November 2009

Dubai stuns debt markets

November 26, 2009

Dubai yesterday shocked investors by asking for a debt standstill at Dubai World, the government’s flagship holding company that has developed some of the world’s most extravagant real estate projects

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Video: Walker Report Threatens `World’s Toughest Bonus Rules’: Video

November 26, 2009

Nov. 26 (Bloomberg) — Bloomberg’s Nick Salter reports on a government-commissioned study into the links between pay and risk-taking in the banking industry and its recommendations on regulating bonus payments. (Source: Bloomberg)

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Video: Dubai World Debt Crisis Rattles Gulf Investor Confidence: Video

November 25, 2009

Nov. 26 (Bloomberg) — Bloomberg’s John Cookson reports on Dubai’s proposal to delay debt payments as it negotiates to extend maturities. (Source: Bloomberg)

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Commercial real estate forecast uncertain (The Record and Herald News)

November 25, 2009

The recent deep economic downturn has had a pronounced impact on commercial real estate sectors, but credit availability is the big unknown that will determine how soon commercial markets recover, according to the National Association of Realtors.

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New Jersey sees increase in distressed assets (The Record and Herald News)

November 25, 2009

“Ask the Realtor” is a weekly column where readers can submit their real estate questions to be answered by a professional from RealSource Association of Realtors. E-mail questions to realestatepr@northjersey.com.

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Federal Bankruptcy Filings Are Up By 34.5%

November 25, 2009

WASHINGTON (AP/HuffPost)– Bankruptcy filings in federal courts jumped by more than one-third this year, as businesses and individuals struggled to regain their footing in a weakened economy. New numbers from the Administrative Office of the U.S. Courts show about 1.4 million bankruptcy cases were filed this fiscal year. That’s up 34.5 percent compared with the more than 1 million cases filed last fiscal year. The bankruptcy figures cover a period from Oct. 1, 2008, to Sept. 30. Filings under Chapters 7, 11, 12 and 13 all rose — particularly filings for Chapter 11 protection, which increased 68 percent. Overall, business filings were up 52 percent, while nonbusiness filings rose by 34 percent. States with the highest bankruptcies per 1,000 population are: 1. Nevada 2. Tennessee 3. Alabama 4. Indiana 5. Michigan 6. Ohio 7. Kentucky 8. Arkansas 9. Illinois 10. Colorado Go to the economics and finance blog Calculated Risk to see these rates graphed.

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Dubai Fund Asks for Stay on Debt Payments

November 25, 2009

position, said on Wednesday that it had asked its banks for a six-month stay on its schedule of debt repayments. The terse statement came in the middle of negotiations between creditors and Dubai World, the corporate arm of Dubai, which has led many of

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Iverson Plans to End 14-Year NBA Career After No Teams Sign Him

November 25, 2009

By Nancy Kercheval Nov. 26 (Bloomberg) — Allen Iverson , the four-time National Basketball Association scoring champion, plans to retire after he cleared waivers and no team signed him, according to a statement on the Web site of sports commentator Stephen A. Smith. “I always thought when I left the game, it would be because I couldn’t help my team the way that I was accustomed to,” Iverson was cited as saying yesterday in a statement on Smith’s Web site. “However, that is not the case.” The 34-year-old Iverson, an All-Star in 10 of the 14 years of his NBA career, was waived by the Memphis Grizzlies on Nov. 16. The New York Knicks decided against signing him because he would compete with the younger talent. “I still have tremendous love for the game, the desire to play, and a whole lot left in my tank,” Iverson added. “I feel strongly that I can still compete at the highest level.” Iverson joined Memphis as a free agent after playing most of last season for the Detroit Pistons. He made three appearances off the bench for the Grizzlies, averaging 12.3 points per game, before taking a leave of absence on Nov. 7 for personal matters. Nine days later, he was placed on waivers. Iverson began his career with the Philadelphia 76ers after becoming the No. 1 pick in the 1996 NBA draft. He played into his 11th season with Philadelphia before being traded to the Denver Nuggets early in the 2006-07 campaign. He was sent to the Pistons early last season and averaged 17.4 points and 4.9 assists in 54 games. Iverson said the chance to spend time with his family is “a reward that far exceeds anything that I’ve ever achieved on the basketball court.” To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net .

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Obama to Offer 17% Emissions-Cut Goal at UN Climate Summit in Copenhagen

November 25, 2009

By Kim Chipman Nov. 26 (Bloomberg) — President Barack Obama will travel to Copenhagen for climate-change talks, where he’ll offer to cut U.S. emissions about 17 percent by 2020 in an effort to help break a deadlock between rich and poor nations. Obama will visit the Danish capital on Dec. 9 during negotiations on a global climate treaty. The U.S. will propose cutting its emissions “in the range of 17 percent” from 2005 levels by 2020, Carol Browner , Obama’s top adviser on energy and the environment, told reporters yesterday. It will be the first time the U.S. has offered such a target. U.S. legislation backed by Obama to cut greenhouse gases and establish a market for the trading of pollution allowances passed the House in June and then stalled in the Senate. Administration officials said they aren’t going to Denmark empty-handed and Obama’s attendance will send a strong signal. “The president going to Copenhagen will give positive momentum to the negotiations,” Michael Froman , Obama’s deputy national security adviser for international economics, told reporters yesterday. “We think it will enhance the prospects for success.” Negotiations for a new global climate treaty have been stymied as industrialized nations and developing countries failed to agree on issues such as emissions-reduction targets and how much financial help rich nations should provide to poor ones. China and India have said industrialized countries must be willing to cut their carbon output 40 percent from 1990 levels by 2020 if they expect poorer nations to agree to long-term reduction goals. ‘Ambitious Actions’ The Obama administration hopes other major economies will “put forth ambitious actions of their own,” Browner said. Obama, who campaigned on a pledge to tackle climate change, has been under pressure to attend the meeting and offer a 2020 reduction target. The U.S., the biggest greenhouse-gas producer among developed nations, has faced criticism for failing to enact legislation. Obama’s attendance is “critical,” Yvo de Boer , executive secretary of the UN Framework Convention of Climate Change, which runs the talks, said yesterday in a Webcast from Bonn. “The world is very much looking to the U.S. to come up with an emissions reduction target” as well as financial aid to help developing countries cut emissions and adapt to global warming, de Boer said. The proposed U.S. emissions reduction is in line with the pending legislation in Congress. The House-passed measure calls for a 17 percent reduction while a version in the Senate calls for a cut of 20 percent. Senate Majority Leader Harry Reid , a Nevada Democrat, said last week that his chamber won’t take up legislation until “sometime in the spring.” ‘Global Game-Changer’ Obama’s decision to go to Copenhagen could prod Congress, Senator John Kerry , a Massachusetts Democrat who has sought a bipartisan compromise on the Senate climate bill, said in a statement. It “could be one hell of a global game-changer with big reverberations here at home,” he said. The president’s plans were also welcomed by companies such as DuPont Co. that are pushing for a cap on U.S. carbon-dioxide pollution that scientists blame for climate change. It “sends a message that addressing climate and energy challenges are priorities for the U.S.,” Michael Parr, manager of government affairs for Wilmington, Delaware-based DuPont, the third-biggest U.S. chemical maker, said in a statement. “Obama has a great story to tell,” James Roger , chief executive officer of Duke Energy Corp. , said in an interview last week, citing House passage of climate legislation and the adoption of greenhouse-gas standards for vehicles. Duke owns electric utilities in the U.S. Southeast and Midwest. ‘Weak and Unfair’ Dissenting from the praise, Friends of the Earth said Obama’s administration has “pushed for a weak and unfair” climate accord. “The president needs to do more than just show up,” Erich Pica , president of the Washington-based environmental group, said in a statement. “He must ensure that the U.S. promotes real solutions.” Danish Prime Minister Lars Loekke Rasmussen has invited the heads of almost 200 countries to the Danish capital for the last two days of the Dec. 7-18 meeting. So far, at least 65 leaders have said they will attend. They include German Chancellor Angela Merkel , U.K. Prime Minister Gordon Brown and Japanese Prime Minister Yukio Hatoyama . Political Agreement Leaders including Obama have said that a binding accord for reducing greenhouse gases isn’t expected in Copenhagen. The UN had previously said the meeting would mark the deadline for completing a treaty. Instead, leaders are now calling for a “meaningful” political agreement as a framework for a final accord to replace to replace the 1997 Kyoto Protocol, which expires in 2012. Negotiations are expected to continue next year. Obama’s visit to Copenhagen, during the first of two weeks of climate talks, will be followed the next day by a stop in Oslo to accept the Nobel Peace Prize. To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net .

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Li Ka-shing Increases Cheung Kong Stake as Developer’s Shares Trail Rivals

November 25, 2009

By Mark Lee Nov. 26 (Bloomberg) — Cheung Kong (Holdings) Ltd. Chairman Li Ka-shing , Hong Kong’s richest man, is buying more shares in the property developer, the worst-performing stock this year among the city’s five biggest real-estate companies. Li paid HK$424 million ($55 million) for 4.39 million shares, about HK$96.50 each, on Nov. 24, the biggest of eight purchases this month, according to Hong Kong stock exchange data. He now owns a 40.9 percent stake, the data showed. Cheung Kong rose 0.5 percent to HK$98.95 at noon in Hong Kong today. The benchmark Hang Seng Property Index has surged 64 percent this year, compared with a 35 percent gain in Cheung Kong, as record low interest rates and the rebounding local economy lifted housing prices. The stock’s underperformance is “a good buying opportunity” for Li, according to JPMorgan Chase & Co. analyst Raymond Ngai . “Cheung Kong’s property business is doing fine,” said Ngai, who rates the company’s shares “neutral.” Cheung Kong has failed to match gains in other local developers because of concerns about unit Hutchison Whampoa Ltd. , Ngai said. Sun Hung Kai Properties Ltd. , the city’s biggest developer by market value, has gained 80 percent this year, Henderson Land Development Co. has almost doubled, Sino Land Co. has gained 85 percent, Hang Lung Properties Ltd. has risen 74 percent and China Overseas Land & Investment Ltd. has increased 55 percent. Hutchison, 49.9 percent-owned by Cheung Kong, will post a 63 percent drop in 2009 full-year profit, according to the average of six analysts’ estimates compiled by Bloomberg. The company, with operations in industries spanning ports, energy, telecommunications and retailing in more than 50 countries, was challenged by the slowing global economy, Li said in August. Li, 81, is dubbed “Superman” by Hong Kong’s media because of his track record for investing. He correctly predicted in 2007 that China’s stock market was in a “bubble,” and his fortune was estimated at $16.2 billion by a Forbes magazine survey in March, making him Asia’s second-richest individual. Cheung Kong is rated the equivalent of “buy” by 13 of 22 analysts tracked by Bloomberg, and nine analysts have “hold” or similar recommendations. To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

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Fujii Says He’s Watching Yen `Closely’ as Currency Climbs to 14-Year High

November 25, 2009

By Kyoko Shimodoi Nov. 26 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii said the government needs to take action on abnormal currency movements, remarks that failed to prevent the yen’s advance to a 14-year high. “I am watching these movements, right now it’s time to watch them closely,” he told reporters in Tokyo today. “We need to take appropriate action against abnormal movements.” Policy makers have stepped up comments on the yen’s advance on concern that an abrupt strengthening of the currency will hurt exporters’ profits and snuff out the nation’s recovery from its worst postwar recession. A stronger yen would be a “huge risk” to producing autos in Japan, Nissan Motor Co. Chief Operating Officer Toshiyuki Shiga said this month. The yen rose to 86.64 per dollar at 12:32 p.m. in Tokyo, the highest since July 1995. It has advanced more than 8 percent against the greenback in the past three months. Fujii said yesterday that the U.S. dollar’s weakness is spurring the yen’s advance. Today he said ‘‘a strong U.S. dollar is in their national interest. There is no change in our support for that.” Japanese authorities haven’t stepped into the currency market since the first three months of 2004. Fujii, who assumed his post in September, spurred some of the yen’s gains by saying he opposed “easy intervention,” only later to tone down his remarks by saying Japan will act if currency moves are “abnormal or disorderly.” To contact the reporter on this story: Kyoko Shimodoi in Tokyo at kshimodoi@bloomberg.net

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Dollar Falls to 14-Year Low Versus Yen, Asia Bank Stocks Fall; Metals Rise

November 25, 2009

By Weiyi Lim and Masaki Kondo Nov. 26 (Bloomberg) — The dollar fell to a 14-year low against the yen, sending metals higher. Japanese exporter shares dropped and Chinese stocks declined to a three-week low. The yen strengthened 0.9 percent versus the dollar to 86.59 at 11:30 a.m. in Hong Kong. The MSCI Asia Pacific index was little changed with five stocks falling for every three that advanced. The Topix Index lost 0.5 percent, dragged down by automakers and the Shanghai Composite Index fell 1 percent, led by Industrial and Commercial Bank of China Ltd. Copper climbed 0.5 percent in London and zinc in Shanghai rallied 1.4 percent. The dollar fell to the lowest since July 1995 after the Federal Reserve said yesterday that its decline was “orderly,” a signal that the U.S. won’t prop up the currency as the world’s largest economy recovers from the first global recession since World War II. The dollar’s decline threatens profits for Asia’s exporters after the MSCI Asia Pacific Index gained 32 percent this year to trade at 1.5 times book value, up from 1.03 in March, according to data compiled by Bloomberg. “I’m not going to risk uncertainty when I’m sitting on nice gains for my portfolio,” said Roger Groebli , Singapore- based head of financial market analysis at LGT Capital Management, which oversees about $75 billion in assets. “The weak dollar is hurting Japanese exporters and their competitiveness.” While it fell against the yen, the Dollar Index, which tracks the greenback against the currencies of six trading partners, rose 0.05 percent to 74.307 after reached a 15-month low yesterday. Japan Stocks Japan’s Topix declined 0.4 percent to 830.16. Honda Motor Co., which generated 42 percent of its sales from North America in the third quarter, lost 1.1 percent to 2,765 yen. Pioneer Corp. , which makes car-navigation and audio equipment, sank 1.2 percent to 238 yen. “The strong yen will curb a further rebound in corporate earnings and weigh on investor sentiment,” said Mitsushige Akino , who oversees the equivalent of $450 million in Tokyo at Ichiyoshi Investment Management Co. The Shanghai Composite fell after China Minsheng Banking Corp. became the first of the nation’s lenders in four years to fall in its Hong Kong trading debut. Minsheng dropped 1.3 percent to HK$8.96 after raising HK$30.1 billion ($3.9 billion) in the city’s biggest public share sale since April 2007. The decline added to concerns about Asia’s banks, which need more capital. China’s five largest banks submitted preliminary plans to regulators earlier this week, according to four people with knowledge of the matter. ICBC, the world’s third-largest company by market value, lost 1.1 percent. Indonesia Growth Stocks rose earlier after Indonesia’s central bank raised its 2009 growth forecast to as much as 4.5 percent and economists estimated Taiwan will say later today that gross domestic product contracted the least in a year during the third quarter. U.S. indexes rose yesterday as U.S. reports showed new home sales beat analyst forecasts and jobless claims fell, spurring optimism the world’s largest economy is recovering from the first global recession since World War II. Taiwan’s dollar rose 0.1 percent to NT$32.19 before a government report which may show the island’s economic decline slowed. Gross domestic product shrank 2.6 percent in the three months through September, the least in a year, according to the median estimate of 17 economists in a Bloomberg News survey. The government will announce the figures at about 5 p.m. in Taipei. Vietnam’s dong plunged 3.4 percent to a record low of 18,500 against the dollar in Hanoi after the central bank devalued the currency to curb quickening inflation and a widening trade deficit. The VN Index sank 4.8 percent, the most in more than three years. Copper, Zinc Copper for delivery in three months on the London Metal Exchange gained as much as 1.1 percent to $7,060 a metric ton, the highest since September last year, after the dollar’s slump deepened and the U.S. housing market improved. Zinc futures in Shanghai rallied as much as 1.4 percent to 18,575 yuan a ton before trading at 18,505 yuan. “Metals climbed across the board because of the dollar’s slump,” Zhu Yanzhong, an analyst at Jinrui Futures Co. said in an e-mailed report today. Crude oil fell 0.5 percent to $77.57 a barrel in New York after rising to a one-week high yesterday. “Oil had a bit of price support from a weaker U.S. dollar,” said Ben Westmore , an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “House prices had some positive growth, so that was definitely a good indicator of consumption and the economy.” OECD Forecast The economies of the Organization for Economic Cooperation and Development’s 30 member countries grew in the third quarter for the first time in more than a year led by a revival in output in Japan and the U.S., the OECD said in a statement this week. Asian bond risk rose today. The Markit iTraxx Asia benchmark index of 50 investment-grade borrowers outside Japan rose 3 basis points to 111.5 basis points as of 8:25 a.m. in Singapore, according to Royal Bank of Scotland Group Plc. Dubai’s Department of Finance said yesterday that Dubai World, with $59 billion of liabilities, is seeking to delay debt payments. Contracts protecting Dubai against default climbed 122 basis points to 440 basis points yesterday, the most since they began trading in January, according to credit-default swap prices from CMA Datavision. To contact the reporter on the story: Saeromi Shin in Seoul at sshin15@bloomberg.net .

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AION Targets Distressed Debt

November 25, 2009

AION Partners is pursuing loan-to-own, value-added opportunities in markets such as Charlotte and Phoenix, where it expects to see job growth in the coming years.

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World’s housing markets recovering unevenly: Q3, 2009

November 25, 2009

Of the 27 countries which have already published their Q3 data, more countries have experienced house price falls (17 countries) during the year to date, than have enjoyed price rises (10). But there is good news.

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Michelin Guide Promotes Three Brothers’ Restaurant to Three Stars in Spa

November 25, 2009

By Richard Vines Nov. 26 (Bloomberg) — Michelin & Cie. creates a new three- star restaurant and elevates four establishments to two stars in the new guide to Spain & Portugal, which goes on sale today. El Celler de Can Roca , the Girona venue run by head chef Joan Roca and his brothers Josep and Jordi, is Spain’s latest to attain top ranking in the French dining guide. Seven now hold the coveted third star, including Ferran Adria’s El Bulli. Another 19 restaurants gain their first stars in the guide, taking the total to 130, compared with 12 that hold two. The new two-star establishments are Casa Marcial, Lasarte (Hotel Condes de Barcelona), La Terraza del Casino and Les Cols. Clermont-Ferrand, France-based Michelin, the world’s second-largest tiremaker, has been publishing dining guides for more than a century. Three stars denote “Exceptional cuisine, worth a special journey;” two stars, “Excellent cooking, worth a detour;” one star, “Very good cooking in its category.” El Celler de Can Roca came fifth in the World’s 50 Best Restaurants awards in April, jumping 21 places in a year. “Spain & Portugal 2010” costs 25.50 euros ($38) and will also go on sale in France in mid-December. To contact the writer on the story: Richard Vines in London at rvines@bloomberg.net .

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Nadal Turns Focus to Defending Davis Cup After ATP Finals Challenge Fails

November 25, 2009

By Danielle Rossingh Nov. 26 (Bloomberg) — Rafael Nadal turned his attention to Spain’s defense of its Davis Cup tennis title and next season after he was ousted from the ATP World Tour Finals. Nadal’s chances of making the semifinals of the season- ending tournament ended last night with his 6-1, 7-6 (7-4) group-match loss to Nikolay Davydenko at London’s O2 arena. The Spaniard, who entered the eight-man event with a chance to get back the No. 1 ranking from Roger Federer , will depart as the world No. 2 after falling to 0-2 following his opening loss to Robin Soderling . He’ll play one more match in London before Spain hosts the Czech Republic in the Dec. 4-6 Davis Cup final. “I am ready to practice hard,” Nadal, 23, told reporters. “I have motivation to play another time my best tennis.” Nadal’s two losses this week come at the end of a season that started with victory in Melbourne, where he reduced Federer to tears after beating the Swiss in five sets to win his first Australian Open. After that, his run of four French Open titles was ended by Soderling, while tendonitis in both knees forced him to pull out of Wimbledon. He aggravated an abdominal injury upon returning that hampered him at the U.S. Open. The injuries and time away left him short on confidence and intensity in the latter part of the season, he said. “I feel a little bit more tired on court than before probably because I didn’t have this continuation in this second half of the year,” Nadal said. “When I play a few tough points, I feel more tired to play the next ones. That’s very important in this sport. I don’t know how far I am from my best.” Last night against Davydenko, Nadal showed flashes of the form that took him to six Grand Slam titles at the age of 22. First Set Nadal lost the first set 6-1 as his serve deserted him and his trademark top-spin ground strokes missed their targets. He fought back from 4-2 down to lead 5-4 in the second set, as the 17,500-strong crowd cheered every point he won. The comeback wasn’t enough, though. Davydenko produced 27 winners — 15 more than Nadal — and won 14 points on the 16 occasions he rushed to the net in a victory that tied their career meetings at 4-4 . The Russian apologized to the crowd for ousting Nadal in a court-side interview after the match. “I’m sorry,” Davydenko said. “I know they support Nadal and want to see him through to the semifinals.” Soderling yesterday became the first player to qualify for the final four by beating defending champion Novak Djokovic of Serbia. Nadal will play third-ranked Djokovic tomorrow in his final match and said he’ll hit the practice courts the following day to get ready for the Davis Cup final in Barcelona. “That’s the way for me, the only way to improve the situation,” Nadal said. “That’s what I did all my life: work.” To contact the reporter on this story: Danielle Rossingh at the O2 arena through the London sports desk at drossingh@bloomberg.net

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Bernanke Goes From Helicopter Ben to Beijing Ben: William Pesek

November 25, 2009

Commentary by William Pesek Nov. 26 (Bloomberg) — You’ve heard of “Helicopter Ben.” Now it’s time to meet “Beijing Ben.” The first of Federal Reserve Chairman Ben Bernanke’s monikers evolved out of a 2002 speech in which he referenced Milton Friedman’s comments comparing unorthodox policies to dropping money from a helicopter. The second is how some are referring to Bernanke’s ever-increasing role in Asia. From Beijing to Hanoi, officials are concerned that low U.S. interest rates are fueling bubbles. It’s the clearest sign yet that Asian officials are worried about bubbles. Investors getting used to double-digit stock gains in Asia should expect a much more challenging environment in 2010. More activist policies aimed at tempering bubbles will see to that. No, you shouldn’t flee the world’s most dynamic economic region. Yet nor should you bet on easy profits. The Fed is already under fire back home. How did it manage to go global with its public-relations problems? By being at least as good a currency manipulator as China . That’s quite a feat and it sets the Fed and Asia up for a difficult 2010. Regulators in Hong Kong, Seoul and Singapore have called on banks to clamp down on risky loans. Central banks are signaling a readiness to act. Thanks to the Fed, they must pick up the pace. It won’t be easy; such steps may run afoul of politicians and Asia’s vast populations. Unfair Practices China’s and Japan’s accusations of U.S. protectionism are a bit silly. True, faced with 10 percent unemployment, the U.S. is looking out for itself and tweaking policies accordingly. Yet Asia’s two biggest economies are hardly in a position to bellyache about unfair trade practices. The dollar is a valid concern, putting the focus on Bernanke and his policy-making colleagues. A year ago, the big worry was reserves. Asian central banks hold trillions of dollars of U.S. debt that are losing value. The focus also was on the risk of the U.S. devaluing its way to growth. Now, it’s all about bubbles. The internationalization of the Fed has fascinated economists for two decades. Mexico in 1994, Asia in 1997 and Russia in the late 1990s — the Fed has been called upon to save the world in each case. From South Korea to Chile, investors often care more about what happens in Washington than they do about actions taken by local monetary authorities. Global Fed That isn’t always lost on the Fed. In October 2008, it provided $30 billion each to the central banks of Brazil, Korea, Mexico and Singapore. The move bestowed a “Good Housekeeping” seal on economies following responsible policies yet feeling the brunt of the credit crisis. The trouble is, the U.S.’s policies have been less than responsible of late. Bernanke inherited a bad situation in 2006 from former Fed Chairman Alan Greenspan , he of the notorious “Greenspan put.” Greenspan, a disciple of philosopher Ayn Rand , talked a good game of letting free markets work their magic. And yet without fail, he was there to rescue markets and investors with lower rates when things got dicey. A year and half later, the credit crisis was heating up. Bernanke cut rates toward zero and embarked on a Japan-like quantitative-easing experiment. Just as in Japan, the problems had more to do with a malfunctioning financial system and a lack of trust than the supply of money. Heading to Asia Rather than boost U.S. lending, liquidity zoomed to Asia. The Shanghai Composite Index has gained 81 percent this year. There are also rallies in Jakarta (118 percent), Mumbai (88 percent), Taipei (72 percent), Manila (66 percent), Singapore (64 percent), Bangkok (59 percent), Seoul (57 percent), Hong Kong (57 percent) and Ho Chi Minh City (56 percent). Overheating, anyone? Liu Mingkang , chairman of the China Banking Regulatory Commission, is warning of “massive dollar arbitrage speculation.” Hong Kong leader Donald Tsang says the Fed risks sparking the next financial crisis. Bank of Japan Governor Masaaki Shirakawa says emerging economies “might overheat and experience financial turmoil.” Strong words all around, yet they are emblematic of Asia’s concerns that the Beijing Ben’s money is overwhelming markets and will fuel inflation. “There is so much hot money coming, and this is really driven by the Fed’s interest-rate policy,” says Andy Xie , former chief Asian economist for Morgan Stanley in Hong Kong. Currency Hysteria Asia isn’t blameless here. The failure to create larger debt markets leaves the region’s equity arena more susceptible to booms and busts. In the hysteria over China’s currency, though, Xie says markets are giving what he sees as the world’s biggest currency manipulator a pass. The so-called dollar-carry trade is driving highly speculative investments in Asian stock, bond and real- estate markets. It will only cool off, he says, when Fed rates are at 4 percent or 5 percent. That’s a long way from today’s near-zero target. Nor does the Fed seem to be considering overseas experiences in its decisions. Federal Reserve Bank of St. Louis President James Bullard said last week it’s not “practical” to adjust U.S. policy to account for surging Asian markets. The onus is on Asia to clean up Beijing Ben’s liquidity mess. It will require much bigger mops than the region has used thus far. ( William Pesek is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

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Mumbai Marks Anniversary of Terrorist Attacks That Paralyzed Financial Hub

November 25, 2009

By Sumit Sharma Nov. 26 (Bloomberg) — Mumbai residents will today mark the first anniversary of a three-day assault on the city by Pakistani gunmen that forced a security overhaul in India’s financial hub and capsized peace talks between the two nations. Employees at the Taj Mahal Palace & Tower on the city’s southern Colaba waterfront will install a memorial near where thirty-one people died in the hotel’s rooms and restaurants as gunmen opened fire and threw grenades during a 60-hour rampage. Police will parade near Chowpatty beach where an officer was killed detaining the only militant to survive the attacks. The city’s business community will be at work in offices that are better protected than a year ago while still vulnerable. “You have to get on with life,” said Andrew Holland , the chief executive officer at investment manager Ambit Capital in Mumbai. “Terrorist attacks can happen anywhere,” he said. Mumbai is as central to operating in India as London and New York are to doing business in the U.K. or U.S., he added. The Nov. 26-29 raid by 10 terrorists left 166 dead and marked a shift in strategy for anti-India groups, targeting Westerners staying at luxury hotels along with the city’s main railway station and a popular bar. The attacks struck at the international links that helped the country’s economy grow at 9 percent in the three years leading up to the killings. Investors have looked past the terrorist threat to focus on India’s growth potential. After slumping by half in 2008, the benchmark Sensitive Index has climbed 78 percent since Jan. 1, poised for the best annual return in 18 years as global funds invested $15.3 billion in shares of local companies. Security Measures Some businesses have responded. Oil and Natural Gas Corp. , India’s biggest oil explorer, will spend $86 million on security this year, buying speed boats to guard oil wells off Mumbai and installing electronic surveillance systems, Chairman R.S. Sharma said last week. Shopping malls have installed metal detectors and armed police patrol outside hotels, the most visible signs of increased vigilance. There are also plans to recruit more police, and elite commandos are now based near four major cities. Nonetheless progress has been slow. “None of this will be close to altering the risk profile of the country,” Ajai Sahni , executive director of New Delhi’s Institute of Conflict Management, said in a telephone interview. Home Minister Palaniappan Chidambaram “has said India remains as vulnerable to terrorist attacks today as it was on 26/11,” Sahni said, using the date the attacks started in the same way New Yorkers refer to 9/11. “It’s a very sober and sobering assessment.” Mixed Targets Soon after the attacks 6,000 new positions in intelligence agencies were approved, Sahni said. “They have actually recruited not more than a hundred.” Still, the government has shown a “great measure of seriousness” in its efforts to make the country a safer place to live and invest, he said. Mumbai is home to both of India’s main stock exchanges as well as being the primary trading center for commodities, bullion, diamond, bonds and currencies. Security checks are commonplace, “but there is not much sense of security,” said Devesh Kumar , managing director of Mumbai stockbroker Centrum Broking Pvt. There have been no terrorist attacks in India since Mumbai, which was preceded in 2008 by bombings in major cities including Jaipur, Bangalore, Ahmedabad and the capital, New Delhi. “We live in a neighborhood which is the epicenter of terror,” Chidambaram, drafted into the Home Ministry hours after the attacks to oversee the response, said Nov. 12. “Some of this is spilling over into India. We have to learn to live with it.” Slow to React The gunmen arrived in Mumbai in the evening aboard a dinghy as commuters headed home. They spread out in groups, leaving bombs in two taxis and opening fire at the railway station and a bar popular with locals and foreign tourists. Mumbai police were slow to realize the scale of the attack and federal forces arrived late — it took more than nine hours for commandos to land from Delhi. The militants opened fire at the Taj and nearby Trident and Oberoi hotels, favored by business executives, before torching rooms and digging in. Among the victims were Ashok Kapur , the 65-year-old chairman of YES Bank Ltd., partly owned by Rabobank of the Netherlands, who was killed as he dined at the Oberoi with his family. Paul Polman , now the chief executive officer of Unilever Plc, and his predecessor, Patrick Cescau , survived the siege at the Taj. Gunmen also took over a Jewish center, where five Israelis died. Nationals from the U.S., the U.K., and Germany were also killed. Nuclear Rivals India blamed the Pakistan-based militant group Lashkar-e- Taiba for the attack and demanded the government in Islamabad act against it. Peace moves were halted. The two nuclear-armed nations have fought three full scale wars and been involved in several skirmishes since independence in 1947. Pakistan acknowledged the raid was planned on its soil. Yesterday an anti-terrorism court charged seven people, including Zaki ur-Rehman Lakhvi , a Lashkar commander, with involvement in the attacks. The group’s founder has been put under house arrest. While leaders from the two countries have met in recent weeks, India insists a return to full talks is still a long way off. The lone surviving gunman, Mohammed Ajmal Kasab , is on trial in a Mumbai court. To contact the reporters on this story: Sumit Sharma in Mumbai at sumitsharma@bloomberg.net .

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China’s Industrial Overcapacity Is Harming Global Economy, EU Chamber Says

November 25, 2009

By Bloomberg News Nov. 26 (Bloomberg) — China’s excess industrial capacity is “wreaking far-reaching damage on the global economy,” stoking trade tensions and raising the risk of bad loans, the European Union Chamber of Commerce in China said. A 4 trillion yuan ($586 billion) stimulus package is worsening overcapacity, especially in the steel, aluminum, cement, chemical, refining and wind-power equipment industries, according to a study by the chamber and Roland Berger Strategy Consultants, released in Beijing today. The world’s third-biggest economy has rebounded this year on stimulus spending and a $1.3 trillion credit boom . China is adding capacity when global demand is yet to recover from the financial crisis, increasing the risk of trade frictions undermining commerce and making the threat of non-performing loans within the nation “ever larger,” the EU Chamber said. “The Chinese stimulus package has poured credit into increasingly questionable projects,” the business group said, without identifying specific ventures. “The global impact already can be felt in the form of growing trade tensions.” U.S. President Barack Obama and Chinese President Hu Jintao pledged this month to work to ease frictions, exacerbated by U.S. duties on Chinese tires. The chamber recommended 30 measures to cut overcapacity, including letting an undervalued yuan gradually appreciate, reducing a “subsidy” for Chinese manufacturers. Energy Prices It also proposed lowering energy-price subsidies, raising interest rates to reduce easy credit, increasing dividend payments by state-owned enterprises, and spending more on health care and social security to encourage consumption and cut precautionary savings. In September, China’s State Council approved plans to curb expansion in industries including steel, cement, glass, coke, wind turbines and shipbuilding. The government has also introduced measures to limit land supply to sectors with excess capacity. So far, the government’s efforts have been ineffective, the chamber said. China’s excess capacity is an “international concern” as goods that can’t be sold locally may be sent to markets that shrank because of the global slump, European Union Trade Commissioner Catherine Ashton said in Beijing Sept. 9. Ashton has since been named the EU’s top diplomat. Yu Yongding , a former adviser to the Chinese central bank, said yesterday in Melbourne that that the “worrying” long-term effects of China’s expansionary policies include overcapacity, bad loans, and inefficient investment. China Is ‘Victim’ Too China’s own economy is the main “victim” of excess capacity, the chamber said. Lower profits mean companies lack cash to invest in research and development and develop more valued-added goods, it said. Businesses are also forced to cut costs, contributing to slower wage growth and less consumption, the report added. “This is a major obstacle on the government’s path to become both an innovative and sustainable economy,” the report said. China’s lending surge this year focused mainly on expanding production at state-owned enterprises, the report said. This led growth in fixed-asset investment by manufacturing companies to jump to 50 percent by mid-year from 25 percent in January and February, the chamber said. Companies in industries with overcapacity will struggle to repay credit, increasing the risk of a repeat of the 1990s surge in non-performing loans, the chamber said. China’s five largest banks have submitted plans to regulators for raising money after unprecedented lending eroded their capital, according to four people with knowledge of the matter. It’s “particularly troubling” that more than 140 billion yuan was invested in the steel industry in the first half of this year and that 58 million tons of capacity are under construction when global demand may decline 14.9 percent in 2009, the report said. The chamber also warned of “a looming deluge” of extra cement capacity in the nation. To contact the Bloomberg News staff on this story: Kevin Hamlin in Beijing at khamlin@bloomberg.net

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China Minsheng Declines in Hong Kong Debut on Bank Capital-Raising Concern

November 25, 2009

By Bloomberg News Nov. 26 (Bloomberg) — China Minsheng Banking Corp. fell in its Hong Kong trading debut after raising HK$30.1 billion ($3.9 billion) in the city’s biggest public share sale since April 2007. Shares of the nation’s first privately owned lender slipped 1.3 percent to HK$8.96 at 10:02 a.m. local time. The company, whose Shanghai-traded stock has doubled this year, sold shares at HK$9.08 apiece, close to the mid-point of a range marketed to investors. Minsheng, the first Chinese bank in two and a half years to sell shares in Hong Kong, capitalized on the city’s stock market revival to help boost a capital ratio that was the second-lowest among China’s publicly traded lenders before the sale. Bigger rivals including Bank of China Ltd. have prepared plans to raise money after record lending eroded their finances. The bank’s six larger competitors that are listed in Hong Kong had an average 13.5 percent gain on their first day of trading, according to Royal Bank of Scotland Group Plc. Minsheng shelved a previous attempt to sell stock four years ago citing market conditions. Hong Kong’s benchmark Hang Seng Finance Index has gained 57 percent this year, led by financial shares. First-time stock sales in Hong Kong have raised HK$154 billion this year, and the territory is vying with mainland China for the status as the world’s biggest IPO market in 2009, according to data compiled by Bloomberg. Minsheng sold 3.32 billion new shares, or a 15 percent stake. International institutions ordered more than $34 billion of shares, and the Hong Kong portion of the sale got bids for 159 times the stock on offer, people familiar with the matter said last week. BOC International (Holdings) Ltd., China International Capital Corp., Haitong Securities Co., Macquarie Group Ltd. and UBS AG are managing the share sale. For Related News and Information: Top financial stories: FTOP Stories on China Banks: TNI CHINA BNK Banking industry debt and equity monitor: BANK Relative value comparison: 600016 CH RVC

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Dong Declines to Record Low, Stocks Slump After Vietnam Devalues Currency

November 25, 2009

By Van Nguyen Nov. 26 (Bloomberg) — Vietnam’s dong plunged to a record low after the central bank devalued the currency to curb quickening inflation and a widening trade deficit. The State Bank of Vietnam yesterday set the reference rate for today’s trading 5.2 percent lower at 17,961 against the dollar, after the difference between the spot and black-market rates widened to the most in a decade. The dong has fallen 5.8 percent this year, heading for a second annual decline. “The central bank is trying to regain control of the foreign-exchange market by stepping up with an aggressive approach to stop the drift in the unofficial market rate,” said Fiachra MacCana , managing director and head of research at Ho Chi Minh City Securities Co. The dong’s 3.4 percent drop today was the biggest in more than 11 years, according to data compiled by Bloomberg. It traded as weak as 18,500 against the dollar, and was at 18,499 as of 8:58 a.m. in Hanoi. The central bank yesterday also narrowed the daily trading band to 3 percent from 5 percent to limit fluctuations. The currency strengthened to 19,450 and 19,650 dong per dollar at money changers in Ho Chi Minh City as of 8:49 a.m., compared with 19,600 to 19,890 yesterday, according to a state- run telephone directory information service. Vietnam yesterday raised the benchmark rate one percentage point to 8 percent, the first nation in Asia to raise borrowing costs. The Southeast Asian nation is trying to sustain economic growth in 2010, lower credit growth and meet economic targets, the central bank said yesterday. “The increase in the prime rate is reasonable, but by itself it’s not going to calm down the currency market,” MacCana said. “The movement in the reference rate is kind of chasing after the black-market rate, but is not enough to catch up.” To contact the reporter on this story: Van Nguyen in Ho Chi Minh City at vnguyen23@bloomberg.net

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Fujii Says Government Needs to Take Action on Abnormal Currency Movements

November 25, 2009

By Kyoko Shimodoi Nov. 26 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii said the government needs to take action on abnormal currency movements after the yen traded close to a 14-year high against the dollar. He was speaking to reporters in Tokyo today. He added that he is watching currency movements now. To contact the reporter on this story: Kyoko Shimodoi in Tokyo at kshimodoi@bloomberg.net

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Samuel H. Williamson: Dealing With America’s Fiscal Hole

November 25, 2009

A recent piece in The Economist titled “Dealing with America’s fiscal hole” says nothing new and gives no insight as to how to deal with the current economic problems. The first thing that bothers me is the statement that “Raising the retirement age for Social Security and Medicare would save money while encouraging Americans to work longer, thereby expanding economic potential.” Right now we have over 14 million people looking for a job and The Economist wants to discourage retirement of those in their 60s. We should be looking for ways to help people afford to retire so younger people can move into their jobs. Also it is debatable as to how many more people would not retire if the retirement age for Social Security were raised compared to those who would still retire at 62 but at even lower benefits. There are other ways to make Social Security fiscally stable. And what are they thinking about it when suggest raising the age for Medicare? Do they want more people without heath insurance? The other thing that bothers me is that there is no discussion about what the government deficits are financing. Governments spend on consumption and gross investment. If we have an increase in the deficit to finance more investment, the economy may be better off. For example, suppose there is a billion dollars to be invested in a highway or a private factory. If it is determined that the economy will grow 5% with the new highway and 2% with the new factory, then society is better off that a billion dollars is loaned to the government and not the owners of the factory. Government investment is what much of stimulus money is spent on and we could use another one. I know there are those who think the government cannot spend any money that would help the economy grow faster than a private sector investment, but I would point out that the state of Michigan, where I live, would have probably have been better off if we had invested more in our schools and crumbling highways and bridges than having GM build factories to produce Hummers.

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CalPERS reportedly severing ties with investment adviser BlackRock (The Sacramento Bee)

November 25, 2009

CalPERS, shaken by heavy losses in a New York apartment deal recommended by investment adviser BlackRock Inc., is leaning toward severing ties with the firm, the Wall Street Journal reported Wednesday. Read the original:  CalPERS reportedly severing ties with investment adviser BlackRock (The Sacramento Bee)

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Patricia Handschiegel: The New Power Girls: Women Entrepreneurs On Acknowledging The Small Wins – And Being Thankful For Them

November 25, 2009

Boston’s Liberty Hotel sits just a few blocks from John Kerry’s house in Beacon Hill, an area that’s known for its historical brick streets and heritage that dates back to the days of early America. The vibe is cool and chic, east coast sophisticate ranging from early 20s to 40s and 50s. The hotel’s lobby is one of the city’s top hot spots for locals, with rumored lines out the door waiting to get in many nights of the week, in addition to being one of the premiere spots for business guests. When I arrive for an overnight while in town to speak at the MIT Futures of Entertainment 4 conference, the end of the workday is nearing. Evening light cascades into the lobby, which is already filled with men in dress suits and shirts either sitting in groups coworking or mingling quietly over drinks. Women are equally in the mix, most in work appropriate fashions in cool, modern cuts. Downstairs, a sample sale is being held with one of Boston’s hottest local designers, who’ll host a fashion show later. By the time we’re noshing on fresh baked signature bread and sipping wine at Scampo, it’s well into the early evening. The lobby upstairs is now pumping. Nightlife attire starts to mix in as Bostonians duck into Clink and the night gets started. As I take a seat on the MIT panel the following morning, I’m reminded of the days long ago when I was still in a corporate job, wishing I could do something bigger. The very next thought that comes to mind is how thankful I am that I’m doing it. It’s one of those many times as a founder, male or female, that you look back a little and recognize all the little steps, experiences and wins along the way. Most days start early and move at a breakneck pace when you run a company. It’s always wonderful when those moments come where you’re reminded of what it’s taken to get there. Not only is it good for the spirit, it may also be good for business. “Looking back at my accomplishments, specifically over the past three years, has helped me tremendously in pushing forward of running my business full-time,” said Jaime Derringer of Design Milk , a digital magazine on all things design that nabs a rumored 60k visitors a day. “Since I just achieved it not too long ago, I have been reflecting on it often.” It’s a conversation I have had with many of the women founders I’ve met and know. Being ambitious and owning a company keeps most entrepreneurs tightly fixed on what’s ahead, but oddly remembering where you’ve been can have equal benefit. It goes beyond just giving thanks to yourself, God, family, employees, etc. to also appreciating yourself and the tiny accomplishments that stitch together the bigger achievement that took your business where you envisioned it. While your racing around to make your work a go, don’t forget to take a minute and notice where you are and what it took for you to get there. Not only will it remind you of all you have, but of the strong, driven, passionate entrepreneur that helped push you to it. Power Girls use the past to drive their steps into the future. See what New Power Girls co-creator Meghan and I have to say about this week’s topic on NPGDaily.com

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British Blue-Bloods Plot to Mollify Hitler in `Glorious 39′: Film Review

November 25, 2009

Review by Farah Nayeri Nov. 26 (Bloomberg) — Britain came close to cutting a deal with Hitler in the late 1930s. Writer-director Stephen Poliakoff shows you just how close in “ Glorious 39 .” His loosely historical movie illustrates the efforts deployed by the establishment to avert another world war. It’s Poliakoff’s first film in a decade; he has been busy making TV dramas, including the multiple Emmy winner “The Lost Prince.” “Glorious 39” is set on the sprawling estate of a Tory grandee who traces his family back a millennium and leads a genteel existence of black-tie dinners and Bentley excursions. He’s married to a somewhat aloof lady who gardens, and they have three kids. Anne (Romola Garai), the eldest, is adopted. A budding actress, Anne is devoted to her father, and the feeling is mutual; she lays on a lavish birthday for him in the opening scenes. Yet Anne soon grows suspicious of the milieu she has been adopted into. Over dinner, a young cabinet member named Hector (David Tennant, the “Doctor Who” of the BBC television series) mentions rumors that Britain is about to pacify the Nazis by getting them a major loan. “Hitler is intent on taking over the whole of Europe, and we’re letting him do it so long as it doesn’t bother us,” protests the tuxedo-clad Hector. Clues to a Plot A few scenes later, Anne’s fiance Lawrence (Charlie Cox) calls her to say that Hector is dead. Anne realizes that Prime Minister Neville Chamberlain, the chief advocate of appeasement, is on a crusade to silence opponents. When she finds Foreign Office archives stacked inside a shed on her family estate, she starts to wonder whether her blue-blood dad might not have a hand in the plot. Poliakoff has crafted a psychological thriller with the spooky feel you get from a Hitchcock film. As a whodunit, his movie is effective. You’re so engulfed by the intrigue that the shortage of on-set extras and the odd tatty costume don’t matter; the film only cost 4.3 million pounds ($7.2 million). The actors are steered with skill. Garai, who was in “Atonement,” is a talented up-and-comer. Bill Nighy is outstanding as the caring father who may or may not have skeletons in the closet. Julie Christie does well as the dotty aunt, even though her character is two-dimensional. “Glorious 39” teeters in its treatment of history. Poliakoff takes a documented fact — that the British secret services sought to derail the anti-appeasement camp — and exaggerates it into a plot where Chamberlain and his cohorts are on a deadly mission to neutralize a blonde actress. Critical Reactions No doubt because of that fictionalized take on history, “Glorious 39” is drawing mixed reactions. “How does Stephen Poliakoff get away with this stuff?” howled the Independent. At a post-screening talk in London, an American-accented woman accused Poliakoff of trivializing the Holocaust by showing “dreadful” scenes of sex and revelry during World War II. Shrill reactions aside, “Glorious 39” does make you wonder what Britain might have been like had it allied with Hitler. Poliakoff, who is Jewish, has thought about it a lot. He says in the film notes that while he was busy researching the film, “I realized what a close-run thing it was that I’m here at all.” Rating: ***. (Farah Nayeri writes for Bloomberg News. The opinions expressed are her own.) To contact the reporter on the story: Farah Nayeri in London farahn@bloomberg.net .

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Israel Settlement Halt Wins Approval From U.S., Rejected by Palestinians

November 25, 2009

By Gwen Ackerman Nov. 26 (Bloomberg) — Israel’s government approved a 10- month halt to the construction of new homes in West Bank settlements, a move immediately welcomed by the U.S. and rejected by Palestinians. George Mitchell , the U.S. Middle East peace envoy, said the action “falls short of a full settlement freeze but it is more than any Israeli government has done before.” Palestinian spokesman Nabil Abu Rudeineh told the official Wafa news agency that the Palestinian Authority “rejects returning to peace talks without the complete cessation of settlement activities in the West Bank and Jerusalem.” Israeli Prime Minister Benjamin Netanyahu has been facing pressure from the U.S. to halt all West Bank settlement- building, which the Palestinians have said is a precondition for resuming peace talks. Efforts by President Barack Obama to bring the two sides together have failed to break the stalemate. Netanyahu said yesterday that Israel wouldn’t halt construction in east Jerusalem or halt public buildings in the West Bank such as synagogues and kindergartens. “This is not an easy step, it is a painful step, but we are taking it out of broad national security considerations with the goal of renewing negotiations to achieve peace with our neighbors, the Palestinians,” Netanyahu said at a press conference in Jerusalem. Clinton Praises Move U.S. Secretary of State Hillary Clinton said in an e-mailed statement that the Israeli decision “helps move forward toward resolving the Israeli-Palestinian conflict.” Her comment came within minutes of Netanyahu’s announcement. “Israel is really negotiating with the U.S. and not with the Palestinians,” said Mark Heller , a political scientist at Tel Aviv University’s Institute for National Security Studies. Israeli-Palestinian negotiations broke down in December 2008 when Israel launched a military operation in the Gaza Strip. “There is a sense that the Israeli government is aware that a vacuum in the Israel-Palestinian political process does not play to Israel’s favor,” said Jonathan Spyer , a political scientist at the Interdisciplinary Center Herzliya, outside Tel Aviv. “It invites the possibility of imposed solutions from outside.” East Jerusalem Palestinians seek east Jerusalem, which Israel captured in the 1967 Middle East war and annexed in a move that wasn’t internationally recognized, as the capital of a future state. The suspension approved by Israeli ministers yesterday “is not enough for the Palestinians,” said Mkhaimar Abusada, a political scientist at Al-Azhar University in Gaza City. If Palestinian Authority President Mahmoud Abbas “goes back to the negotiating table with this Israeli offer, he’s going to lose a lot of credibility with the Palestinian people,” Abusada said. Abbas announced Nov. 5 that he won’t run for re-election in January. Mitchell said the U.S. is encouraging Abbas to stay in office. Israel approved the construction of 455 housing units on the West Bank on Sept. 7, and work is under way on 2,500. Netanyahu has said settlers should be allowed to build new homes and schools in existing settlements to accommodate population growth. A Jerusalem planning committee on Nov. 17 approved the building of 900 new homes in the area of Gilo, built beyond the 1967 borders. To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net .

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Reserve Primary Judge Orders Equal Distribution of Losses From 2008 Crash

November 25, 2009

By Christopher Condon Nov. 25 (Bloomberg) — Reserve Primary investors waiting for cash from the money-market mutual fund whose September 2008 crash helped freeze global credit markets must share equally in its losses, a federal judge said. U.S. District Judge Paul Gardephe in New York today agreed with the Securities and Exchange Commission and ordered a pro rata distribution of almost all the fund’s remaining assets. All shareholders can expect to recover at least 98.75 percent of money held in the fund when it closed on Sept. 16, 2008, according to data compiled by Bloomberg. The decision marks the first major step by a court to clean up the mess left for investors caught in the largest money-fund failure in the industry’s 40-year history. Reserve Primary, the oldest money-market fund, became only the second such fund to drop below its traditional $1 share price, or break the buck, after it lost $785 million on debt issued by Lehman Brothers Holdings Inc . The judge rejected claims for full recovery by investors, such as Deutsche Bank AG and online broker E*Trade Financial Corp ., that made withdrawal requests before the fund’s shares fell below $1. That benefited a smaller group of investors including Ameriprise Financial Inc . that were originally told they would shoulder the entire $785 million shortfall. The SEC is one of more than 30 regulators and investors that sued the fund and its managers. Litigation Expenses Gardephe ordered that $83.5 million be withheld to cover “reasonable litigation expenses” incurred by the fund, its managers and State Street Corp., the fund’s custody bank. That compares with the $3.5 billion set aside in February by Reserve Management Corp., the New York-based firm that ran Reserve Primary. The decision blocks all claims directly against the fund in order to allow for the distribution of cash. It doesn’t affect the status of claims against Reserve Management, or its managers and owners. The SEC has accused Reserve’s founder, Chief Executive Officer Bruce R. Bent , and his son, President Bruce Bent II , of fraud for allegedly misleading investors in an attempt to prevent withdrawals after Lehman filed for bankruptcy in the early hours of Sept. 15, 2008. Reserve Primary held about $62 billion in net assets when Lehman collapsed. Investors withdrew about $10.8 billion before State Street stopped wiring them cash at about noon on Sept. 15. Withdrawal requests continued and, over the next 28 hours, the fund issued receipts promising to pay another $28 billion at a full $1 a share. The fund’s share value dropped to 97 cents, and the fund said it would liquidate, at 4 p.m. on Sept. 16. Investor Arguments Deutsche Bank , which held $500 million in the fund, argued it was entitled to all its principal under rules set by the Investment Company Act of 1940. The SEC countered that Reserve Management’s share-price calculations were “fatally flawed” on the fund’s last two days of operation because managers had misinformed independent directors about the true state of the fund. The power to close a fund lies with its directors. Deutsche Bank stands to lose about $6.25 million, according to Bloomberg calculations based on Reserve Management estimates of assets in the fund. A separate group of investors holding $1 receipts argued in favor of the SEC’s pro rata distribution plan in order to speed the payout of the fund’s remaining money. ‘Only Viable Option’ The group, including China’s $297.5 billion sovereign wealth fund, Time Warner Inc . and International Business Machines Corp ., called the SEC’s plan “the only viable option to achieve a full distribution to the fund’s investors in the near future.” China Investment Corp ., based in Beijing, had the most at stake in the court’s decision. The judgment may leave it about $66 million short of the $5.34 billion it held in the fund, Bloomberg calculations show. Ameriprise is among the biggest winners. It will end up losing about $41.6 million, about $78.4 million less than if the $1 receipts had been honored, according to Bloomberg calculations. Ameriprise had about $3.2 billion invested in Reserve Primary on behalf of more than 325,000 customers, and $128 million of its own capital. The Lehman losses represented about 1.5 percent of the $51.2 billion in shareholder assets on Sept. 16, after the flurry of withdrawals. Returns from holdings have added about $235 million, while legal expenses and management fees amounted to $90 million, according to Reserve Management estimates. That leaves investors with about 98.75 percent of their principal. Next Battles That amount would increase if the fund can sell its Lehman debt for any amount. The SEC and others suing Reserve will now take closer aim at the Bents and other executives at Reserve Management. “The next level of claims, against the managers of the fund for their personal misconduct, is a fight for another day,” Robert Skinner , an attorney for Boston law firm Ropes & Gray LLP representing Ameriprise, said in an interview. Skinner said fraud claims “are still very much in play after the pro rata distribution of the funds.” Reserve Primary’s closure sparked a wider run among investors who withdrew $230 billion from money-market funds within three days, according to Crane Data LLC, a research firm in Westborough, Massachusetts. That caused the market for commercial paper, where money funds provide about 40 percent of demand, to seize up. This threatened the ability of thousands of companies, including Fairfield, Connecticut-based General Electric Co ., to roll over debt they use to fund short-term cash needs. The SEC has proposed changing rules that govern money market funds to make them more stable. To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

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Dollar Approaches 14-Year Low Against Yen on Federal Reserve Rate Outlook

November 25, 2009

By Yasuhiko Seki and Ron Harui Nov. 26 (Bloomberg) — The dollar traded near a 14-year low against the yen as the Federal Reserve’s signal that it will tolerate a weaker greenback encouraged investors to buy higher- yielding assets outside America. The U.S. currency declined beyond $1.51 per euro and dropped to a one-week low against the Canadian dollar after Russia’s central bank announced plans to add Canadian dollars to its reserves to reduce its reliance on the U.S. currency. The Australian dollar traded near a one-week high after stocks and commodities advanced, increasing demand for the nation’s higher- yielding assets. “People are feeling safe to continue dollar-carry trades, given the widespread view that interest rates won’t rise anytime soon in the U.S.,” said Kazumasa Yamaoka , senior currency analyst in Tokyo at GCI Capital Co., a foreign-exchange margin service company. “A lack of concern over the weakness of the dollar from Fed also supports this transaction” The dollar traded at 87.38 yen as of 9:23 a.m. in Tokyo from 87.35 yesterday in New York. It earlier weakened to 87.21, the lowest level since Jan. 21, when it touched 87.13, the weakest since July 1995. The dollar was at $1.5126 per euro from $1.5134. The euro bought 132.16 yen from 132.21 yen. Australia’s currency traded at 92.87 U.S. cents from 93.21 cents in New York yesterday, when it climbed to 93.23 cents, the strongest since Nov. 18. Gold, Australia’s third most-valuable raw material export, advanced to a record for the third time this week. The Reuters Jefferies CRB Index of 19 commodities gained yesterday by the most in a week. Japanese Exporters The yen was also boosted on speculation Japanese exporters will purchase the currency before the end of the month. “It’s month-end, so Japanese companies such as exporters are very likely to repatriate overseas earnings,” said Yuji Saito , head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “The yen will probably be bought.” Large Japanese manufacturers expected the yen to average 94.50 per dollar in the 12 months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released Oct. 1. The forecast in the previous report was for a rate of 94.85. Dollar Loans Demand for the yen increased as dollar loans remained cheaper than those in the Japanese currency. Three-month yen London interbank offered rates, or Libor, stood at 0.301 percent yesterday, higher than the 0.256 percent rate for dollar loans, according to British Bankers’ Association data. Dollar loans became cheaper than those in yen for the first time in August. Fed officials said in minutes of their Nov. 3-4 meeting released on Nov. 24 that the dollar’s decline has been “orderly” and that they would watch for any signs that the depreciation is pushing up people’s expectations for inflation. The euro may gain for a fourth day against the dollar before a report tomorrow that economists say will show European confidence in the economic outlook increased this month as the region showed signs of rebounding from the worst recession in more than six decades. An index of executive and consumer sentiment in the 16- nation euro region rose to 88 this month from 86.2 in October, according to a Bloomberg News survey of economists before the European Commission releases the survey tomorrow. To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net .

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GE May Be Closer to Selling Control of NBC to Comcast as Immelt, Levy Meet

November 25, 2009

By Rachel Layne and Matthew Campbell Nov. 26 (Bloomberg) — General Electric Co. may be closer to selling control of NBC Universal to Comcast Corp. after Chief Executive Officer Jeffrey Immelt met with NBC’s minority owner Vivendi SA, two people with knowledge of the situation said. The talks with Vivendi CEO Jean-Bernard Levy were held in France yesterday and may lead to an agreement in principle, said one of the people, who declined to be identified because the discussions are private. Immelt is negotiating a value for NBC Universal to persuade Paris-based Vivendi to sell its 20 percent stake and let GE push ahead with plans to sell a controlling interest to Comcast, the largest U.S. cable-TV service. They are less than $500 million apart and are discussing how much cash Vivendi may receive before the Comcast deal is completed, the people said. Vivendi’s deliberations are the key to GE’s plans to create a joint venture combining NBC Universal’s film, cable-television and theme-park properties with networks owned by Philadelphia- based Comcast . Comcast would own 51 percent and may acquire full ownership over time. Vivendi may still decide not to sell. GE, the world’s biggest maker of power-generation equipment, was leaning toward allowing an initial public offering of Vivendi’s holding as talks stalled last weekend, a person with knowledge of the situation said earlier this week. GE is committed to forming the venture with Comcast, people with knowledge of those discussions have said. Comcast and Fairfield, Connecticut-based GE value NBC Universal at about $30 billion, people familiar with the discussions said this month. That implies about $6 billion for Vivendi’s stake. Annual Sale Window GE and Comcast haven’t commented publicly on their discussions. Anne Eisele , a GE spokeswoman, declined to comment, as Comcast’s Jennifer Khoury . Antoine Lefort , a Vivendi spokesman, didn’t return calls seeking a comment. A change in ownership of New York-based NBC Universal hinges on Vivendi deciding to sell during an annual window that opened on Nov. 15 and runs through Dec. 10 each year through 2016. GE has the right of first refusal to negotiate a purchase of the NBC Universal stake or an IPO. Vivendi would like to sell its stake, Chief Financial Officer Philippe Capron said on Nov. 19. Vivendi’s NBC Universal stake is valued on the company’s 2008 balance sheet at about 4.3 billion euros ($6.5 billion). “We are not interested in staying on board a new GE- Comcast ownership of NBCU, so yes, we would exit,” Capron said at a conference in Barcelona. “This year the situation is a bit more complex. We are not forced to do anything. We could just also say no.” ‘All Options’ Immelt, 53, said last month he is studying “all the options” for NBC Universal. “We’ve done all the planning to see if an IPO would be fine,” Immelt said on Oct. 21 in San Francisco. “You’ve got to think a couple years ahead in the space and ask: ‘Might there be partnerships to run the company in a better way?’ In this case, we’ve got all the options.” Immelt was in Paris for a previously scheduled trip. GE’s Energy Infrastructure unit is bidding for the French government- owned Areva SA’s power transmission and distribution division. GE, also the world’s biggest maker jet engines and medical imaging machines, gained 6 cents to $16.18 yesterday in New York Stock Exchange composite trading . The stock is little changed this year. Comcast, controlled by the founding Roberts family, fell 5 cents to $15.07 on the Nasdaq Stock Market and has declined 11 percent this year. To contact the reporters on this story: Rachel Layne in Boston at rlayne@bloomberg.net ; Matthew Campbell in London at mcampbell39@bloomberg.net .

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Japanese Stocks Decline on Weaker Dollar Vs. Yen; Asahi Glass Set to Drop

November 25, 2009

By Masaki Kondo Nov. 26 (Bloomberg) — Japanese stocks retreated, dragging down the Topix index toward its lowest close in seven months, as the dollar traded close to a 14-year low against the yen. Toyota Motor Corp. , a carmaker that gets 31 percent of its revenue in North America, lost 1.8 percent. Sony Corp. , the maker of the PlayStation 3 game machine, fell 1.2 percent. Asahi Glass Co., Japan’s biggest producer of the material, was set to decline after saying it will sell bonds convertible into shares. “The strong yen will curb a further rebound in corporate earnings and weigh on investor sentiment,” said Mitsushige Akino , who oversees the equivalent of $450 million in Tokyo at Ichiyoshi Investment Management Co. The Nikkei 225 Stock Average declined 1 percent to 9,347.36 as of 9:04 a.m. in Tokyo. The broader Topix fell 0.8 percent to 826.44, en route to the lowest close since April 28. The dollar depreciated to as low as 87.21 against the yen today, a level not seen since Jan. 21. On that day, it sank to 87.13, the lowest since July 1995. A weaker dollar reduces the value of overseas sales at Japanese companies when converted into their home currency. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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AIG Will Settle With Ex-CEO Greenberg, May Pay $150 Million in Legal Fees

November 25, 2009

By Hugh Son and Dakin Campbell Nov. 25 (Bloomberg) — American International Group Inc. , the insurer bailed out by the U.S., agreed to settle all legal disputes with former Chief Executive Officer Maurice “Hank” Greenberg and may reimburse as much as $150 million in fees. A third party will determine how much AIG must pay in legal fees for Greenberg and former finance chief Howard Smith , the New York-based insurer said today in a regulatory filing. Greenberg, 84, has been locked in court disputes since AIG, once the world’s largest insurer , ousted him in March 2005. A tangle of lawsuits has kept AIG and its former top executive in court together since his departure. “The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise,” said Chief Executive Officer Robert Benmosche, in the filing. Greenberg will get access to archival materials to write his memoirs as part of the deal. AIG and Greenberg agreed that Layn R. Phillips will review legal expenses. Former New York Attorney General Eliot Spitzer sued Greenberg and Smith in 2005, alleging they mislead regulators and investors. Spitzer dropped portions of the suit in 2006 and Greenberg asked a court to dismiss the rest. Spitzer’s Case AIG, based in New York, eventually restated earnings and agreed to pay $1.64 billion to settle claims by Spitzer and other regulators, without admitting or denying wrongdoing. In court papers filed in July 2006, Greenberg argued AIG’s 2005 restatement was unnecessary and designed to force him to retire. He denied any wrongdoing in the New York civil suit. The insurer had sued Starr International Co., the investment firm Greenberg runs, claiming they improperly took $4.3 billion of AIG stock from an employee compensation plan. Earlier this year, a federal jury rejected those claims. The company said in July it would pursue a suit against Greenberg and other former executives. Greenberg and AIG later said they had agreed to binding arbitration to resolve the legal disputes. An arbitrator was to begin work by Oct. 15 and finish by March 31, according to the statement. In August, Greenberg agreed to pay $130 million to settle shareholder suits brought against the company in 2004 and 2005, and separately, U.S. Securities and Exchange Commission allegations that he manipulated AIG’s earnings . Government Rescue Greenberg took the top job at AIG in 1967, and eventually boosted AIG’s assets more than a thousand-fold, making $50 billion in acquisitions to reach 50 million customers in 130 countries. Under his tenure, AIG’s market capitalization grew to $166 billion, before its near-collapse amid the credit crisis. AIG was rescued by the government last year after wrong-way bets on securities tied to U.S. subprime mortgages brought it to the brink of collapse, threatening to cause a financial-system meltdown. The insurer reported a $99 billion net loss last year. The $182.3 billion bailout includes a $60 billion credit line, a Treasury Department investment of as much as $69.8 billion, and a $52.5 billion pledge to buy mortgage-linked assets owned or backed by the insurer. AIG agreed to turn over a majority stake to the U.S. in exchange for the rescue. To contact the reporters on this story: Jamie McGee in New York at jmcgee8@bloomberg.net ; Dakin Campbell in New York at dcampbell27@bloomberg.net

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Aiello joins Whidbey Island Bank as loan officer (The Bellingham Herald)

November 25, 2009

Terry Aiello has joined Whidbey Island Bank, as a real estate loan officer in their Northwest Bellin

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Video: Amaluisa Says U.S. Dollar Is Aiding Ecuador’s Exports: Video

November 25, 2009

Nov. 25 (Bloomberg) — Ecuador’s Trade Commissioner Karina Amaluisa talks with Bloomberg’s Pimm Fox about her government’s efforts to attract foreign investment and the impact of the U.S. dollar on Ecuador’s economy. (Source: Bloomberg)

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Maurice Greenberg, AIG Settle: Legal Fees, Memoir Materials, Persian Rug Returned

November 25, 2009

NEW YORK — American International Group Inc. has agreed to settle all legal disputes with its former chairman Maurice “Hank” Greenberg, the company said late Wednesday. The insurance company, which was bailed out by the government and is now owned by U.S. taxpayers, also resolved its complaints against former Chief Financial Officer Howard I. Smith. AIG said it will pay up to $150 million in past legal fees and expenses for both Greenberg and Smith. The agreement calls for the reimbursements to be reviewed by a third party. Under the terms of the agreement, AIG will also return a Persian rug from the company’s headquarters to Greenberg, as well as photographs of Greenberg with Chinese leaders in AIG’s Shanghai building. Greenberg will also have access to AIG’s archives to write his memoirs. AIG had argued that a Greenberg-controlled investment firm owed it $4.3 billion to cover stock taken from an executive retirement fund. AIG claimed the fund was held in an oral trust for use by company employees. Greenberg argued he could sell the shares because they were controlled by his firm, Starr International. AIG had also claimed that Greenberg and Smith owe part of the $1.6 billion the insurer paid to settle a range of issues with regulators including the Securities and Exchange Commission, Justice Department and New York Attorney General. Greenberg was ousted from New York-based AIG amid an accounting scandal in 2005. The Securities and Exchange Commission charged both Greenberg and Smith with misstating the company’s earnings. AIG had agreed earlier this year to settle its disputes with Greenberg and Smith through arbitration. Around the same time in August, a judge had ruled that Starr International did not improperly seize the AIG stock from the retirement plan. Mark Herr, an AIG spokesman, said the legal costs AIG reimburses Greenberg and Smith may be covered at least partially by insurance.

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Video: Ex-Coach Mike Ditka Says NFL Must Address Concussions: Video

November 25, 2009

Nov. 25 (Bloomberg) — Former National Football League head coach Mike Ditka talks with Bloomberg’s Matt Miller about how the NFL must address players’ head injuries. (Source: Bloomberg)

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Video: Herrmann Says U.S. Unemployment Appears to Be Cresting: Video

November 25, 2009

Nov. 25 (Bloomberg) — John Herrmann, chief economist at Herrmann Forecasting, talks with Bloomberg’s Matt Miller about the outlook for the U.S. labor market. Herrmann also discusses consumer spending and the U.S. economy. (Source: Bloomberg)

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Andy Stern: Lloyd Blankfein Gives Thanks

November 25, 2009

Goldman Sachs CEO Lloyd Blankfein has a lot to be thankful for this year… His turkey dinner with all the trimmings at his 27 million Central Park suite. The 63.6 billion in bailouts and backstops Goldman Sachs has collected from taxpayers since the crash–most of which Goldman need never pay back. The record 23 billion in compensation and bonuses Goldman will dole out this year. The peace of mind offered by the “Too Big to Fail Doctrine” suggesting that taxpayers will always come to Goldman’s rescue. The record breaking100 million trading days Goldman is enjoying thanks to the “Wall Street innovation” that has allowed them to return to the same risky and reckless practices that crashed the economy. . The top corporate lobbyists on Goldman’s payroll who work day and night to keep Wall Street unrestrained and unregulated. But Lloyd Blankfein and the rest of the Wall Street CEOs don’t seem to be very thankful for the American people. We stepped in to rescue the big banks in their time of need. Now the American people need assistance and they’re nowhere to be found. They refuse to help people like Maria Guerra. Maria, who helped her brother buy his first home, thought her family had achieved the American Dream. That dream quickly turned into a nightmare when Maria’s brother was laid off and he fell behind on his mortgage payments. Maria and her brother had to sign his home over to the bank a few weeks ago, and now thanks to the struggling economy and her efforts to support her extended family, Maria is worried about losing her home too. And what about the 150 workers at the Stella D’Oro cookie factory in the Bronx? They lost their jobs and their healthcare when a company owned in part by Goldman Sachs bought Stella D’Oro and closed the factory down. What about the more than 1.5 million Americans who’ve already lost their homes this year? The more than 5.3 million workers who have lost their jobs since the economy crashed? The 14,000 Americans who lose their health insurance each day? The 17,000 forced into personal bankruptcy each week because of their medical debts? What is Wall Street doing to help the rest of America recover? Lloyd Blankfein and the rest of the Wall Street barons need to realize that all of their profits and all of their power don’t mean a thing if they continue to put their company ahead of the greater good of our country. Wall Street wealth is meaningless if Americans don’t have jobs, if more than 10,000 people a day continue to get foreclosure notices, and if small businesses continue to go dark. Wall Street wealth is meaningless when the American Dream continues to slip further and further out of reach for more and more of us. Last week I joined hundreds of other Americans outside Goldman Sachs’ Washington, D.C. headquarters. We had a simple demand for Blankfein: Donate your $23 billion bonus pool and stop all foreclosures for the next year. Goldman’s response? A shallow apology for bringing our economy to its knees and a paltry donation to small businesses equal to just two percent of the bonus money they’re expected to pay out this year. Meanwhile, more than 90,000 Americans now face a similar fate to Maria and her brother. It’s time to do away with the Goldman rule–that those who have the gold make the rules. Lloyd Blankfein can start today by accepting our challenge. He can announce today that Goldman will use its $23 billion bonus pool to help Americans keep their homes. That would be something we could all be thankful for.

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Video: U.S. Stocks Rise on Home Sales and Jobless Claims Data: Video

November 25, 2009

Nov. 25 (Bloomberg) — Bloomberg’s Ellen Braitman reports on the performance of the U.S. equity market today. U.S. stocks gained, sending the Standard & Poor’s 500 Index to a 13-month high, as new home sales beat forecasts and jobless claims fell, suggesting the economic recovery is broadening. (Source: Bloomberg)

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Investors.com – World Boosts Distressed-Property Sales

November 25, 2009

Inside Real Estate . World Boosts Distressed -Property Sales. By REUTERSPosted 11/25/2009 05:37 PM ET. LONDON — Distressed commercial property sales rose in more countries in the third quarter, as a greater number of buildings were …

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Investors.com – Commercial Sector 'Pop' Mulled As Real Estate …

November 25, 2009

Falling rents, rising vacancies and defaults make a rebound in the $6 trillion market hard to fathom, but the estimates are key for investors who have been hoarding cash in anticipation of profit-rich, distressed opportunities. … The vultures are circling commercial real estate . But are they too numerous and too early? These are the questions troubling a new generation of commercial real estate investment trusts as they try to benefit from the problems in retail and …

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Video: Zuckerman Says U.S. Banks Need `Systemic Regulation’: Video

November 25, 2009

Nov. 25 (Bloomberg) — Mortimer Zuckerman, chairman of Boston Properties Inc., talks with Bloomberg’s Matt Miller about the outlook for financial regulation. Zuckerman said U.S. lenders need “systemic regulation” and that the Federal Reserve did “brilliant work” under chairman Ben S. Bernanke. (Source: Bloomberg)

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Cassa NY jacks up prices, FTC goes after mortgage rescue plan …

November 25, 2009

Classic real estate game of chance, Monopoly, gets updated look 17. Market analyst Barry Ritholtz says housing bottom long way off 18. Homebuyer tax credits may further threaten FHA stability 19. Distressed commercial property sales up …

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Video: Benedict Says Target’s Holiday Performance May Surprise: Video

November 25, 2009

Nov. 25 (Bloomberg) — Peter Benedict, an analyst at Robert W. Baird & Co., talks with Bloomberg’s Matt Miller about the outlook for retailers this holiday season. As many as 134 million people plan to shop over the weekend, 4.7 percent more than last year, according to the National Retail Federation, a Washington-based trade group. (Source: Bloomberg)

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Opportunity Investment Fund I, LLC Announces Amendment to Terms of Tender Offer for 100,000 Shares of Common Stock of Piedmont Office Realty Trust,…

November 25, 2009

NEWPORT BEACH, Calif., Nov. 25, 2009 (GLOBE NEWSWIRE) — Opportunity Investment Fund I, LLC, a Delaware limited liability company, today announced that it is amending certain terms of its previously announced tender offer to acquire 100,000 shares of common stock (“Shares”) of Piedmont Office Realty Trust, Inc., a Maryland corporation, at a purchase price equal to $4.60 per Share, less the amount of any dividends declared or made with respect to the Shares between November 16, 2009 and December 18, 2009 or such other date to which this offer may be extended (the “Expiration Date”), in cash, without interest, upon the terms and subject to the conditions set forth in an Offer to Purchase and a related Letter of Transmittal, as each may be supplemented or amended from time to time (which together constitute the “Offer” and the “Tender Offer Documents”).

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Cupcake Shop Fad Appeals To Many Entrepreneurs Across The Country

November 25, 2009

There is no Cupcake Manufacturers Association keeping count, but anecdotal evidence indicates that stand-alone cupcake shops have been spreading not just in the acknowledged cupcake meccas of New York and Los Angeles but also in Boston, Denver, Austin, Tex., and lots of smaller places. Nationwide, cupcake sales, according to the market research firm, Mintel, are projected to rise another 20 percent over the next five years at a time when other baked goods are expected to grow in the single digits.

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Boxer Rodriguez’s Death Is Ruled an Accident, Philadelphia Inquirer Says

November 25, 2009

By Mason Levinson Nov. 25 (Bloomberg) — Boxer Francisco Rodriguez’s death two days ago from injuries in a fight in Philadelphia was ruled an accident by the city’s Medical Examiner’s Office, the Philadelphia Inquirer reported. An autopsy performed yesterday on Rodriguez, 25, found that he died of a “full-blunt impact injury” to the head, the newspaper said on its Web site , citing Jeff Moran , a spokesman for the Medical Examiner’s Office. A five-time Chicago Golden Gloves champion, Rodriguez underwent emergency brain surgery after being injured in a 10th- round knockout in a Nov. 21 bout against Teon Kennedy at the Blue Horizon, the Philadelphia Daily News reported. Soon after being helped to his stool, Rodriguez collapsed, the newspaper said. Physicians attended to him at ringside before he was removed on a stretcher and transported to the hospital, the Daily News reported. It was the first death attributed to boxing injuries in Philadelphia in 31 years. In March 1978, Jody White, a middleweight from Trenton, New Jersey, died after a fourth-round technical knockout at the Blue Horizon, the Philadelphia Daily said. To contact the reporter on this story: Mason Levinson in New York at mlevinson@bloomberg.net .

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Cincinnati’s Kelly Is Favored to Replace Weis as Head Coach of Notre Dame

November 25, 2009

By Erik Matuszewski Nov. 25 (Bloomberg) — University of Cincinnati coach Brian Kelly is the favorite on online gambling sites to take over as football coach at the University of Notre Dame if Charlie Weis is fired. Weis, who has a 35-26 record at the South Bend, Indiana, school over five seasons, has guided the Fighting Irish to a 6-5 record this year heading into the final regular-season game against Stanford University this weekend. Weis said on Nov. 22 it would be hard to argue with a decision to fire him. In addition to Kelly, who is listed as an even-money favorite at Bodog.com , Florida’s Urban Meyer and Stanford’s Jim Harbaugh were asked by media whether they would be interested in following coaches such as Knute Rockne , Frank Leahy , Ara Parseghian and Lou Holtz . “This is the silly season, you know?” Kelly said. “The truth is, this happens every year.” Openings at a program such as Notre Dame’s don’t come along every year, though. The Irish rank third in college football history with 837 wins, have 11 consensus national championships and have produced seven Heisman Trophy winners. Kelly, who has led Cincinnati to a 10-0 record in his third season, is listed at BetUS.com, as the 5-6 favorite. Season Finale Harbaugh, whose Stanford team hosts Notre Dame in this week’s regular-season finale, is given 7-2 odds, according to Antigua-based Bodog . Meyer has 4-1 odds of replacing Weis even though he’s won two of the past three national titles at Florida and said earlier this week that he plans to remain with the Gators as long as they’ll have him. Other coaches listed by Bodog are the University of Oregon’s Chip Kelly at 9-2, Oklahoma’s Bob Stoops at 10-1 and Iowa’s Kirk Ferentz at 14-1. Cincinnati’s Kelly, 48, said he’s being mentioned as a possible candidate at Notre Dame because many people don’t think his current post is a “destination job.” While the Bearcats lead the Big East Conference, they’re fifth in the Bowl Championship Series rankings, the second-lowest among the six undefeated teams at college football’s top level. Harbaugh, 45, has led Stanford to a 7-4 record in his third season and plans to return to the Cardinal next year. I’m “only interested in the one I have,” Harbaugh said during a news conference. “And (I’m) not going to talk about any other job but my own.” Ex-NFL Coaches Costa Rica-based BetUS.com lists Meyer as the second choice at 3-1, followed by Harbaugh at 4-1, and Oregon’s Kelly and Boise State’s Chris Peterson at 5-1. Stoops has odds of 8-1, Ferentz is 12-1, and former NFL coach Mike Shanahan of the Denver Broncos is 20-1. Jon Gruden , the former coach of the NFL’s Tampa Bay Buccaneers and Oakland Raiders, has 30-1 odds at BetUS.com. Gruden attended high school in South Bend and his father was an assistant under former Notre Dame coach Dan Devine. Notre Dame last won a national championship in 1988. Since then, the program has been in a decline. The Irish have won only one of their past 10 bowl games and are 16-20 the past three seasons under Weis. “If they decide to make a change, I’d have a tough time arguing that,” Weis said after last week’s overtime loss to Connecticut that dropped Notre Dame to 6-5. Athletic Director Jack Swarbrick has said a decision on Weis’s job will come after the season. A loss to Stanford this week would give the Irish their third straight regular season without a winning record. To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net

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