they ignored red flags raised over the years about the legitimacy of Bernard L. Madoff Investment Securities in New York.
"Had HSBC and the defendants reacted appropriately to warnings and other obvious badges of fraud outlined in the complaint, the Madoff Ponzi scheme would have collapsed years, billions of dollars, and countless victims sooner," Picard's statement said.
A Ponzi scheme is one in which early investors are paid with the money of new clients.
Picard has filed hundreds of lawsuits in the past week in addition to other lawsuits over the past year. The trustee must file such lawsuits to recover money by the two-year anniversary of Madoff's arrest and his firm's demise on Dec. 11, 2008.
So far, Picard's team says it has recovered $1.5 billion.
Many of Picard's lawsuits seek money from former Madoff clients he considers "net winners" for having withdrawn more from the firm than they invested.
The case is Picard v. HSBC et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-01364 (amended).
Copyright 2010 Thomson Reuters. Click for restrictions.
Michael Glimcher: Musings of a REIT Maven
The CEO of a top-performing REIT sees U.S. retailers going to Europe and Asia for growth—and foreign chains targeting the U.S.
Investor appetite for income has made commercial real estate investment trusts, many of which own regional shopping malls, among the hottest stocks this year. As of Oct. 29, Glimcher Realty Trust (GRT) racked up the biggest return of the bunch, rising 183.4 percent to top Bloomberg's ranking of commercial REITs. Glimcher, which started out as a lumber and building-supply company in 1959, has grown into a publicly traded, $741 million company that owns 27 properties, mostly regional malls, across 14 states. On Dec. 2, Bloomberg Businessweek reporter David Bogoslaw spoke with Chief Executive Michael Glimcher about the company's move to develop higher-end malls through partnerships with such investors as Blackstone. This is an edited version of their conversation.
David Bogoslaw: Glimcher Realty has said it prefers to use cash to pay down debt and for growth rather than to increase its dividend to prerecession levels. What's the priority now—paying down debt or buying new properties?
Michael Glimcher: We're looking at them equally. We want to continue to deleverage, to be in the middle of a 50 percent to 60 percent debt-to-capital range. We're at the higher end of that range now. If we were going to raise equity to do a new acquisition, ideally half the money would go into the new opportunity and half would go to pay down debt.
You recently bought out your partner's 50 percent interest in the Scottsdale Quarter shopping mall in Arizona and completed the $245 million acquisition of Pearlridge Center in Honolulu. [Glimcher has a 20 percent equity stake in Pearlridge; the rest is owned by Blackstone Real Estate Advisors.] Are these joint ventures the model for future growth?
I see us growing with partners, like we did with Pearlridge. We're an equity investor, but we're also the manager of the assets. We can leverage our platform by getting management fees and leasing fees, and we're getting higher-quality assets with sales of $500 per square foot and 99 percent occupancy. We are actively looking at opportunities with Blackstone. We'd consider 25/75 percent joint ventures with institutional partners and are looking at assets typically better than our average assets, preferably in the top quartile of our portfolio's sales-per-square-foot range. And we'd like to see occupancy of 90 percent or above. The fees help [offset] the fixed cost of our operating platform. We already have an accounting staff, a legal staff, and a sales staff. You don't incrementally have to add that much more as far as head count goes to be able to handle additional assets.
How many new malls do you plan to open in 2011?
It could be 10, it could be one, and it could be zero. There aren't that many great opportunities, so it's important that the ones we're working on get done.
U.S. clothing and general merchandise sales have been flat or moving slightly higher for five months, but they still aren't as strong as overall retail sales. What's your take on the overall consumer climate?
Retail is always about what's new, but I don't see anything new in terms of concept. A lot of concepts are—I won't say played out, but mature. When you talk to major nationwide U.S. retailers, they all want to open stores overseas, in Europe and Asia. They aren't interested in new locations in the U.S. But there's an influx of foreign retailers in the U.S. H&M is the biggest one for us. [The Swedish company has stores in two Glimcher malls, in Scottsdale Quarter and an outlet store in Jersey Gardens.] We see a lot more opportunities with them as they're growing. There's an Australian retailer called Cotton On that realized they had no more room to grow in Australia. So far they have one store in our Puente Hills mall in the Los Angeles area. We're working on other opportunities with them. They're looking at Florida and California, since their merchandise caters more to warmer climates.
Do non-U.S. retailers want to open stores in any particular parts of the U.S.?
They will go to the top 10 metro markets and work their way down to the smaller markets. We are typically in their second round of expansion. We don't get any of their first 10 to 20 stores. We don't get the greatest, latest, newest thing. The good news is if they're going to fail, it's probably going to be with their first 20 stores, not their first 100 stores. So by the time we get them, they're more proved, and their new locations have a better chance to succeed.
Are you seeing any U.S. retailers more confident about opening new stores in the U.S.?
Urban Outfitters (URBN), whose specialty brands include Anthropologie and Free People, is opening more stores. The Canadian company Lululemon (LULU) is doing a nice amount of expansion, and their sales are strong. But I don't see anyone out there saying, "I need to open 50 to 100 stores this year."
It has been little more than a year since the first phase of Scottsdale Quarter opened, and you've already bought out your partner's stake. Do you want to increase your equity position in the Pearlridge mall?
It's possible we'll go to a higher equity position at Pearlridge [eventually]. Blackstone typically has a five-year holding period, and we like to stay in assets for 10 years. We're the most logical buyer of Blackstone's interest in five years, and we'd be interested in staying in that asset longer than five years. We may not buy all their interest. We may bring in another [institutional] partner. This model of joint venturing works for us. It lets us put capital out there, and the income from management and leasing fees makes for better returns for us. We're going to make more money owning a half of two properties than we would owning 100 percent of one property, assuming they are similar types of assets.
Are you looking for different kinds of anchor stores to drive higher rents in your malls?
Most of our malls have three anchors—usually a Macy's, a J.C. Penney's (JCP), and a Sears (SHLD). We're seeing more retailers like T.J. Maxx (TJX) starting to open stores. Anchor stores by and large own their own real estate or get it for free. They don't pay rent. There are no department stores as anchors in the Scottsdale Quarter mall. The anchor is a 10,000-square-foot Apple (AAPL) store. Bringing in a better retailer like Apple raises your sales per square foot significantly. We're focused on taking our average sales per square foot over $400 [from an average $355 currently].
Another draw at Scottsdale Quarter is a 40,000-sq.-ft. theater being opened by IPic Entertainment. It's all digital, and people will pay a 50 percent premium ticket price. It will have a bar, so after 7:00 p.m. you have to be 21 years old to get in. Instead of paying $10 for a ticket, you'll pay $15, but for that price, you'll get a bigger chair that can recline, and you can bring a cocktail into the theater with you. [Six iPics are under development, and the one in Scottsdale Quarter will be the first to open, in mid-December.]
What has become really important in Scottsdale is restaurants. The new center we're opening in increments has 400,000-sq.-ft. of retail space, 100,000 of which is restaurants. Restaurants typically do well above [the average] retail sales level. Scottsdale is a great submarket for restaurants. It has a huge daytime population of 250,000 people and is one of best residential areas in terms of population density and household income. The icing on the cake is you have thousands of hotel rooms within a five-mile radius. It's a unique circumstance.
Bogoslaw is a reporter for Bloomberg Businessweek's Finance channel.