television

Qinghai Earthquake Leaves 400 Dead, 8,000 Hurt in Remote Chinese Province

April 14, 2010

By Bloomberg News April 14 (Bloomberg) — A magnitude 6.9 earthquake struck China’s western Qinghai province on the Tibetan Plateau. The temblor killed about 300 people and injured 8,000, the official Xinhua News Agency said. The quake struck at 7:49 a.m. local time about 375 kilometers (235 miles) southeast of the city of Golmud at a depth of 10 kilometers, the U.S. Geological Survey said on its Web site. There were two aftershocks, it said. The provincial government said in a statement that “many” buildings were destroyed. More than 85 percent of houses collapsed in the town of Jiegu near the epicenter, Xinhua reported , citing a local official. Students from a vocational school are buried in the rubble, the official said. The government dispatched about 3,000 paramilitary police to the area to help relief efforts, state-broadcaster China Central Television said. Qinghai has a population of 5.57 million, the second-smallest of China’s provinces after neighboring Tibet. Golmud is located almost 2,000 kilometers west of Beijing. Sichuan Province, which borders Qinghai, was hit by a magnitude 7.9 quake in May 2008 that killed more than 90,000 people and flattened 4.5 million homes. PetroChina Co., the world’s biggest company by market value, hasn’t received any reports of disruptions to operations in Qinghai, spokesman Mao Zefeng said by telephone in Beijing. — Huang Zhe , Baizhen Chua . Editors: John Brinsley , Bill Austin To contact the reporter on this story: Huang Zhe in Beijing at zhuang37@bloomberg.net

Read the full article →

China’s Qinghai Province Struck by Magnitude 6.9 Quake; At Least 67 Dead

April 13, 2010

By Bloomberg News April 14 (Bloomberg) — A magnitude 6.9 earthquake struck China’s western Qinghai province, killing at least 67 people and causing buildings to collapse. The quake struck at 7:49 a.m. local time about 375 kilometers (235 miles) southeast of the city of Golmud at a depth of 10 kilometers, the U.S. Geological Survey said on its Web site. There were two aftershocks, it said. At least 67 people were killed, the China Earthquake Administration said on its Web site, estimating the quake’s magnitude at 7.1. About 90 percent of local homes collapsed, China National Radio said, citing unidentified residents. A Qinghai rescue team has been sent to the site, the earthquake center said. Soldiers are on the scene and have started combing through the rubble of collapsed buildings, state-run China Central Television reported. Qinghai has a population of 5.57 million, the second- smallest of China’s provinces after neighboring Tibet. Golmud is located almost 2,000 kilometers southwest of Beijing. PetroChina Co., the world’s biggest company by market value, hasn’t received any reports of disruptions to operations in Qinghai, spokesman Mao Zefeng said by telephone in Beijing. Sichuan Province, which borders Qinghai, was hit by a magnitude 7.9 quake in May 2008 that killed more than 90,000 people and flattened 4.5 million homes. — Huang Zhe , Baizhen Chua . Editors: John Brinsley , Bill Austin To contact the reporter on this story: Huang Zhe in Beijing at zhuang37@bloomberg.net

Read the full article →

Ousting Abhisit May Not End Protests as Thais Target `Autocratic Rulers’

April 13, 2010

By Daniel Ten Kate April 14 (Bloomberg) — For all the pressure on Thai Prime Minister Abhisit Vejjajiva to step aside, his removal might not be enough to end the deadliest political unrest in 18 years. Anti-government protesters, who yesterday rejected his offer of an election in six months, may have another target in mind. The Privy Council, a body that advises King Bhumibol Adulyadej and is led by an 89-year-old former army chief, is “an autocratic institution” that backs coups and manipulates legal decisions to thwart the will of voters, protest leader Jaran Ditapichahi said in an interview April 12. “The protesters aren’t fighting against Abhisit per se, they are fighting for democracy,” said Kongkiat Opaswongkarn , chief executive at Bangkok-based Asia Plus Securities Pcl, Thailand’s third-largest brokerage by trading volume. “Abhisit says the country is a full democracy, but in reality it’s not.” Abhisit, 45, this week signaled he may dismiss parliament to stem violence that killed 21 people on April 10. The army is calling for a dissolution and the Election Commission on April 12 recommended his party be disbanded for legal infractions, the method used to oust his predecessor when rival demonstrations paralyzed the capital 16 months ago. Bangkok residents and tourists yesterday mingled with the red-shirted demonstrators on the city’s streets, drenching one another with water and smudging their faces with white powder in a traditional salute to the first day of the Thai New Year . Political Risk The festival atmosphere contrasted with the weekend bloodshed. The country has been roiled by rallies and street battles since former Prime Minister Thaksin Shinawatra was removed in a 2006 coup, one of nine since King Bhumibol ascended to the throne in 1946. The benchmark SET stock index , closed for three days for holidays, fell the most in six months on April 12 and the baht weakened 0.3 percent against the dollar. Thai bond risk climbed to a six-week high. Overseas investors reacted to the weekend’s bloodshed by selling a net 3.2 billion baht ($99 million) of Thai equities in the past two trading days, ending 31 days of net purchases. Bangkok-based Thai Airways International P cl tumbled 14 percent on April 12, reflecting the reliance on foreign tourist spending for 6.5 percent of the $261-billion economy. “Top-down investors haven’t favored Thailand for years and they won’t until this political deadlock gets resolved,” said Adithep Vanabriksha, Bangkok-based head of Thai equities at Aberdeen Asset Management Co. Live Television King Bhumibol, 82 has been hospitalized since September and has yet to comment since the deadly skirmishes. In 1973, he allowed student protesters into a palace to provide refuge after troops opened fire. In 1992, his admonishments prompted a military commander and middle-class protest leader to prostrate before him on live television after clashes left dozens dead. The monarch’s advisory body consists of 19 people appointed “at the King’s pleasure,” the constitution says. The council’s president takes over as regent in the event that the monarch can’t perform his duties and hasn’t named a replacement. It also oversees royal succession. The head of the Privy Council is Prem Tinsulanonda , a member since he stepped down as prime minister in 1988. Twelve months ago, about 100,000 protesters marched to Prem’s house in Bangkok to demand he quit for backing the 2006 coup, a charge he denies. Last weekend, the army deployed tanks to protect Prem’s house, according to the INN news service. Last Coup “We will always attack General Prem for being behind the last coup,” Jaran said. “If the Privy Council stopped acting like an autocratic institution, we would stop attacking it,” he said, adding that protest leaders support King Bhumibol. A phone call to the Privy Council April 12 was answered by a person who did not give a name and said no one would be available until April 19, after the New Year’s holiday. The king’s advisers are “good guys” who stand as examples to society of ethical leadership, said Parnthep Pourpongpan, a spokesman for the People’s Alliance for Democracy, whose airport takeover in 2008 helped remove the last pro-Thaksin government. The council’s powers are restricted to advising the king and protesters have “no evidence” to prove their allegations of hidden influence, he said. “The protesters and Thaksin always say that General Prem is behind the scenes because they want to hide their own corruption and illegal behavior,” Parnthep said. “It’s just a rhetorical trick.” Short List The council’s 19 members include seven retired military officials and six former judges. After Thaksin was removed, the military junta’s short list for prime minister was composed of two judges, the army chief and two privy councilors. Court rulings have brought down two pro-Thaksin administrations since democracy was restored in 2007. “This is not about Thaksin Shinawatra any more, it is about people’s rights to be treated as equals,” said Jakrapob Penkair , a former Cabinet minister and government spokesman who advises the billionaire-turned-politician. “The presence of the Privy Council is the most concrete evidence that Thailand is anything but a democracy.” The current constitution, written after the 2006 coup, set up a Senate in which almost half the members are appointed. It also offered amnesty for generals such as Army Chief Anupong Paojinda , who helped oust Thaksin and is now calling for parliament to be dissolved. “Abhisit may resign or dissolve parliament, but that doesn’t necessarily get us anywhere,” said Prudhisan Jumbala, a lecturer at Bangkok’s Chulalongkorn University . “Nobody can implement the rule of law without the cooperation of society, and neither side trusts the authority of the state.” The conflict underpins a split within Thailand’s 67 million people over the extent to which the country’s leaders should be elected. Abhisit’s rule lacks legitimacy, opponents say, because he came to power without winning an election after the court disbanded the ruling party. “The privy councilors must be shivering in their boots,” said Kevin Hewison , a professor in the Department of Asian Studies at the University of North Carolina. “It would be a defeat for them if the protesters have a victory.” To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

Read the full article →

Video: U.S. Stocks Rise as Retail Sales Offsets Greece Concerns: Video

April 8, 2010

April 8 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. Stocks rose for the seventh time in nine days as retailers rallied on faster-than-estimated sales growth, helping the market recover from an early slump triggered by concern over Greece’s debt crisis. Bloomberg Television contributing editor Keith McCullough also speaks. (Source: Bloomberg)

Read the full article →

Baghdad Bombs Kill at Least 35 People, Wound 140 in Second Wave of Attacks

April 6, 2010

By Caroline Alexander April 6 (Bloomberg) — At least 13 people were killed and another 107 injured today by a series of bomb explosions across Baghdad, state-owned al-Iraqiya television reported. It was the second wave of attacks in the Iraqi capital in three days. The neighborhoods of Shula, al-Shurta al-Rabaa, Chikook, Salhiya and Allawi were rocked by explosions, according to al- Iraqiya. Four bombs detonated inside apartment buildings, the television station reported. A fifth blast was caused by a car packed with explosives, it said. Two buildings collapsed in Shula, according to al-Jazeera television, which gave a death toll of 30. The violence follows attacks on April 3, which targeted the Iranian embassy and the German ambassador’s residence in Baghdad and killed 30 people and wounded 200 others. It comes as Iraqi political parties hold talks on forming a new government. Al-Qaeda was responsible for the attacks today and is seeking to undermine security and disrupt the political process, Major General Qassem al-Moussawi Atta, spokesman for the Baghdad Military Command, said in an interview with al-Iraqiya. “We are in a state of war with the remnants of al-Qaeda,” he said. To contact the reporter on this story: Caroline Alexander in London at calexander1@bloomberg.net .

Read the full article →

Brown Steps Up Attack on Economy as Poll Shows U.K. Election Gap Narrowing

March 14, 2010

By Thomas Penny and Gonzalo Vina March 15 (Bloomberg) — U.K. Prime Minister Gordon Brown said the opposition Conservatives would “wreck the recovery” with their planned budget cuts, stepping up his attacks after a poll showed his ruling Labour Party may emerge with the largest number of seats in parliament after the election. A YouGov Plc poll published in yesterday’s Sunday Times newspaper showed Labour at 33 percent, the Conservatives at 37 percent and the Liberal Democrats with 17 percent. Because of the uneven distribution of votes across districts, Labour would get 302 seats in the 650-member parliament and the Conservatives 277, with no party having a majority, the Times said. No margin of error was provided. Conservative poll ratings have slumped this year as the economy exited recession. Opposition spokesmen yesterday reiterated the urgency of cutting a record budget deficit and criticized Labour’s ties to unions. “People think the Conservatives are more likely to actually cut down the deficit, but that this is not necessarily a political plus,” Anthony Wells , a director of YouGov , said in a commentary posted on his blog. “I will stand on my record,” Brown said on BBC Television’s Politics Show yesterday. “The Conservatives are a party that would actually wreck the recovery and bring higher unemployment. I would say take a second look at us, but take a very hard look at the Conservative Party.” Brown is seeking a fourth term for Labour as Britain recovers from its worst slump in six decades. A budget deficit at 12 percent of gross domestic product is the highest among the Group of Seven nations. Sterling Slides Investor concern that a minority government won’t be strong enough to tame public finances pushed the pound to a 10-month low against the dollar this month, making it the worst- performing major currency this year. Sterling has weakened 7 percent against the U.S. currency since January and traded at $1.502 at 7:14 p.m. in London yesterday. The Conservatives countered with claims that Brown’s Labour Party is in the grip of the unions, as the Unite union threatened strikes against British Airways Plc, and by advocating deficit reduction to bolster the confidence of financial markets. “How can you talk about protecting jobs and beating the recession when you are so reliant on this increasingly militant union that is intent on bringing a British company to its knees?” said Eric Pickles , the Conservative Party chairman in a letter to Brown that was released by his office. “You should unequivocally condemn the strike and suspend the party’s financial relationship with Unite.” Osborne’s Cuts Conservative Treasury spokesman George Osborne said yesterday that the budget reductions need to start this year, while both Labour and the Liberal Democrats say they should wait until after the economic recovery is assured. “We need to start in 2010/11,” Osborne told the News of the World in an interview. “It is not credible to say I’m going to be virtuous tomorrow, you have to be virtuous today.” Osborne, who said it was not reasonable to expect him to spell out his spending plans before Chancellor of the Exchequer Alistair Darling presents his budget on March 24, said he would not cut the 50 percent tax on earnings over 150,000 pounds until he is able to give pay rises to public sector workers. The Times poll showed 50 percent believe the Conservatives would make the biggest cuts in public services, compared with 14 percent for Labour. YouGov interviewed 1,507 adults online. Darling, who said he would delay a spending agreement until after the election, said the Conservatives’ policies on the deficit are “opaque” and accused them of changing their plans to suit different audiences. ‘Vagueness’ “There’s vagueness on the Tory side,” he said. “The confusion in what they’re saying adds to the risks we face.” The Conservatives have a seven-point lead in a poll in the Sunday Telegraph yesterday. The survey, by ICM Research, showed the Conservatives on 38 percent and Labour on 31 percent. ICM interviewed a sample of 1,007 adults and no margin of error was given. The Conservatives will need a lead of at least 10 percent to command a majority in the House of Commons, according to Wells of YouGov. To contact the reporter on this story: Thomas Penny in Birmingham, England at tpenny@bloomberg.net ; Gonzalo Vina in London gvina@bloomberg.net

Read the full article →

E! Renews HQ Lease in Los Angeles

March 14, 2010

E! Entertainment Television has re-upped its headquarters lease in Los Angeles, signing a 10-year renewal at Wilshire Courtyard. Comcast’s popular entertainment network occupies a total of 335,304 square feet at 5700 and 5750 Wilshire Blvd. It is…

Read the full article →

Corker Pushes `Surgical’ Senate Financial-Overhaul Bill, Sees Amendments

March 9, 2010

By Phil Mattingly March 9 (Bloomberg) — Senator Bob Corker , the Republican leading Banking Committee negotiations on legislation to overhaul financial rules, said the bill will be “surgical” and probably amended in committee and on the floor. “I don’t think we ought to try and pass legislation that solves all the problems in the world,” Corker said today during a CNBC Television interview. “There will be other legislation that comes down the road.” Banking Committee Chairman Christopher Dodd , a Connecticut Democrat, has negotiated with Corker for the past month on legislation to rewrite rules and end future taxpayer bank bailouts after the near-collapse of the financial system in 2008. The House passed its overhaul bill in December. “The goal is to have a bill that’s presented to committee that’s close enough to the middle of the road, in balance, that people can offer substantive amendments,” Corker said. Corker said the bill will have a “strong resolution piece” to wind-down systemically risky firms, avoiding bailouts for firms such as Bear Stearns Cos. and American International Group Inc. deemed “too big to fail” in 2008. Negotiators reached “an appropriate balance” on the consumer protection aspects in the bill, Corker said, without offering details on the compromise to remove the main sticking point in negotiations. To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net .

Read the full article →

Democratic Defections on Abortion Issue May Imperil Health-Care Overhaul

March 5, 2010

By Laura Litvan March 5 (Bloomberg) — U.S. House leaders are facing the possible defection of about a dozen anti-abortion Democrats from a health-care bill just as lawmakers enter their final push for the landmark legislation in Congress. Representative Bart Stupak of Michigan said Senate-passed language on abortion isn’t acceptable to him and the other lawmakers in the bloc, and that if the issue isn’t resolved they will vote against the broader health legislation. “We’re prepared to take responsibility” for the defeat of the bill, Stupak said yesterday on ABC Television’s “Good Morning America” program. “I want to see health care, but we’re not going to bypass some principles and belief we feel strongly about.” His comments underscore the risk the abortion issue poses as congressional Democrats seek to pass a measure overhauling the nation’s health-care system with no Republican support. “It’s probably the biggest challenge we have,” said Representative Bill Pascrell , a New Jersey Democrat. The legislation passed the House on Nov. 7 with just 220 of 435 votes, and the potential loss of support over abortion may be enough to sink the bill. Some House Democrats who favor abortion rights have said their votes also may hinge on how the matter is addressed. Echoes of Past Abortion policy has delayed — or killed outright — past legislation ranging from a rewrite of bankruptcy law to foreign aid and military spending measures. To avoid that fate last year, Democratic leaders in both chambers let anti-abortion lawmakers attach tougher restrictions to the health legislation, President Barack Obama’s top domestic priority. Stupak took the lead in the House, while Senator Ben Nelson of Nebraska provided Democrats in that chamber with the 60th vote needed to clear the health measure after he negotiated abortion language. House Speaker Nancy Pelosi said yesterday the Senate language should satisfy those who oppose federal funding for abortions. “If you believe that there should be no federal funding of abortions and if you believe there should be no change in the policy and if you believe we need health care for all Americans, then we will pass the bill,” she told reporters. Democratic leaders say they’ll try to approve health legislation by first pushing the Senate bill through the House. Then each chamber would address a host of changes through separate legislation via a parliamentary maneuver called budget reconciliation, which would allow the Senate to pass it with just 51 votes, sidestepping Republican opposition. Up to Pelosi Democratic leaders said because reconciliation is designed for matters that relate to the federal budget, not social policy, it can’t be used to resolve abortion differences. Senate Majority Whip Richard Durbin , an Illinois Democrat, said it will be up to Pelosi to find the votes in her caucus for the Senate language. “She’s got to deal with this,” Durbin said. The broader legislation, which will cost about $1 trillion over 10 years, is intended to ratchet down health costs and extend coverage to tens of millions of uninsured Americans, offering government subsidies to low-income people. The president, who this week called on Congress to have an up-or-down vote on health care in the next few weeks, met yesterday at the White House with members of the House Progressive Caucus to shore up their support. He pledged to push in the future for ideas championed by the group, including a government insurance option to compete with private insurers, said Representative Raul Grijalva , an Arizona Democrat, who co-chairs the group. Same-Day Signing “Down the road, we’ll continue to work on these issues,” Grijalva said. Grijalva said Obama told the lawmakers he intends to sign both the Senate-passed bill and the reconciliation bill on the same day. The abortion issue may get in the way. Richard Doerflinger, the top lobbyist for the U.S. Conference of Catholic Bishops , agreed with Stupak that a dozen House Democrats will oppose a final measure if the Senate abortion language is in it. They include Representative Brad Ellsworth of Indiana and Representative James Oberstar of Minnesota, he said. “Those members are standing firm,” said Doerflinger. The House health bill restricts federal dollars from being used to pay for insurance plans that include abortion coverage. The Stupak amendment would bar the use of new federal subsidies to pay the costs of any plans covering abortion offered through a new insurance-purchasing exchange. ‘Ban on Abortion’ In the Senate bill, the federal Office of Personnel Management would oversee at least two multistate insurance programs in the exchange. At least one would provide abortion coverage and one wouldn’t. States could opt out of having any plan with abortion coverage. Groups such as the National Right to Life Committee say the Senate language is unacceptable because it would let one plan in each market allow abortion coverage. Pro-choice groups are lobbying against abortion provisions in both the House and Senate bills. Nancy Keenan , president of NARAL Pro-Choice America, said the Stupak language would effectively block private plans on the exchange from offering abortion coverage for many lower-income women. “It is a ban on abortion in the exchange,” she said. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net

Read the full article →

Vivendi Annual Profit Beats Analyst Estimates on `World of Warcraft’ Sales

March 1, 2010

By Matthew Campbell March 1 (Bloomberg) — Vivendi SA , owner of the world’s largest video-game company, posted a less-than-expected decline in full-year profit as it introduced new titles. Adjusted net income, or profit excluding one-time gains or charges, fell to 2.59 billion euros ($3.53 billion) from 2.74 billion euros in 2008, the Paris-based company said in an e- mailed statement today. Analysts had predicted profit at 2.46 billion euros, the average of 20 estimates compiled by Bloomberg. Revenue rose 6.9 percent to 27.13 billion euros. Chief Executive Officer Jean-Bernard Levy has made acquisitions to expand into emerging markets. In October, Vivendi outbid Telefonica SA for control of Brazilian phone operator GVT Holding SA, offering $4.18 billion. Vivendi has also bought out minority partners in some of its main businesses. Last month, it paid 384.2 million euros for 5.1 percent of Canal Plus owned by M6-Metropole Television . “In 2009, we met our operational targets,” Levy said in the statement. “Acquisitions made in 2008 were the principal growth engines.” Vivendi said it would pay a dividend of 1.4 euros per share. In December, Paris-based Vivendi agreed to sell its 20 percent stake in NBC Universal to General Electric Co. for $5.8 billion, ending a decade-long presence in Hollywood. Other than NBC, all of Vivendi’s businesses have been expanded through acquisitions under Levy. The company’s Maroc Telecom unit now operates in Mali and Burkina Faso, while pay-TV operator Canal Plus has started operations in Vietnam. Vivendi’s Activision Blizzard Inc. unit has grown faster than analysts’ expectations. Last month, the world’s biggest maker of video games said it would buy back $1 billion in shares and pay its first dividend. The unit’s games include “Guitar Hero” and“Call of Duty: Modern Warfare 2.” To contact the reporter on this story: Matthew Campbell in London at mcampbell39@bloomberg.net .

Read the full article →

Europe Demands Greece Cut Budget Deficit as Bloc Crafts $34 Billion Rescue

February 28, 2010

By Simon Kennedy and Maria Petrakis March 1 (Bloomberg) — European Union Monetary Affairs Commissioner Olli Rehn will likely push Greece to do more to cut its budget deficit today as governments craft a possible rescue package for the cash-strapped nation. Rehn will meet with Prime Minister George Papandreou as German lawmakers say euro-area officials are devising a plan to grant Greece about 25 billion euros ($34 billion) in aid should it need help financing its debt, possibly by using state-owned lenders such as the KfW Group to buy its bonds. German Chancellor Angela Merkel and Luxembourg Prime Minister Jean-Claude Juncker signaled yesterday that Rehn will warn Greece it must do more to narrow the EU’s largest budget gap and can’t rely on taxpayers elsewhere to help until it acts. Adding to the political pressure, the fiscal strategy of Papandreou’s government may soon be tested by investors as it readies a sale of as much as 5 billion euros of 10-year notes. “If the Greek government cannot raise the necessary funds in the commercial market, which continues to look unlikely, then bilateral loans will be forthcoming,” said Erik Nielsen , chief European economist at Goldman Sachs Group Inc. in London. Rehn arrives after European officials pored over the government’s books to verify it’s doing enough to knock 4 percentage points off its budget deficit from last year’s 12.7 percent of gross domestic product. The country has until March 16 to satisfy fellow EU governments that its deficit reduction plan is on track and faces being pressed to increase consumer taxes and lower capital spending if it can’t show sufficient progress. ‘Additional Actions’ Juncker, who speaks for euro-area finance ministers, yesterday indicated more will be demanded. Greece needs to “take additional actions” to pare its shortfall and “must understand that the taxpayer in Germany, Belgium or Luxembourg isn’t prepared to correct the mistakes of Greek fiscal policy,” he told Eleftherotypia newspaper. In an interview with ARD Television, Merkel denied money has been set aside to bail out Greece and said the country has to “do its homework.” Speaking after the euro recorded its third straight monthly loss against the dollar, its longest losing streak since November 2008, Merkel said the single currency is “certainly facing the most difficult phase.” Billionaire investor George Soros said on CNN yesterday that the euro “may not survive” the Greek turmoil. Bonds Investors last week continued to question Greece’s chances of cutting its budget deficit. Greek two-year yields rose by as much as 75 basis points on Feb. 25, the most since Jan. 20. The spread between 10-year German bunds and Greek securities of a similar maturity widened 12 basis points in the week to 330 basis points. Still, the cost of insuring against default on Greek government debt fell for the first day in more than a week on Feb. 26 on speculation the nation will pledge tougher steps. Credit-default swaps on Greece dropped 35.6 basis points to 364.02, according to CMA Datavision. The contracts are down from Feb. 4’s record 428.25 basis points. Papandreou told the Greek parliament on Feb. 26 that the nation will “meet the challenge with whatever cost and pain we will need to go through.” Government spokesman George Petalotis said in an interview the same day that more measures will be concerned if the EU deems it necessary. Greece needs to raise 53 billion euros this year and redeem more than 20 billion euros of bonds by the end of May, according to data compiled by Bloomberg. It vows to reduce its budget gap below the EU limit of 3 percent of GDP in 2012. The European Commission forecasts a debt equivalent to 124.9 percent of GDP this year. KfW KfW’s purchase of Greek bonds, backed by German government guarantees, would be an emergency measure as it would risk inviting investors to speculate against other euro region countries, the German lawmakers said on condition of anonymity because the information is confidential. France’s state-owned Caisse des Depots may also be involved, Greece’s Ta Nea newspaper reported Feb. 27. The Wall Street Journal said the plan may total 30 billion euros. “Greece won’t be allowed to sink on the condition it respects its commitments to stabilize its budget,” French Finance Minister Christine Lagarde told Europe 1 radio yesterday. “We have a certain number of proposals in the euro zone, involving either private partners or public partners or both.” Strikes EU leaders ordered Greece on Feb. 11 to slash its budget deficit, while promising “determined” yet unspecified action to help if needed. Papandreou will on March 5 meet with Merkel, who yesterday suggested she is worried “emotions” may be spinning out of control. Complicating the country’s efforts last week were another round of strikes and warnings from Standard & Poor’s and Moody’s Investors Service that they may soon cut Greece’s debt rating if the government flounders in reducing its deficit. The government intends to sell 10-year notes by early March, according to a Jan. 26 statement from the Public Debt Management Agency. Fund managers who may take part in the issue say Greece must offer the biggest premium over benchmark German debt since 1998, paying a coupon of about 7 percent. To contact the reporters on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net ; Maria Petrakis in Athens at mpetrakis@bloomberg.net .

Read the full article →

Chile Earthquake Deaths at 708, Will Go Higher, President Bachelet Says

February 28, 2010

By Sebastian Boyd, Michael Smith and James Attwood Feb. 28 (Bloomberg) — Chileans awoke to aftershocks from an earthquake registering 8.8 magnitude that struck before dawn yesterday, killing more than 300 people, severing the country’s main highway and damaging 1.5 million homes. A temblor measuring 6.2 hit the Libertador O’Higgins region, 90 miles south of the capital Santiago, at 6:25 a.m. New York time, the U.S. Geological Survey said on its Web site. More than 50 aftershocks followed yesterday’s quake, which was stronger than the one in Haiti last month that may have killed 300,000. Chile’s death toll is more than 300 people, Jose Abumohor, a spokesman for the National Emergency Agency, said today during a televised news conference. “It’s much worse than I thought it would be,” Public Works Minister Sergio Bitar told reporters yesterday. “It’s not something we can solve quickly. This will take several months.” Yesterday’s quake was centered 200 miles (317 kilometers) southwest of Santiago near the main winemaking region and close to Concepcion, a metropolitan region of over 500,000 people. Highways and airports were shut by damage and some copper mines closed. The total economic damage may be as much as $30 billion, or about 15 percent of the South American country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc. ‘State of Catastrophe’ Chilean President Michelle Bachelet declared a “state of catastrophe.” She said in a televised address yesterday about 2 million people have been affected by the earthquake, which the USGS said is the world’s fifth strongest since 1900. A Pacific- wide tsunami warning has been cancelled “for all countries,” the Pacific Tsunami Warning Center said in an advisory on its Web site. The 90-second temblor severed the Panamerican highway, the country’s main thoroughfare, at several points south of Santiago. Bridges collapsed and embankments have subsided, rendering long sections of asphalt impassable. Bypasses have been set up to reconnect roadways, Abumohor said today. An estimated 1.5 million homes may have been damaged, a third of them severely, Housing Minister Patricia Poblete said. “We are talking almost about a cataclysm,” Poblete said in remarks broadcast on TVN. Cars headed north toward the capital were near stationary in long columns threading their way through the vineyards and fruit orchards of Chile’s central valley as Bitar and Defense Minister Francisco Vidal flew overhead in an army helicopter to inspect the damage. The army may send two field hospitals to the south of Chile, Vidal said. Santiago Palace Damaged In Santiago, people slept in cars, their yards and outside apartment buildings, concerned that aftershocks would further damage their homes. The facade of the fine arts museum collapsed and Bitar said there was damage to part of the La Moneda presidential palace. The worst problems are near the epicenter of the earthquake close to Parral, more than 300 kilometers from Santiago. The tower of the pink church at Pelequen, a place of pilgrimage 130 kilometers south of Santiago, was gone and the roofs of several colonial-style houses had collapsed. Bachelet spent yesterday morning answering phones and huddling with the ministers in the control center of the National Emergency Office in Santiago before boarding a helicopter to Talca. Collapsed Buildings President-elect Sebastian Pinera , who is to be sworn into office on March 11, said he inspected the damaged area and vowed to reassign spending to finance reconstruction. Television images showed collapsed buildings across Concepcion. Rescue workers with specially trained dogs worked through the night to rescue 100 people believed to be trapped inside a 14-story apartment building that toppled onto one side, following the cries of those trapped inside, TVN reported. Tanker trucks distributed drinking water to the city, whose water system was destroyed by the quake, Mayor Jacqueline Von Rysselberghe told TVN, as rescue workers drilled into the toppled building behind her. Food is running out in the city because it’s impossible for supplies to reach the city, she said. Riot police patrolled the streets in Concepcion, firing teargas on people looting a supermarket, TVN images showed. “People are running out of food at home and that encourages looting,” the mayor said. “If we don’t solve that problem tonight will be very hard, the social tension will be very high.” In towns closer to the epicenter, including Curico and Talca, more than 80 percent of buildings were flattened, CHV Television reported. Offshore Epicenter The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the USGS Web site . It carried a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS. “We literally bounced around the room,” Patricia Bustamante, 61, said from the emergency room at the Salvador hospital in Santiago where her daughter was being treated for multiple concussions. “I’ve been through the earthquakes of 1960, 1971 and 1985 and this one felt different. It was like a galloping horse.” Stringent building codes and the most highly-engineered building inventory in Latin America helped mitigate damage, Boston-based Air Worldwide, a catastrophe modeling firm that estimates damages for insurers, said in a press release. Power, Copper Mines Power and phone connections were disrupted and Santiago residents waited in the street amid fears of aftershocks. Chilectra , the electric utility for the Chilean capital of Santiago, said electricity has been restored to 80 percent of the city’s homes and businesses. At least four copper mines responsible for 16 percent of the country’s output halted operations after the quake struck. Chile is the world’s largest copper producer. Codelco’s El Teniente and Andina mine in central Chile will reopen “shortly” after inspectors failed to find major damage, Mining Minister Santiago Gonzalez said without providing a timetable for them to restart. Most of Chile’s copper deposits and port facilities are located in the northern half of the country and had no reports of damage. These include Escondida, the world’s largest copper mine, operated by BHP Billiton Ltd. and in which Rio Tinto Group is a shareholder. Airport Closed Lan Airlines SA , Latin America’s biggest carrier by market value and which is partly owned by the billionaire Pinera, diverted 17 flights after the Santiago airport closed because of damage. It is expected to remain closed for at least 24 hours, according to airport chief Eduardo del Canto. “The terminal is completely inoperable,” he said. “The aftershocks are scary,” said Susan Irvine, one of a group of tourists from Canada stranded in Santiago after the earthquake closed the airport. “We’ve gone from talking about hours to days.” U.S. Secretary of State Hillary Clinton is scheduled to arrive March 1 in Santiago on a regional tour. President Barack Obama , in a phone call with Bachelet, said the U.S. stands ready to assist Chilean rescue and recovery efforts. While Chile “has considerable assets of its own,” the U.S. has put together a disaster response team and has placed two urban search and rescue teams on alert, State Department spokesman Philip Crowley said in a statement. Economic Cost Finance Minister Andres Velasco said it was too early to estimate the economic cost of the quake. He said Chile’s policy of funneling windfall copper profits into a $14.7 billion rainy- day fiscal savings fund would help shoulder the cost of rebuilding. “Chile has saved for a very long time in order to have the savings to be able to face situations like this,” he told reporters. United Nations Secretary-General Ban Ki-Moon said his organization is monitoring the situation. The UN is on standby to provide emergency relief, the organization said yesterday in an e-mailed statement. Five people died and 11 are missing after a tsunami struck the Juan Fernandez archipelago, 420 miles west of the city of Valparaiso on Chile’s coast, according to images broadcast by TVN, while a sea surge reached the central plaza of port city Talcahuano, near Concepcion, leaving boats stranded in streets. Chile was struck by the most powerful earthquake on record in 1960, when a magnitude 9.5 temblor killed about 1,655 people, according to the USGS Web site. A further 211 people died when associated tsunamis struck Hawaii, Japan and the Philippines. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Santiago at mssmith@bloomberg.net ; James Attwood in Santiago at jattwood3@bloomberg.net .

Read the full article →

Chile Hit by Magnitude 8.8 Earthquake, 50 Aftershocks; at Least 300 Killed

February 27, 2010

By Sebastian Boyd, Michael Smith and James Attwood Feb. 27 (Bloomberg) — An earthquake registering 8.8 magnitude struck Chile before dawn today, killing at least 214 people, severing the country’s main highway and damaging 1.5 million homes. Tsunami warnings were issued across the Pacific Ocean as far as Hawaii and New Zealand and Chilean President Michelle Bachelet declared a “state of catastrophe.” She said in a televised address today about 2 million people have been affected by the earthquake, which the U.S. Geological Service said is the world’s fifth strongest since 1900. The pre-dawn quake was centered 200 miles (317 kilometers) southwest of the capital Santiago near the main winemaking region and close to Concepcion, a metropolitan region of over 500,000 people. The USGS reported more than 50 aftershocks following the 90-second temblor, which was stronger than the one in Haiti last month that may have killed 300,000. “There are parts of the country we haven’t gotten to yet,” Interior Minister Edmundo Perez Yoma told reporters, adding that the current death toll of 214 will likely rise. “It will be very hard for us to get precise figures.” Severed Highway The earthquake severed the Panamerican highway, the country’s main thoroughfare, at several points south of Santiago. Bridges collapsed and embankments have subsided, rendering long sections of asphalt impassable. “It’s much worse than I thought it would be,” Public Works Minister Sergio Bitar told reporters. “It’s not something we can solve quickly. This will take several months.” An estimated 1.5 million homes may have been damaged, a third of them severely, Housing Minister Patricia Poblete said. “We are talking almost about a cataclysm,” Poblete said in remarks broadcast on TVN. The worst problems are near the epicenter of the earthquake close to Parral, more than 300 kilometers from Santiago. Cars headed north toward the capital were sitting stationary in long columns threading their way through the vineyards and fruit orchards of Chile’s central valley as Bitar and Defense Minister Francisco Vidal flew overhead in an army helicopter to inspect the damage. The army may send two field hospitals to the south of Chile, Vidal said. The tower of the pink church at Pelequen, a place of pilgrimage 130 kilometers south of Santiago, was gone and the roofs of several colonial-style houses had collapsed. Presidential Palace In Santiago, the facade of the fine arts museum collapsed and Bitar said there was damage to part of the La Moneda presidential palace. Bachelet spent the morning answering phones and huddling with the ministers in the control center of the National Emergency Office in Santiago before boarding a helicopter to Talca. President-elect Sebastian Pinera, who is to be sworn into office on March 11, said he inspected the damaged area and vowed to reassign plan spending to finance reconstruction. Television images showed collapsed buildings across Concepcion. Rescue workers with specially trained dogs searched the rubble of a 14-story apartment building that toppled onto one side, following the screams of victims trapped inside, TVN reported. Rescue workers pulled at least 22 people alive from the building. In towns closer to the epicenter, including Curico and Talca, more than 80 percent of buildings were flattened, CHV Television reported. Tsunami Alert A tsunami alert remained in effect along the Pacific Rim as far north as Alaska, 8,000 miles (12,874 kilometers) from the epicenter, even after the National Weather Service lifted its warning for Hawaii. Government forecasters earlier warned of “widespread damage” as a result of the tidal surge. No damage was reported after waves began hitting the coastline of the Hawaiian Islands around noon Honolulu time (5 p.m. eastern time). The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the USGS Web site . It carried a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, according to the USGS. Five people died and 11 are missing after a tsunami struck the Juan Fernandez archipelago, 420 miles west of the city of Valparaiso on Chile’s coast, according to images broadcast by TVN, while a sea surge reached the central plaza of port city Talcahuano, near Conception, leaving boats stranded in streets. ‘A Galloping Horse’ “We literally bounced around the room,” Patricia Bustamante, 61, said from the emergency room at the Salvador hospital in Santiago where her daughter was being treated for multiple concussions. “I’ve been through the earthquakes of 1960, 1971 and 1985 and this one felt different. It was like a galloping horse.” Stringent building codes and the most highly-engineered building inventory in Latin America helped mitigate damage, Boston-based Air Worldwide, a catastrophe modeling firm that estimates damages for insurers, said in a press release. Power and phone connections were disrupted and Santiago residents waited in the street amid fears of aftershocks. Rescue workers pulled a 92-year-old woman out of a collapsed home, TVN reported. Chilectra , the electric utility for the Chilean capital of Santiago, said electricity has been restored to 80 percent of the city’s homes and businesses. Copper Mines At least four copper mines responsible for 16 percent of the country’s output halted operations after the quake struck. Chile is the world’s largest copper producer. Codelco’s El Teniente and Andina mine in central Chile will reopen “shortly” after inspectors failed to find major damage, Mining Minister Santiago Gonzalez said without providing a timetable for them to restart. Most of Chile’s copper deposits and port facilities are located in the northern half of the country and had no reports of damage. These include Escondida, the world’s largest copper mine, operated by BHP Billiton Ltd. and in which Rio Tinto Group is a shareholder. Lan Airlines SA , Latin America’s biggest carrier by market value and which is partly owned by the billionaire Pinera, diverted 17 flights after the Santiago airport closed because of damage. It is expected to remain closed for at least 24 hours, according to airport chief Eduardo del Canto. “The terminal is completely inoperable,” he said. U.S. Secretary of State Hillary Clinton is scheduled to arrive March 1 to Santiago on a regional tour. President Barack Obama, in a phone call with Bachelet, said the U.S. stands ready to assist Chilean rescue and recovery efforts. Economic Cost While Chile “has considerable assets of its own,” the U.S. has put together a disaster response team and has placed two urban search and rescue teams on alert, State Department spokesman Philip Crowley said in a statement. Finance Minister Andres Velasco said it was too early to estimate the economic cost of the quake. He said the Chile’s policy of funneling windfall copper profits into a $14.7 billion rainy-day fiscal savings fund would help shoulder the cost of rebuilding. “Chile has saved for a very long time in order to have the savings to be able to face situations like this,” he told reporters. United Nations Secretary-General Ban Ki-Moon said his organization is monitoring the situation. The UN is on standby to provide emergency relief, the organization said today in an e-mailed statement. Chile is accustomed to earthquakes and boasts South America’s most seismically-safe infrastructure. It was struck by the most powerful earthquake on record in 1960, when a magnitude 9.5 temblor killed about 1,655 people, according to the USGS Web site. A further 211 people died when associated tsunamis struck Hawaii, Japan and the Philippines. To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net ; Michael Smith in Santiago at mssmith@bloomberg.net ; James Attwood in Santiago at jattwood3@bloomberg.net .

Read the full article →

RBS Chief Executive Officer Stephen Hester Is Said to Waive Any 2009 Bonus

February 22, 2010

By Simon Packard Feb. 22 (Bloomberg) — Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester has decided to forgo any bonus awarded to him for 2009, according to a person familiar with the situation, who declined to be identified before a formal announcement. Hester, 49, is scheduled to release 2009 results for the bank on Feb. 25, the first full-year since he took over as head of the 84 percent state-owned bank in November 2008. Hester joined Edinburgh-based RBS on a package entitling him to as much as 9.74 million pounds ($15 million) if he doubles the bank’s share price. Company spokeswoman Linda Harper declined to comment. The Sunday Times said yesterday that while RBS may report a loss for last year, Hester would be entitled to collect 1.6 million pounds in bonuses. That led U.K. Business Secretary Peter Mandelson to say in a television interview that such a payment would be premature. “If further down the line, in years to come, he has done well and turned around RBS, he deserves something back for it — and I would be the first to say so — but not now,” Mandelson said yesterday in an interview with BBC Television . Hester’s decision follows Barclays Plc Chief Executive Officer John Varley and President Bob Diamond , who refused bonuses the second year in a row. Lloyds CEO The decision by the heads of Barclays and RBS to waive their bonuses increases the pressure on Lloyds Banking Group Plc CEO Eric Daniels to make a similar decision, according to Chris Roebuck , a visiting professor at Cass Business School in London. “If he is fully aware of the anger that it would cause to take a bonus among the general public and the politicians – whether that be right or wrong – he needs to play a diplomatic game” and consider refusing it, Roebuck said. “No decisions have been taken by our independent remuneration about potential bonus awards,” Shane O’Riordain, a Lloyds spokesman, said today. Daniels, who is paid a base salary of 1.04 million pounds, will be entitled to a bonus of around 225 percent of his base salary, which will be paid in stock over three years and subject to clawbacks, O’Riordain said. Hester has an annual salary of 1.2 million pounds. RBS shares must rise to 70 pence and outperform peers for Hester to receive the full amount of shares and options in his pay deal with the company, RBS said last June. RBS rose 2.3 percent to 34.5 pence on Feb. 19 in London trading. The stock climbed 80 percent in the past 12 months, compared with the 89 percent increase of the Bloomberg Europe Banks and Financial Services Index . The bank has a market value of 19.5 billion pounds. In return for a government bailout, RBS accepted that the U.K. Treasury gain oversight of its bonus pool, doubling the number of “high achievers” quitting the company, Hester said in December. To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

Read the full article →

RBS Chief Executive Officer Stephen Hester Is Said to Waive Any 2009 Bonus

February 22, 2010

By Simon Packard Feb. 22 (Bloomberg) — Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester has decided to forgo any bonus awarded to him for 2009, according to a person familiar with the situation, who declined to be identified before a formal announcement. Hester, 49, is scheduled to release 2009 results for the bank on Feb. 25, the first full-year since he took over as head of the 84 percent state-owned bank in November 2008. Hester joined Edinburgh-based RBS on a package entitling him to as much as 9.74 million pounds ($15 million) if he doubles the bank’s share price. Company spokeswoman Linda Harper declined to comment. The Sunday Times said yesterday that while RBS may report a loss for last year, Hester would be entitled to collect 1.6 million pounds in bonuses. That led U.K. Business Secretary Peter Mandelson to say in a television interview that such a payment would be premature. “If further down the line, in years to come, he has done well and turned around RBS, he deserves something back for it — and I would be the first to say so — but not now,” Mandelson said yesterday in an interview with BBC Television . Hester’s decision follows Barclays Plc Chief Executive Officer John Varley and President Bob Diamond , who refused bonuses the second year in a row. Lloyds CEO The decision by the heads of Barclays and RBS to waive their bonuses increases the pressure on Lloyds Banking Group Plc CEO Eric Daniels to make a similar decision, according to Chris Roebuck , a visiting professor at Cass Business School in London. “If he is fully aware of the anger that it would cause to take a bonus among the general public and the politicians – whether that be right or wrong – he needs to play a diplomatic game” and consider refusing it, Roebuck said. “No decisions have been taken by our independent remuneration about potential bonus awards,” Shane O’Riordain, a Lloyds spokesman, said today. Daniels, who is paid a base salary of 1.04 million pounds, will be entitled to a bonus of around 225 percent of his base salary, which will be paid in stock over three years and subject to clawbacks, O’Riordain said. Hester has an annual salary of 1.2 million pounds. RBS shares must rise to 70 pence and outperform peers for Hester to receive the full amount of shares and options in his pay deal with the company, RBS said last June. RBS rose 2.3 percent to 34.5 pence on Feb. 19 in London trading. The stock climbed 80 percent in the past 12 months, compared with the 89 percent increase of the Bloomberg Europe Banks and Financial Services Index . The bank has a market value of 19.5 billion pounds. In return for a government bailout, RBS accepted that the U.K. Treasury gain oversight of its bonus pool, doubling the number of “high achievers” quitting the company, Hester said in December. To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

Read the full article →

Child Obesity Rate Doubled in U.S. Before Showing Signs of Easing Off

February 16, 2010

By Molly Peterson Feb. 16 (Bloomberg) — The rate of childhood obesity and chronic health problems doubled in the U.S. from 1988 to 2006 with fewer cases toward the end of the study consistent with a recent leveling off, researchers found. Children ages 8 to 14 showed an obesity rate of 15.8 percent at the end of 2006, compared with 8.3 percent in a similar period that ended in 1994, according to a study published online today in the Journal of the American Medical Association . The overall rate of chronic childhood health conditions including obesity, asthma and behavioral or learning problems increased to 26.6 percent from 12.8 percent during the same years. The report comes a week after first lady Michelle Obama began a nationwide campaign against childhood obesity, urging American youths to get more exercise and develop healthier eating habits. Another study published by the U.S. Centers for Disease Control and Prevention in January reported the rise in U.S. obesity levels for children, while high, may have leveled off in the decade ended in 2008 at about 17 percent. “We can speculate that because of the increased attention to obesity in recent years, children may actually be making better food choices, have better nutrition, exercise more and spend less time in front of the television and the computer with video games,” said Jeanne Van Cleave, the report’s lead author. Not Permanent For most of the 5,001 children tracked in today’s research, the chronic health conditions weren’t permanent, Van Cleave, a pediatrician at MassGeneral Hospital for Children in Boston and Harvard Medical School, said in an interview. “Half of all children in the U.S. will have a chronic condition during childhood,” she said Feb. 12 in a telephone interview. “But a lot of these conditions resolve over time.” Today’s study analyzed data collected during six-year periods from three consecutive groups of children who participated in a U.S. Bureau of Labor Statistics survey that began in 1979. The study began tracking the first group in 1988, the second in 1994 and the third in 2000. For all of the groups combined, less than 38 percent of the children who had chronic conditions at the beginning of the observation period still had them after six years. “Many conditions in children tend to wax and wane,” Neal Halfon, director of the University of California at Los Angeles’ Center for Healthier Children, Families and Communities, said in an interview. “Even those that get better can, down the line, end up having problems because of the nature of the issues.” Plateau Another study from CDC found U.S. obesity rates may have hit a plateau toward the end of the decade ended in 2008. That study found about 17 percent of children ages 2 to 19 were obese, with the heaviest boys ages 6 to 19 continuing to gain weight over the decade while others leveled off. “The leveling off really speaks to increased attention to childhood obesity recently,” Van Cleave said. President Barack Obama signed an executive order Feb. 9 directing federal departments to come up with a plan within 90 days on how to make federal nutritional and health data more accessible to the public. The same day, Michelle Obama announced a new federal Web site, www.LetsMove.gov , that emphasizes physical activity and more healthful meals in schools. The site also offers tips to help parents choose more nutritional foods for their children. Highlight “I think she’s trying to highlight that it’s not just all about eating or exercise,” Halfon, who co-authored an editorial that accompanied the study in the journal, said of the first lady’s initiative. “It’s about having places where people can exercise. It’s not just about individual behaviors, but about the systems we have in place — the health system, the education system, the nutrition system.” Companies such as Orexigen Therapeutics Inc. of La Jolla, California, Vivus Inc. of Mountain View, California, and San Diego-based Arena Pharmaceuticals Inc. are developing weight- loss drugs. Orexigen has said it plans to seek U.S. approval of its Contrave medicine in the first half of 2010. In December, Arena Pharmaceuticals submitted an application for its obesity drug lorcaserin and Vivus submitted an application for its treatment Qnexa. Japanese-based Shionogi & Co. is also developing a weight loss drug. Today’s study was funded by the Robert Wood Johnson Foundation and the CDC. To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

Read the full article →

`Avatar’ Triumphs in China as State-Backed `Confucius’ Fails to Break Even

February 9, 2010

By Bloomberg News Jan. 21 (Bloomberg) — China will pull the two-dimensional version of News Corp. ’s “Avatar” from theaters on Jan. 22, three weeks after the movie began playing there, a Shanghai film distributor said. Chinese moviegoers will still be able to see the movie in 3-D, Wu Hehu, vice director of Shanghai United Circuit, said in an interview late yesterday. United Circuit is distributing the movie in the city of Shanghai. Revenue from 3-D showings accounted for 84 percent of ticket sales last week, Wu said. The movie has generated $75.6 million in sales since it opened in China on Jan. 2, according to Sherman Oaks, California-based Box Office Mojo. Wu called the decision to pull the 2-D version of the film “normal.” Chris Petrikin , spokesman for News Corp. ’s Twentieth Century Fox, said the company had no comment. In a Jan. 19 statement, News Corp. said it hoped moviegoers would continue to have access to “Avatar” in Chinese theaters. Weng Li, a Beijing-based spokesman for China Film Group Corp. , didn’t immediately answer calls to his office today seeking comment. State-owned China Film Group is the nation’s only movie importer. Zhang Hongsen, vice director of the film bureau of the State Administration of Radio, Film and Television, said yesterday that the decision to pull Avatar from 2-D screens was a government order, the China Daily newspaper reported. Avatar has taken in $1.66 billion worldwide, according to Box Office Mojo. For Related News and Information: Find stories about China’s film industry: TNI CHINA FILM BN Most-read stories about China today:MNI CHINA 1D China economic statistics: ECST CH

Read the full article →

Roubini: Stocks "Flat" Through 2010

February 5, 2010

In an interview with Bloomberg Television today, Nouriel Roubini said he expected the S&P 500 to remain “flat over the year.” Once the stimulus runs out mid-year, he said, the stock market is likely to plunge: “The markets maybe are going to do okay in the first half of the year,” he said, “but [I] expect there’s going to be a massive slow down in growth in the second half of the year.” Here’s the interview:

Read the full article →

Macquarie Banker Caught Browsing Topless Pictures on Live TV Keeps His Job

February 5, 2010

By Angus Whitley Feb. 5 (Bloomberg) — Macquarie Group Ltd. said an employee in Sydney who was caught on live television looking at topless photographs on his computer will stay at the bank. While a Macquarie Private Wealth worker discussed interest rates live on Australia’s 7 News on Feb. 2, an employee could be seen in the background opening several semi-nude photographs on his desktop, before turning to look at the camera. “An internal review into the events has been completed,” said Laura Bramwell, a spokeswoman for Macquarie, Australia’s largest investment bank. “This review has been discussed with the employee and action taken. He will remain an employee. Macquarie and the employee apologize for any offense that may have been caused.” The bank declined to name the individual. Miranda Kerr , the Australian supermodel appearing in the snaps, offered to sign a petition to help the banker keep his job, the Daily Telegraph said today . An archived video of the television footage on Google Inc.’s YouTube won a five-star rating and attracted almost 1 million hits. To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

Read the full article →

Limbaugh’s Barbs Test Palin’s Honest Outrage: Margaret Carlson

February 4, 2010

Commentary by Margaret Carlson Feb. 5 (Bloomberg) — I never thought it would come to this. Sarah Palin is going to have to unheart Rush Limbaugh. Otherwise the only conclusion is that she fakes her emotions, even those that seem most genuine. In her reaction to a remark by Rahm Emanuel , the crude White House chief of staff, her hurt seemed real. Last August, according to a Jan. 26 article in the Wall Street Journal, Emanuel called congressional liberals not supporting the president “retarded,” preceded by a favorite curse word of his. Palin called for his head. “Just as we’d be appalled if any public figure of Rahm’s stature ever used the ‘N-word’ or other such inappropriate language, Rahm’s slur on all God’s children with cognitive and developmental disabilities — and the people who love them — is unacceptable, and it’s heartbreaking,” Palin wrote on her Facebook page. Nothing about Palin is more appealing than her love for her child born with Down syndrome. Palin may wear her other children on her sleeve, and on stage, but Trig she holds in her heart. In the umbrage she took over a tasteless David Letterman joke about one of her daughters, her anger looked simulated. She dragged out that controversy well after the host said he was sorry. Here, her reaction was appropriate. Emanuel apologized privately to Tim Shriver , head of Special Olympics, which was started by his mother, Eunice , to encourage the developmentally disabled through sports. On Wednesday, Emanuel had Shriver and a number of disability groups come to the White House for a public apology. Double Derogatory Limbaugh took the occasion to double-down on Emanuel’s remark. On his radio show, Limbaugh made an even more derogatory comment, insisting that there can be no insult in “calling a bunch of people who are retards, retards.” The real news, Limbaugh continued, was that Emanuel had directed his “retard” comment at Obama supporters. “So now there’s going to be a meeting,” he said. “There’s going to be a retard summit at the White House.” Having called out Emanuel, Palin can’t let Limbaugh get away with his own “slur on all God’s children.” Surely Limbaugh qualifies as a “public figure,” one with far more reach than Emanuel. If a six-month-old Emanuel remark uttered at a private meeting broke her heart, Limbaugh’s rant must have crushed her. Limbaugh’s on-air claim yesterday that, in throwing around the word “retard,” he had been “just quoting Emanuel” is, of course, laughable. As for his observation that the “drive-by” media is “trying to goad Sarah Palin into denouncing” him for his remarks: Well, why not goad, even if we’re not as good at it as Rush is? More Than Crude Limbaugh’s reference to a “retard summit” wasn’t reflexive crudeness. He made the comment with malice aforethought, cloaked in his usual objection to political correctness, on which he bases his license to pick on the weak. His running shtick is that it’s rich white fuzzballs like him who really suffer in a warped society that punishes success. Palin, usually among Rush’s chosen strong, is among the weak in this instance. Mean words about her son touch a spot so tender she flinches. I get a slew of hate mail about my opinions, stupidity and hair. It comes with the privilege of writing a column. The only cruelty I can’t stand is against my mentally disabled brother. I spent much of my childhood forcing the neighborhood kids to choose him for their teams. Now that I’m his guardian, I run a Society for the Prevention of Cruelty to Jimmy. The need to protect never goes away. Triumph of Politics In Palin’s case, we’ll see if politics triumph. She will not want to treat Limbaugh as she did Emanuel, a political enemy. She and Limbaugh are in a mutual-admiration society, working the same side of the street, manning the barricades against the heathen liberals, enforcing the same pure strain of conservatism against infidels. Rush has a conscience. One reason his television show wasn’t as successful as his radio one was that he couldn’t play himself. Inside the cocoon of his radio studio, he exempts himself from the usual rules. He’s an entertainer, so he can say anything. He’s not a journalist, so he doesn’t need to be factual. Liberals are mushy-headed wimps, so he can attack those they coddle to even the score. Physical disability is not off limits. He went after Michael J. Fox with relish, performing a spastic chair dance while claiming that Fox had purposely not taken his medication so that his Parkinson’s disease would be on full display in a TV ad in favor of candidates supporting stem-cell research. (Not true, Fox said.) Maternal Instinct I have a lot of questions about Palin as a candidate for president but not about her maternal instinct. I bet she would give up everything if it would make her child well. I would for my brother. Politics has gotten much meaner since 1995, when I had a long interview with Rush as part of a cover package on him for Time magazine. I went in thinking he was a jerk but came away believing that underneath his jerky persona was a not-so-bad, hyperbolic talk jockey. Now, if he doesn’t apologize for his gratuitous cruelty, I’ll have to conclude that underneath that talk-show bluster, he’s a jerk. ( Margaret Carlson , author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Margaret Carlson in Washington at mcarlson3@bloomberg.net

Read the full article →

North Korea Army Fires Artillery Salvo, Prompting Warning Shots From South

January 26, 2010

By Bomi Lim Jan. 27 (Bloomberg) — North Korea fired artillery off its west coast near the disputed maritime border with South Korea, prompting warning shots from the South. There were no casualties. North Korea fired about 30 shells between 9:05 a.m. and 10:16 a.m. local time that fell into waters north of the border, a South Korean Defense Ministry official said in Seoul today. South Korea responded with several rounds that weren’t aimed at any target, said the official, who declined to be named, citing ministry policy. North Korea plans to continue what it said was an annual exercise, the North’s Korea Central News Agency said. North Korea earlier banned ships from its west coast, indicating it may be planning military exercises. The totalitarian regime of Kim Jong Il fired missiles in October, the latest in a series of tests that included the May detonation of a second nuclear device. The North pulled out of six-nation talks on its atomic program in April and has said it won’t return to negotiations until the United Nations sanctions imposed for its nuclear tests are lifted. “North Korea is raising tension as a way of reminding others that there is always a possibility of war on the peninsula,” said Baek Seung Joo , an analyst at the Korea Institute of Defense Analyses. “The provocation is a message to dialogue partners, urging them to come up with concessions needed to bring it to the table.” Six-Party Talks North Korea resisted provocation that could have caused damage because it still wants to engage with other countries in the six-nation talks, Baek said. The six nations, including China, Japan, Russia, South Korea and the U.S., last met in December 2008. The exercise was held within the country’s territory so there were no grounds for any complaints, KCNA said, citing the General Staff of the North’s Korean People’s Army. The shipping ban was imposed Jan. 25 and is to last through March 29, South Korea’s Unification Ministry spokeswoman Lee Jong Joo said. South Korea called an emergency security meeting, a presidential official who declined to be identified said. “Our government is carefully studying military movements in North Korea, its intentions, and how we should respond,” Lee told reporters in Seoul. The benchmark Kospi index was 0.6 percent lower at 1,641.64 as of 2:49 p.m. in Seoul, having earlier dropped as much as 1 percent. YTN Television yesterday cited an unidentified military source as saying that the no-navigation zone covers an area 4 kilometers (2.5 miles) south of the Northern Limit Line, a border demarcated by the UN after the 1950-53 Korean War. North Korea doesn’t recognize the border, at the center of a dispute that caused bloody naval skirmishes in 1999 and 2002. Skirmish The two countries exchanged fire in November after a North Korean vessel ventured into waters claimed by South Korea. South and North Korea remain divided by an armed border after their conflict ended in a cease-fire, which was never replaced by a peace treaty. North Korea said on Jan. 11 that talks on a peace treaty should begin this year. South Korea this week proposed talks with North Korea on Feb. 8 about resuming tourist visits to the communist nation, a government spokesman said. The South also plans to send 10,000 tons of corn in food aid to the North. To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

Read the full article →

North Korea Fires Artillery Near Maritime Border With South After Ship Ban

January 26, 2010

By Bomi Lim Jan. 27 (Bloomberg) — North Korea fired artillery off its west coast, near the maritime border with South Korea, two South Korean military officials said. There were no casualties. North Korea fired several shells around 9:05 a.m. local time that fell into waters north of the border, prompting three warnings from South Korea’s military, a Defense Ministry official said. He and an official at the Joint Chiefs of Staff, who both declined to be identified, couldn’t confirm a Yonhap News report that South Korea fired back. The incident came after North Korea banned ships from its western coast, indicating it may be preparing to fire missiles. The ban was imposed Jan. 25 and is set to last through March 29, South Korea’s Unification Ministry spokeswoman Lee Jong Joo said. South Korea called an emergency security meeting, according to a presidential official who declined to be identified. “Our government is carefully studying military movements in North Korea, its intentions, and how we should respond,” Lee told reporters in Seoul, without confirming the firing. The benchmark Kospi index was 0.1 percent lower at 1,635.68 as of 12:02 p.m. in Seoul, having earlier dropped as much as 1 percent. North Korea last fired missiles in October, the latest in a series of tests that included the May detonation of its second nuclear device. Kim Jong Il ’s regime pulled out of six-nation talks on its nuclear program in April and has said it won’t return to negotiations until the United Nations sanctions imposed for its nuclear tests were lifted. YTN Television yesterday said, citing an unidentified military source, that the no-navigation zone covers an area 4 kilometers (2.5 miles) south of the Northern Limit Line, a border demarcated by the UN after the 1950-53 Korean War. North Korea doesn’t recognize the border, at the center of a dispute that caused bloody naval skirmishes in 1999 and 2002. In November, the two countries exchanged fire after a North Korean vessel ventured into waters claimed by South Korea. South and North Korea remain divided by an armed border after their conflict ended in a cease-fire, which was never replaced by a peace treaty. North Korea said on Jan. 11 that talks on a peace treaty should begin this year. The six-nation nuclear talks also involve China, Japan, Russia, South Korea and the U.S. To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

Read the full article →

Democrats Will Regroup Before Attempting to Salvage Health-Care Overhaul

January 25, 2010

By Kristin Jensen and Brian Faler Jan. 25 (Bloomberg) — U.S. Democrats, who ran into what President Barack Obama called a “buzz saw” of opposition to their health-care plan, will regroup before trying to salvage what has been their top priority for the past year. The legislation is in peril because a Jan. 19 special election in Massachusetts deprived Democrats of the 60th vote they need in the Senate. House Speaker Nancy Pelosi says she doesn’t have the votes for the quickest fix — approving the Senate version of the bill — and the original option of passing a House-Senate compromise on party-line votes in each chamber is dead. While Democrats don’t want to face voters in November with nothing to show after months of health-care debate, they must focus on job growth and make clear they heard the discontent registered in the Republican upset win in Massachusetts. “We’re going to move on to some other things,” Senate Majority Leader Harry Reid , a Nevada Democrat, said on Jan. 22. He declined to estimate how long a break might last from the legislation, which calls for the most sweeping changes to the nation’s health-care system in more than four decades. Senator Tom Harkin , an Iowa Democrat who heads the chamber’s health committee, said Democrats would let the legislation “sit for a while” and then take it up “in a week or so.” Christopher Dodd , a Connecticut Democrat who helped shepherd the bill through the Senate, said the break might last as long as six weeks. ‘No One Knows’ “No one knows what to do,” Harkin said in a Jan. 22 interview. Lawmakers need a “breather” that would “let everyone calm down, get that panic out of their bodies” after Republican Scott Brown’s victory in the race to fill the seat held for almost half a century by the late Ted Kennedy . Democratic options include passing a series of smaller measures, starting again and trying to win Republican support, or using a budget process known as reconciliation that might result in a smaller bill yet would require just 51 votes in the Senate. If they opt to pass a slimmed-down bill, they may face opposition from labor groups. Andy Stern , the head of the Service Employees International Union, called that “fear masquerading as a strategy” in an interview with The Plum Line blog last week. Obama vowed to press on, telling an audience in Elryia, Ohio, on Jan. 22, “I’m not going to walk away just because it’s hard.” ‘An Ugly Process’ The president said he’d keep working with Democrats and “I hope” Republicans to complete legislation that would cover tens of millions of uninsured Americans and attempt to curb medical costs . “We’ve gotten pretty far down the road, but I’ve got to admit we had a little bit of a buzz saw this week,” Obama said. “I also know that part of the reason is, is that this process was so long and so drawn out. This is just what happens in Congress. It’s just an ugly process.” Obama has been making phone calls and having conversations “to try to see what the climate is, what’s the art of the possible,” Valerie Jarrett , senior adviser to the president, said yesterday on NBC Television’s “Meet the Press.” Lawmakers were days away from finishing work on the legislation when the polls in Massachusetts started turning against Democrat Martha Coakley . Senate Democrats need 60 votes to overcome the delaying tactics of Republicans, who are universally opposed to the bill. The party now can count on just 59 votes in the 100-member body. Seeking Changes Lawmakers emerged from a meeting with Reid on Jan. 22 saying they don’t know how they’ll proceed. In a sign of how swiftly things have changed, one of the Democratic architects of the Senate legislation called for major changes. North Dakota Senator Kent Conrad , who spent months negotiating with a group of senators on the finance panel for a bipartisan compromise, said lawmakers had to listen to voters. “The people we represent are sending us a loud and clear message that the package that’s there is not acceptable,” Conrad told reporters. “The first thing we’ve got to say to people is ‘we get it, we hear you loud and clear.’” All the options before Democrats have drawbacks. A group of 25 House Democrats led by New Jersey Representative William Pascrell is pushing for passage of a series of smaller bills to address costs, insurance practices and medical malpractice concerns. Interconnected Bill That approach would be difficult because so many parts of the bills are intertwined. New York-based Pfizer Inc. and other drugmakers agreed to help elderly people better afford prescription medicines, yet their support was contingent on gaining more insured customers. Limiting the bill to budget-related issues through reconciliation means it might not include provisions such as requiring insurers , including Minnetonka, Minnesota-based UnitedHealth Group Inc. , to accept all customers regardless of pre-existing conditions. And starting over might mean it never gets done. “The leader suggested we take a few days here to let things settle down,” Dodd said after meeting with Reid. “We have to find this way forward, and we’re probably going to do that in a calmer environment.” To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Brian Faler in Washington at   or bfaler@bloomberg.net

Read the full article →

Treasury 10-Year Notes Gain Most in Week Since November After Price Report

January 16, 2010

By Susanne Walker Jan. 16 (Bloomberg) — Treasury 10-year notes posted the biggest gain since November as retail sales unexpectedly declined and consumer prices rose less than forecast, spurring demand at the week’s $84 billion in note and bond sales. Two-year note yields, most sensitive to monetary policy, fell the most in the past two weeks since November 2008 as a report showed on Jan. 8 that the U.S. economy unexpectedly lost jobs in December and investors questioned the strength of the economic recovery. Housing starts rose in December, economists forecast before a report on Jan 20. “We had a few points of weak data this week which didn’t help the outlook on the economy,” said Dan Mulholland , a Treasury trader in New York at Royal Bank of Canada, one of 18 primary dealers required to bid at Treasury auctions. “People feared that supply would take the market to higher yields, but it didn’t. There was a need for Treasuries.” The 10-year note yield fell 15 basis points on the week, or 0.15 percentage point, to 3.68 percent in New York, according to BGCantor Market Data. The 3.375 percent security due November 2019 rose 1 6/32, or $11.88 per $1,000 face amount to 97 1/2. The yield dropped the most since it dropped 17 basis points over the five days ended Nov. 27. Present Weakness Two-year note yields fell 11 basis points on the week, touching 0.86 percent yesterday, the lowest level since Dec. 22. The yield’s 27 basis point decline since Jan. 4 is the most since the 34 basis points it lost over the 10 trade days ended Nov. 14, 2008, when the Federal Reserve cut its target rate below 1 percent as the economic outlook worsened after the collapse of Lehman Brothers Holdings Inc. “It speaks to the economic troubles that still lurk with the sovereigns who are in real trouble and the weakness that is still present in the U.S.,” said Michael Cheah , who manages $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. Sales at U.S. retailers fell 0.3 percent in December, compared with the median forecast in a Bloomberg survey for an increase of 0.5 percent. Consumer prices rose 0.1 percent last month, less than the 0.2 percent median estimate in a separate survey. Companies may have little success raising prices with unemployment projected to average 10 percent this year, the highest annual rate in seven decades. “The Fed has reiterated that they don’t think inflation is going to be a threat and this confirms inflation is still not a big worry right now,” said Sergey Bondarchuk , an interest-rate strategist in New York at primary dealer BNP Paribas. “All in all, the week’s news was positive for Treasuries.” ‘Need to See’ New York Fed President William Dudley said short-term rates may remain “low” for at least six months and possibly for as long as two years. Before supporting an interest rate-increase, “I certainly need to see an economy that’s vigorous enough to bring the unemployment rate down, No. 1,” said Dudley on Jan. 13, according to the transcript of an interview on PBS Television’s Nightly Business Report. Futures on the CME Group exchange show a 27 percent chance the Fed will raise its target lending rate by at least a quarter-percentage point by its June meeting, down from almost 55 percent odds a month ago. Treasuries rose Jan. 12 as China’s central bank moved to curb bank lending by increasing the proportion of deposits that banks must set aside as reserves. The action raised speculation that slowing global growth will boost demand for U.S. debt. ‘Severe Irregularities’ Treasuries also gained amid speculation European sovereign issuers’ credit quality will erode, which has pushed yields higher in Greece, Spain and Ireland. The European Commission said Jan. 12 that “severe irregularities” in Greece’s statistical data leave the accuracy of the European Union’s largest deficit in doubt. The U.S. sold $13 billion of 30-year bonds on Jan. 14, $21 billion in 10-year debt on Jan. 13, and a record-tying $40 billion in three-year notes on Jan. 12. The government also sold $10 billion in 10-year Treasury Inflation Protected Securities on Jan. 11. Investors bid for 2.68 times the amount of securities offered at the 30-year bond sale, the most since September. The bid-to-cover ratio at the $21 billion 10-year offering was 3.00, the most since October. Direct bidders, non-primary dealers that bid on their own accounts, bought 17.3 percent of the 10-year notes, the most since May 2005, and 23.4 percent of the three-year notes, the most since at least 2003. ‘Cloaking Their Intentions’ “The big question during the auctions was the uptick in direct bidding,” said Dan Greenhaus , chief economic strategist at Miller Tabak & Co. LLC in New York. “One possible explanation is that there was one potentially large bidder cloaking their intentions. A more likely explanation is some large bidders who were classified as indirect have taken steps to become direct bidders as the first steps in becoming a primary dealer.” Builders broke ground on 575,000 homes in December, according to the median estimate in a Bloomberg survey before the Jan. 20 report. A separate report is forecast to show producer prices were unchanged last month. To contact the reporters on this story: Susanne Walker in New York at swalker33@bloomberg.net .

Read the full article →

Fed Debate Intensifies on How, When to Drain $1 Trillion From U.S. Economy

January 15, 2010

By Craig Torres Jan. 15 (Bloomberg) — Federal Reserve officials are more confident the U.S. economy is moving toward self-sustaining growth, giving urgency to discussions about the tactics and timing of an exit from record-low interest rates. Kansas City Fed Bank President Thomas Hoenig said Jan. 11 the central bank should end purchases of mortgage-backed securities because the market is “healing.” Philadelphia Fed Bank President Charles Plosser said the next day that the recovery is “sustainable even as the fiscal and monetary stimulus programs eventually wind down.” Policy makers are still studying ways to drain $1 trillion in excess cash from the financial system and debating how to signal a rate increase that economists say is at least 10 months away. The first test of their exit strategy will come in March, when the Fed’s purchases of $1.25 trillion of mortgage-backed securities are scheduled to end. “They’ll tell themselves the unusual support is no longer necessary, the recovery is self-sustaining,” said Vincent Reinhart , a resident scholar at the American Enterprise Institute in Washington who served as director of the Fed’s Division of Monetary Affairs under Chairman Ben S. Bernanke . “Deep down, they probably also believe they have the option of starting up again.” A government report yesterday showed business inventories rose more than forecast in November as companies tried to keep up with a jump in sales. Fed officials are watching to see if inventory restocking sparks gains in jobs and incomes that will boost spending, leading to further increases in hiring. Rate Forecast The Fed will keep its target for overnight lending among banks unchanged through September and raise it by half a point in the fourth quarter, according to the median forecast in a Bloomberg News survey of economists. Policy makers, who have kept the benchmark rate near zero since December 2008, next meet Jan. 26-27. The world’s largest economy will expand 2.7 percent this year, the best performance in four years, the Bloomberg survey showed. Consumer purchases will grow 2 percent, up from a December estimate of 1.8 percent and the first gain since 2007, according to the median forecast of 60 economists. Macroeconomic Advisors LLC, a St. Louis-based forecasting firm, says the economy probably expanded at a 5.5 percent annual pace in the fourth quarter, the fastest in more than five years. Demand will be partly driven by business investment and exports, their forecast shows. Consumption should be supported by household wealth as stocks climb and housing prices steady. The Standard and Poor’s 500 Index is up 36 percent over the past year. Consumer Spending “The drag on consumer spending from rapid declines in wealth has gone away,” said Ben Herzon , an economist at Macroeconomic Advisers. “Demand will pick up.” The Fed’s Beige Book business survey released Jan. 13 signaled the recovery is broadening, with 10 of the Fed’s 12 district banks reporting an improvement last month. Home sales increased toward the end of last year in most Fed districts, the report showed, and manufacturing improved or held steady while the labor market and loan demand remained weak. Fed purchases of mortgage-backed securities have helped stabilize the housing market, which was at the epicenter of the financial crisis, by pushing down borrowing costs for home buyers. Government tax credits also helped propel existing home sales to the highest level in almost three years in November. Yields on Fannie Mae and Freddie Mac mortgage securities are near the lowest relative to Treasuries in nearly two decades. Interest-Rate Spread The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries stood at 0.69 percentage point Jan. 14, up from 0.65 percentage point on Jan. 6, which was the lowest since May 1992, according to data compiled by Bloomberg. Central bankers, like private economists, expect some increase in mortgage rates as purchases of securities tail off. “As our agency mortgage-backed securities purchases come to an end, we’ll probably see a little bit of upward pressure on interest rates,” New York Fed President William Dudley said on Jan. 13 in an interview with PBS Television’s Nightly Business Report. “But there’s a big debate about whether they’ll be small or medium or large. So I think we’ll have to wait and see.” Economists expect the rate on a 30-year fixed mortgage to rise 30 basis points after the Fed’s purchases end, according to the median of 39 economists surveyed by Bloomberg News between Jan. 5 and Jan. 12. The average rate on Jan. 14 was 5.06 percent, according to Freddie Mac. Convincing Signs Central bankers are likely to keep rates unchanged until they see convincing signs the rebound in manufacturing generates enough jobs and income to spur household demand and reduce unemployment that’s near a 26-year high. The U.S. unexpectedly lost 85,000 jobs in December, and revisions showed payrolls increased in November for the first time in almost two years, a Labor Department report showed this month. The jobless rate stayed at 10 percent in December. Job growth “will not likely be rapid enough to put a large dent in the unemployment rate,” Fed Bank of Boston President Eric Rosengren said in a speech on Jan. 8. “This should allow for accommodative monetary policy to continue to support the economy until the underlying demand of consumers and businesses becomes self-sustaining.” Rosengren like Hoenig is a voting member of the Federal Open Market Committee this year. Sales at U.S. retailers unexpectedly fell 0.3 percent in December, a Commerce Department report showed yesterday. After- tax personal income adjusted for inflation was up 1.5 percent in the year ended in November, compared with an average 3.3 percent gain in the decade before the recession. “Short-term rates are going to stay low for a considerable period of time,” the New York Fed’s Dudley said Jan. 13. The policy of keeping borrowing costs low could remain in place “at least six months,” Dudley said. “It could be a year from now, two years from now. It’s going to depend on how the economy develops.” To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net .

Read the full article →

Freezing Weather From China to Florida Disrupts Travel, Boosts Fuel Costs

January 5, 2010

By Gregory Viscusi Jan. 5 (Bloomberg) — Cold weather from China across Europe and reaching to the U.S. is disrupting travel and pushing up energy prices. Crude oil traded near a 14-month high in New York, and spot electricity prices in Europe rose. In China, heavy snows and the lowest temperatures in 50 years hampered delivery of coal. The Florida citrus crop could be hurt by freezing later this week; Manchester airport in England closed due to heavy snow. Crude oil for February delivery advanced as much as 0.6 percent to $81.99 in New York while natural gas for delivery today in the U.K. rose to $7.42 per million British thermal units. The eastern half of the U.S. is facing its coldest winter since 1982, Accuweather said on its Web site. Arctic air from Canada is spreading south. By Jan. 9, New York and Boston may have lows of minus 10 degrees Celsius (14 Fahrenheit). In citrus-growing areas of Florida and Texas, the lows hovered just above freezing last night, sparing the crops any damage, Accuweather said. Freezing temperatures may hit the area starting Jan. 8. The Climate Prediction Center of the National Weather Service forecast below-normal temperatures from Texas to Maine through Jan. 17. The Northeast consumes about four-fifths of heating oil in the U.S. Corn Under Snow About 500 million bushels of corn are stuck under snow in North Dakota and South Dakota, Minnesota, Nebraska and Wisconsin, according to Martell Crop Projections . Beijing temperatures are forecast to drop as low as minus 16 degrees Celsius tonight, according to the China Meteorological Administration . Northern China may have 50-year record-low temperatures, China Central Television reported. Schools in the Chinese capital were shut after it was hit by the heaviest daily snowfall since 1951 on Jan. 3, the official Xinhua News Agency reported. Premier Wen Jiabao called on local authorities to ensure food supplies, farm production and transportation safety, Xinhua reported. Snowfalls have hampered carriage of coal to power plants in the eastern province of Shandong, reducing inventories of the fuel in the region to 2.7 million metric tons, enough for fewer than nine days of consumption, the Dazhong Daily newspaper reported today. That’s below the recommended minimum of 15 days, it said. Beijing Capital International Airport opened its three runways after more than 500 flights were canceled yesterday because of snow, CCTV reported. Germany, France Temperatures will not rise above minus 6 Celsius in Hamburg in northern Germany tomorrow, Uwe Kirsche , the spokesman for Germany’s national weather service, said by phone. The cold weather is expected to continue for two weeks, he said. Temperatures in central and northern France are likely to remain below freezing until early next week, Meteo France said. Freezing temperatures are expected in central and northern Italy by the weekend, meteo.it said. Power for delivery on Jan. 7 in Germany, Europe’s biggest market, is trading at 48.25 euros ($69.60) a megawatt hour, 12 percent higher than for tomorrow, as demand is set to rise. Consumption in France, the second-biggest market, is expected to peak on Jan. 7 at 92,000 megawatts as temperatures may dip as low as 6.5 degrees Celsius below average that day, according to national grid operator RTE. That’s 400 megawatts shy of the consumption record set on Jan. 7 last year. Germany doesn’t publish a national demand forecast. In western France, where temperatures are expected to be about minus 6 Celsius today, RTE asked households to limit consumption to prevent disruptions. To contact the reporter on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net .

Read the full article →

Raymond J. Learsy: SIPC, The Grinch That Grotesquely Stole Christmas

December 22, 2009

You have probably seen the Television add. A young girl is given a bicycle set in a white painted rectangle say 8 feet by 4. Delighted the young girl happily sits on the bicycle and starts to ride. Barely getting started she is stopped at the white line. “That’s as far as you can ride” scolds an austere gentleman who we are given to understand is a banker. Stunned the young girl gazes at him, befuddled and sad. “Didn’t you read the fine print?” he sternly asks, “It says you can only ride the bicycle in a predetermined space.” Welcome to the world of the Securities Investor Protection Corporation (SIPC). Protection?? The Madoff calamity touched thousands of individuals, their families, many of whom lost what amounted to their life savings. Many had gone to bed one night last December secure in knowing that their financial future was secure, the needs of their families were looked after, only to wake up the next day, their lives devastated, their savings worthless, leaving many destitute without even the means to pay their monthly bills and many, given their ages, with no hope of ever finding a job again. Confronted with disaster, all the Madoff account holders believed that with the SIPC seal prominently displayed on their brokerage statements, the seal of an organization created by an act of Congress, would protect them at least up to the $500,000 SIPC was authorized to pay out.. Whether they were generally aware or not, SIPC, in its literature, such as its information brochure, brayed about its insurance coverage; “SIPC replaces missing stocks and other securities…”, while the Financial Industry Regulatory Agency, Inc (FINRA) would point out in its literature; “SIPC’s coverage also includes protection against unauthorized trading in customers securities accounts”. With input like this even a highly sophisticated investor would have found comfort with the SIPC seal that appeared on their Madoff brokerage statement. And yet, perversely and after the fact, SIPC sniffed our a legal loophole that imperiled probably the most vulnerable,longest standing and probably the oldest of the Madoff victims. They adopted a bizarre method of determining claims namely the ‘cash in cash out method’ which repays customers the money they invested minus the cash they withdrew from their account, and thereby seeks where possible, to squelch their maximum $500,000 obligation. It makes as much sense as if the the Federal Deposit Insurance Corporation (FDIC) would deny paying out the bank statement balance of an interest bearing account of one of its failed banks because the customer withdrew more funds from his account than he deposited into the account over the years the account was active.. Instead of finding a solution that would uphold their moral and legal obligo and return credence to SIPC and what was once thought to be bankable government guarantees it was with brazen callousness that SIPC’s deputy solicitor would dismiss the last hope of thousands of claimants “The claims of the Madoff investors cannot be valued based on the balance shown on their account statements”. Possibly that would be true in some measure in bankruptcy court, but SIPC was specifically created to deal with the issues of failure and fraud, with a $500,000 account limit, and if that was the amount lost by the customer that was the amount SIPC was expected to make good. All sums above that figure would be between the account holder and the bankruptcy court. Testimony before the House Financial Services Committee on December 9th bore out the terrible straits of the victims and the callousness of SIPC . “The money I invested with Madoff represented 30 years of my life savings”, Jeannene Langford from San Rafael Calif. told the committee, “This was my retirement, a down payment for a house, investment for the business I was starting and it was money for my daughter’s education. I do not have thirty years to earn this money again.” According to some, SIPC’s hard line is conditioned in part by a perception that it is grossly underfunded having access to only limited funds and an inherent caution that paying out troublesome claims may not leave enough funding for future claimants. In testimony before December 9, 2009 before U.S. House of Representatives , Subcommittee on Capital Markets, Insurance, Government Sposored Enterprises, Committee on Financial Services, Stephen P. Harbeck President and C.E.O. of SIPC testified that the balance of the SIPC’fund was was $1,188,000,000 (poster’s note- less tha 10% of the Goldman Sachs 2009 bonus pool alone). He also advised that SIPC “may borrow $1 billion line of credit from the United States Treasury.” He then went on to proclaim proudly, “In its nearly forty year history, SIPC has never drawn upon the credit line”. In doing so Mr, Harbeck clearly revealed he is not the man for the job. Instead of doing his utmost to calm the turbulent waters caused by the greatest economic crisis since the Great Depression, at a time of massive claims occasioned by the Madoffs, Lehmans, Stanfords bankruptcies and myriad others, he is busy pinching pennies. And where is our Treasury, so eager to bail out or make whole the likes of Citigroup, AIG, Morgan Stanley, Goldman Sachs and on, with billions upon billions of cash loans, infusions and guarantees of otherwise toxic loans and derivatives.. And what would the prospects have been if, as a condition of the billions going to the banking and Wall Street crowd, they would have been persuaded or coerced to use some of their bumper profits to come, to significantly increase their fees to SIPC so it could substantially increase its lines of credit and conduct itself in a way that would be of real assistance to those victims of financial mismanagement and fraud, and to regain for itself the respect and confidence of the nation’s stockholders. In the meantime Mr. Harbeck, better watch out, that little girl may indeed be riding off on that bicycle.

Read the full article →

Ivy League Schools Seeking Sponsor for Their Inaugural Lacrosse Tournament

December 16, 2009

By Curtis Eichelberger Dec. 16 (Bloomberg) — The Ivy League is trying to sell a sponsorship to a sports championship for the first time, searching for a company to pay television production costs for its inaugural lacrosse tournaments. The league, composed of Brown, Columbia, Cornell, Harvard, Princeton and Yale universities, the University of Pennsylvania and Dartmouth College, announced in January that it would hold four-team tournaments to decide which schools get the automatic bids to the National Collegiate Athletic Association Division I men’s and women’s lacrosse tournaments. In previous years, the regular-season champions would advance to the NCAA event. A presenting sponsorship for each of the men’s and women’s finals will underwrite the cost of broadcasting the game on television and probably provide the sponsor with tickets, advertising and an opportunity to entertain clients, said Ivy League Executive Director Robin Harris . “We don’t have a budget to buy the television time,” Harris said in an interview. “So the sponsor’s money essentially goes to pay the television production costs, and we’ll get some ads to sell during the broadcast.” Television production costs for each of the men’s and women’s finals will run about $50,000, the league said. Harris wouldn’t say how much she expected to get for the rights. Three schools — Cornell, Harvard and Princeton — have won a combined nine men’s and four women’s NCAA championships, including Princeton’s sweep of both the men’s and women’s championships in 1994. Ivy League Appeal An Ivy League crowd will appeal to financial services companies, automobile makers and other manufacturers of high-end products who want to reach a highly educated, wealthy demographic, said T.J. Nelligan, founder of Nelligan Sports Marketing in Little Falls, New Jersey, which negotiates marketing agreements for Ivy League schools including Brown, Princeton and Penn. “You have to convince corporate America that this is a different sponsorship program because it’s the Ivy League,” Nelligan said in an interview. “But it has to be about more than a sponsorship or some TV ads; you have to tell them, ‘This is how we’ll help you move your products to our alumni and lacrosse fans.’” Presidents Opposition The Ivy League can sell sponsorships to certain league events, but it doesn’t control the marketing rights or access to individual schools. School presidents oppose the commercialization of sports and haven’t given sponsors access to alumni lists or students in the past, Harris said. “Sometimes you have to be creative when institutions are reluctant to overly commercialize their student and alumni relationship,” said Scott Becher , 46, president of Sports & Sponsorships in Boca Raton, Florida. “It’s incumbent upon the conference and its media partners to find ways that sponsors can feel good about their ability to make an impression on the fans, without compromising the ideals the Ivy League represents.” Harris said the goal behind televising the lacrosse championships isn’t profit. It’s to allow parents and fans to watch their teams, to promoting university initiatives and to tell stories about the academic and off-field successes of student-athletes. “It helps promote our message that we offer a good athletic experience at the Division I level for academically gifted students,” Harris said. The men’s tournament will be held May 7 and May 9, and the women’s tournament April 30 and May 2. To contact the reporter on this story: Curtis Eichelberger in Washington at ceichelberge@bloomberg.net

Read the full article →

Morgan Stanley Has $173 Million Payday From Livedoor as Horie Faces Prison

December 14, 2009

By Takahiko Hyuga Dec. 15 (Bloomberg) — Livedoor Co., the Japanese Internet service provider whose founder Takafumi Horie faces prison for inflating profits, is providing a payday for Morgan Stanley , Goldman Sachs Group Inc. and Deutsche Bank AG. As the largest shareholder of unprofitable LDH Corp. , the holding company that controls Livedoor, Morgan Stanley will receive 15.3 billion yen ($173 million) of dividends this year, according to LDH financial statements released Nov. 17 and June 29. Goldman Sachs is getting 8.4 billion yen and Deutsche Bank is receiving 6.9 billion yen. Morgan Stanley invested in Livedoor after the company was delisted in April 2006 as prosecutors charged Horie with fraud. The bet is paying off as LDH announced 85 billion yen of dividends this year — equivalent to 86 percent of Livedoor’s market value when it stopped trading. Horie, who remains the second-biggest shareholder , won’t get a payout. “It’s good to fish in troubled waters,” Horie, 37, said in an interview yesterday in Tokyo at an event to promote his new book, “The Theory of Hope.” “The overseas firms had the courage to jump in and take risks. The return makes sense.” LDH’s cash pile shrank by more than half in the 12 months through June. “We decided to unwind cash reserves to pay dividends to investors,” Kiyotaka Mura, LDH’s investor-relations manager, said in an interview. “We have caused inconvenience to the investors as they can’t trade the shares.” Rise and Fall Horie has appealed the 30-month prison sentence he received in 2007 for securities fraud to the Supreme Court. His rise and fall captured the public’s attention as the Tokyo University dropout rode the surging share price of Livedoor to become a billionaire, bid for control of the nation’s biggest broadcaster, ran for public office and then was convicted for faking profits. The entrepreneur , who quit school in 1997 to set up what would become Livedoor, thumbed his nose at Japan’s gray-suited business world by spiking his hair and appearing on the April 2005 cover of the Japan version of ‘GQ’ magazine wearing a checkered suit and pink tie. Less than a year later, Horie became a poster boy for corporate wrongdoing. Livedoor’s shares plummeted 80 percent in seven days in January 2006, following news that prosecutors had raided its offices. The company sued Horie in August 2008. As other investors bailed out, Morgan Stanley and Goldman Sachs stepped in. ‘Sufficient Returns’ Hybrid Capital Second, an investment unit of New York-based Morgan Stanley, bought 1.34 million shares in LDH from Usen Corp. Chief Executive Officer Yasuhide Uno in 2007, according to a Usen statement at the time. The price wasn’t disclosed. Uno bought the stake from Fuji Television Network Inc. in 2006 for 9.5 billion yen. “It’s a principal investment using Morgan Stanley’s capital,” Natsuo Nishio , a Tokyo-based spokesman at Morgan Stanley, said when the purchase of Uno’s stake was announced in August 2007. “Looking at Livedoor’s assets, we judged we can get sufficient returns.” Nishio declined to comment for this story. Hybrid Capital President Takumi Ooga and Usen’s Uno didn’t return calls. Hiroko Matsumoto , a Tokyo-based spokeswoman for Goldman Sachs, declined to comment, as did Deutsche Bank’s Aston Bridgman . LDH changed its name from Livedoor Holding Co. in August 2008. Morgan Stanley owned 1.9 million LDH shares, or an 18 percent stake, as of March 31. The firm received a 12.3 billion yen dividend in June and will get a 3 billion yen special payout by Dec. 16, according to LDH statements. ‘Plenty of Cash’ Goldman Sachs appeared on LDH’s list of major shareholders for the first time in 2006 and was the fourth-largest investor as of March 31. Deutsche Bank was No. 7, according to LDH statements. It wasn’t clear whether Goldman Sachs and Deutsche Bank owned the LDH shares or held them on behalf of clients. “Overseas companies and funds have been targeting Japanese companies that have plenty of cash but have some corporate governance issues,” said Takao Saga , a University of Waseda professor who’s also a director at the Japan Securities Research Institute. “Japanese banks won’t do it because of the reputational risk.” Nippon Life Insurance Co. , banks and more than 1,800 individual investors have filed lawsuits against LDH seeking compensation for losses stemming from Horie’s securities law violations. Reduce Cash Pile LDH posted a loss of 57.6 billion yen for the fiscal year ended March 31 as it paid settlements and set aside money to cover lawsuits. The company had 68.1 billion yen of cash on June 30, 57 percent less than a year earlier. This month’s special dividend, which will be paid to all shareholders except Horie, will reduce LDH’s cash pile by 17 billion yen, according to Mura. Sales at LDH’s Internet and portal businesses rose 19 percent to 2.5 billion yen in the quarter ended June 30 from a year earlier. Livedoor sold its unit Cecile Co. , a Japanese mail-order catalog sales company, for 4.4 billion yen in July. “We will expand our blog and advertisement business as we are kind of the market leader,” LDH’s Mura said. “M&A is another possible strategy,” he said, without providing specifics. To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

Read the full article →

Brent Green: Barack Obama and Muhammad Ali: Ironies of War and Peace

December 8, 2009

On November 19th, USA Today published a 64-page special tribute edition in homage

Read the full article →

Darling Considers Plans for Taxes on British Bankers, Wealthiest Families

December 6, 2009

By Gonzalo Vina Dec. 6 (Bloomberg) — Chancellor of the Exchequer Alistair Darling this week may reverse a tax reduction for Britain’s richest households and will consider a levy on bankers’ bonuses in efforts to win over voters before next year’s election. Darling said today that lowering the inheritance tax for the richest people is no longer a priority and didn’t dismiss an interviewer’s suggestion on BBC Television’s Sunday AM show that he is considering a one-time charge on bank bonuses. The chancellor is scheduled to publish a Pre-Budget Report with the tax plans on Dec. 9. “I really can’t believe it would be the first priority of any government, at this time, to give a tax cut to the top 2 percent of estates in this country,” Darling said in the broadcast. Darling and Prime Minister Gordon Brown are seeking to persuade voters that David Cameron ’s Conservative Party, which is sticking to a similar inheritance tax plan, is siding with the rich at a time when the country is recovering from the worst economic crisis since World War II. That strategy has helped Brown’s Labour Party erode Cameron’s lead in opinion polls. Darling said in 2007 that he would raise the inheritance tax threshold to 350,000 pounds ($578,000) from 325,000 pounds for single people and to 700,000 pounds from 650,000 for couples, starting April 2010. Cameron’s Conservatives want to abolish the tax for single people with estates below 1 million pounds and for couples with estates below 2 million pounds. ‘Lurch to Left’ “If the Labour Party wants to say don’t aspire to get on in life, then so be it,” George Osborne , the Conservative lawmaker who shadows Darling in Parliament, told the BBC program. “It’s part of their lurch to the left.” Darling said he will not be “held to ransom” by banks threatening staff defections if their bonuses are curtailed, indicating he is considering plans to levy a one-time charge on bankers if they exploit loopholes on current bonus rules. “We do have a veto over the package,” Darling said of government-controlled Royal Bank of Scotland Plc . “We are not going to be held to ransom by people who believe you can pay extremely large bonuses regardless of what’s going on.” Osborne said he “wouldn’t rule out” such a charge if his party defeats Labour in the election, which has to take place before June. An ICM Research poll for the Sunday Telegraph showed that the Conservatives are on course to obtain a majority of between 20 and 25 seats in the 646-seat House of Commons . A ComRes Ltd. survey Dec. 1 showed that the U.K. may be heading for a so- called hung Parliament, with Cameron leading Brown by 10 percentage points, down 3 points from October. ‘Party of Rich’ A YouGov Plc poll in today’s Sunday Times showed that more than half of the 2,000 people interviewed viewed the Conservatives as the party of the rich. Cameron said Brown had been “spiteful’ in his efforts to tell voters of his privileged upbringing and elite schooling. Darling today stepped up the attack, saying Osborne’s plea to voters to endure tougher times isn’t consistent with tax cuts for the rich. Darling said this week’s budget statement will spell out some detail on how he plans to implement his pledge to reduce the deficit by as much as half over four years. In April, the budget suggested the chancellor would have to find as much as 60 billion pounds to achieve this. Darling has already announced tax increases that will account for about one-quarter of that amount, and has earmarked about 9 billion pounds by cutting waste in government departments, leaving him the challenge of finding a further 40 billion pounds by reducing government spending. NHS Program Darling told the BBC today that he will scrap a 12.4 billion-pound computer program for the National Health Service that is being developed mainly by iSoft Plc . Similar reductions, rather than staff cuts in schools and hospitals, would indicate “the direction of travel” in this week’s report, he said. “The NHS had quite an expensive IT System and I don’t think we need to go ahead with it now,” he said. Brown said yesterday in his weekly podcast that a plan to move more government services online would save about 400 million pounds a year. Darling’s view is that the economy is too fragile to take more steps to repair the 175 billion-pound deficit this year, a Treasury official said this week. Darling will challenge the Labour government’s opponents to spell out their plans on what they plan to reduce, the official said. Pound Rebounds The pound snapped two weeks of declines against the euro last week as industry reports showed that U.K. services and manufacturing industries expanded in November, indicating that the recovery is taking hold. Darling’s approach, contrasting with Conservative Party calls to make deeper and faster cuts, won the support of two groups in London today. The National Institute of Economic and Social Research , a London-based research group that counts the Treasury and the Bank of England as clients, said Darling should keep stimulating the economy during the next few months before reducing the deficit. The British Chambers of Commerce said the government should refrain from cutting the fiscal deficit too quickly as the nation’s economic recovery faces “major risks,” Darling will lower his forecast for the U.K. economy this year, saying the financial crisis has inflicted far deeper pain than he predicted in April, a government official said Nov. 27. Gross domestic product will fall 4.75 percent in 2009, compared with the 3.5 percent drop forecast seven months ago, the official said. Darling said today that growth in 2010 will be “moderate.” Treasury officials said last week that Darling will scale back his estimate for the cost of bailing out Britain’s banks to no more than 10 billion pounds, from 50 billion pounds. The reduction in the sum set aside in the government’s accounts to pay for losses will shave about 40 billion pounds off the Treasury’s debt, now about 792 billion pounds, the officials said. To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

Read the full article →

Nadal Wins on Clay to Give Spain Davis Cup Final Lead over Czech Republic

December 4, 2009

By Alex Duff Dec. 4 (Bloomberg) — Rafael Nadal beat Tomas Berdych to give Spain a 1-0 lead against the Czech Republic in the Davis Cup tennis final. Nadal won 7-5, 6-0, 6-2 showing flashes of his best shot- making as the best-of-five series began in Barcelona. It was his first match on his favorite clay surface in six months. “I was very nervous in the first set but I opened up a little bit and in the second set I was at a good level,” Nadal told Television Espanola. “I’m very happy.” Spain is chasing a fourth title in a decade in the men’s team competition. The Czech Republic is through to its first final since winning the 1980 edition. Nadal broke Berdych’s serve in the first game only to lose his own first service game. The four-time French Open winner hit a down-the-line winner as he broke Berdych again to lead 6-5 and served out the set. The world No. 2 grew in confidence against 20th-ranked Berdych, cruising to the second set in 34 minutes without losing a game. Nadal said he dropped off “a little” in the third set before winning the match with a smash at the net. Nadal began the year by winning the Australian Open but lost in the fourth round of the French Open on May 31, ending a four-year unbeaten run at the Grand Slam. He couldn’t defend his Wimbledon title because of tendinitis in both knees, lost in the U.S. Open semifinals and failed to win a set at last week’s ATP World Tour Finals. To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net

Read the full article →

Video: Grossman Sees `Strength’ Across HSN’s Product Offerings: Video

November 27, 2009

Nov. 27 (Bloomberg) — Mindy Grossman, chief executive officer of HSN Inc., talks with Bloomberg’s Betty Liu, Jon Erlichman and Adam Johnson about the company’s sales outlook during the holiday season. Grossman also discusses the television retailer’s merchandising strategy and customer base. (Source: Bloomberg)

Read the full article →

QVC Black Friday DEALS: Full Details

November 22, 2009

NEW YORK — Television retailer QVC has made aggressive plans to keep shoppers watching – instead of mall-hopping – on Black Friday, an event it has traditionally ignored. The leading network for TV shoppers promises special deals and a healthy dose of new items for sale starting on Thanksgiving night. Program host Dave James plans to stay awake for 28 hours of telethon-like coverage. The day after Thanksgiving is traditionally the biggest shopping day of the year, called “Black Friday” because it’s key for many businesses to go in the black, or turn a profit. QVC, which competes with ShopNBC and the HSN home shopping network, has not wanted to get caught up in the frenzy and has always treated it as just another day for its sales pitches, said Doug Rose, the network’s vice president of programming and marketing. “This year, and we’ve been planning on this for many months, we really expect to join the fray with the other retailers,” Rose said. QVC is hoping for a “Black Friday” of its own. Hurt by the same recession that affected other retailers last year, QVC’s fourth quarter revenue in 2008 was down 8 percent from the previous year. So far this year revenue has been essentially flat, although the value of the items that QVC is selling is down slightly. The network generally offers one “special value” item to customers each day. For “Black Friday” coverage, which starts at 8 p.m. EST on Thanksgiving, there will be three. Every hour, there will be a specially priced offer, and there will be five hours of gifts that have never been available before on the network, QVC said. “There are a lot of people who think of going to the mall on `Black Friday’ as dental surgery – painful and awful,” Rose said. “We’ll be a good alternative.” James, a former radio disc jockey, said the closest thing he’s come to his upcoming 28-hour marathon is hosting radiothons for about half the time. He said he’s working with a nutritionist to prepare him for the ordeal. He’s convinced his family to have an early Thanksgiving dinner and hopes the turkey will let him have a long nap before he goes to QVC’s Pennsylvania studio. “There’s going to be coffee – a lot of coffee,” he said. ___ On the Net: http://www.qvc.com

Read the full article →

Obama Starts Asia Visit With Trip to Japan to Reassert U.S. Role in Region

November 13, 2009

By Edwin Chen and Julianna Goldman Nov. 13 (Bloomberg) — President Barack Obama arrived in Japan today to start an eight-day swing through Asia, meeting with major U.S. creditors and trading partners to assure them he intends to maintain American influence in the region. After a meeting and news conference with Japanese Prime Minister Yukio Hatoyama tonight in Tokyo, Obama will deliver a speech tomorrow intended to articulate his vision for a Pacific alliance that focuses on geopolitical and economic issues including trade, climate change and halting the spread of nuclear weapons. Analysts such as Fred Bergsten , director of the Peterson Institute for International Economics in Washington, said the speech and the rest of Obama’s trip will be closely watched by Asians hoping to see the U.S. pursue a more active agenda for the region as a counterweight to China. “There’s been pretty widespread dismay in Asia about the lack of active engagement so far by the Obama administration on trade and economics more broadly with the Asian countries,” Bergsten said. “The inactivity of the U.S. on anything, on trade in particular, is enabling the Chinese” to make gains. Administration officials said Obama wants to send an explicit signal that the U.S. is not ceding leadership. Long Haul “It’s a common perception in the region that U.S. influence has been on the decline in the last decade, while Chinese influence has been increasing,” said Jeffrey Bader , director of East Asian affairs on the National Security Council. “One of the messages that the President will be sending in his visit is that we are an Asia-Pacific nation and we are there for the long haul.” With stops in Tokyo, Singapore, Shanghai, Beijing and Seoul, Obama will look to improve trade and strategic cooperation with some of the world’s fastest-growing economies and develop a relationship with a new Japanese leader who has indicated he will move to make his nation more independent of the U.S. By giving the speech in Tokyo, Obama is reaffirming that the U.S. alliance with Japan is unchanged by the ascendance of Hatoyama, whose Democratic Party of Japan in August ousted the Liberal Democratic Party after half a century of control. Hatoyama, 62, and the DPJ have called for a more equal relationship with the U.S., and they pledged to alter a 2006 accord that would relocate an American military base on the island of Okinawa. In an interview with NHK Television Nov. 10, Obama said Japan should honor the agreement. Afghanistan Aid Obama also is seeking Japan’s help in keeping together the U.S.-led alliance in Afghanistan, currently the central focus of the administration’s foreign policy. Japan this week moved to ease any U.S. resentment over Hatoyama’s decision to end a naval refueling mission in support of the war by pledging to give $5 billion in aid over five years to rebuild Afghanistan. The two leaders also will issue statement targeting an 80 percent reduction in the world’s greenhouse gas emissions by 2050, Nikkei English News said, without citing anyone. From Japan, Obama, 48, is stopping in Singapore for meetings with leaders from the 20 other economies that are part of the Asia-Pacific Economic Cooperation group. The members of the organization make up more than half of the world’s gross domestic product. After a day of meetings he flies to China for a two-day visit, then makes a stop in South Korea before heading home. Economic Stakes The economic stakes for the U.S. are high in Asia. An International Monetary Fund report last month forecast the region will grow 5.75 percent in 2010, compared with 1.25 percent growth expected for the Group of 7 economies. China and Japan are the two biggest holders of U.S. Treasury securities, with a combined $1.5 trillion, as the country borrows to finance record budget deficits. China, Japan, South Korea, Taiwan and Singapore represent 25 percent of total US trade, according to U.S. Census Bureau figures . As the region with the fastest-growing economy, Asia is crucial to the U.S. and global recovery. “Asia is becoming the most dynamic region in the world,” said Michael Green , an Asia expert at the Center for Strategic and International Studies, a Washington think tank. “It’s the source of recovery from the current economic crisis.” Asians have turned to one another rather than the U.S. to improve their economic prosperity. Trade Agreements More than 70 free-trade arrangements have emerged among Asia countries that largely exclude the United States, Green said. South Korea negotiated a trade agreement with the U.S. in 2007 that’s still awaiting congressional ratification. Along with making his first Asian trip as president, Obama also will be meeting with all members of the Association of Southeast Asian Nations, a group that includes the military government of Myanmar. Obama aides said they don’t anticipate the president will have direct discussions with Prime Minister Thein Sein of the country formerly known as Burma, which is under U.S. sanctions. The administration has called on Myanmar’s government to take steps to show a genuine commitment to democracy. That includes allowing detained opposition leader Aung San Suu Kyi to meet party colleagues. To contact the reporters on this story: Edwin Chen in Tokyo at echen32@bloomberg.net ; Julianna Goldman in Tokyo at jgoldman6@bloomberg.net

Read the full article →

Obama Pushes Japan Before Summit as Both Sides Work to Solve Base Dispute

November 11, 2009

By John Brinsley and Sachiko Sakamaki Nov. 11 (Bloomberg) — President Barack Obama says he expects Prime Minister Yukio Hatoyama to honor an agreement on American troops in Japan as the two countries work to keep the issue from overshadowing this week’s summit. Hatoyama took office two months ago having pledged to alter a 2006 accord that would relocate the Futenma Air Base within the island of Okinawa, host to more than half of the 47,000 U.S. troops stationed in Japan. His Democratic Party of Japan wants to move the facility off the island in response to local complaints about pollution, noise and crime. Obama, in an interview yesterday with NHK Television , said Japan should keep to the agreement. The two countries later agreed to create a cabinet-level working group to resolve the dispute, which threatens to delay a $10.3 billion plan to ease Okinawa’s burden by moving 8,000 Marines to Guam. Both sides “will try to de-focus the issue by postponing a final decision,” former Japanese ambassador to the U.S. Shunji Yanai said in an interview. “Under the present circumstances, there’s no other choice. The issue will not be resolved during President Obama’s visit and that will increase the frustration on the U.S. side.” The leaders will meet in Tokyo on Nov. 13 to discuss the war in Afghanistan, climate change and North Korea’s nuclear weapons program. It will be their second summit since Hatoyama, citing Obama’s call for change as his inspiration, cast out the party that had governed Japan more half a century. Naval Refueling Japan yesterday moved to ease any U.S. resentment over Hatoyama’s decision to end a naval refueling mission in support of the war in Afghanistan by pledging to give $5 billion in aid over five years to rebuild the country. Hatoyama, 62, has called for a more equal relationship with the U.S. and his policies include a review of the bilateral security alliance that next year marks its 50th anniversary. Obama yesterday said that while the U.S. can be patient, Japan should keep its pledges. “It’s perfectly appropriate for the new government to want to re-examine how to move forward,” Obama, 48, told NHK. “I’m confident that once that review is completed that they will conclude that the alliance we have, the basing arrangements that have been discussed, all those things serve the interest of Japan and they will continue.” Okinawa Incidents The DPJ favors changing the U.S.-Japan Status of Forces agreement that protects American troops from Japanese legal prosecution, and Okinawans for years have demanded reducing the military presence. In the latest of a series of incidents, an American serviceman is in U.S. custody on Okinawa in connection with a hit-and-run death of a local man four days ago. Hatoyama yesterday told reporters that the U.S. should hand the suspect over to Japanese authorities. Members of his cabinet have given conflicting statements on what to do about the base, further angering people on Okinawa. Foreign Minister Katsuya Okada said on Oct. 23 that consolidating Futenma with the nearby Kadena base was “one idea.” Defense Minister Toshimi Kitazawa four days later said keeping the base in Okinawa “wouldn’t violate” the party’s election pledge. Asked about the comment, Hatoyama the same day said, “I don’t necessarily agree.” Protest Rally More than 20,000 Okinawa residents held a protest rally against the U.S. base on Nov. 7, the Associated Press reported. “We Okinawans feel betrayed,” Democratic Party lawmaker Shokichi Kina said in an interview. “The prime minister and other DPJ officials campaigned for moving Futenma off Okinawa. They should keep this pledge to voters.” Doing so would scuttle the plan to transfer the Marines to Guam, U.S. Defense Secretary Robert Gates said last month in Tokyo. It would also complicate Hatoyama’s stated intention to “deepen” Japan’s ties with the U.S. Okada and U.S. Ambassador to Japan John Roos yesterday agreed in a meeting to set up a group to resolve the situation. It will include Okada, Secretary of State Hillary Clinton , Gates and Kitazawa. Okada said Roos told him the U.S. hasn’t changed its position. Members of the Liberal Democratic Party , which governed Japan from 1955 with only one 10-month interruption until losing in September, have criticized Hatoyama for endangering Japan’s relationship with its biggest ally. “The government is supposed to fulfill its responsibilities to the international community, the Japanese people, the Japan-U.S. alliance and Okinawa,” former defense chief Shigeru Ishiba said in an interview. “The most urgent task now is to remove the danger of Futenma as soon as possible and move forward with the relocation plan” on the island. To contact the reporters on this story: John Brinsley in Tokyo at jbrinsley@bloomberg.net ; Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net

Read the full article →

`And What a New World It’s Going to Be’: Voices of Berlin Wall’s Collapse

November 9, 2009

By Hellmuth Tromm and David McQuaid Nov. 9 (Bloomberg) — Some rejoiced, others feared. Some stared at television sets, others left their children in bed and ventured out. All agreed life changed forever. Following are extracts from interviews with former activists and officials in Germany and Europe on what they were doing and what went through their minds as the Berlin Wall was breached 20 years ago today. WILLI KUHLMANN, 74, who was called up as a border guard in East Germany the day after the Wall went up in 1961: “My first thought was, ‘This is freedom,’ when relatives from West Berlin phoned to say the Wall was open. We jumped in the car and drove to the Brandenburg Gate from the east side. “I’ve never seen so many happy people and so much broken glass from all the bottles of beer and champagne people were drinking to celebrate.” CHRISTOPHER MALLABY , 73, U.K. ambassador to West Germany and then to Germany from 1988 to 1992: “I went early on the day after to Berlin, in a British army helicopter, landed just on the west side of the wall, very early on a freezing morning, and there were crowds of people. I thought they were Westerners, come like me to see history being made. But when I mixed in the crowd and started chatting, I discovered that they were East Germans who’d come through the wall, round the back to look at it from the Western side. “I said ‘why?’ They said: ‘You can’t believe you’re out until you’ve seen this thing from the Western side.’” “My wife and I went into East Berlin through Checkpoint Charlie. As we waited, people were streaming back, East Berliners who had gone for the day, too numerous to be checked by the police. In the crowd was a little boy, probably three years old. He was pulling a string and on the string was a very large plastic model of a London double-decker bus. “And when I saw that I thought ‘Well, we’re in a new world, and my goodness what a new world it’s going to be.’” TIMOTHY GARTON ASH , 54, Oxford University professor and author of nine books on the transformation of Europe: “The actual night I was asleep at home and I got there the next day. I had spent many years living in East and West Berlin and to walk across the Potsdamerplatz as the Wall came down was something utterly incredible, truly incredible. “It was as if the Alps had just come down. It was something as incredible as that. “I think we all thought that what was clear is that it was the end of Communism in Europe, the end of the Cold War. Actually it was the end of the 20th century.” HANS TIETMEYER , 78, former Bundesbank president who worked in the German Finance Ministry when the Wall fell: “I was very much joyed and encouraged, but at the same time I had a little bit of fear and said to my colleagues: ‘I hope very much that no one is shooting,’ because if that had happened, that would have been a catastrophe, I am sure. But it is very important that this didn’t happen.” MARIANNE BIRTHLER, 61, a former church worker who opposed the communist regime, now head of the government commission in Berlin in charge of the Stasi files: “I remember vividly the terror when I saw the border guard sitting in his little shelter stamping my passport right next to my picture. For a second I wondered whether they would let me back in again. You know, I still had my children in bed at home. It worked out OK after all. “Those who were actually in that huge crowd knew that it would have been impossible to undo this a day later, to close the border again.” DANIEL BARENBOIM , 66, conductor who led a free concert of the Berlin Philharmonic for East Berliners on Nov. 12, 1989, and will conduct an anniversary concert tonight, now chief conductor at Berlin’s Staatsoper Unter den Linden. “I was recording a Mozart opera, ‘Cosi Fan Tutte,’ with the Berlin Philharmonic. We had been out to dinner and we didn’t hear about it, and I was staying in a hotel. I got up in the morning and I saw the newspaper under the door saying that the wall had gone down. I woke up my wife, who was going back to Paris to see our children later that day. I woke her up all excited and said. ‘Look what happened!’ and she said ‘I don’t think that is a very good joke after such a late night.’ “On the Friday morning, we had a session, and the orchestra was in great agitation. They wanted to do a concert for the inhabitants of East Berlin. For most of them it was the first time hearing the Berlin Philharmonic, and the first time in the Philharmonie. It was wonderful.” GEORG DIEDENHOFEN, 49, now a journalist with ARD television who 20 years ago worked for Radio in the American Sector in Berlin, broadcasting to much of East Germany from the west: “The people were getting more and more aggressive, and there was a feeling of pressure against the soldiers, so they had to do something. At 10 p.m. at the gate in Bornholmerstrasse, the soldiers went away from that pressure and opened the gate and the people as a stream went from east to west. “One image that’s burned in my soul at that evening: a woman, maybe she was in the mid-30s, crossed the Wall and went through the door in the west, and in that moment she cries ‘Yeees!’ and goes down on her knees. It was unbelievable — the most used word that evening, unbelievable. “Freedom was the word I couldn’t fill with sense before because I lived in a free country.” HORST TELTSCHIK , 69, senior adviser to former Chancellor Helmut Kohl , who was meeting Poland’s Lech Walesa in Warsaw: “He told the chancellor, ‘What’s going on in the GDR?’ before the gate was opened. ‘This will lead to German unification.’ After this meeting we got the first hints that something was going on in Berlin. It was not easy to get information because you couldn’t just use the telephone. “And then the chancellor got a message that the German parliament with all members of parliament stood up singing the national anthem and that the gate might be open. “It was a small group, the chancellor with three of his staffers and we were really excited and there was a bottle of champagne provided from the Polish government and I said let’s open it and drink. But he was very quiet, the chancellor was very quiet. And I understood that, because in such a moment you have to think about the next steps, the next decisions.” JAN KRZYSZTOF BIELECKI , 58, economic adviser to Poland’s Solidarity movement in the 1980s, then Polish prime minister in 1991, now chief executive officer of Bank Pekao SA in Warsaw: “We watched it on TV. Also due to the fact that at that time we had a visit by Chancellor Helmut Kohl to Poland that was broken off, and he decided to return to Germany. We also watched because before the Wall collapsed, there was some nervousness about what the reaction of the Communist regime might be. “We, as part of the Solidarity caucus, thought this would be a good chance for us to accelerate the change. And shortly afterwards we produced a kind of memo to the Solidarity leadership to say we needed acceleration in Poland.” BAERBEL PLATH, 63, East Berlin resident who was born in West Berlin and moved with her parents to the German Democratic Republic when she was an infant: “My feelings were very mixed. It was clear to me that the GDR wouldn’t exist much longer, and that this would mean that the standard that we had reached, in terms of social policies, wouldn’t be able to be maintained and that many people would lose their jobs.” MARTIN JANKOWSKI, 44, student and pro-democracy activist in Leipzig in 1989 and now an author based in Berlin: “When the Wall came down I was visiting my parents. I was sitting in front of TV. We were demonstrating or watching TV. There was no sleep, no work, only these two things. “The truth is, what happened in that night was a shock for me. Because I had to understand in a way this is the end of the revolutionary process for us. There would not be any options any more. Until Nov. 9 those weeks had been full of possibilities, full of discussions about the way to develop East German society. With this very quick fall of the Berlin Wall, all those discussions were over. Then it was only the question of how quickly will the two German states unify.” SLAWOMIR SKRZYPEK , 46, former student activist arrested for his work with Poland’s Solidarity movement, now governor of the National Bank of Poland: “Many of my friends, many opposition activists, were persecuted. I myself was interned, I was sentenced, and after that I was detained many times. Just like many of my friends, activists who couldn’t accept the reality of the day. “Thanks to our collective resistance, we showed — all of us, from the smallest to the greatest — that change was inevitable in our country. And I’m happy that these changes went so far that today we can boast of independence. Back then it wasn’t so certain.” ZBIGNIEW JAGIELLO , 45, opposition student activist in Poland in 1989, now chief executive officer of PKO Bank Polski SA, the country’s biggest bank: “We felt like Berliners at the time. The beginning was in Poland in 1980 and actions started at that time meant that day by day we removed bricks from the Berlin Wall and this situation in 1989 was that we did our job well.” LASZLO RAJK , 60, disseminated banned literature under communism and a member of Hungary’s first democratically elected parliament of 1990, now an architect in Budapest. His father was a post-war communist interior minister who was executed in 1949: “Not only me, but a lot of friends of mine were absolutely enthusiastic, feeling that probably it’s possible or plausible after several decades: the fall of the Berlin Wall and the Soviet empire. I deliberately say we were enthusiastic and not revolutionary because that is the particularity of this change, that it was a peaceful transition. “I wouldn’t say that all of a sudden everyone decided that ‘I’m going to be a good guy.’ It was a fight, but fortunately beside the table and not on the street.” MIKLOS HARASZTI , 64, co-founder of the Hungarian Democratic Opposition Movement in the 1970s who took part in the negotiations in 1989 for free elections: “We knew instinctively after the Wall fell that we are as free as we had imagined we would be. “When the Wall fell, I knew that the big cycle is over and has reached the beginning and that this liberation is the final one and we have reached a development which now depends on our own will and our own responsibility.” JAN CARNOGURSKY , 65, former dissident and lawyer who became Slovak prime minister in 1991-1992 in the then-federal Czechoslovakia: “At the time I was in prison in Bratislava and yes, I have heard about it from my defender, my lawyer and later the second or third day, from newspapers, from communist ones, that I had gotten into prison. “I lived with the knowledge that Europe was divided by the Berlin Wall, and suddenly this Berlin Wall collapsed.” DAVID CERNY , 42, Czech sculptor who first gained recognition for painting a Russian tank pink after the Velvet Revolution in then-Czechoslovakia: “The falling of the Berlin Wall was amazing and enormously welcomed and we were fascinated and in that time there was nothing going on here. There were only demonstrations against the communists. We were basically jealous.” OTMAR ISSING , 73, former European Central Bank chief economist and sat on the government’s Council of Economic Advisors from 1988 to 1990 as the Wall was toppled: “We were locked in a meeting of the Council of Economic Advisors in Wiesbaden, writing our annual report. I called my wife at midnight, and she was hysterical. ‘All these images, and it’s all passing you by.’ But when I finally got out of the meeting on Nov. 15, it was the first time in ages that we finished our report on time.” EDGAR MOST , 69, vice president of the former East German central bank: “In the morning, I got a call from my daughter. She said ‘Daddy, I was in West Berlin.’ I said: ‘Where were you?’ ‘In West Berlin. Didn’t you see on TV? The Wall is open.’ ‘No!’ “Only then did I switch on the television. So basically, I slept through the fall of the Wall.” “When I saw the crowds of people standing at the wall I was thinking: ‘Hopefully, the guns stay where they are. There are always idiots among people and if one of them starts shooting.’ I was terrified.” To contact the reporters on this story: Hellmuth Tromm in Berlin at htromm@bloomberg.net David McQuaid in Warsaw at dmcquaid1@bloomberg.net

Read the full article →

Imation, Callaway Golf Trade Below Book Value: Statistical Spotlight

November 6, 2009

Nov. 6 (Bloomberg Television) — Imation Corp. and Callaway Golf Co. are highlighted on Bloomberg Television’s “Statistical Spotlight” as debt-free companies that trade below their book value. The companies were the only two among members of the Standard & Poor’s 500 index and Standard & Poor’s 400 Mid- Cap index to meet the criteria: share price below book value, and no short- or long-term debt. The figures are for the most recent quarter reported. Imation makes DVDs and videotapes under brands such as Memorex. Callaway Golf is the maker of Big Bertha and Steelhead golf clubs. # # -0- Nov/06/2009 17:08 GMT

Read the full article →

Bin Laden’s Money Welcome as Desperate Independent Filmmakers Seek Funding

November 4, 2009

By Kristen Schweizer Nov. 4 (Bloomberg) — Todd Solondz , the U.S. director whose movie “Happiness” was nominated for a Golden Globe award in 1999, knows how desperate raising funds for a film has become. “Look, I mean if Osama bin Laden gave me money to film I’d take it,” he said in a phone interview from Singapore. “It’s always difficult for a filmmaker and particularly in these economically troubled times.” Solondz and other independent U.S. filmmakers with funding difficulties even before the financial crisis are calling for government support as hedge funds retreat and credit lines are frozen. As the American Film Market , the largest gathering of the world’s independent film industry, opens in Santa Monica today, the U.S.’s lack of European-style public support for filmmaking is being felt more than ever. “We need to have some kind of government funding,” said first-time U.S. filmmaker Tina Mabry , who spent 18 months raising money for “Mississippi Damned,” an award-winning movie about three children in an abusive household. “In America, independent film is almost a dying art.” U.S. film production has fallen 26 percent since 2005 to 520 films last year, while in Western Europe it rose 9 percent to 1,145, according to David Hancock , the London-based head of cinema at market researcher Screen Digest. Global film-production investment in 2008 was $25.8 billion, with the European Union’s share at $7.04 billion, he said. France alone spent 1.26 billion euros ($1.85 billion) on film production, 26 percent more than 2007, according to the European Audiovisual Observator . U.S. vs Europe While U.S. and European filmmakers are grappling with funding woes in the economic slump, the old continent’s public support is giving it an edge, Hancock said. Take German producer Jens Meurer . His latest film “The Last Station,” about the final days of Russian novelist Leo Tolstoy , was shot in Germany and Russia, with much of its 14 million-euro budget coming from public funds. Gap loans and movie presales made up the rest, said Meurer. The star power of Oscar-winner Helen Mirren and Christopher Plummer , Captain Von Trapp in “The Sound of Music,” wouldn’t have been enough to lure U.S. funds to the film, he said. “I couldn’t have made this film in the U.S. as we did here in Europe, with the financing,” said Meurer, of Berlin-based production house Egoli Tossell Film AG . “It’s a political understanding in Europe that film is a cultural product and needs public support.” No Return U.S. incentives are tied to specific conditions and “not readily turned into cash,” said Jean Prewitt , Santa Monica- based chief executive officer of the Independent Film & Television Alliance , organisers of the American Film Market. “It’s harder to piece it together,” she said. Funds “are non-transferable or refundable if you don’t have a local tax liability.” Funding probably will never return to pre-recession levels, independent producer Mark Damon said. He plans to raise money for a new project at the American Film Market by selling rights to international distributors. The as-yet untitled comedy will star Patrick Dempsey , he said. “We’ll probably be able to conclude some presales and we have some equity financing, so that picture will come to fruition,” Damon said. Gap Financing Gap financing, which traditionally provided as much as 25 percent of a film’s budget, broke down as banks avoided risk, said Angus Finney , a manager at Film London, which joins producers and financiers at the annual London Film Festival every October. Financing from hedge funds, which could have formerly paid for as much as 35 percent, has all but disappeared, he said. Banks and hedge funds that have invested in films in the past include Deutsche Bank AG , Barclays Plc, Merrill Lynch & Co., JPMorgan Chase & Co, Dune Capital Management LP and Elliot Associates LP. Individual investors have included Larry Ellison of Oracle Corp., Paul Allen of Microsoft Corp., Fred Smith of FedEx Corp. and property developer Tom Rosenberg . “A film that has a $5 million budget in the U.S. is now very hard to get made,” said Finney. The most vulnerable films are those between $2 million and $7 million, he said. In Europe that money can be raised by making the film a co-production, drawing public funds from two countries, he said. “It’s easy to see how Europe can become effective strategically in putting films together,” Finney said. Tax Breaks Many U.S. states have started offering tax incentives for filming to revive local economies. Michigan offers one of the world’s highest refundable tax credits, about 40 percent for in- state expenditure. Louisiana provides as much as 30 percent credit on in-state investment of more than $300,000. New York’s package includes exemption of local sales tax on machinery and equipment in production and postproduction. Solondz who put up much of his own money to make 2004’s “Palindromes,” shot his latest $4.5 million film, “Life During Wartime” in Puerto Rico, whose 40 percent tax benefit is among the world’s highest. French director Luc Besson’s film company, EuropaCorp., shot Jim Carey’s latest film, “I Love You Phillip Morris,” in Louisiana, and took advantage of the tax break there. The film is due for release around Valentine’s Day 2010. French Support In Europe, France is the most generous, granting subsidies and loans, and also requiring television broadcasters like Vivendi SA’s Canal Plus to set aside revenue for films. A part of the proceeds from ticket sales also go to filmmakers. Canal Plus put 210 million euros toward the industry last year, said Neil Gillard , a partner in the media department of law firm Reed Smith LLP in London. Broadcasters are also required to broadcast French films at certain times, he said. “If you’re Claire Denis , you can live in France and flourish and be valued as a filmmaker,” said Solondz. “But if she were in America, she would not have a career. There’s no system to subsidize a filmmaker like her.” Denis won the Golden Palm award for 1988’s “Chocolat” and was nominated for a Golden Lion at this year’s Venice Film Festival for her newest release “White Material.” ‘Slumdog Millionaire’ The U.K. offers tax credits as well as funds from the national lottery and government aid for the film industry through BBC Films, the U.K. Film Council and Film4, which helped pay for last year’s Oscar winner, “Slumdog Millionaire.” The U.K. Film Council awarded Lions Gate U.K. Ltd. 120,000 pounds ($196,800) for Heath Ledger’s last film, “The Imaginarium of Doctor Parnassus” and 100,000 pounds for Oscar- winner Jane Campion’s latest film, “Bright Star.” U.K. funding can cover up to 60 percent of a film’s costs, Finney said. The EU’s Media Programme grants a maximum of 60,000 euros to help develop a single film and 150,000 euros for a maximum of three films, said Nils Koch , its spokesman. “Europe sort of stands for loads of soft money, or public money for filming,” said Agnieszka Moody , who heads the Media Programme’s U.K. office. The U.S. has no co-production agreement with Europe, though Americans shooting in Europe get tax incentives and vice versa. “An area that may make sense for the U.S. to broaden its coverage is in co-production treaties,” said Jonathan Wolf , managing director of the American Film Market. “But there’s a strong view here in the first amendment and that government is not involved in content and what you’re producing.” Big Money “Planet 51,” an animated film co-produced in the U.K. and Spain, starring Jessica Biel , Gary Oldman and John Cleese , benefited from tax incentives in both countries, said Michael Ryan , international director at London-based HandMade Films, which produced the film with Spain’s Ilion Animation Studios. “I have no conception how an American filmmaker gets a film made,” Ryan said. “There’s absolutely no support whatsoever. The U.S. government ought to look at this. It’s a big money maker.” To contact the reporter on this story: Kristen Schweizer at kschweizer1@bloomberg.net

Read the full article →

Phillies’ Game 5 World Series Win Over Yanks Sees Rating Drop From Game 4

November 3, 2009

By Michael Buteau Nov. 3 (Bloomberg) — Television ratings for the Philadelphia Phillies’ win over the New York Yankees last night were 5 percent lower than for Game 4 the previous evening. The fifth game in the best-of-seven World Series was seen in an average of 12.8 percent of U.S. households in the top 50 television markets, News Corp.’s Fox Sports said in a news release, citing Nielsen Media Research. Game 4 of the Series, which the Yankees won, was seen in an average of 13.5 percent of U.S. television homes, making it the highest-rated World Series game since 2004, when the Boston Red Sox clinched their first title in 86 years. Last night’s game still pulled in ratings 15 percent higher than for Game 5 a year ago, when the Phillies clinched the Major League Baseball title in a contest spread over two days because of rain. The decline in ratings this year from Game 4 may have reflected competition from the “Monday Night Football” game between the Atlanta Falcons and New Orleans Saints on Walt Disney Co.’s ESPN network. The Phillies beat the Yankees 8-6 at Citizens Bank Park in Philadelphia, narrowing New York’s Series lead to 3-2. Game 6 is scheduled for tomorrow at Yankee Stadium, where New York will attempt to clinch its record-extending 27th title. To contact the reporter on this story: Michael Buteau in Atlanta at mbuteau@bloomberg.net .

Read the full article →

Video: Carl Icahn Discusses His Support for CIT Bankruptcy Plan: Video

October 30, 2009

Oct. 30 (Bloomberg) — Billionaire investor Carl Icahn talks with Bloomberg’s Television about his decision to change his vote in favor of CIT’s proposed pre-packaged bankruptcy plan due to material enhancements which have been made. (This report is an excerpt of the full interview. Source: Bloomberg)

Read the full article →

Hatoyama Orders Probe After Japanese Destroyer Hits South Korean Vessel

October 27, 2009

By Stuart Biggs and Anna Kitanaka Oct. 28 (Bloomberg) — Japan’s Prime Minister Yukio Hatoyama ordered a “thorough” investigation after a Japanese warship collided with a South Korean freighter late yesterday, damaging both vessels and injuring three Japanese sailors. “It’s extremely regrettable,” Chief Cabinet Secretary Hirofumi Hirano told reporters in Tokyo today. “We are very sorry and apologize for the incident. A thorough investigation has been ordered by the prime minister.” The 5,200-ton destroyer, the Kurama , burst into flames in the Kanmon Strait between Japan’s main island of Honshu and Kyushu, Japan’s Defense Minister Toshimi Kitazawa told reporters late yesterday. The South Korean container ship, the Carina Star , has a hole in its hull, though there was no fire or flooding, the minister said. Traffic in the Kanmon Strait was stopped because of the collision. The strait is a major shipping lane between Honshu and Kyushu, linked by a 712-meter suspension bridge between the cities of Shimonoseki and Kitakyushu. It’s the quickest shipping route from South Korea and northern China to the Japanese ports of southern Honshu. The collision occurred at about 8 p.m. local time and national broadcaster NHK Television showed images of an explosion near the suspension bridge. NHK broadcast shots of the ships at dock today showing the damage. The 7,400-ton Carina Star, operated by Seoul-based Namsung Shipping Co. , was sailing to Osaka, according to the company’s online shipping log. The 159-meter long Kurama was returning to its home port of Sasebo, Kitazawa said. The Japanese destroyer Atago collided with a fishing boat in the Pacific Ocean in February 2008, slicing the smaller vessel in half and leaving two of its crew dead. Japan’s Defense Ministry replaced the head of the navy, fired two officers and cut the pay of 21 others because of the collision and other scandals, including the leaking of classified information. To contact the reporters on this story: Stuart Biggs in Tokyo at sbiggs3@bloomberg.net ; Anna Kitanaka in Tokyo akitanaka@bloomberg.net .

Read the full article →

King Opens Rift With Brown, Call for Banks to Be Split to Limit Bailouts

October 21, 2009

By Gonzalo Vina and Jennifer Ryan Oct. 21 (Bloomberg) — Bank of England Governor Mervyn King opened a rift with Prime Minister Gordon Brown’s government by signaling the biggest banks could be broken up to prevent taxpayers having to shoulder the cost of future bailouts. King’s suggestion to separate investment banks from operations that take deposits from consumers and manage payment systems was ruled out by Chancellor of the Exchequer Alistair Darling as recently as yesterday. “It’s clear King’s not happy with where we are now,” said Colin Ellis , an economist at Daiwa Securities SMBC and a former central bank official. “He said the regulatory structure was inadequate, and coming from the governor of the Bank of England that’s as damming as it could be. He’s saying something and advocating something the Treasury has decided not to do.” It’s the second time in seven months that King has broken ranks with the government and sought to publicly discuss the direction of policy. King in March said Brown needed to tackle the budget deficit with greater urgency, a policy that has since become the centerpiece of the Conservative opposition’s agenda. The Conservatives, who lead in U.K. opinion polls less than a year before the next election, embraced King’s remarks without saying how they’d rein in banks that are too big to fail. They have pledged to move financial regulation powers from the Financial Services Authority to the Bank of England if they win power and form the next government. King ‘Persuasive’ “His analysis of how the government’s system for regulating banks failed and how there has been ‘little real reform’ since is one I share,” said George Osborne , the opposition lawmaker who speaks on finance, adding that King was “powerful and persuasive.” King’s comments were meant to catalyze a debate within the Group of 20 nations about how to rein in banks that triggered the credit crisis, resulting in $2.4 trillion of credit losses and writedowns in the U.S., U.K. and Europe. Britain’s four biggest banks — Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc, HBSC Holdings Plc and Barclays Plc — have the most at stake. Their lobby group is resisting talk about dividing the industry. “The key issue is not one of breaking up banks but of financing the economy,” Angela Knight , chief executive officer of the British Bankers’ Association, said in an e-mail. “Big businesses may want big banks which offer a range of products and services while individuals may look to something smaller. Large universal banks are the way forward.” G-20 Talks The G-20, whose finance chiefs meet in two weeks for talks in Darling’s native Scotland, is focusing on pushing banks to raise capital and restrain pay rather than devising an international approach to curbing the size of banks. Darling is writing laws to make banks write a “living will” that enables a quick wind-down of institutions that fail. Former Federal Reserve Chairman Paul Volcker and Nobel laureate Joseph Stiglitz are among those urging governments to curtail the size of banks or risk future crises. Barclays Chairman Marcus Agius told the Financial Times that restraining the banks would drive up credit costs and hurt the recovery. “If the banks are overregulated and returns are regulated out then the capital will walk,” said Mike Trippitt , a London- based banking analyst at Oriel Securities Ltd. The ongoing debate over regulations are “muddying the water in terms of the investment decision,” he said. King said yesterday that, while global efforts to bail out banks had prevented economic disaster, they had created “possibly the biggest moral hazard in history.” He said that it is “hard to see why” proposals such as those made by Volcker to separate proprietary trading from retail banking are “impractical.” ‘Rather Unworldly’ “What does seem impractical are the current arrangements,” King said. “Anyone who proposed giving government guarantees to retail depositors and other creditors and then suggested that such funding could be used to finance highly risky and speculative activities would be thought rather unworldly. But that is where we are now.” Brown, Darling and other ministers have repeatedly said such a split would have failed to prevent the collapse of Lehman Brothers Holdings Inc. or Northern Rock Plc. “The difference between having a retail and investment bank is not the cause of the problem, the cause of the problem is that banking has not been sufficiently regulated,” Brown told lawmakers in London today. Darling’s View “You regulate according to risk,” Darling said yesterday before King’s speech. “The greater the risk, the greater the capital requirement. I don’t think an arbitrary split would deal with the problem.” Treasury Minister Paul Myners today dismissed suggestions of a rift with the central bank, saying legislation mapped out in July already makes provision for altering an institution’s structure to split its deposits from its investing operations. “The governor and the government are in agreement,” Myners told BBC Television today. Simon Lewis , a spokesman for Brown, said: “The governor of the Bank of England set out some interesting thoughts. That is fine. The most important thing is that we move forward so that we are protected for failures in the banking system.” King’s comments carry additional weight because the Treasury is beefing up the Bank of England’s role in overseeing stability of the economy. To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net ; Jennifer Ryan in London at jryan13@bloomberg.net

Read the full article →

Bloomberg LP Acquires BusinessWeek

October 13, 2009

Bloomberg LP has agreed to acquire BusinessWeek from McGraw-Hill, the company announced Tuesday. The terms of the sale were not disclosed, though BusinessWeek’s Tom Lowry cites sources placing the deal in the $2-5 million range : Terms of the offer will not be disclosed by Bloomberg and BusinessWeek parent McGraw-Hill Cos. But knowledgeable sources say that Bloomberg’s cash offer is in the $2 million to $5 million range and that it has agreed to assume liabilities, including potential severance payments. The New York Times ‘ Stephanie Clifford reports that the magazine will now be named Bloomberg BusinessWeek, and that Bloomberg Markets will continue to be published. Bloomberg has been the frontrunner to take over the magazine for several weeks. Time Inc. and Wall Street Journal veteran Norm Pearlstein, who has served as Bloomberg’s Chief Content Officer, will become Chairman of BusinessWeek. “The BusinessWeek acquisition will yield huge benefits for users of the Bloomberg terminal, and for our television, online and mobile properties,” Daniel L. Doctoroff, president of Bloomberg LP, said in a release. “We couldn’t be more excited.” Doctoroff added, “BusinessWeek helps better serve our customers by reaching into the corporate suite and corridors of power in government, where news that affects markets and business is made by CEOs, CFOs, deal lawyers, bankers and government officials who typically are not terminal customers.” Bloomberg News Editor-in-Chief Matthew Winkler added, “BusinessWeek, with its extraordinary context and perspective on the economy and companies, presents a giant opportunity for the BLOOMBERG NEWS service to reach decision makers in the most important industries. We are thrilled to have such experienced journalists as our colleagues.” Developing…

Read the full article →

China Celebrates 60 Years of Communist Rule With Beijing Parade

October 1, 2009

By Bloomberg News Oct. 1 (Bloomberg) — The People’s Republic of China marked its 60th anniversary today with a parade through the heart of Beijing aimed at showcasing the country’s rising power and shoring up the Communist Party’s prestige at home. About 200,000 people took part in the celebration, including President Hu Jintao , former President Jiang Zemin and members of the ruling Politburo Standing Committee who watched from the rostrum of Tiananmen — the Gate of Heavenly Peace. It was there, on Oct. 1, 1949, that Mao Zedong declared the communists’ victory in a civil war. China was “able and confident in playing its global role,” Hu said in a speech, in which he vowed that the country would seek “peaceful reunification” with Taiwan. The island has been ruled for much of the past 60 years by the Nationalists, who fled there following their defeat at Mao’s hands. Hundreds of missiles and tanks and thousands of soldiers from the world’s largest standing army paraded down Chang’an Avenue through Tiananmen Square following Hu’s speech. Hu, 66, wearing a black high-collared suit similar to one worn by Mao, had earlier reviewed the troops from an open-topped Red Flag limousine, yelling out “Hello comrades” and “Comrades it’s been hard on you.” Overhead, 151 military aircraft, including J-10 fighter jets , flew past in 12 formations. Hu and his fellow leaders are celebrating China’s newfound prominence on the global stage. China now produces in a day the equivalent of a year’s output five decades ago, and is poised to surpass Japan as the world’s second-largest economy by 2010. The Communists, who lifted 300 million citizens from abject poverty and raised the country’s international influence, must now meet increasing demands for domestic freedom and accountability. ‘Show-Off’ The celebration “is a show-off to beef up confidence in, and support to, the regime,” said Huang Jing , visiting professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “Serious questions need to be asked how such a show of strength can translate into” transparency and tolerance for “ethnic, cultural and religious diversity.” About 80,000 children in Tiananmen Square spelled out the Chinese characters for “national celebration” with red and gold placards to begin the celebration. Later, the placards read “obey the Party’s command” and “serve the people.” The People’s Liberation Army displayed 52 types of new weapons, including unmanned aerial vehicles and aircraft with advance-warning radar. Five thousand soldiers marched through the square, past portraits of Mao and Sun Yat-Sen , Republican China’s first president after the fall of the Qing Dynasty in 1912. Nuclear Strike Among the new weapons, according to China Central Television, was a cruise missile called the Long Sword. As a battery of Dongfeng (East Wind) intercontinental ballistic missiles on mobile carriers drove by, the CCTV commentator reminded viewers that China abided by a pledge never to make a first nuclear strike. The parade also included a flotilla of 60 parade floats bedecked with flowers and digital displays showcasing six decades of China’s political, scientific, technological and economic achievements. Among those were floats with portraits of Mao, Deng Xiaoping , a leader who died in 1997, as well as Jiang and Hu. Each were accompanied by recordings of their famous speeches, and thousands of marchers surrounding the floats carried banners trumpeting catchphrases such as “implement and carry out scientific development.” ‘Three Represents’ Liang Xiaopeng, 20, was among the students escorting Jiang’s float touting the 83-year-old former leader’s “Three Represents” doctrine, which helped legitimize members of the business class in Chinese socialist theory. “Today China showed its might, and that makes me very proud,” said Liang, a student at Beijing Printing College who wants to stay in Beijing and work for a publisher. The celebration was an opportunity for the government to showcase its achievements to the country’s 1.3 billion people. CCTV’s broadcast of the event telecast preparations of the parade, complete with marching soldiers, jets and tanks, with the theme of Disney Co.’s “Pirates of the Caribbean” in the background. A commentator extolled the economic achievements of the People’s Republic in the minutes before the parade began. Police kept most of Beijing’s 3.8 million private cars off of the roads today, and restricted access to the city center. South of Di’anmen Street, which bisects the inner city from east to west, police armed with machine guns blocked cars from heading toward Tiananmen Square this morning. 14th Parade The PLA parade is the 14th since the army emerged victorious in the 1949 civil war against the Kuomintang, or Nationalist Party, which now governs Taiwan. Economic growth and rising global influence have come at the cost of domestic expression. Opposition to Communist Party rule is banned while dissent, including the 1989 student demonstrations in Beijing’s Tiananmen Square, is crushed. As many as 800 million Chinese, 60 percent of the population, still live in the countryside , and rapid development has left millions of them behind. Still socialist in name, China has a wider income gap than Taiwan and South Korea have now, or had during their export-led industrializations. The gaps are made wider by the spread of corruption. Graft has reached into the senior ranks of officials, with those convicted including the former parliamentary vice chairman Cheng Kejie and Shanghai party chief Chen Liangyu . Ethnic Tensions Even as Tiananmen Square is festooned today with 56 columns representing the country’s biggest ethnic groups, many Uighurs and Tibetans say they see China as an empire diluting their indigenous cultures. The worst riots in six decades broke out in the past two years in Tibet and the Uighur’s homeland of Xinjiang, two provinces on China’s western fringe, spurred by income gaps along ethnic and religious fissures. The world’s most populous nation has also become the largest consumer of commodities and one of the biggest energy users. China last year passed the U.S. as the biggest emitter of greenhouse gasses, and widespread pollution of its atmosphere and waterways is rarely checked by public opposition. The smog that enveloped Beijing for three days before today’s parade lifted overnight and the parade took place under clear blue skies. — Michael Forsythe , Eugene Tang . With assistance from William Bi in Beijing. Editors: John Brinsley , Ben Richardson . To contact Bloomberg staff on this story: Michael Forsythe in Beijing +8610-6649-7580 or mforsythe@bloomberg.net

Read the full article →

China Appeals WTO Ruling That Curbs on U.S. Books, Films, Music Are Unfair

September 22, 2009

By Jennifer M. Freedman Sept. 22 (Bloomberg) — China appealed a World Trade Organization ruling that found its curbs on the sale of books, films and music from the U.S. are unfair. WTO judges concluded on Aug. 12 that China was violating its free-trade commitments by requiring importers to channel foreign publications and audiovisual products through state-run companies. The panel also urged China to allow foreign companies to sell music over the Internet, which would be a boon for Apple Inc., with its iTunes software. “China has appealed to the WTO over the publication ruling,” said a spokesman for the Ministry of Commerce in Beijing. U.S.-Chinese trade relations have soured amid allegations about market-access restrictions, trade protectionism, copyright infringement, currency manipulation and claims that Chinese exporters are undercutting higher-cost American manufacturers. The U.S. has lodged eight complaints against China at the Geneva-based WTO — more than any other government — while four of China’s five trade complaints are against the U.S. The U.S., the world’s biggest exporter of entertainment products, sees higher sales of cultural goods as a way to narrow its trade deficit with China, which totaled $103 billion in the first half of 2009. While foreign films and music are popular in China, suppliers face competition from the country’s thriving black market. President Barack Obama’s trade chief, Ron Kirk , has made getting China, Russia and other nations to clamp down on piracy of American-made goods one of his top goals. Lost Revenue China’s copying of movies, music and software cost companies $2.2 billion in 2006 sales, according to an estimate by lobby groups representing Microsoft Corp., Walt Disney Co. and Vivendi SA. Revenue generated from films in China climbed 27 percent last year to 4.2 billion yuan ($615 million), according to the State Administration of Radio, Film and Television . Foreign movies grossed 1.7 billion yuan, up 8 percent from 2007. Imported films can be distributed only by two state-owned enterprises, a unit of China Film Group and Huaxia Film Distribution Co. China Film controls most of the 20 import licenses that grant foreign films the right to a modest slice of their box-office earnings, usually about 13 percent. While WTO judges didn’t rule against the import quota of 20 foreign films a year, they said China Film “can no longer be the monopoly importer.” The panel also agreed that China has the right to ban foreign films and publications that government censors deem objectionable. China bans foreign social networking Web sites such as Facebook and Twitter . To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net .

Read the full article →

N.Y. Governor Paterson Refuses to End Election Bid as Polls Unsettle Obama

September 21, 2009

By Michael Quint and Nicholas Johnston Sept. 21 (Bloomberg) — New York Governor David Paterson said he still wants to be the Democratic candidate for governor next year, even after President Barack Obama conveyed unease amid sinking poll results. “My plans for 2010 are to run for governor of the state of New York,” Paterson, 55, said after marching in the annual African-American Day Parade in New York City. Paterson said he wouldn’t discuss “confidential conversations” when asked about a New York Times report that Obama administration officials asked him to withdraw. No one at the White House has ordered Paterson not to run, said a White House official, speaking on condition of anonymity. The administration shares the concerns of party leaders in New York about Paterson’s political strength going into the 2010 election, the official said. Obama “has not spoken to me,” Paterson said yesterday. Developing a plan to close a $2.1 billion budget gap in the state’s $131.8 billion spending plan is “the most important issue I’m going to focus on in the next few months,” he said. The Times reported that the administration and New York Democratic Party officials are pushing Paterson, one of only two black state governors in the U.S., because they fear weakness at the top of the ticket might influence other races. Massachusetts Governor Deval Patrick is the other officeholder. Obama’s message was delivered by Democratic Representative Gregory W. Meeks of Queens, according to the Times. Telephone messages left for Meeks at his offices in New York City and Washington were not returned. Polling Data Paterson’s political future has been discussed as public opinion polls show him trailing other Democrats and losing a hypothetical election contest to former New York City Mayor Rudolph Giuliani , a Republican, who has said he is considering seeking the office. “Presidents are party leaders and part of the job, particularly in first term, is to recruit and make tough decisions,” said independent analyst Charles Cook , Washington- based publisher of the nonpartisan Cook Political Report . “The only thing unusual about this is that you have a governor who has no chance of being re-elected who doesn’t seem to take a hint that it’s time to bail out,” Cook said. Traditionally, Democrats running for Congress and the Legislature most directly may feel the effects of a Republican gubernatorial victory. In the New York Senate, Democrats hold a 32-30 majority, after winning control of the chamber in 2008 for the first time in 43 years. 2010 Redistricting Maintaining that edge in next year’s elections is critical to Democrats, because it would give them an advantage drawing new district boundaries based on 2010 Census results. Democrats hold a wide majority in the Assembly. There are 5.87 million registered Democrats and 2.96 million Republicans in New York, according to the Board of Elections . New York’s 29-member U.S. House delegation has 26 Democrats and three Republicans, according to the House Clerk’s office. The Republican count includes Representative John McHugh , who has been confirmed as Army secretary in Obama’s administration. An Aug. 16 Quinnipiac University poll of registered voters showed 59 percent disapproved of the way Paterson is handling the governor’s office. The survey from the Hamden, Connecticut, based school found that voters favor Giuliani over Paterson 53 percent to 33 percent in a potential gubernatorial race. If state Attorney General Andrew Cuomo were the Democratic candidate, he would beat Giuliani 48 percent to 39 percent, according to the poll, which had a 2.4 percentage-point error margin. Giuliani Bid Giuliani’s possible candidacy “frightened a lot of people” and his entry to the race may force party leaders to jettison Paterson, said George Arzt , a Democratic political consultant. The message from the White House is “only three-quarters of a death knell,” and Paterson still may rebound, Arzt said. After the November elections “there will be caucuses around the state, and that is when you could get people going to the governor and saying, ‘You can’t do this,’” Arzt said. Michael Steele , chairman of the Republican National Committee, said he was ‘stunned” the Obama administration would send such a message to Paterson and not to New Jersey Governor Jon Corzine , who has similar approval ratings and trails Republican Christopher Christie in polls before the Nov. 3 election. Steele spoke on CBS Television’s “Face the Nation.” Cuomo Profile In New York, Cuomo is the son of former Democratic Governor Mario Cuomo and has kept his name before the public with investigations of companies making student loans, prices charged by health insurance companies and money managers hired by the state pension fund. For months he has deflected questions about running for governor. “I’ve been doing my job” and want “to stay away from the politics,” Cuomo said during a radio interview Sept. 18 on radio station WGDJ in Albany. Asked about Paterson’s low standing in polls, Cuomo said, “These are very difficult times.” Paterson has confronted growing budget deficits since he became governor in March 2008. He called for a public meeting with lawmakers Sept. 25 to discuss a multiyear solution. The budget approved in April included unpopular fee increases for drivers licenses and vehicle registrations, and ended state rebate checks for local property taxes registration. Spitzer Resignation Paterson, a former state senator from Harlem, was elected lieutenant governor in 2006. He moved to the governor’s office in March 2008 when Eliot Spitzer resigned after being identified as “Client 9” in a federal prostitution investigation. Spitzer wasn’t charged with wrongdoing. Paterson enjoyed early popularity before his ratings slid with his handling of the vacancy created when U.S. Senator Hillary Clinton became Secretary of State. He chose first-term U.S. Representative Kirsten Gillibrand of Hudson, disappointing more experienced congressional Democrats and supporters of Caroline Kennedy , daughter of the slain president, who also sought the job. To contact the reporter on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net ; Nicholas Johnston in Washington at Njohnston2@bloomberg.net .

Read the full article →

Opel’s German Trustees Are Said to Meet on Sept. 10 to Discuss GM Decision

September 4, 2009

By Andreas Cremer and Chris Reiter Sept. 4 (Bloomberg) — The German government-backed trust created to facilitate a sale of General Motors Co. ’s Opel unit plans to meet Sept. 10, signaling GM will have likely made a decision on Opel’s future by then, according to a person familiar with the situation. The trustees, including two representatives from GM and two from Germany as well as a non-voting chairman, will evaluate any proposal by the U.S. automaker’s new board, which is scheduled to meet Sept. 8 and 9 in Detroit, said the person, who asked not to be named because the trustees’ gathering is private. Germany, which provided an emergency 1.5 billion-euro ($2.1 billion) loan to keep Opel solvent, supports a bid from Canadian parts supplier Magna International Inc. and refuses to back a proposal by investment firm RHJ International SA that’s favored by GM. In addition to a sale, other options GM’s board is considering include keeping Opel, and insolvency for the unit, a person familiar with the situation said this week. “We expect a fundamental decision next week,” German Economy Minister Karl-Theodor zu Guttenberg told ARD Television today. Gemany has “done its homework” and contracts requiring “only a signature” are on the table, he said. Carl Graf von Hohenthal , a spokesman for Brunswick Group in Berlin, which advises the Opel trust, declined to comment when reached by Bloomberg News. Opel’s fate has been in question since GM said earlier this year it would shed at least half of the Russelsheim, Germany- based division to save the unprofitable unit from collapse. The trust will evaluate any GM proposal based on 25 commercial criteria, and political considerations aren’t part of the trust’s deliberations, the person said. Citigroup Banker Directors of the trust include Dirk Pfeil , a former state lawmaker who now represents Germany’s four states with Opel plants; Manfred Wennemer , chairman of Kohlberg Kravis Roberts & Co.’s Kion Group GmbH and a former Continental AG chief executive officer, who represents the German federal government; Enrico Digirolamo , chief financial officer of GM Europe; and John Smith, GM’s negotiator for Opel. Fred Irwin , a Citigroup Inc. banker in Germany, chairs the board. GM placed Opel under the control of the trust when it filed for U.S. bankruptcy protection in June. The trust owns 65 percent of Opel, with GM holding the remaining 35 percent. The U.S. carmaker will recommend its preference to the trust’s board, which has to ratify any business decisions by Opel, including who will take over the unit from the trust. To contact the reporters on this story: Andreas Cremer in Berlin at acremer@bloomberg.net Chris Reiter in Berlin at creiter2@bloomberg.net

Read the full article →

Japanese Stocks, Bond Yields May Rise After Opposition DPJ’s Election Win

August 30, 2009

By Theresa Barraclough Aug. 31 (Bloomberg) — Japanese bonds will decline while stocks rise after Japan’s opposition Democratic Party of Japan swept to power, said Yuuki Sakurai , chief executive officer of Fukoku Capital Management Inc. The DPJ won at least 268 of 480 seats to secure a majority in Japan’s lower house, public broadcaster NHK projected. The party may almost triple its seats to more than 300, NHK and Fuji Television reported earlier. Stocks will rise on optimism DPJ policies to stimulate domestic demand will boost growth, while financing for those measures will result in further bond issuance, sending prices down, Tokyo-based Sakurai said. Ten-year government bond yields will probably rise to 1.7 percent by year-end, while the Nikkei 225 Stock Average will advance to as high as 12,000, according to the investor. “It’s a landslide victory for the DPJ and the equity market may remain excited for a couple of days or even a couple of weeks,” said Sakurai, who helps manage about 800 billion yen ($8.6 billion) in assets. Financing for the party’s spending plans “will have to come from government bonds,” he said. The DPJ faces accelerating deflation and record unemployment as it seeks to craft an economic recovery in a nation that only last quarter emerged from its deepest postwar recession. Japan’s consumer prices fell at an unprecedented 2.2 percent in July from a year earlier, while the jobless rate climbed to 5.7 percent, the statistics bureau said Aug. 28. Prime Minister Taro Aso’s Liberal Democratic Party lost about two-thirds of its 303 legislators in the chamber that chooses the premier. The LDP ruled Japan for all but 10 months since 1955. Debt Issuance The Nikkei 225 surged 25 percent through the remaining year after the last general election in 2005. Bonds fell for six straight weeks, the longest stretch in more than a year. A similar result may emerge as the DPJ carries out plans to boost consumption, according to investors and strategists. Bond investors are concerned the new government will increase new issues to finance fiscal measures pledged by the DPJ, adding to public debt that is already almost double the size of Japan’s $4.9 trillion gross domestic product. Debt maturing in more than 10 years handed investors a loss of 2.9 percent this year, according to indexes compiled by Merrill Lynch & Co. Ten-year yields increased one basis point, or 0.01 percentage point, to 1.31 percent on Aug. 28. Shares of companies that rely on domestic spending may benefit as the DPJ focuses on stimulating consumption . The Nikkei 225 rose 0.6 percent on Aug. 28 to 10,534.14. The index has gained 19 percent this year, rebounding from last year’s record 42 percent plunge during the global financial crisis. ‘Stabilizing’ Politics “Stocks will rise as foreign investors regard the stabilizing political situation as a positive,” said Hidenori Suezawa , Tokyo-based chief strategist at Daiwa Securities SMBC Co., a unit of Japan’s second-largest brokerage. Japan’s economy, the world’s second largest, grew at an annual 3.7 percent pace last quarter, the first expansion in more than a year, as more than $2 trillion in stimulus plans worldwide helped revive trade. Aso pledged 25 trillion yen in government spending to combat the recession. Economists expect growth will weaken in coming quarters once government cash injections are exhausted. Japanese companies forecast the yen, which last traded at 93.60 against the dollar on Aug. 28, may average 94.85 in the 12 months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released July 1. The average of the 10 most recent analyst forecasts is for the yen to end the year at 97.3, and finish March at 99.4, according to data compiled by Bloomberg. ‘Good Strength’ The yen is likely to benefit from the DPJ’s pledge to give the Bank of Japan more autonomy, increasing the scope for the central bank to raise interest rates earlier. JPMorgan Chase & Co. overnight interest-rate swaps signal a 19 percent chance borrowing costs will be lifted by the end of July. “The yen is going to rise,” said Kazuaki Oh ’e, a bond salesman in Tokyo at Canadian Imperial Bank of Commerce, the nation’s fifth-biggest bank. “You may think this fact would hurt Japanese exporters, but this economic expansion is mostly on the domestic side. So this stronger yen won’t hurt as much as before. It’s a good strength.” To contact the reporters on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net .

Read the full article →

Democratic Party of Japan Sweeps to Power, Ending LDP’s Half-Century Reign

August 30, 2009

By Sachiko Sakamaki and Stuart Biggs Aug. 30 (Bloomberg) — The Democratic Party of Japan swept to power for the first time, ending a half-century of almost unbroken single-party rule in the world’s second-largest economy. The DPJ won at least 241 of 480 seats to secure a majority in Japan’s lower house, public broadcaster NHK projected. The party may almost triple its seats to more than 300, NHK and Fuji Television reported earlier. Prime Minister Taro Aso ’s Liberal Democratic Party lost about two-thirds of its 303 legislators. DPJ leader Yukio Hatoyama , 62, who is set to become prime minister 16 years after he left the ruling party, told journalists “a change in government is about to be reality.” His party becomes the first to single-handedly defeat the LDP since its establishment in 1955. “Japan has at last truly become a democracy,” said Jiro Yamaguchi , a political science professor at Hokkaido University in Sapporo, northern Japan. “The voters clearly said ‘No’ to the LDP, which can no longer deliver innovative policies.” Aso indicated he will step down as head of the LDP, saying he “must accept responsibility” for the election results. Japan is struggling to emerge from the deepest recession since World War II. The next government must address record unemployment, soaring welfare costs and an aging, declining population. The DPJ has pledged to increase child care, lower corporate taxes and curtail the power of Japan’s bureaucrats to end almost 20 years of economic stagnation. Stocks, Bonds Japan’s stocks and bond yields may rise on prospects the DPJ will increase spending to boost growth. Ten-year government bond yields will probably rise to 1.7 percent by year end, while the Nikkei 225 Stock Average will advance about 14 percent to as high as 12,000, said Tokyo-based Yuuki Sakurai , chief executive officer of Fukoku Capital Management Inc. “It’s a landslide victory for the DPJ and the equity market will remain excited for a couple of days or even a couple of weeks,” said Sakurai, who helps to manage about 800 billion yen ($8.5 billion) in assets. The yen is also likely to benefit from the DPJ’s pledge to give the Bank of Japan more autonomy, increasing the scope for the central bank to raise interest rates earlier. JPMorgan Chase & Co. overnight interest-rate swaps signal a 19 percent chance borrowing costs will be lifted by the end of July. Change of Government Agriculture Minister Shigeru Ishiba said on NHK that “a change in government is certain.” The Democrats had 112 seats before Aso last month dissolved the lower house and called the election. The LDP and its coalition partner New Komeito has 334. Several veteran LDP lawmakers may lose their seats in the projected rout. Former Prime Minister Toshiki Kaifu will lose his constituency, NHK said. Finance Minister Kaoru Yosano said this month he’s in the toughest election fight of his career. “It’s about time for change,” said Yuichi Tauchi, 25, a project manager at a truck manufacturer in Tokyo after voting today for the DPJ. “People have been losing faith in the LDP, and a change in politics will hopefully bring about optimism.” NHK estimated voter turnout at 69 percent of Japan’s 104 million voters. The Liberal Democrats have dominated Japan’s postwar political landscape, governing for all but 10 months since 1955. The party’s first premier was Ichiro Hatoyama, grandfather to the man now aiming to break the LDP’s stranglehold. Ichiro was a rival of Shigeru Yoshida , prime minister from 1948-1954 and Aso’s grandfather. Japan’s Economy Japan’s economy grew an annualized 3.7 percent in the three months ended June 30, the first growth in five quarters, after an 11.7 percent decline in the first quarter of the year. The unemployment rate rose to a record 5.7 percent in July and the national debt is approaching 200 percent of gross domestic product last year, the highest in the world. Priorities for the next government include coping with a population of 127 million that is rapidly aging: Japan has the world’s highest proportion of people over 65 years old and the lowest ratio of those under 15. Welfare outlays already make up a quarter of the 88.5 trillion-yen ($945 billion) budget this year. To finance an economic aid package that would total 16.8 trillion yen by 2013, the DPJ says will eliminate 9.1 trillion yen in unnecessary spending, tap special accounts managed by the nation’s bureaucrats and abolish some tax deductions. Hatoyama is a scion of Japan’s most prominent political family. His great-grandfather was speaker of the lower house and his father was foreign minister. His younger brother, Kunio, is a senior member of the LDP. To contact the reporters on this story: Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net ; Stuart Biggs in Tokyo at Sbiggs3@bloomberg.net

Read the full article →

← Previous Entries

Next Entries →