ireland

Sarkozy Ally Wins European Finance Post, Presaging Fight Over Regulations

November 27, 2009

By Ben Moshinsky Nov. 28 (Bloomberg) — French President Nicolas Sarkozy won his bid to install an ally as the European Commission’s next financial-services regulator, fueling British concern that traders and hedge funds will face stricter rules. Michel Barnier , a former French agriculture minister, was picked by Commission President Jose Barroso to lead a push for tougher bank regulation as part of a new team that he announced yesterday. Barroso rebuffed efforts to split financial oversight from enforcing the EU’s internal-market rules. French officials have pushed for tighter regulations on hedge funds than has outgoing internal-markets chief Charlie McCreevy of Ireland and criticized him for not responding forcefully enough to the financial crisis. The U.K., seeking to protect its financial-services industry, has tried to weaken proposed rules for hedge funds and private-equity managers. “Financial services are a vital British economic interest and, while we want to coordinate regulation internationally, the European Commission’s proposals have the potential to do serious harm to our financial-services industry,” William Hague , who speaks for the U.K.’s opposition Conservative Party on foreign policy, said in an e-mailed statement. Seeking to allay British concerns that France would take almost total control of financial regulation, Barroso appointed Jonathan Faull , a U.K. diplomat at the commission, as director general of financial services, a senior staff role. “I’m pragmatic, I’m ready to work with everyone,” Barnier said at a press conference in Paris. “You don’t need to convince me of the importance of London as a financial center. It was my initiative to have a British deputy. It’s not the first time I’ve had one, it’s always worked very well.” Commission Appointments The 27-member commission, which followed the appointment last week of Belgium’s Herman Van Rompuy as president and Britain’s Catherine Ashton as foreign minister, includes Spain’s Joaquin Almunia as antitrust chief, Finland’s Olli Rehn as economy commissioner and Karel De Gucht of Belgium as the top trade negotiator. Denmark’s Connie Hedegaard will be climate commissioner, Guenther Oettinger of Germany energy chief and Italy’s Antonio Tajani industrial-policy head. Sarkozy began his public campaign for the internal-market job immediately after Van Rompuy and Ashton were named Nov. 19. Were Barnier, 58, to follow Sarkozy’s views, London’s financial firms would face tougher laws from Europe. Sarkozy said in May he wanted a European banking regulator with “real sanctioning power.” “We’ll work with whoever we get,” Lesley McLeod , spokeswoman at the British Bankers’ Association, said in a telephone interview in London. U.K. Position The U.K. is currently negotiating with other member states to weaken the powers of European banking regulator proposed by the commission in September. Talks are set to continue at a meeting of European finance ministers in Brussels next week. Barnier will oversee the development of legislation affecting all areas of financial activity, from bank failures to hedge funds and over-the-counter derivatives trading. The commission hinted at imposing limits on the size of bets traders can make on movements in commodity prices, while the U.K. hedge fund industry faces debt and bonus restrictions. “I’d be more worried about the Germans than the French,” said Peter O’Dwyer, director at Trinity Fund Administration Ltd., a Dublin-based fund administrator. “The French and German agendas are different in this directive in my opinion, the French interest is building up Paris as a financial center, and the German agenda is keeping private equity funds out of Germany.” Splitting the Job Barroso said he decided against splitting financial regulation from duties for overseeing the internal EU market of 500 million consumers. Financial services will “probably” be part of the duties for the commissioner for economic and monetary affairs “in the future,” Barroso said. “That should come only when we have a real internal market for financial services.” Barnier, who was France’s minister for agriculture from 2007 to 2009, said in a May 2009 interview that speculation in agricultural commodities was “inexcusable.” The commission is drafting regulations for derivatives trading that will encompass food-commodity trading. The move marks Barnier’s second time working at the EU regulator in Brussels, where he was commissioner for regional policy from 1999 to 2004. After leaving he immediately became foreign minister of France in Jean- Pierre Raffarin’s government. Barnier, who helped organize the 1992 Winter Olympics in Albertville, France, started his political career at 27, when he was elected to the French National Assembly as a deputy for the Savoie region. To contact the reporters on this story: Ben Moshinsky in Brussels at bmoshinsky@bloomberg.net

Read the full article →

Sarkozy Ally Wins European Finance Post, Presaging Fight Over Regulations

November 27, 2009

By Ben Moshinsky Nov. 28 (Bloomberg) — French President Nicolas Sarkozy won his bid to install an ally as the European Commission’s next financial-services regulator, fueling British concern that traders and hedge funds will face stricter rules. Michel Barnier , a former French agriculture minister, was picked by Commission President Jose Barroso to lead a push for tougher bank regulation as part of a new team that he announced yesterday. Barroso rebuffed efforts to split financial oversight from enforcing the EU’s internal-market rules. French officials have pushed for tighter regulations on hedge funds than has outgoing internal-markets chief Charlie McCreevy of Ireland and criticized him for not responding forcefully enough to the financial crisis. The U.K., seeking to protect its financial-services industry, has tried to weaken proposed rules for hedge funds and private-equity managers. “Financial services are a vital British economic interest and, while we want to coordinate regulation internationally, the European Commission’s proposals have the potential to do serious harm to our financial-services industry,” William Hague , who speaks for the U.K.’s opposition Conservative Party on foreign policy, said in an e-mailed statement. Seeking to allay British concerns that France would take almost total control of financial regulation, Barroso appointed Jonathan Faull , a U.K. diplomat at the commission, as director general of financial services, a senior staff role. “I’m pragmatic, I’m ready to work with everyone,” Barnier said at a press conference in Paris. “You don’t need to convince me of the importance of London as a financial center. It was my initiative to have a British deputy. It’s not the first time I’ve had one, it’s always worked very well.” Commission Appointments The 27-member commission, which followed the appointment last week of Belgium’s Herman Van Rompuy as president and Britain’s Catherine Ashton as foreign minister, includes Spain’s Joaquin Almunia as antitrust chief, Finland’s Olli Rehn as economy commissioner and Karel De Gucht of Belgium as the top trade negotiator. Denmark’s Connie Hedegaard will be climate commissioner, Guenther Oettinger of Germany energy chief and Italy’s Antonio Tajani industrial-policy head. Sarkozy began his public campaign for the internal-market job immediately after Van Rompuy and Ashton were named Nov. 19. Were Barnier, 58, to follow Sarkozy’s views, London’s financial firms would face tougher laws from Europe. Sarkozy said in May he wanted a European banking regulator with “real sanctioning power.” “We’ll work with whoever we get,” Lesley McLeod , spokeswoman at the British Bankers’ Association, said in a telephone interview in London. U.K. Position The U.K. is currently negotiating with other member states to weaken the powers of European banking regulator proposed by the commission in September. Talks are set to continue at a meeting of European finance ministers in Brussels next week. Barnier will oversee the development of legislation affecting all areas of financial activity, from bank failures to hedge funds and over-the-counter derivatives trading. The commission hinted at imposing limits on the size of bets traders can make on movements in commodity prices, while the U.K. hedge fund industry faces debt and bonus restrictions. “I’d be more worried about the Germans than the French,” said Peter O’Dwyer, director at Trinity Fund Administration Ltd., a Dublin-based fund administrator. “The French and German agendas are different in this directive in my opinion, the French interest is building up Paris as a financial center, and the German agenda is keeping private equity funds out of Germany.” Splitting the Job Barroso said he decided against splitting financial regulation from duties for overseeing the internal EU market of 500 million consumers. Financial services will “probably” be part of the duties for the commissioner for economic and monetary affairs “in the future,” Barroso said. “That should come only when we have a real internal market for financial services.” Barnier, who was France’s minister for agriculture from 2007 to 2009, said in a May 2009 interview that speculation in agricultural commodities was “inexcusable.” The commission is drafting regulations for derivatives trading that will encompass food-commodity trading. The move marks Barnier’s second time working at the EU regulator in Brussels, where he was commissioner for regional policy from 1999 to 2004. After leaving he immediately became foreign minister of France in Jean- Pierre Raffarin’s government. Barnier, who helped organize the 1992 Winter Olympics in Albertville, France, started his political career at 27, when he was elected to the French National Assembly as a deputy for the Savoie region. To contact the reporters on this story: Ben Moshinsky in Brussels at bmoshinsky@bloomberg.net

Read the full article →

Almunia Named as EU’s Competition Commissioner, Barnier to Oversee Finance

November 27, 2009

By Jonathan Stearns Nov. 27 (Bloomberg) — Jose Barroso picked Spain’s Joaquin Almunia to be the European Union’s antitrust chief and France’s Michel Barnier to lead a push for tougher bank regulation on a new team that will manage the EU’s $15 trillion economy as it emerges from the recession . Barroso, president of the European Commission, also chose Olli Rehn of Finland as economy commissioner and Karel De Gucht of Belgium as the EU’s top trade negotiator. Denmark’s Connie Hedegaard will be climate commissioner, Germany’s Guenther Oettinger energy chief and Italy’s Antonio Tajani industrial- policy head. The new five-year team will take office as Europe is recovering from the credit crunch and the worst recession in more than half a century. Under Barroso, the EU’s executive arm has cracked down on cartels, pledged to sharpen scrutiny of banks, hedge funds and credit-rating companies , forced industry to reduce emissions blamed for climate change and broken down national barriers in the EU electricity and natural-gas markets. “ This team is a perfect blend of experience and new thinking,” Barroso told reporters today in Brussels. Almunia, Rehn, De Gucht and Tajani are currently commissioners in other areas, while Barnier is a French member of the European Parliament and Hedegaard and Oettinger are newcomers to EU jobs. Global Clout Europe aims for more global clout as a new European governing treaty takes effect and the top EU political and regulatory jobs are filled. Last week, European government heads named Belgium’s Herman Van Rompuy as the EU’s first president and Catherine Ashton of the U.K. as top diplomat — two posts created by the new treaty. The commission proposes legislation, enforces antitrust laws, manages trade policy and administers the bloc’s 123 billion-euro ($184 billion) budget. The leadership team generally balances the demands of big countries for the most influential posts and a need to ensure a degree of independence from national governments, which put forward the candidates for commissioners while letting Barroso assign the portfolios. The lineup proposed today by Barroso will have to win approval from the EU Parliament, which plans to hold hearings with individual commissioners in mid-January before a vote. In 2004, the assembly delayed the start of Barroso’s first term for three weeks by forcing changes to some of his initial team of commissioners. Five Years Barroso, a former Portuguese prime minister, himself won reappointment as commission president in September. In the past five years, the commission has used its regulatory powers to impose record antitrust fines, including a penalty of 1.06 billion euros on Intel Corp. for abuses of competition and fines of 553 million euros each on GDF Suez SA of France and Germany’s E.ON AG for colluding on gas sales. Neelie Kroes , the current EU competition commissioner, led that campaign and will stay on as the Dutch appointee to the new commission to become European telecommunications chief. Almunia will take over the antitrust job after being economy commission, overseeing the expansion of countries using the euro and seeking to maintain the credibility of EU budget- deficit limits as national spending surged amid the recession. Barroso called the Spanish Socialist “one of the best commissioners of the last five years.” Almunia’s Finnish successor in the economy post has been EU enlargement commissioner, steering policy toward aspiring members in the Balkans including Turkey, Croatia and Serbia after 10 mainly ex-communist countries joined in 2004. The Czech Republic’s Stefan Fule is moving from his job as that country’s European affairs minister to be the new EU enlargement chief, who must also manage a membership bid from Iceland. Trade Job Belgium’s De Gucht moves from development commissioner to the top EU trade job, marking the first time in more than a decade that an appointee from a smaller EU state will hold that post. Ashton has been trade commissioner since succeeding fellow Briton Peter Mandelson , who followed France’s Pascal Lamy , now head of the World Trade Organization. The fallout from the 2008 collapse of Lehman Brothers Holdings Inc. prompted the commission to turn its sights to stricter financial-market rules — the focus of Barnier’s job and a priority of French President Nicolas Sarkozy . The commission proposed in April the first EU law on hedge funds and buyout firms, seeking to force money managers to report regularly on their main investments, performance and risks. In September, as part of plans for the most sweeping overhaul of financial regulation, the commission presented draft legislation that would create an economic-risk watchdog led by central bankers and agencies to unify oversight of banks, insurers, investment firms and credit-rating companies. Money Managers Charlie McCreevy oversaw these initiatives and is being replaced as Ireland’s appointee to the commission by Maire Geoghegan-Quinn, who is due to become research commissioner. Hedegaard, now Danish climate and energy minister, will oversee a possible EU decision to force energy and manufacturing companies in the world’s biggest greenhouse-gas market to deepen emissions cuts. The EU is already on course to cut greenhouse gases including carbon dioxide by 20 percent in 2020 compared with 1990. The bloc is due to decide at a United Nations climate summit in Copenhagen next month whether to deepen that reduction target to 30 percent over the period. Tajani has held the post of transport commissioner, which will go to Estonia’s Siim Kallas , currently commissioner for administration. Oettinger, who has been governor of the German state of Baden-Wuerttemberg, takes over the energy job from Latvia’s Andris Piebalgs , who becomes development commissioner. To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

Read the full article →

Swine Flu Deaths Double Almost Every Two Weeks in Europe; 667 Since April

November 23, 2009

By Jason Gale Nov. 23 (Bloomberg) — Swine flu deaths have doubled almost every two weeks since mid-October in Europe, with 166 occurring in the past week, the European Center for Disease Control and Prevention said. Across the region, 667 people infected with the new H1N1 influenza strain have died since April, the Stockholm-based ECDC said today in a report obtained by Bloomberg. Cases of the pandemic flu are being reported in all European Union and European Free Trade Association countries, it said. The infection, which causes little more than a sore throat, fever and a cough in the majority of cases, is increasing hospital admissions. The U.K. has 180 H1N1 patients in intensive care units, France has 81, the Netherlands 38, Norway 24 and Ireland 20, according to the ECDC. To contact the reporter on this story: Jason Gale in Singapore at j.gale@bloomberg.net

Read the full article →

Swine Flu Deaths Double Almost Every Two Weeks in Europe; 667 Since April

November 23, 2009

By Jason Gale Nov. 23 (Bloomberg) — Swine flu deaths have doubled almost every two weeks since mid-October in Europe, with 166 occurring in the past week, the European Center for Disease Control and Prevention said. Across the region, 667 people infected with the new H1N1 influenza strain have died since April, the Stockholm-based ECDC said today in a report obtained by Bloomberg. Cases of the pandemic flu are being reported in all European Union and European Free Trade Association countries, it said. The infection, which causes little more than a sore throat, fever and a cough in the majority of cases, is increasing hospital admissions. The U.K. has 180 H1N1 patients in intensive care units, France has 81, the Netherlands 38, Norway 24 and Ireland 20, according to the ECDC. To contact the reporter on this story: Jason Gale in Singapore at j.gale@bloomberg.net

Read the full article →

Europeans Tussle for Regulatory Posts as Van Rompuy, Ashton Get Top Jobs

November 20, 2009

By James G. Neuger Nov. 20 (Bloomberg) — The European Union’s major powers began maneuvering to win jobs to regulate their $15 trillion economy after leaders named Herman Van Rompuy as the EU’s first president and Catherine Ashton as top diplomat. France bid for the post of financial-services and single- market regulator to be handed out next month, while Germany and Italy campaigned for the post of European Central Bank president when Jean-Claude Trichet steps down in 2011. “Germany as well as France have not eyed the top positions now, which means they are going to have the frontrunners for the other top positions in the commission, for the ECB and other potential jobs,” Fredrik Erixon , director of the Brussels-based European Centre for International Political Economy , said in a Bloomberg Television interview. European chiefs who didn’t field candidates for president and foreign minister laid claim to appointments that will guide the economy and monitor financial firms as the world emerges from the deepest recession since the 1930s. The selection of Van Rompuy, 62, Belgium’s prime minister, and Britain’s Ashton, 53, EU trade commissioner, who are not widely known internationally, undercut the bloc’s stated goal of boosting its clout in a world marked by the rise of China and India, analysts said. Last night’s appointments at a summit in Brussels filled in the first pieces of a puzzle that will include nominations in coming days to the 27-person European Commission , the EU’s executive agency, and will cover the central bank as well. Sarkozy’s Bid French President Nicolas Sarkozy opened the public bargaining last night, saying that he wants a regulatory role over the common market and financial services for France’s nominee to the commission, Michel Barnier . French officials have pushed for tighter regulations on hedge funds than has the current internal markets chief, Charlie McCreevy of Ireland, and criticized him for not responding forcefully enough to the financial crisis. “France will have a European commissioner with important responsibilities,” Sarkozy said. “We’ll see if it’s internal markets or another one.” Barnier, 58, has a longer resume than most commissioners. He was French foreign and agriculture minister and is now in the European Parliament . He served on the commission from 1999 to 2004, helping draft the treaty that created the EU president post. Each EU country has one seat on the Brussels-based commission, to be headed for a second five-year term by Jose Barroso of Portugal. It will take office early next year once approved by the EU Parliament. Commission Wrangling With 27 countries pushing for influence, EU appointments mix officials from big and small countries, rich and poor, east and west, and reflect the balance of power among the major political parties. After the center-right’s Van Rompuy and the center-left’s Ashton snared yesterday’s prizes, the way may open for the Liberal political group to claim the post of competition commissioner, who oversees mergers and market dominance. Contenders for that job include incumbent Neelie Kroes of the Netherlands, who in five years has imposed record antitrust fines, including a penalty of 1.06 billion euros ($1.6 billion) on Intel Corp. for antitrust abuses and fines of 553 million euros each on GDF Suez SA of France and Germany’s E.ON AG for colluding on natural gas sales. Kroes Handicap The Dutch government is one of four yet to announce its commissioner. A handicap for Kroes, 68, is that her party no longer belongs to the Dutch ruling coalition. Another Liberal commissioner already slated for a second term is Olli Rehn of Finland, who guided the enlargement process during his first five years. Rehn, 47, has his sights on a top economic post in the new commission. German Chancellor Angela Merkel indicated that she is biding her time for the ECB post by naming Guenther Oettinger , 56, head of the state of Baden-Wuerttemberg with no previous international experience, as commission representative. “Germany hasn’t been actively pushing a German candidate for positions being taken now,” Laurent Bilke , a London-based economist at Nomura International and former ECB economist, said in an interview. “That’s an indication they’re keeping their ammunition for later.” Europe’s largest economy hasn’t held a major EU appointment since the 1960s and didn’t put up a candidate when the ECB’s first president was picked in 1998. It successfully pushed for Wim Duisenberg of the Netherlands, accepting a tradeoff that handed the job to France’s Trichet in November 2003. Italy’s Interest Italy remained in ECB contention after former Prime and Foreign Minister Massimo D’Alema was passed over last night for foreign-policy czar. Italy has begun to lobby publicly for its central bank chief, Mario Draghi , to head the ECB. His rival in that race is Axel Weber , president of Germany’s Bundesbank, which served as the hard-money model for the ECB. Weber, 52, ranks as one of the Frankfurt-based ECB’s most ardent inflation fighters. Draghi, 62, a former Goldman Sachs Group Inc. executive, has pushed for limits on bankers’ pay and stronger capital requirements as chairman of the Financial Stability Board post. “The Germans were so passive in not putting forward any of their own candidates because they want Axel Weber to become the next president of the European Central Bank,” said Janis Emmanouilidis , an analyst at the European Policy Centre in Brussels. A Weber-Draghi face-off “could be the case because the Italians also want to have something out of the overall deal.” To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

Read the full article →

France’s Henry, Yankees Catch Break as Soccer, Baseball Ban Instant Replay

November 20, 2009

By Tariq Panja Nov. 20 (Bloomberg) — The left hand of Thierry Henry and the left-field foul line at Yankee Stadium have something in common: No instant replay. France reached soccer’s World Cup finals on an overtime goal against Ireland that was set up by what replays showed was a ball illegally directed by Henry’s left hand onto the path of teammate William Gallas . A month earlier and 3,500 miles (5,600 kilometers) to the west, the New York Yankees won a first-round game in Major League Baseball’s playoffs with help from a final-inning call on a fly ball down the left-field line by Joe Mauer of the Minnesota Twins that was called foul. Video replays led even the umpire who called it, Phil Cuzzi, to say that the ruling should have been fair. The Yankees won 4-3 in the bottom of the 11th on their way to claiming a record-extending 27th World Series title. Each case brought cries for the use of video replay to help determine the correct call. Both sports’ leaders said, ‘No.’ “Until I am no longer president, there will be no chance” for replays, said Sepp Blatter , the head of soccer’s governing body FIFA, which said yesterday that the France-Ireland result stood. Baseball Response MLB Commissioner Bud Selig said this week at an owners meeting that he remained opposed to expanding the use of replay beyond the current rules on determining if a home run cleared the fence and whether a homer was fair or foul. “I haven’t changed my view at all, but I’m always willing to talk to a lot of people and I’ve talked to a lot of managers and I’ve talked to a lot of general managers,” Selig said, according to the Associated Press. “I haven’t heard from anybody about instant replay. The only comments I get are when I call somebody on a bunch of subjects and we talk about it.” Video replays showed Henry, the French captain, twice touching the ball with his hand before centering for Gallas to score at Stade de France outside Paris. That gave his team a 2-1 victory in the two-game contest and a trip to South Africa next year. Ireland went home. With millions of dollars at stake, cricket, American football, tennis and rugby are among the professional sports that have turned to video to ensure correct rulings on contentious plays. Ireland’s coach, Giovanni Trapattoni , said soccer must follow. Brief Break “The game could be stopped for 30 seconds,” the 70-year- old coach said yesterday at a news conference in Dublin. “It’s better to have the right decision than this situation.” The Ireland-France match is unlikely to sway the eight members of the International Football Association Board who decide soccer’s rules. Blatter, who chairs the group, says the sport’s beauty is that the rules are the same in the playground and the World Cup final. Other sports have decided that correct calls are more important than an interrupted game. The National Hockey League, National Football League, National Basketball Association, International Cricket Council and International Rugby Board all review plays. Baseball added video replay to judge home-run calls in 2008. Soccer is more likely to add two officials to help make calls in the penalty box. While the Europa League, European soccer’s second-tier club competition, is experimenting with the concept, it will be 2011 at the earliest before a change would be made. ‘Time Has Come’ “Surely, now is the time for technology,” said Steve Bruce , the coach of English Premier League team Sunderland. “When you see every Ireland player appealing for handball, surely now is the time.” As Gallas scored from close range, almost every Irish player, including goalkeeper Shay Given , had their arms raised, calling for play to be stopped. “This is the biggest example of having some way of trying to help the referees,” former Ireland striker John Aldridge said. “He was conned.” Though Henry acknowledged the handball, he said the referee, Martin Hansson, had to make the call. “I didn’t deliberately do it, but it was handball,” the player told Sky Sports. “The ball bounced off my hand, the referee did not see it and I played on.” Ireland’s call to replay the match was immediately rejected by FIFA. “No protest may be made about the referee’s decision regarding facts connected with play,” the sport’s rules say. Ireland’s appeal cited a 2005 replay that was ordered between Bahrain and Uzbekistan. That case was different because the referee misinterpreted the rules rather than made a disputed judgment, FIFA spokesman Alex Stone said. Even if change comes, controversy may continue. Defending U.S. Open tennis champion Serena Williams was serving to stay in the semifinals of the season’s last Grand Slam against Kim Clijsters when she was called for a foot fault. Williams received a second code violation for her protest, which cost her a point and gave Clijsters the match. A foot fault is one of the only calls in tennis that can’t be reviewed on video. To contact the reporters on this story: Tariq Panja at tpanja@bloomber.net or tpanja@bloomberg.net .

Read the full article →

Vanderbilt Biography, New York City Novel Win $10,000 National Book Awards

November 18, 2009

By Laurie Muchnick Nov. 19 (Bloomberg) — “The First Tycoon: The Epic Life of Cornelius Vanderbilt ” by T.J. Stiles won the $10,000 National Book Award for Nonfiction last night at a dinner at Manhattan’s Cipriani restaurant on Wall Street. Stiles, whose book was published by Knopf and who worked in publishing before becoming a writer, began his speech by thanking the people behind the scenes who helped produce his book: the editorial assistants, production managers, indexers, publicists, receptionists, salespeople, mailroom staff, librarians and book reviewers — “Yes, even the book reviewers,” he said. The black-tie ceremony was a benefit for the National Book Foundation, which promotes writing and literacy. The host was comedian and author Andy Borowitz , who bemoaned the lack of an award for his own latest book, “Who Moved My Soap? The CEO’s Guide to Surviving Prison: The Bernie Madoff Edition.” The fiction prize went to Irish-born writer Colum McCann for “Let the Great World Spin (Random House), a novel about New York in the 1970s. “As someone who’s come from Ireland I am extraordinarily honored,” he said. “It seems to me that American literature is able to embrace the other.” The award for Young People’s Literature was won by Phillip Hoose for “Claudette Colvin: Twice Toward Justice” (Farrar, Straus and Giroux), the true story of an African-American teenager who challenged segregation in 1950s Alabama. Colvin accompanied her biographer to the podium. “My job in this book was to pull someone who was about to disappear under history’s rug out from there,” Hoose said. “She did what Rosa Parks did a year before Rosa Parks did it.” Keith Waldrop won the poetry award for “Transcendental Studies: A Trilogy” (University of California Press). Vidal, Woodward Gore Vidal , author of such novels as “Myra Breckinridge” and “Burr,” as well as the award-winning collection “United States: Essays 1952-1992,” received an award for Distinguished Contribution to American Letters. Actress Joanne Woodward , who was married to the late Paul Newman and was Vidal’s friend for half a century, presented the award. The Literarian Award for Outstanding Service to the American Literary Community was presented to Dave Eggers . In addition to his work as a writer (“A Heartbreaking Work of Staggering Genius,” “Zeitoun”), Eggers is the co-founder of the independent publisher McSweeney’s and of 826 Valencia, a nonprofit writing and tutoring center for young people. Other Nominees The other nominees were: Fiction: Bonnie Jo Campbell, “American Salvage” (Wayne State University Press); Daniyal Mueenuddin, “In Other Rooms, Other Wonders” (Norton); Jayne Anne Phillips, “Lark and Termite” (Knopf); Marcel Theroux, “Far North” (Farrar, Straus and Giroux). Nonfiction: Greg Grandin, “Fordlandia: The Rise and Fall of Henry Ford’s Forgotten Jungle City” (Metropolitan); David M. Carroll, “Following the Water: A Hydromancer’s Notebook” (Houghton Mifflin Harcourt); Sean B. Carroll, “Remarkable Creatures: Epic Adventures in the Search for the Origins of Species” (Houghton Mifflin Harcourt); and Adrienne Mayor, “The Poison King: The Life and Legend of Mithradates, Rome’s Deadliest Enemy” (Princeton University Press). Poetry: Rae Armantrout, “Versed” (Wesleyan University Press); Ann Lauterbach, “Or to Begin Again” (Viking); Carl Phillips, “Speak Low” (Farrar, Straus and Giroux); Lyrae Van Clief-Stefanon, “Open Interval” (University of Pittsburgh Press). Young People’s Literature: David Small, “Stitches” (Norton); Deborah Heiligman, “Charles and Emma: The Darwins’ Leap of Faith (Holt); Laini Taylor, “Lips Touch: Three Times (Scholastic); and Rita Williams-Garcia, “Jumped” (HarperCollins). Borowitz ended the ceremony by inviting everyone to come back next year. The early favorite for the fiction award, he said, is Sarah Palin’s “Going Rogue.” ( Laurie Muchnick writes for Bloomberg News. The opinions expressed are her own.) To contact the writer of this review: Laurie Muchnick in New York at lmuchnick@bloomberg.net .

Read the full article →

Swaps Signal Worst Yen Since ’05 as Mounting Debt Overwhelms Market Demand

November 15, 2009

By Chris Fournier and Yasuhiko Seki Nov. 16 (Bloomberg) — The yen is poised for its worst tumble since 2005 as doubts about Japan’s fiscal footing double the cost of insuring its debt. The price of hedging against losses on $10 million of the country’s bonds with credit-default swaps soared this month to as much as $76,160 a year from $37,000 in August, as the new government planned record spending and borrowing even with tax revenue falling. The rise in debt protection costs contrasts with that of the U.S., where prices have fallen to about the lowest in a year amid unprecedented issuance. The difference in prices reached the widest ever on Nov. 9 after Japan’s debt grew to almost twice the size of the economy. “The Japanese fiscal situation is horrific,” said Richard Benson , who helps oversee $11 billion of currency funds at Millennium Global Asset Management in London. “We went short the yen against the dollar and the euro about a month ago” and then turned “more aggressive” on the trade as credit-default swaps rose and investors dumped Japanese bonds, he said, declining to specify the firm’s gains. Selling yen for euros and dollars would have returned as much as 4.3 percent since Oct. 1, data compiled by Bloomberg show. Japan’s unprecedented debt, near-zero benchmark interest rate, ballooning budget deficit, sinking savings rate and worst postwar recession all are aligned against the yen. Standing Alone The Bank of Japan will stand alone in keeping borrowing costs at near-record lows next year to revive the Group of 10’s fastest-shrinking economy, making its assets less attractive to investors, median Bloomberg survey predictions show. The world’s second-biggest economy last year at $4.9 trillion will contract 5.7 percent in 2009, compared with an average of 2.5 percent for the nine other largest economies, according to median forecasts. “We can’t rule out the possibility of capital flight away from Japan due to its deteriorating fiscal position,” said Yuji Saito , head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. The yen has outperformed all 171 other currencies tracked by Bloomberg over the past two years, appreciating 24 percent to 89.53 per dollar today. The currency is up 12.9 percent from a five-month low on April 6, and has gained 1.3 percent this year. Now, 34 of 38 strategists in a Bloomberg survey see it falling by June 2010, including Landesbank Baden-Wuerttemberg, the most accurate of 46 forecasters in the six quarters ending June 30. Steep Tumble The Stuttgart-based bank predicts a 9.9 percent decline to 100 from 90.09 at the end of October, which would be the steepest eight-month drop in four years. Goldman Sachs Group Inc. in New York forecasts 105 in 12 months, a 14.8 percent slide from the Nov. 13 close. Option traders are the least bullish on the yen since July 2007 after the spread between demand for three-month contracts to buy and sell the currency narrowed by the most ever in the past year, so-called risk-reversal rates show. “Declines in risk reversal rates suggest underlying strong pressure to sell the yen,” Societe Generale’s Saito said. Outstanding government loans and bonds totaled a record 864.5 trillion yen ($9.6 trillion) on Sept. 30, making Japan the world’s most indebted nation. That’s 181 percent of gross domestic product , up from 94 percent a decade earlier and the most among the 30 countries of the Organization for Economic Cooperation and Development, which averages 79 percent. The U.S. has about $7 trillion of marketable debt outstanding, or about 50 percent of its GDP, according to government data. Increased Unease While credit-default swaps indicate less than a 6 percent chance the world’s second-largest foreign-reserves holder will default, they show increased unease with the debt’s quality. The five-year contracts cost 67.42 basis points, or 0.6742 percentage point, of the sum covered a year. Of 20 developed countries tracked by Bloomberg, only Greece, Ireland, Spain and Italy have pricier swaps. Insuring the debt of Slovakia and Slovenia, which have the same credit ratings as Japan or worse, is cheaper. Hedging against losses on U.S. bonds cost 27.5 basis points on Nov. 13, down from 100 on Feb. 24. The U.S. will sell a record $2.1 trillion in Treasuries this year and $2.5 trillion next, according to London-based Barclay’s Plc, one of 18 primary dealers that trade with the Federal Reserve. Government bond yields are used as a benchmark for companies such as Shiseido Co., Japan’s biggest cosmetics maker, and brewer Kirin Holdings Co. as they sell debt. ‘Difficult’ Situation “It’s not really a question of default” by Japan, said Carlos Leitao at Montreal-based Laurentian Bank Securities, the second-most accurate economist in a Bloomberg survey last year. “It’s more the situation becoming so difficult, the government is forced to adopt more restrictive fiscal policies to bring deficits under control. That would further slow the economy.” Finance Minister Hirohisa Fujii said on Nov. 10 that “maintaining the trust of investors in the government bond market is our priority” because “the most pressing issue we have to bear in mind when we outline next fiscal year’s budget is that government bond yields are surging.” International demand is already faltering. Foreign investors have sold a net weekly average of 130 billion yen in Japanese bonds this year, after averaging 94 billion in purchases the prior five years, Ministry of Finance data show. Yields on 10-year bonds, which reached 1.485 percent this month on an intraday basis, the highest since June, may rise toward 1.7 percent, said Kazuto Uchida , chief economist for Bank of Tokyo Mitsubishi UFJ Ltd., Japan’s biggest lender. Interest Expense Japan will spend 10.2 trillion yen on interest payments this year, or 26.2 percent of tax revenue, up from 18 percent in 1990 and 18.9 percent in 2004, JPMorgan Chase & Co. of New York estimated in an Oct. 21 report. The percentage may rise to 36.8 in 2014 and 73.9 in 2019, the bank estimated. Domestic buyers will shore up demand for the securities, limiting yield increases, according to Koichi Kurose , chief strategist in Tokyo at Resona Bank Ltd. “The sell-Japan campaign is not likely to become a mainstream move, given the fact that Japanese investors hold over 90 percent of outstanding debt issued by the government,” said Kurose, whose employer is part of the nation’s fourth- largest banking group. “In a country like Japan, where there’s a stable current-account surplus, rising debt issues won’t push up yields perpetually.” Japan almost always exports more than it imports, current- account data show. That broad trade measure shows its surplus rose 0.2 percent to 1.57 trillion yen in September from a year earlier after also rising in August — the first two straight increases since early 2008, the Finance Ministry said Nov. 10. The surplus allows Japan to finance deficit domestically so it doesn’t have to rely on overseas lenders. Saving Less JPMorgan said in its report that Japan’s dependence on domestic bond buyers may hurt demand. Such investors owned 93 percent of the government’s debt as of December, according to a ministry report. Because the Japanese are saving less, they will buy fewer bonds and drive yields up, the bank said, predicting that average families will be squirreling away none of their income within five years, down from about 17 percent in 1980. “A reasonable estimate that falling savings pushes interest rates higher” by 2 percentage points “would quadruple debt service costs in 10 years,” JPMorgan said. Vice Finance Minister Yoshihiko Noda estimated last month that bond sales may hit 50 trillion yen in the fiscal year that started April 1 due to slumping tax revenue, up from the unprecedented 44 trillion estimated in a budget that called for spending a record 102.5 trillion yen. Falling Revenue Tax revenue from April 1 through Sept. 30 totaled 10 trillion yen, 24 percent less than at the same point in the prior fiscal year and the least in 11 years or more, Finance Ministry statistics show. Japan’s deficit “is one of the most significant negative factors” weighing on its credit rating, said Takahira Ogawa , Singapore-based director for sovereign rankings at Standard & Poor’s. S&P isn’t considering changing its “stable” outlook for Japan’s AA international-debt grade, the company’s third highest, he said. Fitch Ratings may review its AA- grade on locally denominated debt if the country violates its pledge to keep next fiscal year’s bond-issuance below 44 trillion yen, said David Riley , the firm’s head of sovereign ratings in London, in a Nov. 10 Reuters Television interview . “Economic conditions point toward a possibly extended period of deflation,” Riley said in a Nov. 10 statement. “Should this happen, it will represent a material risk to the public debt outlook.” In a Nov. 13 e-mail, he said he “cannot comment” on what sum might “trigger a rating action.” Japan Deflation Consumer prices in Japan have fallen from a year earlier for eight consecutive months through September, including a July’s unprecedented 2.3 percent drop. Median quarterly forecasts predict that trend continuing through mid-2011. “If Japan’s sovereign debt loses its current rating, it would also lose its status as a safe-haven asset,” said Soichiro Mori , manager of foreign-exchange promotion at FXOnline Japan Co. “Foreign investors definitely won’t be motivated to hold such debt.” The DPJ won power on Aug. 30 by pledging to boost spending and cut taxes, unseating the Liberal Democratic Party, which reigned for all but 10 months since 1955. Postal Service Concern about DPJ fiscal policies worsened when Prime Minister Yukio Hatoyama , 62, appointed a former finance ministry civil servant, Jiro Saito , to head the postal service, according to investors such as Makoto Kojima , general manager of global markets at SBI Liquidity Market Co., a unit of financier SBI Holdings Inc. The party vowed to curtail bureaucrats’ power by opposing so-called amakudari, the practice of giving them jobs at state-run companies. The Nikkei 225 Stock Average has lost 7.4 percent in yen terms since Aug. 28 , the trading day before the election, making it one of the six worst performers of 89 primary equity indexes tracked by Bloomberg. The yen’s value “is not consistent with the underlying fundamentals, and that’s a huge opportunity,” said Michael Hasenstab , who oversees $45 billion in fixed-income assets for Franklin Templeton Investments and is using forward contracts to bet on the yen’s decline. “The yen is very vulnerable.” To contact the reporters on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net ; Yasuhiko Seki in Tokyo at Yseki5@bloomberg.net .

Read the full article →

Stock Bull of Ireland O’Dwyer Buys BP, Rio Tinto to Bet on Faster Recovery

November 13, 2009

By Dara Doyle and Ian Guider Nov. 13 (Bloomberg) — Ireland’s best-performing money manager is a stock market bull. Joe O’Dwyer , chief investment officer at Merrion Investment Managers in Dublin, bought more shares in oil producers BP Plc and Chevron Corp. and miners BHP Billiton Ltd. and Rio Tinto Group in the past year because he’s optimistic of a “strong” recovery in economies worldwide. “The macro environment has probably surprised people to the extent to which it has recovered,” O’Dwyer, 49, said in an interview in his office in Dublin. “We think it’s going to continue to surprise people.” Governments across the world have pumped more than $2 trillion into economies to halt the worst recession since the Great Depression of the 1930s. The MSCI World Index of developed markets has risen 68 percent since slumping to the lowest closing level since 1995 on March 9 this year. The main pension fund Merrion oversees gained an average of 3.4 percent a year over the past decade, according to consultants Mercer International Inc., three times the average performance of 0.8 percent. The fund rose 22 percent in the year through Oct. 31, compared with an average gain of 14.6 percent. O’Dwyer, who manages about 1 billion euros ($1.5 billion), started with Melbourne-based BHP Billiton, the world’s largest mining company, and smaller London-based rival Rio Tinto. BHP Billiton gained 39 percent this year and Rio more than doubled. “There was massive skepticism in the world and massive fear,” said O’Dwyer. “It’s always darkest before the dawn. In all probability the bad news was already in the price and any good news may not have been in the price.” ‘Aggressive Risks’ O’Dwyer increased the proportion of stocks he holds in the 350 million-euro fund to 80 percent in March from about 60 percent in October 2008, after the Federal Reserve, the Bank of England and the European Central Bank cut interest rates to record lows. The fund is managed for companies and individuals. He has since pared that back to about 70 percent as shares rallied. He’s also concerned that the Fed will raise interest rates faster than expected as the recovery gains pace. He said that view means he is “light” on bonds. “The time to take those aggressive risks was in March, not now,” O’Dwyer said. “We still see long-term value in equities but we will probably pull back in some of our riskier positions.” Ryanair, CRH O’Dwyer joined Merrion when it bought Oppenheim Investment Managers, the Irish arm of Sal. Oppenheim Jr. & Cie. in 2008. O’Dwyer previously worked at Dublin securities firm NCB Stockbrokers as head of European equity sales and was also investment manager with Smurfit Paribas Bank. He is also managing director at Merrion, leading a 15-person team. In his home market, O’Dwyer said he bought shares in Ryanair Holdings Plc , Europe’s biggest discount airline, food company Kerry Group Plc , buildings supplies maker CRH Plc , and Dublin-based fuel distributor DCC Plc . O’Dwyer said these companies aren’t reliant on the Irish economy, which is mired in the worst recession in the country’s modern history. Ireland accounted for 4.3 percent of Dublin- based CRH’s first-half revenue. “We’ve never bought into the idea that you should be in Ireland or you shouldn’t be in Ireland,” O’Dwyer said. “There are certain Irish companies that are exceptionally good. The fact that they are Irish-domiciled is accidental.” When it comes to banks, Merrion holds fewer shares than in the benchmark index because O’Dwyer thinks political pressure in the U.S., Europe and U.K. may limit profit. ‘Value Traps’ In Ireland, Merrion has cut its exposure to Allied Irish Banks Plc and Bank of Ireland Plc , awaiting details of the plan to sell off their toxic loans to the government. “They will have a strong future at some stage,” he said. “In the short term, there’s a lot of uncertainty and risk. You have to respect those uncertainties.” He’s also wary of investing in phone companies including Vodafone Group Plc , the world’s largest mobile-phone company, because they face mounting competition from Google Inc. and Apple Inc. , maker of the iPhone. “They are value traps,” he said. “They look cheap but they are cheap for a reason.” Gold is an insurance policy, he said. O’Dwyer said his purchase of shares in Greenwood Village, Colorado-based Newmont Mining Corp. on behalf of his children in 2000 was both his best and worst investing decision. The shares have almost quadrupled over the last nine years. “I bought gold shares, but I should have bought more,” he said. “Markets have a habit of humiliating you with remarkable regularity. You never know when the bus is going to hit you but you just have to be aware that buses are on the road.” To contact the reporters on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net Ian Guider in Dublin at iguider@bloomberg.net .

Read the full article →

Asia Summit Awaits Obama Trade Policy Promised in May as Agreements Linger

November 12, 2009

By Mark Drajem Nov. 13 (Bloomberg) — President Barack Obama would press for new trade accords only after he set out his approach to international commerce in a speech, U.S. officials said in May. Six months later, trading partners are still waiting. “There is deep frustration at the lack of any trade policy,” said Troy Stangarone, director of congressional affairs at the Korea Economic Institute in Washington, a public policy research group funded mostly by the South Korean government. Trade will be a focus of Obama’s eight-day trip to Asia, beginning today in Japan. He will also attend the Asia-Pacific Economic Cooperation summit in Singapore and make visits to Shanghai, Beijing and Seoul. The region’s leaders are impatient for a clear U.S. approach to trade, said C. Fred Bergsten , director of the Peterson Institute for International Economics in Washington. Governments “are hoping that Obama’s trip will begin the process of re-engaging Asia on trade,” Bergsten, who met with South Korea’s President Lee Myung Bak recently, said in an interview. “Trade is very high on their diplomatic agenda.” Obama inherited bilateral trade accords with Colombia, Panama and South Korea that President George W. Bush completed and Congress never approved. Bush also started the Doha Round of negotiations in the World Trade Organization, which remain unfinished, and said the U.S. would like to join a trade agreement among Singapore, New Zealand, Chile and Brunei. During his presidential campaign, Obama criticized the pending trade deals with Colombia and South Korea. As president, he sided with the United Steelworkers union, imposing duties of 35 percent on automobile tire imports from China in September. He also joined the leaders of the Group of Eight countries in promising to “keep markets open” and “reject protectionism of any kind.” ‘Set a Balance’ Everett Eissenstat , a career official in the U.S. Trade Representative’s office, told a Senate panel in May that Obama wouldn’t press for new agreements until he could give a speech defining his trade agenda and how it fit into his other priorities. The accords have remained in limbo since then, business executives, overseas governments and some lawmakers from Obama’s party have said. “For the past 10 months, the United States has lacked a comprehensive trade agenda,” Senate Finance Committee Chairman Max Baucus , a Montana Democrat, said Nov. 10. “That absence is palpable.” Enforcement, Transparency “Obama laid out a trade agenda in March 2009, and it set out a balance of job-creating market access openings, enforcement, transparency and other policy priorities,” Deborah Mesloh , a spokeswoman for the U.S. Trade Representative , said in e-mailed statement. “On pending free trade agreements, we continue our consultation with stakeholders and Congress to understand concerns and to develop proposals for addressing these concerns.” Obama, in a meeting with his Economic Recovery Advisory Board on Nov. 2, said the U.S. had a “debilitating gridlock of trade policy,” which made it by turns too open or too timid. The president will use his Asia trip to provide more details about how he plans to use trade policy to boost exports to Asia, according to a senior administration official who declined to be identified discussing the president’s intentions. Obama’s position on trade is “a constant question,” said Christopher Wenk , the U.S. Chamber of Commerce’s director for trade. Executives in Geneva Wenk said that during a trade trip with executives from Citigroup Inc ., Ford Motor Co. and General Electric Co. to meet World Trade Organization officials in Geneva, his group was peppered with inquiries about U.S. intentions. “Have you got any indication from the Obama administration as to what their trade policy may be?” Clare Thorpe, Ireland’s agriculture attaché in Washington asked a European Union trade representative at a public forum Oct. 26. Canadian officials are trying to find out if the U.S. will let Canadian-based companies compete for stimulus projects, an irritant since Obama signed that measure in February, said Birgit Matthiesen, the Washington-based adviser to the Canadian Manufacturers & Exporters association. The administration is lacking two of three deputy trade representatives, and the top trade official at the Commerce Department, as those nominees haven’t been confirmed by the Senate. “They don’t have their people in place yet,” Wenk said. By this time in their term, the past two presidents had embraced trade initiatives. Congressional Approval Bush won congressional approval for a trade deal with Jordan and was days away from launching the Doha Round at this point in 2001. President Bill Clinton was in the final lobbying push to get lawmakers to approve the North American Free Trade Agreement, which passed the House on Nov. 17, 1993. No similar action is likely during Obama’s first year, in part because the economy and health-care legislation have dominated his attention, Stangarone, of the Korea Economic Institute, said in an interview. There are economic costs to delay, said Tom Donohue , president of the Washington-based U.S. Chamber of Commerce, the nation’s largest business organization. “We are standing on the sidelines while Asian nations clinch new trade deals,” Donohue said in a statement before leaving to attend the APEC trade meetings. “We’ll pay the price if this continues. It’s time to see action from Washington.” To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net .

Read the full article →

Kidnapped Irish Priest Is Freed by Muslim Rebels in Southern Philippines

November 11, 2009

By Ed Johnson and Francisco Alcuaz Jr. Nov. 12 (Bloomberg) — A 79-year-old Irish priest kidnapped in the southern Philippines has been freed, Ireland’s Foreign Minister said today. Michael Sinnott of the Columban Missionaries was seized by armed men while taking an evening stroll in the garden of his home in Pagadian City, Zamboanga del Sur province last month. Ireland’s Foreign Minister Micheal Martin said the priest “has been freed by his captives and handed over to the Philippine authorities.” No ransom was paid by the Irish government, he added in an e-mailed statement. The Muslim-majority southern Philippines is home to the al- Qaeda-linked militant group Abu Sayyaf, which the government blames for dozens of bombings and kidnappings. The separatist Moro Islamic Liberation Front is also active in the region. Mohagher Iqbal, chief peace negotiator for the MILF, said in a telephone interview today his group secured the release of Sinnott from bandits led by a Commander Inggo by applying “moral force.” The Philippine military said last month that Inggo, an alleged pirate whose real name is Guingona Samal, was an accomplice in the kidnapping and whisked the priest away in a high-powered boat. Major General Ben Dolorfino said at the time the captors probably belonged to a “kidnap-for-ransom” group and had taken Sinnott to an area dominated by MILF rebels so they couldn’t be reached by government troops. Ransom Demand The kidnappers demanded a $2 million ransom for Sinnott, who suffers from a heart condition, the military said last month. Martin said Sinnott’s release was the result of a “major diplomatic effort” by the Irish and Philippine governments and he thanked the European Union, the U.S. and the International Committee of the Red Cross for their support. “It has been a tough 32 days for everybody concerned, but particularly so for those who were waiting anxiously at the end of the phone for news of their loved one,” he said. Abu Sayyaf abducted three Red Cross workers on the island of Jolo nine months ago. They were released one by one in a hostage crisis that lasted for six months. The group was also blamed for kidnapping Italian priest Giancarlo Bossi, who was held for more than a month in 2007. To contact the reporters on this story: Ed Johnson in Sydney at ejohnson28@bloomberg.net ; Francisco Alcuaz Jr . in Manila at falcuaz@bloomberg.net .

Read the full article →

European Finance Ministers Commit to Start Curbing Budget Deficits by 2011

November 10, 2009

By Jennifer Ryan and Francois de Beaupuy Nov. 10 (Bloomberg) — European Union finance ministers committed to start reining in budget deficits by 2011 at the latest even as they said economic stimulus remains necessary to nurture the recovery from the deepest slump in six decades. “Restoring the public finances and tackling unemployment will be the priorities for the time to come,” Spanish Economy Minister Elena Salgado told a press conference in Brussels late yesterday after leading a meeting of euro-area finance chiefs. “Without doubt, public finances are on an unsustainable course,” said Swedish Finance Minister Anders Borg , whose government holds the EU’s rotating six-month presidency. European governments have put forward billions of euros in measures aimed at reviving growth and saving jobs. The average budget shortfall in the euro region will balloon to a record 6.9 percent of gross domestic product next year with all 16 euro nations breaching the EU limit of 3 percent of GDP, the European Commission forecasts. The jobless rate is projected to reach 10.9 percent in 2011, the most since at least 1995. The commission, the Brussels-based EU executive, tomorrow will issue reports assessing efforts by France, Spain, Ireland, Greece and the U.K., which isn’t in the euro area, to start to bring their deficits back into line with EU rules. Germany, Europe’s largest economy, and eight other countries will be given deadlines to correct their deficit overruns. “We have to orient ourselves toward the Stability and Growth Pact,” which sets out the rules for government debt and deficits, Austrian Finance Minister Josef Proell said in Brussels yesterday. “The goal to get below 3 percent of gross domestic product for the deficit and 60 percent for debt has to be kept in mind in the short and medium term.” Budget-Cutting Efforts Overall government debt for the 27 nations in the EU will reach 79 percent of GDP in 2010 and more than 83 percent the following year, the commission forecast last month. Without budget-cutting efforts, the debt-to-GDP ratio “could reach 100 percent as early as 2014 and keep on increasing,” according to a commission document discussed at yesterday’s meeting. The finance ministers last month agreed to wait until 2011 before cutting deficits to allow government spending to boost growth while the region recovers from the recession. EU Economic and Monetary Affairs Commissioner Joaquin Almunia affirmed that timeframe at a press conference following yesterday’s meeting. “If things go the way most central projections suggest, then 2011 would be the year to start consolidation and fiscal exit,” Dutch Finance Minister Wouter Bos said. “We shouldn’t stop stimulating too early.” Risks to Growth The euro-region economy will contract 4 percent this year before expanding 0.7 percent in 2010, according to the forecasts by the commission, the EU executive. European Central Bank President Jean-Claude Trichet said yesterday that while the recovery is taking hold a little faster than expected, risks to growth mean there is “no time for complacency.” Group of 20 governments meeting in St. Andrews, Scotland, on Nov. 7 pledged to keep interest rates low and maintain record budget deficits until recoveries take hold. Global stocks rallied yesterday and the dollar slid after the G-20 commitment to maintain stimulus efforts. Trichet said at the Bank for International Settlements in Basel, Switzerland, that central bankers agreed on the need for a “gradual and timely phasing out” of non-conventional policy measures without signaling that such a move was imminent. The U.K. last week gave more support to Royal Bank of Scotland Group Plc , making it the most expensive bank bailout ever. UBS AG, which amassed the biggest writedowns and losses from the credit crisis among European competitors, on Nov. 3 reported a loss that was bigger than analysts estimated. “We are not yet out of crisis, we have to count on a couple of setbacks in the coming quarters,” ECB Executive Board member Juergen Stark said in a speech tonight in Tuebingen, Germany. “We can’t speak of a self-sustaining recovery, it is mostly due to temporary factors.” The euro-area finance ministers will be joined today by the counterparts from the rest of the 27 EU nations. To contact the reporters on this story: Jennifer Ryan in Brussels at jryan13@bloomberg.net ; Jurjen van de Pol in Brussels at jvandepol@bloomberg.net .

Read the full article →

Spain Beating Europe in Stock Market With 40% of Profit From Latin America

November 5, 2009

By Alexis Xydias and Adria Cimino Nov. 5 (Bloomberg) — Spain, suffering from the highest unemployment rate in Europe, is producing the best stock returns among countries in the region with shrinking economies as sales to Latin America grow. The IBEX 35 rose 17 percent in the past year, the steepest advance in any euro-region economy that is still contracting, data compiled by Bloomberg show. Spain’s benchmark index beat Europe’s Dow Jones Stoxx 600 Index by 15 percentage points in the same period as Madrid-based Telefonica SA, Europe’s second- largest phone company, and Banco Santander SA, the country’s biggest bank, benefited from Brazil’s growth. While Spain’s economy is projected to contract by 0.7 percent, IBEX members receive about 40 percent of earnings from Latin America, with 15 to 20 percent from Brazil, where the economy grew 1.9 percent in the second quarter, according to estimates by Bilbao-based Banco Bilbao Vizcaya Argentaria SA. Santander and Telefonica , which account for 45 percent of the index’s weighting, get more than 34 percent of their operating income from the region, data compiled by Bloomberg show. “For companies that make a lot of sales there, the potential is certain,” said Kilian de Kertanguy , a fund manager at Cholet-Dupont Gestion SA, which oversees about $2.3 billion and shares of Telefonica and BBVA, Spain’s second-biggest lender. “These big companies exposed to Brazil can have a contagious effect and lift the index. As a result, the whole market benefits.” The IBEX 35 slipped 0.5 percent at 11 a.m. in Madrid, while the Stoxx 600 dropped 0.8 percent. Latin America Spanish companies invested 125 billion euros ($185 billion) in Latin America since 1993, a third of which went to Brazil. Earnings from Latin America may encourage investors to buy Spanish stocks as an alternative to emerging markets, according to Bob Parker , who helps manage about $600 billion as vice chairman of Credit Suisse Asset Management in London. “If you ask which European country is most exposed to Latin America, it’s Spain,” said Parker. Investors who believe “emerging markets have climbed too far, too fast” can switch into Spanish equities with lower valuations, he said. Brazil’s Bovespa index is up 70 percent this year, pushing its valuation to 25.5 times reported earnings. Spain’s IBEX 35 is valued at 12.5 times profits. Itau Unibanco Holding SA in Sao Paulo, Latin America’s largest bank by market value, trades at 3.3 times net assets, more than double the 1.3 price-to-book ratio for Santander. BRIC Nations Brazil’s economy, bracketed with Russia, India and China as part of the BRIC group of largest emerging markets, will expand 4.8 percent next year after growing 0.18 percent in 2009, according to a central bank survey of about 100 economists published on Nov. 3. The Brazilian real is the best-performing of the world’s 16 most-traded currencies this year. “Spain is one of the few markets in Europe where you can play the BRIC theme,” said Herbert Perus , Vienna-based head of global equities at Raiffeisen Capital Management. Still, “you can’t buy the whole market as there are a lot of problems in Spain,” he said. The nation has been harder hit by the global recession than other countries after real estate prices slumped and more than 1 million newly built homes went unsold, government data show. Highest Unemployment Spain has the highest unemployment rate among 27 European countries at 18.9 percent, according to Eurostat data. The economy may contract 0.7 percent in 2010, while Germany, France, Italy, the Netherlands, Portugal and the U.K. grow, according to the International Monetary Fund. Only Ireland’s economy will shrink more in Europe, with a 2.5 percent decline in gross domestic product, according to the Washington-based group. Santander , which is based in its namesake Spanish city, plans to open 600 branches in Brazil by 2013 and last month raised 14.1 billion reais ($8.2 billion) in an initial stock sale of its Brazilian unit. The division may earn 4 billion euros in 2011, compared with an estimated 3.2 billion euros from Santander’s Spanish retail-banking business and 2.5 billion euros at its Abbey unit in the U.K., analysts at Evolution Securities wrote in an October report. Telefonica is competing with Paris-based Vivendi SA to buy Curitiba, Brazil-based telephone company GVT (Holding) SA. The Spanish phone company boosted its offer to about $3.99 billion yesterday. Madrid-based Mapfre SA, the country’s biggest insurer, has reached an accord with Brasilia-based Banco do Brasil SA to develop in South America. Such expansion “can be a plus for Spanish companies that have business in Brazil,” said Louis de Fels , a Paris-based fund manager at Raymond James Asset Management International, which oversees about $35 billion worldwide. “Growth in Brazil will help pull the market higher.” To contact the reporters on this story: Alexis Xydias in London at axydias@bloomberg.net ; Adria Cimino in Paris at acimino1@bloomberg.net .

Read the full article →

EU Raises GDP Outlook to See 0.7% Growth in 2010 as Deficits, Jobless Rise

November 3, 2009

By Emma Ross-Thomas Nov. 3 (Bloomberg) — The euro-area economy will return to growth next year, the European Commission said, raising its forecasts even as budget deficits and unemployment swell to the highest levels since at least 1995. The economy of the 16 countries sharing the euro will expand 0.7 percent in 2010 and 1.5 percent in 2011, after contracting 4 percent this year, the Brussels-based commission , the European Union’s executive, said today in its semi-annual economic forecasts . It previously forecast a 0.1 percent contraction in 2010. The region’s average deficit will widen to 6.9 percent of economic output next year and unemployment will reach 10.9 percent in 2011, the most since at least 1995. European companies from STMicroelectronics NV to Pernod Ricard SA cited signs of recovery as they reported earnings in the past month, suggesting that record-low interest rates and emergency stimulus measures are feeding into the broader economy. At the same time, the European Central Bank is warning that it is time for governments to start shoring up budgets or face the risk of higher rates when the stimulus is removed. European governments should start reining in budget deficits in 2011, by which time the recovery should be “sustained,” EU Monetary Affairs Commissioner Joaquin Almunia told a news conference in Brussels after issuing the forecasts. ‘Major Challenges’ “In 2011, I think everybody should start the consolidation,” he said “Major challenges persist for the near term; we are optimistic but we see in 2010 and 2011 only a gradual recovery.” The euro, which has strengthened 10 percent against the dollar in the past six months, traded at 1.4645 at 11:30 a.m. in London, down 0.9 percent from yesterday. The global economy is emerging from the worst recession in six decades, led by China, where data showed yesterday that the manufacturing industry expanded at the fastest pace in 18 months in October. Manufacturing also grew in the euro region last month for the first time in more than a year and expanded more than anticipated in the U.S. Global stocks have soared on expectations of recovery. The MSCI World Index has risen almost 60 percent since March. The commission’s growth forecasts are more optimistic than predictions from the International Monetary Fund on Oct. 1 that the region will grow 0.3 percent next year after a 4.2 percent contraction in 2009. The IMF forecast an unemployment rate of 11.7 percent for next year. ‘Far From Certain’ “It’s still far from certain that we’ve got a sustainable recovery,” said Howard Archer , chief European economist at IHS Global Insight in London. “Global economic activity could suffer a relapse and particularly in the euro zone with the euro at $1.50 any relapse in global activity, together with the strong euro, could really hit European exports.” Euro-area economies are recovering at different speeds, with Germany and France returning to quarterly growth in the three months through June, while Spain, Greece and Ireland are set to post full-year contractions in 2010, according to the commission’s forecasts. Those three countries are also projected to have some of the highest budget deficits and unemployment rates in the region, posing further risks to the recovery . Deficits next year will amount to 14.7 percent of gross domestic product in Ireland, 10.1 percent of GDP in Spain, 8.2 percent in France and 5 percent in Germany, the region’s largest economy, the commission said. All euro-area nations will breach the EU’s deficit limit of 3 percent of GDP in 2010 and 2011, according to today’s forecasts. Large Deficits “The combination of sustained large deficits, lower potential growth and unfavorable demographic trends is a source of major concern,” Almunia said. As some fiscal and monetary stimulus measures start to be withdrawn next year, rising unemployment will also stretch deficits, as joblessness is projected to rise to 10.7 percent next year and 10.9 percent in 2011. Metro AG , Germany’s largest retailer, said today that quarterly profit plunged 61 percent as rising joblessness eroded consumer spending across Europe. The company forecast no improvement for the rest of the year. While unemployment has more than doubled in two years in Spain, countries including Germany and the Netherlands have held down job losses with government incentives. “These schemes are softening the pain,” said Martin van Vliet , senior economist at ING Bank in Amsterdam. “The flip side is that the odds of a jobless recovery in the euro zone are much higher than in the U.S.” Price Declines Inflation next year will remain below the 2 percent ceiling set by the ECB, the commission said, with annual price declines projected in Ireland in 2009 and 2010. The euro-area inflation rate will be 0.3 percent this year, rising to 1.1 percent next year and 1.5 percent in 2011, it said. The Frankfurt-based ECB expects annual price growth to average about 0.4 percent this year and 1.2 percent in 2010. The ECB, which holds its next rate-setting meeting in two days, is expected to keep its benchmark rate at a record low of 1 percent until the third quarter of next year, according to the median forecast of economists in a Bloomberg survey. To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

Read the full article →

EU Raises 2010 GDP Forecast to See 0.7% Growth as Deficits, Jobless Rise

November 3, 2009

By Emma Ross-Thomas Nov. 3 (Bloomberg) — The euro-area economy may expand 0.7 percent next year, the European Commission said, raising its growth forecast even as budget deficits and jobless ranks swell further. The economy of the 16 countries sharing the euro will resume growth in 2010 and expand 1.5 percent in 2011, after contracting 4 percent this year, the Brussels-based commission , the European Union’s executive, said today in its semi-annual economic forecasts. It previously forecast a 0.1 percent contraction in 2010. The region’s average budget deficit will swell to 6.9 percent of gross domestic product next year and slip to 6.5 percent in 2011 and unemployment will rise into 2011, reaching 10.9 percent, the highest since at least 1995. European companies from STMicroelectronics NV to Pernod Ricard SA cited signs of recovery as they reported earnings in the past month, suggesting that record-low interest rates and government stimulus measures are feeding into the broader economy. Even as consumer confidence improves, soaring budget deficits and unemployment rates threaten to undermine the recovery from the worst recession in six decades. “While the recession may be over, the impact of the crisis is not,” the commission said in the report. For a “solid, sustainable” recovery, “it will be key to tackle the labor- market and debt challenges.” The commission’s growth forecasts are more optimistic than predictions from the International Monetary Fund on Oct. 1 that the region will grow 0.3 percent next year after a 4.2 percent contraction in 2009. The IMF forecast an unemployment rate of 11.7 percent for next year. Six Months The euro, which has strengthened 10 percent against the dollar in the past six months, traded at 1.4739, down 0.2 percent from yesterday before the report. Inflation next year will remain below the 2 percent ceiling set by the European Central Bank, the commission said, with annual price declines projected in Ireland in 2010. The euro- area inflation rate will be 0.3 percent this year, rising to 1.1 percent next year and 1.5 percent in 2011, it said. The Frankfurt-based ECB, which aims to keep inflation just below 2 percent, expects annual price growth to average about 0.4 percent this year and 1.2 percent in 2010. ECB President Jean-Claude Trichet said on Oct. 8 that inflation would turn positive again “in the coming months” and inflation expectations are “anchored.” The ECB, which holds its next rate meeting in two days, is expected to keep its benchmark interest rate at a record low of 1 percent until the third quarter of next year, according to the median forecast from a Bloomberg survey. ‘More and More’ Trichet said on Oct. 15 that there are “more and more signs of stabilization in the euro area,” even as it is “premature to declare the financial crisis to be over.” ECB council member Mario Draghi issued a warning about the sustainability of the recovery on Oct. 29, saying it may be based only on extraordinary stimulus measures and fade once those supports are removed. Also threatening the recovery are surging budget deficits and rising unemployment . Deficits next year will amount to 14.7 percent in Ireland, 10.1 percent in Spain, 8.2 percent in France and 5 percent in Germany, the commission said today. All euro region countries will breach the EU’s 3 percent limit in 2010 and 2011, it said. Increasing unemployment will stretch deficits, as joblessness is projected to rise to 10.7 percent next year and 10.9 percent in 2011. Metro AG , Germany’s largest retailer, said today that third-quarter profit plunged 61 percent as rising joblessness eroded consumer spending across Europe. The company forecast no improvement for the rest of the year. While unemployment has more than doubled in two years in Spain, countries including Germany and the Netherlands have held down job losses with government incentives. “These schemes are softening the pain,” said Martin van Vliet , senior economist at ING Bank in Amsterdam. “In the longer term, if unemployment remains relatively low compared to the pain in the economy, the flip side is that the odds of a jobless recovery in the euro zone are much higher than in the U.S.” To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

Read the full article →

Euro Economies to Grow 0.7% in 2010 as Unemployment Rises, Commission Says

November 3, 2009

By Emma Ross-Thomas Nov. 3 (Bloomberg) — The euro-area economy may expand 0.7 percent next year, the European Commission said, raising its growth forecast even as budget deficits and jobless ranks swell further. The economy of the 16 countries sharing the euro will resume growth in 2010 and expand 1.5 percent in 2011, after contracting 4 percent this year, the Brussels-based commission , the European Union’s executive, said today in its semi-annual economic forecasts. It previously forecast a 0.1 percent contraction in 2010. The region’s average budget deficit will swell to 6.9 percent of gross domestic product next year and slip to 6.5 percent in 2011 and unemployment will rise into 2011, reaching 10.9 percent, the highest since at least 1995. European companies from STMicroelectronics NV to Pernod Ricard SA cited signs of recovery as they reported earnings in the past month, suggesting that record-low interest rates and government stimulus measures are feeding into the broader economy. Even as consumer confidence improves, soaring budget deficits and unemployment rates threaten to undermine the recovery from the worst recession in six decades. “While the recession may be over, the impact of the crisis is not,” the commission said in the report. For a “solid, sustainable” recovery, “it will be key to tackle the labor- market and debt challenges.” The commission’s growth forecasts are more optimistic than predictions from the International Monetary Fund on Oct. 1 that the region will grow 0.3 percent next year after a 4.2 percent contraction in 2009. The IMF forecast an unemployment rate of 11.7 percent for next year. Six Months The euro, which has strengthened 10 percent against the dollar in the past six months, traded at 1.4739, down 0.2 percent from yesterday before the report. Inflation next year will remain below the 2 percent ceiling set by the European Central Bank, the commission said, with annual price declines projected in Ireland in 2010. The euro- area inflation rate will be 0.3 percent this year, rising to 1.1 percent next year and 1.5 percent in 2011, it said. The Frankfurt-based ECB, which aims to keep inflation just below 2 percent, expects annual price growth to average about 0.4 percent this year and 1.2 percent in 2010. ECB President Jean-Claude Trichet said on Oct. 8 that inflation would turn positive again “in the coming months” and inflation expectations are “anchored.” The ECB, which holds its next rate meeting in two days, is expected to keep its benchmark interest rate at a record low of 1 percent until the third quarter of next year, according to the median forecast from a Bloomberg survey. ‘More and More’ Trichet said on Oct. 15 that there are “more and more signs of stabilization in the euro area,” even as it is “premature to declare the financial crisis to be over.” ECB council member Mario Draghi issued a warning about the sustainability of the recovery on Oct. 29, saying it may be based only on extraordinary stimulus measures and fade once those supports are removed. Also threatening the recovery are surging budget deficits and rising unemployment . Deficits next year will amount to 14.7 percent in Ireland, 10.1 percent in Spain, 8.2 percent in France and 5 percent in Germany, the commission said today. All euro region countries will breach the EU’s 3 percent limit in 2010 and 2011, it said. Increasing unemployment will stretch deficits, as joblessness is projected to rise to 10.7 percent next year and 10.9 percent in 2011. Metro AG , Germany’s largest retailer, said today that third-quarter profit plunged 61 percent as rising joblessness eroded consumer spending across Europe. The company forecast no improvement for the rest of the year. While unemployment has more than doubled in two years in Spain, countries including Germany and the Netherlands have held down job losses with government incentives. “These schemes are softening the pain,” said Martin van Vliet , senior economist at ING Bank in Amsterdam. “In the longer term, if unemployment remains relatively low compared to the pain in the economy, the flip side is that the odds of a jobless recovery in the euro zone are much higher than in the U.S.” To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

Read the full article →

FirstService Grows Into the UK to Drive Expansion in Europe

October 29, 2009

TORONTO, Oct. 29, 2009 (GLOBE NEWSWIRE) — FirstService Corporation (Nasdaq:FSRV) (TSX:FSV) (TSX:FSV.PR.U) today announced the completion of its purchase of a 29.99% interest in London-based Colliers CRE plc (AIM:COL), a leading commercial real estate consultancy service practice group with operations in the United Kingdom, Ireland and Spain. The terms of the transaction were not disclosed. All dollar amounts noted are in U.S. dollars.

Read the full article →

France to face Ireland in World Cup play-offs

October 20, 2009

France to face Ireland in World Cup play-offs

Read the full article →

China Default Swaps Show Ratings Upgrade That’s No `Slam-Dunk’ for Moody’s

October 15, 2009

By Wes Goodman and Lilian Karunungan Oct. 16 (Bloomberg) — Investors are signaling China’s debt rating is too low for an economy set to overtake Japan as the second biggest, driving up returns on government and corporate securities. Contracts to insure China’s bonds are less expensive than those for Greece, Ireland, Spain and Italy — each deemed at least as safe by Moody’s Investors Service, Standard & Poor’s or Fitch Ratings, after being pricier in 2008. They also are cheaper than all but four of 39 emerging-market credit-default swaps tracked by Bloomberg, including Israel and Abu Dhabi, which have the same or higher international-debt ratings. A JPMorgan Chase & Co. index of dollar-denominated Chinese government and corporate debt is up 27 percent this year after posting its best three quarters since the measure was created in 2005, as China’s $3.9 trillion economy led the recovery from a global recession. Germany’s Union Investment and Japan’s Mitsubishi UFJ Asset Management Co., which together manage more than $280 billion, are betting on China government notes while Western Asset Management in the U.S. is buying debt sold by property developers and gas utilities. “China is the biggest winner to come out of the financial crisis,” said Sergey Dergachev , who works on emerging markets for Union Investment in Frankfurt, which oversees about $230 billion in assets as Germany’s third-biggest money manager. “It will probably be upgraded next year.” Lower Premium It costs 68 basis points, or $68,000 a year to protect $10 million of China’s bonds, 21 points more than for Japan’s debt, which is rated two levels higher. That premium is down from this year’s 69-point average and about the smallest since January 2008. China’s 4.25 percent euro bonds due in 2014 have returned 12 percent this year, the most since they were sold in 2004. They gained 5.1 percent in all of 2008 and 7.2 percent in 2005, the best full year so far, data compiled by Bloomberg show. Demand for the bonds has narrowed the spread to Italy’s bonds to 26 basis points, or 0.26 percentage point, from 1.76 percentage points in October, the month after the collapse of Lehman Brothers Holdings Inc. prompted investors to dump emerging-market debt. Dergachev bought the bonds about six months ago and predicts the yield will fall below Italy’s. Investors would earn 4 percent should demand increase enough to lower the current 3.08 percent yield by 26 basis points in a year, data compiled by Bloomberg show. By comparison, investors have lost 2.9 percent on U.S. Treasuries so far in 2009, Merrill Lynch & Co. indexes show. Reserves China has the world’s largest currency reserves at $2.27 trillion and debt equal to 20 percent of gross domestic product, compared with 219 percent for Japan and 116 percent for Italy. The three main ratings companies say China’s record increase in lending and reliance on government spending to drive growth offset those advantages. “It’s not as obvious as it may seem to some investors that China is a slam-dunk, double-A country,” said Thomas Byrne, a Singapore-based senior vice president at Moody’s, which rates the country A1, four levels below its top Aaa. “Their banks have injected so much credit in a short time,” he said in an Oct. 12 phone interview. Ratings companies say China’s economic growth masks weaknesses because it has been sustained by a $586 billion government stimulus package and record new loans this year of $1.3 trillion. The country’s GDP will expand 9 percent in 2010, versus 1.7 percent for Japan, the Washington-based International Monetary Fund predicts. China’s economy will grow to $5.3 trillion, surpassing Japan’s output of $4.7 trillion, IMF figures show. ‘Weakness Lurking’ Moody’s is evaluating whether there is “weakness lurking in the banking sector” after the lending jump, Byrne said. Kim Eng Tan , an S&P analyst in Singapore, said China’s stimulus may spur an increase in local-government debt. “China’s reported financial attributes do appear strong,” he wrote in an e-mailed response to questions. “However, these have to be balanced against less obvious but important weaknesses.” Fitch isn’t “contemplating” an upgrade until the nation’s exports recover, James McCormack , the head of sovereign debt ratings for Asia and the Pacific in Hong Kong, said in an interview. Exports fell at the slowest pace in nine months in September, dropping 15.2 percent from a year earlier to $115.9 billion, according to the customs bureau. ‘Good News’ “A lot of the good news supporting China is pretty much all priced in,” said Kenneth Akintewe , who helps manage $138 billion at Aberdeen Asset Management Plc in Singapore. “The eternal question now is: How much further can it go?” Aberdeen said the best opportunities are in China’s local- currency debt market, which the company is awaiting a license to access. “China is talking about more currency flexibility, but talk is one thing, and it would be nice to see some more meaningful action,” he said. Speculation about an upgrade comes as China starts to open its local currency debt market to global investors. The government has five bonds denominated in dollars, one in euros and one in yen. Five of the six for which Bloomberg has data have produced profits this year for an average return of 2.7 percent, with three outpacing 2008’s performance. The nation’s overseas bonds total $4.3 billion, less than a fifth of the Philippine government’s $22 billion in outstanding foreign securities. Including corporate bonds, China has $43.5 billion of international debt as of June, according to the Bank for International Settlements in Basel, Switzerland. Foreign Investors As of September, 78 foreign entities, including UBS AG and Morgan Stanley, were permitted to invest another $15.7 billion in local-currency debt and stocks, according to China’s State Administration of Foreign Exchange data. China has said it plans to increase that to $30 billion with additional investment licenses. The government denies foreigners access to the rest of its yuan-denominated bonds, which totaled the equivalent of $1.35 trillion in March, almost double 2006’s year-end sum, BIS figures show. China plans to complete its first auction of yuan bonds in Hong Kong this month, to raise the equivalent of $880 million. Demand has been “quite strong,” said Tse Kwok Leung , head of the economic research division at Bank of China Ltd.’s Hong Kong branch. Bank of China, the nation’s third-largest lender, and mainland financial companies also have sold the equivalent of $4.7 billion in local-currency bonds in Hong Kong since July 2007. China’s foreign-currency debt was upgraded to its current levels of A1 by Moody’s in July 2007, A+ by Fitch in November 2007 and A+ by S&P in July 2008. Japan is rated Aa2, AA and AA, respectively. Lower Costs Since China’s last upgrade, the cost of insuring its bonds has fallen from as high as 2.90 percentage points in October to today’s 0.68 point, the sharpest drop since the contract started trading in 2003. Initially created to protect against defaults, swaps also are used to speculate on credit quality. DBS Asset Management, a unit of Singapore’s largest bank, said state-owned banks’ dollar debt is worth buying, including China Development Bank’s 4.75 percent note due in 2014, which yields 3.70 percent according to data compiled by Bloomberg. It also recommends seeking access to yuan bonds to profit from exchange-rate appreciation. “This year it has been fairly straightforward to make money from dollar credits,” said Desmond Soon , who helps manage about $21 billion at DBS Asset in Singapore. “Next year, the story will be migration towards currency bets.” The median forecast in a Bloomberg survey of 18 currency strategists predicts the yuan will climb 3 percent to 6.63 by the end of 2010. Rush Demand for Chinese bonds will surge as the government opens the local market to overseas investors, said Hideo Shimomura , who helps oversee $55 billion as chief fund investor at Mitsubishi UFJ Asset in Tokyo, part of Japan’s largest bank. It now holds only Chinese and Hong Kong bonds denominated in U.S. and Hong Kong dollars. “People will rush into the market because the currency might strengthen,” Shimomura said. “China is becoming almost the same as industrialized countries, so the rating must be upgraded.” Rajeev De Mello , the head of Asian bonds in Singapore for Western Asset, is buying corporate debt to bet that China will sustain growth. He has bonds of Xinao Gas Holdings Ltd., the gas distributor partly owned by the World Bank, and Sino-Forest Corp., which operates forest plantations in nine Chinese provinces. “The nation is definitely on track for an upgrade,” said De Mello, whose company oversees $513 billion of debt. “The government is pushing growth. That means a bigger infrastructure buildup.” He also holds the debt of Agile Property Holdings Ltd., a Hong Kong-traded developer of real estate in China, and Galaxy Entertainment Group Ltd., which owns the StarWorld Hotel and Casino in Macau. “The market for dollar corporate bonds is a very active, and we’ve seen trading volume up a lot this year,” said Doris Chen , a credit analyst in Hong Kong at SJS Markets Ltd., a brokerage based in the city that specializes in high-yield Asian debt. “There is still a strong interest.” To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net ; Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net .

Read the full article →

Clinton Urges Northern Ireland to Push Ahead With Peace in Belfast Visit

October 12, 2009

By Janine Zacharia and Colm Heatley Oct. 12 (Bloomberg) — Secretary of State Hillary Clinton waded into the Northern Ireland peace process during a visit to Belfast meant to push for implementation of an agreement negotiated during her husband’s presidency. “Northern Ireland has come a long way, old enemies are working together to build a stable, prosperous future,” Clinton told reporters today at the steps of the Assembly on the Stormont estate outside Belfast before entering the building to address lawmakers, adding that business opportunities “will come as investors gain even greater confidence in the long-term stability of Northern Ireland.” Clinton is the first senior foreign dignitary to address the Assembly in the U.K. province, which is battling a recession that has seen property prices slump and unemployment soar amid the worst upsurge in terrorist violence in a decade. A dispute over policing between the pro-U.K. Democratic Unionist Party and the Irish nationalist Sinn Fein party has recently threatened the accord, negotiated in 1998 by former U.S. Senator George Mitchell , now President Barack Obama’s Middle East peace envoy. Clinton met with both parties earlier today. Clinton’s visit follows one by U.K. Prime Minister Gordon Brown , who a week ago met with Northern Ireland’s political leaders in an attempt to resolve a disagreement over the appointment of a policing minister for the province. Brown pushed for agreement between First Minister Peter Robinson of the DUP and Deputy First Minister Martin McGuinness of Sinn Fein on a schedule for the devolution of powers currently held by the British Parliament in London. The two parties are the biggest in the power-sharing Assembly. Sinn Fein Veto Sinn Fein insists that the policing and justice powers need to be devolved to the Assembly before the end of the year, while the DUP has refused to set a time for the transfer. In June 2008, Sinn Fein exercised a veto over the issue, causing the suspension of the province’s ruling executive for five months. “The step of devolution for policing and justice is an absolutely essential milestone,” Clinton said yesterday in Dublin in a preview of her remarks. “Clearly, there are questions and some apprehensions, but I believe that due to the concerted effort of the British government, the Irish government, the support of friends like us in the United States, that the parties understand that this is a step they must take together.” Northern Ireland’s Irish National Liberation Army said yesterday it rejected violence and pledged to achieve its objectives peacefully, following the lead of other groups in the province that fought in the four-decade long conflict known as “The Troubles.” The violence claimed more than 3,500 lives. ‘Supporting Peace’ The INLA, which killed 113 people during its 30-year campaign to unite Ireland, “no longer wants to maintain a military option and is pledged to supporting peace,” Martin McMonagle, who sits on the executive of the INLA-aligned Irish Republican Socialist Party, said yesterday in a telephone interview. Earlier, McMonagle gave the same message to a crowd of republicans in Bray, County Wicklow. All of the main terrorist groups that fought in Northern Ireland’s conflict have now renounced violence. Still, the peace process has been shaken by attacks this year. Dissident republicans, opposed to power-sharing, shot dead two British soldiers and a policeman in March, the first fatalities for the military in the region since 1997. Last month, dissidents planted a 600-pound (272-kilogram) bomb in a bid to kill police and since July have been blamed for orchestrating riots in Belfast. Clinton stayed at Belfast’s Europa Hotel, which was the most-bombed in Europe during the conflict. Peace, Progress The secretary of state, who appointed a special economic envoy for Northern Ireland, said the region could thrive if it moved forward with the peace process. The global economic slump is already undermining gains made as a result of the peace efforts in Northern Ireland. Unemployment has almost doubled in the past year as companies from Caterpillar Inc. to Ulster Bank Ltd. cut jobs. House prices have fallen by almost 35 percent since hitting a peak of 227,970 pounds ($336,271) in late 2007, according to Nationwide Building Society. An Inspiration Clinton noted that she often refers to the Northern Ireland peace process as an inspiration to foes in other places to make peace. “Many people who are despairing over the prospects of peace look to Northern Ireland,” she said yesterday after meeting with Irish Prime Minister Brian Cowen . “They think to themselves that if it could be done there, then perhaps we, too, have a chance to try to cross that border between conflict and peace.” Before flying to Belfast yesterday, Clinton made an impromptu, campaign-like stop in downtown Dublin, detouring to Grafton Street, the city’s fashionable main drag, while en route to the airport. Clinton first surprised patrons at Bewley’s cafe when she came in and ordered a cappuccino. She then walked to an Irish pub, McDaids, and hoisted a Harp beer as people there cheered and raised glasses of Guinness to her. To contact the reporters on this story: Janine Zacharia in Belfast at jzacharia@bloomberg.net ; Colm Heatley in Belfast at cheatley@bloomberg.net .

Read the full article →

European Stocks Extend Six-Month Rally; Allied Irish, Danisco, CRH Climb

September 20, 2009

By Adam Haigh Sept. 19 (Bloomberg) — European stocks advanced for a second week, with the Dow Jones Stoxx 600 Index extending a six- month rally, as economic reports spurred speculation that company earnings will improve amid a global recovery. Allied Irish Banks Plc soared 28 percent after saying it will sell property loans to the country’s so-called bad bank and raise about 2 billion euros ($2.9 billion) in capital. Danisco A/S jumped 19 percent as the Nordic region’s biggest food- ingredient maker reported first-quarter earnings that topped estimates and raised its full-year forecasts. The Stoxx 600 added 1.3 percent to 244.92, as 15 out of 19 industry groups advanced. A 55 percent rally since March 9 has pushed the regional gauge to an 11-month high as results at companies from Goldman Sachs Group Inc. to Roche Holding AG surpassed projections and the German and French economies unexpectedly exited recessions. “We have confidence in top-line growth coming through because we’ve seen the macro economic data tell us there is actually growth in these economies now,” said Nick Nelson , a European equity strategist at UBS AG in London. “Corporate profits are providing you with the reason to get more constructive on stocks.” Earnings for companies in the Stoxx 600 are forecast to rise 4.3 percent this year and 29 percent in 2010, according to weekly data compiled by Bloomberg. Economy Watch Reports this week showed the number of Americans filing first-time claims for jobless benefits fell unexpectedly last week, while builders in the U.S. broke ground in August on the most houses in nine months and manufacturing in the Philadelphia region expanded in September for a second month. Fed Chairman Ben S. Bernanke said Sept. 15 that the worst U.S. recession since the 1930s has probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate. Berkshire Hathaway Inc. Chairman Warren Buffett said at a conference in California this week that his company is buying equities, while billionaire investor Kenneth Fisher said in an interview that global stocks are in the middle of a “V-shaped recovery,” led by emerging markets, that will last for at least another six months. National benchmark indexes advanced in all 18 western European markets except Iceland. The U.K.’s FTSE 100 rallied 3.2 percent and Germany’s DAX added 1.4 percent. France’s CAC 40 increased 2.5 percent. Irish Lenders Ireland’s ISEQ Index rallied 6.1 percent, led by Allied Irish and Bank of Ireland Plc . Ireland’s National Asset Management Agency will buy loans with a combined book value of 40 billion euros from the two banks as the government seeks to purge them of souring assets. Allied Irish said it may tap new and existing investors for capital as well as selling some assets to raise the 2 billion euros. Bank of Ireland shares climbed 20 percent. Sept. 15 saw the one-year anniversary of Lehman Brothers Holdings Inc.’s bankruptcy filing, which exacerbated the credit crunch and helped drag the global economy into its worst slowdown since World War II. Losses at the world’s biggest financial institutions since the start of 2007 have widened to more than $1.6 trillion. Danisco raised its net-income forecast for the 12 months ending April 30 to “slightly above” 700 million kroner ($138 million) from 650 million kroner previously, and said cost plans are starting to work. ‘Outperform’ Construction and material stocks got a boost this week after Exane BNP Paribas raised its recommendation on the industry to “outperform” from “neutral” and Goldman Sachs lifted its stance on European builders to “neutral” from “cautious.” CRH Plc, the world’s second-largest maker and distributor of building materials, rallied 12 percent, while Greece’s Titan Cement Co. climbed 8.2 percent. Lafarge SA, the biggest cement maker, advanced 6.6 percent. This month’s $16 billion bid from Kraft Foods Inc. for Cadbury Plc may signal a pickup in mergers and acquisitions activity, following the slowest August for Europe’s takeover market in five years. In the first half, M&A activity fell 42 percent in the U.S., 50 percent in Asia and almost 60 percent in Europe as the credit crisis choked off financing. Super de Boer NV , the Dutch food retailer controlled by France’s Casino Guichard-Perrachon SA, surged 36 percent after receiving an offer from rival Jumbo Groep Holding BV that values the company at about 482 million euros. Enterprise Inns Plc slumped 14 percent, posting the steepest decline among all the Stoxx 600 constituents. The U.K.’s second-largest pub owner is “likely” to seek to raise 500 million pounds ($813 million) selling shares to ease its debt burden, according to Seymour Pierce analysts. To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

Read the full article →

Video: Irish Stock Performance

September 18, 2009

Domestic property and export demand market slumps greatly affects Ireland’s economy. (Bloomberg News)

Read the full article →

Stocks Decline From Shanghai to New York as China Index Enters Bear Market

August 31, 2009

By Lynn Thomasson and Adria Cimino Aug. 31 (Bloomberg) — Stocks retreated from Shanghai to New York on speculation the six-month rally has outpaced prospects for earnings growth. The yen strengthened after yesterday’s landslide election victory by the Democratic Party of Japan. The MSCI World Index of 23 developed nations slid 1 percent at 9:35 a.m. in New York, trimming its fifth monthly advance since the end of February. The Standard & Poor’s 500 Index fell 0.9 percent, while China’s Shanghai Composite Index tumbled 6.7 percent, the most since June 2008, and entered a so-called bear market. The yen strengthened against all 16 most-traded currencies. “There was more breadth to the global downturn than we’ve ever seen so it’s going to be very difficult to re-start the broader global economy,” said Stephen Roach , chairman of Morgan Stanley Asia Ltd., in an interview on Bloomberg Television. “It’s too early to put all this behind us.” Equities slid after valuations for Europe’s Dow Jones Stoxx 600 Index and the MSCI Asia Pacific Index reached the most expensive levels in six years, as investors speculated that lending curbs in China will damp growth in the world’s third- largest economy. The tumble in Chinese stocks increased demand for the relative safety of the yen. The Japanese currency was also boosted as the DPJ’s victory marked an end to single-party government that lasted almost unbroken for half a century. Rising Valuations The Stoxx 600 fell 0.5 percent, reducing its monthly advance to 5 percent. The rally has driven the price-earnings ratio for the index up to 48.6, the highest level since June 2003, according to weekly data compiled by Bloomberg. Trading in London was closed for a holiday. Allied Irish Banks Plc fell 7.9 percent in Dublin on speculation that the Irish government may cut initial payments to lenders under a plan to buy 90 billion euros ($129 billion) of loans from them. Bank of Ireland Plc slid 13 percent. The S&P 500 was poised to trim its sixth straight monthly advance, the longest stretch of gains since January 2007. “There’s a wide consensus saying that sentiment has been running ahead of fundamentals,” said Vincent Juvyns , a Brussels-based strategist at ING Investment Management, which oversees about $476 billion. The recovery in stocks “is probably too fast and too strong,” he said in a Bloomberg Television interview. Baker Hughes Baker Hughes Inc., the world’s third-largest oilfield services provider, slid 5.9 percent in New York. The company agreed to buy BJ Services Co. for $5.5 billion to add to its natural-gas and deepwater businesses. BJ Services surged 10 percent. The MSCI Asia Pacific Index slipped 0.9 percent. Baoshan Iron & Steel Co. dropped 7 percent after the company reported a 93 percent plunge in first-half profit. The Asian gauge is valued at 108 times the earnings of its 970 companies, the highest level since 2002, Bloomberg data show. China Southern Airlines Co. , the nation’s biggest carrier, fell 7.9 percent. First-half net income at the Guangzhou-based carrier tumbled 97 percent as it failed to repeat year-earlier foreign-exchange gains. Industrial Bank Co. and Aluminum Corp. of China Ltd. tumbled 10 percent after Caijing magazine reported new loan growth this month may be almost half that of July. ‘Bubble Territory’ The Shanghai Composite has slumped 23 percent to 2,667.75 since Aug. 4, more than the 20 percent drop that is the common definition of a bear market. China’s gauge is the worst performer this month among 89 benchmark indexes tracked by Bloomberg globally. China’s economy isn’t “sustainable” and the Shanghai Composite “should be 2,000 or less,” former Morgan Stanley Asian economist Andy Xie said in a Bloomberg Television interview. He added that China’s market remains “in bubble territory.” Japan’s Nikkei 225 Stock Average fell 0.4 percent, reversing an earlier gain of 2.2 percent. The yen appreciated against all 16 major trading partners tracked by Bloomberg. “Some are saying the market has fully reflected the change of government, but the change is too big to be priced in,” said Hisakazu Amano , who helps oversee the equivalent of $18 billion at T&D Asset Management Co. in Tokyo. “The impact of the DPJ victory on company earnings is still uncertain and investors can’t decide what to buy or sell.” Japan’s Election The DPJ routed the Liberal Democratic Party in yesterday’s vote, capturing 308 of 480 lower-house seats. The DPJ has pledged to revive the economy, which is emerging from its deepest recession since World War II, by boosting child-care spending, cutting taxes and limiting the power of bureaucrats. The stronger yen weighed on exporters. Honda Motor Co. , which gets more than half its sales in North America, slid 1.8 percent. Canon Inc., the world’s biggest maker of digital cameras, which gets a third of its sales from the Americas, lost 3.3 percent. To contact the reporters on this story: Adria Cimino in Paris at acimino1@bloomberg.net ; Lynn Thomasson in New York at lthomasson@bloomberg.net ..

Read the full article →

Kennedy’s Ancestral Home in Ireland Mourns Passing of Last Elvis-Like Hero

August 28, 2009

By Fergal O’Brien and Dara Doyle Aug. 28 (Bloomberg) — Ingrid O’Brien said she will lose a hero tomorrow when Edward Kennedy is buried 3,500 miles away. Senator Kennedy, who died this week aged 77, will be laid to rest at Arlington National Cemetery outside Washington where his two brothers John and Robert are interred. More than 150 years ago, their great-grandfather left Dunganstown in southeast Ireland, less than four miles from O’Brien’s home in New Ross. “John, Bobby, Ted, they were like Elvis to us,” said O’Brien, 65, a former head of the local municipal authority. “Except better, because they were ours.” In the U.S., the Kennedys became the most famous members of Ireland’s diaspora. Around New Ross, a port town of 7,000 people, the family’s legacy is everywhere. The family home is a museum and a statue of John F.Kennedy in a suit and tie stands alongside the Barrow river. The Dunbrody , a replica of the famine ships that brought Patrick Kennedy and thousands of others to the U.S., bobs on the waterfront. The municipal building close to the river has a sign on the door inviting passers-by to sign a book of condolences for Ted. “The Kennedy experience is the paradigm of the immigrant experience,” said Sean Reidy, 60, who runs the JFK Trust, which oversees the Dunbrody project. “They left on a famine ship and returned as president.” Kennedy Standstill Ted Kennedy was diagnosed in May 2008 with a malignant brain tumor and died on Aug. 25 at his home in Hyannis Port, Massachusetts. He visited New Ross at least twice, traveling to the family homestead. Reidy said he met Ted four times, including an encounter in his office in Washington in the early 1990s as he sought to raise the finance to build the triple-masted Dunbrody. “I remember he had a Wexford road sign pointing to Dunganstown,” he said. “It was very striking.” Ted’s great-grandfather left Ireland in 1848 from New Ross and sailed to the U.S. The 1840s Irish famine marked the start of a mass emigration trail. Between 1841 and 1961, Ireland’s population shrank to 2.8 million people from 6.5 million. Just over a century after Patrick left, John F. Kennedy became the U.S.’s first Roman Catholic president. Ireland came to a standstill two years later when he visited the country. Shining a Light O’Brien remembers her family buying their first television set to watch Kennedy tour the country. When the president came, “it was like someone had switched on the light,” she said. “New Ross was so poor then, so grey, almost like the Third World.” The president was assassinated in 1963, just months after he visited Ireland. New York Senator Robert F. Kennedy was killed by a gunman five years later. At that point, hopes in New Ross passed to Ted. O’Brien met the senator at a business function in Boston on St. Patrick’s Day , Ireland’s national holiday, two years ago to discuss plans to erect a statue of his brother on the waterfront. “It was like meeting a family member you don’t see very often,” she said. “He was so in tune with what was happening in New Ross. He knew every place, every name we mentioned.” Kennedy helped broker peace in Northern Ireland and proposed laws that would allow undocumented immigrants apply for work and travel permits. ‘Here for Ted’ “He was giant of a politician who was a great friend to this small county,” Ken McMullen, who worked for 17 years in the U.S., said as he lined up at the U.S. embassy in Dublin to sign a book of condolences. “I’m here for Ted today.” Irish Prime Minister Brian Cowen , who last spoke to Kennedy on St. Patrick’s Day, will attend the funeral tomorrow. “He played a particularly important role in the formative days of the Northern Ireland peace process,” Cowen said on Aug. 26. “He used his political influence wisely. He was the voice of moderation and common sense.” While Kennedy’s death deprives the U.S. of one of its greatest lawmakers, Ireland will also lose a friend, said Reidy, who recalls that the Senator’s letter of support for his project helped him lure sponsors for the Dunbrody. “Ted opened doors that nobody else could,” Reidy said by telephone. “He was the patriarch of the family, and the first port of call when Ireland needed something. Now, he’s gone, it’ll never be the same again.” To contact the reporters on this story: Fergal O’Brien in Dublin at fobrien@bloomberg.net ; Dara Doyle at ddoyle1@bloomberg.net

Read the full article →

European Stocks Fall for Second Day; Lloyds, Danske Bank, Natixis Decline

August 11, 2009

By Adam Haigh Aug. 11 (Bloomberg) — European stocks fell for a second day, erasing an earlier advance for the Dow Jones Stoxx 600 Index, as banks retreated. Lloyds Banking Group Plc plummeted 9.4 percent as the Financial Times reported the U.K. lender may face government resistance to its tentative plans to raise approximately 15 billion pounds ($25 billion) in a rights offer. Danske Bank A/S sank 2.1 percent after posting an unexpected net loss. The Stoxx 600 slid 0.4 percent to 228.61 as of 11:38 a.m. in London. The gauge has soared 45 percent since March 9 as companies from GlaxoSmithKline Plc to Intel Corp. reported better-than-estimated results. The measure is valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show. Standard & Poor’s 500 Index futures expiring in September slipped 0.3 percent. Federal Reserve chairman Ben S. Bernanke and his four Federal Open Market Committee colleagues, gathering today and tomorrow in Washington, may acknowledge an improvement in the economic outlook while maintaining a pledge to buy as much as $1.75 trillion of bonds, economists said. Lloyds slid 9.4 percent to 88.72 pence. The bank may face resistance to its tentative rights offer plan to reduce reliance on the government and U.K.’s toxic asset protection program, the Financial Times reported, citing unidentified people familiar with the matter. Danske Bank Danske Bank slid 2.1 percent to 115.75 kroner as Denmark’s largest lender said it expects impairment charges to remain high this year after a surge in loan losses at home and in Ireland resulted in a second-quarter loss. Natixis SA slumped 15 percent to 2.13 euros after the Wall Street Journal said there are no plans to de-list any of the lender’s securities from the market. Adecco SA , the world’s largest supplier of temporary workers, fell 4.3 percent to 50.6 Swiss francs after reporting a net loss of 147 million euros ($208 million) for the second quarter. Analysts surveyed by Bloomberg had predicted net income of 32.8 million euros. Per-share earnings at companies in the Stoxx 600 that reported results since July 8 have slumped 36 percent, while more than half have topped analysts’ projections, according to data compiled by Bloomberg. To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

Read the full article →

Patt Cottingham: Goodbye/Hello 12: Moving Toward Cosmopolitan Brands

August 9, 2009

First, let me define how I am using the term cosmopolitan brands . The origin of the word cosmopolitan is borrowed from the Greek word kosmos or cosmos , meaning world. Through globalization, brands have extended their products and services into new markets. Yet is profiting from new global markets the end game, or will brands come to value the needs of humanity as important to their bottom line? The next phase will be if brands chose to do this. Will they make the choice to be responsible, interconnected world citizens, knowing that the choices they make inevitably effect everyone? If so, they are becoming worldly cosmopolitan brands that are defined and shaped, not just in the short term for profit margins, but in a longer, more sustainable humanitarian view. For a really good article on cosmopolitanism and how Noah Bopp, the director of the School for Ethics and Global Leadership teaches his students how global interconnectedness and choice determine brand ethics by using a Hershey’s Kiss as an example, please visit Patriotism and Cosmopolitanism by Policy Innovations, an online publication of the Carnegie Council Brands like the U.S.’s Patagonia, Sun Chips, Ethos Water, Newman’s Own, Ben & Jerry’s, as well as the U.K.’s Ethletic Sneaker, Ireland’s Edun, France’s Sur Le Dos Des Filles, and Korea’s Beautiful Store and Natural Dream, a growing number around the world are beginning to move in this direction. These brands are making very conscious and considered choices about their impact on humanity. They are building into their brand DNA a code of ethics that is next generation and humanitarian focused. It is a long-sighted view. Given the urgency of global warming, issues of poverty, human rights, and confluence of other factors facing our global human society, planning only in the short term is rapidly becoming yesterday’s model. The new model of cosmopolitan brand building is not waiting for perfection but taking deliberate, consistent steps, and weighing the good of humanity along the way. It will take influencial leaders to guide brand policies, behaviors, and actions as it relates to humanity at large. Informing and educating customers about their policies and practices, and encouraging them to become cosmopolitans is beginning to happen. In turn individuals can make the choice to buy from brands that recognize this worldly interconnected humanitarian view. They can teach their children this one world philosophy early so that they too will contribute to the principle of cosmopolitanism. Brands who build up from a humanitarian foundation will create a more responsible and harmonious system. And that is a really good place for all brands to be and grow into tomorrow. The new model of cosmopolitan brand building is not waiting for perfection but taking deliberate consistent steps weighing the good of humanity along the way. It will take influential leaders to guide brand policies, behaviors, and actions as it relates to humanity at large. Informing and educating customers about their policies and practices, and encouraging them to become cosmopolitans is beginning to happen. In turn individuals can make the choice to buy from brands that recognize this worldly interconnected humanitarian view. They can teach their children this one world philosophy early so that they too will contribute to the principle of cosmopolitanism . Brands who build up from a humanitarian foundation will create a more responsible and harmonious system. And that is a really good place for all brands to be and grow into tomorrow. Goodbye to a limited short-term profit only view of corporate brand building. Hello to a long-term view of strong bottom-lines from humanitarian brand building. Goodbye to disconnected brands lacking ethics and concern for humanity. Hello to an interconnected brands with moral compasses guided by humanity. Goodbye to consumerism. Hello to cosmopolitanism.

Read the full article →

Look for ways to diversify your pension

August 6, 2009

REDDAN . WHILE THE financial crisis has battered pension funds across the globe, few developed countries have seen their private pension funds fall as significantly as Ireland has. A recent survey from the Organisation for Economic Co-operation and

Read the full article →

European Consumer Prices Fall 0.6%; Jobless Rate Rises to Decade-High 9.4%

July 31, 2009

By Emma Ross-Thomas July 31 (Bloomberg) — European consumer prices fell by the most in at least 13 years in July after energy costs declined and unemployment rose to the highest in a decade. Prices in the euro region dropped 0.6 percent from a year earlier, the most since the data were first compiled in 1996, the European Union statistics office in Luxembourg said today.

Read the full article →

European Consumer Prices Fall Most in 13 Years; Unemployment Rate Is 9.4%

July 31, 2009

By Emma Ross-Thomas July 31 (Bloomberg) — European consumer prices fell by the most in at least 13 years in July after energy costs declined and unemployment rose to the highest in a decade. Prices in the euro region dropped 0.6 percent from a year earlier, the most since the data were first compiled in 1996, the European Union statistics office in Luxembourg said today. That exceeded the 0.4 percent decrease forecast by economists, according to the median of 32 estimates in a Bloomberg survey. Unemployment rose to 9.4 percent in June, the highest since 1999, from a revised 9.3 percent in May, a separate report showed.

Read the full article →

Porsche Farce Hits Inspector Clouseau of Finance: Matthew Lynn

July 28, 2009

Commentary by Matthew Lynn July 28 (Bloomberg) — It never takes much to get German industrialists and politicians complaining about Anglo-Saxon capitalism. They line up to point out the flaws of U.K. and U.S. businesses dominated by shareholders and driven by takeovers

Read the full article →

Ireland Bonds Outperform German Bunds as Europe Convergence Trade Returns

July 27, 2009

By Anchalee Worrachate and Anna Rascouet July 27 (Bloomberg) — Less than six months after dumping the downgraded debt of Greece and Ireland , investors are piling back in, sparking the best bond returns in Europe. Greece’s bonds earned 8.1 percent this year, the most in the region, making them a “top pick” for Deka Investment GmbH. HSBC Holdings Plc recommends Italy, whose notes gained 4.1 percent. DWS Investment GmbH is buying Irish securities, which jumped 4.7 percent since March

Read the full article →

Ireland May Sell More Bonds This Year to Help Finance 2010 Budget Deficit

July 22, 2009

By Anchalee Worrachate July 22 (Bloomberg) — Ireland may consider selling more bonds than initially planned this year to help finance the 2010 budget deficit as investor sentiment toward the country improves, according to the nation’s debt agency. While the government has no “specific” plan, it may tap the markets if there is enough demand, said Oliver Whelan , the head of funding and debt management at the Dublin-based agency.

Read the full article →

Next Entries →