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Illinois Treasurer: State Verging On ‘Financial Disaster’

by on May 30, 2011

Huffington Post…

Illinois is “on the verge of a financial disaster” as payments on the state’s debt have skyrocketed, Treasurer Dan Rutherford said on Monday. Illinois faces an estimated $45 billion in principal and interest payments on its outstanding debt over the next 25 years, up nearly four-fold from the $12 billion owed in 2002, according to a position paper from the Republican treasurer, who took office in January. Adding to the state’s debt burden is $140 billion in unfunded pension and retiree health-care liabilities and $8 billion of currently unpaid bills, the paper said. “Every household in Illinois is responsible for the repayment of $10,000 to reimburse our bondholders in the coming years,” Rutherford said in a statement, adding that unpaid bills and pension and health-care liabilities would boost that total to $42,000 per household. Illinois’ widening structural deficit, huge unfunded pension liability, inability to pay the state’s bills on time, cascading bond ratings and its propensity to borrow its way out of financial problems have made the state a major worry in the $2.9 trillion U.S. municipal bond market. “We need to cut our spending and break our unsustainable borrowing cycle before we realize a further financial disaster,” Rutherford said. Even with a big income tax rate hike passed in January, Illinois is still spending about $5 billion more a year than it receives in revenue, according to the position paper, which also said the state’s low bond ratings have resulted in higher borrowing costs compared with other states. Governor Pat Quinn has been pushing the legislature for anywhere from $2 billion to $8.75 billion of bond authority to pay off bills and other obligations incurred this fiscal year. His office said in a statement on Monday that this plan is not new borrowing, but a restructuring of debt the state owes to vendors and service providers who have been waiting months for payments. “Governor Quinn is 100 percent committed to making good on all bills due and feels restructuring debt the state already owes at attractive rates is the least costly option for taxpayers in order to address this bill backlog,” the statement said. Copyright 2011 Thomson Reuters. Click for Restrictions .

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Illinois Treasurer: State Verging On ‘Financial Disaster’

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Nasdaq Makes Huge Rival Bid To Buy NYSE

by on April 1, 2011

Huffington Post…

Nasdaq OMX and IntercontinentalExchange unveiled a rival bid to buy NYSE Euronext for about $11.3 billion in cash and stock, a 19 percent premium to an offer made by German competitor Deutsche Boerse. The move, announced on Friday, represents an intense bidding war for NYSE Euronext, whose derivatives trading operations are highly valuable. The new bid could also sit better politically, because the idea of a German company taking over the emblematic NYSE headquarters had stirred some political opposition in the United States. The offer is valued at $42.50 per share, a premium of 19 percent to the agreement proposed by Deutsche Boerse in February, the companies said in the statement. Shares of NYSE Euronext were up 11.6 percent at $39.26 in trading before the market opened. (Reporting by Supantha Mukherjee in Bangalore and Lauren Tara LaCapra in New York; Editing by Unnikrishnan Nair and Lisa Von Ahn) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Nasdaq Makes Huge Rival Bid To Buy NYSE

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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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Stocks in the United States Continue to Trade in Red as Bernanke Repeats Feb 3, Statement

February 9, 2011

Stocks in the United States Continue to Trade in Red as Bernanke Repeats Feb 3, Statement

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Google Replaces CEO

January 20, 2011

See additional updates in the live blog below In a move that has shocked the tech world, Google has announced that it will be replacing its CEO. Effective April 4 of this year, Google co-founder Larry Page will become CEO, taking over for Eric Schmidt, who has been the company’s chief executive since 2001. Schmidt will stay on as the company’s executive chairman. Schmidt, who was initially hired as CEO to provide more ” mature ” leadership, joked about the management shake-up on Twitter , tweeting, “Day-to-day adult supervision no longer needed!” In a blog post announcing the management changes, Schmidt wrote that in his new role, he will “focus wherever I can add the greatest value: externally, on the deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership that are increasingly important given Google’s global reach; and internally as an advisor to Larry and Sergey.” Noting that “the business has become more complicated” as Google has grown, Schmidt wrote in his statement that he and Google’s co-founders, Page and Sergey Brin, have been “talking for a long time about how best to simplify our management structure,” and looking for ways to “speed up decision making.” “I am enormously proud of my last decade as CEO, and I am certain that the next 10 years under Larry will be even better!” Schmidt wrote. “Larry, in my clear opinion, is ready to lead.” The changes mark Page’s return to the helm of the company he and Brin co-founded in 1998. Page and Brin were co-presidents of Google until Schmidt took over as CEO in 2001. Schmidt has made headlines in the past year with a number of controversial statements about privacy. “Google policy is to get right up to the creepy line and not cross it,” Schmidt said at a conference in October.

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Video: Weiss Says Rosneft Deal May Give BP Access to Resources

January 14, 2011

Jan. 14 (Bloomberg) — Philip Weiss, an analyst at Argus Research, talks about BP Plc’s agreement with Russia’s state oil producer OAO Rosneft to form a global strategic alliance. BP will take 9.5 percent of Rosneft shares after the agreement and the Russian company will hold 5 percent of BP, valued at $7.8 billion, according to a statement released during a signing ceremony in London. The companies agreed to develop three blocks in Russia’s Arctic Ocean. Weiss talked with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart” before the statement was released. (This is an excerpt of the full interview. Source: Bloomberg)

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David Sirota: The Democratic Party Elite’s General Attitude About Organized Labor

January 12, 2011

Over the last few years, we’ve learned a great deal about the Democratic Party’s attitude toward the labor movement. Through the Employee Free Choice Act debate (or lack thereof), we’ve learned that Democrats are happy to rely on union workers hard-earned money to get elected, and then happy to block major pieces of legislation that would help workers join a union. Through the Obama administration’s push for a new NAFTA-style trade deal, we’ve learned that Democratic presidential candidates are happy to sound pro-labor on the campaign trail, and happy to be anti-labor in Washington, D.C. I could go on, but you get the point: We’ve learned that the Democratic Party and labor are in neverending abuser-abused relationship. That said, it’s rare to get a truly unvarnished glimpse into the psychological attitude that undergirds that relationship. It’s rare, but as today shows, it sometimes comes out. Check out this little snippet from the Denver Post on Colorado’s new Democratic governor, John Hickenlooper, and whether he would rescind a past executive order allowing state workers to form unions: “I don’t think that executive order led to a significant increase in collective bargaining or people joining unions,” Hickenlooper said. “It was a statement that I think to a certain extent was largely symbolic, and if that’s the case, I don’t see a reason to go and immediately repeal it.” Read that statement again, just to really see what he’s saying, because it’s so honest. He’s quite explicitly saying that because the executive order “was largely symbolic” and didn’t “lead to a significant increase in collective bargaining or people joining unions,” he does’t “see a reason to go and immediately repeal it.” While it’s good that Hickenlooper isn’t “immediately” rescinding this basic right of workers, his statement logically means two not so good things: 1) If the executive order was more real (ie. not “symbolic”) and had led to more workers joining together in a union, then he likely would “see a reason” to repeal it and 2) Even though the executive order was only “symbolic” he’s saying he won’t repeal it “immediately” – but by definition, reserves the right to consider repealing it later (indeed, the only reason to include the word “immediately” is to deliberately qualify the statement so that it applies only to a specific short-term period of time). In a sense, we should thank Hickenlooper for being so honest, because it gives us a good look at how the larger establishment of the Democratic Party really sees the labor movement and the concepts of worker solidarity and collective bargaining. Unions are fine, says the Democratic Party, as long as they are providing massive Democratic campaign contributions, and as long as not too many people join them for the purposes of negotiating for higher wages, taking on corporate power, etc. But once unions get too uppity – ie. bringing back membership levels from 30 years ago, challenging corporate power, etc. – then a Democratic governor looking to appease his corporate donors is more than willing to consider unilaterally repealing the basic laws that allow workers to even try to join a union. As I said, it’s an abuser-abused relationship – right there for everyone to see.

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Merton and Joan Bernstein: Mistake About Social Security Distorts Sunday New York Times Budget Exercise

November 15, 2010

Sunday’s New York Times , focused on national deficits, introduces its section on Social Security with the statement that, “Social Security is projected to run a deficit by 2015…” There follows a menu of Social Security proposed reductions to avert such a dreadful outcome. You’ll be relieved to hear that the statement is incorrect. But, then you’ll be concerned that the media, deciders and opinion makers and the public, used to depending upon the Times for solid information, will consider the budget debate with that major distortion in mind. The facts: In 2015, the Social Security trustees’ latest report projects program outlays will exceed Social Security payroll tax revenues slightly. But Social Security has two other dedicated income streams. In 2015 one source — taxes on the benefits received by high earners — just about cancels that difference. The third stream — interest on money borrowed by the Treasury from the Social Security Trust fund — would add $154 billion in revenues. So, official projections for 2015 show Social Security generating a surplus of $151 billion. Some pooh-pooh that interest owed by Treasury as IOUs. But IOUs (more formally called “bonds” or “debt obligations”) are what public and private trust funds hold. And among those securities, U.S. Treasury obligations are bought by other nations’ central banks and private investment funds because U.S. Treasuries are so highly valued around the world. Those Treasury obligations came into the Social Security Trust Fund because, since 1983, Treasury borrowed the portion of Social Security income left over after the program paid all benefits when due. Those surpluses and the taxes from high earners were a purposeful part of the 1983 Social Security legislation, designed to provide a long-term cushion for the program and to assure the public that Social Security was socking away funds to supplement payroll tax revenues when needed. Those surpluses now total some $2.5 trillion and will grow to about $4.2 trillion by 2024 enabling the payment of full benefits through 2037. . Social Security participants have already paid for those benefits. So any Treasury borrowing is, not to pay for Social Security, but to repay the borrowing from the Social Security trust fund; that was used largely to pay for the unfunded Iraq and Afghanistan wars and offset the Bush tax cuts. But for that borrowing, income and corporate taxes would have been higher and/or U.S. payments for non-Social Security activities would have been smaller. It would seem fair that the beneficiaries of those wars — certainly not the men and women who waged them, nor their families — but rather the contractors who made out like bandits (which some were) and the general public and corporations spared higher taxes — should replace those funds. That’s an entirely different allocation of future burdens than cutting Social Security as so widely proposed in discussions of deficit reduction. The New York Times ‘ error was not some minor or a technical glitch but a mistake that distorts the whole exercise the Times put before its readers to decide how to reduce projected deficits. Polls repeatedly show popular support for modest increases in the payroll tax, proposals absent from the Times budget exercise. One very gradual change starting in 2015, after the recession is over, would increase the payroll tax by one-twentieth of one percent for both employees and employers for twenty years. That boost would banish more than two-thirds of Social Security’s small long-term shortfall. In combination with raising the taxable amount of wages to its historic level, would make Social Security solvent for 75 years. Both poll very favorably. Preserving, and indeed improving, Social Security should be a top domestic priority. Social Security, the nation’s most effective anti-poverty program, is the mainstay of our retirees, providing the largest source of retirement income. The recession decimated private pensions and savings devices like 401(k)s and IRAs, making Social Security even more vital to seniors, the disabled and their families — over 50 million people. It makes no sense for Republicans to adamantly insist on extending the Bush tax breaks for the wealthiest Americans, at the cost of $4 trillion, while reducing the most important income support program for the rest of the population. And despite reassurances that current Social Security recipients would be unaffected, reducing cost-of-living adjustments, COLA, starting in 2012, is a central feature of such reductions We should not permit the specter of future deficits to further distract our attention and efforts from the most urgent problems millions of Americans already face — the lack of jobs and work income, the loss of millions of homes to foreclosure, and the huge but avoidable non-benefit costs of our health care non-system.

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Steve Ballmer Unloads $1.3 Billion In Microsoft Stocks

November 7, 2010

Microsoft Corp. CEO Steve Ballmer has sold about $1.3 billion worth of his company shares recently, the first time he’s done so in seven years. Ballmer confirmed the stock sales Friday and said they were made to diversify his investments and aid his year-end tax planning. He said he plans to sell as many as 75 million shares by year’s end. Securities and Exchange Commission filings by Ballmer this week show he sold about 50 million shares. Ballmer still holds about 350 million shares, worth some $9 billion at Microsoft’s current price of around $26. Ballmer issued a statement “to avoid any confusion,” saying he was excited about the Microsoft’s new products and is fully committed to the company. In a rare move, Microsoft issued the statement on Ballmer’s behalf, likely looking to head off any speculation that the sale of a substantial block of his shares indicated anything negative about the company. Ballmer heads the powerful software giant and is also one of the biggest names in U.S. business “Even though this is a personal financial matter, I want to be clear about this to avoid any confusion,” Ballmer said in the statement. “I am excited about our new products and the potential for our technology to change people’s lives, and I remain fully committed to Microsoft and its success.” In a gathering with technology workers last month, Ballmer dismissed suggestions that Redmond, Wash.-based Microsoft needs to take differing approaches to technology for consumers and business users. People want the same technology at work as they do at home, he said. Ballmer also said he has no plans to retire anytime soon.

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Obama Concedes Economy Isn’t Producing Enough Jobs

November 5, 2010

WASHINGTON — President Barack Obama says he’s pleased with healthier job growth, but concedes the economy isn’t producing enough jobs to accommodate people in need of work. Speaking after the November jobs report came out, Obama said he’s “open to any idea, any proposal” that will help jumpstart the economy. He also said the country cannot afford two more years of partisan gridlock in Washington. The president made his statement at the White House before leaving on an Asian trip. He said that America cannot get bogged down in political fights while other countries, like China, are moving forward aggressively to build their economies. He said “the recession caused a great deal of hardship” and it’s vital that business growth be spurred so that substantially more jobs can be created. (This version CORRECTS APNewsNow. Corrects spelling error in short headline. This story is part of AP’s general news and financial services. AP Video.)

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Beverly Blair Harzog: 5 Credit Card Traps That Can Ruin Your Retirement

October 22, 2010

Your golden years should be filled with things you’ve always dreamed about. Maybe it’s a cruise to the Mediterranean with your significant other. Or maybe you’re just looking forward to having the time to attend your grandson’s baseball games. These dreams can quickly turn into nightmares if you aren’t careful about the way you handle credit cards . A study by Demos showed that the average credit card debt among those 65 and older was $10,235 in 2008. This is a 26 percent increase between 2005 and 2008, which is also the biggest jump in any age group. Keep in mind that those numbers don’t even reflect the worst years of the recession. Think before you use your credit card and you can protect your retirement dreams. Here are a few of the most common traps to avoid: #1: Racking up charges for your adult kids and/or grandchildren When your baseball-player grandson needs a new bat and his parents can’t afford it, it’s awfully tough to say no. But try very hard to! Once you start down this path, your family might start eyeing your credit card to get things they want. And guess what? At the end of the month, the statement will arrive at your house, not theirs. So be tough and learn how to gently, but firmly, say no. #2: Co-signing a credit card for a college-student grandchild This is a relatively new trap and it’s related to the Credit CARD Act . The Act prohibits anyone under twenty-one years of age from getting a credit card unless they can prove they have enough income to repay debts. If you co-sign, your under-twenty-one grandchild can get a credit card. Well, you might think this is okay because your grandchild is really responsible. Your grandchild may be a great kid, but when using plastic for the first time at college, don’t underestimate the appeal of pizza parties, midnight snacks at the local drive-through and the siren call of the mall. If a credit card is necessary for your grandchild, there are other options. One option is to let his or her parents make your grandchild an authorized user on one of their cards. See how nicely that works? They get the bill, not you. #3: Not being vigilant enough about identity fraud According to the FBI, senior citizens are frequently targeted for credit card fraud. On this page , the FBI gives senior citizens a long list of great tips on how to avoid credit card fraud. In fact, take a minute to read the whole page and you’ll also find tips for avoiding other types of fraud, too, such as investment scams and the ever-popular Nigerian letter scam. But there are a few tips, in particular, that you should always keep in mind. One, make sure that when you shop online, you see the padlock icon in the address bar. Two, be skeptical of unsolicited emails boasting great deals that you can get with your credit card. And three, check your credit card accounts online every day. This is one of the most effective ways to catch credit card fraud early. Report any suspicious activity to your credit card issuer immediately. #4: Not sticking to your retirement budget Going from a full-time salary to a fixed income is quite a challenge. If you don’t redo your budget to account for your lower income, you’ll end up using your credit cards to make up the difference. Here’s the bottom line: You must live within your means. If you aren’t, then take steps immediately to decrease your expenses. This might mean getting a cheaper car or checking into the possibility of getting a reverse mortgage to lower payments on your home. It’s a good idea to use your credit card for rewards points or as a money management tool, but only if you can pay it off when the statement shows up at the end of the month. #5: Getting into credit card debt during your retirement First, stop using your credit cards. Then, take a good look at your situation and decide if you need credit counseling. If you’re overwhelmed and feel like you’re drowning in debt, contact the National Foundation for Credit Counseling to find a reputable counselor in your area. If you’ve decided you can get out of debt on your own, proceed with caution. Many seniors in this situation think it’s a good idea to use retirement funds to get out of debt. This really isn’t a good idea unless you’re so financially secure that decreasing the funds in your IRA won’t jeopardize your ability to pay your other bills. Remember, if you have $20,000 in debt and you’re in a 25 percent bracket, you’ll have to take out around $26,500 to pay the taxes on the withdrawal. This is a big chunk to take out of your retirement fund. Talk to your financial advisor before you do anything risky to get out of debt in a hurry.

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Havilah Resources NL (ASX:HAV) Releases Mutooroo Copper-Cobalt Deposit Resource Statement

October 18, 2010

Havilah Resources NL (ASX:HAV) Releases Mutooroo Copper-Cobalt Deposit Resource Statement

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Jodi R. R. Smith: Back to School, Moving Up

September 30, 2010

September means back to school for many families, but for those of you in the working world I have a quick quiz. Think fast, True or False: _____ Working hard and doing your job are the best ways to get ahead. In our Mannersmith Professional Protocol seminars we always catch participants who believe this statement to be true. But it is not… This statement is completely false. Working hard and doing your job are why you receive your paycheck. To be eligible for promotion, you need to position yourself properly. Not sure what this means? Here are our top ten tips: 1. Create Perception ~ Make sure you look the part. Dress for the job you want. Keep your work area neat and clean. Arrive early, stay late. Respond in a timely manner. Deliver on promises. 2. Behave Better ~ Everything you say and do reflects on your professional persona. Be sure your actions communicate “polished professional.” Imagine your every interaction being captured on video. Act accordingly. 3. Read Cultural Landscapes ~ Understand what is valued in your office. Who are the stars, who is being promoted, who has the VP’s ear? Know the organizational chart as well as those who have personal power in your office. 4. Be the Answer ~ Look for issues at work that need resolution. From the kitchen fridge than needs emptying to the giant software conversion, helping to make things better identifies you as a problem solver. 5. Move Beyond the Safety of Your Desk ~ While you need not be friends with everyone in the office, you should understand the importance of being friendly. Ask about weekends, hobbies, interests. This way, when you do need to work together, the relationship will be there and the interaction will be comfortable. 6. Cross Boundaries ~ Take the time to know people from other departments. Understand how your job impacts them. 7. Follow in Footsteps ~ Look for mentors and ask about their career paths. Know what options you have for promotion based upon your current position. Know your next steps. 8. Replace Yourself ~ Be sure to train a potential replacement. There are times when managers do not promote great employees due to the time, hassle and stress of having to train a replacement. Being “irreplaceable” can hold you back. 9. Next Stop, Knowledge ~ There is always something new to learn in your field. Take the time to take classes and attend conferences so that your skills remain up to date. 10. Build Professional Networks ~ Know others in your field. Look for mentors, make connections, take on leadership roles. Your next stop may be in another organization before returning to your original company. Still not sure what it takes to be promoted? Then you had better ask. From your manager, to human resources, to those in the position you target, to mentors, there is always someone with knowledge and information to share. Lesson One: You are responsible for your own career path, start by playing an active role!

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Congress Investigating BP’s Role In Lockerbie Bomber Case

September 29, 2010

WASHINGTON — Scotland’s prognosis that the Lockerbie bomber had three months to live was not justified, medical experts told Congress on Wednesday, and a senator questioned whether the process was deliberately manipulated to pave the way for the bomber’s release from prison last year. Abdel Baset al-Megrahi served eight years of a life sentence for the Dec. 21, 1988, bombing over Lockerbie, Scotland, which killed all 259 people on board, most of them Americans, and 11 people on the ground. Suffering from advanced prostate cancer, al-Megrahi was released on compassionate grounds in August 2009 by Scotland’s government. He returned to Libya, outraging people on both sides of the Atlantic. He is still alive. “The release on compassionate grounds was deeply, deeply flawed and perhaps even intentionally skewed to allow for al-Megrahi’s release,” said Sen. Robert Menendez, D-N.J., chairing a Foreign Relations Committee hearing. The panel is investigating whether the British-based oil company BP had sought his freedom to help get a $900 million exploration agreement with Libya off the ground. Senators have been rebuffed in their attempts to get outgoing BP CEO Tony Hayward to testify. The medical experts said that a man who had only three months to live wouldn’t have been able to walk up and down stairs without assistance, as al-Megrahi did last year when boarding a plane for Libya and then disembarking to a hero’s welcome. Menendez said his investigative staffer uncovered conflicting accounts of al-Megrahi’s treatment prior to his release. According to the senator, al-Megrahi stated last year that he had not received chemotherapy – and medical records released by Scotland didn’t say he received that treatment. But Menendez said that a Scottish official, George Burgess, told his staffer that al-Megrahi started chemotherapy in July 2009. “I’m not sure which version of the Scottish government’s story to believe, but I do know one thing – the discrepancy raises a number of questions, including why the information was not forthcoming,” he said. Menendez also said that the prognosis was made by al-Megrahi’s primary care physician, who didn’t have the expertise to determine how advanced the cancer was. The Scottish government rebutted both claims. “The senator’s staffer has got both these issues entirely wrong, and the Senate committee is misinformed – we wrote to the committee yesterday informing them of these errors when we became aware of them, and expressing our extreme disappointment,” the government said in a statement. The prognosis was made by Dr. Andrew Fraser, director of health and care of the Scottish Prison Service, according to the statement, which said that Fraser “is a professional of impeccable integrity.” The government also said that al-Megrahi was not on chemotherapy at any point during his time in Scotland. “Officials met Sen. Menendez’s staffer as a courtesy, and we demand a full explanation from the committee for what has happened in a response to our letter as a matter of urgency,” the statement said. Menendez’s office provided The Associated Press with the staffer’s notes from his meeting with Scottish officials, including Burgess and Kevin Pringle, the spokesman for the first minister. The notes say that Burgess confirmed that Dr. Peter Kay, al-Megrahi’s primary care physician, made the prognosis. “I note that Pringle was very uncomfortable after Burgess made this statement and instead insisted that Dr. Fraser had made the prognosis,” the staffer’s notes say. “Burgess then became nervous and tried to retract what he had said.” The notes also say, “Burgess confirmed that al-Megrahi received chemotherapy in July 2009. That is a first.” The question about chemotherapy is not an academic one: Dr. James Mohler, chairman of the Urology Department at the Roswell Park Cancer Center in Buffalo, N.Y., told the committee that someone undertaking new active treatments wouldn’t have been given three months to live. Menendez’s office also provided e-mail exchanges with Scottish officials that show the Senate staffer vainly tried to arrange meetings with doctors who were involved with al-Megrahi’s care. Meanwhile, a State Department official told the committee that a review of government records found no evidence that BP sought al-Megrahi’s release. Nancy McEldowney, a principal deputy assistant secretary, told lawmakers that the State Department has “not identified any further materials, beyond publicly available statements and correspondence, concerning attempts by BP or other companies to influence matters” related to al-Megrahi’s release. BP has acknowledged that it had urged the British government to sign a prisoner transfer agreement with Libya, but stressed it didn’t specify al-Megrahi’s case. McEldowney noted that in 1998, the U.S. and U.K. wrote a letter to the U.N. secretary general, outlining an agreement for al-Megrahi and another suspect, Amin Khalifa Fhimah, to be tried before a Scottish court established in the Netherlands. Al-Megrahi was convicted but Fhimah was acquitted. The letter stated, “If found guilty, the two accused will serve their sentence in the United Kingdom.” She said that back then, the U.S. sought binding assurances that would happen, but the British countered that they couldn’t legally bind the hands of future governments. “But it was our very clear understanding that we had a political commitment that Megrahi’s transfer to Libya would not happen,” she said. “We proceeded on the basis of the understanding that while at some point in the future it might be a theoretical possibility, in practice it would never happen.”

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JPMorgan Foreclosure Disputed, Casting Wider Doubts

September 27, 2010

The integrity of thousands of foreclosure notices issued by JPMorgan Chase could be cast in doubt, as a court battle over one Florida homeowner’s foreclosure might implicate numerous similar filings, reports Bloomberg News . It’s the latest example of a situation that could stall foreclosures across the nation. Last week, the Washington Post reported that Jeffrey Stephan, a document processor for Ally Financial, who lives in a “modest” two-story house in a small Pennsylvania town, had approved up to 10,000 foreclosure documents a month without actually reading them. The news came to light after Ally said it was putting the brakes on foreclosures in 23 states, citing “corrective action” it needed to take. And when, at the end of the week, Ally began to withdraw foreclosure documents reviewed by another employee, Kristine Wilson , it appeared there might be yet another “robo signer.” Now, lawyers for a Florida homeowner are using a May statement by JPMorgan executive Beth Ann Cottrell to claim that the homeowner’s foreclosure isn’t valid. In her statement, Cottrell said she was part of an eight-person team that approved about 18,000 documents a month without seriously reviewing them. “My review is more or less signing the document unless it’s questionable,” she said, according to Bloomberg , where “questionable” is meant literally: “somebody has a question and brings it to me and says, ‘Beth, can you take a look at this?’” These increased doubts about foreclosure filings come as the nation’s total volume of foreclosures is itself increasing. More Americans lost their homes to foreclosure in August than in any other month on record, according to data from RealtyTrac. While the document-processing scandals may seem like good news for homeowners dealing with foreclosure, Bloomberg notes that the doubts could delay the housing market’s recovery. Home prices continue to fall, and foreclosure controversies, which create uncertainty in the market, may delay their hitting bottom.

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MSNBC Rejects MoveOn’s Target Boycott Ad

August 19, 2010

MSNBC has rejected an ad created by the progressive group MoveOn.org that calls for a boycott of Target over the company’s contributions to anti-gay political candidates. In a statement, MoveOn said that MSNBC had notified them that the ad–which mimics Target’s red and white motif and tells people to boycott the company because “our democracy is not for sale”–violated NBC’s “Controversial Issue Advertising policy,” because it was an explicit attack on an individual company. MoveOn’s executive director, Justin Ruben, blasted MSNBC and its parent company, General Electric, in the statement. “According to MSNBC and GE it is alright for corporations, like Target, to attack candidates and buy elections, but it is not OK for citizen organizations, like MoveOn, to fight back. This is the height of hypocrisy,” he said. Target has come under heavy criticism after it was discovered that it donated $150,000 to a business group that supported the gubernatorial campaign of Minnesota Republican Tom Emmer. The money was reportedly used to make political ads highlighting Emmer’s small-government views . WATCH THE REJECTED MOVEON AD: But it is Emmer’s opposition to gay marriage that has caused a major backlash from progressive groups and sparked the boycott. So far, MoveOn said it has gathered 260,000 signatures for a petition pledging a boycott of Target until the company stops donating money to campaigns. Target has apologized , but has not withdrawn the donation. As the Washington Post reported Thursday , the Target controversy is one of the first examples of the new political terrain for major corporations in the wake of the Citizens United decision, which allowed corporations to make direct contributions to political campaigns. With that new freedom comes increased scrutiny about the political slant of those donations, and of the people making the decision about which candidates to give to.

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MSNBC Rejects MoveOn’s Target Boycott Ad

August 19, 2010

MSNBC has rejected an ad created by the progressive group MoveOn.org that calls for a boycott of Target over the company’s contributions to anti-gay political candidates. In a statement, MoveOn said that MSNBC had notified them that the ad–which mimics Target’s red and white motif and tells people to boycott the company because “our democracy is not for sale”–violated NBC’s “Controversial Issue Advertising policy,” because it was an explicit attack on an individual company. MoveOn’s executive director, Justin Ruben, blasted MSNBC and its parent company, General Electric, in the statement. “According to MSNBC and GE it is alright for corporations, like Target, to attack candidates and buy elections, but it is not OK for citizen organizations, like MoveOn, to fight back. This is the height of hypocrisy,” he said. Target has come under heavy criticism after it was discovered that it donated $150,000 to a business group that supported the gubernatorial campaign of Minnesota Republican Tom Emmer. The money was reportedly used to make political ads highlighting Emmer’s small-government views . WATCH THE REJECTED MOVEON AD: But it is Emmer’s opposition to gay marriage that has caused a major backlash from progressive groups and sparked the boycott. So far, MoveOn said it has gathered 260,000 signatures for a petition pledging a boycott of Target until the company stops donating money to campaigns. Target has apologized , but has not withdrawn the donation. As the Washington Post reported Thursday , the Target controversy is one of the first examples of the new political terrain for major corporations in the wake of the Citizens United decision, which allowed corporations to make direct contributions to political campaigns. With that new freedom comes increased scrutiny about the political slant of those donations, and of the people making the decision about which candidates to give to.

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Elizabeth Warren Wins The Support Of Two More Senators

August 13, 2010

Two more Senate Democrats climbed aboard the Elizabeth Warren bandwagon on Friday, signing on to a statement circulated by Sen. Al Franken encouraging President Obama to nominate the Harvard professor to lead the nascent Consumer Financial Protection Bureau, an entity she first proposed and helped shepherd through Congress. The Progressive Change Campaign Committee and the P Street Project have been urging their membership to flood Congress with calls of support for Warren. Franken’s statement gives advocates something to organize around. The group is also calling on citizens to sign a petition backing her. Sens. John Kerry (D-Mass.) and Mark Udall (D-Colo.) have now gotten behind the effort. “Elizabeth Warren has proven that she is willing to stand up to Wall Street on behalf of consumers and is the logical choice to lead the Consumer Financial Protection Bureau,” reads the statement they signed. “If appointed by President Obama, I would vote to confirm Elizabeth Warren to lead the Consumer Financial Protection Bureau.” On Thursday, Warren met with senior staff at the White House. “The President believes that Elizabeth Warren is a champion for middle class families and consumers and she, among others, is a strong contender for this position. The President has not yet made a decision and no announcement is imminent,” said White House spokeswoman Amy Brundage.

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U.S. Stocks Fluctuate Amid Mixed Feelings after the FOMC Statement

June 23, 2010

U.S. Stocks Fluctuate Amid Mixed Feelings after the FOMC Statement

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China Signals End to Yuan&rsquos Two-Year Peg to Dollar

June 19, 2010

By Bloomberg News June 19 (Bloomberg) — China said it will allow a more flexible yuan, signaling an end to the currency’s two-year-old peg to the dollar a week before a Group of 20 summit. The decision to “increase the renminbi’s exchange-rate flexibility” was made after the economy improved, the central bank said in a statement on its website, without indicating a time-frame for the change. It ruled out a one-off revaluation, saying there is no basis for “large-scale appreciation,” and kept the yuan’s 0.5 percent daily trading band unchanged. “The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability,” the People’s Bank of China said in the statement. “It is desirable to proceed further with reform of the renminbi exchange-rate regime and increase the renminbi exchange-rate flexibility.” The decision may help deflect criticism of China when G-20 leaders meet on June 26-27 in Toronto and ease pressure from U.S. lawmakers, who have urged President Barack Obama to use the threat of trade sanctions to force policy change. A more flexible currency would give China more freedom to decide on monetary policy and reduce inflationary pressures by lowering import costs, the World Bank said in a report last week. U.S. politicians “can declare this a partial victory,” said Ma Jun , a Hong Kong-based economist for Deutsche Bank AG. “The impact of this reform on the real economy over the short-term will be limited, because the yuan is unlikely to move significantly against the currency basket.” Winners and Losers Chinese authorities have prevented the currency from strengthening since July 2008 to help exporters cope with sliding demand triggered by the global financial crisis. The currency appreciated 21 percent in the three years after a peg to the dollar was scrapped in July 2005 and replaced by a managed float against a basket of currencies including the euro and the Japanese yen. The yuan is a denomination of China’s currency, the renminbi. Companies focused on the Chinese market, including Beijing- based computer maker Lenovo Group Ltd. and Shanghai-based China Eastern Airlines Corp. , said in March that they would gain from lower import costs and stronger consumer-purchasing power should the yuan appreciate. Textiles makers would stand to lose the most and some would “face bankruptcy” as their profit margins are as low as 3 percent, Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said in March. China’s inflation rate jumped to a 19-month high of 3.1 percent in May, higher than the government’s full-year target of 3 percent. Central bank dollar buying has left the nation with $2.4 trillion in currency reserves , the world’s largest holding. Crisis Policies “China has ended its crisis-mode exchange-rate policy as the economy recovers strongly and inflationary pressure continues to build,” Li Daokui , an adviser on the People’s Bank of China’s policy board, said in an interview. “The yuan’s future trend depends on the euro’s movement, and the trends of other major currencies.” Yuan 12-month forwards rose the most this year yesterday, gaining 0.5 percent to 6.7125 per dollar. The contracts reflect bets the currency will appreciate 1.7 percent from the spot rate of 6.8262. They had been pricing in appreciation of 3.2 percent on April 30 before a slump in the euro and a worsening of Europe’s debt crisis eased pressure for appreciation. “The central bank’s statement means China’s exit from the dollar peg,” said Zhao Qingming , an analyst in Beijing at China Construction Bank, the nation’s second-biggest bank by market value. “If the euro continues to remain weak, it could also mean that the yuan may depreciate against the dollar.” Treasury Response U.S. Treasury Secretary Timothy F. Geithner praised China’s decision today to allow more currency flexibility and said the pledge needs to be followed by “vigorous” action to help strengthen the global economy. “We welcome China’s decision to increase the flexibility of its exchange rate,” he said in a statement released today in Washington. “Vigorous implementation would make a positive contribution to strong and balanced global growth.” Geithner on April 3 postponed an April 15 deadline for a semiannual review of the currency policies of major U.S. trading partners, which may have resulted in China being labeled a currency manipulator. China owned $895.2 billion of U.S. Treasuries as of the end of March, the largest holdings. Today’s announcement is “a gesture to the U.S., but without a specific timetable,” said Tao Dong , a Hong Kong-based economist at Credit Suisse Group AG. “The pressure is on China now to move its exchange rate ahead of the G-20 summit.” Currency Basket China’s overseas sales jumped 48.5 percent in May from a year earlier, the biggest gain in more than six years, according to customs bureau data June 10. Exports exceeded imports by $19.5 billion, from $1.68 billion in April and a deficit of $7.24 billion in March that was the first in six years. China’s narrowing balance of payments gap indicates that there’s no basis for “large-scale appreciation” by the yuan, the central bank said in the English version of its statement. The Chinese version said no “large-scale volatility” Twelve of 19 respondents surveyed by Bloomberg in April predicted the central bank would allow the currency to float more freely this quarter, while the rest saw a move by year-end. Eleven ruled out a one-off revaluation, while fifteen predicted a wider daily trading range. “Continued emphasis would be placed to reflecting market supply and demand with reference to a basket of currencies,” the statement said. That suggests a looser link to the dollar, said Ben Simpfendorfer , chief China economist at Royal Bank of Scotland Group Plc, in Hong Kong. “China has to offer something ahead of the G-20,” he said. “Greater flexibility allows them the option to appreciate against the dollar, perhaps during periods of dollar weakness.” To contact the reporters on this story: Judy Chen in Shanghai at Xchen45@bloomberg.net .

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China Signals End to Yuan’s Two-Year Dollar Peg as Its Economy Recovers

June 19, 2010

By Bloomberg News June 19 (Bloomberg) — China said it will allow a more flexible yuan, signaling an end to the currency’s two-year-old peg to the dollar a week before a Group of 20 summit. The decision to “increase the renminbi’s exchange-rate flexibility” was made after the economy improved, the central bank said in a statement on its website, without indicating a time-frame for the change. It ruled out a one-off revaluation, saying there is no basis for “large-scale appreciation,” and kept the yuan’s 0.5 percent daily trading band unchanged. “The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability,” the People’s Bank of China said in the statement. “It is desirable to proceed further with reform of the renminbi exchange-rate regime and increase the renminbi exchange-rate flexibility.” The decision may help deflect criticism of China when G-20 leaders meet on June 26-27 in Toronto and ease pressure from U.S. lawmakers, who have urged President Barack Obama to use the threat of trade sanctions to force policy change. A more flexible currency would give China more freedom to decide on monetary policy and reduce inflationary pressures by lowering import costs, the World Bank said in a report last week. U.S. politicians “can declare this a partial victory,” said Ma Jun , a Hong Kong-based economist for Deutsche Bank AG. “The impact of this reform on the real economy over the short-term will be limited, because the yuan is unlikely to move significantly against the currency basket.” Winners and Losers Chinese authorities have prevented the currency from strengthening since July 2008 to help exporters cope with sliding demand triggered by the global financial crisis. The currency appreciated 21 percent in the three years after a peg to the dollar was scrapped in July 2005 and replaced by a managed float against a basket of currencies including the euro and the Japanese yen. The yuan is a denomination of China’s currency, the renminbi. Companies focused on the Chinese market, including Beijing- based computer maker Lenovo Group Ltd. and Shanghai-based China Eastern Airlines Corp. , said in March that they would gain from lower import costs and stronger consumer-purchasing power should the yuan appreciate. Textiles makers would stand to lose the most and some would “face bankruptcy” as their profit margins are as low as 3 percent, Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said in March. China’s inflation rate jumped to a 19-month high of 3.1 percent in May, higher than the government’s full-year target of 3 percent. Central bank dollar buying has left the nation with $2.4 trillion in currency reserves , the world’s largest holding. Crisis Policies “China has ended its crisis-mode exchange-rate policy as the economy recovers strongly and inflationary pressure continues to build,” Li Daokui , an adviser on the People’s Bank of China’s policy board, said in an interview. “The yuan’s future trend depends on the euro’s movement, and the trends of other major currencies.” Yuan 12-month forwards rose the most this year yesterday, gaining 0.5 percent to 6.7125 per dollar. The contracts reflect bets the currency will appreciate 1.7 percent from the spot rate of 6.8262. They had been pricing in appreciation of 3.2 percent on April 30 before a slump in the euro and a worsening of Europe’s debt crisis eased pressure for appreciation. “The central bank’s statement means China’s exit from the dollar peg,” said Zhao Qingming , an analyst in Beijing at China Construction Bank, the nation’s second-biggest bank by market value. “If the euro continues to remain weak, it could also mean that the yuan may depreciate against the dollar.” Treasury Response U.S. Treasury Secretary Timothy F. Geithner praised China’s decision today to allow more currency flexibility and said the pledge needs to be followed by “vigorous” action to help strengthen the global economy. “We welcome China’s decision to increase the flexibility of its exchange rate,” he said in a statement released today in Washington. “Vigorous implementation would make a positive contribution to strong and balanced global growth.” Geithner on April 3 postponed an April 15 deadline for a semiannual review of the currency policies of major U.S. trading partners, which may have resulted in China being labeled a currency manipulator. China owned $895.2 billion of U.S. Treasuries as of the end of March, the largest holdings. Today’s announcement is “a gesture to the U.S., but without a specific timetable,” said Tao Dong , a Hong Kong-based economist at Credit Suisse Group AG. “The pressure is on China now to move its exchange rate ahead of the G-20 summit.” Currency Basket China’s overseas sales jumped 48.5 percent in May from a year earlier, the biggest gain in more than six years, according to customs bureau data June 10. Exports exceeded imports by $19.5 billion, from $1.68 billion in April and a deficit of $7.24 billion in March that was the first in six years. China’s narrowing balance of payments gap indicates that there’s no basis for “large-scale appreciation” by the yuan, the central bank said in the English version of its statement. The Chinese version said no “large-scale volatility” Twelve of 19 respondents surveyed by Bloomberg in April predicted the central bank would allow the currency to float more freely this quarter, while the rest saw a move by year-end. Eleven ruled out a one-off revaluation, while fifteen predicted a wider daily trading range. “Continued emphasis would be placed to reflecting market supply and demand with reference to a basket of currencies,” the statement said. That suggests a looser link to the dollar, said Ben Simpfendorfer , chief China economist at Royal Bank of Scotland Group Plc, in Hong Kong. “China has to offer something ahead of the G-20,” he said. “Greater flexibility allows them the option to appreciate against the dollar, perhaps during periods of dollar weakness.” To contact the reporters on this story: Judy Chen in Shanghai at Xchen45@bloomberg.net .

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Twenty Killed in Turkish Military, PKK Clashes Aircraft Bomb Inside Iraq

June 19, 2010

By Steve Bryant June 19 (Bloomberg) — Eight Turkish soldiers were killed in an attack by the Kurdistan Workers’ Party, or PKK, according to Turkey’s armed forces. The military said 12 PKK members had been killed in subsequent clashes. PKK gunmen attacked a company of soldiers in the Semdinli region close to the border with Iraq, the military said in a statement on their website. The military sent additional forces into the area and aircraft were bombing locations within Iraq, the statement said. Fourteen troops were wounded, it said. The clashes came the day after the Turkish Armed Forces warned of an increase in attacks from the PKK. The militants, which cross into Turkey from camps in northern Iraq, have escalated their attacks in recent weeks, killing nine Turkish soldiers and wounding more than 20 people since May 31. Turkey, the U.S. and the European Union classify the PKK as a terrorist group. The group has been fighting the Turkish state since 1984 in a conflict that has killed at least 40,000 people. To contact the reporter on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net

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Twenty Killed in Turkish Military, PKK Clashes Aircraft Bomb Inside Iraq

June 19, 2010

By Steve Bryant June 19 (Bloomberg) — Eight Turkish soldiers were killed in an attack by the Kurdistan Workers’ Party, or PKK, according to Turkey’s armed forces. The military said 12 PKK members had been killed in subsequent clashes. PKK gunmen attacked a company of soldiers in the Semdinli region close to the border with Iraq, the military said in a statement on their website. The military sent additional forces into the area and aircraft were bombing locations within Iraq, the statement said. Fourteen troops were wounded, it said. The clashes came the day after the Turkish Armed Forces warned of an increase in attacks from the PKK. The militants, which cross into Turkey from camps in northern Iraq, have escalated their attacks in recent weeks, killing nine Turkish soldiers and wounding more than 20 people since May 31. Turkey, the U.S. and the European Union classify the PKK as a terrorist group. The group has been fighting the Turkish state since 1984 in a conflict that has killed at least 40,000 people. To contact the reporter on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net

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Broad Commits 75% of Wealth to Charity, Takes Buffett Up on Giving Pledge

June 16, 2010

By Katya Kazakina June 16 (Bloomberg) — Eli Broad and his wife, Edythe, have pledged 75 percent of their wealth to charity, the Los Angeles billionaire and philanthropist said in a statement today. The Broads are part of a drive called “The Giving Pledge,” started by Warren Buffett and Bill and Melinda Gates to encourage rich Americans to give at least 50 percent of their wealth to charitable causes. “Philanthropy is much harder than running two Fortune 500 companies,” said Broad, 77, former chairman of SunAmerica Inc. and KB Home, in an e-mailed statement today. “We will pledge in writing to give away 75 percent of our wealth during and/or after our lifetime.” The Broad Foundations have invested more than $2 billion in education, scientific and medical research and the arts. Their largest commitment has been $600 million to establish the Broad Institute of the Massachusetts Institute of Technology and Harvard University, according to the statement. Buffett, the world’s third-richest person and chairman of Berkshire Hathaway Inc., has pledged more than 99 percent of his wealth to philanthropy. The greatest part of his fortune, estimated in March at $47 billion by Forbes magazine, is being given in annual installments to the foundation established by Microsoft Corp. co-founder Bill Gates and his wife, Melinda Gates. To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net .

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Gareth Evans Promoted to Qantas Chief Financial Officer, Replacing Storrie

June 16, 2010

By Robert Fenner and Sarah McDonald June 16 (Bloomberg) — Qantas Airways Ltd., Australia’s largest carrier, promoted Gareth Evans to chief financial officer, a role he has been performing since Colin Storrie resigned in March. Evans will now supervise finances for all business units after previously having responsibility for only the Qantas airline division, Sydney-based Qantas said in a statement today. Storrie announced his resignation March 2, citing “personal and health reasons.” As CFO, Evans may oversee financing for the more than 160 planes the carrier, which flies under its own name and the Jetstar budget service, has on order. Qantas, one of only three publicly traded airlines with an investment grade credit rating from Standard & Poor’s, has A$3.2 billion ($2.8 billion) of bonds and loans maturing by 2020, according to data compiled by Bloomberg. “Gareth was appointed after a search process that considered a very strong internal and external field,” Chief Executive Officer Alan Joyce said in the statement. Evans joined the company in 1999 after holding finance roles with Caltex Australia Ltd. and KPMG in the U.K. Qantas shares rose 3.3 percent to A$2.47 at the close of trading in Sydney. The benchmark S&P/ASX 200 index advanced 1.2 percent. The airline is rated BBB by Standard & Poor’s, the same ranking as Southwest Airlines Co. Deutsche Lufthansa AG, which is rated BBB-, is the only other carrier with an investment grade rating, according to Bloomberg data. To contact the reporters on this story: Robert Fenner in Melbourne rfenner@bloomberg.net ; Sarah McDonald in Sydney at smcdonald23@bloomberg.net

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Fed Rules to Limit Credit-Card Late Fees, Require Review of Interest Rates

June 15, 2010

By Margaret Collins June 15 (Bloomberg) — The U.S. Federal Reserve approved rules to protect credit-card holders from unreasonable late- payment fees and to require issuers to review interest-rate increases. The Fed’s rules prohibit credit-card issuers from charging consumers more than $25 for paying late unless the card holder has “engaged in repeated violations,” bans inactivity fees for not using the card, prevents multiple penalties on a single late payment and requires issuers that have increased rates since Jan. 1, 2009, to consider reducing those rates, according to a statement today. “The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers,” said Federal Reserve Governor Elizabeth Duke in the statement. “Card issuers must also reevaluate recent interest rate increases and, if appropriate, reduce the rate.” President Barack Obama signed credit-card legislation in May 2009 to be implemented in three stages. Provisions of the law already in effect include giving consumers the right to reject rate increases within 45 days and to pay off balances at the current rate. Companies also must mail bills 21 days before the due date, up from 14 previously. Today’s provisions take effect on Aug. 22. To contact the reporter on this story: Margaret Collins in New York at mcollins45@bloomberg.net .

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Resolution Says It’s in Talks About Axa U.K. Life Insurance Transaction

June 11, 2010

By Mark Rohner June 12 (Bloomberg) — Resolution Ltd., the U.K. buyout firm founded by Clive Cowdery, said it’s in talks on a potential acquisition of Axa SA’s British life insurance operations. “If implemented, this transaction would result in the acquisition by Resolution of the majority of Axa’s life assurance operations in the U.K., including its businesses in the risk areas of protection and annuities and also its group pensions business,” Guernsey, Channel Island-based Resolution said in an e-mailed statement yesterday. Resolution intends to consolidate the U.K. businesses of Axa, France’s biggest insurer, with its Friends Provident operations, the statement said. Resolution said the announcement was “in response to recent press speculation” and there is “no certainty these discussions will result in a transaction.” The Telegraph reported yesterday that Cowdery was offering 2.5 billion pounds ($3.6 billion) for Axa’s U.K. life insurance businesses, without saying where it got the information. To contact the reporter on this story: Mark Rohner in Washington at mrohner@bloomberg.net

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Microsoft Sells $1.15 Billion of Convertible Notes to Extend Debt Maturity

June 8, 2010

By Sarah McDonald June 9 (Bloomberg) — Microsoft Corp. , the world’s biggest software maker, said it sold $1.15 billion of convertible senior notes due 2013 as it seeks to replace short-term borrowings with longer-dated debt. The bonds, which don’t pay interest, can be handed over for shares when Microsoft stock rises to $33.40, a 33 percent increase from its last reported price of $25.11 on June 8, according to a statement distributed by PR Newswire today. Microsoft may also choose to exchange the notes for cash in certain circumstances, the statement said. “Microsoft will use the net proceeds from the offering of convertible notes to repay short-term debt,” the Redmond, Washington-based company said in the statement. Microsoft had $2.25 billion of short-term debt outstanding as of March 31, according to a filing with the U.S. Securities and Exchange Commission. The convertible notes give the company more stability with debt at a fixed rate, compared with the more volatile interest of short-term paper. Convertible bonds allow investors to exchange debt into common stock at a pre- established rate under specified conditions. Microsoft gave underwriters an option to buy an additional $100 million of the notes, according to the statement. Prior to March 15, 2013, the convertible notes will be convertible, only in certain circumstances, into cash and, if applicable, cash, shares of Microsoft’s common stock or a combination thereof, at Microsoft’s election, the statement said. On or after March 15, 2013, the convertible notes will be convertible at any time, it said. The software maker issued $3.75 billion of 5-, 10- and 30- year debt in May 2009 as it tapped the corporate bond market for the first time, according to data compiled by Bloomberg. To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net .

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ABB Agrees to Buy Chloride Group for $1.25 Billion, Beating Emerson Offer

June 8, 2010

By Andrew Noel June 8 (Bloomberg) — ABB Ltd. , the world’s biggest supplier of power grids, agreed to buy Chloride Group Plc in an 864 million-pound ($1.3 billion) offer that beat a rival approach from Emerson Electric Co . Chloride investors will receive 325 pence a share in cash, Zurich-based ABB said in a statement today. That’s 55.5 percent higher than Chloride’s closing price on April 23, the day Emerson made its failed approach. ABB bid 141 million pounds more than Emerson to get Chloride’s seal of approval for a takeover. Management at the British company shunned Emerson, forcing it to take its proposal directly to shareholders. The takeover would mark ABB’s second planned acquisition of more than $1 billion in as many months, ending a decade of sitting on cash reserves that swelled to $7.2 billion last year. “The combination of Chloride’s strong position in the fast- growing medium- to high-power UPS business with ABB’s global reach and complementary power and automation offering provides significant growth opportunities for both businesses,” ABB Chief Executive Officer Joe Hogan said in the statement. “The transaction is in line with our strategy to acquire companies especially in areas where demand for power and automation solutions is converging.” To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

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Blackwater Looking For New Owner

June 7, 2010

RALEIGH, N.C. — The security firm formerly known as Blackwater is looking for new ownership, announcing Monday it is pursuing a sale of the company that became renowned and reviled for its involvement with the U.S. government in Iraq and elsewhere. The Moyock, N.C.-based company now called Xe Services announced its decision in a brief statement that gave few details. “Xe’s new management team has made significant changes and improvements to the company over the last 15 months, which have enabled the company to better serve the U.S. government and other customers, and will deliver additional value to a purchaser,” the statement said. Owner and founder Erik Prince said selling the company is a difficult decision, but constant criticsm of Xe helped him make up his mind. “Performance doesn’t matter in Washington, just politics,” Prince said in a further statement. The private company became famous as Blackwater, which provided guards and services to the U.S. government in Iraq, Afghanistan and elsewhere. It became one of the most respected defense contractors in the world, but also attracted sharp criticism over its role in those missions. It has been trying to rehabilitate its image since a 2007 shooting in Baghdad that killed 17 people, outraged the Iraqi government and led to federal charges against several Blackwater guards. The accusations later were thrown out of court after a judge found prosecutors mishandled evidence. In March, Senate Armed Services Committee Chairman Carl Levin suggested the Pentagon should consider banning Xe from a $1 billion deal to train Afghan police. The Michigan Democrat said he thought the company’s involvement was hindering the U.S. mission in Afghanistan. Prince, who founded the company in 1997 along with former colleagues from the Navy SEALs, said he does not anticipate having any role in Xe after the sale. The process of finding a buyer and completing the deal is expected to take several months, according to spokeswoman Stacy DeLuke. The announcement comes less than three months after Xe sold its aviation division for $200 million to Wood Dale, Ill.-based AAR Corp in a bid to strengthen Xe’s balance sheet. More recently, five former executives, including Gary Jackson, the company’s ex-president, were indicted on charges of conspiring to violate federal firearms laws. Jackson was among the top officials who left the company last year in a management shakeup. ___ Associated Press Writer Mike Baker contributed to this report.

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Blackwater Looking For New Owner

June 7, 2010

RALEIGH, N.C. — The security firm formerly known as Blackwater is looking for new ownership, announcing Monday it is pursuing a sale of the company that became renowned and reviled for its involvement with the U.S. government in Iraq and elsewhere. The Moyock, N.C.-based company now called Xe Services announced its decision in a brief statement that gave few details. “Xe’s new management team has made significant changes and improvements to the company over the last 15 months, which have enabled the company to better serve the U.S. government and other customers, and will deliver additional value to a purchaser,” the statement said. Owner and founder Erik Prince said selling the company is a difficult decision, but constant criticsm of Xe helped him make up his mind. “Performance doesn’t matter in Washington, just politics,” Prince said in a further statement. The private company became famous as Blackwater, which provided guards and services to the U.S. government in Iraq, Afghanistan and elsewhere. It became one of the most respected defense contractors in the world, but also attracted sharp criticism over its role in those missions. It has been trying to rehabilitate its image since a 2007 shooting in Baghdad that killed 17 people, outraged the Iraqi government and led to federal charges against several Blackwater guards. The accusations later were thrown out of court after a judge found prosecutors mishandled evidence. In March, Senate Armed Services Committee Chairman Carl Levin suggested the Pentagon should consider banning Xe from a $1 billion deal to train Afghan police. The Michigan Democrat said he thought the company’s involvement was hindering the U.S. mission in Afghanistan. Prince, who founded the company in 1997 along with former colleagues from the Navy SEALs, said he does not anticipate having any role in Xe after the sale. The process of finding a buyer and completing the deal is expected to take several months, according to spokeswoman Stacy DeLuke. The announcement comes less than three months after Xe sold its aviation division for $200 million to Wood Dale, Ill.-based AAR Corp in a bid to strengthen Xe’s balance sheet. More recently, five former executives, including Gary Jackson, the company’s ex-president, were indicted on charges of conspiring to violate federal firearms laws. Jackson was among the top officials who left the company last year in a management shakeup. ___ Associated Press Writer Mike Baker contributed to this report.

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Blackwater Looking For New Owner

June 7, 2010

RALEIGH, N.C. — The security firm formerly known as Blackwater is looking for new ownership, announcing Monday it is pursuing a sale of the company that became renowned and reviled for its involvement with the U.S. government in Iraq and elsewhere. The Moyock, N.C.-based company now called Xe Services announced its decision in a brief statement that gave few details. “Xe’s new management team has made significant changes and improvements to the company over the last 15 months, which have enabled the company to better serve the U.S. government and other customers, and will deliver additional value to a purchaser,” the statement said. Owner and founder Erik Prince said selling the company is a difficult decision, but constant criticsm of Xe helped him make up his mind. “Performance doesn’t matter in Washington, just politics,” Prince said in a further statement. The private company became famous as Blackwater, which provided guards and services to the U.S. government in Iraq, Afghanistan and elsewhere. It became one of the most respected defense contractors in the world, but also attracted sharp criticism over its role in those missions. It has been trying to rehabilitate its image since a 2007 shooting in Baghdad that killed 17 people, outraged the Iraqi government and led to federal charges against several Blackwater guards. The accusations later were thrown out of court after a judge found prosecutors mishandled evidence. In March, Senate Armed Services Committee Chairman Carl Levin suggested the Pentagon should consider banning Xe from a $1 billion deal to train Afghan police. The Michigan Democrat said he thought the company’s involvement was hindering the U.S. mission in Afghanistan. Prince, who founded the company in 1997 along with former colleagues from the Navy SEALs, said he does not anticipate having any role in Xe after the sale. The process of finding a buyer and completing the deal is expected to take several months, according to spokeswoman Stacy DeLuke. The announcement comes less than three months after Xe sold its aviation division for $200 million to Wood Dale, Ill.-based AAR Corp in a bid to strengthen Xe’s balance sheet. More recently, five former executives, including Gary Jackson, the company’s ex-president, were indicted on charges of conspiring to violate federal firearms laws. Jackson was among the top officials who left the company last year in a management shakeup. ___ Associated Press Writer Mike Baker contributed to this report.

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European Finance Ministers Seal Rescue-Fund Package to Rein in Debt Crisis

June 7, 2010

By Jonathan Stearns and Meera Louis June 7 (Bloomberg) — European finance ministers put the finishing touches on a rescue fund being backed by 440 billion euros ($526 billion) in national guarantees, seeking to halt the spread of Greece’s debt crisis. The European Financial Stability Facility would sell bonds backed by the guarantees and use the money it raises to make loans to euro-area nations in need, the finance ministers decided today in Luxembourg. The new mechanism would sell debt for lending only after an aid request is made by a country. The ministers aim for ratings companies to assign a AAA rating to the facility, whose bonds would be eligible for European Central Bank refinancing operations. The entity will be based in Luxembourg. “We’ve sent a clear signal of stability,” Austrian Finance Minister Josef Proell told reporters at the Luxembourg meeting. “We’ve opened the rescue umbrella and I’m convinced it’s working.” The fund, being created for three years, is the main part of a 750 billion-euro aid package that European Union finance ministers hammered out a month ago to combat a sovereign debt crisis. Another 60 billion euros will come from the European Commission — the EU’s executive arm — and 250 billion euros from the International Monetary Fund. Prodded by the U.S. and Asia to stabilize markets, European governments approved the unprecedented financial backstop on May 9-10 in a bid to end speculation that the euro area might break apart because of a debt crisis that started in Greece. A 110 billion-euro loan package for Greece unveiled on May 2 after the country was cut off from markets failed to stem a surge in Portuguese and Spanish borrowing costs. Euro-Area Fund Governments abandoned the aid model for Greece, based on national loans, when crafting the euro-area fund, which is simpler because it avoids the need for domestic action on disbursement. Delays by Germany in approving its share of the rescue for Greece led to speculation that the Greek package might falter. All euro-area countries plan to be shareholders of the European Financial Stability Facility, or EFSF. The holding of each country will correspond to its share of the ECB’s capital. “National legal procedures to participate in the facility are well on track,” the euro area said in a statement on the fund’s operations. To ensure the highest credit rating for debt sold by the facility, the finance ministers approved a 120 percent guarantee of each country’s pro rata share for each bond issue, according to the statement. Cash Reserve In addition, the ministers authorized the creation, when any loans are made, of a “cash reserve to provide an additional cushion or cash buffer for the operation of the EFSF,” according to the statement. EU Economic and Monetary Affairs Commissioner Olli Rehn said last week he hopes the “sheer size” of the euro-area rescue fund, along with the extra 60 billion euros in possible support from the commission, “will help to stabilize markets” and make aid unnecessary. “No euro has been yet consumed and I hope that no euro will have to be consumed,” Rehn told a June 2 conference in Brussels. Any loans from the rescue fund would impose the kinds of budget-austerity conditions on recipients that Greece faces as part of a program for receiving quarterly aid disbursements under the May 2 accord, Rehn said. “In case any country would have to resort to this European financial stabilization mechanism, it would work in the same principles as we are now working with Greece,” Rehn said. To contact the reporters on this story: Jonathan Stearns in Luxembourg at jstearns2@bloomberg.net ; Meera Louis in Luxembourg at mlouis1@bloomberg.net .

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European Finance Ministers Seal Rescue-Fund Package to Rein in Debt Crisis

June 7, 2010

By Jonathan Stearns and Meera Louis June 7 (Bloomberg) — European finance ministers put the finishing touches on a rescue fund being backed by 440 billion euros ($526 billion) in national guarantees, seeking to halt the spread of Greece’s debt crisis. The European Financial Stability Facility would sell bonds backed by the guarantees and use the money it raises to make loans to euro-area nations in need, the finance ministers decided today in Luxembourg. The new mechanism would sell debt for lending only after an aid request is made by a country. The ministers aim for ratings companies to assign a AAA rating to the facility, whose bonds would be eligible for European Central Bank refinancing operations. The entity will be based in Luxembourg. “We’ve sent a clear signal of stability,” Austrian Finance Minister Josef Proell told reporters at the Luxembourg meeting. “We’ve opened the rescue umbrella and I’m convinced it’s working.” The fund, being created for three years, is the main part of a 750 billion-euro aid package that European Union finance ministers hammered out a month ago to combat a sovereign debt crisis. Another 60 billion euros will come from the European Commission — the EU’s executive arm — and 250 billion euros from the International Monetary Fund. Prodded by the U.S. and Asia to stabilize markets, European governments approved the unprecedented financial backstop on May 9-10 in a bid to end speculation that the euro area might break apart because of a debt crisis that started in Greece. A 110 billion-euro loan package for Greece unveiled on May 2 after the country was cut off from markets failed to stem a surge in Portuguese and Spanish borrowing costs. Euro-Area Fund Governments abandoned the aid model for Greece, based on national loans, when crafting the euro-area fund, which is simpler because it avoids the need for domestic action on disbursement. Delays by Germany in approving its share of the rescue for Greece led to speculation that the Greek package might falter. All euro-area countries plan to be shareholders of the European Financial Stability Facility, or EFSF. The holding of each country will correspond to its share of the ECB’s capital. “National legal procedures to participate in the facility are well on track,” the euro area said in a statement on the fund’s operations. To ensure the highest credit rating for debt sold by the facility, the finance ministers approved a 120 percent guarantee of each country’s pro rata share for each bond issue, according to the statement. Cash Reserve In addition, the ministers authorized the creation, when any loans are made, of a “cash reserve to provide an additional cushion or cash buffer for the operation of the EFSF,” according to the statement. EU Economic and Monetary Affairs Commissioner Olli Rehn said last week he hopes the “sheer size” of the euro-area rescue fund, along with the extra 60 billion euros in possible support from the commission, “will help to stabilize markets” and make aid unnecessary. “No euro has been yet consumed and I hope that no euro will have to be consumed,” Rehn told a June 2 conference in Brussels. Any loans from the rescue fund would impose the kinds of budget-austerity conditions on recipients that Greece faces as part of a program for receiving quarterly aid disbursements under the May 2 accord, Rehn said. “In case any country would have to resort to this European financial stabilization mechanism, it would work in the same principles as we are now working with Greece,” Rehn said. To contact the reporters on this story: Jonathan Stearns in Luxembourg at jstearns2@bloomberg.net ; Meera Louis in Luxembourg at mlouis1@bloomberg.net .

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Two New Jersey Men Charged With Terror Offenses After JFK Airport Arrests

June 6, 2010

By Dan Hart June 6 (Bloomberg) — Two New Jersey men were arrested yesterday at New York’s John F. Kennedy International Airport and charged with conspiracy to kill, maim and kidnap people outside the U.S., the U.S. Attorney for New Jersey said in a statement. The men, Mohamed Mahmood Alessa, and Carlos Eduardo Almonte, were arrested yesterday as they attempted to board separate flights on their way to Egypt to join the Islamic al- Shabaab movement in Somalia, the U.S. Attorney said in the statement. The two are set to appear tomorrow in U.S. federal court in Newark, New Jersey, at 11 a.m. New York time, the office said in the statement. The statement was confirmed by the New Jersey Office of Homeland Security and Preparedness.

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Ex-McKinsey Consultant Convicted by Federal Jury in Iran Trade Ban Case

June 5, 2010

By Patricia Hurtado June 5 (Bloomberg) — Former McKinsey & Co. consultant Mahmoud Reza Banki was convicted by a federal jury in New York of violating the Iran trade embargo and running an unlicensed money-transfer business. The jury took about four hours to convict Banki of all five charges against him. U.S. District Judge John Keenan in New York, who is presiding over the case, told the panel to return June 7 and he will instruct them on the law regarding a forfeiture. The government will ask that he surrender $3.4 million in illegal proceeds. Banki’s lawyer, Baruch Weiss, declined comment after the verdict. Banki, a naturalized U.S. citizen born in Iran, was accused of running a “value-transfer” business that essentially moved money to residents of Iran from 2006 to 2009 in violation of the embargo. Banki received about $4.7 million as part of the transfer process and used the money to buy a $2.4 million condominium, invest in securities and pay credit-card bills, the government charged. “There is an additional thing you’ll have to do, which is the forfeiture of assets,” Keenan told the panel and he advised them not speak to anyone or read about the case until they have concluded their deliberations. “Return to court Monday afternoon and I will charge you on the law regarding forfeiture.” Family Money Banki, who has been in custody since his arrest on the charges in January, didn’t show any reaction to the verdict. His mother and girlfriend began sobbing and as he was led away by U.S. Marshals, his mother attempted to hug her son. “Just a minute for his mother,” she said. “Ma’am, I’m sorry,” a marshal said as he was escorted out of the courtroom to a holding cell. Defense lawyers told the jury during the trial that Banki got the money from his family and reported the funds to the government. Prosecutors alleged during the trial that Banki received the wire transfers in a personal Bank of America Corp. account he set up for that purpose. The money came from companies and individuals in Saudi Arabia, Kuwait, Latvia, Slovenia, Russia, Sweden, the Philippines, the U.S. and other countries, prosecutors said. Banki allegedly used a value-transfer system called hawala, in which money doesn’t physically cross international boundaries through the banking system, according to the statement. Customers transfer funds to operators known as hawaladars in one country, and corresponding funds are distributed by associate hawaladars to recipients in another country, according to the statement. The parallel accounts are later settled by the hawaladars in a variety of ways. The jury convicted Banki of five counts, including conspiracy, violating the Iran trade embargo, operating an unlicensed money transfer process and two counts of making false statements. No sentencing date has been set. The case is U.S. v. Banki, 1:10-CR-00008, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Patricia Hurtado in federal court in New York at pathurtado@bloomberg.net .

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Morgan Stanley Says Stephen Roach to Relocate to New York From Hong Kong

June 3, 2010

June 4 (Bloomberg) — Morgan Stanley , the world’s largest brokerage, said Asia Chairman Stephen Roach will relocate to New York from Hong Kong and become its non-executive chairman for Asia. The move will take effect on July 1, Morgan Stanley said in an e-mailed statement today. Roach, 64, will also join the faculty of Yale University, with a joint appointment at the Jackson Institute for Global Affairs and the School of Management, according to the statement. “While Steve has made the decision to return to the U.S. and join the faculty at Yale, we are delighted he will also remain with the firm,” Chief Executive Officer James Gorman , said in the statement. Roach has served as senior representative of New York-based Morgan Stanley to clients, governments, and regulators across Asia since 2007. He was previously chief economist. Before joining Morgan Stanley in 1982, Roach worked at Morgan Guaranty Trust Company and on the research staff of the Federal Reserve Board in Washington. He has a Ph.D. in economics from New York University. Roach will travel regularly for Morgan Stanley and “stay connected to clients, governments and regulators in Asia and other parts of the world,” according to today’s statement. At Yale University, he will teach upper level undergraduates and graduate students with a focus on Asia and macroeconomic policy. His first course will be on the Chinese economy this fall. Roach has criticized calls to pressure China to allow a stronger currency and forecast that China’s economy will be the largest contributor to global growth by 2025. — Luo Jun . Editor: Brett Miller To contact Bloomberg News staff of this story: Luo Jun in Shanghai at +8621-6104-7021 or jluo6@bloomberg.net To contact the editor responsible for this story: Philip Lagerkranser at +852-2977-6626 or lagerkranser@bloomberg.net

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Xstrata Suspends $5.6 Billion Australian Projects Amid Mining Tax Backlash

June 3, 2010

By Elisabeth Behrmann June 3 (Bloomberg) — Xstrata Plc , the world’s largest thermal coal exporter, shelved spending on projects worth A$6.6 billion ($5.6 billion) in Australia, intensifying pressure on the government to wind back its proposed tax on mine profits. Work totaling A$586 million was halted on the expansion of the Ernest Henry copper mine, approved in December, and the first stage of the A$6 billion Wandoan coal project, Zug, Switzerland-based Xstrata said today in an e-mailed statement. Xstrata is the first global mining company to suspend a major project as mineral producers seek to rally public opinion against the government’s plan to introduce the 40 percent tax on profits from 2012. Prime Minister Kevin Rudd , facing an election before April, said he will study Xstrata’s decision. “The suspension of Ernest Henry is certainly racheting up pressure in the debate about the tax,” said Peter Richardson , chief metals economist for Morgan Stanley Australia Ltd. BHP Billiton Ltd . and Rio Tinto Group, who are reviewing projects in Australia, the biggest exporter of iron ore and coal, are also campaigning against the tax. Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, last month put $15 billion of projects on hold. “Where there’s uncertainty, companies will be shelving projects or putting them on hold,” said Michael Heffernan , a client adviser with Austock Securities Ltd. in Melbourne. Voter Poll Companies have taken out full-page advertisements in Australian newspapers to lobby for changes to the legislation and the Minerals Council of Australia is running television spots. Rudd is failing to win over voters, with 41 percent opposed to the tax and 36 percent in favor, according to a Newspoll survey published June 1 in the Australian newspaper. “There will be claims by mining companies, statements by mining companies, there will be threats of project closures, there will be projects also frozen,” Prime Minister Kevin Rudd told reporters today in Canberra. “This is part and parcel of what will be the normal argy bargy of a very tense debate between parts of the mining industry and the Australian government.” Xstrata shelved A$400 million of planned spending on an underground project to extend the life of the Ernest Henry mine in Queensland state to 2024 from 2013, the company said in the statement. Work on a smaller underground mine is planned to proceed, it said. The company also shelved A$91 million of work on the Wandoan thermal coal mine in Queensland’s Surat basin due to start in July, Xstrata said. In the past three years, A$200 million has been spent on the project, which has an initial production target of 30 million metric tons, it said. Impair Value The tax “has created significant uncertainty for the future of mining investments into Australia and would impair the value of previously approved projects and exploration to the point that continued investment can no longer be justified,” Mick Davis , Xstrata’s chief executive officer, said in the statement. The government, which argues the overhaul will give Australians a “fairer share” of the nation’s natural resources wealth, is committed to the tax and the 40 percent rate is “right” because firms aren’t paying a fair amount, Rudd said two days ago. The country’s trade balance unexpectedly swung to a surplus in April as exports of iron ore jumped by a quarter and coal shipments surged 40 percent, according to data released today. To contact the reporter on this story: Elisabeth Behrmann at Ebehrmann1@bloomberg.net

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Xstrata Suspends $5.6 Billion Australian Projects Amid Mining Tax Backlash

June 3, 2010

By Elisabeth Behrmann June 3 (Bloomberg) — Xstrata Plc , the world’s largest thermal coal exporter, shelved spending on projects worth A$6.6 billion ($5.6 billion) in Australia, intensifying pressure on the government to wind back its proposed tax on mine profits. Work totaling A$586 million was halted on the expansion of the Ernest Henry copper mine, approved in December, and the first stage of the A$6 billion Wandoan coal project, Zug, Switzerland-based Xstrata said today in an e-mailed statement. Xstrata is the first global mining company to suspend a major project as mineral producers seek to rally public opinion against the government’s plan to introduce the 40 percent tax on profits from 2012. Prime Minister Kevin Rudd , facing an election before April, said he will study Xstrata’s decision. “The suspension of Ernest Henry is certainly racheting up pressure in the debate about the tax,” said Peter Richardson , chief metals economist for Morgan Stanley Australia Ltd. BHP Billiton Ltd . and Rio Tinto Group, who are reviewing projects in Australia, the biggest exporter of iron ore and coal, are also campaigning against the tax. Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, last month put $15 billion of projects on hold. “Where there’s uncertainty, companies will be shelving projects or putting them on hold,” said Michael Heffernan , a client adviser with Austock Securities Ltd. in Melbourne. Voter Poll Companies have taken out full-page advertisements in Australian newspapers to lobby for changes to the legislation and the Minerals Council of Australia is running television spots. Rudd is failing to win over voters, with 41 percent opposed to the tax and 36 percent in favor, according to a Newspoll survey published June 1 in the Australian newspaper. “There will be claims by mining companies, statements by mining companies, there will be threats of project closures, there will be projects also frozen,” Prime Minister Kevin Rudd told reporters today in Canberra. “This is part and parcel of what will be the normal argy bargy of a very tense debate between parts of the mining industry and the Australian government.” Xstrata shelved A$400 million of planned spending on an underground project to extend the life of the Ernest Henry mine in Queensland state to 2024 from 2013, the company said in the statement. Work on a smaller underground mine is planned to proceed, it said. The company also shelved A$91 million of work on the Wandoan thermal coal mine in Queensland’s Surat basin due to start in July, Xstrata said. In the past three years, A$200 million has been spent on the project, which has an initial production target of 30 million metric tons, it said. Impair Value The tax “has created significant uncertainty for the future of mining investments into Australia and would impair the value of previously approved projects and exploration to the point that continued investment can no longer be justified,” Mick Davis , Xstrata’s chief executive officer, said in the statement. The government, which argues the overhaul will give Australians a “fairer share” of the nation’s natural resources wealth, is committed to the tax and the 40 percent rate is “right” because firms aren’t paying a fair amount, Rudd said two days ago. The country’s trade balance unexpectedly swung to a surplus in April as exports of iron ore jumped by a quarter and coal shipments surged 40 percent, according to data released today. To contact the reporter on this story: Elisabeth Behrmann at Ebehrmann1@bloomberg.net

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Wealthy Investors Bet on Property, Stocks as Caution Reigns, Barclays Says

June 2, 2010

By Sophie Leung June 2 (Bloomberg) — Wealthy investors globally are avoiding derivatives and hedge funds and turning to property and stocks following the global financial crisis and economic downturn, Barclays Wealth said, citing a survey. More than half of the investors surveyed said they are more cautious than they were before the crisis, Barclays said in a statement in Hong Kong today. About 2,000 wealthy investors who have more than 1 million pounds ($1.47 million) in investments from 20 countries participated in the survey in February and March, it said. “The uncertainty around the prospects and timing of the global economic recovery is causing investors to favor” equities and real estate, Joanna Chu , managing director and head of North Asia at Barclays, said in the statement. Almost 90 percent of the surveyed investors in Singapore said the property market is likely to perform well in the next 12 months, while 68 percent of the Australian respondents said they are positive on equities, according to the survey. To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net

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Israeli Forces Clash With Gaza Aid Flotilla Army Radio Says 10 Killed

May 30, 2010

By Jonathan Ferziger and Calev Ben-David May 31 (Bloomberg) — At least 10 members of a flotilla of ships carrying hundreds of pro-Palestinian activists and humanitarian aid supplies to the Gaza Strip were killed in clashes with Israeli naval forces, Israel Army Radio reported. Turkey’s Foreign Ministry called the raid “inhuman” and said it “may cause damage to our relations that will be impossible to repair,” according to the statement e-mailed by the ministry in Ankara today. Several of the aid ships were from Turkey. Israeli forces met resistance early today when they boarded the ships to prevent them from reaching Gaza, Army Radio said. A spokesman for the Israel army denied initiating violence. “We did not attack any boats,” the spokesman said, speaking anonymously under military guidelines. “The IDF is fulfilling the directions of the Israeli government to prevent anyone from entering the Gaza Strip without proper coordination and authorization from Israel.” Israel has said it wouldn’t let the ships reach Gaza, calling the mission a propaganda trick aimed at making it look bad. The Israeli government had said it would assist in offloading the cargo and sending it by truck to Gaza after a security inspection. Hamas, the militant organization that rules Gaza, said the Israeli action was an “act of terror.” Taher Nunu, a Hamas spokesman, said in an interview with Al-Jazeera television that Israel should be tried for war crimes. Three Israeli navy missile boats left the Haifa naval base last night, planning to intercept the flotilla, according to reporters on board. To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

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Israel Won’t Join Nuclear-Free Mideast Talks, Calls UN Resolution `Flawed’

May 29, 2010

By Gwen Ackerman May 30 (Bloomberg) — Israel called “deeply flawed” and “hypocritical” a United Nations resolution ratified by 181 countries that calls for a 2012 conference on a nuclear-free Mideast, and said it would not take part in the talks. “Israel is not obligated by the decisions of this conference, which has no authority over Israel,” a statement from Prime Minister Benjamin Netanyahu ’s office distributed to press travelling with him in Toronto said. “It singles out Israel, the Middle East’s only true democracy and the only country threatened with annihilation,” the statement said. “It ignores the realities of the Middle East and the real threats facing the region and the entire world.” Agreement on the 2012 meeting helps the U.S. address a demand of Arab nations as President Barack Obama pressures Iran to halt the pursuit of nuclear technologies that might lead to development of an atomic weapon. Arab states have said Israel has a nuclear arsenal that must be part of the discussion. Israel, which hasn’t confirmed or denied it has nuclear weapons, hasn’t signed the non-proliferation treaty and didn’t attend the UN review conference. The declaration said Israel should ratify the treaty and allow inspection of nuclear facilities by the International Atomic Energy Agency. June 1 Meeting Netanyahu will discuss the resolution in a meeting scheduled with Obama on June 1, the statement said. “Regarding the practical consequences of this resolution for Israel, we take note of the important clarifications that have been made by the U.S. regarding its policy,” the statement added. Gary Samore , the White House coordinator for arms control, called the naming of Israel in the UN resolution’s text “a negative political symbol” that made it less likely that Israel will attend, or even that the meeting will take place. Obama, in a White House statement May 28, said the U.S. “welcomes the agreements” from the conference, yet will “strongly oppose efforts to single out Israel, and will oppose actions that jeopardize Israel’s national security.” The U.S. backing of the resolution, even after subsequent criticism of the singling out of Israel by the Obama administration, is likely to be detrimental to ties between the allies, said Gerald Steinberg , a political scientist at Bar Ilan University. U.S. Reliability “Clearly for Israel this is another sign that the U.S. is not reliable on key security issues,” Steinberg said by phone. The resolution will also not benefit the indirect Israeli- Palestinian peace talks launched earlier this month as it will make Israel more reluctant to take security risks, he said. Netanyahu canceled a planned trip to attend a nuclear summit in the U.S. in April when it became apparent that it was going to be used as a vehicle by some countries to attack Israel for not being a signatory to the Nuclear Non-Proliferation Treaty. The Nuclear Non-Proliferation Treaty is an agreement between the five original nuclear powers — the U.S., Britain, China, France and Russia — not to spread the weapons and eventually to disarm, in exchange for a pledge from other nations not to join the arms race. At the same time, the non- nuclear nations were accorded the right to develop peaceful programs. The proposal for Middle East talks in 2012 says all nations will meet “on the establishment” of a zone free of weapons of mass destruction “on the basis of arrangements freely arrived at” by them all. In the past two months, Obama has signed an arms-reduction treaty with Russia, pledged to limit the potential U.S. use of atomic weapons and won commitments from 46 nations to protect stockpiles of uranium and plutonium. To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net .

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China, South Korea to Deepen Ties Amid North Tension

May 29, 2010

By Bomi Lim May 29 (Bloomberg) — China agreed to deepen ties with South Korea and Japan at an annual summit overshadowed by accusations that its ally North Korea sank one of the South’s warships. The North rejected the charges as “sheer fabrication” to justify a “a war of aggression against it.” Chinese Premier Wen Jiabao has steered clear of public discussion of North Korea’s role in the sinking since he arrived in South Korea yesterday. In contrast, Japanese Prime Minister Yukio Hatoyama today paid his respects at a cemetery where the 46 sailors who died in the sinking are buried, before flying to the resort island of Jeju for the two-day summit. There he said he would back any South Korean move to take the case to the United Nations Security Council . The three countries agreed to set up a permanent liaison office in South Korea in 2011 and to pursue a free-trade agreement, the South’s presidential office said today in a statement. The leaders also agreed to cooperate more closely on regional security issues, including getting North Korea to abandon its nuclear weapons, the statement said. South Korea is “focusing all our efforts on holding North Korea responsible,” presidential spokesman Park Sun Kyoo told reporters yesterday in Seoul, adding that this would be a key aim at the summit also. Today’s trilateral summit mostly focused on economic issues, and other regional issues including North Korea’s recent attack will likely be discussed tomorrow, Kazuo Kodama , press secretary for Japan’s Ministry of Foreign Affairs, told foreign media reporters. Security Council South Korea wants China to accept findings that the North fired a torpedo that sank the 1,200-ton Cheonan on March 26. China holds veto powers in the Security Council, so its acquiescence is needed to win a resolution condemning the North. Wen yesterday said that while China won’t protect anyone found guilty of the attack, it is still assessing the evidence. China is North Korea’s largest trading partner and main political ally, having fought alongside the North and against the U.S. in the 1950-1953 Korean War . “The case of the warship sinking is a sheer fabrication made by the South Korean ruling forces, a hideous burlesque” intended “to stir up the atmosphere of escalated confrontation,” state-run Korean Central News Agency said. At the three-way summit, President Lee Myung Bak stressed the need to enhance economic cooperation between the three countries and work toward integrating their economies, Lee’s spokeswoman Kim Eun Hye told reporters. Silence for Dead Hatoyama proposed a silent prayer for the dead at the start of the meeting, after pledging “active support” for South Korea’s push for UN action over the deadliest attack blamed on the North Korean regime in more than two decades. North Korea warned the UN to be wary of evidence that it said falsely accuses the country of torpedoing the warship, likening the case to the claims of weapons of mass destruction that the U.S. used to justify its war against Iraq in 2003. The Security Council risks being “misused” by the U.S., the country’s foreign ministry said last night in a statement carried by KCNA. “The U.S. is seriously mistaken if it thinks it can occupy the Korean Peninsula just as it did Iraq with sheer lies,” the statement said. The U.S. is joining South Korea in blaming North Korea for the sinking to “put China into an awkward position and keep hold on Japan and South Korea as its servants,” KCNA said. China proposed to the U.S. a joint investigation with North and South Korea into the sinking, the Seoul-based Hankyoreh newspaper reported, citing a diplomat it didn’t name. Russia plans to send its own team to South Korea for an independent assessment of the incident. A South Korea-led team involving experts from the U.S., U.K., Australia and Sweden blamed North Korea for the sinking in a May 20 announcement in Seoul. Russia also has veto power in the Security Council and participates in the stalled six-party talks on North Korea’s nuclear weapons program that are hosted by China. The U.S., Japan and South Korea also take part. North Korean Major General Pak Rim Su said in Pyongyang yesterday that the international investigation into the March 26 sinking was biased because it was supervised by the South Korean military and included the U.S., KCNA said. Pak said the North does not have type of submarines that the South said carried out the attack, Agence France-Presse reported, citing North Korea’s Chungang TV. South Korea’s Yonhap News quoted South Korean officials as saying the North has about 10 of the Yeono class submarines, AFP said. Senior Colonel Ri Son Gwon also derided claims that writing on the torpedo was put there by North Korea, AFP reported. “When we put serial numbers on weapons, we engrave them with machines,” Ri said, according to AFP. To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net ;

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AIG Executives Won’t Face Criminal Charges, Lawyers Say

May 22, 2010

The Justice Department has decided not to file criminal charges against the former head of a division at American International Group Inc. whose dealings in mortgage-related securities nearly bankrupted the company and led to a controversial government bailout, according to lawyers involved in the cases. The decision appears to bring an end to the criminal investigation of AIG, but a Securities and Exchange Commission probe into AIG and the dealings of its London-based Financial Products subsidiary is continuing and could lead to a civil securities fraud case. Lawyers representing Joseph Cassano, who formerly ran AIG’s Financial Products unit, and Andrew Forster, who worked for Cassano, said they were told by federal prosecutors late Friday that no criminal charges would be filed. A person familiar with the government’s criminal investigation of AIG confirmed that charges wouldn’t be brought. The person was not authorized to speak publicly on the matter and spoke on condition of anonymity. The Justice Department declined comment Saturday. SEC investigators have been involved in the case from the start, but it is unclear when a decision would be made on a civil fraud case. Federal prosecutors were investigating AIG’s Financial Products unit, which dealt in financial contracts called credit default swaps that helped sink AIG in September 2008, leading to a taxpayer-funded bailout. The credit default swaps AIG sold were insurance-like guarantees on mortgage securities that wound up forcing AIG to pay out billions of dollars after the housing market went bust. Investigators were looking into whether Financial Products officials tried to deceive investors and AIG’s auditors, PricewaterhouseCoopers, by misstating the accounting value of a credit default swap portfolio. When AIG posted a loss for the fourth quarter of 2007, it pinned the blame on an $11 billion writedown related to the credit default swaps held by its Financial Products group. If AIG couldn’t make good on its promise to pay off the contracts, many of which were held by major banks, regulators feared the consequences would pose a threat to the whole U.S. financial system. That led the government to go ahead with the $180 billion bailout. Cassano’s attorneys, F. Joseph Warin and Jim Walden, said in a statement that the two-year federal investigation was intense and difficult. “The results are wholly appropriate in light of our client’s factual innocence,” said the statement, which lauded federal agents and prosecutors for following the facts to end the case. “This result was the product of two things: An innocent client and fair prosecutors and agents. The system worked,” the statement said. Forster’s attorneys, David Brodsky and Richard Owens, said in a statement that they knew it would have been easy for federal prosecutors to win a grand jury indictment, but praised them for listening to their client’s case. “We knew the prosecutors were smart, fair and open-minded and that, given a full opportunity to present all the evidence, we could convince them that our client acted at all times in good faith. In the end, the facts were stronger than the emotions surrounding AIG’s problems,” the statement said. Cassano left AIG in 2008, shortly after the $11 billion loss was reported. Forster is still employed by the company. An AIG spokesman did not return a telephone message left Saturday. The AIG bailout has drawn much public ire, largely because the company paid employees $165 million in retention bonuses after the company nearly failed and had to be bailed out by the government. Nearly two years after a meltdown in the market for subprime mortgage securities cascaded into the worst financial crisis in the U.S. since the 1930s, prosecutors have had little luck bringing criminal cases against top financial executives. Last November two executives at Bear Stearns who ran hedge funds that collapsed after betting on the subprime mortgage market were acquitted of charges that they lied to investors. ___ Associated Press Writer Pete Yost contributed to this story.

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Hinduja Brothers Agree to Acquire KBC Groep Private Bank for $1.69 Billion

May 21, 2010

By John Martens and Martijn van der Starre May 21 (Bloomberg) — India’s Hinduja Group, controlled by billionaire brothers Srichand and Gopichand Hinduja , agreed to buy KBC Groep NV’s private bank for 1.35 billion euros ($1.69 billion) to expand its wealth-management business in Europe. Hinduja Group, based in Mumbai, plans to complete the purchase of Luxembourg-based KBL European Private Bankers SA, which has 47.4 billion euros of assets under management, in the third quarter. Brussels-based KBC said it will take a charge of about 300 million euros in the current quarter. KBL employs 466 private bankers in 10 European countries, adding to Hinduja’s wealth-management business in Switzerland. The Hinduja family, whose other assets include controlling stakes in Ashok Leyland Ltd., India’s second-biggest truckmaker, and chemicals maker Gulf Oil Ltd., is paying 2.85 percent of assets under management for KBL, less than the 3.42 percent Julius Baer Group Ltd. agreed to pay for ING Groep NV’s Swiss private bank in October. “The sale price is below our expectations,” Albert Ploegh , an analyst at ING Wholesale Banking in Amsterdam who has a “hold” recommendation on KBC shares, wrote in a note to clients today. “In our view, the recent sovereign debt worries impacting stock markets across the globe did help in the negotiations.” KBC Groep advanced 76 cents, or 2.6 percent, to 30.58 euros at 11:09 a.m. in Brussels trading, erasing its loss since the start of the year. The 55-company Stoxx 600 Banks Index has lost 14 percent in the period. Repaying the State Belgium’s biggest bank and insurer by market value agreed to sell the private bank to cut weighted risks and accumulate surplus capital. KBC needs to reimburse 7 billion euros of government funds it received in the past two years to help cushion against declines in the value of collateralized debt obligations . The disposal will cut risk-weighted assets by 5.5 billion euros and free 1.3 billion euros of capital, KBC said in the statement today. KBL European Private Bankers contributed 144 million euros to KBC’s profit excluding some items in the 12 months through March. KBC will suffer a 300 million-euro loss on the transaction because the takeover price falls short of the sum of KBL’s book value and outstanding goodwill in KBC’s accounts. Bridge to East KBC, which has until the end of 2013 of to complete a reorganization approved by the European Commission following the Belgian government rescue, has no plans for early reimbursement of the state, Chief Financial Officer Luc Philips told analysts on a May 12 conference call, adding that the bank prefers to maintain a capital buffer should widening corporate credit spreads lead to declines in the value of CDOs. Hinduja plans to invest further in the business and to provide KBL with access to “fast growing” markets in the Middle East, India and Asia, Chairman Srichand Hinduja said in the statement. “We hope to address the private banking needs of clients internationally and facilitate capital flows between fast growing economies and established Western financial markets,” he said. KBC was advised on the transaction by JPMorgan Chase & Co. To contact the reporters on this story: John Martens in Brussels at jmartens1@bloomberg.net ; Martijn van der Starre in Amsterdam at vanderstarre@bloomberg.net .

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Hinduja Brothers Agree to Acquire KBC Groep Private Bank for $1.69 Billion

May 21, 2010

By John Martens and Martijn van der Starre May 21 (Bloomberg) — India’s Hinduja Group, controlled by billionaire brothers Srichand and Gopichand Hinduja , agreed to buy KBC Groep NV’s private bank for 1.35 billion euros ($1.69 billion) to expand its wealth-management business in Europe. Hinduja Group, based in Mumbai, plans to complete the purchase of Luxembourg-based KBL European Private Bankers SA, which has 47.4 billion euros of assets under management, in the third quarter. Brussels-based KBC said it will take a charge of about 300 million euros in the current quarter. KBL employs 466 private bankers in 10 European countries, adding to Hinduja’s wealth-management business in Switzerland. The Hinduja family, whose other assets include controlling stakes in Ashok Leyland Ltd., India’s second-biggest truckmaker, and chemicals maker Gulf Oil Ltd., is paying 2.85 percent of assets under management for KBL, less than the 3.42 percent Julius Baer Group Ltd. agreed to pay for ING Groep NV’s Swiss private bank in October. “The sale price is below our expectations,” Albert Ploegh , an analyst at ING Wholesale Banking in Amsterdam who has a “hold” recommendation on KBC shares, wrote in a note to clients today. “In our view, the recent sovereign debt worries impacting stock markets across the globe did help in the negotiations.” KBC Groep advanced 76 cents, or 2.6 percent, to 30.58 euros at 11:09 a.m. in Brussels trading, erasing its loss since the start of the year. The 55-company Stoxx 600 Banks Index has lost 14 percent in the period. Repaying the State Belgium’s biggest bank and insurer by market value agreed to sell the private bank to cut weighted risks and accumulate surplus capital. KBC needs to reimburse 7 billion euros of government funds it received in the past two years to help cushion against declines in the value of collateralized debt obligations . The disposal will cut risk-weighted assets by 5.5 billion euros and free 1.3 billion euros of capital, KBC said in the statement today. KBL European Private Bankers contributed 144 million euros to KBC’s profit excluding some items in the 12 months through March. KBC will suffer a 300 million-euro loss on the transaction because the takeover price falls short of the sum of KBL’s book value and outstanding goodwill in KBC’s accounts. Bridge to East KBC, which has until the end of 2013 of to complete a reorganization approved by the European Commission following the Belgian government rescue, has no plans for early reimbursement of the state, Chief Financial Officer Luc Philips told analysts on a May 12 conference call, adding that the bank prefers to maintain a capital buffer should widening corporate credit spreads lead to declines in the value of CDOs. Hinduja plans to invest further in the business and to provide KBL with access to “fast growing” markets in the Middle East, India and Asia, Chairman Srichand Hinduja said in the statement. “We hope to address the private banking needs of clients internationally and facilitate capital flows between fast growing economies and established Western financial markets,” he said. KBC was advised on the transaction by JPMorgan Chase & Co. To contact the reporters on this story: John Martens in Brussels at jmartens1@bloomberg.net ; Martijn van der Starre in Amsterdam at vanderstarre@bloomberg.net .

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Dubai World Creditors Agree to Restructure $23.5 Billion of Debt Payments

May 20, 2010

By Arif Sharif May 20 (Bloomberg) — Dubai World, the state-owned holding company, agreed “in principle” with a group of creditor banks on terms to restructure $14.4 billion of loans. Dubai World will pay $4.4 billion in five years and the remaining $10 billion in eight years, the company said in an e- mailed statement today. Banks will have the option to choose from combinations of loan maturities in dollar or dirhams that carry different interest rates. Including the Dubai government’s debt the total liabilities being restructured is $23.5 billion. Banks will be paid 1 percent interest on $4.4 billion of the loans maturing in five years. The lenders have three options in the eight-year maturities covering about $10 billion of debt with at least 1 percent interest and varying additional rates between 1.5 percent and 2.5 percent at maturity. Two of these options also have a shortfall guarantee. “The final proposal has not changed in its fundamentals from the terms announced on March 25. In particular, there is no additional financial support from the Government of Dubai,” it said. “The restructuring proposal requires the agreement of the rest of Dubai World’s financial creditors.” Dubai World’s coordination committee, which is negotiating with the company on behalf of more than 90 lenders, represents about 60 percent of its total bank loans, it said. The committee comprises Emirates NBD PJSC , Abu Dhabi Commercial Bank PJSC, Royal Bank of Scotland Group Plc, HSBC Holdings Plc , Lloyds Banking Group Plc, Standard Chartered Plc and Bank of Tokyo- Mitsubishi UFJ Ltd . “The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders,” Dubai World’s chief restructuring officer Aidan Birkett said in the statement. “It offers the company the ability to maximize the value of its assets over the medium to long term.” To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Astellas Raises Offer for OSI Pharma to $4 Billion, Wins Board’s Approval

May 16, 2010

By Kanoko Matsuyama and Elizabeth Lopatto May 17 (Bloomberg) — Astellas Pharma Inc. agreed to buy OSI Pharmaceuticals Inc. for $4 billion in cash, raising its original offer by 11 percent per share to gain its first marketed cancer drug and sales force in the U.S. The offer was increased to $57.50 a share from $52, Tokyo- based Astellas and OSI, of Melville, New York, said in a statement today. The boards of both companies approved the offer, which is subject to a majority of OSI’s shares being tendered, according to the statement. Astellas said the acquisition will add to earnings from the first year. The company, headed for a third year of profit declines, seeks new medicines to cope with lower sales caused by generic competition to its biggest drugs, Prograf and Harnal. Buying OSI would give Astellas the Tarceva drug for cancer, a disease area that the company has identified as a growth pillar. “With Astellas, you have to look at the longer term,” said Jason Zhang, an analyst for BMO Capital Markets in New York, in a telephone interview today. “This is a step into the U.S., and into oncology. I think this is good for them.” Astellas dropped 1.6 percent to 3,095 yen as of 9:33 a.m. in Tokyo trading. Japan’s benchmark Topix index lost 1 percent. OSI gained 4.4 percent to $59.80 in Nasdaq Stock Market composite trading on May 14 and have surged 62 percent since Feb. 26. The offer “is great” for long-term shareholders of OSI, Zhang said. “In addition to Tarceva, we are pleased to add its oncology infrastructure, discovery platform, expanded pipelines and talent base to our existing businesses,” Astellas Chief Executive Officer Masafumi Nogimori said in the statement. The Japanese drugmaker will brief media on the transaction at 10:30 a.m. in Tokyo today. The tender offer is 55 percent more than OSI’s closing price on Feb. 26 when Astellas first announced its bid. OSI’s board previously rejected the original price as being too low, and Astellas extended the deadline of its tender offer twice. To contact the reporters on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net ; Elizabeth Lopatto in New York at elopatto@bloomberg.net .

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BP Says It Successfully Inserts Tube at Leaking Oil Well in Gulf of Mexico

May 16, 2010

By Kim Chipman and Jordan Burke May 16 (Bloomberg) — BP Plc said it made a breakthrough today in its attempts to control oil leaking from a damaged well in the Gulf of Mexico, successfully inserting a tube that will funnel oil to a ship on the water’s surface. It was BP’s second attempt to insert the tube to capture oil gushing from a well 5,000 feet below the water’s surface. A first attempt failed when the frame that holds the tube shifted, Doug Suttles , BP’s chief operating officer for exploration and production, said yesterday. The tube will capture only some of the spillage. “While not collecting all of the leaking oil, this tool is an important step in reducing the amount of oil being released into Gulf waters,” the statement said. After the tube was successfully inserted and working to funnel the oil, it was dislodged, halting the test. Technicians inspected the system and have reinserted the tube, BP and government authorities said today in a statement from the oil spill’s Joint Information Center. The tube is made from a 4-inch (10.2 centimeters) pipe wrapped with a rubber flange and inserted by remote-operated vehicles into a larger pipe leading from the leaking well. The idea is that undersea pressure will force the oil into the pipe and up to the surface, where a drill ship will separate and store the oil for processing at a refinery. After it was in place, the tube was successfully capturing oil and gas and funneling it to the ship, BP and government officials said in the statement. Transocean Ltd. ’s Deepwater Horizon drilling rig, leased to London-based BP, exploded April 20 and sank two days later, taking the lives of 11 crew members. BP attempted to divert the flow using a 40-foot steel box, which didn’t work. It also failed in an attempt to use remote-operated vehicles to engage a device that would shut the well. To contact the reporters on this story: Kim Chipman in New Orleans, Louisiana at kchipman@bloomberg.net ’ Jordan Burke in New Orleans at jburke29@bloomberg.net .

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