February 2010

FDIC Seeks Bids on $610.5 Million in Unpaid Loans From Failed U.S. Lenders

February 27, 2010

By Brian Louis Feb. 27 (Bloomberg) — The Federal Deposit Insurance Corp. is seeking bids for $610.5 million of unpaid loans it’s holding from failed U.S. lenders including IndyMac Bank, Silverton Bank and New Frontier Bank. The loans are backed in part by land, developed lots and condominium construction projects, said Peter Tobin, managing director of New York-based Mission Capital Advisors LLC , the FDIC’s marketing agent and financial adviser for the offering. Most of the properties are in Colorado, California, Utah and Idaho, and about 78 percent of the debt is 90 days or more past due, according to a description on Mission Capital’s Web site . The FDIC is disposing of real estate, soured mortgages and personal property ranging from tour buses to palm trees that once belonged to failed banks. More than 160 lenders collapsed since the start of 2009, and the tally may grow this year, with 702 firms on the FDIC’s “problem bank” list as of Dec. 31. The sale ”is going to appeal to a broader investor class,” Tobin said. The winning bidder will take an interest in a limited liability company owning the assets in partnership with the FDIC. The auction may attract more bidders than previous sales because the portfolio is smaller, Tobin said. The biggest piece of the package is from New Frontier, the Greeley, Colorado-based lender that failed in April. The portfolio lists $220.2 million in Frontier debt from 187 loans, with 91 percent at least 90 days overdue . Silverton, IndyMac The second-biggest component is from Silverton, the Atlanta-based lender that serviced about 1,400 banks in 44 states until it failed in May. The offering includes 23 Silverton loans showing balances of $85.3 million, with 81 percent behind by 90 days or more. IndyMac’s share of the FDIC offering is a single overdue loan of $48,000, according to Mission Capital’s listing. Regulators seized Pasadena, California-based IndyMac in July 2008. Bids for the latest FDIC auction are due April 6, Mission Capital said. David Barr , an FDIC spokesman, declined to comment. The planned sale was reported earlier by Commercial Real Estate Direct on its Web site . To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net .

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Credit Default Swaps Are Dangerous, US Taxpayers Are Still On The Hook

February 27, 2010

Derivatives are responsible for much of the interconnectedness between banks and other institutions that made the financial collapse accelerate in the way that it did, costing taxpayers hundreds of billions in bailouts. Yet credit default swaps have been largely untouched by financial reform efforts.

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Canada to Face U.S. in Mens Olympic Hockey Final

February 27, 2010
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Fortress Said to Be Near Restructuring of Resort Operator Intrawest’s Debt

February 27, 2010

By Cristina Alesci Feb. 27 (Bloomberg) — Fortress Investment Group LLC has agreed with lenders on the outline of a debt restructuring for Intrawest ULC, owner of Olympic downhill skiing resort Whistler Blackcomb, said a person with knowledge of the talks. Under the plan, Intrawest’s $1.2 billion of debt would be divided into a senior tranche of $800 million and a mezzanine tranche of $400 million, said the person, who declined to be identified because the discussions are private. The parties have set an April 16 deadline to complete negotiations. Fortress or its funds would have to put in an additional $150 million to buy equity in the resort company under the terms of the deal. Two Fortress-backed funds already kicked in $345 million in October 2008 to keep lenders at bay. Creditors led by Lehman Brothers Holdings Inc., Davidson Kempner Capital Management LLC and Oak Hill Advisors LP have sought control of Intrawest since it missed a final payment on a $1.4 billion loan due in December. The Vancouver-based company has struggled even after layoffs and other expense reductions. The lenders’ administrative agent originally set a Feb. 19 date to auction off Intrawest assets, which include the ski resort where Lindsey Vonn won her Alpine gold at the Winter Games. Intrawest would pay 10 percent interest on the senior debt under the agreement, while lenders are demanding as much as 17 percent for the mezzanine debt, said the person. The interest on the mezzanine part will depend on the payment terms, which have not been disclosed. Buyout Financing The original loan of about $1.4 billion, used to finance the buyout in 2006, called for an interest rate of 275 basis points above the London interbank offered rate. A basis point is one hundredth of a percent. Libor is the rate banks charge to lend to each other. Intrawest, founded in 1976, runs ski and golf resorts in Canada and the U.S. It sells vacation timeshares through its Club Intrawest unit and owns Canadian Mountain Holidays, the world’s largest heli-skiing operation, according to its Web site. Heli-skiing runs are reached via helicopters rather than ski lifts. Fortress, which is negotiating with lenders on behalf of Intrawest, agreed to buy the company in August 2006. Investors in Fortress’s Fund IV, Fund IV Co and FICO funds saw their collective $1.7 billion equity stake shrink to 4 cents on the dollar as of Oct. 31. To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net

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Hawaii, Pacific Warned of Tsunami Damage; U.S. West Coast Placed on Alert

February 27, 2010

By Alan Bjerga

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Chile Hit by Magnitude 8.8 Earthquake, at Least 147 Die; Tsunami Threatens

February 27, 2010

By Sebastian Boyd and Michael Smith Feb. 27 (Bloomberg) — A massive 8.8 magnitude earthquake struck Chile early this morning, destroying highways, bridges and apartment buildings and leaving at least 122 people dead. Tsunami warnings were issued across the Pacific Ocean as far as Hawaii and New Zealand, and Chilean President Michelle Bachelet declared a “state of catastrophe.” The pre-dawn quake was centered 200 miles (317 kilometers) southwest of the capital Santiago near the main winemaking region and close to Concepcion, a metropolitan region of over 500,000 people. In the minutes and hours after the 90-second temblor, stronger than the one in Haiti last month that may have killed 300,000, the U.S. Geological Service reported almost 30 aftershocks. Five measured 6.0 or above. “Amid such a major earthquake we can’t rule out that the death toll will rise,” Bachelet said at a televised news conference. “We will provide information as soon as we have it.” President-elect Sebastian Pinera told reporters that at least 122 people were killed. “This earthquake is a massive blow to Chilean society,” Pinera told reporters in Santiago. Buildings collapsed across Concepcion, CHV Television reported. One four-story apartment building had fallen into a trench opened up by the quake, while another residential building was split in two, television images showed. Many streets were blocked with rubble from collapsed buildings. In towns closer to the epicenter, including Curico and Talca, more than 80 percent of buildings were flattened, CHV Television reported, citing unidentified officials at the national emergency agency. Collapsed Bridges, Roads Closer to the capital, a helicopter tour of the region showed collapsed bridges blocking motorways. Embankments fell apart, and lengthy stretches of road were impassable. Long lines of cars were visible at gasoline stations. Tsunami warnings were issued across the Pacific region, including South America, Australia, New Zealand, Japan, the Philippines, Russia and many islands, including Hawaii where the Pacific Tsunami Warning Centre said “urgent action should be taken to protect lives and property.” An evacuation of Easter Island has been ordered due to the tsunami threat, Bachelet said. Residents on the Pacific Ocean island, 2,180 miles (3,510 kilometers) west of the South American mainland, were told by the Chilean navy that the threat of a tsunami had eased. The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the U.S. Geological Survey Web site . Power and phone connections were disrupted and Santiago residents waited in the street amid fears of aftershocks, pictures on CNN+ showed. Copper Mines While the world’s largest underground copper mine, El Teniente, is 180 miles from the epicenter, most of the country’s copper deposits and port facilities are at least 500 miles to the north. Breakwater Resources Ltd., a Canadian mining company, said its Toqui mine facility was undamaged by the earthquake. “I’m trying to get in touch with Santiago,” said Gonzalo Cuadra , a London-based executive at Codelco, the world’s biggest copper producer and the owner of El Teniente. “I think in the north there haven’t been problems. We have to see what happened with the mines near Santiago.” The El Teniente underground copper mine, which is in central Chile, wasn’t damaged, Carmen Fernandez, head of the national emergency office, said in an interview in Santiago. Rio Tinto Group, a shareholder in the world’s largest copper mine, Escondida, located in northern Chile and owned by BHP Billiton Ltd., also had no reports of damage, London-based spokeswoman said Christina Mills said by telephone. State of Emergency A state of emergency was declared in Maule and the province of BioBio to the south, where Concepcion is located. A third region, Araucania, south of BioBio and the center of the country’s forestry industry, may also be added, Bachelet said. Some of the worst damage was around the cities of Talca, Curico and Cauquenes, near the quake’s epicenter, according to ONEMI, the national emergency agency. In downtown Santiago, rescue workers pulled a 92-year-old woman out of a home that had been reduced to a pile of rubble, TVN reported. The city’s international airport will be closed for at least 24 hours because of damage, airport chief Eduardo del Canto told the broadcaster. “The terminal is completely inoperable,” he said. “This is a major, damaging earthquake,” Randy Baldwin of the USGS told the BBC in an interview. “For any population in the area it would be reasonable to expect some damage.” Secretary of State Hillary Clinton is scheduled to arrive March 1 to Santiago on a regional tour. The State Department said in a statement the U.S. government is committed to helping the government of Chile “as rapidly and effectively as we can.” UN, U.K. Help While Chile “has considerable assets of its own,” the U.S. has put together a disaster response team and has placed two urban search and rescue teams on alert, State Department spokesman Philip Crowley said in a statement. “We continue to assess the situation and are prepared to offer whatever assistance Chile needs,” Crowley said. United Nations Secretary-General Ban Ki-Moon said his organization in monitoring the situation in Chile. The UN is on standby to provide emergency relief, the organization said today in an e-mailed statement. U.K. Prime Minister Gordon Brown also offered help. Chile was struck by the most powerful earthquake on record in 1960, when a magnitude 9.5 temblor killed about 1,655 people, according to the USGS Web site. A further 211 people died when associated tsunamis struck Hawaii, Japan and the Philippines. Earlier today, a magnitude 7 earthquake hit near Okinawa, Japan, at about 5:31 a.m. local time, the USGS said. Last month, Haiti was struck by a magnitude 7 quake. The death toll may reach 300,000, President Rene Preval said Feb. 21. More than 1 million people were left homeless. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith at mssmith@bloomberg.net

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Michael J. Panzner: Temporary Hiring: A Different Kind of Signal

February 27, 2010

A recent Associated Press report, “Temp Hiring No Longer Seen as Sign of Recovery,” suggests that one economic rule of thumb no longer applies: When employers hire temporary staff after a recession, it’s long been seen as a sign they’ll soon hire permanent workers. Not these days. Companies have hired more temps for four straight months. Yet they remain reluctant to make permanent hires because of doubts about the recovery’s durability. Even companies that are boosting production seem inclined to get by with their existing workers, plus temporary staff if necessary. “I think temporary hiring is less useful a signal than it used to be,” says John Silvia, chief economist at Wells Fargo. “Companies aren’t testing the waters by turning to temporary firms. They just want part-time workers.” Despite that claim, the article offered little hard evidence, other than statements by economists and anectodal reports from a few workers and employers. However, an analysis of Bureau of Labor Statistics data on temporary services and total private nonfarm payrolls seems to bear out the fact that past experience may no longer be relevant. In the wake of the 1990 recession, for example, the year-on-year pace of temporary hiring jumped 23.6 percentage points from its May 1991 lows. That coincided with a 5 percentage point gain for private nonfarm payrolls as a whole. Following the 2001 recession, the peak-to-trough change in the rate of temporary worker employment was even greater, at 27.8 percent. But the gain was not matched by a similarly robust recovery in the broader labor market, where the change in the pace of private nonfarm payrolls growth was only 2.9 percentage points. The recent trend is worse still. Since April of last year, the year-on-year rate of temporary staffing employment has climbed 26.5 percentage points (over a much shorter time span than during the previous two recessions, I might add). But again, hiring of permanent staff has not kept pace. Over the past 9 months, the differential has been 2 percentage points. Of course, it’s possible that the rebounds we’ve seen so far are not finished, and that a growing number of businesses will soon decide that the time is right to beef up their headcounts in anticipation of the long-awaited recovery. Then again, maybe Main Street’s persistent complaint that there’s no real light at the end of the tunnel is on the mark. In that case, the tepid recovery we’ve seen so far may well be the end of it.

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Kevin Connor: Goldman’s Role in Greek Crisis Is Proving Too Ugly to Ignore

February 27, 2010

Goldman Sachs appears to be testing the limits of its special talent for avoiding all accountability following revelations of its role in exacerbating the Greek debt crisis. The bank has come under heavy criticism from European political officials over its role in helping Greece hide its debts, and on Wednesday, Greek labor unions staged a historic strike that shut down the country’s national infrastructure in response to economic policies urged by bankster elites. The European turmoil has forced US officials to take notice, and scrutiny of the bank is now coming from the unlikeliest of quarters, with Ben Bernanke telling Congress on Thursday that the Federal Reserve is looking into Goldman and questions surrounding the bank’s swap transactions with Greece. Bernanke was vague about what, exactly, the Fed is investigating, and it is possible that the inquiry will go nowhere. But the fact that the Fed chair would make remarks that amplify concerns about Goldman’s role in Europe is a sign that the political winds have shifted significantly since Matt Taibbi’s “vampire squid” metaphor first captured the public imagination last summer. The populist outcry against bankster fraud and collusion finally shows signs of steering the authorities towards a more oppositional, watchdog role. The truly scandalous story with respect to Goldman Sachs and Greece — that the bank may have been speculating heavily in the Greek debt markets at the same time it was trying to help the country hide its debt — is also starting to gain traction. During his testimony, Bernanke raised concerns about speculative activity in the Greek debt markets and said that the SEC was investigating, and Phil Angelides, chair of the Financial Crisis Inquiry Commission, said that he was particularly concerned about Goldman’s role in betting against securities that it had helped create. On Thursday the New York Times published a story with the headline “Banks Bet Greece Defaults on Debt They Helped Hide.” The article reported that a company backed by Goldman and other banks set up a new index in September of this year that investors could use to bet on the likelihood that Western European countries like Greece would default on their debt. This is history repeating itself: the very same company that created this index set up a similar index in early 2006 that allowed investors to bet on the likelihood of defaults in the subprime bond market. That index was a collaboration between Markit and CDS IndexCo , a consortium of 16 banks, including Goldman Sachs, which has since been acquired by MarkIt. The acting chairman of CDS IndexCo was Goldman Sachs managing director Bradford S Levy, suggesting that Goldman has significant power within Markit now. Guess which investors cleaned up on that index in 2006 and 2007? Goldman Sachs and partner-in-crime John Paulson , the hedge fund manager who made billions betting against the subprime sector. The sovereign index and its subprime predecessor would be less troubling if there was some transparency around Markit, the pricing mechanisms it uses, its owners (including Goldman Sachs), and so forth, given the critical informational role it plays in markets which threaten global financial stability quite frequently. The Department of Justice opened an investigation of the company for possible anti-trust violations last summer. If Goldman is, in fact, using swaps to bet heavily on the likelihood of a Greek default at the same time that it is helping the country hide its debts, the parallels to its corrupt, cynical, and incredibly greedy housing bubble investment strategy extend beyond the Markit index. The game plan is fairly simple: stuff some entity full of hidden liabilities by devising securities that mask true levels of exposure, collect enormous fees for doing it, then find ways to make enormously profitable bets against the financial carcass created in the process. Goldman Sachs and John Paulson did this with AIG , devising complex securities known as “synthetic CDOs” which were composed entirely of bets on a set of mortgage pools. Paulson (not to be confused with former Treasury Secretary Hank Paulson) picked the mortgage pools, selecting the ones that were most likely to experience high levels of foreclosure. Goldman then created the securities and sold them to investors like AIG. The bets were essentially designed to fail, with Paulson (and Goldman) on the winning end. The hidden exposure was massive enough to take down AIG, threaten the world financial system, and necessitate a government bailout. These bailout funds were then passed through to Goldman Sachs. Carolyn Maloney has noted these parallels and is now calling for a Congressional hearing on Goldman’s involvement in the Greek crisis. Greece is far less likely to implode than AIG, and the liabilities that Goldman tucked into its national accounts are less severe. But now that the country is dealing with the prospect of financial ruin, Paulson and Goldman appear to share the same vulture flight pattern , once again. Paulson & Co is reported to have been speculating heavily in Greek debt markets with a team of 20-30 traders focused on the country. Goldman is also rumored to have been one of these speculators. According to the Wall Street Journal , Paulson has since exited his large bearish bet on Greek debt. But in a sign that Paulson’s Greek adventures haven’t ended, Goldman recently took representatives of his hedge fund on a “field trip” to Greece: On Jan. 28 and 29, analysts from Goldman Sachs Group Inc. took a group of investors on a field trip to meet with banks in Greece. The group included representatives from about a dozen different money managers, say attendees, including Chicago hedge-fund giant Citadel Investment Group , the New York hedge fund Eton Park Capital Management , and Paulson, which sent two employees, say people who were there. Eton Park declined to comment. During meetings with the Greek deputy finance minister and executives from the National Bank of Greece, among other banks, some investors raised tough questions about the state of the country’s economy, according to these people. Greece appears to have been negotiating for its economic future with Goldman Sachs and its network of hedge fund colluders, many of whom have taken large speculative positions on Greek debt. This amounts to an unofficial diplomatic mission, a negotiation between a sovereign country and the sociopathic financiers who hold sway over its economic fortunes. Is Europe really ok with that? The Wall Street Journal article goes on to report on a Manhattan dinner party where a group of hedge fund managers discussed their bearish bets on the Euro. The article suggests that the funds are partnering on their trades, and includes a somewhat confusing sentence: “There is nothing improper about hedge funds jumping on the same trade unless it is deemed by regulators to be collusion.” So it isn’t collusion unless regulators have “deemed” it as such? And Madoff wasn’t actually running a Ponzi scheme before the SEC noticed? The growing turmoil in Europe and Bernanke’s comments may signal that we’ve reached a tipping point — that these financial firms will no longer be able to avoid all substantial inquiries into their business practices, and that they’ll no longer hold sway over economic policies here and abroad. Not that Bernanke himself will follow through. But the need for a significant, public investigation of these individuals and their firms has become so pressing that even the most compromised US officials are paying it lip service. Whether it happens here or in Europe, Goldman’s day in court is drawing near.

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Roxanne Emmerich: Make the Decision to Engage

February 27, 2010

A recent survey by the Conference Board finds that only 45 percent of employed Americans are satisfied with their jobs. Most of those plan to look for something new once the current unpleasantness is done — presumably because everything will be red roses and caramel mochaccinos in the new workplace. Bad idea. Whenever someone changes jobs in order to run from a situation, as opposed to going TO an opportunity, it’s pretty much inevitable that the issues will follow, nipping at their heels. Within six months, that person will be hating the new employer just as much. It’s important for workers to stop thinking the grass is greener in the next pasture. The answer is not to polish up the résumé and leap into another workplace, but to help build a more positive workplace so you can love the one you’re with. Employee engagement is about more than good feelings. A landmark 2006 study by the Gallup Management Journal estimated that a typical organization loses $3,400 in productivity for every $10,000 of payroll due to disengaged employees. So while bottom-line troubles are often said to fuel disengagement, it’s really the other way around. I can honestly say that I’ve loved every job I’ve ever had. Notice I didn’t say I loved every job equally , or that I loved every job completely . That’s just not gonna happen. But I can honestly say that I have loved them all. It’s not that I’ve been especially lucky. I simply realized early on that loving your job is a DECISION. There were some jobs that better fit with my skills and values, but regardless of where I was, I always found things to celebrate and be joyful about. It’s like a marriage. Anyone who has been married more than a day knows that there are delightful, wonderful things about your spouse — as well as a few areas for improvement. (Look in the mirror and realize that your spouse can say the same.) So where do you put your focus? When we focus on the positives, the delightfuls and the wonderfuls, our marriage works much, much better. If on the other hand we focus on all of those things that aren’t so hot, we’ll start accumulating baggage, bit by bit, until the marriage is crushed under the weight of it. Happens all the time. The same is true for the marriage of employee and employer. No employer ever hires the perfect human being — but how would you like it if your employer chose to focus relentlessly on your imperfections? Likewise, an employee marinating in grievances about the employer will make him or herself miserable — a misery that spreads quickly to everyone around, taking engagement AND productivity down with it. So do you want to focus on the problems of your current position, or the positives? The choice is yours, but the happiness or misery that results from that choice will be shared by everyone around you. Recognize that your own job satisfaction is a decision — then decide well.

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Michael Jordan Agrees to Buy Controlling Stake in NBA’s Charlotte Bobcats

February 27, 2010

By Bob Bensch Feb. 27 (Bloomberg) — Michael Jordan has agreed to buy controlling interest in the National Basketball Association’s Charlotte Bobcats. Bobcats owner Robert Johnson announced the sale to MJ Basketball Holdings LCC, a group headed by six-time NBA champion Jordan, in a statement. Financial terms of the sale, which must be approved by NBA owners, weren’t disclosed. Jordan, a North Carolina native, has been a part-owner of the Bobcats since 2006. He’s also been running the team’s basketball operations. Johnson became the first black majority owner of a U.S. professional sports team when he was granted an expansion franchise in 2003. Charlotte, which hasn’t finished with a winning record since joining the NBA in 2004, is 28-29 this season. Jordan, who was elected to the Basketball Hall of Fame in September, won five NBA Most Valuable Players Awards and six titles with the Chicago Bulls before retiring in 1998. He became one of the most recognized athletes in the world, earning the nickname “Air Jordan” for his soaring dunks that became a commercial fixture for Nike Inc. The 47-year-old Jordan was named president of basketball operations for the Washington Wizards in 2000 and acquired a stake in the franchise, but resigned 19 months later to return to the team as a player. After he retired in 2003, he tried to return to his front-office post and was fired by Wizards owner Abe Pollin . Jordan also considered buying the Milwaukee Bucks in 2003 before the team was pulled off the market. He also tried to buy a 50 percent stake in the Charlotte Hornets in 2000 but couldn’t reach an agreement with owner George Shinn over control of the franchise. To contact the reporter on this story: Bob Bensch in London at bbensch@bloomberg.net .

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Chile Hit by Magnitude 8.8 Earthquake, at Least 122 Die; Tsunami Threatens

February 27, 2010

By Mike Millard and Paul Tobin Feb. 27 (Bloomberg) — Tsunami warnings were issued across the Pacific Ocean after an 8.8-magnitude earthquake struck Chile, where President Michele Bachelet declared a “state of catastrophe.” The quake was centered 200 miles (317 kilometers) southwest of Santiago near the main winemaking region. At least 78 people have been killed, Bachelet told reporters. Tsunami warnings have been issued across the Pacific region, including South America, Australia, New Zealand, Japan, the Philippines, Russia and many islands, including Hawaii where the Pacific Tsunami Warning Centre said “urgent action should be taken to protect lives and property.” An evacuation of Easter Island has been ordered due to the tsunami threat, the British Broadcasting Corp. reported, citing Bachelet. The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the U.S. Geological Survey Web site . In the aftermath of the 90- second quake, the USGS reported 19 aftershocks, of which five measured 6.0 or above. “Amid such a major earthquake we can’t rule out that the death toll will rise,” Bachelet told televised news conference. “We will provide information as soon as we have it.” Copper Mine Power and phone connections were disrupted and Santiago residents waited in the street amid fears of aftershocks, pictures on CNN+ showed. The quake’s focus was 70 miles north of Concepcion, Chile’s second city, close to the vineyards of the Curico valley. While the world’s largest underground copper mine, El Teniente, is 180 miles from the epicenter, most of the country’s copper deposits are at least 500 miles to the north. “I’m trying to get in touch with Santiago,” said Gonzalo Cuadra , a London-based executive at Codelco, the world’s biggest copper producer and the owner of El Teniente. “I think in the north there haven’t been problems. We have to see what happened with the mines near Santiago.” The El Teniente underground copper mine, which is in central Chile, wasn’t damaged, Carmen Fernandez, head of the national emergency office, said in an interview in Santiago. Rio Tinto Group, a shareholder in the world’s largest copper mine, Escondida, located in northern Chile and owned by BHP Billiton Ltd., also had no reports of damage, London-based spokeswoman said Christina Mills said by telephone. State of Emergency A state of emergency was declared in Maule and the province of BioBio to the south, where Concepcion is located. A third region, Araucania, south of BioBio and the center of the country’s forestry industry, may also be added, Bachelet said. Some of the worst damage was around the cities of Talca, Curico and Cauquenes, near the quake’s epicenter, according to ONEMI, the national emergency agency. In downtown Santiago, rescue workers pulled a 92-year-old woman out of a home that had been reduced to a pile of rubble, TVN reported. The city’s international airport will be closed for at least 24 hours because of damage, airport chief Eduardo del Canto told the broadcaster. “The terminal is completely inoperable,” he said. Sections of the Panamerican Highway south of Santiago were blocked after pedestrian overpasses and a bridge collapsed, according to TVN images. Elsewhere, numerous pedestrian highway overpasses collapsed, Bachelet told reporters. ‘Some Damage’ “This is a major, damaging earthquake,” Randy Baldwin of the USGS told the BBC in an interview. “For any population in the area it would be reasonable to expect some damage.” Chile was struck by the most powerful earthquake on record in 1960, when a magnitude 9.5 temblor killed about 1,655 people, according to the USGS Web site. A further 211 people died when associated tsunamis struck Hawaii, Japan and the Philippines. Earlier today, a magnitude 7 earthquake hit near Okinawa, Japan, at about 5:31 a.m. local time, the USGS said. Last month, Haiti was struck by a magnitude 7 quake. The death toll may reach 300,000, President Rene Preval said Feb. 21. More than 1 million people were left homeless. To contact the reporters on this story: Mike Millard in Singapore at Mmillard2@bloomberg.net ; Paul Tobin in Madrid at ptobin@bloomberg.net

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Prudential Plc in Talks on $25 Billion AIG Asia Unit Purchase, Sky Reports

February 27, 2010

By Howard Mustoe Feb. 27 (Bloomberg) — Prudential Plc , the U.K.’s largest insurer, is in talks to buy the Asian operations of American International Group Inc. in a transaction that would be valued at about $25 billion, Sky News said, citing unidentified people. A proposal to buy American International Assurance Co. will be put to AIG’s board by Prudential’s Chief Executive Officer Tidjane Thiam in New York today, Sky said, citing one unidentified person close to the talks. Prudential would seek to fund the acquisition with the sale of about 15 billion pounds ($23 billion) in new stock, Sky reporter Mark Kleinman wrote on his blog. The London-based company might also sell off parts of its U.K. business, though that wouldn’t be necessary to fund the AIA deal, Kleinman said. Credit Suisse Group AG, HSBC Holdings Plc, JPMorgan Chase & Co. and Lazard Ltd. are advising Prudential, Sky said. Prudential Group Communications Director Stephen Whitehead declined to comment to Bloomberg News today, as did AIG spokesman Mark Herr . London-based JPMorgan spokesman David Wells declined to comment too. Spokespeople for Credit Suisse and Lazard said they couldn’t immediately comment. A spokesman for HSBC didn’t immediately respond to an e- mail seeking comment, and a spokeswoman for AIA in Hong Kong didn’t immediately respond to a voicemail left on her mobile phones outside regular office hours. Earlier this month, AIG, the insurer selling assets to repay its $182.3 billion bailout by the U.S. government, hired about seven additional banks to help manage an initial public offering for AIA in Hong Kong, according to five people familiar with the decision. AIA IPO Credit Suisse, CCB International, Goldman Sachs Group Inc. and UBS AG were among banks due to work with the original sale managers, Deutsche Bank AG and Morgan Stanley, said the people, who declined to be identified before a public announcement. One year ago, the New York-based AIG, once the world’s largest insurer, was forced to shelve talks with potential corporate buyers of AIA because bids were too low, people familiar with the matter said at the time. AIA had attracted interest from Manulife Financial Corp., Prudential and Temasek Holdings Pte, with all seeking to buy a stake, according to people familiar with the matter, speaking in May 2009. The unit had an embedded value of about $20 billion, a person familiar with the valuation said one year ago. Embedded value estimates a company’s net worth excluding new business. Prudential has a market value of 15.3 billion pounds. The stock has more than doubled in the past year. The shares rose 2.3 percent yesterday in London trading to 602.5 pence. To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net

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Buffett Sees U.S. Housing Recovery by 2011, Prices Below `Bubble’ Levels

February 27, 2010

By Andrew Frye Feb. 27 (Bloomberg) — Billionaire Warren Buffett said the U.S. will recover from the residential real estate slump by 2011 as demand for houses catches up with the supply that accumulated during the bubble. “Within a year or so, residential housing problems should largely be behind us,” Buffett wrote in his annual letter to the shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means.” The worst housing decline since the Great Depression has drained profits from the nation’s largest banks and forced the bailout of companies including Citigroup Inc. and American International Group Inc. Record foreclosures flooded a U.S. real estate market already glutted with unsold property, causing housing starts to fall to their lowest in at least five decades, the U.S. Census Bureau said in a December statement . “People thought it was good news a few years back when housing starts — the supply side of the picture — were running about two million annually,” said Buffett, 79, the chairman and chief executive officer of Omaha, Nebraska-based Berkshire, in today’s letter. “But household formations — the demand side — only amounted to about 1.2 million.” Buffett built Berkshire into a $198 billion company through takeovers and investments in companies he believes have lasting competitive advantages and superior management. His deals transformed the company from a failing maker of men’s suit linings into an enterprise with businesses ranging from ice cream and underwear to power plants and corporate jet leasing. ‘Ridiculously Cheap’ Berkshire, which has a real-estate brokerage, a business that constructs pre-fabricated houses and units making products used in homebuilding, has suffered amid the downturn. Profit at carpet manufacturer Shaw Industries fell 30 percent last year to $144 million. “He’s very deeply invested in this,” said Tom Russo , partner at Gardner Russo & Gardner, which holds Berkshire stock. “Across his industrial companies, he’s massively poised to gain” from a housing recovery, Russo said. Buffett wrote today that his company should have made more purchases of corporate and municipal bonds last year because they were priced ”ridiculously cheap” compared with U.S. Treasuries. “When it’s raining gold, reach for a bucket, not a thimble,” he said. Pied Pipers Buffett has used past letters to discuss plans for his successor, praise Berkshire managers and confess his failings. He’s written passages that compare investing to baseball , derivatives to venereal disease , and Wall Street bankers to Pied Pipers . Last year, he said the U.S. economy was “in shambles” after reckless lending caused the worst financial “freefall” he ever saw. Buffett said this year that the CEOs and boards of directors of companies that failed during the credit crisis shouldn’t be able to pass blame to those below them. Boards should insist on CEOs taking full responsibility for risk, he said. “If he’s incapable of handling that job, he should look for other employment,” Buffett wrote. Shareholders weren’t the ones who botched the operations of some of the country’s largest financial institutions, Buffett said, “yet they have borne the burden with 90 percent or more” of their holdings wiped out in cases of failure. “If their institutions and the country are harmed by their recklessness, they should pay a heavy price,” he wrote. The Oracle The annual communications with shareholders have won Buffett a following of professional money-managers and amateur investors who have given him the moniker “the Oracle of Omaha.” Past letters have been compiled into a book for those who want to study Buffett’s pronouncements. “It’s Moses coming off the mountain with the Ten Commandments,” said Gerald Martin , a finance professor at American University’s Kogod School of Business in Washington who has made Buffett’s letter assigned reading for his students. “It’s something we all look forward to.” Buffett agreed to his largest deal last year when he arranged the $27 billion takeover of railroad Burlington Northern Santa Fe. Berkshire completed the acquisition, which Buffett described as an “all-in wager” on the U.S. economy, on Feb. 12. Shares of Berkshire traded at about $15 when Buffett took control in 1965. The Class A stock closed yesterday at $119,800, its highest since October 2008. Buffett added Class B shares in 1996, and agreed to split them this year to help pay Burlington Northern shareholders. Record Trading When Berkshire replaced the railroad in the Standard & Poor’s 500 Index , it prompted record trading. The value of Berkshire shares changing hands that day amounted to the most for a single company in one day of trading on the New York Stock Exchange. The annual letters typically give a preview of the company’s upcoming shareholder meeting, scheduled this year for May 1. Buffett announced a change in the format of the meeting in the last letter after shareholders at prior gatherings sought his opinion on sports, abortion and religion while asking few questions about Berkshire. Berkshire had announced that this year’s meeting won’t include a separate event for non-U.S. investors. He used the session in prior years to scout for acquisitions outside the country. To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net .

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AIG Chairman Says Feinberg’s Pay Limits Hindered Repayment of U.S. Bailout

February 27, 2010

By Hugh Son Feb. 27 (Bloomberg) — American International Group Inc. Chairman Harvey Golub told shareholders that decisions by U.S. paymaster Kenneth Feinberg to limit compensation at the government-owned insurer made “little business sense” and hurt the firm’s ability to repay its bailout. Golub, who became AIG chairman in August, made the comments in a letter to shareholders posted yesterday on AIG’s Web site . The New York-based insurer’s board is focused on working with the Federal Reserve Bank of New York and Treasury Department and “dealing with” Feinberg’s pay guidelines, Golub wrote. “While we can pay the vast majority of people competitively, on occasion, these restrictions and his decisions have yielded outcomes that make little business sense,” Golub, 70, said of Feinberg. “In some cases we are prevented from providing market-competitive compensation to retain some of our most experienced and best executives. This hurts the business and makes it harder to repay the taxpayers.” Feinberg, the Obama administration’s special master on executive pay, has instituted a $500,000 base salary cap for most AIG employees. He has made exceptions for those deemed necessary for the insurer’s success, including Chief Executive Officer Robert Benmosche , who secured a $7 million salary and $3.5 million in long-term incentive awards. “AIG owes the taxpayer a huge amount of money and we want to make sure that my compensation practices take into account the need for AIG to thrive,” Feinberg said in a Dec. 11 interview with Bloomberg Television. AIG received a $182.3 billion bailout. AIG plans to add several directors to its board because the workload required “is as high as I’ve ever seen in any company and is likely to continue for some time,” wrote Golub, the former chairman and CEO of American Express Co. Dammerman Retires Dennis Dammerman , the former Discover Financial Services chairman elected to AIG’s board in November 2008, will retire for “personal health reasons,” Golub wrote. Dammerman led the board search committee that selected Benmosche last year. Mark Herr , a spokesman for AIG, declined to comment. To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

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Alan Schram: Buffett’s Shareholder Letter-Synopsis

February 27, 2010

Warren Buffett’s eagerly anticipated annual letter to shareholders was released this morning. Here are the highlights: Book value increased 19.8% last year, gaining $21.8 billion in net worth, and is at $84,487 per share. In the last 45 years, Berkshire never had a five-year period during which its book value didn’t outperform the S&P 500. The company had net income of $8.06 billion, or $5,193 per share in 2009, which is about $155 million a week. It has $156.6 billion in cash and securities, or approximately $100,000/share. The letter included a primer on Berkshire’s approach to business, for the benefit of the 60,000 new shareholders due to the acquisition of Burlington Northern Santa Fe (BNSF). It contained details on Berkhire’s four separate business segments: 1. Insurance, which had a float of $62 billion at the end of the year, and earned an underwriting profit of over $1.5 billion in 2009. 2. Regulated utility business, which earned Berkshire over $1 billion for the year. In the future, the newly acquired BNSF railroad business is going to be a part of this segment. Berkshire is committed to providing the country with reliable electricity and railroad systems, despite the capital intensive nature of this business and its heavy demand for continuing capital expenditures. 3. Manufacturing, Service and Retailing, with over $60 billion in revenue and net income of $1.1 billion for the year. The diverse businesses Berkshire owns in this segment distribute groceries, sell chocolate, furniture, jewelry, paint, shoes, cutting tools, ice cream and more. Most of these operations suffered from the recession, but Buffett singles out NetJets, which sells fractional ownership of jets, as particularly problematic. NetJets has been losing money and without Berkshire guaranteeing its debt, would be out of business. Buffett assigned Dave Sokol as its new CEO, with the task of turning NetJets around. 4. Financial Products: Berkshire owns Clayton Homes, a manufactured home builder, an industry that has been in shambles partly because mortgage rates kept low by the government do not apply to low cost manufactured homes. Berkshire also has furniture and trailer leasing operations that have been hit hard by the economic downturn. All in all, this business segment earned $781million pre-tax last year. Another part of Berkshire are its investments: Berkshire has common stock investments worth $59 billion, with a cost basis of $34.6 billion. In the cases of Conoco Phillips, Kraft, Sanofi Aventis and US Bancorp, the market value of its holdings is below Berkshire’s cost. In addition Berkshire owns $26 billion of non traded stocks, in companies like GE, Goldman Sachs and others. These holdings pay Berkshire $2.1 billion in annual dividends and interest. The much maligned derivatives contracts Berkshire holds has shown unrealized gains of $3.5 billion in 2009. Regarding the BNSF acquisition, Buffett says outright that he and Charlie Munger believe the Berkshire shares they used to buy BNSF were worth more than their market value (second paragraph, page 17). This is a rare statement. I can only remember one other time that Buffett, in his 45 years at the helm, has said Berkshire shares were undervalued, and that was in 2000, in what turned out to be a major bottom for the stock.

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Long-Term Joblessness ‘Off The Charts’

February 27, 2010

Even though many economists say the Great Recession ended over the summer, you’d never know it by the millions of Americans still struggling to find work. The once prosperous and gainfully-employed middle class is being hit especially hard, reports CBS News Correspondent John Blackstone.

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Damien Hoffman: Is Scandal the New Model for Marketing?

February 27, 2010

At the beginning of the week my wife likes to watch the anthropological study called The Bachelor . Inevitably, I get sucked in. This week the show did a Q&A with all the ladies who got dumped. However, the directors spent an incredible amount of time focusing on one topic: “the greatest scandal in Bachelor history.” (For those unaware, one of the female contestants hooked up with a show producer and was booted from the game show — yes , it’s a game show.) At first glance, this seems like a normal dramatic episode in the reality TV dimension of planet Earth. However, the intense focus on the scandal felt forced and strategic. It had the feel of a product placement or PR plug. It had the aroma of Madison Avenue. Another recent scandal was whether the Jersey Shore kids were degrading the image of all Italian-Americans. Really? That show is nothing more than an ethnic version of The Real World (which has been on for 18 years). However, Viacom brilliantly played the media for every last drop of scandal PR. The result: the most popular show for Viacom in years. Scandal is an awesome marketing tool. Rather than pay for ads in People, US Weekly, or on shows like E! or Headline News, with a little scandal you can get millions of dollars of press for free. Moreover, all that press becomes gossip (AKA “word-of-mouth” marketing). Now more than ever, scandal can go uber-viral on the backbone of social media. In a modern world where media companies are competing against new outlets such as Facebook, YouTube, and blogs, executives know it takes something shocking to gain a share of our finite attention spans. Therefore, marketing departments salivate to solve the Davinci Code of their careers by getting clients’ products tweeted, dugg, messaged, youtubed, or texted. If the past year has been any indicator, I anticipate scandal to play an increasingly important role in many media marketing budgets in the years to come. Luckily for marketing’s mad men and women, there is no shortage of egomaniacs-gone-wild to support the cause. What do you think about scandal’s role in marketing? Share your comments below.

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N.Y. Governor Paterson’s Abandoned Candidacy Makes Cuomo `Natural Choice’

February 27, 2010

By Henry Goldman and A. Catarina Saraiva Feb. 27 (Bloomberg) — New York Governor David Paterson ’s decision to abandon his run for election makes his one-time rival, state Attorney General Andrew Cuomo , the “natural choice” to be the Democratic candidate, said the party’s New York chief. Paterson, 55, dropped out yesterday after published reports that he and state police officers spoke with a woman who had filed domestic abuse charges against one of his aides. He accompanied his decision, which came six days after he opened his campaign in Hempstead, New York, with a vow to serve out his term as governor through year-end. “Cuomo is going to be our nominee, I’m confident of that,” Jay Jacobs, chairman of New York’s Democratic Party, told reporters following the news conference yesterday in midtown Manhattan at which Paterson announced his plans. “I will be endorsing Andrew Cuomo.” Paterson, the former lieutenant governor who took office after Eliot Spitzer resigned in March 2008, ended his campaign as the state faces a deficit of $8.2 billion in its more-than $135 billion budget in the next fiscal year. Sinking public approval ratings had provoked the likely September primary challenge from Cuomo, 52, whom Paterson asked this week to probe the allegations. “It has become increasingly clear to me in the past few days I cannot run for office and do the state’s business at the same time, and right now New York needs a leader who can devote full-time to this service,” Paterson said at the press conference. Offer of Assistance Paterson said he offered his assistance to Cuomo should he become a candidate. The attorney general said he would announce his political intentions “at the appropriate time,” in an e- mailed statement. On Feb. 24 the New York Times reported state police officers and Paterson spoke with a former girlfriend of David Johnson, 37, whom the newspaper described as one of Paterson’s closest aides, after she accused Johnson of assault and sought a court-issued protective order against him. The case was dismissed after the woman didn’t appear for a court hearing the day after she and Paterson spoke by phone, the Times said. Paterson suspended Johnson without pay, the governor said in a Feb. 24 statement. ‘Personal Oath’ He rejected allegations that he had used his position to interfere in any way. “I’m looking forward to a full investigation of actions taken by myself and my administration, but I give you this personal oath,” Paterson said. “I have never abused my office, not now, not ever, and I believe that when the facts are reviewed the truth will prevail. “There are 308 days left in my term. I will serve every one of them fighting for the people of the state of New York,” he said. “Let’s see if the decision not to run stops the bleeding,” said Kenneth Sherrill , a political science professor at Hunter College in Manhattan. “My sense is that a lot of people in Albany really want to see him out of office.” Calls for Paterson’s resignation appeared yesterday in the New York Post and the Daily News, the city’s two largest tabloids, and from city Comptroller John Liu . “We have a $4.1 billion budget deficit to grapple with in New York City and cannot make real progress until the state budget is resolved on time one month from now,” Liu said in an e-mailed statement. “In order for this to happen, we need Governor Paterson to step down now.” ‘Sad Day’ Cuomo’s statement described the announcement as “a sad day for the governor and his family,” and added “it is in the best interests of all New Yorkers that the state government function through this difficult time and address the pressing budgetary problems we face.” The attorney general led Republican Rick Lazio , a former Long Island congressman who has said he intends to run for governor, 63 percent to 26 percent in a Feb. 22 poll by Loudonville, New York-based Siena Research Institute . The same poll showed Paterson trailing Lazio 39 percent to 46 percent. The poll had a 3.5 percentage point error margin. The Reverend Al Sharpton , the Harlem-based political activist, said it would be “premature to talk about supporting Cuomo.” Speaking at a separate Manhattan news conference yesterday, he said he wanted to see the results of the attorney general’s inquiry before calling for the governor to step down. Governor Lists Accomplishments In his announcement, Paterson cited as accomplishments his efforts to reduce more than $33 billion in accumulated budget deficits during his tenure, an increase in state contracts to minority and women-owned businesses and the repeal of laws enacted during the administration of Governor Nelson Rockefeller more than 40 years ago setting mandatory prison sentences for illegal drug possession. Paterson last month proposed a budget with $5.5 billion of spending cuts, increased federal aid, and new taxes including a 1-cent-per-ounce tax on sugared beverages to raise $465 million. Democratic Senate leaders have opposed the spending cuts. The gap for this fiscal year increased from a $500 million total officials estimated last month, as income tax revenue fell short of projections and Medicaid health services expenditures for the poor exceeded expectations. State Comptroller Thomas DiNapoli said in a Feb. 22 report the budget gap may be as high as $2 billion over the remainder of this year. DiNapoli and state Senator Liz Krueger , a Manhattan Democrat, said Paterson should remove himself from budget negotiations with the Legislature in favor of Richard Ravitch , Paterson’s appointed lieutenant governor, a real estate developer and former Metropolitan Transportation Authority chairman. “Somebody’s got to get this budget negotiated,” Krueger said in a phone interview. Ravitch “has an experience in government budgeting and negotiating under complex circumstances. He is a very skilled public finance person.” To contact the reporters on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net ; A. Catarina Saraiva in New York at asaraiva5@bloomberg.net

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Mukherjee’s Budget Plan Offers India’s Central Bank Scope to Raise Rates

February 27, 2010

By Cherian Thomas Feb. 27 (Bloomberg) — India’s pledge to enact the biggest budget-deficit reduction in 19 years may offer the central bank more scope to rein in inflation without choking off lending growth. Finance Minister Pranab Mukherjee yesterday unveiled plans to cut the deficit to 5.5 percent of gross domestic product in the year starting April 1 from 6.9 percent the previous year. Tax increases and 400 billion rupees ($9 billion) of state asset sales will shrink a debt burden equivalent to about 82 percent of the economy. Prime Minister Manmohan Singh ’s government will need to tap less of the nation’s savings than anticipated, lessening the impact on private credit growth from higher interest rates. The Reserve Bank of India may start boosting its benchmark rates at or before the next policy gathering in April, according to Goldman Sachs Group Inc. “By cutting the deficit, the finance minister has made room for monetary tightening without crowding out” lending to private businesses, said K. Ramanathan, who helps manage the equivalent of 22 billion rupees ($477 million) at ING Investment Management in Mumbai. Low Borrowing Cost The reduction in the budget deficit will also check borrowing costs from rising in the economy, Montek Singh Ahluwalia , deputy chairman of Planning Commission, an agency that sets India’s growth and investment targets, said in an interview in New Delhi today. “I would not assume that you’ll see that big a rise in the interest-rate structure in the course of the year,” Ahluwalia said. “As a percentage of GDP, the deficit is significantly lower than earlier.” Stocks rose after yesterday’s budget release, with the Sensitive Index gaining 1.1 percent in Mumbai, helping pare losses since the start of the year that were spurred in part by global investor concern about sovereign debt quality. Bonds at first rallied, then closed lower on concern a rise in the tax on fuels will boost energy costs and worsen inflation. Fitch Ratings analyst Andrew Colquhoun said “we are marginally less encouraged to go for a downgrade” in India’s sovereign debt rating after the budget proposal. Standard & Poor’s said in a statement that it may raise its rating outlook to stable should finances improve, echoing similar remarks by Moody’s Investors Services before the release. Fiscal Consolidation Moody’s ranks India’s rupee-denominated debt at Ba2, two levels below investment grade, while Fitch and S&P have a BBB- rating, the lowest investment grade. That puts India below its BRIC counterparts, which include China, Russia and Brazil. Central banks are urging governments to curb deficits after the global recession ended and after Greece’s debt downgrade hit the euro. Federal Reserve Chairman Ben S. Bernanke this week said high deficits may cause “crowding out” of investment and Bank of Japan Governor Masaaki Shirakawa last week called for a “path for fiscal consolidation.” In India, where policy makers aim to achieve the fastest- growing economy in the world within four years, fiscal stimulus measures saw the deficit climb from 2.7 percent of GDP two years ago. The finance ministry yesterday said public debt sales will rise by 1.3 percent, less than the 2 percent median forecast in a Bloomberg News survey, to 4.57 trillion rupees in the next fiscal year. Monetary Policy Focus Governor Duvvuri Subbarao had last month warned that fiscal stimulus, worth more than 4 percent of GDP given since 2008, must be withdrawn to ensure companies have access to funds. “With fiscal policy in train, the focus will now shift to monetary policy to remove its massively accommodative stance,” Tushar Poddar , chief economist at Mumbai-based Goldman Sachs India Securities Ltd., said in a report. He said the RBI may raise interest rates by 3 percentage points this year to slow “rising domestic demand and inflationary pressures.” Yesterday’s budget numbers are counting on a smooth series of asset sales, wireless license auctions and increase in tax revenue as the economy expands, JPMorgan Chase & Co. analysts said in a note. Should the deficit objective be reached, there will be “space for a strong pick up in investment and credit growth.” ‘Shaky’ Budget “If a few things go wrong, the budget will look shaky,” Mumbai-based JPMorgan analysts Jahangir Aziz and Gunjan Gulati said in the note. “The global recovery can turn up nasty surprises and create enough anxiety to keep domestic financial markets volatile.” Policy makers are working to unwind 7.5 trillion rupees of tax and interest rate cuts to curb consumer-price inflation that’s the highest in the Asia-Pacific region, according to data compiled by Bloomberg. While India’s inflation has been stoked mainly by shortages in food supply after last year’s worst monsoon rainfall in 37 years, officials are concerned a surfeit of cash in the economy will spur excessive demand for services and industrial goods. Prices paid by industrial workers in India rose almost 15 percent in December from a year earlier, the most in 11 years. Industrial production grew 16.8 percent in December, the quickest pace since at least 1994, prompting the central bank to say manufacturers are nearing capacity. Mukherjee raised the excise tax on almost all products to 10 percent from 8 percent in his budget to help trim the deficit. Prices Rise Indian oil retailers including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. increased gasoline prices after the levies were announced. Gasoline prices will be raised by 2.71 rupees a liter and diesel by 2.55 rupees a liter, Oil Secretary S. Sundareshan said. Tata Motors Ltd., India’s biggest truckmaker, will pass on the higher tax to consumers and may raise prices by as much as 70,000 rupees, Managing Director Prakash Telang said. Maruti Suzuki India Ltd. raised prices of various models by as much as 13,000 rupees with immediate effect, the company said in a statement on Feb. 26. Bharatiya Janata Party’s Sushma Swaraj , the main opposition leader in the lower house of parliament called the budget “inflationary” after higher taxes were imposed. Swaraj led a walk-out by her party during Mukherjee’s budget presentation. “Any kind of subsidy cut will require a trade-off between living with slightly higher inflation in the near term but with more sustainable growth dynamics over a medium term,” said Rajeev Malik , a Singapore-based regional economist at Macquarie Group Ltd. “I don’t think the move to tax fuel will mean a more aggressive tightening by the central bank.” Usha Thorat , a deputy governor at the central bank, told reporters in Mumbai yesterday that “the budget is positive for inflation reduction, in the sense it is in sync with the expectation that we outlined.” For Related News and Information: India Country Guide Page: COUN INR India Budget-Related Stories: INEL India industrial-output stories: INPIINDY CN India inflation: INWHOLEY HP Most-read India economy stories: MNI INDECO BN Benchmark interest-rate graph: INRPYLD GP M

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Chile Hit by Magnitude 8.8 Earthquake, at Least 78 Dead; Tsunami Threatens

February 27, 2010

By Mike Millard and Paul Tobin Feb. 27 (Bloomberg) — Tsunami warnings have been issued across the Pacific Ocean after an 8.8-magnitude earthquake struck Chile, where President Michele Bachelet declared a “state of catastrophe.” The quake was centered 200 miles (317 kilometers) southwest of Santiago near the main winemaking region. At least 78 people have been killed, Bachelet told reporters. Tsunami warnings have been issued across the Pacific region, including South America, Australia, New Zealand, Japan, the Philippines, Russia and many islands, including Hawaii where the Pacific Tsunami Warning Centre said “urgent action should be taken to protect lives and property.” An evacuation of Easter Island has been ordered due to the tsunami threat, the British Broadcasting Corp. reported, citing Bachelet. The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the U.S. Geological Survey Web site . In the aftermath of the 90- second quake, the USGS reported 19 aftershocks, of which five measured 6.0 or above. “Amid such a major earthquake we can’t rule out that the death toll will rise,” Bachelet told televised news conference. “We will provide information as soon as we have it.” Copper Mine Power and phone connections were disrupted and Santiago residents waited in the street amid fears of aftershocks, pictures on CNN+ showed. The quake’s focus was 70 miles north of Concepcion, Chile’s second city, close to the vineyards of the Curico valley. While the world’s largest underground copper mine, El Teniente, is 180 miles from the epicenter, most of the country’s copper deposits are at least 500 miles to the north. “I’m trying to get in touch with Santiago,” said Gonzalo Cuadra , a London-based executive at Codelco, the world’s biggest copper producer and the owner of El Teniente. “I think in the north there haven’t been problems. We have to see what happened with the mines near Santiago.” The El Teniente underground copper mine, which is in central Chile, wasn’t damaged, Carmen Fernandez, head of the national emergency office, said in an interview in Santiago. Rio Tinto Group, a shareholder in the world’s largest copper mine, Escondida, located in northern Chile and owned by BHP Billiton Ltd., also had no reports of damage, London-based spokeswoman said Christina Mills said by telephone. State of Emergency A state of emergency was declared in Maule and the province of BioBio to the south, where Concepcion is located. A third region, Araucania, south of BioBio and the center of the country’s forestry industry, may also be added, Bachelet said. Some of the worst damage was around the cities of Talca, Curico and Cauquenes, near the quake’s epicenter, according to ONEMI, the national emergency agency. In downtown Santiago, rescue workers pulled a 92-year-old woman out of a home that had been reduced to a pile of rubble, TVN reported. The city’s international airport will be closed for at least 24 hours because of damage, airport chief Eduardo del Canto told the broadcaster. “The terminal is completely inoperable,” he said. Sections of the Panamerican Highway south of Santiago were blocked after pedestrian overpasses and a bridge collapsed, according to TVN images. Elsewhere, numerous pedestrian highway overpasses collapsed, Bachelet told reporters. ‘Some Damage’ “This is a major, damaging earthquake,” Randy Baldwin of the USGS told the BBC in an interview. “For any population in the area it would be reasonable to expect some damage.” Chile was struck by the most powerful earthquake on record in 1960, when a magnitude 9.5 temblor killed about 1,655 people, according to the USGS Web site. A further 211 people died when associated tsunamis struck Hawaii, Japan and the Philippines. Earlier today, a magnitude 7 earthquake hit near Okinawa, Japan, at about 5:31 a.m. local time, the USGS said. Last month, Haiti was struck by a magnitude 7 quake. The death toll may reach 300,000, President Rene Preval said Feb. 21. More than 1 million people were left homeless. To contact the reporters on this story: Mike Millard in Singapore at Mmillard2@bloomberg.net ; Paul Tobin in Madrid at ptobin@bloomberg.net

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Mukherjee Budget Offers India Scope to Raise Rates Without Choking Lending

February 27, 2010

By Cherian Thomas Feb. 27 (Bloomberg) — India’s pledge to enact the biggest budget-deficit reduction in 19 years may offer the central bank more scope to rein in inflation without choking off lending growth. Finance Minister Pranab Mukherjee yesterday unveiled plans to cut the deficit to 5.5 percent of gross domestic product in the year starting April 1 from 6.9 percent the previous year. Tax increases and 400 billion rupees ($9 billion) of state asset sales will shrink a debt burden equivalent to about 82 percent of the economy. Prime Minister Manmohan Singh ’s government will need to tap less of the nation’s savings than anticipated, lessening the impact on private credit growth from higher interest rates. The Reserve Bank of India may start boosting its benchmark rates at or before the next policy gathering in April, according to Goldman Sachs Group Inc. “By cutting the deficit, the finance minister has made room for monetary tightening without crowding out” lending to private businesses, said K. Ramanathan, who helps manage the equivalent of 22 billion rupees ($477 million) at ING Investment Management in Mumbai. Low Borrowing Cost The reduction in the budget deficit will also check borrowing costs from rising in the economy, Montek Singh Ahluwalia , deputy chairman of Planning Commission, an agency that sets India’s growth and investment targets, said in an interview in New Delhi today. “I would not assume that you’ll see that big a rise in the interest-rate structure in the course of the year,” Ahluwalia said. “As a percentage of GDP, the deficit is significantly lower than earlier.” Stocks rose after yesterday’s budget release, with the Sensitive Index gaining 1.1 percent in Mumbai, helping pare losses since the start of the year that were spurred in part by global investor concern about sovereign debt quality. Bonds at first rallied, then closed lower on concern a rise in the tax on fuels will boost energy costs and worsen inflation. Fitch Ratings analyst Andrew Colquhoun said “we are marginally less encouraged to go for a downgrade” in India’s sovereign debt rating after the budget proposal. Standard & Poor’s said in a statement that it may raise its rating outlook to stable should finances improve, echoing similar remarks by Moody’s Investors Services before the release. Fiscal Consolidation Moody’s ranks India’s rupee-denominated debt at Ba2, two levels below investment grade, while Fitch and S&P have a BBB- rating, the lowest investment grade. That puts India below its BRIC counterparts, which include China, Russia and Brazil. Central banks are urging governments to curb deficits after the global recession ended and after Greece’s debt downgrade hit the euro. Federal Reserve Chairman Ben S. Bernanke this week said high deficits may cause “crowding out” of investment and Bank of Japan Governor Masaaki Shirakawa last week called for a “path for fiscal consolidation.” In India, where policy makers aim to achieve the fastest- growing economy in the world within four years, fiscal stimulus measures saw the deficit climb from 2.7 percent of GDP two years ago. The finance ministry yesterday said public debt sales will rise by 1.3 percent, less than the 2 percent median forecast in a Bloomberg News survey, to 4.57 trillion rupees in the next fiscal year. Monetary Policy Focus Governor Duvvuri Subbarao had last month warned that fiscal stimulus, worth more than 4 percent of GDP given since 2008, must be withdrawn to ensure companies have access to funds. “With fiscal policy in train, the focus will now shift to monetary policy to remove its massively accommodative stance,” Tushar Poddar , chief economist at Mumbai-based Goldman Sachs India Securities Ltd., said in a report. He said the RBI may raise interest rates by 3 percentage points this year to slow “rising domestic demand and inflationary pressures.” Yesterday’s budget numbers are counting on a smooth series of asset sales, wireless license auctions and increase in tax revenue as the economy expands, JPMorgan Chase & Co. analysts said in a note. Should the deficit objective be reached, there will be “space for a strong pick up in investment and credit growth.” ‘Shaky’ Budget “If a few things go wrong, the budget will look shaky,” Mumbai-based JPMorgan analysts Jahangir Aziz and Gunjan Gulati said in the note. “The global recovery can turn up nasty surprises and create enough anxiety to keep domestic financial markets volatile.” Policy makers are working to unwind 7.5 trillion rupees of tax and interest rate cuts to curb consumer-price inflation that’s the highest in the Asia-Pacific region, according to data compiled by Bloomberg. While India’s inflation has been stoked mainly by shortages in food supply after last year’s worst monsoon rainfall in 37 years, officials are concerned a surfeit of cash in the economy will spur excessive demand for services and industrial goods. Prices paid by industrial workers in India rose almost 15 percent in December from a year earlier, the most in 11 years. Industrial production grew 16.8 percent in December, the quickest pace since at least 1994, prompting the central bank to say manufacturers are nearing capacity. Mukherjee raised the excise tax on almost all products to 10 percent from 8 percent in his budget to help trim the deficit. Prices Rise Indian oil retailers including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. increased gasoline prices after the levies were announced. Gasoline prices will be raised by 2.71 rupees a liter and diesel by 2.55 rupees a liter, Oil Secretary S. Sundareshan said. Tata Motors Ltd., India’s biggest truckmaker, will pass on the higher tax to consumers and may raise prices by as much as 70,000 rupees, Managing Director Prakash Telang said. Maruti Suzuki India Ltd. raised prices of various models by as much as 13,000 rupees with immediate effect, the company said in a statement on Feb. 26. Bharatiya Janata Party’s Sushma Swaraj , the main opposition leader in the lower house of parliament called the budget “inflationary” after higher taxes were imposed. Swaraj led a walk-out by her party during Mukherjee’s budget presentation. “Any kind of subsidy cut will require a trade-off between living with slightly higher inflation in the near term but with more sustainable growth dynamics over a medium term,” said Rajeev Malik , a Singapore-based regional economist at Macquarie Group Ltd. “I don’t think the move to tax fuel will mean a more aggressive tightening by the central bank.” Usha Thorat , a deputy governor at the central bank, told reporters in Mumbai yesterday that “the budget is positive for inflation reduction, in the sense it is in sync with the expectation that we outlined.” For Related News and Information: India Country Guide Page: COUN INR India Budget-Related Stories: INEL India industrial-output stories: INPIINDY CN India inflation: INWHOLEY HP Most-read India economy stories: MNI INDECO BN Benchmark interest-rate graph: INRPYLD GP M

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U.S. Stocks Retreat, Paring February Gain, as Confidence in Recovery Wanes

February 27, 2010

By Craig Trudell Feb. 27 (Bloomberg) — U.S. stocks declined this week, trimming the Standard & Poor’s 500 Index’s rally for February, as unexpected declines in consumer confidence and equipment orders signaled the economic recovery may lose momentum. American Express Co. and Caterpillar Inc. fell more than 2 percent after consumer confidence fell to the lowest level in 10 months and companies scaled back orders for durable goods, excluding transportation equipment. Coca-Cola Co. lost 5.4 percent as the world’s biggest soda maker agreed to buy Coca- Cola Enterprises Inc.’s North American bottler. H&R Block Inc. retreated 18 percent and Fluor Corp. lost 6.8 percent after saying 2010 earnings would miss forecasts. The S&P 500 decreased 0.4 percent to 1,104.49, posting the first slump in three weeks and paring its advance for the month to 2.9 percent. The Dow Jones Industrial Average slipped 77.09 points, or 0.7 percent, to 10,325.26. “Investors are coming to grips with the fact that maybe the economic recovery is not going to be as strong as they once thought,” said Greg Woodard , a strategist at Manning & Napier, which manages about $27 billion in Fairport, New York. “It’s going to be difficult for the consumer to pick up where monetary and fiscal stimulus left off.” As the U.S. economy recovered from its biggest contraction since the 1930s, the S&P 500 rallied as much as 70 percent from the 12-year low it reached in March. The equity rally stalled a month ago and the S&P 500 lost as much as 8.1 percent amid concern that the labor market isn’t recovering fast enough and that European budget deficits will slow growth. ‘Nascent’ Recovery Stocks rallied on Feb. 24, when Federal Reserve Chairman Ben S. Bernanke said the economy still requires low interest rates to spur demand given the “nascent” recovery. The Conference Board’s measure of consumer confidence fell to 46 in February, the lowest level since April. Its measure of current conditions decreased to 19.4, a 27-year low. Orders for durable goods excluding transportation fell 0.6 percent, the most since August, and sales of new homes declined 11 percent to an annual pace of 309,000, the lowest level on record. “The market is on hold until we get more convincing data that the recovery is still holding,” said Robert Baur , chief economist at Principal Global Investors, which oversees $215 billion in Des Moines, Iowa. Bernanke said during two days of testimony before the U.S. House Financial Services committee that slack labor markets and low inflation will allow the Federal Open Market Committee to keep the benchmark lending rate, which has been in a range of zero to 0.25 percent for more than a year, low “for an extended period.” Discount Rate Boost The testimony followed the Federal Reserve Board’s decision to raise the cost of direct loans to banks last week by a quarter-point to 0.75 percent. “We’re not going to see rates going up anytime soon,” Manning & Napier’s Woodard said. “There are lots of other steps the Fed can take prior to raising rates. That provides a nice backdrop for equities.” American Express, which generated almost half its 2009 revenue from U.S. credit cards, slumped 2.2 percent to $38.19 this week. Caterpillar, the world’s largest maker of bulldozers and excavators, fell 2.1 percent to $57.05. Coca-Cola lost 5.4 percent to $52.72. It agreed to pay $12.3 billion for the Coca-Cola Enterprises unit, more than six months after PepsiCo Inc. moved to bring its bottlers in-house to cut costs. Coca-Cola Enterprises surged 29 percent to $25.55. Unemployment H&R Block, the biggest U.S. tax preparer, plunged 18 percent to $17.28 after the company said unemployment curtailed tax returns and as TurboTax-owner Intuit Inc. won more business. Fluor, the largest publicly traded U.S. construction company, dropped 6.8 percent to $42.80 after lowering its 2010 earnings forecast . Monsanto Co. fell 9.1 percent to $70.65, helping send the S&P 500 Materials Index to a 2.4 percent for the week’s biggest drop among 10 industries . The world’s largest seed company said new genetically modified corn and soybeans it’s counting on to drive earnings this decade may be planted on fewer U.S. acres in 2010 than previously forecast. First Solar Inc. retreated 8.8 percent to $105.75 after Chairman Michael J. Ahearn sold more than 40 percent of his holding in the solar-panel maker. GameStop Corp. retreated 11 percent to $17.20 for the biggest S&P 500 decline behind H&R Block. The video-game retailer said Chief Financial Officer Catherine R. Smith resigned to join Wal-Mart Stores Inc., the world’s biggest retailer. Millipore Corp. soared 32 percent, the most in the S&P 500, to $94.41. Thermo Fisher Scientific Inc., the world’s largest maker of lab instruments, offered about $6 billion for Millipore Corp., seeking to expand its biotechnology business, according to two people close to the situation. Millipore is worth at least $115 a share, 21 percent more than the bid valued at about $95 from Thermo Fisher, Jefferies & Co. analyst Jon Wood said in a report. To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.net

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Berkshire Discloses Increased Stakes in Sanofi-Aventis, Britain’s Tesco

February 27, 2010

By Hugh Son Feb. 27 (Bloomberg) — Billionaire investor Warren Buffett ’s Berkshire Hathaway Inc . disclosed increased stakes in drugmaker Sanofi-Aventis SA and Tesco Plc, Britain’s largest retailer. Berkshire’s holdings of Sanofi-Aventis rose about 14 percent to 25.1 million shares and the stake in Tesco rose 3.1 percent to 234.2 million shares, the Omaha, Nebraska-based company said in a regulatory filing today. Berkshire now owns 1.9 percent of Sanofi and 3 percent of Tesco. To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

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Berkshire Profit Surges to $3.06 Billion as Buffett’s Derivatives Recover

February 27, 2010

By Andrew Frye and Jamie McGee Feb. 27 (Bloomberg) — Warren Buffett ’s Berkshire Hathaway Inc. said fourth-quarter profit jumped on improved investment results and the recovery of derivative bets tied to the world’s stock markets. Net income rose to $3.06 billion, or $1,969 a share, from $117 million, or $76, in the same period a year earlier, the Omaha, Nebraska-based company said today in its annual report . The profit increase, Berkshire’s third straight, helps rebuild a cash pile that diminished since 2007 as Buffett invested in financial firms bruised by the recession. Companies including Goldman Sachs Group Inc. that turned to Buffett for funding are now paying Berkshire interest of 10 percent or more. The shopping spree culminated with the November agreement to buy railroad Burlington Northern Santa Fe for $27 billion. “When the crisis hit full bore, he was the investor of last resort, so he got the terms he was looking for on the investments he made,” said Glenn Tongue , a partner at T2 Partners LLC, which owns Berkshire shares. Buffett is Berkshire’s chairman, chief executive officer and largest shareholder. Contracts linked to four equity indexes improved from the fourth quarter of 2008, when the global decline in stocks after the collapse of Lehman Brothers Holdings Inc . contributed to $4.61 billion in derivative losses at Berkshire. The losses reverse when the indexes, including the Standard & Poor’s 500 , climb closer to the levels they were at when Buffett made the deals near the market’s peak in 2006 and 2007. Stocks Soar Berkshire’s own stock has gained 52 percent in the past year as these so-called equity-index puts rebounded and the value of the firm’s top stocks rose. The Class A shares closed yesterday at $119,800, their highest since Oct. 21, 2008. The 20 largest holdings in its U.S. portfolio all increased in the past 12 months. Coca-Cola Co. , Berkshire’s top holding, climbed 29 percent. Wells Fargo & Co. doubled and American Express Co. tripled. The U.S. portfolio was valued at $57.9 billion at Dec. 31, a 12 percent rise from a year earlier. The surge helped increase Berkshire’s book value last year. Buffett typically highlights book value, the measure of assets minus liabilities, in the first sentence of his annual letter to shareholders. In his “ owner’s manual ” for Berkshire investors, Buffett says he considers the figure to be the best objective measure of a company’s success. Buffett added a $2.6 billion investment in Swiss Reinsurance Co., completed in March, to a portfolio of financing deals that he struck during the credit freeze as other investors were withholding funds. The Swiss Re transaction pays a 12 percent coupon, while Berkshire gets 10 percent annually on its $5 billion injection in Goldman Sachs and its $3 billion of preferred shares in General Electric Co . Railroad Replacement Berkshire joined the S&P this month after completing the takeover of Fort Worth, Texas-based Burlington Northern. The move prompted managers of funds that attempt to recreate the returns of the index to add Buffett’s company to their portfolios. Buffett cut jobs and reshuffled managers at Berkshire’s operating companies last year as retail and industrial demand suffered in the recession. He replaced the CEOs of NetJets, the money-losing luxury flight provider, and jeweler Helzberg Diamond Shops Inc. This month, Berkshire reported its workforce fell by 9.8 percent since the end of 2008 to 222,000 employees. Buffett was stripped of his final AAA credit grade from a major rating firm this month when Standard & Poor’s downgraded Berkshire. The cut, which followed reductions last year by Fitch Ratings and Moody’s Investors Service, came as Berkshire neared the completion of the Burlington Northern takeover. To contact the reporters on this story: Andrew Frye in New York at afrye@bloomberg.net ; Jamie McGee in New York at jmcgee8@bloomberg.net .

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NIREM concerned over lack of real estate education in India

February 27, 2010

WITH THE dynamic growth of real estate in India over the last few years, the need for manpower also increased tremendously. Moreover, in the absence of trained and competent professionals, real estate employers including real estate

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Kurt Friese: Pig Business or Business Pigs?

February 27, 2010

Ever feel like you were playing checkers and the other guy was playing chess? That’s the sort of feeling I get often when I watch many of the recent spate of food documentaries to be released. Activists announce that this or that is wrong with the food system, and on the rare occasion when something appears to be getting done about it, the folks who are doing things badly simply change their tactics, but not their strategy. It happened again while watching the British documentary film Pig Business . I watched this film in several ten-minute segments via YouTube because it hasn’t been released in the US, primarily due to legal pressure brought upon the producer (Tracy Worcester) by the film’s main “villain,” Smithfield Foods (the world’s largest pork producer). Despite four letters threatening litigation, the UK’s Channel 4 played the film last summer. But since no US insurer would back the film’s release here in the States due to concerns over threatened lawsuits from Smithfield, it has become essentially a black market film. Thus as Americans have fought censorship by our government for more than 200 years, corporate censorship continues unabated. Smithfield does, in one sense, have cause for concern: this film certainly does not show their company in the most favorable light. Right off the bat the viewer is struck with some rather gruesome images of pigs being brutally mistreated, apparently at the hands of workers in Smithfield-run facilities. We hear from farmers and neighbors complaining of health problems that they tie to the fumes and water contamination from Smithfield hoglots. When this large corporation and their methods of competition had pushed the owner of a small family farm in Poland out of business, he said, “I don’t know whether I should retire, hang myself, or emigrate.” In Poland in the early 90′s, there were 27,500 independent pig farmers. Today there are 2,200 hoglots, and 1,600 of them are wholly owned by Smithfield Foods. Smithfield has 52,000 employees processing 27 million pigs per year in 15 countries and accruing annual sales around $12 billion. Each of those factory farms in Poland replaced 10 family farms with 2-3 minimum wage jobs. Any objective accountant might call that efficiency, but one protester in the film had another way to describe it: Why is it, when people are in bondage to their government it is called ‘tyranny,’ but when the oppressor is a multinational corporation, it is called ‘efficiency?’ It was precisely this form of “efficiency” the art and social critic John Ruskin had in mind when he said “There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey.” Smithfield is not alone under Worcester’s microscope: she takes large financial institutions to task as well. In an interview with noted Belgian economist Bernard Lietaer , he points out that Big Finance has its fingers in absolutely everything-making 1/3 of all political contributions in the US. This is a figure that is sure to only increase in light of the Supreme Court’s recent decision in the Citizen’s United case. Big Money’s influence, along with that of many other large and wealthy corporations, dictates the type and scope of laws throughout the US and the world. My daddy used to call this the Golden Rule: He who has the gold makes the rules. That influence is precisely what makes the competitive practices of Smithfield (not to mention many other agribusiness conglomerates) patently unfair. As Pig Business points out, if the likes of Smithfield had to pay for the damages they cause-to the environment and to human health-then any small farmer in the world could out-compete them. But they don’t, because the game is rigged. So most of the time agribusiness will take its profits and go obliviously on its way. But if anyone points out that this emperor has no clothes, they have scads of lawyers and PR professionals to make certain no one hears. Watching Pig Business on YouTube is one small way to get past their invisible hand.

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GDP Shows U.S. Economy Expanded Strongly in the Fourth Quarter, Yet More Recent Data Suggest the Recovery Will Stall

February 27, 2010

GDP Shows U.S. Economy Expanded Strongly in the Fourth Quarter, Yet More Recent Data Suggest the Recovery Will Stall

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The Asian region releases much data but with no effect on the market

February 27, 2010

The Asian region releases much data but with no effect on the market

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Euro Zone Risks Moving Away From Recovery, While U.K. Growth Figures Surprise Markets

February 27, 2010

Euro Zone Risks Moving Away From Recovery, While U.K. Growth Figures Surprise Markets

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iSOFT Group Limited (ASX:ISF) Interview With CEO Mr Gary Cohen Explaining Various Impacts From The First Half Result

February 27, 2010

iSOFT Group Limited (ASX:ISF) Interview With CEO Mr Gary Cohen Explaining Various Impacts From The First Half Result

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Montreal set to welcome leading international financial experts

February 27, 2010

Montreal set to welcome leading international financial experts

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Orckit-Corrigent strengthens its presence in India

February 27, 2010

Orckit-Corrigent strengthens its presence in India

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Navistar and Iveco dissolve Australian truck marketing relationship

February 27, 2010

Navistar and Iveco dissolve Australian truck marketing relationship

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South Korea’s foreign investments hit $605b

February 27, 2010

South Korea’s foreign investments hit $605b

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Korea Expressway wins $2.65m deal in Cambodia

February 27, 2010

Korea Expressway wins $2.65m deal in Cambodia

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Singapore manufacturing output jumps 39.4%

February 27, 2010

Singapore manufacturing output jumps 39.4%

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US existing home sales decline in January

February 27, 2010

US existing home sales decline in January

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India firm on currency identity

February 27, 2010

India firm on currency identity

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Corporate India hails budget, disappointed at hike in MAT

February 27, 2010

Corporate India hails budget, disappointed at hike in MAT

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Indian businessmen welcome budget

February 27, 2010

Indian businessmen welcome budget

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Editorial: Icelanders’ plight

February 27, 2010

Editorial: Icelanders’ plight

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Chile Struck by Magnitude 8.8 Earthquake, at Least Six Are Reported Killed

February 27, 2010

By Mike Millard Feb. 27 (Bloomberg) — Chile was rocked by a magnitude 8.8 earthquake, the USGS said on its Web site . A tsunami warning was issued by the Pacific Tsunami Warning Center for Chile and Peru, and later extended to Colombia, Panama, Costa Rica and Antarctica. The temblor struck 197 miles (317 kilometers) southwest of the capital, Santiago, at a depth of 36.9 miles at 3:34 a.m. local time, the USGS said. “This is a major damaging earthquake,” Randy Baldwin of the USGS told the BBC in an interview. “For any population in the area it would be reasonable to expect some damage occcuring.” Chile’s Radio Cooperativa reported that the quake struck near a copper mining area, that power and telephone lines in Santiago were cut and that the airport was closed. Chile was shaken in 1960 by the most powerful earthquake on record, a magnitude 9.5 temblor that killed about 1,655 people, according to the USGS Web site. A further 211 people were killed by tsunamis generated by the quake that struck Hawaii, Japan and the Philippines. Earlier today, a magnitude 7 earthquake hit near Okinawa, Japan, at about 5:31 a.m. local time, the U.S. Geological Survey said on its Web site. Last month, Haiti was struck by a magnitude 7 quake. The death toll may reach 300,000, Psresident Rene Preval said Feb. 21. More than 1 million people were left homeless. To contact the reporter on this story: Mike Millard in Singapore at Mmillard2@bloomberg.net ;

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Wen Says He’s `Confident’ Government Can Keep China Home Prices Affordable

February 27, 2010

Feb. 27 (Bloomberg) — China Premier Wen Jiabao said he’s “confident” he can manage the nation’s soaring property market and keep home prices at a reasonable level during his tenure. The government aims to boost the supply of affordable housing and will use “economic and legal measures” to curb home purchases for speculative purposes, Wen said during a Webcast today from Beijing. China’s policy makers aim to avert asset bubbles and restrain inflation after banks extended 19 percent of this year’s 7.5 trillion yuan ($1.1 trillion) lending targets in January and property prices climbed the most in 21 months. China’s growth accelerated to 10.7 percent in the fourth quarter, the fastest pace since 2007. The central bank earlier this month ordered lenders to set aside more deposits as reserves for the second time in a month to cool the world’s fastest-growing economy. Wen said today that 2010 will be the most “complicated” year for the Chinese economy as the government needs to strike a balance among maintaining “stable and relatively fast” growth, adjust the nation’s growth model and manage inflation expectations. He reiterated that China will continue a “moderately loose” monetary policy this year. Consumer prices rose 1.5 percent from a year earlier in January, down from 1.9 percent in December, on smaller gains in food prices. Inflation will accelerate to 3.6 percent by the end of June, according to a Bloomberg News survey of economists. Property prices across 70 cities surged 9.5 percent in January from a year earlier, exports climbed and producer-price inflation accelerated. Trade Surplus Last year’s record lending of 9.59 trillion yuan and a 4 trillion yuan stimulus package have helped the nation to lead the recovery from the first global recession since World War II. The world may again count on China as the biggest engine of growth. The World Bank last month raised its forecast for the global expansion in 2010 to 2.7 percent from 2 percent in June, and predicted 9 percent growth in China, which is poised to overtake Japan as No. 2 in GDP rankings this year. Wen said the U.S. should ease restrictions on exports of technology products as a way to narrow China’s trade surplus. China and U.S. should settle trade friction through negotiations rather than sanctions, Wen said today, adding he hopes 2010 won’t be an “unpeaceful” year for the two nations. U.S. Senator Charles Schumer and 14 colleagues said this week Chinese exporters should be hit with stiffer U.S. tariffs to compensate for the unfair advantage they get from an undervalued yuan. China’s central bank buys dollars to keep the yuan from strengthening, purchases that helped drive China’s foreign- exchange reserves 23 percent higher to a record $2.4 trillion last year. Japan’s reserves are the world’s second largest at $1 trillion. — Luo Jun . Editors: Virginia Van Natta , Jim McDonald To contact Bloomberg News staff of this story: Luo Jun in Shanghai at +8621-6104-7021 or jluo6@bloomberg.net To contact the editor responsible for this story: Mike Millard at +65-6212-1519 or mmillard@bloomberg.net

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Chile Struck by Magnitude 8.8 Earthquake, Tsunami Alert Issued, USGS Says

February 27, 2010

By Mike Millard Feb. 27 (Bloomberg) — Chile was rocked by a magnitude 8.8 earthquake, the USGS said on its Web site . A tsunami warning was issued by the Pacific Tsunami Warning Center for Chile and Peru. The temblor struck 197 miles (317 kilometers) southwest of the capital, Santiago, at a depth of 36.9 miles at 3:34 a.m. local time, the USGS said. Chile’s Radio Cooperativa reported that the quake was in the Antofagasta region, a copper mining area. Power and telephone lines in Santiago were cut. Chile was shaken in 1960 by the most powerful earthquake on record, a magnitude 9.5 earthquake that killed about 1,655 people, according to the USGS Web site. A further 211 people were killed by tsunamis generated by the quake that struck Hawaii, Japan and the Philippines. Last month, Haiti was struck by a magnitude 7 quake. The death toll may reach 300,000, President Rene Preval said Feb. 21. More than 1 million people were left homeless. To contact the reporter on this story: Mike Millard in Singapore at Mmillard2@bloomberg.net ;

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Asian Currencies Advance as Reports Show Economic Recovery Is Gaining Pace

February 27, 2010

By David Yong Feb. 27 (Bloomberg) — Asian currencies strengthened this week, led by Singapore’s dollar and Malaysia’s ringgit, after government reports showed economic recoveries in the region are gathering pace. The MSCI Asia-Pacific Index of shares rallied 2.4 percent and bond yield premiums helped attract fixed-income investors as the Federal Reserve damped speculation U.S. interest rates will be raised. The Philippines predicts economic growth will exceed the government’s target this year, while Taiwan data showed export orders surged the most on record. “Recovery momentum in Asia is still intact and should continue to benefit from the uptick in the manufacturing cycle,” said Sim Moh Siong , a foreign-exchange strategist at Bank of Singapore Ltd. “The long-term picture should continue to favor Asian and emerging-market currencies.” Singapore’s dollar appreciated 0.7 percent to S$1.4058 against the U.S. currency, while the ringgit rose 0.3 percent to 3.4000, according to data compiled by Bloomberg. The peso advanced 0.3 percent to 46.135. South Korea’s won and Indonesian rupiah have led regional gains in the past 12 months, strengthening 31 percent and 28 percent, respectively. Interest rates of zero to 0.25 percent in the U.S. spurred so-called carry trades, in which investors borrow at low rates to purchase higher-yielding assets elsewhere. ‘Yield Hungry Investors’ Emerging-market bond funds received net inflows for a 16th week from “yield hungry investors,” according to a Feb. 25 statement from EPFR Global. Investors ploughed more than $3.5 billion into debt sold by developing nations this year, after investing a record $8 billion in 2009, said the Cambridge, Massachusetts-based research company that tracks $12 trillion of assets worldwide. Fed Chairman Ben S. Bernanke said this week that the U.S. economy is in a “nascent” recovery that still requires its target rate for overnight loans to be kept at near zero “for an extended period.” The Philippine peso is the best-performing currency in Asia this month on optimism money sent home by Filipinos working abroad will increase this year. Economic growth may exceed the government’s 3.6 percent target in 2010 compared with an annualized 0.9 percent expansion last year, central bank Deputy Governor Diwa Guinigundo said on Feb. 25. The 9 million Philippine nationals employed overseas repatriated a record $17.3 billion in 2009, up 5.6 percent from the previous year. Those remittances will rise 6 percent this year, according to official estimate. “Remittances are still a big story and prospects for growth are better,” said Lito Mercado , head of trading at Rizal Commercial Banking Corp. in Manila. “Growth in remittances could be closer to 10 percent this year.” Manufacturing Boost Singapore’s industrial production rose 39.4 percent in January from a year earlier, twice the pace estimated by economists in a Bloomberg survey, according to government figures published yesterday. Taiwan, Thailand and Malaysia this week released data showing their economies emerged from recessions in the final quarter of 2009, with all three reporting faster expansions than economists anticipated. “The Asia data flow remains fairly strong,” Sebastien Barbe , head of emerging-market research at Credit Agricole CIB in Hong Kong, wrote in a Feb. 26 research note. Improved Confidence South Korea’s won appreciated 0.1 percent this week to 1,159.85 per dollar in Seoul. It gained 0.3 percent yesterday, as the outlook for factory production brightened. An index measuring manufacturers’ expectations climbed to a seven-year high of 101, from 92 a month ago, the Bank of Korea said yesterday. “The manufacturing data helps the won,” said Thio Chin Loo , a senior currency strategist at BNP Paribas SA in Singapore. “There is some profit-taking in dollar positions before the weekend.” India’s rupee strengthened yesterday by the most in almost seven weeks on speculation sales of state assets will draw investment from abroad. The country plans to raise 400 billion rupees ($8.7 billion) selling stakes in state-owned companies in the year beginning April 1, versus about 250 billion rupees in the current fiscal year, Finance Minister Pranab Mukherjee said. The rupee climbed 0.6 percent to 46.126 in Mumbai yesterday, versus the greenback, giving a weekly advance of 0.4 percent, according to data compiled by Bloomberg. Gross domestic product rose 6 percent from a year earlier in the fourth quarter, after gaining 7.9 percent in the previous three months, and Mukherjee said growth may reach 8.5 percent in the coming fiscal year. Elsewhere, Taiwan’s dollar rose 0.1 percent for the week to NT$32.085 against its U.S. counterpart and the baht advanced 0.3 percent to 33.07. China’s yuan advanced 0.1 percent to 6.8260, from 6.8330 on Feb. 12, before the weeklong Lunar New Year holiday. To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net .

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Treasuries Gain on U.S. Economic Reports, Threat to Greece’s Debt Ratings

February 27, 2010

By Cordell Eddings and Susanne Walker Feb. 27 (Bloomberg) — Treasuries advanced for the first time in three weeks as weaker-than-forecast economic reports and the threat of credit-rating downgrades for Greece spurred demand for the safety of U.S. government debt. Yields on 30-year bonds fell the most this week in six months as reports showed sales of new and existing homes unexpectedly tumbled, consumer confidence dropped and fourth- quarter consumer spending grew less than forecast. A report on March 5 is forecast to show that U.S. employers cut 50,000 jobs in February. “The government did a lot to prop up our economy and get things going, but there just has been no follow-through from consumers or employment,” said Justin Hoogendoorn , Chicago- based chief investment strategist at Bank of Montreal’s BMO Capital Markets unit. “Add the sovereign concerns and you have a lot of uncertainty.” The benchmark 10-year note yield fell 16 basis points, the most since the five days ended Nov. 27, to 3.62 percent, according to BGCantor Market Data. A basis point is 0.01 percentage point. The 3.625 percent security due February 2020 rose 1 10/32, or $13.13 per $1,000 face amount, to 100 2/32. The 30-year bond yield decreased 15 basis points, the most since Aug. 28, to 4.56 percent. The yield difference between 2- and 10-year notes, known as the yield curve, was at 2.81 percentage points after narrowing for a second week. It touched a record high of 2.94 percentage points on Feb. 18. Treasuries advanced for a second month, returning investors 0.12 percent after a 1.6 percent gain in January, according to Bank of America Corp.’s Merrill Lynch index data. Greece’s Ratings Standard & Poor’s and Moody’s Investors Service both said this week that Greece faces potential debt rating downgrades as it struggles to reduce the European Union’s biggest budget shortfall. “The situation in Greece has been a factor for the last few weeks,” said Tom Roth , senior Treasury trader in New York at Mitsubishi UFJ Securities. “Any uncertainty will cause people to stay close to home or stay in quality products. Uncertainty helps the Treasury market.” Concern that Greek fiscal problems may spread boosted demand at a $32 billion auction of U.S. seven-year securities on Feb. 25. The number of bids was 2.98 times the securities offered, the highest since the note was reintroduced in February 2009 after a 16-year hiatus. The sale was the last of four auctions this week totaling a record $126 billion of 2-, 5- and 7-year notes and $8 billion of 30-year inflation-linked bonds. Supply ‘Well Absorbed’ “Supply surely hasn’t become the concern that many had feared and continues to be well absorbed,” Martin Mitchell , head government bond trader at the Baltimore unit of Stifel Nicolaus & Co., a St. Louis-based brokerage firm, wrote in a note to clients. “Friendly data” and Federal Reserve Chairman Ben S. Bernanke ’s congressional testimony this week did nothing to derail the positive sentiment, he said. Bernanke said the U.S. economy is in a “nascent” recovery. Conditions are likely to warrant “exceptionally low levels” of the benchmark interest rate for an extended but unspecified period, he said, delivering his semiannual report on monetary policy. Sales of previously owned U.S. homes unexpectedly tumbled in January for a second month. Purchases fell 7.2 percent, the second-largest drop ever, the National Association of Realtors said yesterday in Washington. The data followed a Commerce Department report on Feb. 24 that showed new-home sales dropped to a record low last month, an annual pace of 309,000. Confidence among U.S. consumers fell in February to the lowest level in 10 months, the Conference Board’s confidence index showed on Feb. 23. Consumer Spending A Commerce Department report yesterday showed consumer spending rose at a 1.7 percent pace from October through December, compared with a 2 percent rate forecast by economists in a Bloomberg News survey. Revised gross domestic product for the quarter increased at a 5.9 percent annual pace, the fastest in six years. The median forecast was for a 5.7 percent advance. “The economic data has been mixed to outright negative,” said George Goncalves , head of interest-rate strategy at Nomura Holdings Inc., one of 18 primary dealers that trade directly with the Federal Reserve. “People expected to see brighter horizons, but actually the numbers are coming in weaker.” Traders cut bets the Fed will raise the cost of borrowing. Rate futures on the Chicago Board of Trade yesterday showed a 48 percent chance U.S. policy makers would raise the target lending rate by November. The odds were 61 percent a week earlier. The difference in yields between 10-year inflation-linked Treasuries and comparable conventional U.S. notes, known as the breakeven rate, touched 2.14 percentage points yesterday, the lowest since Dec. 11. The rate, which reached a 2010 high of 2.49 percent on Jan. 11, is a measure of traders’ expectations for inflation. To contact the reporters on this story: Cordell Eddings in New York at ceddings@bloomberg.net ; Susanne Walker in New York at swalker33@bloomberg.net

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Bank of America Pays $29.9 Million to Montag, Keeps Merrill Lynch Promises

February 27, 2010

By Dakin Campbell Feb. 27 (Bloomberg) — Bank of America Corp. gave Thomas Montag a $29.9 million compensation package in 2009 for running its global banking and markets units and to fulfill promises made when Merrill Lynch & Co. hired him in 2008. Montag, president of the unit that includes trading and investment banking, received more than the $6.51 million awarded to new Chief Executive Officer Brian Moynihan , according to a regulatory filing . Also yesterday, Citigroup Inc. said CEO Vikram Pandit was paid $125,001 for last year, reflecting compensation in the weeks before he voluntarily took a cut to $1 a year. Wells Fargo & Co. announced it had cut the 2010 base pay for most top executives. “With regard to Bank of America, this is another example of pay for attendance rather than pay for performance,” Frank Glassner , CEO of Veritas Executive Compensation Consultants LLC in San Francisco, said in a phone interview. Banks are working to retain executives while facing pressure from lawmakers to cut compensation and quell public anger about taxpayer bailouts. Former Bank of America CEO Kenneth D. Lewis , who stepped down last year after four decades at the bank, accumulated more than $80 million in benefits during his career, according to the company’s filing. Keeping Montag was a priority last year for Bank of America, the biggest U.S. bank. The Charlotte, North Carolina- based company installed new management and repaid $45 billion in U.S. bailout funds to escape federal caps on compensation. Montag, Price Montag, 53, exceeded the $6.12 million earmarked for Joe Price , the former finance chief now in charge of consumer banking. Montag joined Bank of America four months before it agreed to buy Merrill Lynch in September 2008. John Thain , then Merrill Lynch’s CEO, “probably thought that having Montag around would make Merrill more attractive,” said David Schmidt , senior consultant at James F. Reda & Associates in New York, which specializes in compensation. “Companies are willing to put a lot of money on the table to get somebody good.” Wells Fargo, based in San Francisco, halved CEO John Stumpf’s salary to $2.8 million from $5.6 million for 2010 and slashed pay for most top executives, according to a company filing. The company said salaries would be paid in cash instead of last year’s mix of cash and stock. The reduction reflects the board’s desire to tie more pay to company performance because additional compensation may take the form of shares whose value can rise or fall with the firm, spokeswoman Melissa Murray said in an interview. Salary Doubles David Carroll , Wells Fargo’s head of wealth management, saw his salary more than double to $1.5 million from $700,000. Chief Financial Officer Howard Atkins will receive $1.7 million in 2010, down from $3.4 million last year. Base pay for both David Hoyt , head of wholesale banking, and Mark Oman , head of home and consumer finance, was cut to $2 million from $3.9 million, the company said. The salaries take effect March 1. The package for Citigroup’s Pandit, 53, reflects the bank’s failure to turn a profit last year and eliminate lingering bailout obligations from late 2008. Pandit, who got $38 million in 2008, used a February 2009 congressional hearing to declare that he would cut his own pay to $1 a year until the bank returned to profitability. Citigroup had a net loss of $1.6 billion in 2009 after losing $27.7 billion the prior year. Citigroup Vice Chairman Edward “Ned” Kelly , who was chief financial officer from March to July and negotiated most of the bank’s deals with the government, got $8 million for 2009, including salary, bonus and other pay, New York-based Citigroup said yesterday in a regulatory filing. Trading and investment- banking chief John Havens got $9.5 million. Executives Other Citigroup executives whose pay was disclosed in the filing include Latin America regional chief Manuel Medina-Mora , who got $9 million for 2009. Chief Financial Officer John Gerspach got $5 million. Alberto Verme , Citigroup’s top executive for Central and Eastern Europe, got $7.43 million. Compensation for Bank of America’s Montag included $29.3 million of stock awards and $586,539 of salary. The package included a $20 million restricted stock award set in May 2008 when Merrill Lynch hired Montag, “well before the Bank of America acquisition ,” the lender said in the filing. The lender’s global banking and markets units, headed by Montag, reported a profit of $10.2 billion last year, helping offset losses from the company’s home-loan and credit-card businesses. Montag’s total compensation is among the highest reported by U.S. bankers this year. JPMorgan Chase & Co.’s Jamie Dimon received $17 million. Lloyd Blankfein , head of Goldman Sachs Group Inc., received $9.7 million. To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

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Fannie Mae’s Aid Request Reaches $76.2 Billion After 10th Straight Loss

February 27, 2010

By Dawn Kopecki Feb. 27 (Bloomberg) — Fannie Mae will seek $15.3 billion in U.S. aid, bringing the total owed under a government lifeline to $76.2 billion, after its 10th consecutive quarterly loss. The mortgage-finance company posted a fourth-quarter net loss of $16.3 billion, or $2.87 a share, Washington-based Fannie Mae said in a filing yesterday with the Securities and Exchange Commission. Fannie Mae, which owns or guarantees about 28 percent of the $11.8 trillion U.S. home-loan market, has been hobbled by a three-year housing slump that wiped 28 percent from home values nationwide and led to record foreclosures . The company, which posted $120.5 billion in losses over the previous nine quarters, and rival Freddie Mac were seized by regulators in September 2008. “Our financial results for 2009 reflected the continued adverse impact of the weak economy and housing market, which has resulted in record mortgage delinquencies and contributed to our recording significant credit-related expenses and net losses during each quarter of the year,” Fannie Mae said in the filing. For the full year, Fannie Mae’s loss widened to $74.4 billion from $59.8 billion in 2008. The company’s shares, which peaked at $87.81 in December 2000, closed at 99 cents yesterday in New York Stock Exchange composite trading. The Treasury owns 79.9 percent of the company’s outstanding common stock. Avoiding Receiver After the next government payout, Fannie Mae’s borrowings will carry an annual dividend cost of $7.6 billion, which the company said it will repay by borrowing more money from the Treasury. “This amount exceeds our reported annual net income for all but one of the last eight years, in most cases by a significant margin,” the company said. The company said the ability to tap continuing cash infusions from the Treasury this year “is critical to keeping us solvent and avoiding the appointment of a receiver.” The loss in the fourth quarter was driven in part by a $5 billion writedown on low-income housing tax credits that the Treasury Department barred the company from selling. Rival Freddie Mac took a $3.4 billion charge for the same reason. Losses at Fannie Mae are likely to grow with rising unemployment and costs to implement President Barack Obama’s plans to reduce foreclosures, the company said. Housing Slump Fannie Mae and McLean, Virginia-based Freddie Mac survived last year on investments the government made in the companies. The Treasury on Christmas Eve removed a $200 billion aid limit on each company, extending unlimited backing through 2012. The two companies own or guarantee more than $5 trillion in U.S. residential debt, and were responsible for as much as 75 percent of the new mortgages made last year. A record 3 million U.S. homes will be repossessed by lenders this year as unemployment and depressed home values leave borrowers unable to sell or make their house payments, according to a RealtyTrac Inc. forecast last month. Last year there were 2.82 million foreclosures, the most since the Irvine, California-based company began compiling data in 2005. Fannie Mae and smaller rival Freddie Mac were chartered by the government primarily to lower the cost of homeownership by buying mortgages from lenders, freeing up cash at banks to make more loans. The companies make money by financing mortgage-asset purchases with lower-cost debt and by charging fees to guarantee securities they create out of home loans from lenders. Treasury Borrowings Fannie Mae’s net worth , or the difference between assets and liabilities, was negative $15.3 billion as of Dec. 31, compared with negative $15 billion on Sept. 30 and negative $10.6 billion on June 30, according to company statements. For the fourth quarter, Fannie Mae decreased reserves for future credit losses to $64.9 billion from $65.9 billion in the previous quarter. The amount of nonperforming loans that Fannie Mae guarantees for other investors rose to $174.6 billion from $163.9 billion in the third quarter, according to the filing. Fannie Mae also owned $41.9 billion in non-performing loans as of Dec. 31, up from $34.2 billion in the third quarter. The fair value of Fannie Mae’s assets was negative $98.8 billion last quarter, compared with negative $90.4 billion at the end of September. Future of Companies The Obama administration will wait until next year to seek legislation that addresses the future of Fannie Mae and Freddie Mac, Treasury Secretary Timothy F. Geithner told the House Budget Committee on Feb. 24. “We are going to propose reforms to the Congress next year to try to make sure we bring about fundamental change in the housing market and get ourselves in a position where the government is playing a less risky, but more constructive role in supporting housing markets,” Geithner said. “That’s going to be a difficult set of reforms.” The Treasury and the companies’ regulator, the Federal Housing Finance Agency, blocked Freddie Mac and Fannie Mae from selling their low-income housing tax credits, which can only be recognized if the companies expect to be profitable. The Treasury found that an agreement Fannie Mae had to sell about half of its credits would have cost taxpayers more than the company would gain from the deal, according to a November letter to that company. To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net .

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Why Today’s Lenders Need a Solid Borrower Plan

February 27, 2010

must look at the general and local economies and particularly at local employment trends, which directly correlate to real estate values. We also must consider the massive wave of maturing commercial loans. When this wave begins, borrowers will face a

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Paul Fried

February 27, 2010

must look at the general and local economies and particularly at local employment trends, which directly correlate to real estate values. We also must consider the massive wave of maturing commercial loans. When this wave begins, borrowers will face a

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