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U.K. Jobless Claims Decline at Fastest Pace Since 1997 as Economy Recovers

by on March 17, 2010

By Jennifer Ryan March 17 (Bloomberg) — U.K. jobless claims unexpectedly fell in February at the fastest pace since 1997, suggesting the economic recovery is strengthening as Britons prepare for a general election within weeks. The number of people receiving unemployment benefits dropped 32,300 from January to 1.59 million, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 29 economists was for an increase of 6,000. The jobless rate declined to 4.9 percent from 5 percent. The figures are a boost for Prime Minister Gordon Brown, who is seeking to persuade voters his Labour Party has the best strategy to cement the economic recovery. The Conservatives’ pledge to cut the record budget deficit faster than Brown is planning has cost the party support, raising the specter of a minority government after the election due by June. “We’re at a stabilization point in the level of unemployment,” Ross Walker, an economist at Royal Bank of Scotland Group Plc in London, said in an interview before the report. “Things are still quite fragile. The austerity message isn’t an easy one to sell, and in the short term you’re vulnerable to accusations that unemployment might rise.” The pound rose 0.4 percent after the report and was trading at $1.5280 as of 9:31 a.m. in London. A wider survey-based measure of unemployment based on International Labour Organization counting methods fell by 33,000 to 2.45 million in the three months through January, the biggest drop since the fourth quarter of 2007. The 7.8 percent jobless rate on that basis compares with 9.7 percent in the U.S., 9.9 percent in the euro region and 4.9 percent in Japan. Minority Government In January, the number of jobless claims rose by 5,300 instead of the 23,500 increase originally reported. A March 15 YouGov Plc poll for the Sun newspaper put the Conservatives 5 points ahead of Labour with 37 percent support, compared with a lead of 12 points at the start of the year. Speculation that no party will get an outright majority of the seats in Parliament at the election sent the pound to a 10- month low against the dollar this month. Investors are concerned that a minority administration will find it hard to cut the deficit, which is almost as big as Greece’s at more than 12 percent of economic output. The Bank of England said this week its agents expect businesses to keep staff numbers stable in the coming months. Britain emerged from its deepest recession since World War II in the fourth quarter with growth of 0.3 percent. The statistics office said today growth in weekly pay including bonuses quickened to 0.9 percent in the three months through January from 0.7 percent. Regular pay rose 1.4 percent and bonus pay fell declined 7.1 percent. To contact the reporter on this story: Jennifer Ryan in London at jryan13@bloomberg.net

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U.K. Jobless Claims Decline at Fastest Pace Since 1997 as Economy Recovers

Japan’s Fourth-Quarter Capital Spending Slides 18.5%, 11th Quarterly Drop

by on March 3, 2010

By Keiko Ujikane March 4 (Bloomberg) — Japanese businesses cut spending for an 11th quarter, signaling a revival in exports remains insufficient to prompt investment that would spur the recovery. Capital spending excluding software fell 18.5 percent in the three months ended Dec. 31 from a year earlier, after dropping a record 25.7 percent in the previous quarter, the Finance Ministry said today in Tokyo. Sales fell and profits doubled, the report showed. Sony Corp. and Panasonic Corp. are among companies cutting costs and restraining investment to protect earnings even as demand from abroad picks up. “Corporate spending may have nearly hit a bottom but it will take more time until it recovers,” Naoki Tsuchiyama , market economist at Mizuho Securities Co. in Tokyo, said before the report. “Companies will likely keep shedding costs and investment as they focus on restoring their profitability.” The yen traded at 88.59 per dollar at 9 a.m. in Tokyo from 88.52 before the report. The Nikkei 225 Stock Average fell 0.1 percent. The Cabinet Office will use today’s report to revise fourth-quarter gross domestic product figures on March 11. The economy grew at an annual 4.6 percent pace in the three months ended Dec. 31, preliminary figures showed last month. Companies’ sales slid 3.1 percent last quarter after tumbling 15.7 percent the previous three months, the Finance Ministry said. Profits surged 102.2 percent, compared with a 32.4 percent decline in the third quarter. Weak Link Capital spending remains the weak link of a recovery that’s being driven by exports and showing signs of improvement in the labor market . About a third of factory capacity is sitting idle in the wake of the nation’s worst postwar recession, discouraging companies from buying equipment. “Capital utilization is recovering but the level is still historically low,” Mizuho’s Tsuchiyama said. “That means companies try to use existing facilities and equipment rather than investing in new things.” Sony last month narrowed its forecast for a net loss, saying it is approaching its target of trimming 330 billion yen in costs by eliminating jobs and shutting factories. Capital spending for this fiscal year will probably total 220 billion, 34 percent less than a year earlier and lower than the 250 billion yen estimated in October, Sony said on Feb. 4. Panasonic last month raised its operating profit forecast, as cuts in fixed and material costs lead to a recovery in earnings from consumer electronics and appliances. Capital investment for the nine months ended Dec. 31 stood at 275.6 billion yen, 22 percent less than the same period a year earlier, according to a company statement. Slumping Prices Slumping prices also are squeezing profit margins. Consumer prices excluding food and energy dropped 1.2 percent in January, matching December’s record decline, the government said last week. Finance Minister Naoto Kan renewed calls on the Bank of Japan to help arrest deflation this week, saying he hopes prices will rise this year. The government has been encouraging spending by providing incentives to buy cars and consumer electronics. Those initiatives are becoming less effective, said Tetsufumi Yamakawa , chief Japan economist at Goldman Sachs Group Inc. “Not only is capital investment slack but the demand boost from policies to stimulate replacement purchase of energy-saving electrical goods and environment-friendly autos is fading,” Yamakawa said. Still, some companies are benefiting from rebounding demand in Asia, particularly China, the world’s fastest-growing major economy and Japan’s biggest overseas market. Hitachi Construction Hitachi Construction Machinery Co. , Asia’s second-largest excavator maker, may double sales in China this quarter, beating its forecast as the nation’s spending on railroads and mining fuels demand, Chief Executive Officer Michijiro Kikawa said in an interview on March 1. Japanese manufacturers increased output in January at the fastest pace since May and exports climbed the most in almost 30 years, government reports showed last month. The global economy is on a cyclical recovery as the U.S. economy is rebounding, in addition to stronger-than-expected growth in Asia, said Shunsuke Saito , an economist at Dai-Ichi Life Research in Tokyo. The U.S. economy expanded the most in six years last quarter. “The worst for capital spending may be over as corporate profits are recovering,” Saito said. “Even though the pace of growth may slow, Japan should avoid a standstill in the first half of this year as exports maintain high growth.” To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Japan’s Fourth-Quarter Capital Spending Slides 18.5%, 11th Quarterly Drop

Villamar @ the Harbour ‘set for 2011 completion’

March 3, 2010

03 Mar 2010 Kuwait construction firm Gulf Holding Company (GHC) has announced the Villamar @ the Harbour project is on course to be completed by the end of 2011. Work on the three towers of the dev…

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Buffett Defies Downgrades as Berkshire Credit Risk Drops to 17-Month Low

February 23, 2010

By Andrew Frye and Shannon D. Harrington Feb. 23 (Bloomberg) — Warren Buffett ’s name in credit markets is stronger than it’s been since 2008 as debt investors defied downgrades to his Berkshire Hathaway Inc. and pushed down the price of default protection on the firm. Berkshire credit-default swaps fell to the lowest in 17 months, ending at 128.1 basis points yesterday in New York, according to CMA DataVision prices. The swaps reached 127.6 on Sept. 22, 2008. That compares with 130.4 on Feb. 19 and 525 basis points on March 5, 2009. A rising stock market in the final nine months of 2009 boosted Berkshire’s results, allowing investors to look beyond the three AAA ratings the company lost in the last year. “The market’s increasingly recognizing the fundamental creditworthiness of Berkshire,” said Bill Bergman , an analyst with Morningstar Inc. “They’ve cemented their position in the marketplace.” Berkshire recovered from a $1.5 billion loss in the first quarter of 2009 as the Standard & Poor’s 500 Index surged 40 percent in the last nine months of the year. Berkshire’s stock portfolio increased to more than $55 billion, and the company’s liability fell for multiyear bets it made on the direction of world equity markets. Buffett didn’t reply to a request for comment left with his assistant, Carrie Kizer . The cost to protect against corporate bonds dropped since March 2009, after the Federal Reserve and U.S. government spent, lent or committed $11.6 trillion to stabilize credit markets and pull the economy out of recession. Banks that suffered after the 2008 Lehman Brothers Holdings Inc. bankruptcy got a lifeline with the Troubled Asset Relief Program. Berkshire, whose main business is insurance, didn’t take a bailout. Berkshire Fared Bettter “Spreads have tightened dramatically across the finance sector from last year’s widest levels,” said Kathleen Shanley , a debt analyst at Chicago-based research firm Gimme Credit LLC. “Berkshire Hathaway fared better than most in the crisis and was able to seize on some profitable opportunities.” The Markit CDX North America Investment Grade Index, a benchmark for credit-default swaps that is linked to 125 companies in the U.S. and Canada, has dropped 171 basis points since March 9, 2009, to 91 basis points, CMA prices show, and last month reached the lowest since December 2007. Credit swaps on Berkshire, which traded lower than the index in the three years before October 2008, are trading about 37 basis points wider than the index, CMA prices show. Buffett, the second-richest American, positioned Berkshire to weather the contraction in the U.S. economy by stockpiling $44 billion in cash. Starting in 2008, when corporate borrowing costs surged, he drew on that hoard to finance Goldman Sachs Group Inc. , General Electric Co., Swiss Reinsurance Co. and the Mars Inc. takeover of chewing-gum maker Wm. Wrigley Jr. Co. Railroad Acquisition Those transactions are paying coupons that helped boost investment income in the first nine months of last year. This year, Buffett acquired railroad Burlington Northern Santa Fe Corp. for $27 billion , the biggest takeover of his four decades as Berkshire’s chief executive officer. He raised funds for that deal by selling $8 billion of bonds. “His most recent purchase was the railroad, which is certainly less risky than financial” companies, said Arthur Cohen, a Berkshire investor at Arthur M. Cohen & Associates LLC. Standard & Poor’s downgraded Berkshire this month, following cuts by Fitch Ratings and Moody’s Investors Service, leaving Buffett’s firm without a top grade at any of the three biggest credit-rating companies. Credit-default swaps, used to hedge against losses or to speculate on the ability of companies to pay debt, rise as investor confidence deteriorates. A basis point on a credit- default swap contract protecting $10 million of debt for five years is equivalent to $1,000 a year. Buffett, who has a reputation as the world’s pre-eminent stock picker , struck deals with unidentified firms to protect them against long-term declines in four equity indexes. Berkshire’s liabilities on those positions narrowed to about $8 billion as of Sept. 30 from $10.2 billion six months previous. To contact the reporters on this story: Andrew Frye in New York at afrye@bloomberg.net ; Shannon D. Harrington in New York at sharrington6@bloomberg.net .

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ThyssenKrupp posted profits in the three months ending in December

February 12, 2010

ThyssenKrupp posted

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Alico Reports First Quarter Earnings

February 9, 2010

LA BELLE, Fla., Feb. 9, 2010 (GLOBE NEWSWIRE) — Alico, Inc. (Nasdaq:ALCO), a land management company, announced a net loss for the three months ended December 31, 2009 of $1.4 million or $0.19 per share compared with a loss of $0.2 million or $0.02 per share, for the three months ended December 31, 2008. Earnings from interest on mortgages, real estate sales and agriculture operations were below prior year results and combined to cause the earnings decline.

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Truesport Alliances, Ltd. Names Eddie Wenrick as Interim CEO

January 25, 2010

LAS VEGAS, NV–(Marketwire – January 25, 2010) – Truesport Alliances, Ltd. ( OTCBB : SEWE ) has named entertainment business executive to lead Truesport Alliances, Ltd., a mixed martial arts (MMA) company, as it continues its growth of the Company’s exclusive international TapouT Training Center licenses and manufacturing of MMA equipment. Truesport Alliances, Ltd.’s board of directors announced the appointment of Mr. Wenrick to serve as interim CEO of Truesport Alliances, Ltd. Mr. Wenrick will be engaged in early financing actions, support of partnering contracts and recruiting of additional management team members. Mr. Wenrick will serve as interim CEO for the next three months. Truesport Alliances, Ltd. is in negotiations to have a formal long-term contract in place with Mr. Wenrick prior to the expiration of the three month term.

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The Handbook of Commercial Real Estate Investing

January 18, 2010

Publisher McGraw Hill X PDF mb The Handbook of Commercial Real Estate Investing delivers an authoritative &ldquo best practices&rdquo approach to the three major areas of the industry 172134.

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Sheldon Filger: People of Iceland Versus Global Economic Policymakers

January 5, 2010

An extraordinary development is occurring in the tiny island nation of Iceland. The first sovereign casualty of the financial tsunami that occurred during the onset of the global economic crisis in 2008, Iceland underwent a fiscal meltdown and currency collapse when its 3 largest banks became insolvent. A neo-liberal government allowed Iceland’s financial industry to go global amid an environment of deregulation. The result was that Icelandic banks held more deposits from foreigners than from the nation’s citizens. When the global economy went into a nosedive, the three banks were rendered utterly insolvent, with liabilities exceeding the GDP of Iceland by a multiple of ten. The national currency, the krona, collapsed. The government was forced to nationalize the three banks, go to the IMF for emergency loans, then resign as the population of Iceland erupted in a massive display of civil disobedience. A new government came to power, seeking to responsibly cope with the profound financial disaster that has engulfed Iceland. However, the governments of the UK and the Netherlands, which had reimbursed citizens who lost their deposits in the Landsbanki, which had enticed them with above market interest rates through a program known as Icesave, demanded that Iceland assume full financial liability and pay back those governments. Desperate to enter the European Union and receive additional IMF help, the government in Reykjavik felt it had no choice but to agree to compensate London and the Hague, to the tune of $6 billion, payable over 15 years. This would mean that every one of Iceland’s 300,000 souls would be responsible for paying the British and Dutch governments $20,000. The Icelandic government has told its citizens that there is no choice: either abide by the agreement or accept isolation from the global financial system, junk bond status in sovereign debt markets and a termination in loans from the IMF. The citizens of Iceland have reacted with a petition containing the names of 25% of the nation’s registered voters, opposing the agreement. In response, Icelandic President Ólafur Ragnar Grímsson announced that he would not sign the agreement as approved by the nation’s parliament, and would instead call for a national referendum. Current projections are that 70% of the voters would reject the agreement. What is now occurring in Iceland is a foretaste of what may become more common throughout the developed world. Taxpayers have been told by policymakers that they must bear the financial costs of failed decisions made by private business, no matter how steep the price, or accept even more horrendous economic consequences. For the first time, an aroused public in at least one country has rejected the dictates being imposed by the political establishment. No wonder that the Dutch and British governments reacted so swiftly with a condemnation of Iceland’s citizens for having the audacity to think they have the right to exercise their democratic rights in deciding for themselves what is in the best economic interests of their nation. As the global economic crisis continues, leading to more private business failures and demands by policymakers that taxpayers fund ever-larger bailouts, look for other aroused citizenry following in the footsteps of Iceland’s.

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Manhattan Apartment Prices Decline Further, Bringing Drop From Peak to 21%

January 5, 2010

By Oshrat Carmiel Jan. 5 (Bloomberg) — Manhattan apartment prices fell for a third consecutive quarter as Wall Street job losses drained demand and the decline in co-op and condominium values reached 21 percent since the market peak. The median price slid 10 percent to $810,000 in the fourth quarter from a year earlier, down from almost $1.03 million in 2008, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales jumped 8.4 percent to 2,473 as lower prices pushed transactions above the 10-year quarterly average. Values continued to fall across apartments of all sizes as New York City recorded 10 percent unemployment in November. Fallout from the recession and credit crisis that cost more than 184,000 finance jobs in the Americas is still hurting New York. The city lost 25,200 finance jobs in the 12 months ending Nov. 30, the state Labor Department said Dec. 17. “We have some big macro issues ahead of us,” said Jonathan Miller , president of Miller Samuel. “My view is: We’re not done.” Five Manhattan property reports issued today showed overall price declines. The Corcoran Group , a New York-based broker that conducts its survey with the research company PropertyShark.com , said the median apartment price dropped 15 percent from a year earlier. Brown Harris Stevens and Halstead Property LLC put the decline at 11 percent and StreetEasy.com said the drop was 10 percent. The number of apartments for sale dropped 25 percent from the previous year to 6,851, according to Miller Samuel and Prudential. The 10-year average of quarterly inventory for sale is 7,094 units. ‘An Anomaly’ Miller called the decline in inventory “an anomaly” brought on by a wave of buyer interest built up during the first half of 2009. More than 6,000 apartments in new developments have yet to be listed for sale, he said. The biggest price reduction in the three months ended Dec. 31 was for a 43rd-floor, two-bedroom condominium in the Financial District’s William Beaver House, according to StreetEasy. The price was cut to $1.66 million from $3.05 million and the unit sold 10 days later for $1.53 million, according to StreetEasy. A smaller proportion of Manhattan apartment sellers discounted their listings in the fourth quarter. About 27 percent of properties for sale carried price cuts, compared with 33 percent a year ago, according to StreetEasy. Condo sellers cut an average of 7.8 percent off their asking prices, while co- op sellers whittled an average of 7 percent from prices in the three months ending Dec. 31. Hitting Bottom? “If we have not hit a bottom, we have definitely hit a level of resistance here,” said Bill Staniford , chief executive officer of PropertyShark.com. “This is an area where buyers and sellers met and agreed there is value at this level.” Studio apartments prices fell 11 percent from a year earlier to a median of $375,000, Miller Samuel and Prudential said. One-bedrooms dropped 7.6 percent to $661,000; two-bedrooms fell 23 percent to $1.24 million and three-bedrooms plunged 42 percent to $2.35 million. Apartments with four or more bedrooms fell 38 percent to a median price of $5.4 million. Three of the five most expensive closings of 2009 happened in the fourth quarter, according to StreetEasy. The priciest was a 12th-floor unit at 820 Fifth Ave. bought by Ken Griffin , founder of Citadel Investment Group, for $40 million. He bought from philanthropist Lily Safra and closed the deal last month. South of 34th Street, sales at the Superior Ink Condominiums and Townhouses helped boost the average price for apartments with at least three-bedrooms by 39 percent to $4.67 million, according to Halstead and Brown Harris, both owned by Terra Holdings LLC. “A lot of those units were bought some time ago,” reflecting prices at the peak of the market, said Gregory Heym , chief economist for Terra Holdings. The market reports issued today are compiled from public records and brokers’ proprietary data. To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net .

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Iceland Approves Loan Guarantee to Repay Depositors in Failed Landsbanki

December 31, 2009

By Omar R. Valdimarsson Dec. 31 (Bloomberg) — Iceland’s parliament passed a bill allowing the government to provide a state guarantee for loans from the U.K. and the Netherlands to repay depositors in failed lender Landsbanki Islands hf. “I’m very relieved that the bill has been passed, as it’s been a burden on Iceland for a long time,” Prime Minister Johanna Sigurdardottir said in an interview in the Reykjavik- based parliament, moments after the vote. “The resolution of this case will contribute to Iceland regaining the trust and confidence of the international community.” The bill allows Iceland’s government to guarantee repayments of up to 2.35 billion pounds ($3.8 billion) borrowed from the U.K. and 1.2 billion euros ($1.7 billion) borrowed from the Netherlands to repay depositors of Landsbanki high-yielding Icesave Internet accounts. Failure to approve the accord may have threatened to reignite a dispute that prompted the U.K. to use anti-terror legislation to freeze Icelandic assets last year. Thousands of British and Dutch depositors risked losing their savings when Landsbanki collapsed along with the rest of Iceland’s over-leveraged banking system in October 2008. By passing the bill, lawmakers have paved the way for unlocking further disbursements from a $4.6 billion bailout from the International Monetary Fund and Nordic countries, which were contingent on resolving the dispute. Iceland’s parliament, the Althingi , voted 33 in favor and 30 against. ‘Major Step’ “I believe this is a major step for Iceland in creating a better relationship with other nations, international institutions and investors,” Finance Minister Steingrimur J. Sigfusson said in an interview after the vote. “We’re now heading towards resurrecting Iceland’s reputation as a responsible nation which shoulders its obligations. The resolution of this matter simplifies the tasks that lie ahead, such as creating economic stability.” A tentative agreement on repaying the depositor claims and a state guarantee attached to them was reached on June 6. The agreement had to be ratified by Iceland’s parliament which attached conditions to the state guarantee. The Althingi’s conditions linked repayments to economic growth, preserved the island’s right to legally challenge its payment obligation, and called for a full suspension in repayments in 2024. Some of the conditions were rejected by the U.K. and the Netherlands, sending the three nations back to the negotiating table. Outstanding Claims The bill allows for some of the parliament’s original conditions, such as linking payments to economic growth. The bill establishes a mechanism on how to settle any outstanding claims in 2024, for which Iceland bares full responsibility. The Netherlands and the U.K. will acknowledge that Iceland has the right to challenge the agreement, according to a joint statement from the three countries published on Oct. 19. The failure of Landsbanki, Glitnir Bank hf and Kaupthing Bank hf led to the collapse of the currency and forced Iceland to go to the IMF to get a $2.1 billion loan, with a further $2.5 billion pledged by Nordic nations. To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

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Investors Real Estate Trust Reports Second Quarter 2010 Financial and Operating Results

December 10, 2009

MINOT, N.D., Dec. 10, 2009 (GLOBE NEWSWIRE) — Investors Real Estate Trust (Nasdaq:IRET) (Nasdaq:IRETP) (“IRET” or the “Company”), today reported its financial and operating results for the three months ended October 31, 2009.

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Swiss National Bank Halts Emergency Bond Buying, Will Keep Selling Franc

December 10, 2009

By Klaus Wille Dec. 10 (Bloomberg) — The Swiss central bank left its benchmark rate unchanged today as it tries to nurture the economy’s recovery from the deepest recession in three decades. The Swiss National Bank, led by Jean-Pierre Roth , held the three-month Libor target at 0.25 percent, as expected by all 16 economists in a Bloomberg News survey. Roth and the two other members of the SNB governing board will hold a press conference at 10 a.m. The SNB said it will stop bond purchases and continue currency purchases. The Swiss economy emerged from its worst recession in more than 30 years in the third quarter after the SNB cut borrowing costs, bought corporate bonds and purchased foreign currencies to halt the franc’s gain and stave off deflation. Roth said Nov. 30 that signs of growth “don’t mean that all problems are gone.” “We may see the beginning of a road map for the exit set out,” said Julien Manceaux , an economist at ING Group in Brussels, who expects the SNB main rate may remain unchanged until September 2010. “The Swiss economy is not out of the woods yet and any overzealousness” could threaten the recovery. The SNB has left its main rate at 0.25 percent since March. Swiss gross domestic product rose 0.3 percent in the three months through September, ending a year-long contraction, and data indicate the recovery is strengthening. The KOF leading indicator has risen for seven months and manufacturing has resumed expansion. Roth, chairing his last monetary policy meeting before Vice-Chairman Philipp Hildebrand takes over in January, said on Nov. 30 that there was a “bit of light” in the economy. To contact the reporter on this story: Klaus Wille in Zurich at kwille@bloomberg.net .

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Swiss National Bank Halts Emergency Bond Buying, Will Keep Selling Franc

December 10, 2009

By Klaus Wille Dec. 10 (Bloomberg) — The Swiss central bank left its benchmark rate unchanged today as it tries to nurture the economy’s recovery from the deepest recession in three decades. The Swiss National Bank, led by Jean-Pierre Roth , held the three-month Libor target at 0.25 percent, as expected by all 16 economists in a Bloomberg News survey. Roth and the two other members of the SNB governing board will hold a press conference at 10 a.m. The SNB said it will stop bond purchases and continue currency purchases. The Swiss economy emerged from its worst recession in more than 30 years in the third quarter after the SNB cut borrowing costs, bought corporate bonds and purchased foreign currencies to halt the franc’s gain and stave off deflation. Roth said Nov. 30 that signs of growth “don’t mean that all problems are gone.” “We may see the beginning of a road map for the exit set out,” said Julien Manceaux , an economist at ING Group in Brussels, who expects the SNB main rate may remain unchanged until September 2010. “The Swiss economy is not out of the woods yet and any overzealousness” could threaten the recovery. The SNB has left its main rate at 0.25 percent since March. Swiss gross domestic product rose 0.3 percent in the three months through September, ending a year-long contraction, and data indicate the recovery is strengthening. The KOF leading indicator has risen for seven months and manufacturing has resumed expansion. Roth, chairing his last monetary policy meeting before Vice-Chairman Philipp Hildebrand takes over in January, said on Nov. 30 that there was a “bit of light” in the economy. To contact the reporter on this story: Klaus Wille in Zurich at kwille@bloomberg.net .

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Despite Financial Crisis, Credit Rating Agencies Skirt Overhaul

December 7, 2009

When the financial crisis began, few players on Wall Street looked more ripe for reform than the Big Three credit rating agencies… So as Washington rewrites the rules of Wall Street, how is the overhaul of the Big Three coming? It isn’t, finance experts say.

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Foote’s Texas Orphan Toils on Drunkard’s Farm in Family Saga: John Simon

November 30, 2009

Review by John Simon Nov. 30 (Bloomberg) — Horton Foote lived just long enough to complete “ The Orphans’ Home Cycle ,” the trilogy that follows the turbulent life of Texan Horace Robedaux from the turn of the 20th century to the Depression. The first part of the nine-hour epic, currently being staged in New York by the Signature Theatre Company , is a magnificent cross-section of a great playwright’s career. We see Robedaux, loosely based on Foote’s father, transformed from an eager 12-year-old boy to a bedeviled 20- year-old in Part 1. Over the next two plays, he gets married, endures the 1918 flu epidemic, deals with the death of his father-in-law and struggles to support his family. Foote, who died in March at the age of 92, covered the same territory in nine previous plays about the Robedaux family, but now they’ve been condensed into a three-part cycle that can been seen as separate dramas or in one marathon session. Part 1 is performed by a 22-member cast, including several in dual roles. One of those doing double-duty is the playwright’s daughter, Hallie Foote, who seamlessly negotiates two antithetical parts. At the start, young Horace is left with feuding relatives in the small town of Harrison after his father dies and his mother prepares to remarry and move to Houston with her daughter. A certain confusion reigns here as 15 characters are thrown at us cold. Even so, we get a sense of alliances and internecine hostilities, and how bedeviling it all is for a young boy whose loyalty is divided, schooling interrupted and future uncertain. Father’s Tombstone We next find Horace at 14 employed at a violent drunkard’s farm that uses convict labor. Though working his tail off, he is denied even the measly pay with which he hopes to buy a tombstone for his father. Eight new characters demand spectator agility. Later, Horace visits his mother in Houston on railway fare she had to sneak to him. She has married a dour and hostile railroad employee, Pete Davenport, who adopted Horace’s narcissistic sister, Lily Dale, but not Horace. Unwelcome by Pete even as an overnight visitor, sudden illness beds Horace for a much longer stay. The poisonous atmosphere in Houston is tense as can be. By now, we feel deeply involved with Horace and the hardscrabble lives of those around him. Michael Wilson’s fluid staging helps to tie together three somewhat disparate acts. But what most justifies the three-hour duration, which includes two brief intermissions, is Foote’s uncanny ability to empathize with his characters, regardless of how marginal or unsympathetic they are. Three Horaces Confronted with such a huge cast, I must limit myself to praising the three Horaces — Dylan Riley Snyder, Henry Hodges and Bill Heck — as well as Annalee Jefferies as the mother, Jenny Dare Paulin as the sister and James DeMarse as the dangerously soused, gun-toting landowner. Part 1, “The Story of a Childhood,” is playing through March 27 at the Peter Norton Space, 555 W. 42nd St., between 10th and 11th Avenues. Information: +1-212-244-7529; http://www.signaturetheatre.org . Rating: **** Part 2, “The Story of a Marriage,” opens Dec. 3 and runs through March 27. Part 3, “The Story of a Family,” runs from Jan. 7 to March 28. Marathon performances, which include all three plays, will be staged on Feb. 6, Feb. 27 and March 6. ( John Simon is the New York drama critic for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: John Simon in New York at jis1925@aol.com .

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RBS Sells $7 Billion of Debt in Biggest U.S. Corporate Offering Since May

November 20, 2009

By Gabrielle Coppola Nov. 20 (Bloomberg) — Royal Bank of Scotland Plc plans to sell $7 billion of debt due in March 2012 backed by the U.K. government, according to a person familiar with the transaction. The issue will be split between $2 billion of fixed-rate notes that may pay a yield of 26 basis points more than the benchmark midswap rate, and $5 billion of floating-rate debt that may pay a spread of 26 basis points more than the three- month London interbank offered rate, said the person, who declined to be identified because terms aren’t set. A basis point is 0.01 percentage point. To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

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Mitsubishi UFJ’s Planned Sale Spells `Harsh World’ for Japan Bank Rivals

November 18, 2009

By Finbarr Flynn and Takako Taniguchi Nov. 19 (Bloomberg) — Mitsubishi UFJ Financial Group Inc. may beat Japanese banking rivals to market with its planned sale of as much as 1 trillion yen ($11.2 billion) in stock as regulators demand bigger capital cushions. Chief Executive Officer Nobuo Kuroyanagi said he didn’t want to “miss the opportunity” to tap equity investors for the second time in less than a year as smaller competitors Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are barred from selling common stock for at least another month. Pulling off what could be Japan’s largest sale of additional common stock may “have potentially positive impact” on Mitsubishi UFJ’s credit ratings, Standard & Poor’s said. The offering will add to more than $20 billion of stock sales by Mitsubishi UFJ, Sumitomo Mitsui and Mizuho in the past year. Mitsubishi UFJ “issued first and denied the fruits to its peers,” said Nicholas Smith , director at MF Global FXA Securities Ltd. in Tokyo. “It’s a harsh world.” Sumitomo Mitsui, Japan’s second-largest bank by market value, fell 5.9 percent in Tokyo trading yesterday, the worst performer on the 84-stock Topix Banks Index . The company can sell more common stock from next month under the terms of its $9.7 billion offering in July. Mizuho Financial declined 2.4 percent yesterday. The bank, which has the weakest capital ratio among the three lenders, is restricted from selling common equity until January. Mizuho raised about $5.9 billion in July. ‘More Pressure’ Mizuho “will have to raise capital” regardless of yesterday’s announcement, said Ismael Pili , a Tokyo-based analyst at Macquarie Group Ltd. “For Sumitomo Mitsui, it puts more pressure on them.” Pili estimated the so-called core Tier 1 capital ratio at Mitsubishi UFJ, Japan’s largest bank by market value , would climb 1 percentage point to 7.8 percent if it raises 1 trillion yen. Tier 1 ratios measure banks’ ability to absorb losses. JPMorgan Chase & Co., the largest U.S. bank by market value, had a core Tier 1 ratio of 8.2 percent as of Sept. 31, while HSBC Holdings Plc stood at 8.8 percent at the end of June. Mizuho will need an additional 1.8 trillion yen in capital to keep pace with a potential 1 trillion yen stock sale by Mitsubishi UFJ, Nana Otsuki , a Tokyo-based analyst at UBS AG, said this week. Sumitomo Mitsui would need to raise 1.2 trillion yen. Investors at the smaller banks face greater risk of share dilution compared with Mitsubishi UFJ’s, she said. Earnings Gain Mitsubishi UFJ’s net income climbed 59 percent to 65 billion yen for the three months ended Sept. 30 as lending and trading income increased. The first-quarter earnings were derived from subtracting from half-year figures reported in a statement to the Tokyo Stock Exchange yesterday. A plan to merge its brokerage unit with Morgan Stanley’s Japanese securities unit is also being revised, Mitsubishi UFJ said. Mitsubishi UFJ and Morgan Stanley will split the joint venture into two parts, allowing the U.S. firm to keep a voting majority at its Japanese brokerage. The revised agreement may hamper Mitsubishi UFJ’s efforts to compete with Nomura Holdings Inc. , Japan’s largest brokerage, as the companies step back from full integration of their Japanese securities operations. To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net

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Buffett’s Berkshire Discloses Holdings in Exxon Mobil, Nestle, Travelers

November 17, 2009

By Andrew Frye Nov. 17 (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. took stakes in Exxon Mobil Corp. and Nestle SA , betting on the world’s biggest oil and food companies. Berkshire held about 1.28 million Exxon shares and 3.4 million American depositary receipts of Nestle at the end of the third quarter, the Omaha, Nebraska-based company said in a regulatory filing yesterday. The stake in Irving, Texas-based Exxon would be worth about $95 million, based on yesterday’s stock price, while the Nestle holding would be valued at $161.5 million. Berkshire also raised its stake in Wal-Mart Stores Inc. , the largest retailer. “Berkshire is increasingly looking for companies that are world-leading brands,” said Tom Russo , partner at Gardner Russo & Gardner, which holds shares in Berkshire and Vevey, Switzerland-based Nestle. Buffett is drawing down Berkshire’s cash hoard to invest in some of the world’s biggest firms as credit markets improve. The $2.23 billion spent on stocks in the three months ended Sept. 30 is the most in a year and allowed Berkshire to add a stake in insurer Travelers Cos. and increase its holding of Wells Fargo & Co. Buffett agreed this month to take over Burlington Northern Santa Fe Corp. , the No. 1 U.S. railroad, for $26 billion . “They are all very unique and strong franchises,” said Mohnish Pabrai , founder of Irvine, California- based Pabrai Investment Funds, which owns shares in Berkshire and San Francisco-based Wells Fargo. “The equity bets are tending to be ones which can be held for a very long period of time.” Stocks Rally Berkshire, whose U.S. stock portfolio was valued at $56.5 billion at the end of the third quarter, is benefiting from the biggest rally in the Dow Jones Industrial Average since 1933. The addition of Exxon and New York-based Travelers gives Berkshire equity stakes in 11 of the Dow’s 30 companies. The 113-year-old Dow has surged 59 percent since March 9, the steepest run-up over the same number of days since 1933, according to data compiled by Bloomberg. Travelers , which was added to the Dow this year, has gained 58 percent over that period, while Exxon is up 15 percent to give the firm a market value of about $353 billion. “Exxon has probably the lowest cost structure in the industry, which I know is attractive to Buffett,” said Philip Weiss , a senior analyst at Argus Research Corp. “No matter where oil prices go, Exxon always fares better.” Stock picks by Buffett, the second-richest American, are watched by mutual funds and individuals looking for clues about his investment strategy. Berkshire’s biggest stockholding is an investment in Coca-Cola Co. worth about $10.7 billion. The firm’s holding in Walmart rose 90 percent in the third quarter and is valued at about $2 billion. Long-Term Advantage “Buffett buying more indicates that Walmart has a long- term competitive business advantage,” David Katz , who oversees $1.2 billion, including Walmart shares, at Matrix Asset Advisors in New York, said by telephone. “This fits exactly into what Warren Buffett likes: growth businesses where you’re not paying a lot.” Walmart, based in Bentonville, Arkansas, increased profit 3.2 percent in the quarter that ended Oct. 31 by reducing inventories 4.1 percent and boosting revenue 1.1 percent to $99.4 billion. It is accelerating efforts to curb expenses amid falling food prices and the worst U.S. unemployment rate in 26 years, Chief Executive Officer Mike Duke told analysts Nov. 12. “A terrible market or a terrible economy is your friend,” Buffett said at a forum in New York last week, when asked whether the stock market rally was unwarranted, given the recession. “It’s a terrible mistake to look at what’s going on in the economy today and decide whether to buy or sell stocks.” Wells Fargo Berkshire, already the largest shareholder in Wells Fargo, increased holdings of the bank by 3.6 percent to 313.4 million shares in the third quarter. The biggest-U.S. home lender has more than tripled from lows in March. Buffett has said he told students that month that if he had to put all his net worth into one stock, Wells Fargo “would be the stock.” Berkshire continued to cut its holdings in No. 2 U.S. oil refiner ConocoPhillips, trimming its stake about 11 percent in the three months ended Sept. 30. A decline in the value of the stake contributed to Berkshire’s worst quarterly loss in at least two decades in the first three months of 2009. Buffett called the investment a “major mistake” after building the shares with oil prices near their peak last year. Berkshire showed no stake in Eaton Corp. , the Cleveland- based maker of circuit breakers and fuel pumps. Buffett’s company held 2 million shares three months earlier. The firm cut holdings of NRG Energy Inc. , the second-largest power producer in Texas, by 17 percent to 6 million. WellPoint, SunTrust Berkshire reduced its stake in WellPoint Inc. , the largest U.S. health insurer by membership, by 3 percent to 3.39 million shares. The stake in Atlanta-based SunTrust Banks Inc. was cut by 3.9 percent in the three months to 3.07 million shares. Berkshire disclosed a stake of 3.63 million shares in trash hauler Republic Services Inc. Will Flower , a spokesman for Phoenix-based Republic, said the investment was “a good fit” with Berkshire’s strategy. Exxon spokesman Rob Young , Wal-Mart’s John Simley , Travelers spokesman Shane Boyd and Eaton’s Hilary Spittle declined to comment. The filing omits information about some transactions because Buffett is permitted to keep them confidential for now. The U.S. Securities and Exchange Commission sometimes allows companies to withhold data from the public to limit copycat investing while a firm is building or cutting a position. Berkshire disclosed that it had a stake in Exxon as of June 30, a holding not announced in the second-quarter report. Buffett’s reported portfolio doesn’t list stocks he’s not required to disclose, including non-U.S. holdings. To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net .

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Japan’s Economy Expanded at 4.8% in Third Quarter, More Than Anticipated

November 15, 2009

By Jason Clenfield and Tatsuo Ito Nov. 16 (Bloomberg) — Japan’s economy grew at an annual 4.8 percent pace in the third quarter, the second straight expansion after the nation’s worst postwar recession. Gross domestic product accelerated from a revised 2.7 percent expansion in the three months ended June 30, the Cabinet Office said today in Tokyo. The median estimate of 20 economists surveyed by Bloomberg News was for 2.9 percent. Analysts had forecast growth to slow next year as the impact of stimulus spending wanes. A third of Japan’s factories still sit idle, forcing firms to delay hiring and investment that would help to sustain the revival. “Growth is still being driven by things that are temporary: the inventory cycle and fiscal stimulus,” Hiroshi Shiraishi , an economist at BNP Paribas in Tokyo, said before the report. “The main upside is emerging markets, which are doing quite a bit better than a lot of people expected.” The yen traded at 89.53 per dollar at 9:12 a.m. in Tokyo from 89.60 before the report was published. The currency’s more than 5 percent gain against the dollar over the past three months has made Japanese products more expensive abroad. The Nikkei 225 Stock Average rose 0.05 percent. Uncertainty about the economy’s long-term prospects has weighed on the stock average, which has fallen 1.8 percent since June 30, even as companies report improved earnings. Inherited Policies Investment by companies drove the growth acceleration. Capital spending rose 1.6 percent in the three months through September, the first gain in six quarters and faster than the 0.5 percent median estimate of analysts, the report showed. Business investment accounts for about 15 percent of the economy and drove more than a third of Japan’s growth between 2002 and 2007. Consumer spending, which makes up about 60 percent of the economy, climbed 0.7 percent, more than the 0.6 percent expected by economists. Exports increased 6.4 percent from the previous quarter, in line with analysts’ forecasts. Prime Minister Yukio Hatoyama’s Democratic Party of Japan inherited policies that helped prop up spending at home at the cost of increasing a debt that’s approaching double the size of GDP. The DPJ last month froze about 3 trillion yen ($33 billion) of the previous government’s 25 trillion yen in stimulus packages, saying it was wasteful, and is now contemplating whether to redeploy the cash this fiscal year. Extra Spending Plan Finance Minister Hirohisa Fujii said on Nov. 13 that today’s GDP report will be “one of the important factors” in deciding whether to compile an extra spending plan in the year ending March 2010. Stimulus from abroad has also spurred Japan’s growth. China’s 4 trillion yuan ($586 billion) in government spending on building projects and household subsidies helped Hitachi Construction Machinery Co. drain stockpiles and return to profit last quarter. Honda Motor Co. last month tripled its full-year profit forecast because of Chinese sales. Japan’s expansion since March doesn’t make up the ground lost during the previous four quarters of contraction, when the economy shrank to its 2003 size. Industrial production is still about 20 percent below last year’s level and the slump in domestic demand has depressed consumer prices , which have dropped for seven months. The Bank of Japan last month forecast deflation will persist through fiscal 2011, leaving little room to raise interest rates from near zero. Central bank Governor Masaaki Shirakawa on Nov. 7 pledged to maintain an “extremely accommodative monetary environment.” “Manufacturers are saddled with massive overcapacity so you can’t expect a strong recovery for quite some time. That’s a given,” said BNP’s Shiraishi. “That means this initial bounce-back in the economy won’t really accelerate.” To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito2@bloomberg.net

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Japan Economy Grew at 4.8% Pace in Third Quarter, Faster Than Anticipated

November 15, 2009

By Jason Clenfield and Tatsuo Ito Nov. 16 (Bloomberg) — Japan’s economy grew at an annual 4.8 percent pace in the third quarter, the second straight expansion after the nation’s worst postwar recession. Gross domestic product accelerated from a revised 2.7 percent expansion in the three months ended June 30, the Cabinet Office said today in Tokyo. The median estimate of 20 economists surveyed by Bloomberg News was for 2.9 percent. Analysts had forecast growth to slow next year as the impact of stimulus spending wanes. A third of Japan’s factories still sit idle, forcing firms to delay hiring and investment that would help to sustain the revival. “Growth is still being driven by things that are temporary: the inventory cycle and fiscal stimulus,” Hiroshi Shiraishi , an economist at BNP Paribas in Tokyo, said before the report. “The main upside is emerging markets, which are doing quite a bit better than a lot of people expected.” The yen traded at 89.53 per dollar at 9:12 a.m. in Tokyo from 89.60 before the report was published. The currency’s more than 5 percent gain against the dollar over the past three months has made Japanese products more expensive abroad. The Nikkei 225 Stock Average rose 0.05 percent. Uncertainty about the economy’s long-term prospects has weighed on the stock average, which has fallen 1.8 percent since June 30, even as companies report improved earnings. Inherited Policies Investment by companies drove the growth acceleration. Capital spending rose 1.6 percent in the three months through September, the first gain in six quarters and faster than the 0.5 percent median estimate of analysts, the report showed. Business investment accounts for about 15 percent of the economy and drove more than a third of Japan’s growth between 2002 and 2007. Consumer spending, which makes up about 60 percent of the economy, climbed 0.7 percent, more than the 0.6 percent expected by economists. Exports increased 6.4 percent from the previous quarter, in line with analysts’ forecasts. Prime Minister Yukio Hatoyama’s Democratic Party of Japan inherited policies that helped prop up spending at home at the cost of increasing a debt that’s approaching double the size of GDP. The DPJ last month froze about 3 trillion yen ($33 billion) of the previous government’s 25 trillion yen in stimulus packages, saying it was wasteful, and is now contemplating whether to redeploy the cash this fiscal year. Extra Spending Plan Finance Minister Hirohisa Fujii said on Nov. 13 that today’s GDP report will be “one of the important factors” in deciding whether to compile an extra spending plan in the year ending March 2010. Stimulus from abroad has also spurred Japan’s growth. China’s 4 trillion yuan ($586 billion) in government spending on building projects and household subsidies helped Hitachi Construction Machinery Co. drain stockpiles and return to profit last quarter. Honda Motor Co. last month tripled its full-year profit forecast because of Chinese sales. Japan’s expansion since March doesn’t make up the ground lost during the previous four quarters of contraction, when the economy shrank to its 2003 size. Industrial production is still about 20 percent below last year’s level and the slump in domestic demand has depressed consumer prices , which have dropped for seven months. The Bank of Japan last month forecast deflation will persist through fiscal 2011, leaving little room to raise interest rates from near zero. Central bank Governor Masaaki Shirakawa on Nov. 7 pledged to maintain an “extremely accommodative monetary environment.” “Manufacturers are saddled with massive overcapacity so you can’t expect a strong recovery for quite some time. That’s a given,” said BNP’s Shiraishi. “That means this initial bounce-back in the economy won’t really accelerate.” To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito2@bloomberg.net

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Japan Risks `Stop-and-Go’ Recovery as Hatoyama Redirects Stimulus Spending

November 12, 2009

By Jason Clenfield Nov. 13 (Bloomberg) — Japan’s economy probably expanded at the fastest pace in more than a year in the third quarter, helped by emergency spending by the former government that Prime Minister Yukio Hatoyama wants to phase out. Gross domestic product grew an annualized 2.9 percent in the third quarter, following a 2.3 percent expansion in the three months ended June 30, according to the median forecast of 20 economists surveyed ahead of the GDP release due Nov. 16. Domestic demand will make up more than half of the expansion for the period, the first time that’s happened since the first quarter of 2007, according to the median projection. Hatoyama’s plan to redirect what he termed the wasteful spending implemented by the ousted Liberal Democratic Party clouds the outlook for growth in 2010, analysts say. “The plan is to divert the money to more constructive measures,” said Takahide Kiuchi , chief economist at Nomura Securities Co. in Tokyo. “The problem is that in this very delicate period, a stop-and-go approach poses a huge risk,” he said, adding that delays in implementing stimulus policies may trim growth by 0.5 percentage point in the six months to March. Hatoyama’s Democratic Party of Japan inherited policies that helped stabilize the economy at the cost of increasing a debt that’s approaching double the size of GDP. The DPJ last month blocked about 3 trillion yen ($33 billion) in stimulus spending it says is wasteful. Consumer Spending Consumer spending, which makes up about 60 percent of the economy, rose 0.6 percent last quarter, the survey indicates. More than 20 trillion yen in stimulus that includes subsidies for companies that choose not to dismiss workers has helped stem job losses and lift household sentiment to a two-year high. Incentives to encourage purchases of energy-saving appliances also added to sales at retailers including electronics dealer Yamada Denki Co. Government spending on day-to-day operations increased 0.5 percent last quarter, while public investment in roads, bridges and other projects fell 0.6 percent, according to the survey. Since Hatoyama took office in September, the government has frozen 2.9 trillion yen of the LDP’s supplementary budget, including public works and some subsidies to local governments. While the DPJ plans to divert the funds to its own programs, it hasn’t determined when or how to use them. DPJ Pledges The party has said it needs to find 7.1 trillion yen in the year beginning April 1 to fulfill pledges ranging from childcare subsidies to lowering school tuition costs. “The sustainability of growth could be impacted by the policy fluctuation under the Democratic Party,” said Tetsuro Sugiura , chief economist at Mizuho Securities Research Institute in Tokyo. “As long as they cut 3 trillion yen out of the budget, it will negatively affect economic activity in the near future, particularly if it’s public works.” Uncertainty about the economy’s longer-term prospects has weighed on the Nikkei 225 Stock Average , which has fallen 2.1 percent since June 30, even as companies report profits nearly double those of the previous period. Still, profits may have grown enough to allow businesses to resume buying plant and equipment. Economists predict capital spending rose 0.5 percent in the three months through September, the first gain in six quarters. Business investment accounts for about 15 percent of the economy and drove more than a third of Japan’s growth between 2002 and 2007. Orders Rebound Machinery orders , which tend to lead capital spending by three to six months, are projected to rise 1 percent in the current quarter. The rebound follows a quarter in which bookings sank to the lowest level since records started in 1987. Japan’s recovery has benefited from stimulus spending by governments abroad as well. Exports accounted for almost half of the country’s growth in the three months ended Sept. 30, increasing 6.2 percent from the previous quarter, according to the survey. Demand from China, which is implementing 4 trillion yuan ($586 billion) of extraordinary spending, has helped Japanese companies as diverse as Hitachi Construction Machinery Co. and Honda Motor Co. Sales there helped Hitachi clear an inventory backlog and return to profit last quarter. Honda last month tripled its full-year profit forecast, even as its U.S. revenue slumps. Japan’s expansion in the half year since March doesn’t make up the ground lost during the previous four quarters of contraction, when the economy shrank to its 2003 size. Industrial production is still about 20 percent below last year’s level and the slump in domestic demand has depressed consumer prices , which have dropped for seven straight months. The Bank of Japan last month forecast deflation to persist through the 2011 fiscal year, leaving little room to raise interest rates from near zero. Governor Masaaki Shirakawa on Nov. 7 pledged to maintain an “extremely accommodative monetary environment.” To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net

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Whitestone REIT Announces Third Quarter 2009 Results

November 10, 2009

HOUSTON, Nov. 10, 2009 (GLOBE NEWSWIRE) — Whitestone REIT, a public, non-traded REIT that acquires, owns and operates Community Centered Properties(TM), which are visibly located properties in established or developing culturally diverse neighborhoods, today announced financial results for the three and nine months ended September 30, 2009.

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Buffett’s Firm Berkshire Hathaway Sees Profits Triple

November 8, 2009

Berkshire Hathaway said its net profit was $3.2bn (£1.9bn) in the three months to September, compared to $1.1bn in the same period last year.

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NTS Realty Holdings Limited Partnership Announces It Intends to File Its Quarterly Report on Form 10-Q for the Three and Nine Months Ended September…

November 6, 2009

LOUISVILLE, KY–(Marketwire – November 6, 2009) – ( NYSE Amex : NLP ) – NTS Realty Holdings Limited Partnership (the “Company”) announced that it intends to file its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2009 with the Securities and Exchange Commission (the “Commission”) today. The Quarterly Report will contain earnings information for the Company for the three and nine months ended September 30, 2009. A copy of the Quarterly Report will be available on the Company’s website at http://www.ntsdevelopment.com under the heading “Investor Relations” and from the Commission’s website at http://sec.gov .

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Detroit Schools, Indiana Hospital Win Voter Approval for Bonds

November 4, 2009

By Michael B. Marois Nov. 4 (Bloomberg) — Voters in Indiana, New Jersey and the city of Detroit approved plans to sell more than $1.6 billion of bonds, delivering victories to the three largest borrowing proposals in yesterday’s election. U.S. states and municipalities sought voter approval to issue $7.9 billion in debt, the smallest sum in 14 years, according to Ipreo LLC , a New York-based financial software firm. Borrowing measures were on the ballot in 24 states led by Texas, where more than 60 bond initiatives were proposed. Officials have scaled back plans to borrow for public works from a record $78.6 billion in 2006 as the worst recession since the Great Depression slashes tax collections. In the second quarter, state tax receipts tumbled by a record 17 percent, according to the Rockefeller Institute of Government in Albany, New York. Governments have been cutting spending to make up for the drop. Reluctance to ask voters to approve more spending or borrowing during a recession may have led to the lower number of bond proposals, said Joseph Seneca , professor of economics at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy in New Brunswick, New Jersey. “The theme is deep voter concern about public-sector costs,” Seneca said in an interview before the votes. “I think it’s going to be a mood of caution.” Four-Decade Low Average yields on top-rated municipal securities fell to 3.94 percent, the lowest level in more than four decades, on Oct. 1 as cash flowing into mutual funds accelerated to a record. Borrowing costs, as measured by the weekly Bond Buyer 20 Index, rose to 4.39 percent on Oct. 29. This year’s number of bond proposals was low, even for an off-year election when voters aren’t casting ballots in nationwide races for Congress or the Presidency. The previous low was $7.27 billion in 1995, when voters approved 84.5 percent. Early returns showed that all of the measures valued at more than $200 million were winning. Voters in Indiana’s Marion County, the home of the state capital and largest city, Indianapolis, approved selling securities to build a $754 million medical center to replace the county’s Wishard Memorial Hospital, where some buildings are almost a century old. Detroit Schools A plan to raise $500 million to build eight schools and upgrade others passed in Detroit, the largest U.S. city with a credit rating below investment grade. The school system wants to sell debt under two federal stimulus initiatives: Build America Bonds and the Qualified School Construction bond program, according to district documents . Under the Taxable Build America Bonds program, 35 percent of interest cost is paid by the U.S. Treasury. Qualified school debt compensates investors with federal tax credits and gives localities zero or low interest-rate loans. New Jersey voters approved a measure to sell $400 million of state-backed bonds to fund conservation of open spaces in the most densely populated U.S. state. The ballot question asked to give the state authority to sell general obligation bonds and use the proceeds to create parks and preserve farms and historic sites from urban sprawl. Voters in Fairfax County, Virginia, which carries the highest bond ratings of the three main credit evaluators, approved a $232.5 million debt sale to finance expansion and renovation of schools. Over Capacity The work is needed at the 12th-largest U.S. school system because enrollments have pushed some buildings beyond capacity and will continue to grow for the next five years, according to the district’s Web site. In Utah, voters in the Granite School District , the second- largest in the state, approved a ballot measure to sell $256 million of bonds for school construction. Voters in the Davis School District, the third-largest in Utah, were approving a ballot measure seeking $250 million of bonds by 20 percentage points with a quarter of the ballots counted. Ohio voters passed a constitutional amendment that authorizes the state to sell $200 million of debt to pay bonuses to members of the military. Under the plan, the Ohio Department of Veterans Services will pay as much as $1,000 a month to Ohio residents who served in the military during the wars in the Persian Gulf, Afghanistan and Iraq. The Texas Veterans Land Board, which provides housing loans, won voter assent through an amendment to the state constitution allowing the agency to issue as much as $4 billion in debt. The board previously had to seek voter approval every time it wanted to raise capital. To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

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Berlin Wall 20th Anniversay Commemoration Reunites Bush, Gorbachev, Kohl

October 31, 2009

By Patrick Donahue Oct. 31 (Bloomberg) — Former President George Bush lauded his German ex-counterpart, Helmut Kohl , as a “solid rock” and onetime Soviet President Mikhail Gorbachev called for an American “perestroika” as the three Cold War leaders reunited for the 20th anniversary of the collapse of the Berlin Wall. The three were honored at an event today in Berlin attended by Chancellor Angela Merkel and German President Horst Koehler as the capital prepares to mark two decades since the wall came down on Nov. 9, 1989, bringing an end to communist rule in East Germany and preparing the way for reunification. It was 79-year-old Kohl’s first appearance in public since a fall last year at his home in southwestern Germany left him hospitalized and in need of physical rehabilitation. He appeared on stage in a wheelchair and spoke haltingly. “In German history we don’t have many reasons to be proud,” Kohl told the audience. Still, he said that of his own chancellorship, “I have every reason, despite the resentment and exasperation, to be proud. I have nothing better to be proud of than being proud of German unity.” Bush, who experienced the Berlin Wall’s collapse in the first year of his presidency and went on to support German reunification in the face of resistance from European leaders, played down the politics of the changes in 1989. He said the breakthrough occurred “in the hearts and minds of people who had too long been deprived of their God-given rights.” The oldest of the three leaders, 85-year-old Bush walked with a cane. Gorbachev, 78, recalled how relations with Kohl began badly before improving. The former Soviet leader, whose liberalizing policies of “glasnost” (transparency) and “perestroika” (rebuilding) ushered in the downfall of the Soviet Union, called for renewed friendship between Russia and its former Cold War foes. Citing the election of President Barack Obama , Gorbachev said that the U.S. “needs its own perestroika.” To contact the reporter on this story: Patrick Donahue in Berlin at at pdonahue1@bloomberg.net .

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U.K. Unemployment Rises by 88,000, the Least in a Year, as Recession Eases

October 14, 2009

By Svenja O’Donnell (Corrects election deadline in third paragraph.) Oct. 14 (Bloomberg) — U.K. unemployment rose by the least in a year and fewer people signed on for jobless benefits than economists forecast as the recession eased. The number of people seeking work in the three months through August rose by 88,000, the smallest increase since the quarter through July 2008, the Office for National Statistics said in London today. Claims for jobless benefits rose by 20,800 in September, less than the 24,500 median forecast in a Bloomberg News survey of 28 economists. Prime Minister Gordon Brown is trying to revive the economy in time for an election due by June 2010 which opinion polls show he is still on track to lose. Gross domestic product, which has dropped for five quarters, may have stopped shrinking during the three months through September, curbing job losses. “We can take some comfort from recent trends in unemployment numbers,” Philip Shaw , chief economist at Investec Securities in London, said before the report. “There is some justification for a bit of optimism but evidently unemployment looks set to continue rising for a little while longer.” The unemployment rate in the three months through August as measured by International Labour Organisation standards was 7.9 percent, the statistics office said. That compares with 9.6 percent in the euro region, 9.8 percent in the U.S. and 5.5 percent in Japan. Job Cuts Alliance & Leicester, a unit of Banco Santander SA, announced the closure of its Heritage House site and the loss of 200 jobs across two Leicester sites in England, the Communication Workers Union said yesterday in a statement. Overall unemployment was 2.47 million in the quarter through August, a drop of 1,000 from the three months through July. The total claimant count rose to 1.63 million in September, the highest since April 1997. Brown’s Labour Party advanced in a survey by Populus Ltd. after ministers attacked bankers and the rich, narrowing the Conservatives’ lead over the government. Labour had the support of 30 percent of voters compared with 40 percent for the opposition, according to the survey for the London-based Times conducted from Oct. 9 to Oct. 11. The U.K. economy shrank 0.6 percent in the second quarter, less than previously estimated, and the National Institute of Economics and Social Research said last week gross domestic product stopped falling in the three months through September. Signs of recovery are allowing some companies to limit job losses. General Motors Co.’s U.K.-based Vauxhall unit, which employs more than 5,000 people, will suffer no compulsory job losses following its planned takeover by Magna International Inc. of Canada, the Unite union said yesterday. Average earnings excluding bonuses grew an annual 1.9 percent in the quarter through August, the lowest since at least 2001, the statistics office said. Including bonuses, they increased by 1.6 percent. To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

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Unemployment in U.K. Rises Least in Year as Jobless Claims Trail Forecasts

October 14, 2009

By Svenja O’Donnell (Corrects election deadline in third paragraph.) Oct. 14 (Bloomberg) — U.K. unemployment rose by the least in a year and fewer people signed on for jobless benefits than economists forecast as the recession eased. The number of people seeking work in the three months through August rose by 88,000, the smallest increase since the quarter through July 2008, the Office for National Statistics said in London today. Claims for jobless benefits rose by 20,800 in September, less than the 24,500 median forecast in a Bloomberg News survey of 28 economists. Prime Minister Gordon Brown is trying to revive the economy in time for an election due by June 2010 which opinion polls show he is still on track to lose. Gross domestic product, which has dropped for five quarters, may have stopped shrinking during the three months through September, curbing job losses. “We can take some comfort from recent trends in unemployment numbers,” Philip Shaw , chief economist at Investec Securities in London, said before the report. “There is some justification for a bit of optimism but evidently unemployment looks set to continue rising for a little while longer.” The unemployment rate in the three months through August as measured by International Labour Organisation standards was 7.9 percent, the statistics office said. That compares with 9.6 percent in the euro region, 9.8 percent in the U.S. and 5.5 percent in Japan. Job Cuts Alliance & Leicester, a unit of Banco Santander SA, announced the closure of its Heritage House site and the loss of 200 jobs across two Leicester sites in England, the Communication Workers Union said yesterday in a statement. Overall unemployment was 2.47 million in the quarter through August, a drop of 1,000 from the three months through July. The total claimant count rose to 1.63 million in September, the highest since April 1997. Brown’s Labour Party advanced in a survey by Populus Ltd. after ministers attacked bankers and the rich, narrowing the Conservatives’ lead over the government. Labour had the support of 30 percent of voters compared with 40 percent for the opposition, according to the survey for the London-based Times conducted from Oct. 9 to Oct. 11. The U.K. economy shrank 0.6 percent in the second quarter, less than previously estimated, and the National Institute of Economics and Social Research said last week gross domestic product stopped falling in the three months through September. Signs of recovery are allowing some companies to limit job losses. General Motors Co.’s U.K.-based Vauxhall unit, which employs more than 5,000 people, will suffer no compulsory job losses following its planned takeover by Magna International Inc. of Canada, the Unite union said yesterday. Average earnings excluding bonuses grew an annual 1.9 percent in the quarter through August, the lowest since at least 2001, the statistics office said. Including bonuses, they increased by 1.6 percent. To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

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Focus Minerals raises A$8.25m for Three Mile Hill plant

October 12, 2009

Focus Minerals raises A$8.25m for Three Mile Hill plant

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Wen, Hatoyama, Lee Push for Resumption of North Korea Nuclear Negotiations

October 9, 2009

By Bloomberg News Oct. 10 (Bloomberg) — The leaders of China, Japan and South Korea pledged to work together to quickly restart talks aimed at removing North Korea’s nuclear weapons program. Chinese Premier Wen Jiabao , Japanese Prime Minister Yukio Hatoyama and South Korean President Lee Myung Bak said they wanted an early resumption of joint talks with North Korea, which also include the U.S. and Russia. Earlier this week Wen, visiting Pyongyang, won an assurance from North Korean leader Kim Jong Il that he is willing to return to nuclear disarmament talks. The regime said in April it was abandoning the negotiations forever. “The North Korean side during the negotiations expressed flexibility toward the six-party talks, and said they were not opposed to them,” Wen said at a press conference with Hatoyama and Lee in Beijing today. “We’ve come across some good luck,” he said of talks with the North. “If we take advantage of it and use it we can make some positive progress. If we miss this opportunity, we will waste a lot of effort.” Wen said the nuclear issue occupied four of the 10 hours of his discussions with leaders including Kim. “North Korea doesn’t just want to improve relations with the U.S., but also with South Korea and Japan,” Wen said. China until June had resisted efforts by Japan and the U.S. to get penalties imposed on North Korean entities involved in the country’s nuclear and missile programs. China is trying to avoid sudden regime change in North Korea, which could spark a refugee crisis along the 1,415-kilometer (880-mile) border it shares with its ally of six decades. Change of Stance China’s stance changed after North Korea launched a rocket on April 5 and tested a nuclear device on May 25. China agreed in June to back curbs of loans and money transfers to North Korea as punishment for the tests. Wen today pledged to uphold UN Security Council resolutions on North Korea. “We will make joint efforts with other parties for an early resumption of the six-party talks, so as to safeguard peace and stability in Northeast Asia, and thereby to build an Asia of peace, harmony, openness and prosperity,” Wen, Hatoyama and Lee said in a joint statement. The challenge for China, Japan and South Korea is to prevent Kim from exploiting differences among them that would delay any agreement to curtail North Korea’s nuclear weapons program, said Zhu Feng , a professor at Beijing University who specializes in international security issues. ‘Tricky’ “We all know who Kim Jong Il is, we know how tricky” the North Koreans are, Zhu said. “If China moves one way and Japan and South Korea move in the opposite direction, then we’ll leave room for North Korea to maneuver.” Both Lee and Hatoyama need Wen’s government to continue to exert pressure on North Korea to make good its promises to return to nuclear talks. Beijing University’s Zhu said a common front by North Korea’s neighbors is central to achieving that. “It is so significant for the three East Asian nations, China, Japan and Korea to formulate a consensus,” Zhu said. “We should put our hands together.” The second summit between the three countries marks a further warming of ties with Japan. Hatoyama has pledged not to visit a shrine in Tokyo that memorializes Japan’s war dead, including leaders responsible for the country’s aggression in China during the first part of the 20th century. Visits by some of his predecessors angered China and South Korea, which were both occupied by Japan. Long View “We agree that it is important to look at the relationship between the three countries from a long-term and strategic point of view,” Wen said at the press conference. The three leaders also pledged to work together to help enact a new climate-change accord this December in Copenhagen, which is meant to replace the Kyoto Protocol. Hatoyama, who took office last month, has made climate change a focus of his administration, vowing to cut carbon emissions 25 percent from 1990 levels by 2020. His proposal is contingent on other countries adopting targets as well, something China, the world’s biggest emitter of greenhouse gasses, has resisted. China, India and other developing countries say cutting emissions will crimp economic growth, and instead are focusing on reducing the amount of energy used to generate a given amount of economic output. In the statement, the three leaders pledged to work together to help manage forests and rivers and promote recycling. They also pledged to help conclude a new round of global trade talks, oppose protectionism and promote economic growth that minimizes damage to the environment. — Michael Forsythe , Takashi Hirokawa , Seonjin Cha . Editors: Ben Richardson , Mike Millard . To contact Bloomberg News staff on this story: Michael Forsythe in Beijing at +8610-6649-7580 or mforsythe@bloomberg.net .

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Video: Market Close 10.9

October 9, 2009

All Three Major Indexes Each Rise Less Than 1%; S&P Now Higher for October, Dow Ends Week with Highest Close in a Year; Chevron Shares Rise 1.8%, Says Oil Prices Will Be Higher; Spectrum Plunges 18% on FDA Finding; Acordia Therapeutics Shares Fall 21% on FDA Finding (Bloomberg News)

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Playboy’s New Business Model: A Return To Night Clubs

October 9, 2009

in the three months since Scott Flanders took over for Christie Hefner as CEO of Playboy Enterprises Inc., he has come to a simple conclusion about its magazine, TV and digital media businesses: Tough way to make money. So in the coming months, Flanders will be placing his bet on two long overshadowed operations: product licensing and Playboy clubs.

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Fitch notes Realogy, Chesapeake Energy debt risk

September 29, 2009

CHICAGO – Fitch Ratings said Tuesday that the three issuers of junk debt most in danger of breaching lender requirements are Realogy Corp., Chesapeake Energy Corp. and Frontier Communications Co. Calls for comment to all three companies were not

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China says Three Gorges Dam cost $37 billion

September 14, 2009

China says Three Gorges Dam cost $37 billion

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Video: Market Close 9.11

September 11, 2009

All Three Major Indexes Each Fall Less Than 1%; Quadrangle Capital to Shut Down London Office to Increase Asia Focus; FedEx Boosts 1Q Outlook; AIG Shares Urged to Be Sold by Three Different Firms; Coca-Cola Leads DJIA as Best Performer, No Specific News (Bloomberg News)

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U.K. Consumer Confidence Climbs to the Highest Level in More Than a Year

September 9, 2009

By Jennifer Ryan Sept. 9 (Bloomberg) — U.K. consumer confidence rose to the highest level in more than a year in August as signs mounted that the economy is emerging from the worst recession in a generation, Nationwide Building Society said. An index of sentiment rose to 63, the highest since May 2008, from 61 in July, Britain’s biggest customer-owned lender said in an e-mailed statement today. TNS questioned 1,000 people for Nationwide from July 20 to Aug. 23. The National Institute of Economic and Social Research said yesterday that the economy has started growing again, and a separate report today signaled the first improvement in the labor market for 17 months. The Bank of England will tomorrow probably stick to its plan to keep spending newly printed money as policy makers try to entrench the recovery, economists say. “Consumers are beginning to feel more positive not only about the future, but also about the present situation,” Martin Gahbauer , chief economist at Nationwide, said in the statement. “A number of key economic indicators continue to show that we may have reached the bottom of the current recessionary cycle.” A measure of Britons’ assessment of their present situation rose 1 point to 17, and a gauge of willingness to spend increased to 97 from 96, the report showed. Nationwide’s index of future expectations increased 3 points to 94. Gross domestic product increased 0.2 percent in the three months through August, compared with a decline of 0.3 percent in the three months through July, Niesr, whose clients include the central bank, said yesterday. That’s the first time GDP has risen since the quarter through May 2008. Labor Market The labor market, where unemployment reached a 14-year high in the second quarter, may be showing signs of improvement, according to a separate report today by KPMG and the Recruitment and Employment Federation. Their measure of hiring for permanent jobs rose to 50.6 last month from 46.1 in July. That’s the first result above 50, signaling expansion, since March 2008. The threat of deflation may convince policy makers to keep up their measures to stoke economic growth. Average U.K. shop prices fell 0.1 percent in August from a year earlier, the first annual decline since February 2007, according to a report released today by the British Retail Consortium. The bank will leave the benchmark interest rate at a record low of 0.5 percent tomorrow, according to all 60 economists in a Bloomberg News survey . All 35 forecasts in another survey are for no change in the 175 billion pounds ($290 billion) total that the bank plans to spend in U.K. debt markets with newly printed money. To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net

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Australia’s Retail Sales Survive Global Slump, May Suffer During Recovery

September 8, 2009

By Jacob Greber Sept. 9 (Bloomberg) — Australian retail sales growth will slump as a boost from government cash handouts to consumers wanes and rising interest rates erode disposable incomes, research-company Access Economics said. Retail sales growth, adjusted to remove the effect of inflation, will slow to 0.8 percent in the 12 months through June 2011 from 1 percent in the current fiscal year, Access Director David Rumbens said in a report released in Canberra today. Sales will gain 3.7 percent in 2011-12. Household spending surged 4.1 percent in the year to June 2009 at retailers including Harvey Norman Holdings Ltd., Australia’s largest furniture and electrical seller, stoking the fastest economic expansion last quarter in more than a year. The government has distributed more than A$12 billion ($10.2 billion) in cash to consumers this year and the central bank has slashed borrowing costs to a half-century low. “We have spent our way through the most turbulent period in the global economy in 60 years,” helping retailers survive “the bust in rather spectacular fashion,” Rumbens said in the report. “Surviving the recovery may prove to be a trickier proposition,” he added. “The cash handouts are beginning to fade, interest rates are more likely to rise than be lowered, and the labor market is still set to weaken.” Retail sales unexpectedly dropped 1.4 percent in June, the first decline in four months, a report showed on Aug. 4. Sales probably rose 0.5 percent in July, according to the median estimate of 20 economists surveyed by Bloomberg News. The figures will be released at 11:30 a.m. in Sydney today. Retail Profits Mark McInnes , chief executive officer of Australia’s second-biggest department-store chain, David Jones Ltd., said last month that while sales in the three months through June were “pleasing,” there is “still some uncertainty in relation to the future outlook.” Growth in profit after tax for the year ending July 2010 will be between zero and 5 percent, Sydney-based David Jones said on Aug. 5. Since the collapse of Lehman Brothers Holdings Inc. almost a year ago, the government has handed out more than A$20 billion to households, cut taxes and is spending another A$22 billion upgrading roads, ports, railways and schools. The spending helped boost gross domestic product by 0.6 percent in the three months through June from the previous quarter, when it gained 0.4 percent, a report showed last week. Consumer Confidence “To what extent, if at all, retail spending will moderate further over the coming months as the cash handout effect fades is the key question,” said Rumbens. “You can’t keep spending a temporary windfall, but at the same time the underlying economic environment is certainly much brighter now than six months ago.” Consumer confidence has climbed to the highest level in almost two years. Westpac Banking Corp. will release this month’s consumer sentiment survey results at 11 a.m. in Sydney today. Household disposable income will probably fall 2.7 percent in the 12 months through June 2010 before rising 1.7 percent the following year, today’s Access report says. Incomes rose by an annual average of 3.2 percent for the past five fiscal years. While unemployment is rising less than forecast by the government, “the average number of hours worked by employees is falling, which will cut into underlying incomes,” Rumbens said. To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

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Berkshire, Munich Re Benefit as Reinsurer Surplus Rebounds on Investments

August 31, 2009

By Jamie McGee Aug. 31 (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. and Munich Re are among reinsurers that benefited in the second quarter as the industry’s surplus in the U.S. expanded for the first time in seven periods on investment gains. The combined surplus of 19 reinsurers climbed 11 percent in the three months ended June 30 to $66 billion, the Reinsurance Association of America said today in a report. The surplus, a measure of assets minus liabilities, hadn’t increased since the third quarter of 2007. The figure was $72.8 billion on June 30, 2008, before the collapse of Lehman Brothers Holdings Inc. forced down the value of the industry’s investments. “You are starting to see a rebound in the financial markets, and therefore you are starting to see a little bit of an uptick in the valuations of the assets,” said Michael Paisan , an analyst at Stifel Nicolaus & Co. Reinsurers provide coverage to primary carriers, protecting them from large claims including catastrophes. Munich Re, the world’s largest reinsurer, posted a 14 percent profit gain in the second quarter as investments and sales climbed. Buffett told investors this month that he is more willing to take the risk of covering disasters after Omaha, Nebraska-based Berkshire’s investment portfolio gained. “Barring a catastrophe in the third quarter,” the surplus gains are likely to continue, said Dean Evans , an analyst with KBW Inc. “The current outlook is still pretty good for profitability.” Hurricane Season Catastrophes last year, including Hurricanes Gustav and Ike, cost $25.2 billion, the most since the record storm season of 2005, an industry group said in January. Forecasters have scaled back predictions for the severity of this year’s storm season because of warming in the eastern Pacific Ocean. The Atlantic didn’t produce a named storm in 2009 until Ana on Aug. 15, the latest in more than two decades for the first storm of a calendar year to reach that intensity. The season runs from June 1 to Nov. 30. Policy sales for the group of 19 reinsurers climbed to $12.8 billion in the first half of the year, up from $12.7 billion the same period in 2008, the Washington-based RAA said. Property reinsurances rates have advanced as capital has diminished and insurers seek protection from natural disasters. Reinsurance prices for U.S. catastrophe zones increased as much as 15 percent in July 1 renewals, Willis Group Holdings Ltd. reported last month. Reinsurers have been unable to boost prices for casualty coverage, Paisan said. Property Coverage “Particularly on the property-catastrophe reinsurance, you are seeing a pretty sizeable uptick in pricing,” Paisan said. “In the current market where the equity markets are volatile, and debt markets are essentially closed or prohibitively costly, the only additional alternative form of capital is the reinsurance market.” Munich Re’s surplus in the U.S. advanced about 6.2 percent in the three months ended June 30 to $3.6 billion. The surplus at Berkshire’s National Indemnity Co. gained 18 percent to $28.4 billion. “Due to the restoration of net worth that occurred during the second quarter, management’s willingness to write large catastrophe risks has increased, but to date rates have not warranted such writing,” Berkshire said in an Aug. 7 regulatory filing. Capital needs have led reinsurers to pursue acquisitions this year, Paisan said. Validus Holdings Ltd. announced plans to buy IPC Holdings Ltd. , and PartnerRe Ltd. agreed in July to acquire Paris Re Holdings Ltd. “The real driver for merger and acquisition activity within the reinsurance area would be more based on trying to build a larger capital base,” Paisan said. “It’s been increasingly more important to have a larger capital base within the reinsurance industry.” To contact the reporters on this story: Jamie McGee in New York at Jmcgee8@bloomberg.net

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Loans to European Companies, Individuals Expand at Slowest Pace on Record

August 27, 2009

By Jana Randow Aug. 27 (Bloomberg) — Loans to households and companies in Europe grew at the slowest pace on record in July after the worst recession since World War II curbed demand for debt and banks tightened credit standards. Loans to the private sector rose 0.6 percent from a year earlier, the slowest growth since records began in 1991, after increasing an annual 1.5 percent in June, the European Central Bank said today. On the month, loans fell 0.4 percent, the biggest decline ever recorded. M3 money-supply growth, which the ECB uses as a gauge of future inflation, slowed to 3 percent from 3.6 percent. The global recession has made banks more reluctant to lend and eroded company and household demand for credit. The ECB, which kept its benchmark interest rate at a record low of 1 percent this month, is buying covered bonds and flooding banks with cash in an effort to revive lending. The euro-region economy barely contracted in the second quarter as Germany and France unexpectedly emerged from recession. “The decline in new loans is primarily demand-driven and reflects, until recently, terrible economic conditions,” said Michael Schubert , an economist at Commerzbank AG in Frankfurt. “While demand will improve in the coming months, credit supply may worsen further. We won’t see a sustainable recovery in loan issuance before next year.” European banks tightened credit standards for companies and households again in the second quarter, albeit less aggressively than in the first, according to a survey published by the ECB on July 29. Policy makers have urged banks to clean up their balance sheets and step up lending after the collapse of Lehman Brothers Holdings Inc. last year exacerbated the global slump. In the three months through July, annual M3 growth slowed to 3.4 percent from 4.1 percent in the three months through June, the ECB said. M3 is the broadest gauge of money supply and includes cash in circulation, some forms of savings and money- market holdings. Demand for the most liquid assets rose. The annual rate of M1 money-supply growth increased to 12.2 percent in July from 9.4 percent in June. To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net .

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U.K. House Prices Increase at the Fastest Pace Since 2006, Nationwide Says

August 27, 2009

By Svenja O’Donnell Aug. 27 (Bloomberg) — U.K. house prices rose at their fastest pace in more than 2 1/2 years in August as low interest rates spurred demand and a lack of property for sale underpinned values, Nationwide Building Society said. The average cost of a home climbed 1.6 percent, the most since December 2006, to 160,224 pounds ($260,000), the mortgage lender said in a statement today. Economists predicted an increase of 0.5 percent, according to the median of 17 forecasts in a Bloomberg News survey . From a year earlier, prices fell 2.7 percent. The Bank of England this month kept the benchmark interest rate at 0.5 percent and extended its asset-purchase program to pull Britain out of its worst recession in a generation. Today’s report adds to evidence the housing market may be stabilizing. “Even though house prices remain high relative to earnings, the fall in interest rates has improved the affordability of mortgages for those looking to buy a home,” Martin Gahbauer, Nationwide’s chief economist, said in the statement. “The fall in debt servicing costs has meant that fewer homeowners are under immediate financial pressure to sell.” The August increase in house prices was the fourth in succession, leaving them 3.2 percent higher than at the end of 2008, according to Nationwide. In the three months through August, they rose an average of 3.3 percent from the previous period, the most since February 2007. House prices are still down 14.4 percent from their peak in October 2007, the mortgage lender said. Mortgage Approvals Britain’s six biggest banks approved more home loans in July, a sample from the Bank of England’s lending panel showed on Aug. 20. U.K. mortgage approvals rose in July to the highest level since February 2008, the British Bankers’ Association said this week. Recent house price increases may “become difficult to sustain” if efforts to spur economic growth are successful and lead the U.K. central bank to raise interest rates in the future, Nationwide said. “At the moment, a rise in interest rates is probably still some way off,” Gahbauer said. “However, the eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases.” The economic slump is also keeping a lid on workers’ pay. The median pay award in the country was for a 1 percent increase in the three months to July, Incomes Data Services said in a separate report today. The report was based on a survey of 75 settlements covering more than 500,000 employees. To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net .

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Calpers sues over ratings of securities – NYT

July 14, 2009

July 15 (Reuters) – Calpers, the biggest U.S. public pension fund, has filed a suit in a California state court in connection with $1 billion in losses that it says were caused by inaccurate credit ratings from the three leading ratings agencies, The New York Times reported. The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, inc Go here to read the rest:  Calpers sues over ratings of securities – NYT Reuters 2009 Institutional Partners News Headlines Feeds Private Equity www.institutionalpartners.com

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