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Treasury Notes Decline for a Third Week Amid Greek Debt Bailout Optimism

By Cordell Eddings and Susanne Walker

2012-02-17T22:12:07Z

http://www.bloomberg.com/news/2012-02-17/treasury-yield-is-31-basis-points-from-record-low-before-inflation-report.html

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Treasuries fell, with 10-year notes declining for a third straight weekly, amid speculation euro- area finance ministers will reach an agreement to provide funding for Greece, discouraging demand for the safest assets. Yields on benchmark 10-year notes remained above 2 percent even after a report showed consumer prices increased less than forecast by economists. U.S. debt securities have lost 0.5 percent this year, while corporate bonds have returned 2.3 percent, according to Bank of America Merrill Lynch indexes. “We’ve had some positive news out of Europe and the economic data of late has been stronger, which has been weighing on Treasuries,” said Scott Sherman , an interest-rate strategist at Credit Suisse Group AG in New York, one of 21 primary dealers that trade directly with the Federal Reserve . “In a vacuum, yields should head higher if things stay like this, but there is still a lot of uncertainty over what the Fed will do. And that contains any selloff.” Yields on 10-year notes rose two basis points, or 0.02 percentage point, to 2 percent at 5 p.m. New York time, according to Bloomberg Bond Trader prices. The 2 percent securities maturing in February 2022 fell 5/32, or $1.56 per $1,000 face amount, to 99 31/32. The yields, which slid to a record low 1.67 percent on Sept. 23, gained for a second day and have increased one basis point this week. Treasuries extended losses after Italian Prime Minister Mario Monti , German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism on a conference call that an “agreement on Greece” can be reached at a Brussels meeting of euro-area finance ministers on Feb. 20. Risk Rally The Stoxx Europe 600 Index (SXXP) gained 0.6 percent, pushing its advance this year to 9 percent, as investors become more comfortable owning higher-returning assets. Standard & Poor’s 500 Index rose 0.2 percent. “The bond market is trading as if there’s a better than 50 percent probability that a deal will get done,” said Michael Franzese , managing director and head of Treasury trading at Wunderlich Securities Inc. in New York. “The bond market is also showing signs of growth in the U.S. as the rest of Europe may go into recession.” The consumer-price index increased 0.2 percent after no change the prior month, the Labor Department reported today in Washington . Economists surveyed by Bloomberg had forecast a 0.3 percent gain. Over the past 12 months, prices climbed 2.9 percent, the smallest year-to-year advance since March 2011. Monetary Policy “It’s hard to see inflation of any significant magnitude coming in the U.S. for a while,” Rick Rieder, chief investment officer for fundamental fixed-income portfolios at BlackRock Inc., said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “The Fed is going to keep moving and keep being accommodative. I think they’re ultimately going to go down the road of QE3. If inflation continues to be tame, then I think they can go down the road and focus on their statutory obligations to keep moving and get to full employment.” A few members of the central bank’s policy-setting Federal Open Market Committee said the group may soon have to consider more asset purchases, while others said the economic outlook would have to deteriorate first, according to minutes of their Jan. 24-25 meeting issued Feb. 15. The Fed bought $4.96 billion of Treasuries due from May 2018 to February 2020 today as part of its plan to hold down borrowing costs by exchanging shorter-term debt in its holdings for longer ones. The euro crisis and the Fed’s accommodative policies have lowered the 10-year note yield by 45 basis points from where it would be otherwise, according to Goldman Sachs Group Inc. Risk Premium “With the uncertainty around Greece still unresolved, markets remain in a ‘wait and see’ mode,” Silvia Ardagna, an analyst at Goldman Sachs, wrote in a note to clients. “Some of euro-area risk needs to be removed before we can recommend taking short positions on U.S. Treasuries.” A measure of traders’ expectations for inflation that is tracked by the Fed has risen this year to 2.54 percent from a low of 2.42 percent in January. The five-year, five-year forward break-even rate , which projects annualized price increases over a five-year period starting in 2017, is below its 2.76 percent average over the past decade. Assuming nonfinancial corporations are at least as healthy as they have been on average over the last 20 years, spreads should narrow by at least 50 basis points for investment-grade bonds and possibly by 100 basis points for high-yield debt, Rieder wrote in a report on the New York-based company’s Website. BlackRock manages $3.51 trillion. Swap Spreads The Bank of America index (SXXP) of U.S. corporate and below- investment-grade bonds yields 2.96 percentage points more than Treasuries. The spread narrowed to 2.95 percentage points on Feb. 14, the least since August. Even so, some measures of stress in global credit markets have stopped easing as the rescue plan for Greece still threatens to unravel and some of the largest U.S. and European banks face potential ratings cuts. The U.S. two-year interest-rate swap spread touched 31.25 basis points yesterday, the most since the beginning of the month. The measure rises when investors seek the perceived safety of government securities and falls when they favor assets such as corporate bonds. To contact the reporters on this story: Susanne Walker in New York at [email protected] Cordell Eddings in New York at [email protected] To contact the editor responsible for this story: Dave Liedtka at [email protected]

2012

reasury-yield-is-31-basis-points-from-record-low-before-inflation-repor

Frankfurt Airport Says Strike May Hamper Some Flights

By Konstantin Riffler and Alex Webb

2012-02-17T16:32:55Z

http://www.bloomberg.com/news/2012-02-17/frankfurt-air-traffic-disrupted-a-second-day-as-runway-staff-resume-strike.html

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Frankfurt airport , Europe ’s third- busiest, is facing a third day of disruptions as striking runway controllers consider continuing their protest on Feb. 20. Fraport AG (FRA) , which owns the German hub, canceled 298 of today’s planned 1,300 flights, spokeswoman Stephanie Wagener said. Controllers are halting work from 8 a.m. to 10 p.m., according to the Gewerkschaft der Flugsicherung (GdF) union. “A strike on Monday is a real possibility,” GdF negotiator Dirk Vogelsang said, adding that there would be no strike on the weekend. “If there’s no forward movement from the Fraport side then the protests will continue next week.” Frankfurt, which ranks after London Heathrow and Paris Charles de Gaulle in yearly passenger numbers, is the main base for Deutsche Lufthansa AG (LHA) , Europe’s second-biggest airline. Lufthansa has canceled 125 of the 290 medium-haul and domestic flights scheduled for today, a figure the company doesn’t expect to change, spokeswoman Claudia Lange said, adding that long-distance flights are not affected. Travelers are being held hostage by the controllers’ demands, with the action likely to affect the whole of Europe, Klaus-Peter Siegloch, president of the BDL airline and airport trade association, said in a statement yesterday. Lufthansa passengers can rebook on other flights, apply for a refund or, for travel in Germany , switch to Deutsche Bahn AG trains, spokesman Thomas Jachnow said. The GdF, which has reached deals with Munich and Berlin airports, says it has accepted a recommendation from mediator Ole von Beust for a two-step increase in monthly wages of between 200 euros and 1,600 euros ($263 to $2,100). More Walkouts With Fraport planning to outsource the ground-control function, the GdF also wants it to agree that workers will be transferred to a single company on a single contract, Markus Siebers, the union’s wages and rights representative, said. The GdF aims to carry on striking “in stages” until it reaches an acceptable settlement, Siebers said, adding “This is just the warm-up. It’s going to get more intense.” Fraport says further compromise is required from the union, which represents about 90 percent of the 200 controllers. During yesterday’s strike 172 flights were canceled, with 70 percent of flights after 3 p.m. still operating, Fraport said in an e-mailed statement today. To contact the reporters on this story: Konstantin Riffler in Frankfurt at [email protected] ; Alex Webb in Frankfurt at [email protected] To contact the editors responsible for this story: Angela Cullen at [email protected] ; Chad Thomas at [email protected]

2012

frankfurt-air-traffic-disrupted-a-second-day-as-runway-staff-resume-strike

UTair to Build Peru Helicopter Maintenance Center, Andina Says

By Alex Emery

2012-02-17T00:02:21Z

http://www.bloomberg.com/news/2012-02-17/utair-to-build-peru-helicopter-maintenance-center-andina-says.html

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Russian aviation group UTair (UTAR) aims to build Latin America’s first helicopter maintenance center in Peru, state news agency Andina reported. The company plans to invest $8 million in 10 hectares of land south of Lima, workshops, offices and a hangar to handle growing regional demand for Russian choppers, the Lima-based agency said, citing UTair Helicopter Services president Alexei Vinogradov. UTair will also invest $50 million this year in new MI-171 helicopters for its Helisur unit which supplies Peru’s oil industry, according to Andina. To contact the reporter on this story: Alex Emery in Lima at [email protected] To contact the editor responsible for this story: Joshua Goodman at [email protected] .

2012

utair-to-build-peru-helicopter-maintenance-center-andina-says

Blackstone Said to End Talks to Buy Brocade Because of Price

By Serena Saitto

2012-02-17T23:43:54Z

http://www.bloomberg.com/news/2012-02-17/blackstone-said-to-end-talks-to-buy-brocade-communications-amid-stock-gain.html Blackstone Group LP (BX) , the world’s largest private-equity firm, ended talks to buy Brocade Communications Systems Inc. (BRCD) because the price was too high for a leveraged buyout, said a person with knowledge of the situation. Blackstone and Francisco Partners had been discussing a potential takeover of Brocade after other private-equity firms lost interest, said the person, who declined to be identified because the matter is private. The maker of switches for data- storage networks, which has been looking for a buyer since 2009, has a market value of about $2.58 billion. Brocade has become more expensive after rebounding more than 60 percent since an Aug. 5 drop, when the San Jose , California-based company reported preliminary results that fell short of its forecasts. Brocade’s fourth-quarter earnings excluding items beat analysts’ estimates in November, helped by record revenue in its Ethernet business. The company has more than doubled its free cash flow in the past five years. “Brocade generates a very healthy cash flow and doesn’t have the financial urgency to sell,” said Erik Suppiger , an analyst at JMP Securities LLC in San Francisco , who has a neutral rating on the stock. “The question is how long its growth will last, as Brocade’s legacy fiber-channel technology gets replaced by the new Ethernet technology. The transition could take a decade

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down 2.2 percent to $5.68 as of 4 p.m. New York time. The stock advanced 12 percent this year through yesterday. Spokesmen for New York-based Blackstone and Brocade declined to comment. A representative of Francisco Partners wasn’t immediately available to comment. Brocade bought Foundry Networks Inc. in December 2008 to enter the market for so-called Ethernet switches, which are gaining popularity in data centers. In July, Dell Inc. passed over Brocade to buy competitor Force10 Networks Inc., a person with knowledge of the situation said at the time. Elliott Management Corp., the hedge fund that pushed Novell Inc. to sell itself in 2010, reduced its stake in Brocade last month to 7.5 percent from 8.5 percent. At the time, Brocade had gained about 64 percent on renewed speculation about a potential sale since Elliott amassed the stake in August. Fund managers sometimes use their status as shareholders to urge management to shift strategy or look for a buyout. Activist investor Carl Icahn pressed Motorola Mobility Holdings Inc. (MMI) on July 21 to explore strategic alternatives. Google Inc. agreed to acquire Motorola Mobility for $12.5 billion on Aug. 15. To contact the reporter on this story: Serena Saitto in New York at [email protected] To contact the editor responsible for this story: Jennifer Sondag at [email protected]

2012

blackstone-said-to-end-talks-to-buy-brocade-communications-amid-stock-gain

Wells Fargo Breaks From Pack in Swaps

By Dakin Campbell and Mary Childs

2012-02-17T05:00:58Z

http://www.bloomberg.com/news/2012-02-17/wells-fargo-breaks-away-from-bank-pack-in-default-swaps-corporate-finance.html

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Wells Fargo & Co. ’s perceived creditworthiness is rising relative to peers at the fastest rate in almost three months as investors reward the bank for limited risk from mortgage litigation and the European debt crisis. Credit-default swaps tied to the bonds of the San Francisco-based lender have held steady in February as contracts on JPMorgan Chase & Co. (JPM) and other banks climb, according to data provider CMA. The difference, 112 basis points, has more than doubled since August. Concern is growing that Europe’s credit crisis, costs tied to faulty mortgages and pending regulation of proprietary trading will damage bank balance sheets. Wells Fargo has had fewer costs in the mortgage crisis than JPMorgan on an absolute basis and as a percentage of assets, according to data compiled by Bloomberg. “Wells Fargo looks like a much more stable business, almost like an industrial company,” George Strickland, who helps oversee about $12 billion in fixed-income assets at Santa Fe , New Mexico-based Thornburg Investment Management Inc. said in a telephone interview. “They’re much more of a commercial bank. They didn’t get caught up in the mortgage fiasco as much as the other banks and they also aren’t nearly as involved in the capital markets as the others.” Ancel Martinez, a Wells Fargo spokesman, declined to comment. Joe Evangelisti , a JPMorgan spokesman in New York , didn’t immediately respond to a voice message seeking comment. Swaps Gap While credit-default swaps on Wells Fargo, which investors use to hedge against losses on the company’s debt or to speculate on creditworthiness, have climbed to 110 basis points since this year’s low of 95.5 basis points, contracts tied to its peers have risen faster, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The gap between Wells Fargo swaps and the average of those linked to the six biggest U.S. banks, including Bank of America Corp., JPMorgan, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley (MS) , widened to 112 basis points yesterday, compared with 42 basis points at the beginning of August and 23 basis points this time last year. That difference, which grew to as much as 180.8 basis points in October as Greece ’s debt woes roiled markets, grew 22.3 basis points for the two weeks ended Feb. 15, the fastest since Nov. 25, the data show. A basis point equals $1,000 annually on a contract protecting $10 million of debt. ‘Domestic-Focused’ Bond investors are accepting the lowest interest rates from Wells Fargo, among the six biggest U.S. banks. Its debt yields to 2.85 percent, Bank of America Merrill Lynch index data show. JPMorgan debt yielded 3.53 percent and Goldman Sachs 4.73 percent as yesterday, the data show. “The view that they are very domestic-focused is helping, so the improving U.S. economy benefits them and they have less exposure to the rest of the world,” said Peter Tchir, founder of TF Market Advisors in New York. “Markets are getting concerned about bank trading desk ability to generate revenue as Dodd-Frank is on the horizon,” which doesn’t impact Wells Fargo in the way it does Morgan Stanley, Goldman Sachs, Citigroup, or Bank of America. Little Sovereign Risk Wells Fargo had $3.2 billion of exposure to Europe , of which “very little” is sovereign risk, Chief Financial Officer Timothy J. Sloan said in a July 19 teleconference to discuss earnings with analysts and investors. The six biggest U.S. banks had $50 billion in risk tied to five troubled nations of Europe on Sept. 30, according to Fitch Ratings . Against JPMorgan, the Wells Fargo swap contracts have diverged by the most since November 2008 this week, reaching 19.7 basis points on Feb. 13, CMA data show. Credit swaps, which typically decline as investor confidence improves, pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. Moody’s Investors Service said yesterday it was reviewing 17 banks and securities firms with global capital markets operations for downgrades, including Morgan Stanley, Goldman Sachs (GS) , JPMorgan, Citigroup, and Bank of America. Wells Fargo is not under review. The ratings company cited “more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.” Volcker Rule Banks may suffer as financial reform crimps profits and funding costs become increasingly sensitive to investor confidence, Moody’s said. U.S. regulators are planning to implement a ban on proprietary trading in five months called the Volcker rule, part of the Dodd-Frank financial regulation overhaul. The potential downgrades may raise borrowing costs and force banks to increase collateral, and bank funding costs have already climbed worldwide. Moody’s downgraded Bank of America and Wells Fargo in September, when it said the possibility of emergency government support had decreased. With European financial leaders struggling to bail out Greece, the mortgage overhang unresolved and capital markets volatile, “there is still a healthy degree of skepticism across the group,” Andrew Marquardt , an analyst at New York-based Evercore Partners Inc., said in a telephone interview. “Of the big banks, Wells is the one that gives investors the greatest amount of comfort in this very uncertain time.” Costs from faulty mortgages and shoddy foreclosures have topped $72 billion at the biggest U.S. banks through the end of last year. JPMorgan accounts for about $18.5 billion, or 0.8 percent of its assets at the end of last year, while Wells Fargo is about $6 billion, or 0.5 percent, Bloomberg data show. “Wells Fargo has managed through the housing situation very well, they have less global capital markets exposure, and therefore European risks and concerns, than JPMorgan,” said David Brown , a money manager who helps oversee $88 billion of fixed-income assets at Neuberger Berman LLC in Chicago . “JPMorgan has more capital markets exposure. Some of that’s out of their control, and they’re just being a little bit subject to the volatility there.” To contact the reporters on this story: Dakin Campbell in San Francisco at [email protected] ; Mary Childs in New York at [email protected] To contact the editors responsible for this story: Alan Goldstein at [email protected] ; David Scheer at [email protected]

2012

wells-fargo-breaks-away-from-bank-pack-in-default-swaps-corporate-finance

U.S. Gas Low Enough to Boost Switch From Coal, Goldman Says

By Yee Kai Pin and Christian Schmollinger

2012-02-17T03:31:41Z

http://www.bloomberg.com/news/2012-02-17/u-s-gas-low-enough-to-encourage-coal-switching-goldman-says.html

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U.S. natural-gas prices are in a “stable” range that is low enough to encourage power generators to switch from coal and high enough to keep gas producers from cutting production, according to Goldman Sachs Group Inc. (GS) The probability has increased that futures will miss the bank’s 2012 forecast of $3.10 per million British thermal units, Goldman said in a report e-mailed today. Contracts for March delivery on the New York Mercantile Exchange traded at about $2.54 today. “While low Nymex natural-gas prices are motivating Powder River basin coal-to-gas substitution, power generation demand for natural gas has also increased in other regions of the country, resulting in very strong overall demand from power generators so far this year,” said David Greely , Goldman’s head of energy research in New York . Coal demand in the U.S. is collapsing as power companies switch away from the fossil fuel to take advantage of the cheapest natural gas in 10 years. Use of coal to generate electricity will drop 2 percent this year to the lowest since 1992, while gas-fired consumption rises 5.6 percent, according to the Energy Department. Gas prices have tumbled to the weakest levels since February 2002 this year amid a boom in output and milder-than-normal weather. Natural gas is the worst performer so far in 2012 among 22 commodities ranked by Bloomberg, amid an increase in U.S. output and milder-than-normal weather. Front-month Nymex futures are down 15 percent, compared with a 20 percent rally for silver, the biggest gainer. Use of coal to generate electricity will drop 2 percent this year to the lowest since 1992, while gas- fired consumption will rise 5.6 percent, according to a U.S. Energy Department outlook on Feb. 7. Upside Surprise Gas use by power generators has risen 19 percent from a year ago to about 3 billion cubic feet a day, compared with an expected increase of 2 billion, according to Goldman. Coal-to- gas switching in the Central Appalachian, east of the Mississippi River , has “surprised to the upside,” it said. Appalachian coal is the U.S. benchmark grade. Goldman said it continues to recommend investors buy U.K. National Balancing Point gas contracts for the fourth quarter, a call first made in April. The trade has lost 3.9 pence a therm so far, the report showed. The U.S. is the world’s second-largest energy user after China . Coal accounts for about 45 percent of power generation and gas totals about 24 percent, Energy Department data show. To contact the reporters on this story: Yee Kai Pin in Singapore at [email protected] ; Christian Schmollinger in Singapore at [email protected] To contact the editor responsible for this story: Mike Anderson at [email protected]

2012

u-s-gas-low-enough-to-encourage-coal-switching-goldman-says

Former Highway Bill Foe Boehner Scavenging for U.S. House Votes

By Kathleen Hunter

2012-02-17T18:47:20Z

http://www.bloomberg.com/news/2012-02-17/former-highway-bill-foe-boehner-scavenging-for-u-s-house-votes.html U.S. House Speaker John Boehner has never voted for highway-funding legislation, and he’s having trouble selling fellow Republicans on a plan written with them in mind. The bill he planned to push through the House this week is being delayed amid criticism from his Republican majority as well as Democrats. Although Senate Majority Leader Harry Reid , a Democrat, this week called the House plan “a love note to the Tea Party ,” Republicans who have made cutting the size of government their chief goal say they are bothered by the $260 billion price tag. “We’re dipping deep, deep into the general fund for what has traditionally been limited to the highway trust fund, and that’s a level of expenditure that’s not wise,” Representative Jeff Flake, an Arizona (BEESAZ) Republican who opposes the bill, said in an interview. The plan would reauthorize the 18.4-cent federal gasoline tax and set maximum spending levels for roads, bridges and mass transit for five years. The current highway law, which expires March 31, is the eighth temporary extension since a $244 billion, four-year plan ended in 2009. “This is a much more difficult process than we’ve seen in the past,” Boehner of Ohio told reporters yesterday. “There is clearly angst on both sides of the aisle over a number of issues.” Earmarked Funds One reason, the speaker said, is that the plan lacks earmarked funds for lawmakers’ pet projects, which he has previously said numbered more than 6,000 in the last highway measure. The Republican approach to the transportation bill is aimed at appealing to a “new breed” of lawmaker with “little understanding, little appreciation for bill history, who just wants to wipe out what was,” said Jim Oberstar, a former Minnesota representative who served as the top Democrat on the Transportation and Infrastructure Committee for 16 years before he was defeated in the 2010 election. Oberstar noted that during his time on the panel, he and the top Republican would

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would veto the House bill, saying it would reduce safety, weaken environmental and labor protection and wouldn’t do enough to improve roads and bridges. The Senate is working on its plan, S. 1813, which would authorize $109.8 billion in spending for fiscal 2012 and 2013. Three Bills Republican leaders have split the House plan into three bills, and lawmakers are offering more than 300 amendments. The House passed the first measure last night and is set to consider the other two parts after next week’s Presidents’ Day recess. Allowing votes on amendments to expand states’ responsibility to fund roads, bridges and mass transit and to limit spending on highways and mass transit will help Republicans get the 218 votes they need, even though the amendments probably won’t be adopted, said a Republican lawmaker who is helping rally votes for the measure and spoke on condition of anonymity. The lawmaker said leaders are counting on some Republican critics to come on board after they go on the record in favor of changes. New Jersey Republican Scott Garrett proposed an amendment to create pilot programs allowing states to receive federal transportation funds through block grants. Oklahoma Republican James Lankford is pushing to let states opt out of federal highway programs, either by keeping the funds they contribute to the Highway Trust Fund or by allowing them to increase state gas taxes to cover the loss in revenue. ‘Right Direction’ Although Lankford said the highway bill was a “step in the right direction,” it wouldn’t go as far as he wanted to trim the federal government’s role in funding transportation. In previous years, the highway bill “has always been something that’s attracted three-hundred-and-something votes,” LaTourette said. This year, every Democrat on the Transportation and Infrastructure Committee voted against the bill on Feb. 6. A Democrat on the panel, Pennsylvania ’s Jason Altmire, said he opposed the plan because of provisions he viewed as anti- labor and because it would eliminate automatic funding for mass transit. He predicted it will take far beyond March 31 for the House and Senate to work out a plan. “The likely outcome, everyone would agree, is we will not have a long-term highway bill by the end of the year,” Altmire said. “I just don’t see, this year, given the politics, how that’s possible.” To contact the reporter on this story: Kathleen Hunter in Washington at [email protected] To contact the editor responsible for this story: Katherine Rizzo at [email protected]

2012

former-highway-bill-foe-boehner-scavenging-for-u-s-house-votes

Vattenfall Charges Hamburg Buses With Hydrogen From Renewables

By Stefan Nicola

2012-02-17T11:30:00Z

http://www.bloomberg.com/news/2012-02-17/vattenfall-charges-hamburg-buses-with-hydrogen-from-renewables.html

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Vattenfall AB (VATT) , the Nordic region’s biggest utility, said it opened Europe ’s largest hydrogen filling station fed by renewable energy in Hamburg. The utility funded 43 percent of the 10 million-euro ($13 million) investment, and the German Transport Ministry paid the rest, Alexander Hauk, a spokesman for Vattenfall Europe AG, said by phone today. About 20 buses and several cars a day can be charged with hydrogen from at least 50 percent renewable energy, according to an e-mailed company statement. Storing wind power by converting it to hydrogen “is an important approach that could play a key role in the future German energy landscape,” Oliver Weimann, head of Vattenfall Europe Innovation GmbH, said in the statement. Germany , Europe’s biggest economy, seeks to install 25,000 megawatts of offshore wind turbines by 2030 as it phases out atomic energy by 2022. The expansion of renewables has been accompanied by concerns that their fluctuating production may strain power networks and leave consumers without energy when wind doesn’t blow or the sun doesn’t shine. Vattenfall is part of a group including car maker Daimler AG (DAI) and Total SA (FP) promoting and testing hydrogen-powered transport in Germany. The Clean Energy Partnership receives financing from the Transport Ministry. The filling station produces its renewable fuel through electrolysis, a chemical process that uses electricity to break down water into oxygen and hydrogen. To contact the reporter on this story: Stefan Nicola in Berlin at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected]

2012

vattenfall-charges-hamburg-buses-with-hydrogen-from-renewables

Bank of New York Accused of $1.5 Billion Fraud in Amended U.S. Complaint

By David McLaughlin

2012-02-17T18:29:21Z

http://www.bloomberg.com/news/2012-02-17/bank-of-new-york-accused-of-1-5-billion-fraud-in-amended-u-s-complaint.html

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Bank of New York Mellon Corp. , the world’s largest custody bank, defrauded clients of more than $1.5 billion through foreign-exchange trades, according to a new complaint by the U.S. government. The bank “repeatedly lied” about a service for foreign currency transactions and defrauded clients, including pension funds and federally insured financial institutions, of more than $1.5 billion, the U.S. Attorney’s Office in Manhattan said in an amended complaint. It was filed last night, according to the office. “Standing instruction was so much more profitable to BNYM than any other foreign exchange service because it relied on a fraudulent business model,” Preet Bharara , the U.S. Attorney in Manhattan, said in the filing. The government’s lawsuit is one of several brought against the bank, including one by New York Attorney General Eric Schneiderman , alleging it defrauded clients through its so- called standing instruction foreign-exchange service. In the first complaint filed in October, the U.S. Attorney’s Office said the bank defrauded clients of “hundreds of millions of dollars.” Part of the lawsuit was resolved under an agreement approved last month. “As we have said before regarding this lawsuit, we believe it is without merit, and we will defend ourselves in court,” said Kevin Heine, a Bank of New York spokesman. The case is U.S. v. Bank of New York Mellon Corp. (BK) , 11-6969, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: David McLaughlin in New York at [email protected] . To contact the editor responsible for this story: Michael Hytha at [email protected] .

2012

bank-of-new-york-accused-of-1-5-billion-fraud-in-amended-u-s-complain

Telefonica Czech Unit Jumps Most Since 2008 on Higher Profit

By Krystof Chamonikolas

2012-02-17T16:31:05Z

http://www.bloomberg.com/news/2012-02-17/telefonica-czech-unit-heads-for-best-day-since-2008-on-earnings.html

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Telefonica Czech Republic AS (SPTT) jumped the most in more than three years after the phone company’s fourth-quarter net income exceeded analysts’ estimates. The unit of Spain’s Telefonica SA rose 7.2 percent to 392.2 koruna at the end of trading in Prague , the biggest jump since October 2008. Turnover was 1.94 million shares, or more than six-times the daily average over the past three months. The stock was the best performer in the PX (PX) equity index today. Profit in October to December rose to 2.87 billion koruna ($151 million) from 1.91 billion koruna a year earlier, helped by a one-time tax income, the Prague-based company said today. The median estimate of 11 analysts surveyed by Bloomberg was for 2.2 billion koruna. The company proposed a 40 koruna dividend, of which 13 koruna will come from a share-capital reduction. “Net income significantly exceeded estimates,” Josef Nemy , an analyst at Prague-based Komercni Banka AS, wrote in a report to clients today. The dividend plan “is very good news” and “Telefonica clearly demonstrated its willingness to keep the dividend at 40 koruna even in following years,” he said. To contact the reporter on this story: Krystof Chamonikolas in Prague at [email protected] To contact the editor responsible for this story: Gavin Serkin at [email protected]

2012

elefonica-czech-unit-heads-for-best-day-since-2008-on-earnings

India’s BSE and NSE Equity Derivative Market Activity

By Shraddha Kothari

2012-02-17T04:30:13Z

http://www.bloomberg.com/news/2012-02-17/india-s-bse-and-nse-equity-derivative-market-activity.html Following are the highlights for the equity derivative market activity at the National Stock Exchange and the Bombay Stock Exchange.

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Construction Output in Euro Region Increases Most in Five Months on Spain

By Simone Meier

2012-02-17T10:11:43Z

http://www.bloomberg.com/news/2012-02-17/euro-area-construction-output-increases-most-in-five-months.html

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European construction output advanced the most in five months in December as a rebound in Spain helped offset declines from Germany to Portugal . Construction (EUCPTSAM) in the 17-nation euro region rose 0.3 percent from November, when it gained a revised 0.2 percent, the European Union’s statistics office in Luxembourg said today. That is the biggest advance since July. From a year earlier, output increased 7.8 percent. In Germany, Europe’s largest economy, construction dropped 6.4 percent in December from the previous month, when it rose 3.3 percent, today’s report showed. France reported a decrease of 2.2 percent, while Portugal saw a drop of 0.2 percent. In Spain, output advanced 1.1 percent from November, when it decreased 0.5 percent. The statistics office had previously reported a monthly gain of 0.8 percent in November. It didn’t provide December data for nations including Greece , Ireland, Italy and Austria. The euro was little changed against the dollar after the data, trading at $1.3159 at 10:08 a.m. in London , up 0.2 percent on the day. In the 27-nation EU, construction output decreased 0.4 percent in December, according to the statistics office. To contact the reporter on this story: Simone Meier in Zurich at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected]

2012

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Baidu Sees Strong Growth in Demand for Mobile Search in China, CEO Li Says

By Mark Lee

2012-02-17T04:25:28Z

http://www.bloomberg.com/news/2012-02-17/baidu-sees-strong-growth-in-services-for-mobile-users-ceo-says.html

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Baidu Inc. (BIDU) , owner of China ’s dominant search engine, expects strong growth in demand for its mobile services this year, after computer-based operations drove a better-than-expected increase in fourth-quarter profit. China’s mobile Internet market is growing at an “astonishing pace,” Chief Executive Officer Robin Li said on a conference call today. Baidu will step up efforts in generating sales from mobile services, which make up a small percentage of revenue at present, he said. Baidu’s stock rose in extended trading after the company yesterday reported net income climbed 77 percent, boosted by a surge in advertising sales. The Beijing-based company plans to generate more sales from social-media services and is seeking “long-term international opportunities,” Li said today. About 15 percent of the search queries handled by Baidu now come from mobile users, Li said. The chief executive didn’t provide targeted revenue figures for mobile services. Baidu’s American depositary receipts, each representing 0.1 share, advanced 2.5 percent to $141.83 on the Nasdaq Stock Market yesterday before the earnings announcement, and gained 1 percent to $143.25 in extended trading. Fourth-quarter net income climbed to 2.05 billion yuan ($325 million), or 5.87 yuan per ADR, from 1.16 billion yuan, or 3.32 yuan, a year earlier, Baidu said in a statement. That exceeded the 2 billion-yuan average of 10 analyst estimates compiled by Bloomberg. Keyword Advertising Revenue, almost all from online sales, jumped 83 percent to 4.47 billion yuan in the quarter ended Dec. 31. Advertisers increased spending to buy keywords as Baidu extended its lead over Google (GOOG) Inc. in China. First-quarter revenue will increase as much as 78 percent, to between 4.2 billion yuan and 4.33 billion yuan, Baidu forecast. Analysts project sales of 4.23 billion yuan, according to the average of 10 estimates compiled by Bloomberg. The company accounted for 78.3 percent of China’s search- engine market by revenue last quarter, rising from 78.2 percent in the previous three months, according to Analysys International. Google’s share dropped to 16.7 percent from 17.2 percent, the research company said. Google has been losing ground in China’s search-engine market since January 2010, when the Mountain View , California- based company said it was no longer willing to comply with Chinese regulation to self-censor Web content. Two months later, Google shut its Google.cn service and redirected Chinese users to its site in Hong Kong . Robin Li is China’s second-richest man with a fortune of $9.2 billion, according to Forbes Asia . To contact the reporter on this story: Mark Lee in Hong Kong at [email protected] To contact the editor responsible for this story: Michael Tighe at [email protected]

2012

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Encana Plans to Reduce Natural-Gas Output, Spending in 2012

By Jeremy van Loon

2012-02-17T21:20:32Z

http://www.bloomberg.com/news/2012-02-17/encana-posts-profit-below-estimates-plans-gas-output-reduction.html

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Encana Corp. (ECA) , Canada ’s biggest natural-gas producer, will scale back investment and cut output to reduce North American supplies by as much as 600 million cubic feet a day in a bid to boost prices for the heating and power-plant fuel. The company will immediately halt 250 million cubic feet a day from wells, Chief Executive Officer Randy Eresman said in a statement today. Spending for 2012 will drop about 37 percent to $2.9 billion, reducing output by another 250 million cubic feet a day from last year. The remaining cut is in the form of gas used as royalties, the Calgary-based company said. Encana’s reductions come on the heels of similar moves by North American competitors. Chesapeake Energy Corp. (CHK) said on Jan. 23 it would idle drilling rigs and reduce spending in gas fields by 70 percent. EQT Corp. (EQT) announced three days earlier that it will suspend drilling in its Huron Field in Kentucky . “Natural- gas prices in North American look set to remain weak through 2012 and beyond,” Terry Marshall and a group of Moody’s Investors Service analysts wrote in a report today. Producers will cut gas spending by at least 40 percent this year and the number of wells drilled by at least half, they wrote. Gas futures posted their first weekly gain since January, rising 4.6 percent to settle at $2.685 per million British thermal units on the New York Mercantile Exchange . Average gas prices in New York fell 13 percent to $3.476 per million British thermal units in the fourth quarter from a year earlier. Prices reached $13.577 in 2008. Prices ‘Below Costs’ “It is abundantly clear that a continued reduction of drilling activity will be required to restore market balance,” Encana said in the statement. “For the industry as a whole, near-term natural-gas prices are at levels below what it costs to add most new production.” In a separate statement, Encana said Tokyo-based Mitsubishi Corp. (8058) agreed to pay C$1.45 billion ($1.46 billion) for a 40 percent interest in its Cutbank Ridge gas assets in northeastern British Columbia. Mitsubishi will pay another C$1.45 billion over five years for development costs. Encana said it will cut spending elsewhere to reduce the deal’s impact on gas supplies. Joint-venture agreements to develop shale-gas resources and continuing gas production from “wet” fields, drilled to get access to propane and ethane, will mean a “slight increase” in supply this year, Moody’s wrote. Encana will “almost certainly have the liquidity necessary to withstand this lean period” of gas prices, according to the note. Encana reported fourth-quarter net loss narrowed to $246 million, or 33 cents a share, from $469 million, or 64 cents, a year earlier. Sales rose 72 percent to $2.46 billion. The shares, which have seven “buy,” three “sell” and 17 “hold” ratings from analysts, fell 0.9 percent to C$19.97 at the close in Toronto. To contact the reporter on this story: Jeremy van Loon in Calgary at [email protected] To contact the editor responsible for this story: Susan Warren at [email protected]

2012

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As a Compromise, How About a Federal Sex Tax? Stephen L. Carter

By Stephen L. Carter

2012-02-17T15:58:47Z

http://www.bloomberg.com/news/2012-02-17/as-a-compromise-how-about-a-federal-sex-tax-stephen-l-carter.html Here’s a modest proposal: Let’s tax sex and use the proceeds to fund birth control for women whose health plans don’t cover it. Surely this compromise would resolve the controversy over contraceptives and religious organizations. All women would have access to contraception, and religious objectors wouldn’t have to pay a penny. Before you start laughing, consider the policy arguments. It’s heterosexual sex that creates the medical problem contraception is intended to avert, so we would be aligning the incentives properly. Moreover, by all accounts there is plenty of sex going on in America, so the tax would generate a great deal of money. (If 200 million sexually active citizens have sex twice a month, a $2 fee would amount to about $10 billion a year. Of course, we would have to rely on self-reporting, but that’s a separate issue.) True, the people actually engaging in sex (as well as many others who wish they were) might object that the sex tax burdens a fundamental right. They would be entirely correct. But so what? The Constitution (which doesn’t mention sex) is after all a living document, which must be reinterpreted to meet the needs of the era. And the basic need of this era, it seems, is contraception for all. Thus the claim of right must yield. Fundamental Rights This is basically the position of those who think we should ignore the objections of the Catholic bishops and others to the new Health and Human Services rule (and it is a final rule , not a proposed rule) requiring employers to provide health insurance that covers a variety of forms of contraception. The Catholic bishops and other protesters are making precisely the same argument as would arise against my proposal for a sex tax: that it violates a fundamental right. And, unlike the right to sex (which I take it most of us hold dear) the right to religion is actually mentioned in the Constitution. The initial HHS rule required all employers, subject to a religious exemption drawn with contemptuous narrowness, to provide health insurance policies that included various forms of contraception. After protests, the administration rewrote the rule in a way that makes no difference whatsoever. Now the rule requires that the insurer cover contraception, but the employer evidently need not tell the employee this

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example. This principle should be honored across lines of party and ideology. The Constitution, with all those pesky rights and cumbersome processes, often gets in the way of government action. But that is exactly what the document is for. It slows us down, forces us to rethink, forbids us to place our agenda above its guarantees. You can think the HHS rule a wise one. You can think the protests misguided. You can believe that the government should indeed be able to command religious organizations to pay for medical procedures for their employees, even when the religion objects. You can believe all of that, and be a perfectly civic- minded individual. What you cannot do is to believe all of that, and also support the separation of church and state. That is what worries me: On the evidence of this rule, it is hard not to conclude that those who have written it do not, fundamentally, understand the compromise on which the religion clause of the First Amendment rests. If HHS regulators believe that the wall of separation imprisons the church but allows the state to decide where the boundaries lie, then negotiation would be fruitless. So fundamental a misunderstanding of the constitutional order should be corrected, and swiftly, by wiser heads in the administration. (Stephen L. Carter is a Bloomberg View columnist and a professor of law at Yale University . He is the author of “The Violence of Peace: America’s Wars in the Age of Obama,” and his next novel, “The Impeachment of Abraham Lincoln ,” will be published in July. The opinions expressed are his own.) Read more opinion online from Bloomberg View . To contact the writer of this article: Stephen Carter at [email protected] . To contact the editor responsible for this article: Michael Newman at [email protected] .

2012

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Apple’s Stock May Not Be as Cheap as It Looks: Jonathan Weil

By Jonathan Weil

2012-02-17T00:00:00Z

http://www.bloomberg.com/news/2012-02-17/apple-s-stock-may-not-be-as-cheap-as-it-looks-jonathan-weil.html Throughout the extraordinary surge in Apple Inc. (AAPL) ’s share price , a persistent question has lingered: Why is the stock still so cheap ? One overlooked answer may be that Apple’s accounting isn’t as conservative as it used to be. After topping $500 a share this week, the iPhone and iPad maker now has a $468 billion market capitalization . Yet Apple trades for only 14.3 times its earnings for the previous four quarters

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than it used to. In short, one reason Apple’s earnings have been so high is accounting inflation, and the market realizes this. Restated Numbers The easiest way to see the rule change’s impact is to look back at the two sets of numbers Apple reported for fiscal 2009. Originally, the company said it had $5.7 billion of net income for the year on $36.5 billion of revenue. Then in January 2010 Apple retroactively adopted the new accounting principles and restated its previous numbers. The restatement boosted Apple’s fiscal 2009 net income 44 percent to $8.2 billion. Revenue was revised to $42.9 billion, 17 percent higher than originally reported. Nothing changed economically, of course. Only the accounting did. On the surface, though, Apple’s valuation looked cheaper under the new reporting regime than under the old one. On Dec. 31, 2009, for instance, Apple had a market capitalization of about $191 billion. Using the fiscal 2009 earnings that Apple initially reported, its price-earnings ratio that day was about 33. Using its restated numbers, the ratio would have been about 23. My guess is a similar effect is occurring today: Had it not been for the rule change, Apple’s P/E ratio would be higher, because the “E” would be lower. “It would appear that the market continues to consider a significant component of Apple’s revenues and gross profit to be presently unearned and not deserving of a normal market multiple,” said Charles Mulford, an accounting professor and director of the Financial Reporting and Analysis Lab at Georgia Institute of Technology in Atlanta. Apple was one of a handful of companies that lobbied the Financial Accounting Standards Board for the new rules in 2009. The impact for Apple seems to have been greater than for most others, probably because of the nature of its products. Dell Inc. (DELL) said the rule switch had no material impact on its results. Microsoft Corp. (MSFT) and Oracle Corp. (ORCL) said the same. Hewlett-Packard Co. (HPQ) ’s earnings got a slight boost. The FASB rule change had two main parts. One related to so- called multiple-deliverable arrangements , while another covered software sales. When Apple sells an iPhone, for example, the hardware and software are delivered at the time of sale. Other deliverables include the rights to future software upgrades and other features. Economic Life The old accounting rules required Apple to defer large chunks of its revenue and recognize the amounts gradually over each product’s economic life. While the details are complicated, the gist under the new rules is that Apple is allowed to record more revenue upfront. What’s unknowable is how much different Apple’s latest results would have looked had the FASB not amended its standards. There’s no way to tell from the company’s disclosures. Plus, Apple adopted the new accounting principles right before it introduced the iPad. An Apple spokeswoman, Kristin Huguet , didn’t return phone calls seeking comment. Let me be clear: I’m not opining on whether Apple is overvalued or undervalued, and I’m certainly not making any predictions about its stock price. The point here is that it makes sense for Apple’s earnings multiple to have declined significantly once you consider how the company’s accounting has changed. The bottom line: Not all iEarnings are created equal. ( Jonathan Weil is a Bloomberg View columnist. The opinions expressed are his own.) Read more opinion online from Bloomberg View . To contact the writer of this article: Jonathan Weil in New York at [email protected] To contact the editor responsible for this article: Mark Whitehouse at [email protected]

2012

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Yankees Send Pitcher A.J. Burnett to Pirates for Prospects, N.Y. Post Says

By Eben Novy-Williams

2012-02-17T21:02:13Z

http://www.bloomberg.com/news/2012-02-17/yankees-send-pitcher-a-j-burnett-to-pirates-for-prospects-n-y-post-says.html

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The New York Yankees agreed to trade starting pitcher A.J. Burnett to the Pittsburgh Pirates for two prospects and about $13 million in salary relief, the New York Post reported today. The Pirates will pay more than a third of the $33 million remaining on the right-handed pitcher’s contract in a deal that is awaiting approval from Major League Baseball Commissioner Bud Selig , the newspaper reported without saying where it obtained the information. It said the deal should be approved by baseball Commissioner Bud Selig by tomorrow. The Yankees signed Burnett to a five-year, $82.5 million contract before the 2009 season, making him at the time the fourth-highest-paid pitcher in baseball, according to a USA Today salary database. He struggled in the past two seasons, posting the two highest single-season earned-run averages of his 13-year career. In 10 seasons with the Toronto Blue Jays and Florida Marlins prior to joining the Yankees, Burnett was 87-76, with a 3.81 earned-run average and 8.4 strikeouts, 3.7 walks and 7.8 hits allowed per nine innings. All of those metrics worsened in his three seasons in New York, where he was 34-35 with a 4.79 ERA, and 7.9 strikeouts, 4.0 walks and 9.0 hits allowed per nine innings. One of the prospects involved in the trade is right-handed relief pitcher Diego Moreno, who advanced to the Double-A level last season, the Post said. The other player, is unknown, the newspaper said. To contact the reporter on this story: Eben Novy-Williams in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

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Shell Spill-Plan Approval Advances Its U.S. Arctic Drilling

By Katarzyna Klimasinska

2012-02-17T21:19:36Z

http://www.bloomberg.com/news/2012-02-17/shell-wins-approval-for-oil-spill-response-plan-in-arctic-1-.html

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Royal Dutch Shell Plc (RDSA) won U.S. approval for its oil-spill response plan in the Chukchi Sea, bringing the company closer to drilling off the north coast of Alaska after a five years of preparation. Shell must obtain drilling permits from the Interior Department’s Bureau of Safety and Environmental Enforcement to start work as early as July. The company also needs U.S. Fish and Wildlife Service and National Marine Fisheries Service permission for “incidental” disruption of polar bears, walrus, whales and seals. Shell, which has spent about $4 billion on leases, seismic studies and research of Arctic mammals since acquiring access to the Beaufort Sea in 2005, is seeking to drill as many as five wells this year in a region with an estimated 26.6 billion barrels of oil. The exploration plans for both Chukchi and Beaufort seas were approved last year. “Approval of our Chukchi Sea oil-spill response plan is another major milestone on the path to drilling in the Alaska offshore this summer,” Pete Slaiby, Shell’s Alaska exploration manager, said in an e-mail. “We will continue to work with regulators and the Department of Interior to achieve the final permits needed to begin drilling in July.” Environmental Opposition Exploration by Shell in the region was delayed after environmentalists and Eskimos filed lawsuits to block permits, and by the administration of President Barack Obama after BP Plc’s Gulf of Mexico spill in April 2010. Environmental groups including the New York-based Natural Resources Defense Council oppose the drilling, saying more research is needed to identify areas that need to be protected, such as habitats for bowhead whales. The NRDC, Sierra Club and residents in Point Hope, a North Slope village close to the drilling sites, sued to challenge a lease sale that gave Shell access to the Arctic waters. “Drilling is a dirty and dangerous business and is a threat to the fragile environment of America’s Arctic Ocean,” Cindy Shogan, the executive director of the Washington-based Alaska Wilderness League, said today in an e-mailed statement. “President Obama has the ability to stop the next oil spill disaster before it happens by not granting Shell’s final drilling permits.” To contact the editor responsible for this story: Jon Morgan at [email protected]

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JPMorgan’s $21 Million MF Global Account Not Customer Money, Trustee Says

By Thom Weidlich and Linda Sandler

2012-02-17T22:33:23Z

http://www.bloomberg.com/news/2012-02-17/jpmorgan-s-mf-global-account-not-customer-money-trustee-says.html

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A probe of a JPMorgan Chase & Co. account that received almost $1.8 billion in inflows of cash in the month before MF Global Holdings Ltd. (MFGLQ) ’s bankruptcy showed no evidence that brokerage customers’ money was being siphoned off, a trustee said. Louis Freeh , who is handling the parent company’s bankruptcy, said all transactions between the MF Global Inc. brokerage customer account and the JPMorgan account, held by the parent company’s finance affiliate, related to margin loans. The affiliate lent money to brokerage customers to cover margin requirements and was later repaid, he said in a report. Freeh said he started the probe, which included “review of volumes of bank statements and an extensive population of cash- transaction activity during October 2011,” after U.S. Bankruptcy Judge Martin Glenn in Manhattan asked if any cash in the account belonged to brokerage customers, as some customers had alleged. His findings indicate that at the JPMorgan account money flowed from the parent’s affiliate to the brokerage, and not the reverse. After an investigation, “the trustee does not believe that any of the cash in the JPM account as of the petition date represents misdirected customer property,” Freeh said in the report filed yesterday in bankruptcy court in Manhattan. Account Activity Even the account activity from Oct. 26-28, when a shortfall began in MF Global’s segregated customer accounts, showed no misdirected customer cash moving to the account at JPMorgan, he said. In those two days, $322 million flowed into the finance unit’s account and $773 million flowed out, of which $697 million was sent to the brokerage, Free said. MF Global Holdings (MFGLQ) , formerly run by ex- Goldman Sachs Group Inc. (GS) co-chairman Jon Corzine , filed the eighth-largest U.S. bankruptcy on Oct. 31, listing debt of almost $40 billion. MF Global is using money in the account, which had a balance of $25.3 million on Oct. 28, while it is in bankruptcy. The account had about $21 million as of Jan. 31, according to a monthly operating report filed yesterday. Customers of the failed brokerage had said the money may have been part of the $1.2 billion believed at the time to be missing from their segregated accounts. The brokerage trustee, James Giddens, has since traced most of the missing money, which had been added to other sums he hasn’t immediately been able to recover. He currently estimates the gap between customer claims and funds available to pay them at $1.6 billion. Freeh is handling the parent company’s bankruptcy in a separate court proceeding. The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-cv-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court , Southern District of New York (Manhattan). To contact the reporters on this story: Thom Weidlich in New York at [email protected] ; Linda Sandler in New York at [email protected] To contact the editors responsible for this story: Michael Hytha at [email protected] ; John Pickering at [email protected]

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U.S. Says Rajaratnam and Gupta Lawyers May Be Sharing Memos

By Patricia Hurtado

2012-02-17T01:58:20Z

http://www.bloomberg.com/news/2012-02-17/u-s-says-rajaratnam-and-gupta-s-lawyers-may-be-sharing-memos.html

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Lawyers for Rajat Gupta , the former Goldman Sachs Group Inc. (GS) director charged with insider trading , may have received government memos on two witnesses who testified against Galleon Group LLC co-founder Raj Rajaratnam last year, a prosecutor said. Assistant U.S. Attorney Reed Brodsky said at a court hearing today in Manhattan that Gupta’s lawyers may already have copies of dozens of memos concerning Anil Kumar , a former partner at McKinsey & Co., and Adam Smith , a former Galleon portfolio manager, based on interviews conducted by agents with the Federal Bureau of Investigation . Kumar and Smith pleaded guilty and agreed to testify against Rajaratnam, who was convicted of insider trading in May. The memos, known as “302s,” were handed over by prosecutors to Rajaratnam’s lawyer during his trial last year, Brodsky said at the hearing. “What we didn’t produce and what we didn’t review were Kumar and Smith FBI reports that we produced in the Rajaratnam trial,” Brodsky told U.S. District Judge Jed Rakoff, who is overseeing Gupta’s criminal case as well as a suit filed by the U.S. Securities and Exchange Commission. ‘No Right’ “We’re asking if they received them from Rajaratnam’s counsel,” Brodsky said. Gupta’s lawyer, Gary Naftalis , said he wouldn’t tell prosecutors if he had the memos. He noted that Rakoff ordered prosecutors last week to turn over the bulk of evidence they had in preparation for the trial, set to begin in May. “They have absolutely no right to know the answer when they were ordered to do this,” Naftalis said. Rakoff said he was concerned to learn there may have been sharing of evidence, known as “3500 material,” between Gupta and Rajaratnam. The judge said the while the men are codefendants in the SEC lawsuit filed in October, they aren’t codefendants in the criminal case before him. “3500 material is normally to be returned at the close of a case,” Rakoff said. “There may be a reason why the court should find out what’s going on. I do have some concern about whether there was such an exchange and whether or not it’s harmless error.” Phone Conference Rakoff ordered the lawyers in the case to confer with him tomorrow in a phone conference to resolve the matter. Gupta, 63, the one-time McKinsey & Co. leader and former director at Procter & Gamble Co ., was accused in October by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara of passing inside information to Rajaratnam. The U.S. says Gupta tipped Rajaratnam about Goldman Sachs and P&G earnings. A revised indictment filed in January expanded prosecutors’ description of the insider-trading scheme, saying it began in March 2007, a year earlier than the U.S. alleged in October when Gupta was first charged. ‘Joint Investigation’ During today’s hearing, David Frankel, a lawyer for Gupta, argued that his team was also entitled to material collected by the SEC, including written reports and interviews conducted by regulators. He argued that prosecutors and regulators had conducted a “joint investigation” of Gupta. Kevin McGrath, a lawyer for the SEC, said regulators had acted independently of prosecutors and that Gupta’s lawyers weren’t entitled to such information. Rakoff said he wouldn’t rule on the matter immediately. In November, Rakoff said Gupta’s lawyer could question Goldman Sachs Chief Executive Officer Lloyd Blankfein and six others under oath. Frankel said after court that Gupta’s legal team hasn’t interviewed Blankfein and that two other Goldman Sachs employees refused to speak to Gupta’s team. Rajaratnam, who was convicted by a jury, is serving an 11- year prison term. The case is U.S. v. Gupta, 11-cr-00907, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Patricia Hurtado in New York at [email protected] To contact the editor responsible for this story: Michael Hytha at [email protected]

2012

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Asian Stocks Rise, Set for Ninth Weekly Rally, on U.S., Greece

By Yoshiaki Nohara

2012-02-17T11:04:03Z

http://www.bloomberg.com/news/2012-02-17/asian-stocks-advance-set-for-ninth-weekly-rally-on-u-s-greece-outlook.html

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Asian stocks rose, with the regional benchmark index set to match its longest streak of weekly advances, after U.S. economic reports beat estimates and optimism increased that Greece will get a second debt bailout, boosting demand for riskier assets. Honda Motor Co. (7267) , the carmaker that generates 44 percent of its revenue in North America , rose 2.4 percent in Tokyo . Mitsubishi UFJ Financial Group Inc. (8306) , Japan’s biggest lender, led financial companies higher. Billabong International Ltd. (BBG) , a global surfwear maker, surged 46 percent in Sydney after confirming a takeover approach. The MSCI Asia Pacific Index gained 1.1 percent to 127.23 as of 8:02 p.m. in Tokyo. The measure has advanced 1.9 percent this week, extending its winning streak to the longest since December 2005. The gauge has advanced nine consecutive weeks only three times since 1988. “It’s a distinct improvement from the fourth quarter last year from the perspective of investor confidence and risk appetite,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “When there’s a bit of relief from the European front, the markets can focus on fundamentals, which seem to be improving by the day.” U.S. Data Japan ’s Nikkei 225 Stock Average rose 1.6 percent, its biggest weekly gain since the period ended Dec. 2, as the yen fell against all of its 16 major counterparts. The currency declined to a four-month low after the Bank of Japan surprised the market on Feb. 14 by expanding its government bond purchases. A weaker yen boosts the overseas earnings of Japanese companies. Australia’s S&P/ASX 200 added 0.3 percent, and South Korea’s Kospi Index advanced 1.3 percent. Hong Kong ’s Hang Seng Index gained 1 percent, while the Shanghai Composite Index was little changed after swinging between gains and losses. Futures on the Standard & Poor’s 500 Index were little changed today. The gauge advanced 1.1 percent in New York yesterday after reports showed Americans filed the fewest claims for jobless benefits since March 2008 and builders broke ground on more houses than expected. Manufacturing (OUTFGAF) in the Philadelphia region expanded this month at the fastest pace in four months as orders and sales rose. Exporters to the U.S. advanced. Honda gained 2.4 percent to 2,950 yen. James Hardie Industries SE (JHX) , a building-materials supplier that gets 68 percent of sales from the U.S., rose 2.3 percent to A$7.26 in Sydney. Techtronic Industries Co. (669) , a power- tool maker that counts North America as its largest market, added 3.1 percent to HK$10.10 in Hong Kong. Banks Rise Financial companies contributed the most to gains in the MSCI Asia Pacific Index amid optimism Europe ’s debt crisis won’t throw the global financial system into disarray. Euro-area officials said the European Central Bank is swapping its Greek bonds for new securities to protect from losses in a debt restructuring. European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the ECB to plug a new financing gap in the second bailout for Athens, two people familiar with the discussions said. “The sense of worry is weakening slightly in markets across the board,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at T&D Asset Management Co. in Tokyo. “Expectations for a U.S. economic recovery are increasing and the uncertainties on the European debt issues are subsiding.” TPG Eyes Billabong Mitsubishi UFJ Financial Group advanced 1.3 percent to 406 yen. Nomura Holdings Inc. (8604) , Japan’s biggest brokerage by market value, rose 3.3 percent to 345 yen. HSBC Holdings Plc (HSBA) , Europe’s No. 1 lender, climbed 1.7 percent to HK$70.50. Billabong International jumped 46 percent to A$2.62 after it received a takeover approach from buyout firm TPG Capital valuing the company at A$765 million ($824 million). The interest comes less than two months after the apparel maker started a review of its capital structure amid a slump in earnings and looming debt payments. The Asia Pacific index gained 11 percent this year through yesterday, compared with an 8 percent advance by the S&P 500 and an 8.1 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.4 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.9 times for the Stoxx 600. Of 467 companies listed in the Asia Pacific index that have reported net income since Jan. 9, 256 missed analysts’ estimates while 126 beat them, according to data compiled by Bloomberg. Bridgestone Corp (5108) , the world’s biggest tiremaker by market value, jumped 4 percent to 1,833 yen after saying it expects net income to surge 63 percent to 168 billion yen ($2.1 billion) this year on growing sales. The Japanese tire company also said it will spend about 4.7 billion yen to boost production capacity. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at [email protected] To contact the editor responsible for this story: Nick Gentle at [email protected]

2012

asian-stocks-advance-set-for-ninth-weekly-rally-on-u-s-greece-outlook

Inter-American Development Bank Said to Sell Bonds in Pounds

By Ben Martin

2012-02-17T09:28:19Z

http://www.bloomberg.com/news/2012-02-17/inter-american-development-bank-said-to-sell-bonds-in-pounds.html

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Inter-American Development Bank is selling at least 200 million pounds of bonds due in December 2014, according to a banker involved in the transaction. The notes may be priced to yield about 43 basis points more than gilts, the banker said. Deutsche Bank AG and HSBC Holdings Plc (HSBA) are managing the deal. To contact the editor responsible for this story: Ben Martin at [email protected]

2012

inter-american-development-bank-said-to-sell-bonds-in-pounds

Ukraine’s Grain Exports Fell in February, Confederation Says

By Kateryna Choursina

2012-02-17T08:12:58Z

http://www.bloomberg.com/news/2012-02-17/ukraine-s-grain-exports-fell-in-february-confederation-says.html

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Ukraine’s grain exports fell to about 600,000 metric tons in the first 15 days of this month, the country’s Agrarian Confederation said. “Grain exports from Ukraine shrank sharply in February” because of freezing weather and after the government asked traders to slow wheat shipments, Sergey Stoianov, director of the producers group, said today on its website. That compares with 1.9 million tons of grain exports in the whole of January. Wheat shipments were less than 100,000 tons in the first 15 days of this month, Stoianov said, compared with 540,000 tons of wheat exported in the whole of last month, according to the confederation’s data. To contact the reporter on this story: Kateryna Choursina in Kiev at [email protected] To contact the editor responsible for this story: Claudia Carpenter at [email protected]

2012

ukraine-s-grain-exports-fell-in-february-confederation-says

Emerging Stock Inflows Halved, EPFR Says

By Leon Lazaroff

2012-02-17T21:15:40Z

http://www.bloomberg.com/news/2012-02-17/emerging-stock-inflows-halved-epfr-says.html

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Emerging-market equity funds took in $2.2 billion in the week ended Feb. 15, less than half the previous week, as concern Greece wouldn’t secure emergency bailout funds and tension in the Middle East damped the outlook for global growth, according to EPFR Global. Net investment into developing-nation equity funds has totaled $19.2 billion in 2012, compared with outflows of $9.83 billion for the same period of 2011, according to a report e- mailed today by Cambridge, Massachusetts-based EPFR. Developing- nation fund inflows for the week ended Feb. 8 were a net $5.8 billion, the most since October 2010. Investors have returned over 40 percent this year of the $47 billion pulled out of emerging market equity funds in 2011 as developing nations demonstrate “more fiscal and monetary firepower to sustain growth rates two-to-three times greater than their developed-market counterparts,” Cameron Brandt , EPFR’s director of research, said by e-mail. So-called Global Emerging-Market funds, or GEM funds, recorded a net outflow for the week of $1.67 billion, the worst performance since the first week of January. During the week ended Feb. 8, GEM funds posted inflows of $5.4 billion, the data show. The average emerging-market equity portfolio posted a 0.2 percent gain for the week, extending the 2012 advance to 14.8 percent, Brandt said. China-dedicated equity funds recorded their sixth consecutive week of inflows to total $1.8 billion for 2012. Brazil funds experienced the most outflows in five weeks after companies reported worse-than-estimated earnings, while rising crude prices boosted flows into Russia . India funds attracted new money on speculation of additional rate cuts, EPFR said in today’s statement. Emerging-market bond funds registered inflows of $673 million after posting gains for three straight weeks, Brandt said. These funds amassed a record $2.14 billion of inflows in the week ended Feb. 8, the data showed. To contact the reporter on this story: Leon Lazaroff in New York [email protected] To contact the editor responsible for this story: Emma O’Brien at [email protected]

2012

emerging-stock-inflows-halved-epfr-says

Governments to Get ECB’s Bond Profits, Praet Tells Tijd, Echo

By John Martens

2012-02-17T23:00:00Z

http://www.bloomberg.com/news/2012-02-17/governments-to-get-ecb-s-bond-profits-praet-tells-tijd-echo.html

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European Central Bank Executive Board member Peter Praet said profits from the sale of the ECB’s Greek bond holdings will be distributed via the national central banks to the euro-area governments, which can “spend the money as the wish,” De Tijd and L’Echo reported. The Frankfurt-based central bank can’t participate in a private-sector debt writedown of Greek assets and the ECB is prohibited from financing governments’ debt by buying their bonds, the newspapers quoted Praet as saying in a joint interview. Praet told the newspapers that while the ECB’s three-year bank loans are an “important operation,” they are not a “bazooka” and the program is an “extraordinary measure” that is “temporary,” the newspapers cited him as saying. The policy maker said the Greek austerity plan is “feasible” and support from the public is “crucial,” according to the newspapers. To contact the reporter on this story: John Martens in Brussels at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected]

2012

governments-to-get-ecb-s-bond-profits-praet-tells-tijd-echo

Bank of East Asia’s China Unit Wins Approval for Dim Sum Bonds

By Stephanie Tong

2012-02-17T04:36:58Z

http://www.bloomberg.com/news/2012-02-17/bank-of-east-asia-s-china-unit-wins-approval-for-dim-sum-bonds.html

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Bank of East Asia Ltd. , the third- largest Hong Kong-based lender, said its China unit won regulatory approval to sell 1 billion yuan ($159 million) of Dim Sum bonds in the city. China’s National Development and Reform Commission recently granted approval for the bond sale, Brian Li, deputy chief executive of Bank of East Asia, said in an e-mailed reply to questions today. The bank plans to complete the sale this year, he said. Yuan bond sales in Hong Kong increased more than fourfold to 151.4 billion yuan last year, from 35.7 billion yuan in 2010, according to data compiled by Bloomberg. HSBC Holdings Plc, the top underwriter for the notes, forecasts total Hong Kong sales of as much as 310 billion yuan this year. China’s Vice Premier Li Keqiang pledged in August to allow mainland Chinese companies to borrow as much as 50 billion yuan each year through bond sales in the city. The government has also relaxed rules to allow direct investments denominated in the currency. To contact the reporter on this story: Stephanie Tong in Hong Kong at [email protected] To contact the editor responsible for this story: Chitra Somayaji at [email protected]

2012

bank-of-east-asia-s-china-unit-wins-approval-for-dim-sum-bonds

Brazilian Coffee Extends Decline as Futures Tumble, Brokers Say

By Isis Almeida

2012-02-17T13:56:12Z

http://www.bloomberg.com/news/2012-02-17/brazilian-coffee-extends-decline-as-futures-tumble-brokers-say.html

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Coffee prices in Brazil , the world’s largest producer, extended a decline as arabica futures tumbled and touched the lowest price in 15 months yesterday, local brokers said. The price of fine cup arabica beans is 420 reais ($245) to 450 reais for a 60-kilogram (132-pound) bag, according to Flavour Coffee. That compares with 480 reais on Feb. 3, when the price fell below 500 reais for the first time since August, the Rio de Janeiro-based broker said, and 470 reais to 480 reais on Feb. 9. Arabica futures dropped for a seventh consecutive day yesterday, falling to as low as $1.978 a pound, the lowest price for the most active contract since Nov. 4, 2010, on expectations of a big harvest in Brazil in the season starting in July. The commodity for May delivery was little changed at $2.0145 by 8:25 a.m. today on ICE Futures U.S. It’s a “scary movie for many people, especially for some producers,” Thiago Cazarini, a broker at Varginha, Brazil-based Cazarini Trading Co., wrote in a report yesterday. “If prices keep coming down it won’t take long for them to sell a lot of the stocks they have.” Coffee output in Brazil will rise to a record 49 million to 52.3 million bags this year, from 43.5 million last year, the Agriculture Ministry ’s crop-forecasting agency, known as Conab, estimated on Jan. 10. The “local market followed ICE falls this week, with prices trading as low as 420 reais, a quite impressive drop,” Flavour Coffee said in a report e-mailed yesterday. To contact the reporter on this story: Isis Almeida in London at [email protected] To contact the editor responsible for this story: Claudia Carpenter at [email protected] .

2012

brazilian-coffee-extends-decline-as-futures-tumble-brokers-say

UBS Survey Shows Record Demand for ECB’s Next Three-Year Loans

By Jeff Black

2012-02-17T10:03:57Z

http://www.bloomberg.com/news/2012-02-17/ubs-survey-shows-record-demand-for-ecb-s-next-three-year-loans.html Demand for three-year loans from the European Central Bank will increase to a record amount at the next offering on Feb. 28, UBS AG said, citing a survey. Euro-area banks will borrow 629 billion euros ($826 billion) from the ECB, according to the median of 317 forecasts in the UBS survey. The ECB allocated a record 489 billion euros in the first three-year tender in December. Forecasts for the second tender ranged from zero to 3 trillion euros, with two- thirds between 400 billion euros and 800 billion euros, UBS said. Its own estimate is 492 billion euros. The ECB will allocate the funds on Feb. 29. It charges the average of its benchmark rate

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period of the loan and banks have the option of repaying after one year. The ECB also satisfies all bids against eligible collateral, leaving the ultimate amount of money it lends in the hands of the banks asking for the funds. ECB President Mario Draghi has said the first three-year loan helped avert a credit crunch as the region’s debt crisis makes banks wary of lending. Yields on government bonds across the 17-nation euro region have also dropped, suggesting banks are using some of the money to invest in sovereign debt. UBS chief European economist Stephane Deo said an allotment of more than 500 billion euros in the second operation “would represent banks over-funding” and using the money “to carry trade.” Of the 317 survey participants, 132 were from UBS, the bank said. To contact the reporter on this story: Jeff Black in Frankfurt at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected]

2012

ubs-survey-shows-record-demand-for-ecb-s-next-three-year-loans

Nigeria to Add 2.1 Million Tons of Rice in 4 Years

By Maram Mazen

2012-02-17T11:45:07Z

http://www.bloomberg.com/news/2012-02-17/nigeria-to-add-2-1-million-tons-of-rice-in-4-years-correct-.html

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(Corrects to show production figure is additional output.) Nigeria will raise its annual rice production by 2.1 million metric tons within the next four years, making the West African nation self-sufficient in output of the staple crop, said Agriculture Minister Akinwunmi Adesina. The country will sign a deal with U.S.-based Dominion Farms Ltd. to start a 300,000-ton, $40 million rice farm that would be the biggest of its kind in Africa , he told reporters in Abuja, the capital, today. The plantation’s output will save Nigeria 54 billion naira annually in rice-import costs, Adesina said. To contact the reporter on this story: Maram Mazen in Abuja at [email protected] To contact the editor responsible for this story: Emily Bowers at [email protected]

2012

nigeria-to-add-2-1-million-tons-of-rice-in-4-years-correct-

Global Funds Buy Net 6.79 Billion Rupees of Indian Derivatives

By Paresh Jatakia

2012-02-17T03:47:33Z

http://www.bloomberg.com/news/2012-02-17/global-funds-buy-net-6-79-billion-rupees-of-indian-derivatives.html

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Global investors bought a net 6.79 billion rupees ($137.8 million) of Indian equity derivatives yesterday, according to the National Stock Exchange. Open interest, or the number of contracts outstanding in value terms, rose 2.4 percent to 977.3 billion rupees, or 31.8 percent of the gross market position, according to the exchange’s website. Open interest reached a record 1.6 trillion rupees on Sept. 21, 2010. Foreign funds bought a net 1.84 billion rupees of shares in the cash segment yesterday, according to preliminary data given by the bourse. To contact the reporter on this story: Paresh Jatakia in Mumbai at [email protected] To contact the editor responsible for this story: Arijit Ghosh at [email protected]

2012

global-funds-buy-net-6-79-billion-rupees-of-indian-derivatives

Gazprom Sees U.S. Exporting LNG in Decade, Downplays Competition

By Anna Shiryaevskaya and Halia Pavliva

2012-02-17T12:17:16Z

http://www.bloomberg.com/news/2012-02-17/gazprom-sees-u-s-exporting-lng-in-decade-downplays-competition.html

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OAO Gazprom (GAZP) , the biggest natural-gas producer, said it expects U.S. exports of the fuel in a decade, downplaying the prospect of increased competition. The U.S. has overtaken Russia as the largest gas producer, using hydraulic fracturing, or fracking, and horizontal drilling to pump fuel from shale beds. Rising production has driven down prices, cut shipments to the U.S. and prompted owners of import terminals to study switching to liquefied natural gas exports. “I don’t anticipate that the LNG exports from the U.S. could reach big volumes,” Gazprom Deputy Chief Executive officer Alexander Medvedev said in an interview. “In order to be competitive and to cover the cost, it should go not to Europe probably but to Asia , where the market demand is so high.” Gazprom, which depends on piping gas to Europe for most of its sales, plans to grow in Asia and boost its share of the LNG trade by buying cargoes, building plants and seeking projects abroad. LNG is gas turned into a liquid and shipped by tanker. The U.S. plans to be a net exporter of LNG from 2016, with initial sales of 1.1 billion cubic feet a day doubling after three years, the Energy Information Administration said Jan. 23. While former Exxon Mobil Corp. chief Lee Raymond this month said politics and concern that production at shale fields isn’t sustainable may hinder development of LNG export plants, some gas companies are confident the U.S. will be a major exporter. BG Group Plc, the U.K.’s third-largest oil and gas company, said in February the U.S. will be able to supply about 9 percent of global LNG output by the end of the decade and have capacity to export about 45 million metric tons a year from 2020. Later Start? U.S. LNG exports may start “later, maybe in the next 10 years” as approvals and construction take time, Medvedev said yesterday in New York . Volumes may be 10 billion cubic meters (353 billion cubic feet) to 20 billion cubic meters a year, he said. Cheniere Energy Partners LP (CQP) received permission from the U.S. Energy Department in May to sell LNG overseas. “In the end it is good for the global gas industry because now the U.S. feels more secure, comfortable, and the role of gas is growing in the economy, including innovative sectors like bunkering for the fleet or transportation fuel,” Medvedev said. Gazprom exports LNG from its share of the Sakhalin-2 plant off Russia’s Pacific coast and buys the fuel from other sources. Its total traded LNG rose 25 percent to 3 billion cubic meters in 2011, a presentation to investors last week showed. That’s a fraction of Asian demand, less than the demand in 2010 for Hong Kong alone, BP Plc (BP/) ’s Statistical Review of World Energy shows. While demand is increasing in China , India , Pakistan and Bangladesh, “not too much capacity” will become available in three to five years, Medvedev said. Gazprom expects Asian LNG prices to stay linked to oil or the so-called Japanese Crude Cocktail, a benchmark index used to price long-term contracts. To contact the reporter on this story: Anna Shiryaevskaya in Moscow at [email protected] ; Halia Pavliva in New York at [email protected] To contact the editor responsible for this story: Will Kennedy at [email protected]

2012

gazprom-sees-u-s-exporting-lng-in-decade-downplays-competition

WaMu Bankruptcy Judge to Approve $7 Billion Reorganization

By Steven Church

2012-02-17T21:14:27Z

http://www.bloomberg.com/news/2012-02-17/wamu-judge-approves-7-billion-reorganization-plan-overruling-objections.html

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Washington Mutual Inc. (WM) won court approval for a $7 billion reorganization plan that resolves some legal claims related to the biggest U.S. bank to fail. Creditors may be paid the first chunk of money as early as March 8 once a deadline passes for shareholders to decide whether they will waive their right to sue over the collapse of WaMu’s former bank, said Fred Hodara , a lawyer for the creditors’ committee. “It should be confirmed immediately so stakeholders can get a distribution,” U.S. Bankruptcy Judge Mary Walrath said today in Wilmington, Delaware . Walrath said she will sign a final order approving the plan after wording changes are submitted by company lawyers. The approval followed a deal struck this week to allow common shareholders to split ownership of the only unit of WaMu that will emerge from bankruptcy, a reinsurance company valued at about $140 million. Even with the deal, shareholders will still lose more than other WaMu investors, Edgar Sargent, with the law firm Susman Godfrey LLP, said in court. “Getting to a recovery for shareholders was not an easy process,” Florin Matache, a shareholder who estimates he lost about $10,000 on WaMu common stock purchased before the bankruptcy, said in an interview after the hearing. “I am not sure the struggle was worth it.” Break Even Matache, a 34-year-old pharmacist from Roseville, California , said he tried to cut his losses after the Chapter 11 filing by buying WaMu securities that had dropped in value. Should the reinsurance company be worth $140 million, as WaMu financial advisers estimated, Matache expects to break even on his post-bankruptcy investments. Bondholders, some of whom bought WaMu’s debt for pennies on the dollar after the company’s 2008 collapse and bankruptcy filing, will be repaid in full plus interest, according to court documents. WaMu, based in Seattle , filed for bankruptcy on Sept. 26, 2008, the day after its banking unit was taken over by regulators and sold to JPMorgan Chase & Co . for $1.9 billion. Washington Mutual Bank had more than 2,200 branches and $188 billion in deposits. Creditors will collect more than $7 billion, mainly from about $4 billion in cash that WaMu had on deposit with the banking unit bought by JPMorgan and from tax refunds. The cash and the refunds were split with JPMorgan and the Federal Deposit Insurance Corp. to settle a dispute about who owned the assets and who should be held responsible for WaMu’s collapse. Shared Recovery Today’s approval of WaMu’s plan came after a group of creditors known as the TPS Consortium, who hold securities that resemble preferred shares, agreed to switch their vote and support the proposal. In return for their support, the group’s members will share stock in the reinsurance company that would exit bankruptcy under the plan. Those creditors and another group of investors who hold the same securities will share $18 million provided by JPMorgan. The deal removed the last major objection to the plan, WaMu attorney Brian Rosen , with the law firm Weil, Gotshal & Manges LLP , said in court. He compared a small stack of objections for this version of the plan, the seventh, to the hundreds of written critiques of the previous plan. “It was like the winner of the ‘Biggest Loser’ contest,” Rosen said, referring to the reality-television show in which obese people try to lose weight. About 15.5 million common shares traded hands today, the highest volume since Dec. 13, and almost three times the 30-day moving average. The shares rose 7.6 percent to 4.5 cents in over-the-counter trading, according to information compiled by Bloomberg. The bankruptcy case is In re Washington Mutual Inc. (WAMUQ) , 08-12229, U.S. Bankruptcy Court , District of Delaware (Wilmington). To contact the reporter on this story: Steven Church in Wilmington at [email protected] To contact the editor responsible for this story: John Pickering at [email protected]

2012

wamu-judge-approves-7-billion-reorganization-plan-overruling-objections

ING and Axis CDs Deals:Indian Money Market

By Shraddha Kothari

2012-02-17T12:47:58Z

http://www.bloomberg.com/news/2012-02-17/ing-and-axis-cds-deals-indian-money-market.html

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Following is a table showing certificate of deposits issued by Indian banks.The data has been provided by Trust Financial Consultancy Services,Mata Securities India Pvt Ltd,Derivium Tradition Securities (I) Pvt. Ltd ,And,NVS Brokerage Ltd. Contributed via: Bloomberg Publisher WEB Service Provider ID: 0ad1ae0946d84ddbaf7ca1697c7f5c67

2012

ing-and-axis-cds-deals-indian-money-marke

Larger Turbines May Help China’s Wind Developers, Ming Yang Says

By Bloomberg News

2012-02-17T00:00:00Z

http://www.bloomberg.com/news/2012-02-17/larger-turbines-may-help-china-s-wind-developers-ming-yang-says.html

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Developers of wind-power projects in China are increasing installations of larger capacity turbines to reduce costs in the world’s biggest market, the chief executive officer of China Ming Yang Wind Power Group Ltd. (MY) said. More than 40 percent of new installations in China in 2012 will comprise turbines with capacities above 2 megawatts, Zhang Chuanwei, the CEO of the company that is China’s only maker of the machines with shares traded in the U.S., said in a Feb. 15 telephone interview. The market is dominated by 1.5-megawatt turbines, according to Bloomberg New Energy Finance, which estimated that the larger machines accounted for less than 10 percent of installations last year. “Developers have started leaning toward buying 2.5- or 3- megawatt turbines to enable them to use fewer machines to save on land costs,” said Zhang, whose company is the country’s fourth-biggest producer of the machines. Growth in China ’s wind industry is slowing after the government tightened approval for wind projects on concern over the ability of grids to carry electricity load. Turbine-makers including Ming Yang and the three biggest, Sinovel Wind Group Co. (601558) , Xinjiang Goldwind Science & Technology Co. and Guodian United Power Technology Co., produce machines that have larger capacities than the standard 1.5 megawatts. China led the world in wind capacity last year, installing 18 gigawatts of wind farms, a 9 percent increase from the previous year, according to the Global Wind Energy Council. Zhang expects the country to add 18 to 20 gigawatts this year. Continued Dominance “The 1.5-megawatt turbines will continue its dominance this year,” said Demi Zhu, a Beijing-based analyst at New Energy Finance. She only expects larger turbines to supply a majority of the market after 2013. Zhang expects prices of wind turbines to rebound this year. The average price of Chinese turbines for onshore projects declined 3.8 percent to about 3,853 yuan ($612) a kilowatt in the fourth quarter from a year earlier, according to New Energy Finance data. Producers can’t afford to only compete by offering lowest prices, as developers also “care about the durability of the turbines, the track record of suppliers and their after-sale services,” Zhang said. China in 2011 stopped allowing local governments to approve the construction of new turbine-production plants to control the crowded market for smaller turbines on fears overcapacity could damage the industry. Zhongshan-based Ming Yang, whose shares have gained 14 percent this year in New York trading, won orders in a tender in October to supply 2.5- or-3-megawatt turbines for projects in Jiuquan city in China’s northwestern province of Gansu, Zhang said, without elaborating. Ming Yang is “interested in expanding our presence in emerging wind markets in Mongolia , South Africa , India , South Asia and Eastern Europe,” Zhang said. The company on Feb. 7 agreed to supply turbines to 125 megawatts of wind farms in Bulgaria . To contact Bloomberg News staff for this story: Feifei Shen in Beijing at [email protected] To contact the editor responsible for this story: Reed Landberg at [email protected] .

2012

arger-turbines-may-help-china-s-wind-developers-ming-yang-says

Wuerth Gruppe Sees 2012 Sales Over EU10 Billion, Berliner Says

By Brian Parkin

2012-02-17T18:29:02Z

http://www.bloomberg.com/news/2012-02-17/wuerth-gruppe-sees-2012-sales-over-eu10-billion-berliner-says.html Wuerth Gruppe, a privately owned German maker of screws, adhesives and other fasteners, expects sales this year will exceed 10 billion euros ($13.1 billion) for the first time, the Berliner Zeitung reported, citing an interview with the company’s founder, Reinhold Wuerth. Sales this year are being helped by a weaker euro that’s boosting exports, the newspaper cited Wuerth as saying.

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Brian Parkin in Berlin at [email protected] To contact the editor responsible for this story: James Hertling at [email protected]

2012

wuerth-gruppe-sees-2012-sales-over-eu10-billion-berliner-says

Zynga Said to Plan Game Promotions to Lessen Facebook Reliance for Sales

By Douglas MacMillan and Adam Satariano

2012-02-17T05:01:00Z

http://www.bloomberg.com/news/2012-02-17/zynga-said-to-plan-game-promotions-to-lessen-facebook-reliance-for-sales.html

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Zynga Inc. (ZNGA) , the online-game company that sold shares to the public in December, plans to unveil services designed to promote other developers and lessen its dependence on Facebook Inc . (FB), two people with knowledge of the matter said. Through a new publishing program, due to begin in March, other game developers will be able to advertise their wares in Zynga (ZNGA) titles and on a separate Web portal, said the people, who asked not to be identified because the plan isn’t public. Zynga will keep a portion of the sales generated from the games, according to the people. Zynga, the biggest developer of games played on Facebook , is seeking new sources of revenue after raising $1 billion in its initial public offering. By selling services to other developers, it may reduce its reliance on the social network, which accounts for more than 90 percent of sales and takes a 30 percent cut of virtual goods sold in Zynga games. “Any progress Zynga can make in revenue diversification is a positive,” said Colin Sebastian , an analyst at Robert W. Baird & Co. in San Francisco, who downgraded shares of Zynga to “neutral” earlier this week. Dani Dudeck, a spokeswoman for Zynga, said the company doesn’t comment on rumors or speculation. Zynga shares rose 2.2 percent to $12.06 yesterday. The stock has climbed 28 percent this year. Expensive Development Promoting apps made by other developers is likely to carry fewer risks than Zynga’s main business of developing games itself. The company’s profitability has been crimped by the cost of creating new blockbuster titles. The plan for a new publishing platform in March is contingent on talks with partners, as well as internal development, according to the people familiar with the effort. The release could come later, they said. By becoming a publisher, Zynga emulates traditional console game companies such as Electronic Arts Inc. (EA) , which distribute and promote games made by independent design studios in exchange for a cut of sales. Over time, Zynga’s publishing business could become a significant driver of sales, depending on how much of the market it controls, said Robert W. Baird ’s Sebastian. “This could present a $500 million incremental opportunity in just a few years,” he said. Facebook’s Role Joining Zynga’s network will not exempt developers from giving Facebook (FB) a commission, a person with knowledge of the revenue agreement said. Because Facebook Credits are used by all developers selling virtual goods on the social network and games promoted by Zynga, participating developers will still pay Facebook a cut of sales, the person said. Zynga, with more than 246 million users, operates six of the seven most popular games played on Facebook, according to research firm AppData. “Hidden Chronicles,” released last month, has become Zynga’s third most popular game, with 30.7 million monthly users, according to AppData . It ranks behind two more established titles, “CityVille” and “Texas HoldEm Poker.” During an event at the company’s San Francisco headquarters in October, Zynga debuted a new service, called Project Z, geared toward curbing its dependence on Facebook. Project Z would be part of a larger corporate strategy, dubbed Zynga Direct, that is aimed at building “a direct relationship with consumers whether they are on the Web or mobile,” Chief Executive Officer Mark Pincus said at the event. Earlier this week, Zynga’s shares had their biggest one-day drop since their Dec. 16 debut after an earnings report showed product-development costs are cutting into profitability. To contact the reporters on this story: Douglas Macmillan in San Francisco at [email protected] ; Adam Satariano in San Francisco at [email protected] To contact the editor responsible for this story: Tom Giles at [email protected]

2012

zynga-said-to-plan-game-promotions-to-lessen-facebook-reliance-for-sales

Bankrupt Banker Drumm’s Mansion Offers Marble, Chandeliers, Irish Payback

By Finbarr Flynn

2012-02-17T07:07:52Z

http://www.bloomberg.com/news/2012-02-17/bankrupt-banker-drumm-s-mansion-offers-marble-chandeliers-irish-payback.html

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Anglo Irish Bank Corp.’s (ANGL) failure helped push Ireland to the brink of insolvency. Now, the country may get some payback as the six-bedroom mansion belonging to the lender’s bankrupt former chief executive, David Drumm, goes on sale. The Regency style, double-fronted house in an affluent Dublin suburb is being sold on behalf of the trustee appointed by a U.S. bankruptcy court to wring as much as possible out of Drumm’s property to pay creditors, including now government- owned Anglo Irish . Drumm, 55, filed for Chapter 7 protection in Boston 15 months ago, citing $14.2 million owed to creditors and assets valued at $13.9 million. Anglo Irish, renamed the Irish Bank Resolution Corp., claims Drumm owes it about 8 million euros ($10.5 million). Ireland has spent about 30 billion euros bailing out the bank, which was nationalized in January 2009 after the real-estate market imploded. Though Drumm left for the U.S. as things fell apart, his three-story, 5,167-square-foot (480-square-meter) house remained well kept. “The house is in very good condition as it was well minded,” said Simon Stokes, a director at North’s Property, which is offering the house for 1.65 million-euros. The property has been shown to 15 or 20 potential buyers since North’s put it on the market last month, he said. The rise and fall of Drumm and Anglo Irish mirrors the country’s. Under the stewardship of Drumm and former Chairman Sean Fitzpatrick , Anglo Irish bankrolled many of the property developers behind the Celtic Tiger boom that drove economic growth to an average 6 percent in the first half of the 2000s. Coastal Village Anglo Irish’s strategy unraveled as credit evaporated in the wake of Lehman Brothers Holdings Inc. (LEHMQ) ’s bankruptcy in September 2008. Drumm resigned three months later and subsequently left for the U.S., leaving behind the house near the coastal village of Malahide. Malahide, with its marina and chic boutiques, is one of Ireland’s wealthiest towns. Georgina Byrne, daughter of former Irish Prime Minister Bertie Ahern lives in the area with her pop star husband Nicky Byrne of Westlife. U2 guitarist David Howell Evans, better known as The Edge, and the group’s bassist Adam Clayton went to primary school there. The ground floor drawing room includes two small chandeliers, and features wood flooring and a marble fireplace. There’s a large 12-light crystal chandelier in the main reception room leading to a long, winding timber staircase that runs to six bedrooms on the second and third stories, each with wood floors heated from underneath. The house comes with three reception rooms, a tiled kitchen with a marble worktop and a so- called Belfast sink and four bathrooms. Golf Trolley Those looking for signs of the Drumms may be left disappointed. Aside from some children’s toys and a Powakaddy golf trolley left in the detached double-garage, there are few to be found. Off the ground floor drawing room is a study with a fireplace and library-style shelving. Empty unmarked folders fill an unlocked filing cabinet. Stokes said he’s optimistic about getting the offer price for the house, even in “slow market,” saying that not everybody lost out in the Irish property bubble. The former ownership of the property “is not something that people have raised when looking at it,” he said. “I see houses being sold at over 1 million euros all the time,” Stokes said. “There are people out there who have cash reserves and who sold when the market was stronger.” Banking Crisis Ireland, however, is still trying to clean up the mess left by Anglo Irish. The country was forced to seek a bailout from the European Union, International Monetary Fund and European Central Bank in 2010 as its banking crisis became too big to handle alone. Police are investigating the circumstances behind Anglo Irish’s collapse, though no one has been charged and Drumm denies wrongdoing. The bank is suing him in the U.S. in connection with money he allegedly borrowed from it. Francis C. Morrissey of Morrissey, Wilson, & Zafiropoulos, LLP, Drumm’s bankruptcy lawyer, declined to comment. The bankruptcy trustee, Kathleen P. Dwyer, sold Drumm’s waterfront house in Chatham, Massachusetts , on Cape Cod for about $3.9 million. He paid $4.6 million for that property in March 2008, according to documents obtained from the Barnstable County Registry of Deeds. ‘Insane Lending’ Irish Justice Minister Alan Shatter has introduced legislation to give police greater powers in banking investigations after what he said was “insane lending.” “Property values were substantially overblown in the boom market that developed, which was fueled by the financial institutions holding hands with developers,” Shatter said in a Feb. 10 interview. The government is seeking European help to refinance the 30 billion euros of bonds used to help rescue Anglo Irish. For Ireland to get out of the bailout program, “we will need to find a new arrangement to replace the Anglo promissory notes,” Irish Transport Minister Leo Varadkar said on Feb. 10. “We are in a hole, but slowly we are clawing our way back out.” To contact the reporters on this story: Finbarr Flynn in Dublin at [email protected] ; To contact the editor responsible for this story: Colin Keatinge at [email protected]

2012

bankrupt-banker-drumm-s-mansion-offers-marble-chandeliers-irish-payback

Ride Emerging Middle Class Boom to Profit, EG/A’s Holderith Says

By Ye Xie and Tal Barak Harif

2012-02-17T18:14:52Z

http://www.bloomberg.com/news/2012-02-17/ride-emerging-markets-middle-class-boom-to-profit-eg-a-s-holderith-says.html

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Emerging-market stocks with links to the middle class are the best bets to profit on expansion in those economies, said Bob Holderith, who oversees the U.S.’ fastest growing developing-nation exchange traded fund. “The amount of the discretionary spending is going to double and triple,” Holderith, president and founder of Emerging Global Advisors in New York , said in an interview at Bloomberg’s headquarters yesterday. “It’s tough to find another story like that in the emerging markets .” Total assets of EGShares Emerging Markets Consumer Titans Index Fund (ECON) , which tracks the stocks of food, car and media companies in developing countries , have soared 1,136 percent to $329 million since its inception in September 2010, data compiled by Bloomberg show. That’s the biggest increase among emerging-market ETFs domiciled in the U.S. with assets of at least $100 million. Spending by middle-class consumers in countries such as China and Brazil will probably swell from $6.9 trillion to more than $20 trillion by 2022, equivalent to the size of the economies of the U.S., U.K. and Japan combined, according to a study by McKinsey & Co. in April 2011. The Dow Jones Emerging Markets Consumer Titan 30 Index , the benchmark stock measure that EGShare’s ETF tracks, has gained 188 percent in the past three years, more than double the return of the Standard & Poor’s 500 Index. Good Mood “The mood in most of the emerging markets is good,” Holderith said. “The growth of the emerging-market consumer is going to be similar but at a multiple larger in size to the growth of the U.S. consumer and the Japanese consumer.” EGShare’s consumer ETF has earned 20 percent since its inception. The Vanguard MSCI Emerging Market ETF (VWO) , the largest developing-economy exchange-traded fund with total assets of $50 billion, returned 0.5 percent during the same period. The consumer fund’s largest holdings include the American Depositary Receipts of Cia de Bebidas das Americas , Latin America’s largest brewer known as AmBev, Naspers Ltd. (NPN) , Africa’s largest media company, and Chinese carmaker Donfeng Motor Group Co. The ADRs of Sao Paulo-based AMBev have increased 111 percent in the past two years. To contact the reporters on this story: Ye Xie in New York at [email protected] ; Tal Barak Harif in New York at [email protected] To contact the editor responsible for this story: Emma O’Brien at [email protected]

2012

ride-emerging-markets-middle-class-boom-to-profit-eg-a-s-holderith-says

China Egg Producer to Set Up U.S. Biogas Project With Smithfield

By Bloomberg News

2012-02-18T03:24:41Z

http://www.bloomberg.com/news/2012-02-17/china-egg-producer-to-set-up-u-s-biogas-project-with-smithfield.html

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Beijing DQY Agriculture Technology, a Chinese egg producer, will co-operate with a unit of U.S. meat supplier Smithfield Foods Inc. (SFD) on a bio-fuel joint venture, the Chinese company said in a statement yesterday. The biogas project will produce 3.5 million cubic meters of methane annually and have a power generating capacity of 1 megawatt, according to a statement on DQY’s website, which did not give an investment amount. The U.S. and China plan to sign a five-year accord to cooperate on agriculture trade, production and food security, expanding ties as population and income growth in Asia boost demand for everything from pork to cotton. The agreement with Smithfield, Virginia-based Smithfield Foods was signed on Feb. 16 at a farm symposium in Des Moines , Iowa, which Chinese Vice President Xi Jinping attended, according to DQY’s statement. DQY and Smithfield will invest $1.8 billion in the joint venture, China ’s Xinhua news Agency reported yesterday. The project will require an insignificant investment on the part of Smithfield, Keira Lombardo, a spokeswoman for the company, said in an e-mail. To contact the reporter on this story: Liza Lin in Shanghai at [email protected] To contact the editor responsible for this story: Chua Kong Ho at [email protected]

2012

china-egg-producer-to-set-up-u-s-biogas-project-with-smithfield

Guinea Starts Study to Evaluate Fishing Potential, Minister Says

By Ougna Camara

2012-02-17T07:57:45Z

http://www.bloomberg.com/news/2012-02-17/guinea-starts-study-to-evaluate-fishing-potential-minister-says.html

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Guinea started a study to estimate fish stocks in its territorial waters, Moussa Conde, the minister of fisheries and aquaculture, said. The research will help the West African country decide whether it can continue issue commercial-fishing licenses, Conde said on the Conakry-based Radio Television Guineenne yesterday. Commercial fishing companies caught 24,060 metric tons in its waters in the 11 months through November, according to the country’s Finance Ministry . To contact the reporter on this story: Ougna Camara in Conakry at [email protected] To contact the editor responsible for this story: Antony Sguazzin at [email protected]

2012

guinea-starts-study-to-evaluate-fishing-potential-minister-says

Consumer Prices in U.S. Climbed Less Than Economists Forecast in January

By Bob Willis

2012-02-17T13:50:09Z

http://www.bloomberg.com/news/2012-02-17/consumer-prices-in-u-s-climbed-less-than-economists-forecast-in-january.html

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The cost of living in the U.S. rose less than forecast in January, supporting the Federal Reserve ’s view that inflation will be contained. The consumer-price index increased 0.2 percent after no change the prior month, the Labor Department reported today in Washington . Economists surveyed by Bloomberg had forecast a 0.3 percent gain. Over the past 12 months, prices climbed 2.9 percent, the smallest year-to-year advance since March 2011. Retailers from Limited Brands Inc. and Target Corp. (TGT) discounted merchandise after the holidays as 12.8 million Americans remain unemployed, showing companies have little pricing power. A lack of inflation is one reason Fed policy makers have said they intend to keep interest rates low through at least 2014. “We’ve seen the peak” in inflation, said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York . “There is still a reasonable amount of slack in the labor market.” Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2 percent to 1,357.5 at 8:49 a.m. in New York amid optimism Greece will get a bailout. CPI estimates of the 82 economists surveyed ranged from increases of 0.1 percent to 0.4 percent. Core Prices The so-called core measure, which excludes more volatile food and energy costs, also increased 0.2 percent, matching the median forecast. The increase in the core gauge followed a 0.1 percent advance in December. They were up 2.3 percent for the past 12 months, the most since a 2.5 percent increase in the year ended Sept. 2008. The price report may underscore Fed ChairmanBen S. Bernanke’s comments on Feb. 7 that central bank officials expected inflation to “remain subdued” due to the “well- anchored inflation expectations, more-stable commodity prices, and substantial slack in labor and product markets.” Household purchases climbed 2.2 percent in 2011 after an increase of 2 percent in 2010, the weakest two-year performance of any post-World War II expansion. Unemployment has held above 8 percent since February 2009, the longest such run since the monthly record-keeping began in 1948. Nonetheless, the rate is starting to drop, reaching a three-year low of 8.3 percent in January. Stagnant Wages While the labor market is improving, paychecks are failing to keep up with even limited inflation. Hourly earnings adjusted for prices were unchanged in January and fell 1 percent over the past 12 months, today’s report showed. Energy costs increased 0.2 percent in January from a month earlier, as did food costs. An increase in gasoline prices was mostly offset by a drop in costs for natural gas. The increase in the core measure was driven by rising costs for apparel, toys, tobacco and medical care. Used-car and truck prices dropped as did airline fares. The cost of new automobiles was little changed. Fed policy makers see inflation decelerating in 2012 to below their 2 percent goal, with most expecting prices to rise 1.4 percent to 1.8 percent this year, according to forecasts released Jan. 25. “Inflation has been subdued in recent months, and longer- term inflation expectations have remained stable,” the Federal Reserve said Jan. 25. The monetary policy-making committee “also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the committee’s dual mandate” of fostering price stability and maximum employment. Post-Holiday Discounts Retailers, including Limited Brands Inc. (LTD) and Target Corp., posted same-store sales last month that were stronger than forecast as shoppers took advantage of post-holiday discounts. More shoppers cashed out their holiday gift cards and sought out clearances on winter apparel, according to a Bloomberg Industries report. The CPI is the broadest of three price gauges from the Labor Department because it includes goods and services. Almost 60 percent of the index covers prices consumers pay for services ranging from medical visits to airline fares, movie tickets and rents. To contact the reporters on this story: Robert Willis in Washington at [email protected] To contact the editor responsible for this story: Christopher Wellisz at [email protected]

2012

consumer-prices-in-u-s-climbed-less-than-economists-forecast-in-january

Saints Beat Sinners for Sustainable Investing: Stock Chart

By Tom Randall

2012-02-17T17:42:21Z

http://www.bloomberg.com/news/2012-02-17/saints-beat-sinners-for-sustainable-investing-stock-chart.html For most investors, "sustainability" isn't about doing the right thing. The conversation has evolved. It's about doing the smart thing. This demands an answer to the fundamental question: Does it pay to invest in sustainability? Early results are in. This chart, drawn from a  Harvard Business School study , tracks the performance of 180 companies over 18 years. The 90 firms that adopted environmentally and socially responsible policies significantly outperformed their peers. Every dollar invested in a portfolio of sustainable companies (blue line) in 1993 would have grown to $22.60 by 2011. That beats the rise to $15.40 for a portfolio of companies less focused on sustainability (purple line). The Harvard report, first released in November, is the most rigorous attempt yet to identify which companies were transforming themselves in sustainable ways before sustainability was "cool." It's also the first study to follow companies' performance for decades

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Vice President Al Gore and former Goldman Sachs executive David Blood. Drawing in part from the Harvard study, Gore and Blood recommend investors identify “stranded assets” whose value could change significantly under certain scenarios, such as a price being set for carbon or for water. They say investors should use environmental, social and governance data like those used in the Harvard study to augment the financial data typically used to value companies. Gore draws an analogy between climate change and the subprime mortgage crisis: “These subprime carbon assets have an asserted value based on the assumption that it’s perfectly OK to put 90 million tons of global warming pollution into the atmosphere every 24 hours,” Gore told Bloomberg News reporter Simon Clark. “Actually it’s not.”

2012

saints-beat-sinners-for-sustainable-investing-stock-char

Syncrude Strengthens as Enbridge Starts Michigan Oil Pipeline

By Aaron Clark

2012-02-17T22:03:31Z

http://www.bloomberg.com/news/2012-02-17/syncrude-strengthens-as-enbridge-starts-michigan-oil-pipeline.html

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Syncrude (USCSSYNS) oil’s discount to the U.S. benchmark strengthened after Enbridge Inc. reopened a pipeline that transports crude to U.S. and Canadian refineries. Enbridge returned the 491,200-barrel-a-day Line 5, shut Feb. 15 after a leak near Sterling, Michigan , to service at 7 a.m. local time, said Lorraine Little, an Enbridge spokeswoman in Superior, Wisconsin . The line carries oil from Superior to refineries near Sarnia, Ontario. Syncrude’s discount to West Texas Intermediate futures narrowed $1.50 to $15.50 a barrel at 4:05 p.m. in New York , according to data compiled by Bloomberg. Western Canada Select (USCSWCAS) strengthened 50 cents to a discount of $28.50 a barrel. Bakken (USCSUHC1) oil’s discount grew $3 to $13 a barrel below WTI. In the U.S. Gulf Coast, Light Louisiana Sweet (USCSLLSS) ’s premium to WTI lost $2.60 to $18.75 a barrel. Heavy Louisiana Sweet decreased $3.50 to a premium of $19.75. Thunder Horse’s premium to WTI lost $2.50 to $18.25 and Mars Blend’s decreased $2.30 to $14.10. Poseidon (USCSPOSE) ’s premium narrowed $2.25 to $13.90 a barrel. Southern Green Canyon (USCSSGCN) ’s dropped $2.25 to $15 over WTI. West Texas Sour (USCSWTSM) ’s discount widened 5 cents to $3.80 a barrel. To contact the reporter on this story: Aaron Clark in New York at [email protected] To contact the editor responsible for this story: Dan Stets at [email protected]

2012

syncrude-strengthens-as-enbridge-starts-michigan-oil-pipeline

Thailand to Sell Record Debt After Floods, Bond Association Says

By Yumi Teso

2012-02-17T05:59:09Z

http://www.bloomberg.com/news/2012-02-17/thailand-to-sell-record-debt-in-2012-after-floods-bond-association-says.html

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Thailand is expected to sell the most debt on record this year as infrastructure is rebuilt following the worst floods in seven decades, according to the Thai Bond Market Association. The government plans to sell about 500 billion baht ($16.3 billion) of bonds in the first nine months of 2012, compared with 512 billion baht for the whole of 2010, which was the most since the TBMA began collecting the data in 2002, the group’s President Niwat Kanjanaphoomin said in an interview in Bangkok. Thai companies may sell 300 billion baht of debt this year, the most since 2009 and up from 212 billion baht in 2011, Niwat said. Prime Minister Yingluck Shinawatra has pledged to spend 350 billion baht on water-management projects to avoid a repeat of last year’s floods, which spread across two-thirds of the country and crippled thousands of factories. PTT Pcl (PTT) , Thailand’s biggest company, last month revived a planned sale of 20 billion baht of bonds that it postponed in November, and Bank of Ayudhya Pcl plans to sell 20 billion baht of debt to fund new loans. The yield on Thailand’s five-year government bond has dropped 28 basis points in the past six months to 3.22 percent yesterday and the rate on corporate notes has slumped 51 basis points to 3.5 percent, according to data compiled by Bloomberg and the TBMA. “Yields are shifting down, giving lower costs for the issuer, and it’s also time to restart projects and new investment postponed after the floods,” Niwat said. “The government has a plan to use its budget to restore confidence and build some protection from the floods, so we will have more issues from the government and corporates.” Flood Damage The TBMA’s forecast for bond sales in the first nine months of this year excludes potential government debt offerings as part of its 350 billion-baht budget for improving waterways, Niwat said. Thailand’s economy probably shrank 5 percent in the three months through December from a year earlier, according to the median estimate of 14 economists surveyed by Bloomberg before a Feb. 20 report. That would be the first decline since 2009. “Without external factors, an increase in issuance is negative for Thai bonds,” said Wee-Khoon Chong, a strategist at Societe Generale SA in Hong Kong . “There is concern that the fiscal situation will further deteriorate for Thailand, more so due to the floods.” Thailand’s long-term local-currency debt is rated A- by Standard & Poor’s , two levels below South Korea and one step below Malaysia . South Korea’s five-year government bond yield is 3.56 percent and Malaysia’s is 3.16 percent. Bank Fees Thai financial institutions are also selling more debt as they prepare to start paying higher fees in July, Niwat said. Banks will pay an annual amount equivalent to 0.47 percent of their total deposits, up from 0.4 percent, to help repay state debt, the government and the central bank said this month. Global funds will probably buy more Thai securities because of uncertainties surrounding Europe ’s debt crisis, Niwat said. He expects foreign holdings of Thai government bonds to increase to more than 500 billion baht by the end of this year from 442 billion baht in January. The government has 5.2 trillion baht of outstanding debt, according to TBMA data. To contact the reporter on this story: Yumi Teso in Bangkok at [email protected] To contact the editors responsible for this story: James Regan at [email protected] ; Tony Jordan at [email protected]

2012

ailand-to-sell-record-debt-in-2012-after-floods-bond-association-says

Spain to Slim Public Companies That Have $75 Billion Debt

By Emma Ross-Thomas and Angeline Benoit

2012-02-17T14:46:25Z

http://www.bloomberg.com/news/2012-02-17/spain-to-slim-public-companies-that-have-75-billion-debt-1-.html

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Spain ’s Cabinet approved new pay limits at public companies and reduced board members before a full overhaul of the sector aimed at curbing spending to meet European Union budget pledges. “The Cabinet will examine in a few weeks the first phase of a restructuring of the state-owned companies,” Deputy Prime Minister Soraya Saenz de Santamaria told reporters after the weekly meeting in Madrid today. Spain’s two month-old government is trying to slim down state spending that ballooned during the decade-long property boom amid a surge in tax revenue. The People’s Party government, seeking to reduce the budget gap, is trying to restore investor confidence to tame borrowing costs and shield Spain from debt- crisis contagion. Saenz said Spain expects major savings from restructuring central government-owned companies, which will be downsized, sold or scrapped if their business can be taken over by public administrations. The government will also encourage regions and town halls to restructure their own companies, Saenz said, as this will be a condition to get help from Madrid to meet their funding needs. Public companies linked to the central government have accumulated debt of 32.3 billion euros, according to the Bank of Spain, and European Union rules don’t require that borrowing to be included in public-debt data. Regions and city halls have taken on 24.9 billion euros of debt, Bank of Spain data show. “These kinds of companies and foundations, which in the end aimed to avoid the controls of the central government, have blossomed, to put it nicely, and it’s not good practice,” Economy Minister Luis de Guindos said yesterday said in an interview with RNE. To contact the reporters on this story: Emma Ross-Thomas in Madrid at [email protected] ; Angeline Benoit in Madrid at [email protected] To contact the editor responsible for this story: Emma Ross-Thomas at [email protected]

2012

spain-to-slim-public-companies-that-have-75-billion-debt-1-

Natural Gas Jumps as Encana to Cut Output: Commodities at Close

By Thomas Galatola

2012-02-17T21:55:00Z

http://www.bloomberg.com/news/2012-02-17/natural-gas-jumps-as-encana-to-cut-output-commodities-at-close.html

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The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.3 percent to settle at 688.44 at 3:50 p.m. in New York , led by natural gas. The UBS Bloomberg CMCI index of 26 prices declined 0.2 percent to 1,608.19. NATURAL GAS Natural gas surged, capping the biggest two-day gain since October, after Encana Corp., Canada ’s top producer, said it will scale back output. Encana plans to cut North American supply by as much as 600 million cubic feet a day. Gas tumbled 16 percent in January after plunging 32 percent in 2011. On the New York Mercantile Exchange , gas futures for March delivery gained 4.6 percent to $2.684 per million British thermal units, Yesterday, the price jumped 5.9 percent, bringing the two-day gain to 11 percent, the most since late October. U.K. gas rose on forecasts for a return of freezing weather that may boost demand for the heating fuel. Gas for delivery on Feb. 20 climbed 0.5 pence to 57.9 pence a therm at 4:53 p.m. London time, according to broker data compiled by Bloomberg. That’s equivalent to $9.16 per million Btu. A therm is 100,000 Btu. CRUDE OIL Crude oil climbed to a nine-month high as signs of an improving U.S. economy and progress on a bailout for Greece bolstered the outlook for fuel demand. On the Nymex, oil futures for March delivery rose 0.9 percent to $103.24 a barrel, the highest settlement since May 10. Brent oil for April settlement dropped 0.4 percent to $119.58 a barrel on the London-based ICE Futures Europe exchange. Earlier, the contract reached $120.70, the highest since June 15. OAO Lukoil failed to sell Russian Urals at a higher price. No bids or offers were made for North Sea Forties for the second straight day. Reported North Sea trading typically occurs during the Platts window, which ends at 4:30 p.m. London time. Before the session, Forties loading in 10 to 25 days was $1.08 a barrel more than dated Brent, down from yesterday’s four-month high of $1.10, according to data compiled by Bloomberg. The grade was last sold at a premium of $1.05 a barrel to the benchmark on Feb. 15, the highest since Sept. 27. LIVESTOCK Cattle jumped to a record for the 10th time this year as rising demand for U.S. beef tightens supply and increases costs for restaurants. On the Chicago Mercantile Exchange, cattle futures for April delivery rose 1 percent to $1.309 a pound. Earlier, the price reached $1.31275, the highest for a most-active contract since the commodity started trading on the CME in 1964. Feeder-cattle futures for March settlement gained 1 percent to $1.58425 a pound. Earlier, the commodity advanced to a record $1.5905. Hog futures for April settlement rose 0.2 percent to 90.375 cents a pound. GRAINS, OILSEEDS Soybeans rose to the highest price in almost five months after China purchased a record amount from the U.S., the world’s top producer. On the Chicago Board of Trade, soybean futures for May delivery climbed 0.7 percent to $12.7375 a bushel. Earlier, the price reached $12.795, the highest since Sept. 23. Corn futures for May delivery rose 0.9 percent to $6.4525 a bushel. Wheat futures for May delivery climbed 2 percent to $6.4775 a bushel. SOFT COMMODITIES Orange-juice futures rose the most in three weeks after a U.S. regulator denied a request to permit a higher concentration of a banned fungicide in imports temporarily. On ICE Futures in New York, orange juice for March delivery climbed 1.5 percent to $1.878 a pound, the biggest gain since Jan. 27. Cotton futures for May delivery dropped 1.1 percent to 92.65 cents a pound. Cocoa for May delivery declined 2.5 percent to $2,345 a metric ton. Raw-sugar futures for May delivery gained 0.2 percent to 23.77 cents a pound. Arabica-coffee futures for May delivery gained 0.6 percent to $2.0235 a pound, ending a seven-session slump. PRECIOUS METALS Gold futures fell for the first time in three days as progress on a bailout for Greece eroded the appeal of the precious metal as a haven. On the Comex in New York, gold futures for April delivery fell 0.1 percent to $1,725.90 an ounce. The price rose 0.6 percent in the previous two days. Silver futures for March delivery dropped 0.5 percent $33.216 an ounce. On the Nymex, platinum futures for April delivery rose 0.5 percent to $1,633.90 an ounce. Palladium futures for March delivery fell 1.2 percent to $688.10 in New York. OIL PRODUCTS Gasoline fell for the first time in three days as Brent crude slipped and a rise in U.S. consumer prices boosted concern that demand for the fuel may decline. On the Nymex, gasoline for March delivery fell 1 percent to $3.0156 a gallon. Heating-oil futures for March delivery fell 0.6 percent to $3.1889 a gallon on the exchange. To contact the reporter on this story: Thomas Galatola in New York at [email protected] To contact the editor responsible for this story: Steve Stroth at [email protected]

2012

natural-gas-jumps-as-encana-to-cut-output-commodities-at-close

China-Switzerland Free-Trade Talks Make Progress, Ministry Says

By Bloomberg News

2012-02-17T14:35:09Z

http://www.bloomberg.com/news/2012-02-17/china-switzerland-free-trade-talks-make-progress-ministry-says.html

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China and Switzerland made progres on a potential fee-trade agreement during a fourth round of talks, the Chinese Ministry of Commerce said. The two nations discussed the garment trade, intellectual property, competition policy and technical barriers to trade during the negotiations, held Feb. 14-Feb. 16 in Beijing, the ministry in a statement posted on its website today. Bilateral trade between China and Switzerland increased 54 percent last year to $30.9 billion, the ministry said. To contact Bloomberg News staff for this story: Liza Lin in Shanghai at [email protected] To contact the editor responsible for this story: Joshua Fellman at [email protected]

2012

china-switzerland-free-trade-talks-make-progress-ministry-says

South Korea Buys 3,000 Tons of Primary Aluminum in Tender

By Sungwoo Park

2012-02-17T08:03:45Z

http://www.bloomberg.com/news/2012-02-17/south-korea-buys-3-000-tons-of-primary-aluminum-in-tender-1-.html

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South Korea ’s Public Procurement Service, a state-run body that manages strategic commodities, purchased 3,000 metric tons of high-grade primary aluminum ingots of Indian origin in a tender, according to notices posted on its website. Of the total, the agency purchased 2,000 tons from LG International Corp. (001120) at a premium of $121 per ton added to the London Metal Exchange cash-settlement price, the notices showed today. It bought the remaining 1,000 tons from Daewoo International Corp. (047050) for a premium of $116 per ton over the same benchmark price. Aluminum for delivery in three months on the London Metal Exchange increased 0.7 percent to $2,176 a ton at 4:42 p.m. Seoul time, bringing this year’s gain to 7.7 percent. To contact the reporter on this story: Sungwoo Park in Seoul at [email protected] To contact the editor responsible for this story: James Poole at [email protected]

2012

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Vestas Jumps as Traders Cover Short Positions: Copenhagen Mover

By Christian Wienberg

2012-02-17T08:54:37Z

http://www.bloomberg.com/news/2012-02-17/vestas-jumps-as-traders-cover-short-positions-copenhagen-mover.html

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Vestas Wind Systems A/S (VWS) , the world’s biggest wind turbine maker, rose the most in two weeks in Copenhagen trading as investors who had borrowed the stock and sold it on bets it would decline repurchased the shares to cover their so-called short positions. Vestas jumped as much as 8.7 percent, the most since Feb. 3, making it today’s biggest winner in the Copenhagen 20 Index. The stock advanced 1.6 kroner to 54.60 kroner at 9:40 a.m. in the Danish capital. The Aarhus, Denmark-based company has lost 68 percent of its market value over the past 12 months after cutting sales and profit forecasts. Short interest in Vestas reached a record-high 22.1 percent of shares outstanding on Feb. 15, according to the most recent figures available from Data Explorers . Most companies have about 3 percent short interest in their stock, according to Data Explorers. Vestas said yesterday it will propose Sony Ericsson Mobile Communications AB Chief Executive Officer Bert Nordberg as chairman when Bent Erik Carlsen steps down in March. “The spike suggests a short-covering squeeze as some market players probably reacted after the share fell below 50 kroner yesterday,” Ole Kjaer Jensen, chief share trader at Sydbank A/S, said by phone. “Maybe there’s also some delayed reaction to yesterday’s board member announcement.” Vestas on Feb. 8 reported a bigger 2011 net loss than analysts had estimated and said last month it will cut 10 percent of its workforce as Chinese competitors take market share. To contact the reporter on this story: Christian Wienberg in Copenhagen at [email protected] To contact the editor responsible for this story: Tim Quinson at [email protected] .

2012

vestas-jumps-as-traders-cover-short-positions-copenhagen-mover

Precious Shipping Signs $100 Million Loan for Vessel Buys

By Katrina Nicholas

2012-02-17T09:25:24Z

http://www.bloomberg.com/news/2012-02-17/precious-shipping-signs-100-million-loan-for-vessel-buys-1-.html

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Precious Shipping Pcl (PSL) , the largest Thai dry-bulk shipping company, signed a $100 million term loan with Export-Import Bank of Thailand to finance as much as 80 percent of the acquisition costs of new and second-hand vessels. The loan has a commitment fee equal to 0.7 percent per year of the undrawn facility, payable quarterly, and total monies outstanding will be repaid in 8.5 years, according to a regulatory statement by the company. Precious Shipping has $318.6 million in loans outstanding, according to data compiled by Bloomberg. To contact the reporter on this story: Katrina Nicholas in Singapore at [email protected] To contact the editor responsible for this story: Shelley Smith at [email protected]

2012

precious-shipping-signs-100-million-loan-for-vessel-buys-1-

Ethanol Gains on Concern That Record Supply May Cut Production

By Mario Parker

2012-02-17T20:59:59Z

http://www.bloomberg.com/news/2012-02-17/ethanol-gains-on-concern-that-record-supply-may-cut-production.html

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Ethanol futures gained for a second day in Chicago on speculation that producers will temper output after stockpiles climbed to a record. The biofuel rose 0.6 percent after an Energy Department report showed inventories climbed for a record ninth straight week to an all-time high of 21.5 million barrels last week. Production (DOETFETH) is down 3.6 percent from the record of 963,000 barrels a day set the week ended Dec. 30. “We’re still building inventories, but at the same time everybody and their mother is talking about slowing down,” said Jerrod Kitt, an analyst at Linn Group in Chicago. Denatured ethanol for March delivery increased 1.3 cents to $2.215 a gallon on the Chicago Board of Trade. Prices are down 12 percent from a year ago. In cash market trading, ethanol was unchanged in the U.S Gulf at $2.225 a gallon and in New York the biofuel slipped 1 cent, or 0.4 percent, to $2.24, according to data compiled by Bloomberg. Ethanol in Chicago jumped 1.5 cents, or 0.7 percent, to $2.175 a gallon and on the West Coast the additive rose 1 cent, or 0.4 percent, to $2.295. The biofuel is blended with gasoline to augment supply and meet federal mandates. There are 209 ethanol distilleries in the U.S., with the capacity to produce 14.8 billion gallons annually, according to the Renewable Fuels Association , a Washington-based trade group. To contact the reporter on this story: Mario Parker in Chicago at [email protected] To contact the editor responsible for this story: Dan Stets at [email protected]

2012

ethanol-gains-on-concern-that-record-supply-may-cut-production

Santorum Is Endorsed by Former Romney Supporter

By Lisa Lerer and Mark Niquette

2012-02-18T05:01:29Z

http://www.bloomberg.com/news/2012-02-17/santorum-said-to-win-backing-of-former-romney-supporter-in-ohio.html Rick Santorum was endorsed in the Republican presidential race by Ohio Attorney General Mike DeWine, another sign he is gaining ground on rival Mitt Romney . Standing next to Santorum yesterday on the steps of the Ohio statehouse in Columbus, DeWine said he backed Romney last October because he thought the former Massachusetts governor was the best candidate to defeat President Barack Obama . DeWine said he no longer believes that after the campaign run by Romney, with support from an outside political action committee, Restore Our Future. “To be elected president, you have to do more than tear down your opponent; you have to give the American people a reason to vote for you,” DeWine said. “Rick Santorum has done that. Sadly, Governor Romney has not.” The endorsement is a boost for Santorum, whose standing in the polls rose after wins in three states last week. He is now leading in polls in Michigan , which holds its primary on Feb. 28, and in Ohio, one of 11 states with a contest on March 6, Super Tuesday. A victory for Santorum in Michigan, Romney’s native state, would position him as the leading candidate among the party’s anti-abortion-rights and anti-tax activists. ‘True Conservative’ “Rick Santorum is a true conservative,” DeWine said at a Republican dinner last night in Georgetown, Ohio. “He is a man of great principle.” Santorum is using his background

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Gingrich has been in the Los Angeles area and Paul held rallies in Idaho and Washington state. Gingrich hasn’t aired a television ad since Jan. 31, when he lost the Florida primary to Romney, and a political committee independently supporting his campaign was last on television on Feb. 7, according to New York-based Kantar Media’s CMAG, which tracks advertising. Rick Tyler , a spokesman for the group, Winning Our Future, said it began a pro-Gingrich radio advertising campaign around Republican-leaning talk shows this week. Internet Ads Paul hasn’t been on television since Jan. 29, CMAG data show. A political committee backing his candidacy is focusing its spending on Internet advertising . CNN this week canceled a debate among the candidates scheduled for March 1 in Georgia , another of the states with a March 6 contest. The Romney campaign had announced he wouldn’t participate in the debate, saying in a statement he would be “campaigning in other parts of the country.” CNN said Paul’s campaign also declined an invitation to the gathering. The decision was a blow to Gingrich, whose debate appearances have fueled his campaign. Sheldon Adelson , a Las Vegas casino billionaire, might be considering a $10 million donation to Winning Our Future by the end of the month, according to CNN and CBS News . Ron Reese , a spokesman to Adelson, wouldn’t confirm those reports. Adelson’s family has contributed at least $11 million to Winning Our Future, according to FEC reports. To contact the reporters on this story: Lisa Lerer in Washington at [email protected] ; Mark Niquette in Columbus at [email protected] To contact the editor responsible for this story: Jeanne Cummings at [email protected]

2012

santorum-said-to-win-backing-of-former-romney-supporter-in-ohio

Clinton’s Charm Blunts His Errors in Documentary; ’Good Wife’: TV Review

By Greg Evans

2012-02-18T05:01:00Z

http://www.bloomberg.com/news/2012-02-17/clinton-s-charm-blunts-his-errors-in-film-good-wife-review.html In 1973, Hillary Rodham told her boss at the White House that her Arkansas beau was coming to visit. “He’s going to be President of the United States ,” Rodham, a recent Yale Law School grad working an entry-level job, told a skeptical Bernard Nussbaum, then-White House counsel. Her certitude

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character drama and big-issue court cases. This Sunday’s episode, “Live From Damascus,” finds Alicia and Will championing a class-action case against an American software billionaire (John Benjamin Hickey) accused of selling spyware to the repressive Syrian government. Will, meanwhile, is facing a personal crisis: Potential disbarment for a long-ago financial transgression. Charles, as increasingly usual, is the episode’s solid rock (Margulies is a generous star, to a fault), and Archie Panjabi as the firm’s trouble-shooting investigator Kalinda Sharma is deployed once again as the series’ most reliable weapon. Compared to newer innovators like Showtime’s “Homeland” or even Fox (NWSA) ’s “American Horror Story,” “The Good Wife” breaks little new ground. But it knows how to win. “The Good Wife” airs Sunday on CBS at 9 p.m. New York time. Rating: *** (Greg Evans is a critic for Muse, the arts and leisure section of Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: Greg Evans at [email protected] . To contact the editor responsible for this story: Manuela Hoelterhoff in New York at [email protected] .

2012

clinton-s-charm-blunts-his-errors-in-film-good-wife-review

Goldman Sachs, Advent to Buy TransUnion

By Sabrina Willmer, Devin Banerjee and Steven Fromm

2012-02-17T22:08:33Z

http://www.bloomberg.com/news/2012-02-17/transunion-to-be-bought-by-advent-goldman-sachs-for-3-billion.html

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TransUnion Corp. (TRANSU) , a provider of credit information to banks and consumers, said Advent International Corp. and Goldman Sachs Group Inc. (GS) ’s private equity unit agreed to buy the company from Madison Dearborn Partners and the Pritzker family in the largest leveraged-buyout deal this year. The transaction, which is expected to be completed by early in the second quarter, values the company at more than $3 billion, according to a statement today from TransUnion. The Chicago-based firm had total debt of $1.6 billion last year, according to public filings, and is preparing to take on $600 million more, according to a Standard & Poor Financial Service’s report issued today, valuing the equity component of the transaction at about $800 million. “The conversion of cash to plastic is an unstoppable, global trend and several markets would be well served by a credit bureau like TransUnion,” said Philip J. Philliou of New York-based Philliou Partners, a payments consultant. “Global expansion has got to be part of Advent’s investment thesis.” TransUnion’s owners had initially planned to sell shares in the company to the public, filing in July of last year to raise $325 million in an initial public offering, just before the market rout in the third quarter slowed stock sales. TransUnion and its biggest competitors, including Equifax Inc. and Experian Plc, are now coming under scrutiny as state and federal regulators focus on the practice of providing credit checks to employers. Heightened Scrutiny Bobby Mehta, the company’s chief executive officer, and the rest of the leadership team will remain with TransUnion, according to the statement. The company has been criticized by civil rights groups and the AFL-CIO, the nation’s largest labor union, who say that credit checks by employers discriminate against black, Latino and unemployed applicants. TransUnion, which keeps credit histories on 500 million consumers and businesses, has led lobbying against state laws restricting the use of such data, those groups said in October. The U.S. has sued companies such as the Washington Post Co. (WPO) ’s Kaplan Inc. education unit over using credit reports in hiring and California ’s Democratic Governor Jerry Brown last year signed a law that limits many employers from engaging in the practice. The Consumer Financial Protection Bureau yesterday proposed a regulation that would let it examine the books of such businesses for the first time. Supervision, the process of examining records and collecting data from companies, can lead to enforcement action if regulators find violations of the law. Madison Dearborn “Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks,” Richard Cordray , the bureau’s director, said in an e-mailed statement yesterday. Created as a rail-car holding company in 1968, TransUnion began a credit-reporting business and became the first company to replace physical records with automated tape-to-disc transfer, according to its website . In 2002, the company acquired TrueCredit.com to offer credit services directly to customers online, expanding beyond credit reporting and business-to-business services. In April 2010, Madison Dearborn, a Chicago-based private equity firm, acquired a 51 percent stake in TransUnion from the city’s Pritzker family. Advent International, based in Boston , focuses on international buyouts, strategic repositioning opportunities and growth buyouts. Goldman Sachs will be making the investment out of its $20.3 billion GS Capital Partners VI (PEF3230) Fund LP raised in 2007. Bank of America Merrill Lynch and Deutsche Bank AG (DBK) advised TransUnion on the deal. Advent International and GS Capital Partners were advised by Evercore Partners Inc. and Goldman Sachs, with Deutsche Bank and affiliates of Goldman Sachs providing bank and bridge financing commitments. To contact the reporters on this story: Sabrina Willmer in New York at [email protected] ; Devin Banerjee in New York at [email protected] ; Steven Fromm in New York at [email protected] To contact the editor responsible for this story: Christian Baumgaertel at [email protected]

2012

ransunion-to-be-bought-by-advent-goldman-sachs-for-3-billion

Legal Challenge to Google Privacy Policy Is Baseless, U.S. Says

By Karen Gullo

2012-02-18T05:01:01Z

http://www.bloomberg.com/news/2012-02-17/government-says-lawsuit-over-google-privacy-is-baseless-.html

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A privacy group should lose its bid for a court order forcing the Federal Trade Commission to challenge Google Inc. (GOOG) ’s changes to its privacy policy, the U.S. Justice Department said. The Electronic Privacy Information Center has no basis in the law to compel the FTC to take enforcement action against Google, said Drake Cutini, a Justice Department lawyer, in a filing yesterday in federal court in Washington . The privacy group sued Feb. 8, claiming Google’s planned changes to its privacy policy violate a consent order requiring the search engine company to protect consumer data. The group said in its complaint that the FTC should sue Google. The consent order stems from a lawsuit that the group, known as EPIC, filed against Google. “We are asking the court to dismiss the case because parties such as EPIC are barred by law from interfering with the proper investigation and enforcement of FTC orders,” Claudia Farrell, an FTC spokeswoman, said in an e-mail. “There can be no question that the Federal Trade Commission has a duty to enforce its final order in the Google matter,” Marc Rotenberg , EPIC’s executive director, said in an e-mail. YouTube, Android Google, the world’s most-popular search engine , announced plans on Jan. 24 to unify privacy policies for 60 services and products including YouTube videos and Android software for mobile phones. The move, set to take effect March 1, would simplify conditions for user agreements, the Mountain View , California-based company said. EPIC said the plan would allow Google to combine more information about users, reduce users’ control of their own data and give more personal information to advertisers. The FTC’s 2011 settlement with Google over privacy, which barred sharing user data outside the company without clear permission, stemmed from a complaint filed by the advocacy group in 2010. Under the consent decree announced March 30, Google agreed it used deceptive tactics and violated its own privacy policies when it introduced its Buzz social-networking service in 2010. The 20-year settlement bars Google from misrepresenting how it handles information and obliges the company to follow policies that protect consumer data in new products. The case is Electronic Privacy Information Center v. Federal Trade Commission, 12-00206, U.S. District Court, District of Columbia (Washington). To contact the reporter on this story: Karen Gullo in San Francisco at [email protected] To contact the editor responsible for this story: Michael Hytha at [email protected]

2012

government-says-lawsuit-over-google-privacy-is-baseless-

Port Authority Handled Record Amount of Shipping Cargo in 2011

By Freeman Klopott

2012-02-17T22:03:17Z

http://www.bloomberg.com/news/2012-02-17/port-authority-handled-record-amount-of-shipping-cargo-in-2011.html

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The Port Authority of New York and New Jersey handled a record amount of cargo last year, beating the previous mark set in 2007, before the start of the economic crisis, the agency said. The third-busiest U.S. port processed 5.5 million 20-foot equivalent units of container cargo in 2011, an almost 4 percent increase over the prior year, the agency said in a statement today. The authority’s on-dock rail system, ExpressRail, also set a record, handling 422,144 containers, or 12 percent more than in 2010. “The investments we made in the port’s infrastructure have paid dividends,” Executive Director Pat Foye said in the statement. “We will continue to demonstrate that our port is open for business and prepared to handle increasing volumes of cargo from around the world.” The authority oversees the region’s three major airports; marine terminals and seaports; the PATH commuter rail line; six tunnels and bridges between New York and New Jersey ; the Port Authority Bus Terminal; and the World Trade Center. California’s Los Angeles and Long Beach ports are the busiest in the U.S. To contact the reporter on this story: Freeman Klopott in Albany, New York at [email protected] To contact the editor responsible for this story: Mark Tannenbaum at [email protected]

2012

port-authority-handled-record-amount-of-shipping-cargo-in-2011

How 3 Myths Drive Europe’s Response to Debt Crisis: Harald Uhlig

By Harald Uhlig

2012-02-17T00:18:06Z

http://www.bloomberg.com/news/2012-02-17/how-3-myths-drive-europe-s-response-to-debt-crisis-harald-uhlig.html In many ways, things in Europe look better than they did just a month or two ago. The European Central Bank is providing banks with almost unlimited cash to buy their governments’ bonds. Yields on Italian debt have declined. This breather is a perfect opportunity to examine some pernicious

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currency, as well as the ECB would be secured. If, however, Europe continues to head down the same path, the current respite might be short-lived. (Harald Uhlig is chairman of the economics department at the University of Chicago and a contributor to Business Class . The opinions expressed are his own.) Read more opinion online from Bloomberg View . To contact the writer of this article: Harald Uhlig at [email protected] To contact the editor responsible for this article: Max Berley at [email protected] .

2012

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Central Chile Electricity Bills to Fall 7.8% in March, Emol Says

By Randall Woods

2012-02-17T13:21:13Z

http://www.bloomberg.com/news/2012-02-17/central-chile-electricity-bills-to-fall-7-8-in-march-emol-says.html

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Chileans living in Santiago and the central part of the country will see electricity bills decline by an average of 7.8 percent starting next month, El Mercurio reported in its online edition, Emol.com, citing Energy Minister Rodrigo Alvarez. Power bills may decline again in the middle of this year, the Santiago-based newspaper reported, without giving a reason for the reduction. To contact the reporter on this story: Randall Woods in Santiago at [email protected] To contact the editor responsible for this story: Joshua Goodman at [email protected]

2012

central-chile-electricity-bills-to-fall-7-8-in-march-emol-says

Global Private-Debt Deals Seen Reaching $80 Billion, CEPRES Says

By Patricia Kuo

2012-02-17T15:10:22Z

http://www.bloomberg.com/news/2012-02-17/global-private-debt-deals-seen-reaching-80-billion-cepres-says.html

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Debt financing targeting private capital markets worldwide may reach $80 billion within four years as banks retreat from lending to non investment-grade companies, according to CEPRES, an industry research firm. “With ongoing restrictions on senior lenders due to regulatory pressures and rebuilding balance sheets and a refinancing bubble on the horizon between 2012 and 2015, we only expect conditions to improve for private debt strategies,” Daniel Schmidt, managing partner at CEPRES, wrote in a report on the mezzanine market. “As much as $80 billion of new deal flow opportunity could be on the table for private debt within the coming three to four years.” Pricing for European mezzanine financing deals last year exceeded 1,000 basis points more than benchmark lending rates for the first time, up from 900 basis points in 2010 and 800 basis points in 2007, according to data from Munich-based CEPRES. A basis point is 0.01 percentage point. Mezzanine financing is a type of private high-yield debt that often gives investors access to the equity of the borrowers. To contact the reporter on this story: Patricia Kuo in London at [email protected] To contact the editor responsible for this story: Faris Khan at [email protected]

2012

global-private-debt-deals-seen-reaching-80-billion-cepres-says

New York Mets Owners Ask Judge Again to Dismiss Madoff Trustee’s Lawsuit

By Linda Sandler

2012-02-17T16:37:45Z

http://www.bloomberg.com/news/2012-02-17/new-york-mets-owners-ask-judge-again-to-dismiss-madoff-trustee-s-lawsuit.html

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The owners of the New York Mets asked a judge again to dismiss a $386 million lawsuit by the liquidator of Bernard Madoff’s brokerage, saying he distorted the law by alleging they were willfully blind to the fraud. Madoff trustee Irving Picard hasn’t offered evidence that they believed fraud was probable and deliberately avoided looking into it, they said in a filing yesterday in U.S. District Court in Manhattan. Separately, the trustee asked the judge to let him claim $83 million from the Mets owners. To contact the reporter on this story: Linda Sandler in New York at [email protected] To contact the editor responsible for this story: Stephen Farr at [email protected]

2012

new-york-mets-owners-ask-judge-again-to-dismiss-madoff-trustee-s-lawsui

Google Dodged IPhone Users’ Privacy With DoubleClick, Stanford Study Finds

By Heather Perlberg and Brian Womack

2012-02-17T22:39:10Z

http://www.bloomberg.com/news/2012-02-17/google-dodged-iphone-users-privacy-with-doubleclick-stanford-study-finds.html Google Inc. (GOOG) violated users’ privacy on Apple Inc.’s Safari Web browser, Stanford University research found, adding to a drumbeat of criticism from consumer groups and lawmakers over how the search giant tracks people online. Using its DoubleClick ad network, Google has been dodging a privacy setting in Safari, the primary Web browser on the iPhone, iPad and Apple computers, according to a report today by Stanford’s Security Lab and the Center for Internet and Society. The study named three other companies

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personal information and the Web content they browse,” she said. “However, the Safari browser contained functionality that then enabled other Google advertising cookies to be set on the browser. We didn’t anticipate that this would happen.” Letter to FTC The controversy drew fresh concerns from lawmakers. Representatives Edward Markey , a Democrat from Massachusetts ; Joe Barton , a Republican from Texas ; and Cliff Stearns , a Republican representing Florida , sent a letter to the FTC today asking whether Google violated its agreement with the agency over privacy. Senator Jay Rockefeller , chairman of the commerce committee, said in a statement that Google “may have violated the company’s own stated privacy policies.” Rockefeller, who represents West Virginia , said he intends to look into the matter. Separately, a Safari Web browser user sued Google, accusing the company of violating privacy. The findings of the Stanford study were reported earlier by the Wall Street Journal. “Consumers are outraged at news reports today that Google used a work-around hack to ‘trick’ the Apple (AAPL) Safari browser into allowing the dominant Internet and advertising company to track the Web browsing habits of millions of Apple users,” said Steve Pociask, president of the American Consumer Institute, an organization in Washington . Google shares fell less than 1 percent to $604.64 today. The shares have declined 6.4 percent this year. Google began using data from its Google+ service in search results of members this year and announced a new privacy policy covering the majority of its products that will take effect on March 1. The updated policy will let Google provide more targeted advertisements, part of an effort to compete more closely with Facebook Inc. To contact the reporters on this story: Heather Perlberg in New York at [email protected] ; and Brian Womack in San Francisco at [email protected] To contact the editor responsible for this story: Tom Giles at [email protected]

2012

google-dodged-iphone-users-privacy-with-doubleclick-stanford-study-finds

Apple, Corcept Therapeutics, Codexis: U.S. Equity Preview for Feb. 21

By Katia Porzecanski

2012-02-17T22:52:49Z

http://www.bloomberg.com/news/2012-02-17/apple-corcept-therapeutics-codexis-u-s-equity-preview.html

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Shares of the following companies may have unusual moves in U.S. trading on Feb. 21. U.S. markets will be closed on Feb. 20 for the Presidents’ Day holiday. Stock symbols are in parentheses, and prices are as of 5:40 p.m. in New York. Standard & Poor’s 500 Index futures expiring in March rose 0.4 percent to 1,359.70. Apple Inc. (AAPL) : HTC Corp. lost a patent-infringement claim against the world’s largest technology company at the U.S. International Trade Commission, the first of the Taiwanese handset maker’s cases targeting the iPhone. Corcept Therapeutics Inc. (CORT) : The specialty drug company that hasn’t generated revenue since 2009 won approval for its leading product candidate, a treatment that uses the active ingredient of the abortion pill RU-486 to treat Cushing’s Syndrome. Codexis Inc. (CDXS) : Alan Shaw resigned as president and chief executive officer of the company, which makes enzymes used in producing drugs. He will continue to serve as an adviser to the board of directors. The board appointed Peter Strumph, business head of pharmaceuticals, as interim CEO. To contact the reporter on this story: Katia Porzecanski in New York at [email protected] To contact the editor responsible for this story: Nick Baker at [email protected]

2012

apple-corcept-therapeutics-codexis-u-s-equity-preview

U.S. Volcker Rule Could Hurt Liquidity, Bipartisan Senators Say

By Silla Brush and Phil Mattingly

2012-02-17T01:50:36Z

http://www.bloomberg.com/news/2012-02-17/volcker-rule-may-hurt-bank-liquidity-bipartisan-senators-tell-regulators.html A proposed U.S. ban on proprietary trading may limit liquidity and restrict bank market-making for clients, six Republican and Democratic senators told the Federal Reserve and other regulators. “The proposed rule, as drafted, could adversely affect Main Street businesses by reducing market liquidity and increasing the cost of capital,” the senators said in a letter today. “There is evidence that this is already beginning to occur.” The letter was signed by Democratic Senators Tom Carper of Delaware, Mark Warner of Virginia and Chris Coons of Delaware; and Republicans Pat Toomey of Pennsylvania, Mike Crapo of Idaho and Scott Brown of Massachusetts. The prop-trading ban is part of the Volcker rule, named after former Fed Chairman Paul Volcker , within the 2010 Dodd-Frank Act overhaul of Wall Street rules. The ban was backed by lawmakers seeking to limit risky trading at banks that operate with federal guarantees. “As market-makers reduce or eliminate inventory, liquidity is reduced and trading spreads widen,” the senators said in the letter. “This will increase trading costs paid by investors, thereby reducing returns for investors large and small alike.” The letter was sent to regulators charged with implementing the Volcker rule, including the Federal Deposit Insurance Corp., Securities and Exchange Commission, Commodity Futures Trading Commission and Office of the Comptroller of the Currency. Venture Capital The proposed rule’s limits on banks’ private equity and hedge-fund investments may restrict venture capital , the senators said. “We urge you to address the definition of covered funds in order to prevent disrupting commonly held corporate structures, used mainly for ordinary course lending and investing, and to conclude that venture capital funds are not covered by the Volcker rule,” the senators said. In scores of comment letters filed on Feb. 13, bankers and their trade associations said the rule would increase risk, raise investor costs, hurt U.S. competitiveness and be vulnerable to legal challenge. “The proposal, if implemented in its current form, will overly restrain our customer-facing market-making businesses and our risk-mitigating hedging activities to the detriment of our customers,” Colm Kelleher , co-president of Morgan Stanley’s institutional securities group, and Jim Rosenthal , the company’s chief operating officer, wrote in a Feb. 13 letter. The lawmakers responsible for the provision’s inclusion in Dodd-Frank

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to be more forceful in implementing the rule. “The Volcker rule demands Wall Street change its culture,” Merkley and Levin wrote in their own comment letter. To contact the reporters on this story: Silla Brush in Washington at [email protected] ; Phil Mattingly in Washington at [email protected] To contact the editor responsible for this story: Maura Reynolds at [email protected]

2012

volcker-rule-may-hurt-bank-liquidity-bipartisan-senators-tell-regulators

Argentine Stocks: Telecom, Banco Macro Gain; Edenor Falls

By Christine Jenkins

2012-02-17T17:24:41Z

http://www.bloomberg.com/news/2012-02-17/argentine-stocks-telecom-banco-macro-gain-edenor-falls.html

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The following companies are having unusual price changes in Argentine trading. Stock symbols are in parentheses and share prices are as of 1:58 p.m. in Buenos Aires. The Merval (MERVAL) Index rose 0.9 percent to 2,791.42. Telecom Argentina SA (TECO2) (TECO2 AF), the Argentine phone company, advanced 2.9 percent to 19.20 pesos. Profit in 2011 was 2.4 billion pesos ($551 million), an increase of 33 percent from the previous year, Chief Executive Officer Franco Bertone told reporters in Buenos Aires today. Banco Macro SA (BMA) (BMA AF), Argentina ’s largest lender by market share, rose 1.9 percent to 10.80 pesos. Banco Macro climbed for a second day after saying fourth-quarter net income increased 26 percent from a year earlier to 346.4 million pesos. Empresa Distribuidora & Comercializadora Norte SA (EDN AF), Argentina’s biggest power distributor, dropped 1.5 percent to 1.35 pesos. Edenor fell after Chief Executive Officer Alejandro Macfarlane’s resignation. The company named Edgardo Volosin as the new CEO, according to a filing to the Buenos Aires stock exchange yesterday. To contact the reporter on this story: Christine Jenkins in New York at [email protected] To contact the editor responsible for this story: David Papadopoulos at [email protected]

2012

argentine-stocks-telecom-banco-macro-gain-edenor-falls

Libya Boosts April Es Sider Oil Premium to $1 a Barrel

By Grant Smith

2012-03-21T11:46:01Z

http://www.bloomberg.com/news/2012-02-17/libya-keeps-march-es-sider-crude-price-at-70-cents-premium-1-.html

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(Corrects month in headline.) Libya ’s state-run National Oil Corp. increased the official selling price of benchmark Es Sider crude for loading in April to $1 a barrel over Dated Brent, from 70 cents a barrel in March, according to a price list obtained by Bloomberg News. Following is a table of prices of Libyan crude grades. The blends are priced in relation to Dated Brent, except Al-Jurf and Bouri, which are based on Urals in the Mediterranean. To contact the reporter on this story: Grant Smith in London at [email protected] To contact the editor responsible for this story: Stephen Voss on [email protected]

2012

ibya-keeps-march-es-sider-crude-price-at-70-cents-premium-1-

U.S. Will Not Defend Prohibition on Same-Sex Military Benefits

By Seth Stern

2012-02-17T20:52:31Z

http://www.bloomberg.com/news/2012-02-17/u-s-will-not-defend-prohibition-on-same-sex-military-benefits.html

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The Obama administration said it won't defend laws that prohibit U.S. military service members from obtaining benefits for their same-sex spouses. Attorney General Eric Holder announced the decision today in a letter to House Speaker John Boehner , an Ohio Republican. The Justice Department last year said it would no longer defend the government against challenges to the Defense of Marriage Act, which prohibits the federal government from recognizing same-sex marriages for purposes of taxes, social security and other programs. The Justice Department is taking the same position on other statutory provisions that “may affect the eligibility of same- sex couples for military and veterans’ benefits,” Holder said today in his letter. Holder said the department’s position applies to challenges under the Fifth Amendment’s equal protection guarantee. To contact the reporter on this story: Seth Stern in Washington at [email protected] To contact the editor responsible for this story: Steven Komarow at [email protected]

2012

u-s-will-not-defend-prohibition-on-same-sex-military-benefits

Obama’s Export-Credit Plan Draws Praise, Criticism

By William McQuillen and Susanna Ray

2012-02-17T23:53:59Z

http://www.bloomberg.com/news/2012-02-17/obama-export-credit-plan-praised-called-corporate-welfare-1-.html

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American manufacturers applauded President Barack Obama ’s plan to compensate them with credit to offset the unfair financing given to competitors by their governments while one critic labeled it “corporate welfare.” Obama today unveiled a plan for the Export-Import Bank to help combat foreign competitors’ sources of official funding, as well as a program to ease access to credit for small-business exporters. The announcement was made at a Boeing Co. (BA) factory in Everett, Washington , where eight out of every 10 planes go to foreign airlines. “I will not stand by when our competitors don’t play by the rules,” Obama said. The administration will use existing authority within the bank’s charter to provide financing options for the first time for U.S. firms competing for domestic sales with foreign rivals whose countries have offered financial backing, Fred Hochberg , the bank’s chairman, said in an interview in Seattle. Previously, the institution had only offered financing for sales outside the U.S. ‘Level Playing Field’ “The principle is we need a level playing field,” Hochberg said. The National Association of Manufacturers praised Obama’s plan, while the Washington-based Club for Growth , which promotes shrinking the government, said it produce more “corporate welfare.” The duopoly in jetliner production shared by Boeing and its larger European rival, Airbus SAS, is being challenged by new competitors. Canada’s Bombardier Inc. and China ’s Comac are developing new single-aisle planes set to enter service this decade that will compete with Boeing 737 and the Airbus A320 , the workhorses of the airline industry . U.S. exporters, including Boeing and Caterpillar Inc. (CAT) , have been pushing for reauthorization and expansion of the lending ceiling of the bank, which is nearing its limit. The companies last week lobbied more than 100 lawmakers to push for raising the lending limit 40 percent to $140 billion. They say failure to act will cost jobs. “This obviously broadens the number of transactions we will consider, so yes, it certainly might require us having greater capacity” than what’s already been requested, Hochberg said. Export Goal Jay Timmons , the chief executive officer of the National Association of Manufacturers, said Obama’s plan could help companies reach the president’s goal of doubling exports. The Club for Growth disagreed, saying it will “distort trade” and provide handouts to big business. Obama should instead lower tariffs and reform corporate taxes to make U.S. producers more competitive, the group said in statement. The Export-Import Bank has too much power selecting winners and losers in the private sector, the group said. “It is nothing more than a corporate welfare slush fund for companies with the best lobbyists, and Boeing has led the pack,” Chris Chocola, president of the group, said in the statement. Hochberg countered that the bank’s Transport Finance unit, which includes Boeing planes as well as business jets and helicopters built by other companies, makes up just 40 percent of the annual authorization amount. In his State of the Union speech, Obama called for a program to provide credit to companies competing against foreign counterparts that benefit from preferential credit from their governments. Boeing ‘Encouraged’ “We’re always encouraged about efforts to support U.S. competitiveness, but we need to understand more about how it would apply in our circumstances,” John Kvasnosky, a spokesman for Boeing Capital Corp., said in an interview at the Boeing factory before Obama spoke. Boeing currently can offer guarantees for bank debt or commercial debt by the U.S. Export-Import Bank for airlines struggling to find financing. Regulations restrict where governments can offer guarantees. For two decades, the U.S. and Europe have maintained an informal agreement that bars countries where Boeing and Airbus planes are built from providing guarantees to local carriers. To prevent unfair competition, guarantees also cannot be offered in the market of the rival manufacturer. Self-Sustaining The bank, which is self-sustaining, provides financing to U.S. exporters through loans, loan guarantees and payment insurance. It has committed about $90 billion and will probably reach its $100 billion limit by the end of next month, according to the White House. The Export-Import Bank authorized $32.7 billion in guarantees in the year that ended in September. The lending serves as a part of Obama’s effort to double U.S. exports to $3.14 trillion. The Senate Banking Committee in September backed the 40 percent increase in Ex-Im bank lending limit. A House Financial Services Committee panel in June approved a measure to increase the cap over three years to $160 billion. The full House and Senate haven’t taken up the legislation. To contact the reporter on this story: Susanna Ray in Seattle at [email protected] To contact the editor responsible for this story: Jon Morgan at [email protected]

2012

obama-export-credit-plan-praised-called-corporate-welfare-1-

Michigan Boom Haunts GOP Bailout Foes Before Primary

By Chris Christoff

2012-02-17T20:17:05Z

http://www.bloomberg.com/news/2012-02-17/auto-recovery-defines-terms-of-engagement-for-michigan-primary.html Don’t tell Tracey Harmon that the $82 billion federal auto bailout was a bad idea. Harmon and her sister moved from Ohio in the past two years to work at Chrysler Group LLC plants in Michigan (STOMI1) after President Barack Obama completed the rescue of the company and General Motors Co. (GM) “That saved a lot of jobs,” Harmon, 40, said during lunch at a restaurant near the Sterling Heights Assembly Plant, where she puts together doors for the Chrysler 200. Before the bailout, the plant had been scheduled to close. In a state where making cars determines economic health, auto factories are humming, unemployment is dropping and Republican presidential candidates are bringing this message to voters in their Feb. 28 primary: Government has done you wrong. Mitt Romney , Rick Santorum , Newt Gingrich and Ron Paul may have a tough sale to make in Macomb County . It’s home to the 16,000-job GM Technical Center, and 155 car plants and parts suppliers with least 38,000 jobs, according to county officials. Yesterday, GM said it earned $9.19 billion last year, the largest profit in its 103-year history, and regained its position as the world’s top-selling automaker. The near-death and revival of the industry is the backdrop for a Republican campaign that’s hammered at big government. No Loans, Please “I will vote for the most conservative, electable candidate,” said Brian Pannebecker, a 52-year-old who works at a Ford Motor Co. (F) parts plant in Sterling Heights. He called himself a union conservative and Tea Party follower who opposes government loans on principle. He also said that the federally assisted rebirth of GM and Chrysler helped his state. During the 18-month recession that began in December 2007, the worst since the Great Depression, Michigan’s economy fared worse than most of the nation’s. Its 9.3 percent unemployment rate in December compares with a peak of 14.1 percent in August 2009, a month when the national rate was 9.6 percent. Last year, Michigan gained 66,000 net jobs, the first increase since the turn of the century, according to a Jan. 13 state report. The University of Michigan ’s Research Seminar in Quantitative Economics predicts a net rise of 101,300 by 2015. About 135,000 Michiganders will work for the three major U.S. automakers by 2015, after bottoming at 102,000 in 2009, according to Ann Arbor ’s Center for Automotive Research. Net Required Those numbers carry weight in Macomb County, which abuts Detroit ’s northeast border and where Obama won by 8 percentage points in 2008. Its population of 841,000 has a median household income of $54,000, according to the U.S. Census . Macomb voters don’t despise government, though they’re wary of how it spends money, said Ed Sarpolus, 58, a Lansing-based political consultant. “You can’t go into Macomb and just call Democrats tax-and- spenders unless you have solutions to protect them with the safety net,” Sarpolus said. A survey of Michigan voters this week showed that 52 percent support the auto bailout and 53 percent said Obama’s leadership had been good for the state economy, according to Public Policy Polling in Raleigh, North Carolina . Michigan’s economic health dropped 1.3 percent after Obama took office in January 2009 through the third quarter of last year, although that decline was second mildest among states, the Bloomberg Economic Evaluation of States shows. Michigan improved faster than all states except North Dakota between the third quarters of 2010 and 2011. ‘Crony Capitalism’ Republican Governor Rick Snyder has said the rescue probably prevented an economic meltdown in Michigan that would have shut down the national automotive supply chain. All the Republican presidential candidates opposed it. Romney in 2008 said a bailout would mean “you can kiss the American automotive industry goodbye.” In a Feb. 14 guest editorial in the Detroit News , he said Obama’s program was “crony capitalism on a grand scale.” The auto industry would have been as well off or better without government help, Santorum told the Detroit Economic Club yesterday. The bailout started in the last Republican presidency. President George W. Bush ’s administration provided loans to GM and Chrysler starting with $4 billion to each company in December 2008 and January 2009. Bush eventually provided $17.4 billion to the automakers before Barack Obama ’s administration expanded the rescue of the companies to $62 billion. More money went to Ally Financial Inc. (ALLY) , formerly known as GMAC Inc., and to suppliers. Yearning for Christie The moves saved more than 1.4 million jobs and $96 billion in personal income nationwide, according to a November 2010 report by the Center for Automotive Research. Many Republicans didn’t support the rescue because it hurt GM bondholders in favor of the United Auto Workers union, said Republican state Representative Pete Lund of Macomb County. County resident John Lankston, 68, said he opposed the bailout and that GM

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survived without it. Still, Lankston, a retired hospital executive, said he doesn’t like any of the Republican candidates. He wants New Jersey Governor Chris Christie to enter the race. “He seems to be very straightforward and he really doesn’t hold anything back,” Lankston said. In hypothetical matchups, Santorum trailed Obama by 11 percentage points and Romney trailed the president by 16, according to the Public Policy Polling survey. The company surveyed 560 voters from Feb. 10 to Feb. 12 and said the poll had a margin of error of plus or minus 4 percentage points. Meet the People Lisa Lauretti, co-owner of The Pantry Restaurant, said saving Chrysler, which is majority owned by Fiat SpA (F) and has four plants in the county, was an obvious benefit to a business her father opened 34 years ago. Now, her top concern is for the government to help homeowners facing foreclosure. Lauretti, 51, said her father was a staunch Republican. She’s more independent, having voted for Obama. She said she’s open to change in the White House, though she doesn’t care for any of the Republican candidates and is repelled when they attack one another. Britni Gibbons, 20, of Macomb Township, plans to vote in her first presidential election this year. She doesn’t see much improvement in the economy. She is pursuing a degree in criminology and said financial aid is difficult to obtain. “I worry about where I’m going to be in five years,” Gibbons said. “Am I going to be done with school, and am I going to have a secure, stable job?” A president must show one quality above all, she said: “I want them to be interested in the working class. That’s a lot of people in America. He should know what they have to do to make ends meet every day.” To contact the reporter on this story: Chris Christoff in Lansing at [email protected] To contact the editor responsible for this story: Mark Tannenbaum at [email protected]

2012

auto-recovery-defines-terms-of-engagement-for-michigan-primary

Lafarge Cuts More Costs on Surprise Loss

By Francois de Beaupuy

2012-02-17T08:17:39Z

http://www.bloomberg.com/news/2012-02-17/lafarge-lowers-dividend-targets-cost-cuts-after-surprise-5-million-loss.html

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Lafarge SA (LG) , the world’s biggest cement maker, will double cost cuts and put more assets up for sale to lower debt after reporting a surprise fourth-quarter loss amid writedowns. The net loss was 3 million euros ($4 million) after a profit of 62 million euros a year earlier, the Paris-based company said in a statement today. Analysts surveyed by Bloomberg had expected a profit of 258 million euros. Operating income excluding some items rose 3 percent, beating estimates . The shares rose as much as 4.5 percent. Chief Executive Officer Bruno Lafont is deepening cost cuts amid higher raw material prices as he seeks to repair a credit rating that has fallen below investment grade. Lafarge has earmarked 500 million euros in additional savings and will cut capital spending to 800 million euros, from 1.2 billion euros in 2011, Lafont said today. Asset disposals will exceed 1 billion euros, he said. “We’re remaining cautious for 2012,” with a “contrasted situation” between growth in cement demand in emerging nations and a stabilization in developed nations, Lafont said on a conference call with journalists. “Debt will be significantly reduced” as Lafarge improves its cash flow , he said. Writedowns The stock rose 4 percent to 33.10 euros as of 9:16 a.m. in Paris as fourth-quarter earnings before interest, tax, depreciation and amortization of 798 million euros beat analysts’ estimates for 684 million euros. Lafarge wrote down 285 million euros of assets, including about 180 million euros related to Greece , where demand has slumped, Lafont said. Lafarge proposed to cut the dividend to 50 cents a share. Last year, the company also reduced the payout by half. Revenue in the fourth quarter rose 5 percent to 3.81 billion euros. The French company forecast that cement demand in its markets will grow by 1 percent to 4 percent in 2012, with moderating growth in emerging nations, a drop in Western Europe, and stable demand in North America . Cost inflation, which was 6 percent in 2011, will slow in 2012, though will remain “significant,” Lafont said. “We’ve started implementing price increases announced in recent months, and we will of course continue,” he said. Lafont announced 460 job cuts this month as part of plan to lower costs. Standard & Poor’s and Moody’s Investors Service cut the company’s credit rating to below investment grade in 2011. Net debt stood at 12 billion euros at the end of the fourth quarter, compared with 14 billion euros a year earlier, meeting Lafont’s plan to reduce debt by at least 2 billion euros. Gypsum Sale Lafont lowered costs by 250 million euros in 2011 , pushed through the dividend reduction, and sold 2.2 billion euros of assets , including more than half of Lafarge’s gypsum business and some cement plants in the U.S. Of the 500 million euros in savings planned in total, 400 million euros will come this year, Lafarge said today. Half of the cost cuts will be on general and fixed industrial costs, 20 percent will come from productivity gains, and 30 percent from energy savings, Lafont said. To contact the reporter on this story: Francois de Beaupuy in Paris at [email protected] To contact the editor responsible for this story: Benedikt Kammel at [email protected]

2012

afarge-lowers-dividend-targets-cost-cuts-after-surprise-5-million-loss

Colombian Stock Movers: Ecopetrol, Pacific Rubiales, Canacol

By Blake Schmidt

2012-02-17T15:39:47Z

http://www.bloomberg.com/news/2012-02-17/colombian-stock-movers-ecopetrol-pacific-rubiales-canacol.html

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The following companies are having unusual price changes in Bogota trading. Stock symbols are in parentheses and prices are as of 10:14 a.m. local time. The IGBC Index (IGBC) gained 0.4 percent to 14,578.32, while the Colcap Index rose 0.2 percent to 1,708.61 Ecopetrol SA (ECOPETL) , Colombia’s largest oil company, rose 0.4 percent to 4,990 pesos, the highest since November 2007. Fourth-quarter profit jumped 64 percent from a year ago to 4.4 trillion pesos ($2.47 billion), as crude production climbed, the company said Feb. 15. Profit exceeded the 4.36 trillion pesos average estimate of five analysts surveyed by Bloomberg. If Ecopetrol decides to maintain its current dividend policy in a shareholder meeting next month it would have one of the highest payments by a Colombian company in 2012, Samuel David Garcia, an analyst at Valores Bancolombia, said in an e- mailed statement today. Oil companies gained after Colombia’s exports rose 43 percent to $5.5 billion in December from the same month a year before, driven “fundamentally” by 63 percent growth of sales of oil and its derivatives, the national statistics agency reported on its Web site after the market closed yesterday. Canacol Energy Ltd. (CNEC) , the Calgary-based oil company that operates fields in Colombia, gained 2.2 percent to 1,630 pesos. Pacific Rubiales Energy Corp. (PRE) , the Toronto-based oil producer that operates fields in Colombia, climbed 0.8 percent to 48,900 pesos. To contact the reporter on this story: Blake Schmidt in Bogota at [email protected] To contact the editor responsible for this story: David Papadopoulos at [email protected]

2012

colombian-stock-movers-ecopetrol-pacific-rubiales-canaco

Megaupload Defendants to Face More Criminal Counts in Internet Piracy Case

By Karen Gullo

2012-02-17T21:27:08Z

http://www.bloomberg.com/news/2012-02-17/megaupload-defendants-face-more-criminal-counts-in-internet-piracy-case.html

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Megaupload.com, a file-sharing website charged with illegally distributing copyrighted movies and music, faces more counts of criminal copyright infringement and wire fraud. A revised indictment filed in a U.S. court in Alexandria, Virginia , yesterday charged Megaupload.com and founder Kim Dotcom with three new criminal copyright counts and five new wire fraud counts for allegedly running an illegal enterprise for five years that unlawfully copied works and made them available for download to customers. The original Jan. 5 indictment included five counts. Since September 2005, what prosecutors have dubbed the “Mega Conspiracy” has generated more than $175 million in criminal proceeds by distributing millions of copies of copyrighted works, such as movies, television programs, music, books, video games and software, according to the indictment. Megaupload reproduced copyrighted works directly from other websites including Google Inc.’s YouTube for illegal sharing and to give the false impression that a related video-sharing website hosted user-generated, rather than copyrighted, content, prosecutors said in an e-mailed statement today. The conspiracy was led by Dotcom, a resident of Hong Kong and New Zealand and a dual citizen of Finland and Germany, who founded Megaupload Ltd., according to the indictment. New Zealand Bail Dotcom, imprisoned in New Zealand since Jan. 20 at the request of the U.S., failed to win release yesterday after a judge declined to immediately rule on his bid for bail. North Shore District Court Judge N. R. Dawson said he would deliver his decision before Feb. 22, according to an e- mailed statement from the court. North Shore District Judge David McNaughton on Jan. 25 denied Dotcom’s request for bail, saying the risk of him fleeing New Zealand to a jurisdiction such as his home country of Germany , which has no extradition treaty with the U.S., was too great. The case is U.S. v Megaupload.com, 12-0003, U.S. District Court, Eastern District of Virginia (Alexandria). To contact the reporter on this story: Karen Gullo in San Francisco at [email protected] To contact the editor responsible for this story: Michael Hytha at [email protected]

2012

egaupload-defendants-face-more-criminal-counts-in-internet-piracy-case

Estonia Unions Plan Strikes, Protests Over Collective Deals

By Ott Ummelas

2012-02-17T17:40:12Z

http://www.bloomberg.com/news/2012-02-17/estonia-unions-plan-strikes-protests-over-collective-deals.html

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Estonian trade unions will hold a series of strikes and protests over government plans to make it easier for employers to terminate collective agreements. The Confederation of Estonian Trade Unions will stage a protest tomorrow in the capital, Tallinn, before nationwide demonstrations and strikes begin March 5, Chairman Harri Taliga said today by phone. The action will peak with a strike of teachers and daycare workers, starting March 7, which may be supported by other unions, according to Taliga. Draft legislation that’s cleared the first of three parliamentary readings would stop collective agreements from running indefinitely, which the Justice Chancellor has ruled unconstitutional, according to an explanatory letter on the legislature’s website . That would allow employers to abandon such deals more easily, harming workers’ rights, Taliga said. Protests “will be further spurred” after the government announced this week that it plans to scrap a commitment to pay unemployment benefits of 40 percent of a worker’s last salary to employees who leave their jobs voluntarily or by agreement with their employer, Taliga said. To contact the reporter on this story: Ott Ummelas in Tallinn at [email protected] To contact the editor responsible for this story: Balazs Penz at [email protected]

2012

estonia-unions-plan-strikes-protests-over-collective-deals

Ukraine Grain Traders to Restrict Wheat Exports, Izvestia Says

By Kateryna Choursina

2012-02-17T08:21:20Z

http://www.bloomberg.com/news/2012-02-17/ukraine-grain-traders-to-restrict-wheat-exports-izvestia-says.html

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Ukrainian grain traders agreed to export no more than 1.7 million metric tons of wheat before the end of the marketing year on June 30, Ekonomicheskie Izvestia reported, citing an unidentified chairman of a trading company who took part in talks with the government. The government and traders agreed that outbound shipments shouldn’t exceed 800,000 tons before March, the Kiev-based newspaper said. That will bring wheat exports in the marketing year that ends on June 30 to 4.8 million tons, or half what traders wanted, Izvestia cited the trader as saying. To contact the reporters on this story: Kateryna Choursina in Kiev at [email protected] To contact the editor responsible for this story: Claudia Carpenter at [email protected]

2012

ukraine-grain-traders-to-restrict-wheat-exports-izvestia-says

Japanese Yen Slides Against All 16 Major Peers as Asian Stocks Advance

By Candice Zachariahs

2012-02-17T01:43:47Z

http://www.bloomberg.com/news/2012-02-17/japanese-yen-slides-against-all-16-major-peers-as-asian-stocks-advance.html

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The yen slid against all 16 of its major peers as Asian stocks rallied, curbing demand for haven assets. The Japanese currency dropped 0.2 percent to 79.13 per dollar as of 10:41 a.m. in Tokyo . It lost 0.3 percent to 103.99 per euro. The MSCI Asia Pacific Index of stocks jumped 1.2 percent. To contact the reporter on this story: Candice Zachariahs in Sydney at [email protected] To contact the editor responsible for this story: Benjamin Purvis at [email protected]

2012

japanese-yen-slides-against-all-16-major-peers-as-asian-stocks-advance

Euro Strengthens on Greece Bailout Optimism; Yen Falls Against Major Peers

By Allison Bennett

2012-02-17T22:20:44Z

http://www.bloomberg.com/news/2012-02-17/euro-rises-against-dollar-amid-optimism-greece-agreement-will-be-reached.html

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The euro strengthened against most of its most-traded counterparts on optimism European leaders will agree to release bailout funds for Greece on Feb. 20. The yen fell to a six-month low versus the dollar and declined against all its major peers as global equity and commodity markets rallied. The euro pared gains against the dollar as the Greek government drew up legislation that could be used to impose losses on investors who don’t support a debt swap. Norway’s krone rallied even as the central bank said it was monitoring recent gains. “The euro has a track record of rallying into summits, like we have coming on Monday, only to back pedal when the meetings have missed expectations,” said Joe Manimbo , a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. “Yen weakness has been compounded by the fact that investors are feeling a bit more buoyant about the global economy as well as the situation in Greece.” The euro rose 0.9 percent to 104.54 yen at 5 p.m. in New York after touching 104.67 yen, the strongest level since Dec. 5. The shared currency gained 0.1 percent to $1.3140 after reaching $1.3198. The dollar rose 0.8 percent to 79.55 yen, and reached 79.62, the strongest since Aug. 4. The Standard & Poor’s 500 Index rose 0.2 percent, and the MSCI All-Country World Index gained 0.6 percent. The S&P GSCI Index of 24 raw materials advanced 0.3 percent. ‘Agreement on Greece’ Italian Prime Minister Mario Monti , German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism that an “agreement on Greece” can be reached at a Brussels meeting of euro-area finance ministers on Feb. 20 after a joint conference call today. Getting investors to agree to a writedown on the debt is a condition for sealing the second Greek bailout as officials seek to cut the nation’s debt load. Euro-area finance ministers have slated the meeting as a make-or-break effort to solve such open questions, Deputy German Finance Minister Steffen Kampeter said in Hamburg last night. “It’s simply a reversal of an overly pessimistic view on the euro zone from earlier in the week, so there is upside for the euro and there is a recovery in the stability trade,” said Andrew Wilkinson , chief economic strategist at Miller Tabak & Co. in New York. “There’s become a clear case of buying the dips in the market’s mentality.” The New York-based Conference Board’s gauge of the U.S. outlook for the next three to six months increased 0.4 percent in January after a revised 0.5 percent rise the previous month. The cost of living rose 0.2 percent in January after no change the prior month, Labor Department data showed. Yen Declines The yen has tumbled 6.6 percent over the past month and the dollar dropped 2.9 percent, the two worst performers among 10 developed-market currencies monitored by Bloomberg Correlation- Weighted Indexes. The euro gained 0.6 percent over the period. South Korea ’s won rose 0.6 percent to 1,125.50 per dollar as foreigners demanded $568.8 million more of the nation’s equities than last week. Norway’s krone rose 0.3 percent to 5.7135 per dollar and advanced 0.2 percent to 7.5089 versus the euro. The nation’s central bank is monitoring the krone after its recent gains as policy makers focus on boosting competitiveness in the oil-exporting nation, Governor Oeystein Olsen said. Crude oil futures rose 1.7 percent to $104.04 a barrel in New York. The pound gained 0.2 percent to $1.5828, extending its weekly advance to 0.5 percent. Sterling rose 1 percent to 125.92, the strongest since Nov. 1. Sales including fuel climbed 0.9 percent from December, when they rose 0.6 percent, the Office for National Statistics said today, spurring speculation the U.K. economy will avoid a recession. To contact the reporter on this story: Allison Bennett in New York at [email protected] To contact the editor responsible for this story: Dave Liedtka at [email protected]

2012

euro-rises-against-dollar-amid-optimism-greece-agreement-will-be-reached

AFRICA WEEK AHEAD: Nigerian Inflation, Namibian Interest Rate

By Emily Bowers

2012-02-17T11:12:32Z

http://www.bloomberg.com/news/2012-02-17/africa-week-ahead-nigerian-inflation-namibian-interest-rate.html

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Nigeria’s National Bureau of Statistics releases January inflation rate on Feb. 20. The rate fell to 10.3 percent in December. Namibia ’s Monetary Policy Committee releases decision on interest rates at 11am in Windhoek on Feb. 22.

2012

africa-week-ahead-nigerian-inflation-namibian-interest-rate

Red Sox Pitcher Wakefield Retires as MLB’s Oldest Player After 19 Seasons

By Eben Novy-Williams

2012-02-17T17:37:56Z

http://www.bloomberg.com/news/2012-02-17/wakefield-retires-as-baseball-s-oldest-player-after-19-seasons.html

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Boston Red Sox pitcher Tim Wakefield, the oldest active player in Major League Baseball , is retiring after 19 seasons and 200 wins. Wakefield, 45, will make the announcement later today at a press conference from the team’s spring training facility in Florida , the Red Sox said in an e-mailed statement. The 45-year- old knuckleball pitcher retires as baseball’s active leader in wins (200), losses (180), home runs allowed (418) and innings pitched (3,226 1/3). Wakefield signed with the Red Sox in 1995 after being released by the Pittsburgh Pirates. In spring training with Boston that year he worked with Hall of Fame pitcher Phil Niekro, another knuckleballer, developing the pitch that helped him win 1995 American League Comeback Player of the Year and defined his career. Over 17 years with the Red Sox, he never pitched in less than 20 games, including a 49-appearance season in 1999 when he started 17 games and had 15 saves in relief. He won 10 or more games 11 times, most recently in 2009. A member of World Series-champion teams in 2004 and 2007 with the Red Sox, Wakefield was 5-7 in the postseason. Perhaps his most memorable playoff moment came in the seventh game of the 2003 AL Championship Season against New York , when Wakefield gave up an 11th-inning home run to Aaron Boone that sent the Yankees to the World Series . Wakefield, who worked out of the bullpen in parts of his final two seasons, won his 200th game on Sept. 13 at Fenway Park after eight previous attempts while at 199. He received a standing ovation from the crowd and was doused in champagne following the milestone. In 2009, at 42, he became the oldest first-time All-Star in MLB history, according to radio station WEEI in Boston. He finishes with 186 wins in a Red Sox uniform, trailing Roger Clemens and Cy Young, who both won 192. To contact the reporter on this story: Eben Novy-Williams in New York at [email protected] To contact the editor responsible for this story: Michael Sillup at [email protected]

2012

wakefield-retires-as-baseball-s-oldest-player-after-19-seasons

Global CO2 Aviation Plan Could Replace EU Curbs, Hedegaard Says

By Ewa Krukowska

2012-02-17T12:26:10Z

http://www.bloomberg.com/news/2012-02-17/global-carbon-aviation-plan-could-replace-eu-curbs-hedegaard-says.html The European Union can replace its carbon curbs on aviation with a global measure to cut pollution from the industry as long as the broader program is as ambitious as the EU plan, the bloc’s climate chief said. The 27-nation EU won’t abandon the expansion of its emissions trading system into international aviation in the face of opposition from nations outside the region, Climate Commissioner Connie Hedegaard said in an interview today. The first expansion of the EU emissions cap-and-trade program abroad has drawn fire from countries including the U.S., Russia and Japan , which said the measure was inconsistent with international law. “It’s clear that the moment we have a global regime entering into force, something that we all agree to, then the EU legislation will not be relevant,” Hedegaard said by telephone from Copenhagen. “That can be different models for sure, but the bottom line from our perspective must be that it is something that is at least as good for climate and environment as what we have in Europe right now.” Her comments come as countries challenging the system plan to meet in Moscow on Feb. 21-22 to coordinate action and discuss a “basket of countermeasures” against the EU emissions trading system, often referred to as the ETS, according to an agenda of the gathering obtained by Bloomberg News. Their talks will follow a non-binding resolution adopted by the United Nations ’ International Civil Aviation Organization last year at the urging of 26 nations, including India , China , Japan and Russia, calling for the exemption of non-EU airlines from the ETS. Global Deal “So far it very much seems this group of countries can agree on one thing: what should not be done,” Hedegaard said. “But it would be much more interesting to see what new move they are willing to take that would make it likely this time to get a global deal through ICAO.” The UN aviation body intends to strike a deal this year creating a global carbon market for the industry, Raymond Benjamin , ICAO’s secretary general, said in November. The EU, which aims to lead the global fight against climate change , won’t insist on any particular instrument and would welcome “some kind of a market-based system that really reduces emissions and creates the right incentives for the whole sector to become more efficient,” according to Hedegaard. “We don’t have a one-way recipe to say this is how it must be done,” she said, adding that the bloc hopes to see ICAO taking action. “Those who believe that as long as we just talk about a global regime then the EU law could disappear

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not going to happen.” To contact the reporter on this story: Ewa Krukowska in Brussels at [email protected] To contact the editor responsible for this story: Stephen Voss at [email protected]

2012

global-carbon-aviation-plan-could-replace-eu-curbs-hedegaard-says

BowLeven Jumps 20% on Speculation Tullow to Bid for Explorer

By Eduard Gismatullin

2012-02-17T11:38:30Z

http://www.bloomberg.com/news/2012-02-17/bowleven-jumps-20-on-speculation-tullow-may-bid-for-explorer.html

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BowLeven Plc (BLVN) , the U.K. oil explorer focused on Cameroon, jumped as much 20 percent in London on speculation that Tullow Oil Plc (TLW) may bid for the company. The shares jumped as much as 14.75 pence to 88.75 pence in London trading, the biggest gain since Oct. 14. The shares traded at 87 pence at 11:24 a.m. local time. “The shares are rising on speculation” that Tullow may make a bid, Tracy MacKenzie, an analyst at Brewin Dolphin Securities Ltd., said by phone. Spokesmen for London-based Tullow and Edinburgh-based BowLeven declined to comment. BowLeven raised $124 million in a share sale on Oct. 19 with a 36 percent increase in ordinary stock capital. The funds will be used for a drilling program this year. The shares surged 60 percent on Oct. 14 after the Sapele-3 well discovered oil in the Douala Basin at the Etinde permit in Cameroon. “We think more likely than not that BowLeven will partner and secure funding,” said Stuart Joyner, an analyst at Investec Securities in London . “That would be positive for the shares but its negotiating position is weak and downside risks in the event of a no deal are considerable.” To contact the reporter on this story: Eduard Gismatullin in London at [email protected] To contact the editor responsible for this story: Will Kennedy at [email protected]

2012

bowleven-jumps-20-on-speculation-tullow-may-bid-for-explorer

Christie Holds Veto Over New Jersey Gay Marriage Legislation

By Terrence Dopp and Stacie Servetah

2012-02-17T17:31:27Z

http://www.bloomberg.com/news/2012-02-17/christie-holds-veto-over-new-jersey-gay-marriage-legislation-1-.html

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New Jersey (STONJ1) ’s Republican Governor Chris Christie has 45 days to fulfill his promise to veto a bill passed by the Democratic-led Legislature that would legalize gay marriage. The legislation was delivered to Christie’s office this morning after it passed the Assembly yesterday and the Senate on Feb. 13. New Jersey Democrats have made legalizing same-sex marriage a priority, two years after they failed to pass a similar bill supported by then-Governor Jon Corzine , a Democrat. Christie, 49, has said he believes that marriage should be between a man and a woman, and that voters should decide the issue. Steven Goldstein, chairman of gay-rights group Garden State Equality, said he thinks Christie isn’t homophobic, and that his opposition comes from national political ambitions and appeasing the socially conservative wing of his party. “I don’t think Chris Christie has an anti-gay bone in his body,” Goldstein said today in a statement. “He won’t veto the bill because he’s anti-gay. He’ll veto the bill because the 2016 South Carolina Republican Presidential primary electorate is anti-gay.” Christie in October spurned Republican calls to run for president this year, and endorsed former Massachusetts Governor Mitt Romney. He has declined to rule out becoming Romney’s vice presidential running mate, or seeking the White House in 2016. Override Effort Democrats control the New Jersey Assembly, 48-32, and the Senate, 24-16. The bill needed 41 votes to pass the Assembly and 21 to pass the Senate. It was approved 42-33 in the Assembly and 24-16 in the Senate. “This is a great day for equality and I just hope the governor pays attention to what happened here,” said Reed Gusciora, an Assembly Democrat from Trenton who’s gay. “He’d do a great service for equality by signing the bill into law or by simply walking away and letting it become law without his signature.” Sponsors said they’ll work to gather the two-thirds majority in each chamber needed to override a veto. They would need 27 supporters in the Senate and 54 in the Assembly. ‘Swift Action’ “They are going to be nowhere near the votes to override in either chamber,” Christie said Feb. 14 in his Trenton office. “Believe me, I will take very swift action on the bill,” he said. “And we can move on to the things the people of New Jersey say are most important to them, which are creating jobs, lowering taxes and continuing the New Jersey comeback.” Michael Drewniak , a spokesman for Christie, declined to say when the governor will strike down the bill. Lawmakers seeking an override have almost two years, the time remaining in the legislative session, to act. Goldstein, the pro-gay marriage activist, said his group will use that time to build support and press ahead with a legal challenge of the state’s civil-union statute. Supporters of gay and lesbian marriage contend the civil- union law fails to guarantee those couples equal protection. Democrats and advocates say that marriage is a civil right and putting it to a vote in a referendum, as Christie wants, would be improper. 31 Rejections Voters nationwide have rejected gay marriage in all 31 referendums on the issue. New Jersey Senate President Stephen Sweeney , a West Deptford Democrat, said this week “there’s not a chance in hell” he’d bring a referendum bill to a vote. Washington Governor Christine Gregoire signed a bill this week to make her state the seventh to grant same-sex couples the right to marry. New York , Massachusetts, Connecticut , Iowa , New Hampshire , Vermont and the District of Columbia already permit same-sex weddings. Maryland’s House of Delegates, which last year stood in the way of gay marriage legislation, may soon vote on a similar measure. To contact the reporter on this story: Terrence Dopp in Trenton at [email protected] To contact the editor responsible for this story: Mark Tannenbaum at [email protected]

2012

christie-holds-veto-over-new-jersey-gay-marriage-legislation-1-

Telefonica Czech Quarterly Net Income Rises on Slovak Tax Income

By Lenka Ponikelska

2012-02-17T13:00:01Z

http://www.bloomberg.com/news/2012-02-17/telefonica-czech-quarterly-net-income-rises-on-slovak-tax-income.html

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Telefonica Czech Republic AS, the country’s largest phone operator, said fourth-quarter profit rose 50 percent thanks to a one-time gain from deferred tax income booked at its Slovak unit. Net income for the three months ended Dec. 31 was 2.87 billion koruna ($151 million), compared with 1.91 billion koruna a year earlier, the company said today in an e-mailed statement. Revenue declined 4 percent to 13.4 billion koruna. The fourth quarter was “positively” impacted by deferred tax income booked in Slovakia worth 709 million koruna, the Prague-based company said. Oibda, or operating income before depreciation and amortization, rose 1.2 percent to 5.8 billion koruna in the quarter, the company said. The company’s board will propose to pay a dividend of 40 koruna a share from 2011 earnings. Of the total, 13 koruna will represent a share capital reduction. To contact the reporter on this story: Lenka Ponikelska in Prague at [email protected] To contact the editor responsible for this story: James M. Gomez at [email protected]

2012

elefonica-czech-quarterly-net-income-rises-on-slovak-tax-income

U.S. Exporters Sell 2.9 Mln Tons of Soybeans to China

By Steve Stroth

2012-02-17T15:34:04Z

http://www.bloomberg.com/news/2012-02-17/u-s-exporters-sell-2-9-mln-tons-of-soybeans-to-china-correct-.html

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U.S. exporters sold 2.923 million metric tons of soybeans to China , the U.S. Department of Agriculture said today in an e-mailed statement. To contact the reporter on this story: Steve Stroth in Chicago at [email protected] To contact the editor responsible for this story: Steve Stroth at [email protected]

2012

u-s-exporters-sell-2-9-mln-tons-of-soybeans-to-china-correct-

Hong Kong Stocks Rise for Seventh Weekly Gain on U.S., Greece

By Kana Nishizawa

2012-02-17T08:46:02Z

http://www.bloomberg.com/news/2012-02-17/hong-kong-stocks-rise-set-for-seventh-weekly-gain-on-u-s-data.html

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Hong Kong stocks rose, with the benchmark Hang Seng Index (HSI) extending its longest streak of weekly gains since 2010, as U.S. economic reports beat estimates and optimism increased that Greece will get a bailout. Techtronic Industries Co. (669) , a power-tool maker that counts North America as its largest market, gained 3.1 percent. Esprit Holdings Ltd. (330) , a clothier that gets most of its revenue from Europe, increased 4.9 percent. China Life Insurance Co., the nation’s biggest insurer by market value, advanced 3.5 percent after saying premium income rose 12 percent in January. Sands China Ltd. (1928) , a Macau casino operator, climbed 6.2 percent on speculation visitors to the city will increase. The Hang Seng Index rose 1 percent to 21,491.62 at the close, rising 3.4 percent for the week. It posted a seventh- straight week of gains, the longest winning streak since the period ended Oct. 15, 2010. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong rose 1.2 percent to 11,711.51. “It seems like the U.S. economy is improving with the quantitative easing starting to show its effect,” said Lewis Wan, chief investment officer at Pride Investments Group Ltd. in Hong Kong. “That’s giving the market some confidence right now.” Hang Seng’s Advance Hong Kong’s Hang Seng Index has risen 17 percent this year amid optimism Europe will contain its debt crisis and U.S. data signaled strength in the world’s biggest economy. Shares in the Hang Seng Index traded at 10.9 times estimated earnings, compared with 13 times for the Standard & Poor’s 500 Index and 10.9 times for the Stoxx Europe 600 Index. Futures on the Standard & Poor’s 500 Index were little changed today. The gauge advanced 1.1 percent in New York yesterday after reports showed Americans filed the fewest claims for jobless benefits since March 2008 and builders broke ground on more houses than expected. Manufacturing (OUTFGAF) in the Philadelphia region expanded this month at the fastest pace in four months as orders and sales rose. Techtronic gained 3.1 percent to HK$10.10. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc., advanced 1 percent to HK$24.55. Esprit climbed 4.9 percent to HK$15.02, leading gains on the Hang Seng, while HSBC Holdings Plc (HSBA) , Europe’s biggest bank by market value, rose 1.7 percent to HK$70.50. Bailout on Horizon European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the European Central Bank to plug a new financing gap in the second Greek bailout, two people familiar with the talks said. China Life rose 3.5 percent to HK$23.60 after reporting January premium income was 49.1 billion yuan ($6.8 billion). Sands China jumped 6.2 percent to HK$29.95 and Wynn Macau Ltd., a unit of the casino operator founded by billionaire Steve Wynn, advanced 1.8 percent to HK$20.30 after Union Gaming Group LLC analysts said China’s government is simplifying visa applications for people to attend meetings, conferences and exhibitions in Macau. Among stocks that fell, steelmaker Citic Pacific Ltd. (267) sank 4.1 percent to HK$14.68 after Standard Chartered Plc cut its rating on the stock to “in-line” from “outperform.” Futures on the Hang Seng Index expiring this month rose 1.1 percent to 21,444. The HSI Volatility Index fell 1.3 percent to 22.75, indicating options traders expect a swing of 6.5 percent in the benchmark index over the next 30 days. To contact the reporter on this story: Kana Nishizawa in Hong Kong at [email protected] To contact the editor responsible for this story: Nick Gentle at [email protected]

2012

ong-kong-stocks-rise-set-for-seventh-weekly-gain-on-u-s-data

EOG Resources Falls on Uneven Production Forecast: Houston Mover

By Edward Klump

2012-02-17T21:19:47Z

http://www.bloomberg.com/news/2012-02-17/eog-resources-falls-on-uneven-production-forecast-houston-mover.html

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EOG Resources Inc. (EOG) , the third- largest U.S. independent oil and natural-gas producer by market value, declined as the company warned of “lumpiness” in its production growth after fourth-quarter profit more than doubled. EOG fell 2.8 percent to $114.35 at the close in New York , the biggest drop in more than two months. EOG’s production growth in the first and second quarter may not be strong sequentially, Chief Executive Officer Mark Papa said on a conference call today. The “lumpiness” may occur because of drilling schedules, maintenance at processing plants and asset sales, Papa said. Some investors are focusing on the fact that most of the company’s growth is expected to occur in the second half of this year, Leo Mariani , an analyst at RBC Capital Markets in Austin, Texas , said in a telephone interview today. Investors should instead consider the 78 percent boost of possible recoverable reserves in the Eagle Ford Shale in Texas, said Mariani, who has an “outperform” rating on EOG shares and doesn’t own any. EOG may be able to recover the equivalent of 1.6 billion barrels of oil from the Eagle Ford, higher than a previous estimate of 900 million barrels, the Houston-based company said in a statement yesterday. The assessment is based on data from well production and higher output expected from more closely spaced wells, EOG said. Total Output Grows Total output is expected to climb 5.5 percent this year, less than 2011’s 9.4 percent increase, according to the statement. The company is planning to sell $1.2 billion of assets this year and forecast that North American gas output will fall 11 percent. Output of petroleum liquids, such as crude, is expected to rise 30 percent in 2012. EOG’s fourth-quarter net income climbed to $120.7 million, or 45 cents a share, from $53.7 million, or 21 cents, a year earlier. Excluding certain gains and losses, per-share profit was 28 cents more than the 87-cent average of 29 analysts’ estimates compiled by Bloomberg. Anadarko Petroleum Corp. and Apache Corp. are the largest U.S. independent producers by market value. Such companies focus on oil and gas exploration. To contact the reporter on this story: Edward Klump in Houston at [email protected] To contact the editor responsible for this story: Susan Warren at [email protected]

2012

eog-resources-falls-on-uneven-production-forecast-houston-mover

Uganda Keeps Coffee-Output Target Amid Disease, Climate Change

By William Davison

2012-02-17T06:11:28Z

http://www.bloomberg.com/news/2012-02-17/uganda-keeps-coffee-output-target-amid-disease-climate-change.html

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Uganda , Africa’s biggest coffee exporter, is maintaining its target to boost production to 4.5 million bags by 2015 even as it faces challenges from rising temperatures and coffee-wilt disease, an industry body said. The East African nation plans to begin planting seven strains of robusta-variety trees that are resistant to coffee wilt, while climate change will partly be combated by irrigation programs, said Edmund Kananura Kyerere, quality and regulatory manager at the Uganda Coffee Development Authority. “We are still targeting increased production,” Kyerere said in an interview at the African Fine Coffee Conference in Addis Ababa , the Ethiopian capital, yesterday. “The target is still 4.5 million bags.” Uganda exported 3.14 million 60-kilogram (132-pound) bags of coffee in 2011, ranking the country as the world’s ninth- biggest shipper of the beans, according to data on the International Coffee Organization ’s website. Robusta beans, which are used in espressos and instant drinks, account for about 85 percent of the nation’s annual production, according to the authority. Output in Uganda has declined from 4.4 million bags in 1996-97 partly because of damage caused by coffee-wilt disease. The fungus that predominantly affects the robusta variety of coffee was first detected in Uganda in 1993 and destroyed about 150 million trees, according to the UCDA. Uganda hopes to plant 200 million trees resistant to the disease “within 10 years,” Kyerere said. The authority is campaigning to change the “negative image” of coffee among Ugandans, he said. The annual increase in domestic consumption may double to 4 percent next year. “There are a lot of cafes coming up,” said Kyerere. Robusta coffee futures have risen 20 percent so far this year and traded 1.1 percent higher at $2,167 a metric ton on the NYSE Liffe exchange in New York yesterday. To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at [email protected] . To contact the editor responsible for this story: Paul Richardson in Nairobi at [email protected] .

2012

uganda-keeps-coffee-output-target-amid-disease-climate-change

Merkel Confident of Greek Aid Accord Next Week After Monti-Papademos Talks

By Tony Czuczka

2012-02-17T14:15:09Z

http://www.bloomberg.com/news/2012-02-17/merkel-monti-papademos-confident-on-greek-accord-by-monday-germany-says.html

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German Chancellor Angela Merkel , Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos discussed efforts to secure a second bailout for Greece and are confident that euro-area finance ministers will “find a solution for open questions” on Feb. 20, Steffen Seibert, Merkel’s chief spokesman, said in a statement. The three leaders held a conference call around noon today, Seibert said in the e-mailed statement. To contact the editor responsible for this story: Tony Czuczka at [email protected]

2012

erkel-monti-papademos-confident-on-greek-accord-by-monday-germany-says

Record $6 Trillion of Fake U.S. Bonds Seized

By Elisa Martinuzzi

2012-02-17T18:01:38Z

http://www.bloomberg.com/news/2012-02-17/italy-police-seize-6-trillion-of-fake-u-s-treasury-bonds-in-switzerland.html

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Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt. The bonds were found hidden in makeshift compartments of three safety deposit boxes in Zurich, the prosecutors from the southern city of Potenza said in an e-mailed statement. The Italian authorities arrested eight people in connection with the probe, dubbed “Operation Vulcanica,” the prosecutors said. The U.S. embassy in Rome has examined the securities dated 1934, which had a nominal value of $1 billion apiece, they said in the statement. “Thanks to Italian authorities for the seizure of fictitious bonds for $6 trillion,” the embassy said in a message on Twitter. The financial fraud uncovered by the Italian prosecutors in Potenza includes two checks issued through HSBC Holdings Plc (HSBA) in London for 205,000 pounds ($325,000), checks that weren’t backed by available funds, the prosecutors said. As part of the probe, fake bonds for $2 billion were also seized in Rome. The individuals involved were planning to buy plutonium from Nigerian sources, according to phone conversations monitored by the police. The fraud posed “severe threats” to international financial stability, the prosecutors said in the statement. HSBC spokesman Patrick Humphris in London declined to comment when contacted by telephone. The U.S. Secret Service assisted the Italian authorities, spokesman Edwin Donovan said. Money Laundering Creating fake Treasuries is a “common scam, especially in Italy ,” he said. The tipoff was the “astronomical” face value of each bond, he said. Fake bonds in high denominations are more common in Europe , where people are less familiar with the face value of U.S. Treasury bonds than in the U.S., he said. Zurich’s public prosecutor’s office provided material to their Italian counterparts in Potenza in 2011, according to Corinne Bouvard, a spokeswoman for the senior public prosecutor’s office of the canton of Zurich. The Swiss part of the investigation ended on July 22, she said. The Italian investigation initially focused on a Sicilian who was living in Potenza and was “already known for money laundering and exporting currency abroad,” according to the statement from the Potenza prosecutor’s office. Phony U.S. securities have been seized in Italy before and there were at least three cases in 2009. Italian police seized phony U.S. Treasury bonds with a face value of $116 billion in August of 2009 and $134 billion of similar securities in June of that year. The U.S. Secret Service averages about 100 cases a year related to bonds and other fictitious instruments. To contact the reporter on this story: Elisa Martinuzzi in Milan at [email protected] To contact the editor responsible for this story: [email protected]

2012

italy-police-seize-6-trillion-of-fake-u-s-treasury-bonds-in-switzerland

Dutch Prince Friso Is in Critical Condition After Avalanche While Skiing

By Martijn van der Starre and Boris Groendahl

2012-02-17T18:47:17Z

http://www.bloomberg.com/news/2012-02-17/dutch-prince-in-critical-condition-after-avalanche-while-skiing.html

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Friso van Oranje, the second son of Queen Beatrix of the Netherlands, is in critical condition in an Austrian hospital after being buried in an avalanche while skiing, the Dutch Government Information Service said. Friso, 43, was admitted to the intensive care unit of the hospital in Innsbruck, Austria , where he is “not out of danger of death,” the information service in The Hague said. Doctors won’t be able to give a prognosis for several days, it said. The prince was skiing off-piste with another person without a guide and triggered the avalanche, according to Hermann Fercher, tourism director at Lech, the ski resort in the western Austrian province of Vorarlberg where the Dutch royal family regularly spends vacations. “Only the prince was buried, and he was rescued within 20 minutes,” Fercher said by telephone today. An elevated avalanche risk of four on a scale of five was in effect in the region today, Fercher said. Friso was recovered by the Lech mountain rescue service and volunteers with the help of avalanche beacons and was helicoptered to Innsbruck. Friso , the younger brother of Crown Prince Willem- Alexander, is chief financial officer at Urenco Ltd., a London- based uranium enrichment company. He gave up his claim to the throne in 2003 by deciding to marry Mabel Wisse Smit without parliament’s permission. Wisse Smit had provided incomplete information to the government during a background check about her past relationship with the late Klaas Bruinsma, the former head of a Dutch criminal organization. Family Members Present Queen Beatrix and Mabel joined Friso in the hospital, the Dutch government’s information service said. Willem-Alexander and Friso’s younger brother Constantijn are on their way to Innsbruck with their families , Dutch newswire ANP reported. Snowfall and strong winds have raised the avalanche risk in many parts of the Austrian Alps, where two skiers died in an avalanche yesterday, according to the Austria Press Agency. Lech and neighboring Zuers were cut off overnight because of avalanche risk before roads were reopened this morning. The rail tunnel through the Arlberg mountain range remained closed until the evening. Friso graduated in aeronautical engineering from the University of Delft and in economics from Erasmus University in Rotterdam, according to Urenco’s website. He joined the Amsterdam office of McKinsey & Co. in 1995 and moved to Goldman Sachs Group Inc. (GS) ’s investment banking division in 1998, where he worked until 2003. Friso has been involved as an investor in technology companies and joined his current employer last year. To contact the reporters on this story: Martijn van der Starre in Amsterdam at [email protected] ; Boris Groendahl in Vienna at [email protected] To contact the editors responsible for this story: Mariajose Vera at [email protected] ; Frank Connelly at [email protected]

2012

dutch-prince-in-critical-condition-after-avalanche-while-skiing

Wheat Futures Advance for Second Day as Egypt Buys From U.S.; Corn Gains

By Tony C. Dreibus and Luzi Ann Javier

2012-02-17T13:49:47Z

http://www.bloomberg.com/news/2012-02-17/wheat-advances-for-second-day-as-egypt-buys-from-u-s-corn-soybeans-gain.html

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Wheat rose after Egypt bought from U.S. inventories and corn gained on a Department of Agriculture report that showed overseas sales jumped last week. Soybeans also rose. Egypt bought 180,000 metric tons of U.S. wheat at a tender yesterday, said Nomani Nomani, vice chairman of the General Authority for Supply Commodities. That added to the 55,000 tons bought from the U.S. on Feb. 11. U.S. corn sales in the week through Feb. 9 totaled 1 million tons, up 41 percent from the prior week, USDA data show. “The weekly U.S. export figures published yesterday by the U.S. Department of Agriculture are also providing tailwind” for prices, said Carsten Fritsch , an analyst at Commerzbank AG in Frankfurt , in a report today. “The brightening of sentiment on the financial markets is also giving buoyancy to prices of grains and oilseeds.” Wheat for May delivery gained 1.3 percent to $6.435 a bushel by 1:35 p.m. London time on the Chicago Board of Trade, taking gains for the most-active contract to 2.1 percent this week. Milling wheat for May delivery gained 1.2 percent to 208.50 euros ($274.76) a ton on NYSE Liffe in Paris. Corn for May delivery climbed 0.8 percent to $6.4475 a bushel in Chicago, taking gains for the most-active contract to 2.1 percent this week. Soybeans for May-delivery rose 0.9 percent to $12.765 a bushel. The most-active contract is set for a 3.9 percent gain this week, the biggest since the five days ended Oct. 14. Argentina’s soybean harvest may reach 43.5 million tons to 45 million tons, the Agriculture Ministry said yesterday. That compares with a 48 million-ton forecast by the U.S. Department of Agriculture on Feb. 9. “Recent developments in the soybean market have so far buttressed” the bullish view on the oilseed in 2012, Abah Ofon , an analyst Standard Chartered Plc, said in an e-mail. To contact the reporter on this story: Luzi Ann Javier in Singapore at [email protected] Tony C. Dreibus in London at [email protected] To contact the editor responsible for this story: James Poole at [email protected]

2012

wheat-advances-for-second-day-as-egypt-buys-from-u-s-corn-soybeans-gain

Gilts Decline for Second Day After U.K. Retail Sales Unexpectedly Increase

By Emma Charlton

2012-02-17T16:39:46Z

http://www.bloomberg.com/news/2012-02-17/pound-climbs-extending-weekly-advance-as-retail-sales-unexpectedly-rise.html

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Gilts declined for a second day after a government report showed U.K. retail sales unexpectedly increased in January, fueling optimism that the economy will avoid a recession. Sterling strengthened to a three-month high against the yen as the data followed reports this month showing manufacturing returned to growth in January and an expansion in services accelerated. The pound headed for a weekly advance against the euro and the dollar after Bank of England Governor Mervyn King said this week the economy should “gradually” recover this year. U.K. stocks rose for the first time in four days. “There’s a two-fold pressure on gilts today,” said Marc Ostwald , a strategist at Monument Securities Ltd. in London. “The general positive tone in markets, with equities rising, and the good retail sales data.” The 10-year gilt yield climbed five basis points to 2.18 percent at 4:23 p.m. London time. The 3.75 percent bond due in September 2021 fell 0.445, or 4.45 pounds per 1,000-pound ($1,581) face amount, to 113.42. Retail sales including fuel climbed 0.9 percent from December, when they increased 0.6 percent, the Office for National Statistics said in London . Economists forecast a 0.3 percent decline, according to a Bloomberg News survey. The FTSE 100 Index of shares climbed 0.3 percent, extending this week’s gain to 0.9 percent. The pound rose 0.6 percent to 125.43 yen after climbing to 125.71, the strongest level since Nov. 7. The currency was little changed at $1.5807 having risen 0.3 percent this week. Sterling was also little changed at 83.16 pence per euro. ‘Helped the Pound’ “The retail sales data helped the pound, it was surprisingly good,” said Steven Barrow , head of Group of 10 research at Standard Bank Plc in London. “The numbers look genuinely good and may be something that helps the momentum of sterling. It makes me a little bit more positive that growth in the first quarter won’t fall, avoiding a technical recession.” Sterling has gained 0.5 percent this week, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies, trimming its decline this year to 0.8 percent. The pound also advanced this week after the Bank of England revised up its inflation forecasts on Feb. 15, prompting speculation that it won’t expand its bond-buying program. The central bank kept its benchmark interest rate at a record low 0.5 percent and raised its asset-purchase target by 50 billion pounds to 325 billion pounds on Feb. 9 to underpin the economy. Gilts have lost of 1.8 percent this year, after returning almost 17 percent in 2011, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German debt and U.S. Treasuries both lost 0.4 percent in 2012, the indexes show. To contact the reporter on this story: Emma Charlton in London at [email protected] To contact the editor responsible for this story: Daniel Tilles at [email protected]

2012

pound-climbs-extending-weekly-advance-as-retail-sales-unexpectedly-rise

Ghana to Use Next Millennium Challenge Funding on Energy

By Ekow Dontoh

2012-02-17T10:15:18Z

http://www.bloomberg.com/news/2012-02-17/ghana-to-use-next-millennium-challenge-funding-on-energy.html

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Ghana, West Africa’s second-biggest economy, plans to use the second tranche of funding from the U.S. Millennium Challenge Corp. to boost investments in energy production. “We are looking at total energy supply , from gas, electricity, solar to wind energy,” Martin Eson-Benjamin, chief executive officer of the Millennium Development Authority, the aid agency’s local unit, said by phone from Accra, the capital, yesterday. Ghana’s first funding tranche, worth $547 million, ended this week with the inauguration of a 14-kilometer (8.7-mile) highway in the city by President John Atta Mills. Funds were used for other infrastructure and agriculture projects in the world’s second-biggest cocoa producer. Ghana plans to boost electricity production to 3,300 megawatts by the end of 2013 from 1,800 megawatts in 2009, Mills said yesterday. Studies are being conducted to decide on new energy projects and a proposal will be sent to the U.S. agency, which agreed on Ghana ’s second deal in January 2011, said Eson- Benjamin. The amount will be “determined based on studies that will be conducted,” said Daniel Yohannes, chief executive officer of the MCC, in an interview in capital, Accra, Feb. 14. Africa accounts for about 70 percent of the corporation’s total funding of $5.2 billion, with 11 countries at various stages of completion of their funding plans, he said. To contact the reporter on this story: Ekow Dontoh in Accra at [email protected] To contact the editor responsible for this story: Emily Bowers at [email protected]

2012

ghana-to-use-next-millennium-challenge-funding-on-energy

Indonesian Rupiah Gains on U.S. Economic Data, Greece Optimism

By Yudith Ho and Lilian Karunungan

2012-02-17T08:39:11Z

http://www.bloomberg.com/news/2012-02-17/indonesian-rupiah-gains-on-u-s-economic-data-greece-optimism.html

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Indonesia’s rupiah rose for the first time in four days after U.S. reports added to signs of a recovery in the world’s biggest economy and optimism increased that Greece will secure a second bailout. Gains in the currency may be limited after Bank Indonesia Governor Darmin Nasution said on Feb. 10 that authorities have been intervening in the currency and bond markets to curb volatility. The MSCI Asia Pacific Index (MXAP) of shares had a ninth weekly gain, equal to the longest winning streaks since it was introduced in 1988. Jobless claims in the U.S. fell to a four- year low and the Federal Reserve Bank of Philadelphia’s economic index beat economist estimates, data showed yesterday. “All the other regional currencies are picking up and the rupiah is moving in the same direction,” said Artanavaro Gasali, a Jakarta-based trader at PT Bank ICBC Indonesia. “It should stay somewhere within 8,900 to 9,000 in the coming week, because the central bank is keeping it in a range.” The rupiah appreciated 0.35 percent to 9,058 per dollar as of 3:36 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency fell 0.3 percent this week. European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the European Central Bank to plug a new financing gap in the second bailout program for Athens, two people familiar with the discussions said. U.S. jobless claims dropped by 13,000 in the week ended Feb. 11 to 348,000, less than the most optimistic estimate of 45 economists surveyed by Bloomberg News, Labor Department figures showed yesterday. The yield on the government’s 7 percent bond due May 2022 climbed eight basis points, or 0.08 percentage point, to 5.23 percent this week, according to midday prices from the Inter Dealer Market Association. The rate increased one basis point today. To contact the reporters on this story: Yudith Ho in Singapore at [email protected] ; Lilian Karunungan in Singapore at [email protected] . To contact the editor responsible for this story: James Regan at [email protected] .

2012

indonesian-rupiah-gains-on-u-s-economic-data-greece-optimis

Goldman Sachs’s Blankfein May Step Down This Year, Fortune Says

By Michael J. Moore

2012-02-17T22:34:19Z

http://www.bloomberg.com/news/2012-02-17/goldman-sachs-s-blankfein-may-step-down-this-year-fortune-says.html

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Lloyd Blankfein , chief executive officer of Goldman Sachs Group Inc. (GS) since 2006, may step down as early as the U.S. summer, Fortune Magazine reported today, citing an unnamed executive at the firm. Gary Cohn, president and chief operating officer, is the board’s top candidate to replace Blankfein, according to the report. Blankfein’s departure isn’t certain, Fortune wrote. David Wells, a spokesman for the New York-based firm, declined to comment. Goldman Sachs’s 2011 earnings dropped 47 percent to the lowest level since 2008 on a second consecutive annual decline in fixed-income trading revenue. Blankfein has sought to repair the firm’s reputation after the Securities and Exchange Commission and a Senate subcommittee accused the company of misleading buyers of mortgage-linked investments. J. Michael Evans , a vice chairman who runs Goldman Sachs business in growth markets, has tried to position himself to replace Blankfein, Fortune reported. He hasn’t won the support of the board, Fortune said. Goldman Sachs shares have jumped 28 percent in 2012 after plunging 46 percent last year. To contact the reporter on this story: Michael J. Moore in New York at [email protected] To contact the editor responsible for this story: David Scheer at [email protected]

2012

goldman-sachs-s-blankfein-may-step-down-this-year-fortune-says

General Mills Cuts Full-Year Profit Forecast Amid Weak Demand

By James Callan

2012-02-17T13:05:47Z

http://www.bloomberg.com/news/2012-02-17/general-mills-cuts-full-year-profit-forecast-amid-weak-demand.html

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General Mills Inc. (GIS) , the maker of Cheerios cereal and Yoplait yogurt, reduced its earnings forecast for this year, citing “weak” demand in the U.S. Profit for 2012 will be $2.53 a share to $2.55 a share, the Minneapolis-based company said today in a statement. Previously, General Mills predicted $2.59 a share to $2.61 a share. Analysts projected $2.60, the average of estimates compiled by Bloomberg. General Mills said “weak volume performance” across U.S. retail food categories in December and January hurt results in its fiscal third quarter. Yesterday, J.M. Smucker Co. (SJM) , the maker of its namesake jams, said its full-year profit may be less than previously forecast because of lower consumer demand. General Mills fell 4.5 percent to $38 at 7:55 a.m. in New York . The shares rose 14 percent last year. To contact the reporter on this story: James Callan in New York at [email protected] To contact the editor responsible for this story: Robin Ajello at [email protected]

2012

general-mills-cuts-full-year-profit-forecast-amid-weak-demand

Los Angeles Gasoline Tumbles After Valero Starts Refinery Units

By Lynn Doan

2012-02-17T21:44:52Z

http://www.bloomberg.com/news/2012-02-17/los-angeles-gasoline-tumbles-after-valero-starts-refinery-units.html

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California-blend gasoline in Los Angeles tumbled by the most in three months after Valero Energy Corp. (VLO) started a crude unit and a coker at the Wilmington refinery in Southern California following maintenance. Carbob in Los Angeles (MOGLDB85) fell for the first time in four days, by 6 cents to a premium of 30 cents a gallon against gasoline futures traded on the New York Mercantile Exchange at 4:16 p.m. East Coast time, according to data compiled by Bloomberg. That’s the largest drop for the fuel since Nov. 15. Valero’s 135,000-barrel-a-day Wilmington (VAWICRUD) refinery has started the crude and coker units following a maintenance turnaround that began last month and is increasing rates, said Bill Day , a Valero spokesman at the company’s headquarters in San Antonio . “Other units at the refinery have not begun restarting yet,” Day said in an e-mail. The premium for Carbob in San Francisco (MOGSD85P) also fell 6 cents to 24 cents a gallon above gasoline futures, the lowest level for the fuel in four days. Conventional, 87-octane gasoline in Portland, Oregon (MOGHD87P) , slipped 1.5 cents to a premium of 6.5 cents versus gasoline futures. The fuel jumped 12.5 cents yesterday to the highest level against futures since Jan. 5. California-blend, or CARB, diesel in San Francisco strengthened 0.63 cent to a premium of 3.13 cents against Nymex heating oil futures. Houston-based ConocoPhillips (COP) may cut diesel output at the 128,000-barrel-a-day Rodeo (CPACCRUD) refinery in Northern California for two and a half weeks while working on a hydrogen plant, according to Contra Costa County regulators. Los Angeles Carbob (DIEILCAD) was unchanged at a premium of 4.5 cents to Nymex heating oil futures. To contact the reporter on this story: Lynn Doan in San Francisco at [email protected] To contact the editor responsible for this story: Dan Stets at [email protected]

2012

os-angeles-gasoline-tumbles-after-valero-starts-refinery-units

Tullow Seen Beating Peers With $30 Billion Africa Find: Energy

By Eduard Gismatullin

2012-02-17T17:24:33Z

http://www.bloomberg.com/news/2012-02-17/tullow-seen-beating-peers-with-30-billion-africa-find-energy.html Tullow Oil Plc (TLW) , the U.K. explorer that unlocked billions of barrels in frontiers from Uganda to French Guiana, wants to repeat those landmark finds drilling onshore East Africa as peers target natural gas offshore. With Canadian partner Africa Oil Corp. , Tullow is aiming for at least 300 million barrels of oil worth $30 billion or more with its first two sites in an underdeveloped area stretching from Kenya to Ethiopia , a plot almost the size of England . Shallow wells for seismic surveys have shown so-called oil seeps

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probably one of the better places to try frontier opportunity,” said Jason Kenney, an analyst at Banco Santander SA in Edinburgh. Tullow leapfrogged peers by finding some 4 billion barrels in French Guiana and Ghana since 2007, and is poised to complete the sale of two-thirds of its Uganda discovery to Total SA (FP) and Cnooc Ltd. (883) for $2.9 billion. Tullow’s ability to find new fields has made it the U.K.’s most-expensive oil explorer, based on the price that investors are willing to pay for a share of its earnings. The shares rose 2 percent to a record 1,566 pence in London today. The Kenyan prospect has similar geology to Uganda, and oil prices are currently at least 7 times higher than benchmark U.S. natural gas, based on their energy content. While Eni SpA (ENI) of Rome and Anadarko Petroleum Corp. (APC) , based in The Woodlands, Texas , led exploration off Africa’s east coast that yielded the biggest gas finds in a decade, Tullow Exploration Director Angus McCoss said the company has “made a very deliberate decision to stay focused on oil.” ‘Magic Opportunity’ The strategy evolved since the Uganda find and counters the industry view that the local geology is more likely to yield gas, McCoss said. “That’s the magic,” McCoss said. “That’s how the industry got it so wrong and that was our opportunity. We quite like these deeply entrenched notions the others have, and we challenge them.” Tullow has outperformed both the benchmark FTSE All-Share Index and the 19-member oil and gas subindex in the last 12 months. Thirty-five analysts out of 38 surveyed by Bloomberg recommend buying or holding the shares. Investors are endorsing its strategy. They’re paying about 33 times expected profit for Tullow shares, the highest price to earnings ratio on the 19-member FTSE All-Share Oil & Gas Producers Index. Tullow had a slow start this year, gaining 9.5 percent, ranking eighth out of 19 stocks behind leader Afren Plc. (AFR) Peers Follow Tullow’s find in Uganda is attracting other explorers to the region. About 14 companies including Anadarko, Vancouver- based Vanoil Energy Ltd. (VEL) and Afren have signed 26 production- sharing agreements with Kenya, the country’s Petroleum Commissioner Martin Heya said in August. Kenya has no proven oil reserves. Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) found gas in the Anza Basin in 1976. Tanzania to the south produces gas from two offshore deposits for domestic power generation, and neighboring South Sudan is sub-Saharan Africa’s third-biggest oil producer, after Angola and Nigeria. “The early indications we have in the rift basin is that they are generally oil prone,” said Africa Oil Chief Executive Officer Keith Hill. Royal Dutch Shell Plc (RDSA) and Amoco Corp., now part of BP Plc (BP/) , drilled wells in Kenya and recovered oil in the early 1990s, according to Hill. Cradle of Mankind Tullow and Africa Oil hired China ’s BGP Inc. to survey the South Omo Block in the Omo River Delta in Ethiopia, the area where Richard Leakey and a team of paleontologists discovered in 1967 the oldest remains of Homo sapiens known to science. The partners last month started drilling the Ngamia-1 well in Kenya’s Block 10BB , part of a plan for two wells in Kenya and one in Ethiopia this year. It will take at least 60 days to drill and the rig will then move to spud the Paipai-1 well in Block 10A in the second quarter. It will be “a multi-year exploration program,” Tullow Chief Operating Officer Paul McDade said. “There should be some oil,” said Oswald Clint , an analyst at Sanford C. Bernstein & Co. in London. “It’s tough to say until you drill. Nothing has been discovered yet. It’s a very underexplored region.” About 500 exploratory wells have been drilled in East Africa , according to data from U.K.-based Afren, which has exploration licenses in Kenya, Ethiopia and Tanzania. That compares with almost 15,000 in the west of the continent and 20,000 in north and central Africa. ‘Oily Area’ The geological formations Tullow is exploring are formed by tectonic forces pulling apart, trying to split an old plate into two and creating rifts in the earth’s surface. The company is focusing on the intersection of a rift that runs diagonally from South Sudan into Kenya and a North-South rift that resembles the Lake Albert formation to the west. “We are particularly interested in the intersection of the two geological trends,” McCoss said. “There are interesting parallels” with Uganda. Afren is betting on the Gondwanaland theory, that oil can be found in places including Kenya and Ethiopia where the ancient mega-continent broke apart 200 million years ago. “Geologically it’s a very oily area,” CEO Osman Shahenshah said. Tullow seemed to prove the Gondwanaland hypothesis last year with a discovery in the new frontier off French Guiana, which mirrors oil-rich West Africa across the Atlantic. Premier Oil Plc (PMO) and partners including BG Group Plc (BG/) and Cove Energy Plc (COV) are exploring off Kenya and hoping that gas discoveries made to the south in Tanzania and Mozambique are stretching into their waters. In Kenyan “deeper-water offshore we are convinced it will be gas if it works,” said Premier CEO Simon Lockett. “But in the shallow section there is a potential for oil.” To contact the reporter on this story: Eduard Gismatullin in London at [email protected] To contact the editor responsible for this story: Will Kennedy at [email protected]

2012

ullow-seen-beating-peers-with-30-billion-africa-find-energy

India’s 10-Year Bonds Set for Second Weekly Drop on Cash Squeeze

By V. Ramakrishnan

2012-02-17T05:11:24Z

http://www.bloomberg.com/news/2012-02-17/india-s-10-year-bonds-set-for-second-weekly-drop-on-cash-squeeze.html

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India ’s 10-year bonds headed for a second weekly decline on speculation fewer funds in the banking system will reduce demand for debt. Lenders borrowed an average 1.3 trillion rupees ($26.4 billion) a day from the central bank this year to meet cash shortages, more than double the 600 billion rupees “comfort zone” indicated by the Reserve Bank of India in its Jan. 24 policy statement. A rise in oil prices to near a six-week high may also pressure Indian refiners to increase fuel costs, according to Paresh Nayar, head of money-market and currency trading at FirstRand Bank. “People are concerned about the liquidity shortage,” Mumbai-based Nayar said. “Inflation worries may resurface with oil prices inching up again.” The yield on the 8.79 percent notes due November 2021 rose one basis point, or 0.01 percentage point, this week and today to 8.21 percent as of 9:55 a.m. in Mumbai, according to the central bank’s trading system. The finance ministry will sell 120 billion rupees of government bonds due in 2018, 2021 and 2041 today. Crude for March delivery was at $102.45 a barrel on the New York Mercantile Exchange after closing at $102.31 yesterday. India imports about 80 percent of its oil needs. India’s inflation slowed to the lowest level in 26 months in January. The wholesale-price index rose 6.55 percent, compared with 7.47 percent in December, according to official data. The rate held above 9 percent in the previous 12 months. The cost of one-year interest-rate swaps, or derivative contracts used to guard against fluctuations in funding costs, fell five basis points this week to 8.08 percent, according to data compiled by Bloomberg. To contact the reporter on this story: V. Ramakrishnan in Mumbai at [email protected] To contact the editor responsible for this story: James Regan at [email protected] .

2012

india-s-10-year-bonds-set-for-second-weekly-drop-on-cash-squeeze

Moroccan Immigrant Charged With Attempted Suicide Bombing at U.S. Capitol

By Tom Schoenberg

2012-02-18T05:01:01Z

http://www.bloomberg.com/news/2012-02-17/moroccan-immigrant-charged-with-attempted-suicide-bombing-at-u-s-capitol.html

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A Moroccan immigrant was charged with attempting to use a weapon of mass destruction in a suicide bombing at the U.S. Capitol. Amine El Khalifi, 29, of Alexandria, Virginia , was arrested yesterday in a parking garage near the Capitol after meeting with an undercover agent posing as a member of an armed extremist group, according to an affidavit filed with a criminal complaint in federal court in Alexandria. El Khalifi was taken into custody as he began walking toward the Capitol carrying a MAC-10 automatic weapon and wearing a vest containing what he believed to be a functioning bomb, according to the affidavit by Steven Hersem, an agent of the Federal Bureau of Investigation . The weapons had been made inoperable by investigators, prosecutors said. “El Khalifi allegedly believed he was working with al- Qaeda and devised the plot, the targets and the methods on his own,” U.S. Attorney Neil MacBride of Alexandria said in an e- mailed statement. He faces a maximum sentence of life in prison if convicted. At a hearing yesterday in Alexandria, El Khalifi was ordered to be held pending a preliminary and detention hearing scheduled for Feb. 22, according to Peter Carr , a spokesman for MacBride. Senate Majority Leader Harry Reid , a Nevada Democrat, told reporters he wasn’t aware of the arrest. House and Senate members were at the Capitol yesterday to pass an extension of a payroll tax cut. ‘Suspected Terrorist’ “Thanks to the hard work of the FBI and the U.S. Capitol Police a suspected terrorist was thwarted in his attempt to attack the U.S. Capitol today,” House Majority Leader Eric Cantor , Republican of Virginia, said yesterday in an e-mailed statement. The arrest resulted from an undercover terrorism investigation during which El Khalifi was “closely monitored by law enforcement,” according to a Justice Department statement. El Khalifi entered the U.S. in June 1999 on a tourist visa that expired later that year. He has lived in the U.S. illegally since then, according to the affadavit. In January 2011, the FBI learned through a confidential informant that El Khalifi met with other individuals at a residence in Arlington, Virginia, where one person brought out firearms, including an AK-47 assault rifle. That person said the “war on terrorism” was a “war on Muslims” and that the group needed to be ready for war, according to the affidavit. El Khalifi allegedly expressed agreement with those statements. Al-Qaeda Operative In December, El Khalifi traveled to Baltimore with an individual known as “Hussien,” who claimed to be an al-Qaeda operative, to meet someone whom he believed was associated with an armed extremist group. That person, who went by “Yusuf,” was an undercover law enforcement officer, FBI agent Hersem said in the affidavit. El Khalifi allegedly told Hussien and Yusuf on at least three occasions that he wanted to attack various sites, including an office building used by the U.S. military and a synagogue. He also said he was interested in an operation in which he would use a gun “and kill people face to face,” according to the affidavit. On Dec. 15, he allegedly told Hussien he’d found a restaurant in Washington that he wanted to bomb because it was next to a government building, according to the affidavit. “It was El Khalifi’s understanding that his attack on the restaurant would be part of an al-Qaeda operation that would include both his restaurant bombing and the attack against a military installation,” Hersem wrote. Test Explosives On Jan. 15, El Khalifi allegedly drove to a West Virginia quarry with Hussien to meet with Yusuf and test explosives. During the drive, the suspect told Hussien that he wanted to conduct a suicide bombing on the Capitol and that he would be happy killing 30 people, according to the affidavit. Later, he said “he wanted a bigger bomb to do more damage, and asked if the explosives he intended to use could destroy the entire building,” according to the affidavit. El Khalifi and the informant conducted surveillance on the Capitol and discussed the door he would use for the attack, according to the affadavit. “El Khalifi stated that he would shoot the police officer stationed at the door to ensure that he would be able to detonate the bomb inside the building,” Hersem wrote. The case is U.S. v. El Khalifi, 12-mj-00087, U.S. District Court, Eastern District of Virginia (Alexandria). To contact the reporter on this story: Tom Schoenberg in Washington at [email protected] . To contact the editor responsible for this story: Michael Hytha at [email protected] .

2012

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U.S. Companies Reporting Lower Quarterly EPS, Feb. 17

By Wendy Soong

2012-02-17T21:26:43Z

http://www.bloomberg.com/news/2012-02-17/u-s-companies-reporting-lower-quarterly-eps-feb-17.html

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The following U.S. companies reported lower earnings per share for their latest quarter (end date of the quarter is noted in the last column). Earnings estimates provided by Bloomberg. To contact the reporter on this story: Wendy Soong in New York at at [email protected] . To contact the editor responsible for this story: Alex Tanzi at at [email protected]

2012

u-s-companies-reporting-lower-quarterly-eps-feb-17

Canada January Composite Leading Indicators (Text)

By Ilan Kolet

2012-02-17T13:30:01Z

http://www.bloomberg.com/news/2012-02-17/canada-january-composite-leading-indicators-text-.html

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Following is the text of Canada 's leading indicators report from Statistics Canada . The composite leading index increased 0.7% in January, following an identical gain in the previous month. This was the seventh consecutive increase in the index. The increase was concentrated in manufacturing, housing and services employment, and was offset by declines in durable goods sales and equity prices. Out of the three manufacturing components, two increased. The ratio of shipments to inventories rose for the third straight month as sales strengthened and inventories were depleted, while the average workweek lengthened for the fourth month in a row. However, new orders for durable goods edged down after two monthly gains. Housing, money supply , and services employment components also increased. This was the 10th monthly increase in services employment. Furniture and appliance sales fell; their fifth straight decline. Spending on other durable goods also declined after posting gains since May. The US leading indicator decreased for a second month in a row, while the equity prices were down for the eighth consecutive month. To contact the reporter on this story: Ilan Kolet in Ottawa at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected]

2012

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