quake

Video: KBW”s Threadgold Sees Value in Tokio Marine, NKSJ, T&D

by on May 27, 2011

May 27 (Bloomberg) — David Threadgold, a Tokyo-based analyst at Keefe Bruyette & Woods Inc., talks about the impact of Japan’s March 11 earthquake on insurers. Japan’s four largest life insurers, including Nippon Life Insurance Co., reported a 10.5 percent drop in combined full-year profit on claims following the quake. Threadgold speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

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Video: KBW”s Threadgold Sees Value in Tokio Marine, NKSJ, T&D

Japan Could Need Additional Stimulus, Moody’s Says

by on May 23, 2011

Huffington Post…

TOKYO (Leika Kihara) – Japan’s return to recession and a bigger-than-expected slump in first-quarter economic growth are negative for its credit rating, Moody’s Investors Service said, warning that a delay in recovery could warrant additional fiscal and monetary stimulus. The triple blow of the March earthquake, tsunami and nuclear crisis has nudged Japan into recession and led to a surprisingly deep 0.9 percent contraction in January-March, which Moody’s said was negative for Japan’s rating and made it increasingly urgent for Prime Minister Naoto Kan to compile a second extra budget. “Reconstruction and relief expenditures will eventually lead to a rebound in economic growth later this year and in 2012,” Moody’s said in a statement on Monday. “But the scale of the loss in output and income caused by the earthquake may already have lowered the future growth trajectory of the Japanese economy, thwarting Japan’s long-term growth rate, which is currently around 1 percent,” it said. While the shock from power shortages will be temporary, the risk of Japanese companies permanently losing global market share due to current supply chain disruptions is more damaging, Moody’s said. “Should the rebound in Japan’s economy be weaker than forecast or delayed entirely, additional actions by both the Ministry of Finance and Bank of Japan may be needed,” the ratings agency said in a statement. Japan is facing its worst crisis since World War Two after the magnitude 9.0 earthquake and a deadly tsunami battered its northeast coast on March 11, leaving about 25,000 dead or missing and crippling a nuclear power plant. The economy shrank in January-March at nearly double the pace forecast by markets and is expected to contract again in the second quarter as supply chain disruptions and power shortages hit factory output. ADDITIONAL ACTION The Bank of Japan eased monetary policy days after the quake but has stood pat since then on the view — shared by many economists — that growth will pick up from around autumn when supply constraints ease. But the central bank has expressed its readiness to ease policy further if the damage from the quake is bigger than expected and threatens Japan’s return to a moderate recovery. The government, for its part, passed through parliament a 4 trillion yen ($48 billion) first emergency budget for immediate disaster relief and is now eyeing a second extra budget for reconstruction, which Moody’s said will “likely need to be much larger than the first one.” Kan has signaled that the second extra budget would be quite big, while Economics Minister Kaoru Yosano said reconstruction may cost up to 15 trillion yen. But any progress in compiling the second extra budget would be slow as Kan needs cooperation from opposition parties, which control the upper house, to pass necessary legislation through parliament. Another uncertainty overshadowing Japan’s fiscal outlook is the extent to which the government will share the burden of Tokyo Electric Power’s (9501.T) rising quake-related liabilities, Moody’s said. Japan’s public debt, at double the size of its $5 trillion economy, is the biggest among major industrialized economies, limiting room for additional fiscal stimulus and triggering warnings from ratings agencies. But lawmakers are hesitant about raising taxes, particularly the politically sensitive sales tax, for fear of scaring voters away, even as the cost of quake reconstruction adds to the heavy burden of spending for social welfare in a rapidly aging society. Moody’s warned in February that it might cut Japan’s Aa2 rating — its third highest rating — if the government fell short of crafting comprehensive tax reform to fix the country’s tattered finances. ($1 = 81.710 Japanese Yen) (Editing by Michael Watson and Edmund Klamann) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Japan Could Need Additional Stimulus, Moody’s Says

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Toyota’s Profit Plunges After Japan Disaster

May 11, 2011

TOKYO — Toyota’s quarterly profit crumpled more than 75 percent after the March earthquake and tsunami wiped out parts suppliers in northeastern Japan, severely disrupting car production. The maker of the popular Prius hybrid gave no forecast for the current fiscal year through March 2012, citing an uncertain outlook because production continues to be hampered by shortages of parts. Toyota is expected to lose its spot as the world’s top-selling automaker to General Motors Co. this year because of the disasters. The automaker’s president Akio Toyoda said he and others at Toyota are “gritting our teeth” to keep jobs in Japan. He promised to disclose earnings forecasts by mid-June. Toyota Motor Corp. reported Wednesday that January-March profit slid to 25.4 billion yen ($314 million) from 112.2 billion yen a year earlier. For the fiscal year ended March 2011, Toyota’s earnings doubled, showing that the Japanese automaker had been on the way to recovery from its recall crisis when the magnitude-9.0 earthquake struck on March 11. But Toyota also said efforts to fix production, including using other plants and finding replacement parts, were going better than initially expected, with car manufacturing expected to gradually pick up in Japan and abroad from next month to 70 percent of pre-disaster levels. Toyota earlier said such production improvements wouldn’t start in Japan until about July, and overseas in August, with a full recovery not expected until late this year. “Our priority is to get our production back to normal and recover from the disaster,” a somber Toyoda told reporters. When a full recovery would come was still unknown, he said. By the end of May, the crisis has cost the company production of 550,000 vehicles in Japan, and another 350,000 overseas. Production is now back at about 50 percent. “By reviving our company, we want to help bring Japan’s comeback,” said Toyoda. Analysts say the quake and tsunami have sorely hurt Toyota but a production recovery could come quickly. “I think chances may be good that getting production back would be speedy,” Shotaro Noguchi, analyst at SMBC Nikko Capital Markets in Tokyo, said in a recent report. Still, Toyota may face a different kind of challenge in the months ahead because the government has asked for a shutdown of the Hamaoka nuclear power plant, which is located on a fault-line and furnishes the power supply for the region where Toyota is headquartered and has many of its plants and suppliers. The request came because of growing fears about the safety of nuclear power after the tsunami damaged the cooling systems at the Fukushima Dai-ichi plant on the northeastern coast, sending it to the brink of a meltdown. Toyoda did not say how much the Hamaoka shutdown would reduce production, but promised the company would do its utmost to secure a stable power supply. He said production at all lines for all models would be back at pre-disaster levels by November or December at the latest, but efforts are under way to do it faster. The hit Toyota has taken makes it likely a resurgent General Motors will regain the title of world’s No. 1 automaker by annual vehicle sales. Toyota overtook GM as the world’s biggest automaker in 2008, a distinction the American manufacturer had held since 1932. Toyota said it sold 7.31 million vehicles for the fiscal year through March 2011, up by 71,000 vehicles from the previous year. For the January-March period, Toyota sold 1.79 million vehicles worldwide. That is fewer than the 2.22 million vehicles GM sold and fewer than No. 3 automaker, Volkswagen AG of Germany, at 1.99 million. Toyoda said the automaker was still missing about 30 types of parts, although that was an improvement from the 150 it had lacked before. Toyota hopes to be producing at 70 percent of its pre-quake levels by June. The automaker’s full-year results highlight how, when the quake struck, Toyota had been on its way to a recovery from the recall fiasco, affecting 14 million vehicles worldwide, which had battered its reputation for quality. Sales for the January-March quarter dipped 12 percent year-on-year to 4.6 trillion yen ($57 billion), according to Toyota. For the fiscal year ended March 2011, profit doubled to 408.1 billion yen ($5 billion) from 209.4 billion yen the previous year. Annual sales edged up 0.2 percent to 18.99 trillion yen ($234 billion). Toyota said vehicle sales fell in North America, Japan and Europe, but it had robust sales in other regions, such as the rest of Asia, Africa and South America. Toyota is especially struggling in the U.S., where its April sales rose just 1 percent from the previous year, while GM’s car and truck sales surged 26 percent and South Korean rival Hyundai Motor Co. posted a 40 percent jump in sales. Like other Japanese exporters, Toyota has been hurt by the surging yen, which erodes overseas earnings. The dollar has now fallen to near 80 yen from about 90 yen a year earlier. “Despite negative factors such as a rapid rise in the yen and the earthquake, our profit sharply rose, thanks to massive cost-cutting and sales efforts,” said Toyoda, referring to the full-year result. Honda, which reported a quarterly profit drop of 38 percent last month, has said it doesn’t expect to return to full production in Japan until the end of the year. Toyota shares closed up 0.6 percent at 3,270 yen ($40) in Tokyo, shortly before earnings were announced. That is still down 9 percent from before the quake. ___ Associated Press writer Shino Yuasa contributed to this report.

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Industrial production in Japan records a contraction by 15.3% during the quake’s month 

April 28, 2011

Industrial production in Japan records a contraction by 15.3% during the quake’s month

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Japan Central Bank: Economy To Shrink Through June

April 23, 2011

(Reuters) – Bank of Japan Governor Masaaki Shirakawa said the country’s economy will likely shrink in the first half of 2011 due mainly to stalled output in the wake of Japan’s March 11 earthquake and tsunami, the Wall Street Journal reported on Saturday. “We are now expecting production and GDP will decline in the first quarter and the second quarter,” Shirakawa said in the interview conducted on Friday, echoing the views of most private-sector economists who also see a first half contraction. The focus is now on how quickly the Japanese economy will return to growth. This largely depends on when supply chain disruptions will ease and to what degree power shortages could affect factory output during the peak summer period. Shirakawa was quoted as saying supply constraints would likely continue at least until August before recovering. “Once supply capacity is recovered, then the Japanese economy is moving back to the original growth path,” Shirakawa said in the interview. The BOJ is expected to hold off on any further easing of monetary policy next week but will likely reiterate its readiness to act if the quake’s damage threatens Japan’s return to a moderate economic recovery. In a twice-yearly outlook report to be issued at next week’s rate review, the BOJ will cut its economic forecast for the current fiscal year, which began on April 1, from its January projection of 1.6 percent growth to reflect the impact of the quake, sources familiar with the BOJ’s thinking have told Reuters. But many in the bank agree with the dominant market view that Japan will avoid a contraction for the full fiscal year as growth is expected to pick up from around autumn. (Reporting by Leika Kihara; Editing by Nathan Layne) Copyright 2010 Thomson Reuters. Click for Restrictions .

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European stocks slide after Japan was struck by another quake

April 11, 2011

European stocks slide after Japan was struck by another quake

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Daniel Wagner: Japan’s Government Needs to Move Quickly

April 3, 2011

Minimal Impact to the Global Supply Chain? In the absence of evidence to the contrary, it has become fashionable for some in the global business community to believe that the economic impact of Japan’s earthquake will be minimal. No one can truly know the ultimate impact because the world has never experienced such a severe natural disaster in an economy so critical to the global supply chain: This is not Indonesia, New Zealand, Chile or Pakistan — which have also experienced recent severe earthquakes — this is Japan. For the past three weeks, the world’s third largest economy has been plagued by chronic power shortages and supply chain disruptions — the ‘new normal,’ which is likely to continue for years. Although much of Japan’s heaviest manufacturing occurs in its south, which was largely undamaged as a result of the quake and tsunami, the ability to ship components to these facilities has in some cases been severely impacted, and ongoing power supply disruptions threaten to introduce long-term interruption into the production process. Japan produces approximately 60% of the world’s silicon, used to produce semiconductor chips. Shortages in these chips are only now being felt, as manufacturers had a 2-to-3 week surplus of chips prior to the quake. Japanese manufacturers are expected to lose up to $60 billion as a result of interruption in production capability this year due to power disruptions. For manufacturing organizations outside Japan, the long-term impact is more difficult to assess, but businesses as diverse as auto manufacturers, and video game, LCD, and laptop producers, have already been affected. Businesses throughout Japan have reported difficulty obtaining raw materials and transporting workers. Given that the timing of rolling brownouts is unpredictable, the ‘new normal’ for businesses involves flexible office hour scheduling and inconsistent transportation links, which are subject to change on short notice. All indications are that this is likely to continue for the foreseeable future, and will become acute during peak usage seasons during the winter and summer. If so, expect a more significant impact on the global supply chain in due course. The Importance of Chernobyl’s Radiation Legacy Chernobyl resulted in 400 times more radiation being released than was released in the atomic bombing of Hiroshima, but compared with the amount of radiation released during the atomic testing of the 1950s and 1960s, Chernobyl was a small fraction of that amount. Current estimates of the nature of radioactive contamination in the area surrounding the Fukushima plant downplay the significance of a problem. According to an April 2nd New York Times article , and based on a variety of sources of information it gathered, air and food was only considered to be harmful at the plant “after a short period of time”, while air, soil, water and food was considered to be “possibly harmful after a longer period” near the plant. Only food was considered to be “possibly harmful” elsewhere in Japan, though most of the prefectures in northeast Honshu had detected radiation in food above the legal limit in Japan. According to the report, there is no current cause for concern elsewhere in the world. If Chernobyl is any guide for Japan with respect to radiation contamination, this information is in stark contrast with the facts 10 years after Chernobyl. Vast areas of Belarus and the Ukraine remained contaminated . According to a study released in 2006 by the IAEA, a combination of human activity and precipitation reduced the negative impact of radioactivity on populated areas near Chernobyl, but resulted in the contamination of sewage systems. The main pathways for radiation to impact people was from radionuclides deposited on the ground and the ingestion of contaminated terrestrial food products. The ingestion of drinking water, fish, and products contaminated with irrigation water were considered to be minor pathways toward contamination. Due to the short half-life of radioactive iodine (just 8 days), the contamination of milk, which was the most immediate concern in the food chain, only remained a real concern for about two months following the period when radiation from Chernobyl was stopped. Contamination of various crops, including green leafy vegetables, was also a concern for about two months, though the longer-term impacts have been difficult to quantify. Longer-term concern with respect to human ingestion of foods were most notable in milk, meat, and vegetables. Japan should expect to need to monitor its food supply, and possibly rely on external sources of these foods, for a long time to come. Why the Japanese Government Needs to Move Quickly The focus of much of the press since the quake and tsunami has been on levels of radioactive iodine that has been released into the environment, but cesium-137 is a much greater health concern and has been linked to cancer deaths nine times greater than radioactive iodine, with a half life of 30 years . Last week, for the first time, the Japanese science ministry began to release measurements of cesium-137 in soil around the plant. The levels were highest from two points northeast of the plant, ranging from 8,690 becquerels/kilogram to a high of 163,000 Bq/kg measured on 20 March from a point about 40 kilometers northwest of the Fukushima plant. The hottest spot is similar to levels found in some areas affected by Chernobyl. Assuming the measurement is no more than 2 centimeters deep, nuclear engineer Shih-Yew Chen of the Argonne National Laboratory calculates that 163,000 Bq/kg is roughly equivalent to 8 million Bq/m2. The highest cesium-137 levels in some villages near Chernobyl were 5 million Bq/m2. If true, Fukushima has already released higher levels of Cesium 137 than Chernobyl, making it the worst source of nuclear radiation release in history. Given this, the Japanese government must now move quickly to stop the release of radiation from the Fukushima plants. If preliminary information is correct, Fukushima already is the worst nuclear disaster in history. It could become much worse by degrees if the Japanese government hesitates to use every resource at its disposal — including that of the IAEA and foreign governments — to solve the problem. In the absence of admitting the severity of the problem and acting with haste, Japan’s economy and its people face potentially grave consequences, and the northeast Asia region faces unknown consequences from the release of high levels of cesium-137. Daniel Wagner is managing director of Country Risk Solutions, a political risk consulting firm based in Connecticut, and senior advisor to the PRS Group.

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Video: Lyman Says U.S. Nuclear Plants Need More Safety Measures

March 25, 2011

March 25 (Bloomberg) — Edwin Lyman, a scientist at the Union of Concerned Scientists, talks about damage at nuclear reactors in Japan as a result of the March 11 earthquake and tsunami and the implications for the U.S. nuclear industry. Japan’s nuclear regulator says a reactor core at the quake-damaged Fukushima power plant may be leaking after workers were injured by radioactive water. Lyman speaks with Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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CNBC Anchor’s SHOCKING Statement About Japan Quake

March 13, 2011

CNBC anchor Larry Kudlow made a startling statement about the earthquake in Japan on Friday. (h/t Vanity Fair .) Kudlow was listening to a report about the global stock markets doing well in the wake of the quake. “All in all, the market taking this in stride,” his co-host said to him. “The human toll here looks to be much worse than the economic toll and we can be grateful for that,” Kudlow responded. “And the human toll is a tragedy, we know that.” Kudlow later apologized for the statement on Twitter, writing, “talking about markets.I flubbed the line. Sincere apology.”

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New Zealand Dollar will Realign with Risk Trends after Quake Toll

February 26, 2011

New Zealand Dollar will Realign with Risk Trends after Quake Toll

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Qinghai Quake Leaves 400 Dead, 10,000 Hurt as China Mobilizes Rescue Teams

April 14, 2010

By Bloomberg News April 14 (Bloomberg) — China mobilized thousands of rescue workers in a race to save people stuck under the rubble of collapsed homes and schools following a 6.9 magnitude earthquake that left at least 400 dead and many more injured. President Hu Jintao , on a trip to Washington, called for an all-out effort to rescue victims in the province of Qinghai, sandwiched between the restive regions of Tibet and Xinjiang. Vice Premier Hui Liangyu arrived to oversee relief efforts in the mountainous region on the Tibetan Plateau, where temperatures were forecast to fall below freezing tonight. Urgent assistance is needed to help at least 10,000 people injured after the quake struck at 7:49 a.m. local time, the official Xinhua News Agency reported. A 2008 tremblor that hit Sichuan province in May of 2008 killed about 90,000 people after buildings collapsed, sparking protests and accusations of corruption over sub-standard buildings. State-broadcaster China Central Television showed footage of local residents digging through the rubble of collapsed building with their hands. Dozens of rescuers were shown fighting fire and smoke to reach eight people trapped under a collapsed hotel, the TV channel said. Many more people are still buried under the debris, Yushu prefecture’s Li told Xinhua. Efforts “by every means” should be made to rescue those trapped, Hu and Premier Wen Jiabao said in a statement posted to central government’s Web site . At least one third of the buildings in the Yushu Vocational School collapsed and a student told Xinhua that there were several students in the building at the time. Rescue efforts have been hampered by a shortage of equipment, the agency said. Wood, Mud Many of the buildings in the region, which has a significant ethnic-Tibetan population, are made of wood and mud, Xinhua said. Ethic Tibetans and Uighurs in neighboring Xinjiang province have complained for years that they are discriminated against by the majority Han Chinese and have not benefited from the country’s economic growth. Deadly clashes have broken out in both regions in the past few years, undermining the central government’s main stated aim of ensuring social stability. Six hundred paramilitary personnel based in the vicinity were immediately dispatched to the disaster area. By 2:30 p.m. local time, they had rescued 113 people trapped under rubble, Xinhua said. More than 3,700 paramilitary troops in Qinghai province were due to land in the disaster site by 9 p.m. local time today, Xinhua said. The airforce sent three planes to help transport rescue teams and 100 geologists to the quake site, it said. State-controlled China Eastern Airlines Corp., the nation’s second-biggest carrier, sent two aircraft to help transport personnel and relief supplies, the state-owned news agency reported. Help was also en route from other provinces: Guangdong in the south and Sichuan sent 600 firefighters, it said. Aftershocks The national earthquake center said there is a risk of “strong” secondary quakes in coming days. Four aftershocks with a magnitude of 4.8 or higher followed within four hours of the main quake, the U.S. Geological Survey said on its Web site. Sichuan province was hit by a magnitude 7.9 earthquake in May of 2008 as China prepared to host the summer Olympics in Beijing. The epicenter of today’s earthquake was near the town of Jiegu, also known as Gyegu, which is the seat of Yushu prefecture and home to about 100,000 residents, Xinhua reported. Yushu is a Tibetan populated area within Qinghai province. Power Cut Electricity was to the area has been cut, roads damaged and telecommunications disrupted, according to the report. A local reservoir was also cracked, with workers trying to prevent water flooding out, Xinhua said. The Ministry of Finance said it allocated 200 million yuan ($29 million) to deal with the aftermath of the quake. Qinghai has a population of 5.57 million, the second- smallest of China’s provinces after Tibet. The province’s economy is also only larger than Tibet’s. Qinghai was used as a nuclear weapons testing site. The 721,000 square kilometer province is larger than Texas. The quake also killed five people and injured another person in neighboring Sichuan province and was felt in parts of Tibet, according to Xinhua. The Chinese president met U.S. President Barack Obama in Washington on April 12 and is due in Brazil from April 14-17 to meet leaders from Brazil, Russia and India. The Chinese president returned early from the Group of Eight summit in July of last year after ethnic rioting erupted in Xinjiang. Today’s earthquake in Qinghai is unlikely to result in a repeat, said Willy Lam Wo-Lap , adjunct professor of history at Chinese University in Hong Kong. “This is simply an earthquake which involves no military or political issues, unlike the Xinjiang riots,” Lam said. The Qinghai quake is also not as severe as the one that hit Sichuan. PetroChina Co., the world’s biggest company by market value, hasn’t received any reports of disruptions to its oil and gas fields in Qinghai, which are about 700 kilometers from the epicenter, said Zong Yiping. — , Baizhen Chua , Michael Forsythe , Huang Zhe , Yang Huiwen . Editors: John Liu , Ben Richardson . To contact Bloomberg News staff on this story: Huang Zhe in Beijing at +86-10-6649-7552 or zhuang37@bloomberg.net

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Chile May Borrow Abroad, Tap Copper Savings for $30 Billion Reconstruction

March 13, 2010

By Sebastian Boyd March 13 (Bloomberg) — Chilean President Sebastian Pinera plans to tap copper savings funds and may borrow abroad to pay for the estimated $30 billion cost of repairing damage caused by the 8.8-magnitude earthquake that struck the country Feb. 27. More than 500 Chileans died in the quake and the tsunami that followed it, Pinera said yesterday. That death toll will probably rise as more bodies are identified and because of the “many people” still missing, he said. The country has been left poorer by the earthquake, he said, citing damage done to homes, schools, hospitals and infrastructure. Last month’s quake, the world’s fifth biggest in the past century, was a “calamity” for Chile, Pinera said. “Chile is poorer than a few weeks ago,” Pinera told reporters in Santiago yesterday. “We’re poorer for the loss of life, we’re poorer for the loss of economic wealth.” Pinera said he plans to rewrite the 2010 budget to free up resources for a reconstruction fund, adding the government will also tap its savings. Chile has $11.3 billion invested overseas in an economic stabilization fund that the government can use to finance a budget deficit. Using money from the fund could mean selling dollars to buy pesos, boosting the Chilean currency. “We will study the possibility of contracting debts overseas,” Pinera said. “Chile has hardly any public sector debt.” Chile, South America’s fifth-largest economy with gross domestic product of $169 billion, is a net creditor, with more in its offshore savings funds than it owes. The country has $1.75 billion of international bonds outstanding, all due before the end of 2013, according to data compiled by Bloomberg. Loan Offers Multilateral lenders such as the World Bank, the Inter- American Development Bank and Caracas-based Corporacion Andina de Fomento have offered to lend Chile money, Finance Minister Felipe Larrain said. “The options are there, but before that we have to look at the numbers and see how much we’ll need in financing,” Larrain said. “We’re still working on the budget and analyzing the different items in the budget to see how to allocate resources to reconstruction.” Chile’s government will spend $300 million on cash handouts to the poor, Larrain said. Pinera signed the bill authorizing the payments in his first legislative act as president, and it will be sent to Congress on March 15, Larrain said. The government hopes to make the first payments this month, the finance minister said. The high price of Chile’s main export, copper, may also help pay for reconstruction, the president said. Years of Rebuilding Rebuilding “won’t last weeks or months,” Pinera said. “It will last years, because the magnitude of the damage caused is on a scale never before seen in Chile,” Chile’s new government will need to weigh the advantages of borrowing in dollars, which may push up the peso, and borrowing in pesos, which could push up the cost of selling bonds for Chilean companies. “If they tap too much domestically, they’ll crowd out the private sector, which needs funds for reconstruction,” said Rafael de la Fuente, chief Latin American economist at BNP Paribas SA in New York. “If they go abroad, they put pressure on the currency. That’s the trade-off.” The peso rose 3.1 percent in the five days following the quake, the most of any of the seven Latin American currencies tracked by Bloomberg, on speculation the government would need to sell dollars to pay for rebuilding. Since then it has depreciated 1.8 percent, the most of 26 emerging-market currencies, after central bank President Jose De Gregorio said it may have “overshot.” Chile’s peso will begin weakening late this year as the earthquake, economic growth and record-low interest rates sap demand for fixed-income assets, said Guillermo Osses, who helps oversee $50 billion in emerging-market assets at Pacific Investment Management Co. The peso may slide to 550 per dollar in a year and to as weak as 600 in an “extreme case,” Osses said. To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

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`Cinderella’ Wine Valley Razed by Chile Quake Signals Bankrupt Vineyards

March 9, 2010

By Matt Craze and Rodrigo Orihuela March 9 (Bloomberg) — Chile’s strongest earthquake in 50 years may bankrupt smaller winemakers after vines collapsed, casks broke apart and millions of liters were spilled, a former Goldman Sachs Group Inc. banker-turned-winemaker said. The O. Fournier winery , located in the south-central Maule Valley region about 100 kilometers (62 miles) from the quake’s epicenter, lost 35 feet (10.7 meters) of vines to the Loncomilla River, owner Jose Manuel Ortega said. While O. Fournier is set to recover and the industry “will bounce back quickly,” Ortega said, some wineries are likely to fold as the quake’s damage compounds a slump in sales caused by the global economic crisis. “One-hundred and fifty years of history and it’s gone,” Ortega said March 5 as he surveyed the ruins of the main house on the Valley’s Gillmore estate, toppled by the 8.8-magnitude temblor that struck Feb. 27. “We are coming from a financial earthquake to a real one. Some wineries will disappear.” Wine is the fifth-largest export product for Chile, the world’s 10th biggest producer, according to the California-based Wine Institute. In 2008, the most recent year with official data, exports rose 9.6 percent to $1.4 billion, according to the nation’s export promotion agency ProChile . Unlike most Maule Valley producers, Ortega says he uses centuries-old vines instead of planting new ones. Partly because of this, he calls his farms there “My Cinderella Valley.” “We moved those grapes that everyone thought was the cleaning lady, and turned them into a princess,” he said. 125 Million Liters Lost Damage from the earthquake to wine vats caused losses of 125 million liters (33 million gallons), or an estimated $250 million, Chile’s association of winemakers said March 3. Concha y Toro SA, the nation’s largest producer, suspended harvesting and bottling operations after the temblor struck, the company said in a March 3 statement filed with the securities regulator. At the Balduzzi winery in San Javier, 275 kilometers (171 miles) south of Santiago, four 15-foot high stainless-steel tanks lay on their sides, crumpled like beer cans. Full of wine when the quake hit, they burst and sent a river of wine, some waiting since 2005 to be bottled, cascading into the streets. The company, founded in 1906, lost about 600,000 bottles that day, or more than half its annual production. “All of it is gone,” operations manager Jorge Eduardo Balduzzi said. Spain’s Miguel Torres SA, which has made wine for 140 years, said 300 of its casks, a 100,000-liter stainless steel tank, machinery and bottles were damaged at its Curico vineyard. Began Production Ortega, originally from Spain, started producing wine in Chile in 2007, seven years after he founded O. Fournier in Spain’s Ribera del Duero region. The company also bottles wine in Argentina and Portugal. The risk of not supplying wine after the quake is that foreign clients will turn elsewhere for supplies, according to Ortega. “Your importers will say: ‘See you later,’” he said. Before becoming a winemaker, Ortega worked for Goldman Sachs in London from 1990 to 1995, first in the mergers-and- acquisition office and later in corporate finance. He then moved to Banco Santander SA, whose private-equity fund he started. “We are certain that in the short-term, shipments and meeting orders will return to normal without major problems,” Rene Merino, president of the Wines of Chile, an industry association, said at a March 3 press conference in Santiago. Normal Harvest The wine harvest, which traditionally begins March 1, will proceed normally, Eduardo Silva, vice president of Chile’s Wine Corporation, another industry association, said at the same conference. A bad year for Chilean wine producers won’t affect world markets, Jon Fredrikson , a wine researcher at San Francisco- based Gomberg, Fredrikson & Associates, said in a March 5 telephone interview. “Fifty percent of Chile’s exports are bulk wine, which is relatively easy to replace because there’s so much wine out there this year,” Fredrikson said. To contact the reporters on this story: Matthew Craze in Talca at mcraze@bloomberg.net and Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net

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Chilean Government Widens Curfew as Army Fights Looters After Earthquake

March 2, 2010

By Sebastian Boyd and Michael Smith March 2 (Bloomberg) — Chile asked for international aid to recover from the 8.8-magnitude earthquake that killed at least 723 people in the South American country as people scrounged for food in hard-hit areas and looters emptied supermarkets. U.S. Secretary of State Hillary Clinton arrived in Chile today to offer support as the country works to repair billions of dollars in damage following the Feb. 27 temblor. Chile asked the United Nations for mobile bridges, electric generators, water purification systems and field kitchens. Brazil will send a field hospital and rescue teams to Chile, President Luiz Inacio Lula da Silva said yesterday during a visit to Santiago. Bands of looters roamed the streets of Concepcion and the port city of Talcahuano, about 15 kilometers (9 miles) away, emptying supermarkets, stores and homes of food, appliances, and clothes. People collected water from drainage ditches and muddy ponds as taps ran dry. Rescuers dug through rubble in the hardest hit areas, including Concepcion, a metropolitan region of about 1 million people 115 kilometers from the epicenter of the powerful earthquake. Military personnel are combing Chile’s coast for people affected by tsunami waves spawned by the quake. “The scenario changes with each aftershock and each passing hour, but due to the conditions we’re working in and the good weather, we can’t lose hope,” said Santiago fireman Captain Juan Carlos Subercaseaux, who was in Concepcion to assist. He and his team were trying to gain access to a 15-story building that collapsed with dozens of people inside. Maintaining Hope Antonio Fuenzalida, 48, watched as firemen cut a hole into the side of the building close to where his nephew Jose Luis Leon’s apartment stood. Earlier, the firemen had pulled out some of his nephew’s clothes. “I hope he’s alive and in an open space inside,” Fuenzalida said. “We’re trying not to lose hope.” The total economic cost from the quake may be as much as $30 billion, or about 15 percent of the country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. Insured losses may amount to between $3 billion and $8 billion, Eqecat said. Finance Minister Andres Velasco declined yesterday to give estimates for losses, saying the government is focused now on getting help to victims. Economic Outlook JPMorgan Chase & Co. said today that growth in South America’s fifth-largest economy may accelerate to 5.5 percent this year, from a previous estimate of 5 percent, due to reconstruction work. Central Bank President Jose De Gregorio said Chile’s monetary policy will remain expansive in the aftermath of the quake, telling reporters that policy makers will keep borrowing costs at an “appropriate” level to finance the rebuilding. The government extended a curfew from 8 p.m. to 6 a.m. in Concepcion, and broadened it to other cities closer to the quake’s epicenter such as Talca. The military deployed more troops and equipment, including armored personnel carriers that patrolled the streets of Concepcion. Military commanders said groups of thieves were banding together and moving from business to business, leading mobs of people searching for food and water. Acrid Smoke “These are thieves who are taking advantage of the breakdown in order to steal from homes and businesses,” said naval marine First Lt. Francisco Gazategui, as he returned from leading eight soldiers on an all-night patrol yesterday. A plume of acrid smoke billowed into the sky from a supermarket as looters ran off with armloads of food, water and clothes. An army truck pulled up and 16 soldiers in combat gear and assault rifles jumped out to pursue looters and secure the store so firefighters could put out the blaze. “It’s overwhelming for us because we have no water and our resources are stretched thin,” said Captain Fernando Cartes, who commands a firehouse in Talcahuano. “The horrible part is it’s not the earthquake that started the fires, but looters.” Of the 723 dead, 544 died in the Maule region, the National Emergency Office said. The region’s more than 900,000 people still have no access to running water and little access to electric power, the emergency office said. Stocks Chile stocks fell the most in almost a month yesterday, the biggest drop among the world’s 50 largest markets, led by Empresa Nacional de Electricidad SA, the nation’s biggest power generator, and Lan Airlines SA, the country’s largest carrier. Salfacorp SA, Chile’s biggest building company, jumped 5.98 percent on speculation it will benefit from increased business. It fell 0.53 percent at 9:47 a.m. New York time. The IPSA share index fell a further 1.04 percent to 3742.54. Chile’s peso rose 0.5 percent to 522 per dollar after closing little changed yesterday. Endesa SA’s Chilean unit said about 13 percent of its clients are without power. Empresa Nacional de Petroleo said today it expects to restart its Aconcagua oil refinery later this week while a second refinery will be closed for weeks. Copper Production Chilean state copper miner Codelco said its Andina mine will return to full production today, as rival Anglo American Plc also ramped up output. Codelco, the world’s largest copper producer, reopened its 381,000-ton El Teniente mine after restoring electricity to the mine in central Chile. Most of Chile’s copper deposits and port facilities are in the northern half of the country and had no reports of damage. Concerns about supply caused copper for May delivery to climb 6.6 cents, or 2 percent, yesterday on the New York Mercantile Exchange’s Comex unit. Today, it rose 0.3 cent, or 0.1 percent, to $3.353 a pound at 8:31 a.m. after dropping as much as 1.8 percent earlier. Copper for three-month delivery slipped 0.1 percent to $7,390 a metric ton on the London Metal Exchange. Some flights are arriving at the Santiago airport while outgoing air traffic remains closed, Chile’s national emergency service said. Lan Airlines will run a partial flight schedule until March 4, the company said on its Web site . Lan canceled sales of plane tickets to and from Santiago until March 7. The port of Valparaiso resumed operations at four dock areas, keeping four others shut while possible structural damage is evaluated, operator Puerto Valparaiso said on its Web site. Stringent building codes and the most highly engineered building inventory in Latin America helped mitigate damage, said Boston-based Air Worldwide, a catastrophe modeling firm that estimated more than $2 billion in insured losses for insurers. The Feb. 27 earthquake was the world’s fifth strongest since 1900, carrying a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Concepcion at mssmith@bloomberg.net

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Chile Asks for International Aid as Looting Spreads

March 2, 2010

By Sebastian Boyd and Michael Smith March 2 (Bloomberg) — Chile asked for international aid to recover from the 8.8-magnitude earthquake that killed at least 723 people in the South American country as people scrounged for food in hard-hit areas and looters emptied supermarkets. U.S. Secretary of State Hillary Clinton arrived in Chile today to offer support as the country works to repair billions of dollars in damage following the Feb. 27 temblor. Chile asked the United Nations for mobile bridges, electric generators, water purification systems and field kitchens. Brazil will send a field hospital and rescue teams to Chile, President Luiz Inacio Lula da Silva said yesterday during a visit to Santiago. Bands of looters roamed the streets of Concepcion and the port city of Talcahuano, about 15 kilometers (9 miles) away, emptying supermarkets, stores and homes of food, appliances, and clothes. People collected water from drainage ditches and muddy ponds as taps ran dry. Rescuers dug through rubble in the hardest hit areas, including Concepcion, a metropolitan region of about 1 million people 115 kilometers from the epicenter of the powerful earthquake. Military personnel are combing Chile’s coast for people affected by tsunami waves spawned by the quake. “The scenario changes with each aftershock and each passing hour, but due to the conditions we’re working in and the good weather, we can’t lose hope,” said Santiago fireman Captain Juan Carlos Subercaseaux, who was in Concepcion to assist. He and his team were trying to gain access to a 15-story building that collapsed with dozens of people inside. Maintaining Hope Antonio Fuenzalida, 48, watched as firemen cut a hole into the side of the building close to where his nephew Jose Luis Leon’s apartment stood. Earlier, the firemen had pulled out some of his nephew’s clothes. “I hope he’s alive and in an open space inside,” Fuenzalida said. “We’re trying not to lose hope.” The total economic cost from the quake may be as much as $30 billion, or about 15 percent of the country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. Insured losses may amount to between $3 billion and $8 billion, Eqecat said. Finance Minister Andres Velasco declined yesterday to give estimates for losses, saying the government is focused now on getting help to victims. Economic Outlook JPMorgan Chase & Co. said today that growth in South America’s fifth-largest economy may accelerate to 5.5 percent this year, from a previous estimate of 4 percent, due to reconstruction work. Central Bank President Jose De Gregorio said Chile’s monetary policy will remain expansive in the aftermath of the quake, telling reporters that policy makers will keep borrowing costs at an “appropriate” level to finance the rebuilding. The government extended a curfew from 8 p.m. to 6 a.m. in Concepcion, and broadened it to other cities closer to the quake’s epicenter such as Talca. The military deployed more troops and equipment, including armored personnel carriers that patrolled the streets of Concepcion. Military commanders said groups of thieves were banding together and moving from business to business, leading mobs of people searching for food and water. Acrid Smoke “These are thieves who are taking advantage of the breakdown in order to steal from homes and businesses,” said naval marine First Lt. Francisco Gazategui, as he returned from leading eight soldiers on an all-night patrol yesterday. A plume of acrid smoke billowed into the sky from a supermarket as looters ran off with armloads of food, water and clothes. An army truck pulled up and 16 soldiers in combat gear and assault rifles jumped out to pursue looters and secure the store so firefighters could put out the blaze. “It’s overwhelming for us because we have no water and our resources are stretched thin,” said Captain Fernando Cartes, who commands a firehouse in Talcahuano. “The horrible part is it’s not the earthquake that started the fires, but looters.” Of the 723 dead, 544 died in the Maule region, the National Emergency Office said. The region’s more than 900,000 people still have no access to running water and little access to electric power, the emergency office said. Stocks Chile stocks fell the most in almost a month yesterday, the biggest drop among the world’s 50 largest markets, led by Empresa Nacional de Electricidad SA, the nation’s biggest power generator, and Lan Airlines SA, the country’s largest carrier. Salfacorp SA, Chile’s biggest building company, jumped 5.98 percent on speculation it will benefit from increased business. It fell 0.53 percent at 9:47 a.m. New York time. The IPSA share index fell a further 1.04 percent to 3742.54. Chile’s peso rose 0.5 percent to 522 per dollar after closing little changed yesterday. Endesa SA’s Chilean unit said about 13 percent of its clients are without power. Empresa Nacional de Petroleo said today it expects to restart its Aconcagua oil refinery later this week while a second refinery will be closed for weeks. Copper Production Chilean state copper miner Codelco said its Andina mine will return to full production today, as rival Anglo American Plc also ramped up output. Codelco, the world’s largest copper producer, reopened its 381,000-ton El Teniente mine after restoring electricity to the mine in central Chile. Most of Chile’s copper deposits and port facilities are in the northern half of the country and had no reports of damage. Concerns about supply caused copper for May delivery to climb 6.6 cents, or 2 percent, yesterday on the New York Mercantile Exchange’s Comex unit. Today, it rose 0.3 cent, or 0.1 percent, to $3.353 a pound at 8:31 a.m. after dropping as much as 1.8 percent earlier. Copper for three-month delivery slipped 0.1 percent to $7,390 a metric ton on the London Metal Exchange. Some flights are arriving at the Santiago airport while outgoing air traffic remains closed, Chile’s national emergency service said. Lan Airlines will run a partial flight schedule until March 4, the company said on its Web site . Lan canceled sales of plane tickets to and from Santiago until March 7. The port of Valparaiso resumed operations at four dock areas, keeping four others shut while possible structural damage is evaluated, operator Puerto Valparaiso said on its Web site. Stringent building codes and the most highly engineered building inventory in Latin America helped mitigate damage, said Boston-based Air Worldwide, a catastrophe modeling firm that estimated more than $2 billion in insured losses for insurers. The Feb. 27 earthquake was the world’s fifth strongest since 1900, carrying a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Concepcion at mssmith@bloomberg.net

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Chile’s `Somber’ Peso, Bond Markets Weeks Away From Earthquake Recovery

March 2, 2010

By Andrea Jaramillo and Drew Benson March 2 (Bloomberg) — Chilean equity, bond and currency trading may take two weeks to recover after volumes plunged following the strongest earthquake in five decades, according to the local unit of Bank of Nova Scotia. Stock volume yesterday was 179.1 million shares, 57 percent of the average traded over the previous month, according to data compiled by Bloomberg. Equity volume was about half the normal $150 million, said Hugo Aravena of Scotiabank’s Scotia AFG in Santiago. About $260 million in currency traded, one-third the usual volume, as most traders halted transactions at noon, two hours early, said Denisse Bocaz , a trader with Banco Santader Chile in Santiago. “It was very emotional to come into the office,” said Aravena, who helps manage $1.5 billion at Scotia AFG. “The place is sad and somber. Everyone is worried.” The benchmark Ipsa share index fell for a second day today after posting the biggest decline in the world yesterday. The measure slid 1.2 percent in the first day of trading after the Feb. 27 temblor killed at least 700 people, severed highways and damaged 1.5 million homes. The peso pared a retreat of as much as 1 percent, losing less than 0.1 percent to 524.70 per dollar, on speculation the government will repatriate overseas savings to fund reconstruction. Trading in Santiago will take about two weeks to return to levels achieved before the quake, said Luis Cancino , head of the asset and liability management unit for Scotiabank Sud Americano SA. Luis Morales , a currency trader at BCI Corredor de Bolsa SA, said it will be “at least a week.” The Ipsa’s drop to 3,782.04 was the biggest since Feb. 5. Copper Rises Copper, Chile’s biggest export, jumped to a seven-week high in New York yesterday after the 8.8-magnitude quake shut some mines in the world’s largest producer of the metal. The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units slid four basis points, or 0.04 percentage point, to 2.96 percent, the lowest since October, according to Bloomberg composite prices. “There’s not a lot of liquidity in the market, neither in the peso nor in the fixed income market,” said Andres Orlandi , an emerging market strategist at Deutsche Bank AG in New York. The total economic cost of the quake, which was centered 200 miles (317 kilometers) southwest of Santiago, may be as much as $30 billion, or about 15 percent of the South American country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. Aravena said he found computers on the floor and cables disconnected when he arrived at his office at 8:30 a.m. yesterday. ‘Traumatic’ Day “Evidence was everywhere” of the quake, he said. Traders and their co-workers spent much of the day talking about where they were when the quake hit, according to Morales and Diego Echenique , a trader with Larrain Vial SA in Santiago. Trading took a backseat to emotion. “You can feel people’s stress,” said Morales, 35. “Everyone told their story when they arrived. It’s traumatic.” Morales was a boy when the country suffered its last major earthquake in 1985. That one, he said, was nothing compared with the early morning rumbling this weekend that shook his apartment floor so much he couldn’t get out of bed. “I’ve never seen the earth move like that,” he said. “Never ever ever ever.” To contact the reporters on this story: Andrea Jaramillo in Bogota at Ajaramillo1@bloomberg.net ; Drew Benson in Buenos Aires at abenson9@bloomberg.net ;

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Chile Asks for International Aid as Looting Spreads After Quake

March 2, 2010

By Sebastian Boyd and Michael Smith March 2 (Bloomberg) — Chile asked for international aid to recover from the 8.8-magnitude earthquake that killed at least 723 people in the South American country as people scrounged for food in hard-hit areas and looters emptied supermarkets. U.S. Secretary of State Hillary Clinton arrives in Chile today to offer support as the country works to repair billions of dollars in damage following the Feb. 27 temblor. Chile asked the United Nations for mobile bridges, electric generators, water purification systems and field kitchens. Brazil will send a field hospital and rescue teams to Chile, President Luiz Inacio Lula da Silva said yesterday during a visit to Santiago. Bands of looters roamed the streets of Concepcion and the port city of Talcahuano, about 15 kilometers (9 miles) away, emptying supermarkets, stores and homes of food, appliances, and clothes. People collected water from drainage ditches and muddy ponds as taps ran dry and electricity was out for a third day. Rescuers dug through rubble in the hardest hit areas, including Concepcion, a metropolitan region of about 1 million people 115 kilometers from the epicenter of the powerful earthquake. Military personnel are combing Chile’s coast for people affected by tsunami waves spawned by the quake. “The scenario changes with each aftershock and each passing hour, but due to the conditions we’re working in and the good weather, we can’t lose hope,” said Santiago fireman Captain Juan Carlos Subercaseaux, who was in Concepcion to assist. He and his team were trying to gain access to a 15-story building that collapsed with dozens of people inside. Maintaining Hope Antonio Fuenzalida, 48, watched as firemen cut a hole into the side of the building close to where his nephew Jose Luis Leon’s apartment stood. Earlier, the firemen had pulled out some of his nephew’s clothes. “I hope he’s alive and in an open space inside,” Fuenzalida said. “We’re trying not to lose hope.” At least 48 people may be still inside, including a couple on the ninth floor, where rescuers heard tapping, Subercaseaux said. Firemen have pulled nine bodies from the building. The total economic cost may be as much as $30 billion, or about 15 percent of the country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. Insured losses may amount to $3 billion to $8 billion, Eqecat said. Finance Minister Andres Velasco declined yesterday to give estimates for losses, saying the ministry wants to see data first. The government is focused now on getting help to victims, he said. Economic Outlook Bank of America cut its forecast for economic growth this year to 4 percent from a previous estimate of 4.7 percent. Central Bank President Jose De Gregorio said Chile’s monetary policy will remain expansive in the aftermath of the quake, telling reporters that policy makers will keep borrowing costs at an “appropriate” level to finance the rebuilding. The government extended a curfew from 8 p.m. to 6 a.m. in Concepcion, and broadened it to other cities closer to the quake’s epicenter such as Talca. The military deployed more troops and equipment, including armored personnel carriers that patrolled the streets of Concepcion. Military commanders said groups of thieves were banding together and moving from business to business, leading mobs of people searching for food and water. Acrid Smoke “These are thieves who are taking advantage of the breakdown in order to steal from homes and businesses,” said naval marine First Lt. Francisco Gazategui, as he returned from leading eight soldiers on an all-night patrol. A plume of acrid smoke billowed into the sky from a supermarket as looters ran off with armloads of food, water and clothes. An army truck pulled up and 16 soldiers in combat gear and assault rifles jumped out to pursue looters and secure the store so firefighters could put out the blaze. “It’s overwhelming for us because we have no water and our resources are stretched thin,” said Captain Fernando Cartes, who commands a firehouse in Talcahuano. “The horrible part is it’s not the earthquake that started the fires, but looters.” Of the 723 dead, 544 died in the Maule region, the National Emergency Office said. The region’s more than 900,000 people still have no access to running water and little access to electric power, the emergency office said. Sixty-four of the confirmed dead are in the BioBio region, including Concepcion. Aftershocks In the almost three days since the quake struck in the early-morning hours of Feb. 27, the U.S. Geological Survey recorded at least 121 aftershocks of magnitude 5.0 or greater. Eight of these aftershocks have magnitudes of 6.0 or greater. Chile stocks fell the most in almost a month yesterday, the biggest drop among the world’s 50 largest markets, led by Empresa Nacional de Electricidad SA, the nation’s biggest power generator, and Lan Airlines SA, the country’s largest carrier. Salfacorp SA, Chile’s biggest building company, jumped on speculation it will benefit from increased business. Chile’s peso pared a retreat of as much as 1 percent, losing less than 0.1 percent. Currency trading grinded to a near halt at noon as many traders and support staff at the country’s banks and brokerages left early to check on their families. Endesa SA’s Chilean unit said about 13 percent of its clients are without power. Two oil refineries owned by Empresa Nacional de Petroleo, Chile’s state oil company, were shut down. Copper Production Chilean state copper miner Codelco said its Andina mine was close to resuming some production, as rival Anglo American Plc also ramped up output. Codelco, the world’s largest copper producer, reopened its 381,000-ton El Teniente mine after restoring electricity to the mine in central Chile. Most of Chile’s copper deposits and port facilities are in the northern half of the country and had no reports of damage. Concerns about supply caused copper for May delivery to climb 6.6 cents, or 2 percent, yesterday to $3.35 a pound on the New York Mercantile Exchange’s Comex unit. Some flights are arriving at the Santiago airport while outgoing air traffic remains closed, Chile’s national emergency service said. Lan Airlines will run a partial flight schedule until March 4, the company said on its Web site . Lan canceled sales of plane tickets to and from Santiago until March 7. The port of Valparaiso resumed operations at four dock areas, keeping four others shut while possible structural damage is evaluated, operator Puerto Valparaiso said on its Web site. Stringent building codes and the most highly engineered building inventory in Latin America helped mitigate damage, said Boston-based Air Worldwide, a catastrophe modeling firm that estimated more than $2 billion in insured losses for insurers. The Feb. 27 earthquake was the world’s fifth strongest since 1900, carrying a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Concepcion at mssmith@bloomberg.net

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Chile Seeking International Aid as Looting Spreads After Deadly Earthquake

March 2, 2010

By Sebastian Boyd and Michael Smith March 2 (Bloomberg) — Chile asked for international aid to recover from the 8.8-magnitude earthquake that killed at least 723 people in the South American country as people scrounged for food in hard-hit areas and looters emptied supermarkets. U.S. Secretary of State Hillary Clinton arrives in Chile today to offer support as the country works to repair billions of dollars in damage following the Feb. 27 temblor. Chile asked the United Nations for mobile bridges, electric generators, water purification systems and field kitchens. Brazil will send a field hospital and rescue teams to Chile, President Luiz Inacio Lula da Silva said yesterday during a visit to Santiago. Bands of looters roamed the streets of Concepcion and the port city of Talcahuano, about 15 kilometers (9 miles) away, emptying supermarkets, stores and homes of food, appliances, and clothes. People collected water from drainage ditches and muddy ponds as taps ran dry and electricity was out for a third day. Rescuers dug through rubble in the hardest hit areas, including Concepcion, a metropolitan region of about 1 million people 115 kilometers from the epicenter of the powerful earthquake. Military personnel are combing Chile’s coast for people affected by tsunami waves spawned by the quake. “The scenario changes with each aftershock and each passing hour, but due to the conditions we’re working in and the good weather, we can’t lose hope,” said Santiago fireman Captain Juan Carlos Subercaseaux, who was in Concepcion to assist. He and his team were trying to gain access to a 15-story building that collapsed with dozens of people inside. Maintaining Hope Antonio Fuenzalida, 48, watched as firemen cut a hole into the side of the building close to where his nephew Jose Luis Leon’s apartment stood. Earlier, the firemen had pulled out some of his nephew’s clothes. “I hope he’s alive and in an open space inside,” Fuenzalida said. “We’re trying not to lose hope.” At least 48 people may be still inside, including a couple on the ninth floor, where rescuers heard tapping, Subercaseaux said. Firemen have pulled nine bodies from the building. The total economic cost may be as much as $30 billion, or about 15 percent of the country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. Insured losses may amount to $3 billion to $8 billion, Eqecat said. Finance Minister Andres Velasco declined yesterday to give estimates for losses, saying the ministry wants to see data first. The government is focused now on getting help to victims, he said. Economic Outlook Bank of America cut its forecast for economic growth this year to 4 percent from a previous estimate of 4.7 percent. Central Bank President Jose De Gregorio said Chile’s monetary policy will remain expansive in the aftermath of the quake, telling reporters that policy makers will keep borrowing costs at an “appropriate” level to finance the rebuilding. The government extended a curfew from 8 p.m. to 6 a.m. in Concepcion, and broadened it to other cities closer to the quake’s epicenter such as Talca. The military deployed more troops and equipment, including armored personnel carriers that patrolled the streets of Concepcion. Military commanders said groups of thieves were banding together and moving from business to business, leading mobs of people searching for food and water. Acrid Smoke “These are thieves who are taking advantage of the breakdown in order to steal from homes and businesses,” said naval marine First Lt. Francisco Gazategui, as he returned from leading eight soldiers on an all-night patrol. A plume of acrid smoke billowed into the sky from a supermarket as looters ran off with armloads of food, water and clothes. An army truck pulled up and 16 soldiers in combat gear and assault rifles jumped out to pursue looters and secure the store so firefighters could put out the blaze. “It’s overwhelming for us because we have no water and our resources are stretched thin,” said Captain Fernando Cartes, who commands a firehouse in Talcahuano. “The horrible part is it’s not the earthquake that started the fires, but looters.” Of the 723 dead, 544 died in the Maule region, the National Emergency Office said. The region’s more than 900,000 people still have no access to running water and little access to electric power, the emergency office said. Sixty-four of the confirmed dead are in the BioBio region, including Concepcion. Aftershocks In the almost three days since the quake struck in the early-morning hours of Feb. 27, the U.S. Geological Survey recorded at least 121 aftershocks of magnitude 5.0 or greater. Eight of these aftershocks have magnitudes of 6.0 or greater. Chile stocks fell the most in almost a month yesterday, the biggest drop among the world’s 50 largest markets, led by Empresa Nacional de Electricidad SA, the nation’s biggest power generator, and Lan Airlines SA, the country’s largest carrier. Salfacorp SA, Chile’s biggest building company, jumped on speculation it will benefit from increased business. Chile’s peso pared a retreat of as much as 1 percent, losing less than 0.1 percent. Currency trading grinded to a near halt at noon as many traders and support staff at the country’s banks and brokerages left early to check on their families. Endesa SA’s Chilean unit said about 13 percent of its clients are without power. Two oil refineries owned by Empresa Nacional de Petroleo, Chile’s state oil company, were shut down. Copper Production Chilean state copper miner Codelco said its Andina mine was close to resuming some production, as rival Anglo American Plc also ramped up output. Codelco, the world’s largest copper producer, reopened its 381,000-ton El Teniente mine after restoring electricity to the mine in central Chile. Most of Chile’s copper deposits and port facilities are in the northern half of the country and had no reports of damage. Concerns about supply caused copper for May delivery to climb 6.6 cents, or 2 percent, yesterday to $3.35 a pound on the New York Mercantile Exchange’s Comex unit. Some flights are arriving at the Santiago airport while outgoing air traffic remains closed, Chile’s national emergency service said. Lan Airlines will run a partial flight schedule until March 4, the company said on its Web site . Lan canceled sales of plane tickets to and from Santiago until March 7. The port of Valparaiso resumed operations at four dock areas, keeping four others shut while possible structural damage is evaluated, operator Puerto Valparaiso said on its Web site. Stringent building codes and the most highly engineered building inventory in Latin America helped mitigate damage, said Boston-based Air Worldwide, a catastrophe modeling firm that estimated more than $2 billion in insured losses for insurers. The Feb. 27 earthquake was the world’s fifth strongest since 1900, carrying a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Concepcion at mssmith@bloomberg.net

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Copper Jumps to Five-Week High in London as Chile Quake Disrupts Supplies

February 28, 2010

By Bloomberg News March 1 (Bloomberg) — Copper jumped to the highest level in more than five weeks in London and by the limit in Shanghai after a magnitude-8.8 earthquake disrupted supplies from Chile, the world’s largest producer. Copper for three-month delivery on the London Metal Exchange surged as much as 5.6 percent to $7,600 a metric ton, the highest price since Jan. 20. The contract traded at $7,430 a ton at 9:46 a.m. in Shanghai. The June-delivery contract on the Shanghai Futures Exchange climbed 5 percent from the previous settlement price to 61,150 yuan ($8,958) a ton, and last traded at 60,410 yuan. The quake which hit central Chile on the morning of Feb. 27 forced Codelco and Anglo American Plc to halt mine operations. Codelco said it will meet supply contracts with shipments from undamaged plants in Chile’s north. Copper represented half of Chile’s $53 billion of exports last year. “The initial reaction to the quake is for copper to shoot up,” Xu Liping, an analyst at HNA Topwin Futures Co., said from Shanghai today. “The extent of the rally will depend on what additional information emerges and interpretation of the actual supply damage,” he said. Codelco’s El Teniente and Andina mines halted operations because of the power outage on the day the quake struck, and the company said two mines will reopen “shortly” after inspectors failed to find major damage. Anglo American Plc said its Los Bronces and El Soldado mines in Chile stopped operating for the same reason, without giving more details on whether the company was planning a restart. The South American country’s production of the metal used in pipes and wiring climbed 0.7 percent to 5.4 million metric tons in 2009. Aluminum in London was 0.3 percent up at $2,140 a ton, zinc added 1.4 percent to $2,226, lead increased 1.6 percent to $2,200 a ton, nickel rose 0.6 percent to $21,300, and tin climbed 1 percent to $17,300. — Li Xiaowei . With reporting by Sebastian Boyd, James Attwood and Eduard Thomson in Santiago. Editors: Richard Dobson, Matthew Oakley. To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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

February 27, 2010

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

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Globalstar chooses Quake Global to produce a new generation of satellite modems

September 14, 2009

Globalstar chooses Quake Global to produce a new generation of satellite modems

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Indonesian Quake Death Toll Reaches 32 in West Java, Disaster Agency Says

September 2, 2009

By Yoga Rusmana and Aaron Sheldrick Sept. 2 (Bloomberg) — Indonesia’s death toll from the 7- magnitude earthquake that struck near the island of Java today reached 15, according to the National Disaster Management Agency. More than 100 houses were destroyed, the Indonesian Red Cross said. Ten people died in a landslide in Cianjur, four were killed in Tasikmalaya and one person was killed in Sukabumi, the agency said. All three towns are in West Java. Rescue workers have been sent to the affected areas, Rustam Pakaya , head of the Ministry of Health’s crisis center, said by phone in Jakarta. The quake hit at 2:55 p.m. Jakarta time at a depth of 50 kilometers off the south coast of Java, Indonesia’s most populous island, the U.S. Geological Survey said on its Web site. It’s the strongest since a 7.5-magnitude earthquake in India’s Andaman Islands on Aug. 10, according to USGS. It struck close to the epicenter of a 7.7-magnitude temblor that hit in July 2006, leaving 730 people dead and generating a tsunami, according to the USGS. “The impact of the quake was felt in Jakarta, Central Java and West Java,” said Arifin M. Hadi, head of disaster management at the Indonesian Red Cross. “The magnitude was high and the scope was wide so we are getting reports of damage from many towns. A university building in Tasikmalaya has also collapsed.” Blackouts were reported in areas of West Java including Bandung, Ciamis, Sumedang, Tasikmayala and Sukubami. PT Perusahaan Listrik Negara’s geothermal power plant Gunung Salak Unit 2 was knocked offline by the quake, as well as a 500- kilovolt transformer in Bandung and some 150 kilovolt transformers in southern West Java province, said Murtaqi Syamsudin, director of operations at Perusahaan’s Java-Bali electricity system. Jakarta Evacuations The quake rocked buildings in the capital and forced evacuations of businesses and hotels. Thousands of people filled the streets, blocking traffic and forcing pedestrians to mingle with motorcyles and cars as they tried to move through the narrow roads behind the buildings. Almost everyone had a phone to an ear, trying in vain to contact relatives and friends as communication lines and wireless services were rendered useless. Finance Minister Sri Mulyani Indrawati and Senior Deputy Governor of Bank Indonesia Darmin Nasution stopped a press conference they were holding in Jakarta to explain Indonesia’s agenda at the G-20 meeting in London this weekend. Employees at the energy ministry in Jakarta evacuated the building and other office buildings were emptied in the capital. The Pacific Tsunami Warning Center canceled an alert for the coast of southern Java. It said no significant tsunami was generated by the quake. To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net ; Aaron Sheldrick at asheldrick@bloomberg.net .

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