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WTI Trades Near One-Week High on U.S. Supply, Mideast

http://www.bloomberg.com/news/2013-08-12/wti-rises-a-third-day-amid-speculation-u-s-stockpiles-shrank.html

West Texas Intermediate crude traded near a one-week high amid forecast that U.S. stockpiles fell and as Middle East unrest curbs exports. Futures rose as much as 1 percent. U.S. crude inventories dropped by 1.55 million barrels last week, according to a Bloomberg News survey before tomorrow’s Energy Department report. Libya’s biggest oil terminal remained shut yesterday after briefly reopening, a port official said. South Sudan is working to avoid halting fuel exports planned by Sudan on Aug. 22, according to a Foreign Ministry spokesman. “It’s the mix of political factors keeping prices up,” said Frank Klumpp, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany. “The last uptick we had was because of seasonal demand, but that will fade and fundamental factors should weigh more until the end of the year.” WTI for September delivery advanced as much as $1.09 to $107.20 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.38 as of 12:52 p.m. London time. The volume of all futures traded was 8 percent above the 100-day average. Prices have climbed 16 percent this year. Brent for September settlement gained 66 cents to $109.63 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $3.26 to WTI, compared with $2.86 yesterday. U.S. crude inventories probably fell as new pipeline capacity helped shrink a glut at Cushing in Oklahoma , the largest U.S. oil hub, the Bloomberg survey showed. That would leave supplies at the lowest level since Jan. 11. All 10 respondents forecast a drop. The American Petroleum Institute in Washington will publish its own data today. U.S. Stockpiles Stockpiles declined 30.8 million barrels from June 21 to Aug. 2 as refineries operated at more than 90 percent of capacity, according to the Energy Information Administration, the Energy Department’s statistical unit. Supplies at Cushing, the delivery point for WTI contracts, have decreased for five consecutive weeks to 39.9 million, the lowest since March 2012. “It’s very hard for inventories to post consistent gains when refineries operate in excess of 90 percent of capacity,” Tom Finlon, the director of Energy Analytics Group LLC in Jupiter, Florida , said yesterday. “We should also see supplies draw out of Cushing because of the new pipeline capacity.” Libyan Ports The Libyan port of Es Sider shut after opening on Aug. 11. It was closed since July 28 amid protests by the Petroleum Facilities Guard, which is pressing for better working conditions. Interruptions at ports and other installations across Libya reduced the country’s oil production to 800,000 barrels a day in July, half the rate of a year earlier, according to a Bloomberg survey of output by members of the Organization of Petroleum Exporting Countries. South Sudan is producing 160,000 barrels a day, Petroleum Minister Stephen Dhieu Dau said on Aug. 9. The nation seceded from Sudan in July 2011 and took three-quarters of the formerly united country’s output of 490,000 barrels a day. In Europe, production of the North Sea Ekofisk grade was curtailed after a gas turbine broke down Aug. 7, Jan Erik Geirmo, a BP spokesman in Stavanger, Norway , said in an e-mail yesterday. The affected fields were producing 8,000 barrels a day, according to estimates by the Norwegian Petroleum Directorate. To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net ; To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

Soybeans Gain on Improved U.S. Exports to China; Wheat Declines

http://www.bloomberg.com/news/2013-08-12/wheat-recovers-from-seven-week-low-before-usda-s-global-outlook.html

Soybeans rallied to a one-week high after China , the world’s largest buyer, made the sixth-biggest purchase ever from the U.S. Wheat fell for a fourth straight session, and corn was little changed. Exporters sold 713,000 metric tons of soybeans to China for delivery in the 12 months starting Sept. 1, the U.S. Department of Agriculture said today. China imported a record 7.2 million tons in July, customs figures show, and the USDA predicts the country will import 69 million tons next year, up from 59 million forecast in the year that ends Sept. 30. “Big Chinese purchases are providing support to the soybean market,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana , said in a telephone interview today. “U.S. soybeans are competitive, and China is buying ahead to lock in import needs.” Soybean futures for delivery in November climbed 1.9 percent to $12.0525 a bushel at 9:48 a.m. on the Chicago Board of Trade, after touching $12.07, the highest since Aug. 2. Prices as of Aug. 9 dropped 16 percent this year, the sixth-largest decline among 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Soybeans also rose on speculation that U.S. production will be smaller than the government predicted in July, Gerlach said. The USDA is scheduled to update its forecasts at noon today in Washington. Traders predicted the USDA will cut its soybean forecast by 1.8 percent to 3.357 billion bushels from 3.42 billion expected in July, a Bloomberg survey showed. Inventories before the 2014 harvest may be cut 11 percent from 295 million bushels anticipated in July, according to a Bloomberg survey Wheat futures for delivery in December fell 0.2 percent to $6.4575 a bushel on the CBOT. On Aug. 9, prices reached $6.435, the lowest for a most-active contract since June 18, 2012. France ’s wheat harvest, the European Union’s biggest, will climb 1.7 percent to 36.1 million tons from 2012, the Agriculture Ministry forecast, raising its outlook from 35.9 million tons a month ago on better-than-expected yields. Corn futures for delivery in December was up 0.1 percent at $4.5375 a bushel in Chicago, after fluctuating between gains and losses. Earlier, the price touched $4.515, the lowest for a most-active contract since September 2010. To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net ; Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

U.S. Regulator Subpoenas Banks Over Long Warehouse Queues

http://www.bloomberg.com/news/2013-08-12/u-s-regulator-subpoenas-banks-over-long-queues-at-warehouses.html

The top U.S. derivatives regulator subpoenaed Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) for documents relating to their warehouses for aluminum and other metals, according to two people with knowledge of the probe. The Commodity Futures Trading Commission has requested documents dating to the start of 2010 about the banks’ commodity warehouses, according to the people, who asked not to be named because the subpoenas are private. Glencore Xstrata Plc, which owns warehousing business Pacorini, also received a subpoena, another person said. MillerCoors LLC, Encore Wire Corp. (WIRE) and other metal users have complained about long queues and artificially high prices at the warehouses, particularly for copper and aluminum. “We’re a market regulator overseeing the commodity futures, swaps markets and have clear authority to police markets for fraud, manipulation and other abuses,” CFTC Chairman Gary Gensler said in response to questions about warehousing at a Senate Banking Committee hearing last month. Dennis Holden, a CFTC spokesman, declined to comment on the subpoenas. Commodities Units The subpoena to Goldman was also sent to its Metro International Trade Services unit, which stores aluminum, copper and other metals as part of the London Metal Exchange system. JPMorgan owns Henry Bath & Son Ltd., a founding member of the LME and a warehouse operator. Glencore, the biggest publicly traded raw-materials supplier, is one of the largest owners of warehouses monitored by the LME as lawmakers and regulators increase scrutiny. Global aluminum costs were inflated by $3 billion in the past year through unfair rules that allow warehouse owners to slow deliveries, Tim Weiner, a global risk manager at Chicago-based brewer MillerCoors, said in written testimony before his July 23 appearance at a U.S. Senate hearing. Senator Sherrod Brown, an Ohio Democrat, said he plans to hold additional congressional hearings on banks’ ownership of mines, pipelines, tankers and warehouses. “It does significant potential damage to the economy,” Brown said July 23. To contact the reporters on this story: Silla Brush in Washington at sbrush@bloomberg.net ; Dawn Kopecki in New York at dkopecki@bloomberg.net To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

Dufner’s Emotionless Showing Leads to First Major Golf Title

http://www.bloomberg.com/news/2013-08-12/dufner-s-emotionless-showing-leads-to-first-major-golf-title.html

Jason Dufner was walking to the fifth tee at Oak Hill Country Club when his ears were blasted by a three-man group of supporters. “Come on Duf,” the trio shouted. “Smile.” Dufner turned slightly to his right and allowed himself a small grin, his teeth barely visible above a small patch of hair growing below his lower lip. It was a major show of emotion for a golfer best known for staring slack-jawed, and for blowing a previous chance at a major championship. The three fans high-fived each other as Dufner sauntered away. By the time he walked off the fifth green about 15 minutes later, Dufner had dropped a two-foot birdie putt to take a lead he would never relinquish en route to winning the PGA Championship, his first title at a Grand Slam tournament. “I come across as a pretty cool customer, I guess,” Dufner, 36, said in a press conference. “But there are definitely some nerves out there. You try to act like it’s not that big a deal, but it is a pretty big deal.” Dufner’s two-shot victory over Jim Furyk in Rochester, New York, yesterday capped a rise to the top of the sport for one of its most outwardly emotionless players. He raised his arms in the air after tapping in his final putt at the 18th hole, yet didn’t break out into a smile for all to see until he hugged his wife of 15 months, 25-year-old Amanda, just off the 18th green. “I think he still may be in a little bit of shock,” she told reporters, insisting her husband is just misunderstood. “He’s a really, really funny guy,” she said. “He’s always trying to have a good time. On the golf course, he’s just there to work. Some people just don’t get him. But some people do.” Bradley’s Hug Keegan Bradley, who defeated Dufner in a playoff two years ago at the PGA Championship in Atlanta, is among those who do. After finishing his round, Bradley was present at the 18th green to hug his friend before Dufner lifted the same 27-pound Wanamaker Trophy that Bradley had hoisted in 2011. “We just sort of bro-hugged,” Dufner said at a news conference, then tapping the silver trophy. “He always jabbed at me a little bit about having one of these in his house. Now I’ve got one, too. It’s pretty neat.” Dufner won his first title in one of golf’s four annual major tournaments on an 89-year-old course where Tiger Woods , a 14-time major champions who finished 40th, has never broken par. British Open champion Phil Mickelson , the world’s No. 2-ranked player behind Woods, finished 22 shots behind Dufner, an Ohio native who now calls Auburn, Alabama , home. Twitter Fame After winning twice on the PGA Tour in 2012, Dufner gained a wider measure of fame in March when a local television reporter snapped a picture of him at the Byron Nelson Championship outside Dallas during a charity appearance at the J. Erik Jonsson Community School. With tousled hair and wearing a red golf shirt, black pants and black shoes, an expressionless Dufner was slumped against a wall alongside a group of children. Staring across the room, Dufner’s hands were tucked under his thighs. After Bradley posted the photo on the social-media website Twitter, “Dufnering” was born. Golfers, other athletes and fans began posting their own versions of the pose, with PGA of America President Ted Bishop doing it this week. “It got some notoriety for maybe something that was probably trying to hurt me a little bit,” Dufner said. “I ran with it and it helped me a lot. I got a lot of fans because of it.” Tobacco Hit Dufner repeatedly stuffed a pinch of smokeless tobacco in the right side of his lower lip through his final round. Only occasionally did he replace the tobacco with a bite-sized energy gel square, the kind that runners use to get through the final miles of a marathon. While Dufner won’t be mistaken for a marathoner as he moves around the course, waving his club like a metronome before each shot, he outlasted several would-be contenders, including Furyk, the 2003 U.S. Open winner, and Sweden ’s Henrik Stenson , who was third. Dufner said afterward that what people see doesn’t always tell the true story. He said his pulse was racing when he was faced with a three-foot par putt on the first hole yesterday. “After I made that, I would say I was pretty flat-lined for most of the day,” the new champion said. Dufner said his calm demeanor is simply a byproduct of the sport he plays for a living. “There are big plays in basketball, home runs in baseball, big plays in football,” he said. “For me, golf is a little bit more boring. I hit it in the fairway or I didn’t; I hit the green or I didn’t. Usually I’m struggling with the putter, so there’s not too much to get excited about with that.” After his loss in Atlanta two years ago, Jason and Amanda made the two-hour drive home to Auburn, stopping for fast-food cheeseburgers. This year, they had other plans. Amanda said the couple would fly home and sip champagne. “My name will always be on this trophy, and nobody can take that away from me,” Dufner said. “I’m really excited about it.” To contact the reporter on this story: Michael Buteau in Rochester, New York at mbuteau@bloomberg.net To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

Sina Posts Surprise Loss as New Services Drive Up Costs

http://www.bloomberg.com/news/2013-08-12/sina-posts-surprise-loss-as-new-services-drive-up-costs.html

Sina Corp. (SINA) , owner of China’s largest Twitter-like service, posted a second-quarter loss on a charge related to an asset sale as it boosted spending on new services on mobile applications to contend with Tencent Holdings Ltd. (700) The net loss was $11.5 million in the three months ended June 30 after taking a $27.1 million charge related to a sale of a stake in its Weibo service to Alibaba Group Holding Ltd., the New York-listed company said in a statement yesterday. Sales rose 20 percent to $157.5 million, beating the $146.1 million average of eight analyst estimates compiled by Bloomberg. Sina boosted spending on mobile development as more of its 536 million Weibo account-holders access the microblogging service from wireless devices. The company sold an 18 percent stake in Weibo to Alibaba for $586 million in April as the companies work to compete with Tencent on social e-commerce. “Revenue was better than expected but a rise in operating costs hurt Sina’s profit,” Ricky Lai, an analyst at Guotai Junan International Holdings Ltd. said by phone. “Working with Alibaba could help improve its financials in the second half and compete with Tencent.” Operating expenses, including costs on sales and marketing, product development and staff, rose 46.9 percent to $102.5 million in the second quarter. Alibaba, China ’s biggest e-commerce company, is allowing shoppers to log on to its Taobao Marketplace using their Sina Weibo accounts, after it disabled sellers’ access to Tencent’s instant messaging app WeChat. The two companies are also developing mobile payment systems, mobile gaming and videos. New Formats “We are going to create new advertising formats or marketing campaign formats for Taobao,” Charles Chao, chairman and chief executive officer of Sina said during an earnings call today. “There’s a bunch of opportunities that we are going to explore, we are working on all these fronts.” The company forecast third-quarter non-GAAP revenue of $176 million to $180 million, including advertising sales of $151 to $153 million. Sina’s ad sales increased 17 percent in the second quarter to $120.6 million, according to the statement. Advertising from the Weibo unit more than tripled to $30 million. Weibo value-added services revenues, which include revenue share from web games and membership fees, grew 186 percent to $7.7 million. To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

Mexico Peso Rises Before Pena Nieto to Release Oil Law Proposal

http://www.bloomberg.com/news/2013-08-12/mexico-peso-rises-before-pena-nieto-to-release-oil-law-proposal.html

Mexico ’s peso headed to its strongest level in three weeks as President Enrique Pena Nieto prepares to present a proposal today for boosting private investment in the energy industry. The currency appreciated 0.4 percent to 12.593 per U.S. dollar at 8:49 a.m. in Mexico City, according to data compiled by Bloomberg. The peso has advanced 2.3 percent this year, the best performance among major currencies tracked by Bloomberg. Pena Nieto is scheduled at 11 a.m. local time to release his plan to open the state-owned oil industry to more private investment in a bid to bolster Mexican growth, which the central bank says may slow to as low as 2 percent this year from 3.9 percent last year. Cesar Camacho, the head of Pena Nieto’s ruling Institutional Revolutionary Party, said in an interview on Aug. 6 that the president will propose changing the constitution to allow production-sharing contracts. “It’s a very significant motor for the country’s growth,” Rafael Camarena , an economist at Grupo Financiero Santander Mexico SAB, said in a telephone interview from Mexico City. Yields on Mexican government peso bonds maturing in 2024 fell four basis points, or 0.04 percentage point, to 5.73 percent, according to data compiled by Bloomberg. To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

SVG to Sell SVG Investment Advisers as NAV Climbs 23%

http://www.bloomberg.com/news/2013-08-12/svg-to-sell-svg-investment-advisers-as-nav-climbs-23-.html

SVG Capital Plc (SVI) , the biggest backer of private-equity firm Permira Advisers LLP, agreed to sell SVG Investment Managers as it posted 23 percent increase in the value of its assets in the first half of the year. Hansa AG, a Basel-based investment company, will buy the unit, which buys minority stakes in publicly traded companies, for an undisclosed sum, London-based SVG said in a statement today. The stock rose as much as 7.2 percent in London trading. Chief Executive Officer Lynn Fordham has been overhauling the investment firm after it was forced to cut its commitment in Permira’s latest fund by half during the financial crisis. SVG has since sought to broaden its range of investments and pledged in February to return 300 million pounds ($464 million) to investors. It also sold a controlling stake in SVG Advisers, its funds-of-private-equity-funds unit, to Aberdeen Asset Management Plc. “We have a portfolio of high-quality assets that continue to report good revenue and earnings growth,” Fordham said in the statement. “We are confident that the high quality management teams at the portfolio companies will continue to deliver growth for investors.” Net asset value a share climbed to 480.4 pence as of June 30 from with 391.2 pence at the end of December, buoyed by the firm’s holdings in German broadcaster ProSiebenSat.1 Media AG and fashion label Hugo Boss AG (BOSS) , according to the statement. The stock climbed 27.9 pence to 418 pence as of 8:07 a.m. in London trading. To contact the reporter on this story: Kiel Porter in London at kporter17@bloomberg.net To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Rebar Advances to Highest in Four Months on China Demand Outlook

http://www.bloomberg.com/news/2013-08-12/rebar-advances-to-highest-in-four-months-on-china-demand-outlook.html

Steel reinforcement-bar futures in Shanghai rose for a ninth day to a four-month high on optimism that demand will pick up in China , the world’s largest producer and consumer. Rebar for January delivery on the Shanghai Futures Exchange climbed as much as 0.5 percent to 3,773 yuan ($617) a metric ton, the highest level for a most-active contract since April 17, and was at 3,766 yuan at 10:56 a.m. local time. ArcelorMittal raised its outlook for China’s steel consumption growth to 5.8 percent for this year, CEO Lakshmi Niwas Mittal said in an earnings call last week. Iron ore for immediate delivery rose for a fourth day on Aug. 7, adding 1.3 percent to $133.10 a dry ton, the highest since April 30, according to a price index compiled by The Steel Index Ltd. “Prices remain strong after last week’s rally because demand is seen improving in September and October,” said Wu Jingchen, an analyst at Capital Futures Co. “Market sentiment is very bullish now.” Rebar inventory tracked by Shanghai’s Steelhome Information Technology Co. fell for an 18th week on Aug. 9, declining 1.9 percent to 6.67 million tons, the lowest since January. The average spot price of rebar advanced for a fifth day on Aug. 9, adding 0.5 percent to 3,517 yuan a ton, according to Beijing Antaike Information Development Co. To contact Bloomberg News staff for this story: Alfred Cang in Shanghai at acang@bloomberg.net To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

Perion Shares in Tel Aviv Follow U.S. Down on Outlook

http://www.bloomberg.com/news/2013-08-12/yahoo-fails-to-lift-perion-amid-outlook-israel-overnight.html

Perion Network Ltd. (PERI) , the software maker whose New York shares trade at almost half of its historical valuation, fell to the lowest in four months in Tel Aviv as its lower-than-estimated sales forecast outweighed a search partnership with Yahoo! Inc. (YHOO) Shares of the Tel Aviv-based company declined 2.3 percent to 37.32 shekels, the lowest since April 8, at 10:31 a.m. in Israel. The TA-25 Index (TA-25) rose 0.3 percent. The U.S.-traded shares sank 14 percent yesterday, the biggest retreat since March 2010. Perion forecast maximum third-quarter sales of $22 million, below the mean projection of four analysts surveyed by Bloomberg amid delays in implementing new partnerships. The projection overshadowed the announcement of a pact with Yahoo, which Perion is pursuing to diversify its revenue sources after Google Inc. (GOOG) halted automatic software downloads on Feb. 1, raising concern the number of Perion’s products installed would decline. Google’s “policy change fell into place in February and everyone expected there would be some impact from that, but nobody knew how big it was going to be,” Jay Srivatsa , an analyst at Chardan Capital Markets LLC in New York who rates Perion a buy, said in a telephone interview yesterday. “They’re betting a lot on” Yahoo, he said. “We’ll have to wait to see how that plays out.” Search Revenue In addition to Google and Yahoo, Perion has partnerships with Microsoft Corp.’s Bing, Oakland, California-based Ask.com and toolbar-developer Conduit. Google, which contributed all of Perion’s 2012 search revenue, accounted for 51 percent in the second quarter. Chief Executive Officer Josef Mandelbaum told Bloomberg News in June that no single provider will make up more than 50 percent of search revenue by the end of this year. “Our second-quarter results were impacted by certain execution delays launching our new partnerships,” Mandelbaum said on a conference call with analysts yesterday. “These delays will also affect the third quarter.” Perion fell to $10.33 in New York , sending its valuation to 5.7 times estimated earnings, compared to an almost seven-year average of 11, according to data compiled by Bloomberg. To contact the reporter on this story: Jessica Summers in New York at jsummers17@bloomberg.net To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

KfW Bank of Germany Funds 42-Megawatt Akuo Wind Farm in Uruguay

http://www.bloomberg.com/news/2013-08-12/kfw-bank-of-germany-funds-42-megawatt-akuo-wind-farm-in-uruguay.html

KfW Group, a German development bank, is financing a 42-megawatt wind-farm project by France ’s Akuo Energy SAS in Uruguay. KfW’s IPEX export bank is providing a long-term loan of as much as $79.5 million for the Minas project in Uruguay’s Lavalleja region, the lender said today in an e-mailed statement. Eighty percent of the loan is covered by a guarantee from Danish export credit insurer Eksport Kredit Fonden. The wind farm will use 14 turbines made by Vestas Wind Systems A/S (VWS) and produce enough energy for about 40,000 households, KfW said. To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

South Africa Ready to Act If Sustained Breach of CPI Target

http://www.bloomberg.com/news/2013-08-12/south-africa-ready-to-act-if-sustained-breach-of-cpi-target.html

The South African Reserve Bank will act to ensure that inflation does not breach the upper end of its target band for a prolonged period, Deputy Governor Daniel Mminele said. “Depending on unfolding events in the global and domestic environment, the bank stands ready, as always, to act in whichever manner is prudent, in line with its mandate, to ensure that inflation does not breach the upper end of the inflation band on a sustained basis and results in a deterioration of inflation expectations,” Mminele said in a speech at an investment conference in Johannesburg today, a copy of which was published on the central bank’s website. The Reserve Bank expects inflation to average 5.9 percent this year, up from a previous estimate of 5.8 percent, and to exceed its target temporarily in the third quarter, when it will average 6.3 percent. It has held the repurchase rate at 5 percent for the past year. Risks to the inflation outlook present themselves mainly through a depreciated exchange rate of the rand, especially if such depreciation occurs very rapidly and is sustained, Mminele said. The rand has lost 14 percent against the dollar this year, the worst performance among 16 major currencies tracked by Bloomberg. The inflation rate generally rises as much as 2 percentage points for every 10 percent decline in the rand, Reserve Bank Governor Gill Marcus has said. The pass-through effect on inflation has not been as severe as in the past, she said Risks to the outlook also come from inflationary pressures arising from excessively high wage settlements and from higher food prices, Mminele said. Under Pressure The rand’s decline this year is putting pressure on prices, creating a dilemma for the Reserve Bank because of a slowing economy, Mminele said in an interview last month in Moscow. Weak demand for manufactured exports and mining strikes are limiting growth in Africa ’s biggest economy, which expanded at the slowest pace since a 2009 recession in the first quarter. Risk to South Africa ’s economic growth stem from relatively weak business and consumer confidence , and international factors, Mminele said today. This has impacted private sector real gross fixed capital formation and household consumption expenditure, which is also being constrained by subdued employment growth, Mminele said. An additional risk to growth is possible disruptions from strike action as part of current wage negotiations in various industries, he said. To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

Crude Rises on North Sea Disruption, Libya Port Shutdown

http://www.bloomberg.com/news/2013-08-12/crude-declines-sixth-day-in-seven-as-japan-economy-slows.html

West Texas Intermediate crude rose with Brent as North Sea production was curtailed and Libya shut its biggest oil export terminal. Brent’s premium over WTI widened for a sixth time in seven days. Futures advanced for a second day as a compressor breakdown at the Ula platform reduced production of Ekofisk crude, a spokesman with BP Plc (BP/) , the platform’s operator, said today. Libya shut the Es Sider port after opening yesterday. WTI slipped to $105.03 in intraday trading on reports that Japan’s (JGDPAGDP) growth slowed to 2.6 percent in the second quarter. “We’ve got supply issues in the North Sea and Libya,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The market momentum is higher. $105 is an important support level.” WTI for September delivery gained 14 cents to settle at $106.11 a barrel on the New York Mercantile Exchange. Trading was 15 percent below the 100-day average for the time of day at 2:37 p.m. Brent for September settlement gained 75 cents, or 0.7 percent, to end the session at $108.97 a barrel on the London-based ICE Futures Europe exchange. Volume was 1.9 percent below the 100-day average. The European benchmark’s premium to WTI widened to $2.86 a barrel from $2.25 on Aug. 9. Production of Ekofisk was curtailed as a “gas turbine powering a compressor at Ula had a breakdown as of Wednesday evening August 7,” Jan Erik Geirmo, a BP spokesman in Stavanger, Norway, said in an e-mail today. The affected fields were producing 8,000 barrels a day, according to estimates by the Norwegian Petroleum Directorate. ‘Pushing Higher’ “More than anything, the North Sea disruption is pushing oil higher,” said Phil Flynn , senior market analyst at the Price Futures Group in Chicago. “On top of that, we have issues in Libya.” The brief opening of Es Sider allowed two tankers to berth at the facility and they may be turned away tonight if no crude loadings occur, the port coordinator, Captain Abu Ejela Al Zanati, said today by phone. Six more vessels are anchored outside the port. Es Sider has been closed since July 28 amid protests by the Petroleum Facilities Guard, which is pressing for better working conditions. Interruptions at ports and other installations across Libya lowered the country’s oil production to 800,000 barrels a day in July, half the level of the post-revolution peak a year earlier, according to a Bloomberg survey of output from OPEC members. Japan Growth WTI fell in early trading as Japan ’s gross domestic product rose an annualized 2.6 percent, down from 3.8 percent the prior quarter, the Cabinet Office said. Second-quarter growth in Japan, the third-largest oil-consuming country, was slower than the 3.6 percent gain predicted by 32 economists in a Bloomberg survey. The U.S. and China are the top two oil users. “Japan is clearly the headline,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis , which oversees $1.4 billion. “That’s probably having a little bit of a damp on crude.” Bijan Namdar Zanganeh pledged to raise Iran ’s output if he becomes the country’s oil minister. Zanganeh, a former Iranian oil minister nominated by President Hassan Rohani to take the post, said his “first action will be to bring the country’s oil production capacity back to 2005” levels, according to Shana, the oil ministry’s news website. Iran, once the second-biggest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia , has slipped to sixth place, producing 2.56 million barrels a day in July, according to a Bloomberg survey of producers and analysts. Its 2005 production averaged almost 4 million barrels a day. ‘Ease Tension’ Rohani “is going to ease tension rather than raise it,” O’Grady said. For oil prices , “to move higher you are going to need some kind of outside catalysts such as more geopolitical tension.” Implied volatility for at-the-money WTI options expiring in October was 21.8 percent, up from 21.6 percent on Aug. 9, data compiled by Bloomberg showed. Electronic trading volume on the Nymex was 481,477 contracts as of 2:46 p.m. It totaled 690,133 contracts on Aug. 9, 5.5 percent above the three-month average. Open interest was a record 1.93 million contracts. To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Czech Economy to Exit Record-Long Slump as Politics Unravel

http://www.bloomberg.com/news/2013-08-12/czech-economy-set-to-exit-record-long-slump-as-politics-unravel.html

The Czech economy probably exited its longest recession on record in the second quarter, defying political turmoil that’s raised the prospect of early elections. Gross domestic product rose 0.5 percent from the previous three months in the April-June period, the first increase since mid-2011, according to the median estimate of 15 economists in a Bloomberg survey. The Statistics Office will publish preliminary data without a breakdown at 9 a.m. tomorrow in Prague. GDP shrank 1.4 percent from a year earlier, the survey showed. The $196 billion economy has suffered the longest contraction since current records began in 1996 as efforts to narrow the budget deficit curbed household spending, the euro area’s debt crisis harmed export demand and ex-Prime Minister Petr Necas’s cabinet collapsed in June. The central bank responded by cutting the benchmark interest rate to what it calls a “technical zero” of 0.05 percent last year. “We anticipate that government consumption and restocking were behind the growth in the second quarter, with net exports a positive contributor as well,” Martin Lobotka , an analyst at Ceska Sporitelna AS, a unit of Erste Group Bank AG, said Aug. 9 by e-mail. Czech borrowing costs have risen since allegations of illegal spying and graft toppled Necas’s government in June. The yield on 10-year koruna bonds was 2.23 percent yesterday, holding 41 basis points, or 0.41 percentage point, below comparable U.S. Treasuries, data compiled by Bloomberg show. No Confidence The turmoil deepened last week after the interim government of Jiri Rusnok, picked by President Milos Zeman in a snub to lawmakers, lost a parliamentary confidence vote. The bloc of three parties that backed the previous cabinet disintegrated and deputies agreed to hold a vote on dissolving the lower house of parliament, a condition for calling early elections. While economic uncertainty will probably hinder the economic recovery, it doesn’t materially affect the stable outlook on the country’s A1 rating because of the country’s favorable budget performance, Jaime Reusche, a sovereign-debt analyst at Moody’s Investors Service, said in a report today. “Should the authorities choose to loosen fiscal policy to prop up economic activity, we believe that debt and deficit metrics are unlikely to deteriorate sufficiently to undermine fiscal policy credibility given the sovereign’s track record of fiscal prudence,” Reusche said. Mixed Signals Economic data are sending mixed signals, clouding the nation’s outlook, the central bank said in minutes from this month’s rate-setting meeting. While retail sales and industrial output fell more than analysts estimated in June, the trade surplus widened as exports fell less than imports, statistics office data showed. After exhausting room for traditional monetary easing , policy makers are debating whether the first koruna sales in more than a decade are needed to bring inflation toward their 2 percent target from 1.4 percent in July. Currency depreciation helps boost export competitiveness while making imports more expensive, curbing deflation risks. The koruna was little changed at 25.830 per euro late yesterday in Prague and has lost 0.1 percent in the past three months, the second-best result among major emerging-market currencies tracked by Bloomberg. Persistent Slowdowns Other parts of the region have struggled to shake off slowdowns, with Russian and Estonian GDP (CZGDPSAY) missing economists’ forecasts in the second quarter, advancing 1.2 percent and 1.3 percent from a year earlier. Still, the euro-area economy grew 0.2 percent from the previous three months last quarter, exiting a 1 1/2-year recession, according to a survey of 41 analysts. Positive economic data from countries such as Germany , the Czech Republic ’s biggest trading partner, may help boost the koruna, Jan Cermak, an analyst at CSOB AS, a unit of KBC Groep NV in Prague, said yesterday in a note to clients. The currency “so far looks as if it’s neglecting the fact that the central bank is holding its finger on the intervention trigger,” he said. To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Group Holding Lebanese Shiites Demands Syrian Prisoners’ Release

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The Syrian rebel group holding nine Lebanese men said it will not free them unless the government of President Bashar al-Assad releases 127 female prisoners. The Shiite Muslim Lebanese, kidnapped last year by the rebel Northern Storm Brigade, have become part of a bigger web of hostage-takings on the margins of the Syrian civil war. A Lebanese Shiite group abducted two Turkish Airlines pilots in Beirut last week as bargaining chips to try to secure their release. “There’s nothing to negotiate over before the female prisoners are released,” the Northern Storm Brigade said on its website yesterday. The rebel group said it had originally sought the release of 500 women prisoners before moderating its demands. The Turkish pilots, kidnapped in a Beirut neighborhood controlled by the Lebanese Shiite militant group Hezbollah, have become pawns in the battle between Assad and rebels who have been trying to topple him for more than two years. Turkey has supported the rebels while Hezbollah backs the Syrian president and has sent its men to fight alongside his troops. The families of the nine Lebanese Shiite captives have said they were not involved in the kidnapping of the Turkish pilots. They say Turkey has influence with the rebels and has not pressed them enough to free the hostages. To contact the reporter on this story: Donna Abu-Nasr in Beirut at dabunasr@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Mexico’s Latest Energy Revolution

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Mexico is on the brink of a quiet energy revolution. President Enrique Pena Nieto’s ambitious reform proposal, announced today, would enable foreign oil companies to help tap Latin America ’s third-largest reserves, improve Mexico’s economic growth and move North America further on the road to self-sufficiency. Pena Nieto and his Institutional Revolutionary Party , or PRI, want to let foreign companies such as Exxon Mobil Corp., Chevron Corp. and Repsol SA sign production-sharing contracts for oil exploration and output. (The companies would still be prohibited from operating their own fields.) Thus would Mexico return to the situation that prevailed from 1938, when the country expropriated oilfields from U.S. and British companies but allowed them to operate them, to 1958, when Petroleos Mexicanos , the state-owned oil company also known as Pemex, gained exclusive control of all phases of the petroleum industry. In Mexico, foreign oil companies still trigger a national neuralgia: In one 2012 poll, 77 percent of respondents said foreign investment benefited Mexico -- but 65 percent opposed any foreign investment in the oil industry. Unfortunately for the celebrants of March 18th, the national holiday marking the expropriation of foreign oil companies, Pemex’s technological and financial limitations are becoming all too clear. Last month, its oil output was the lowest it has been in 18 years; Pemex is heading toward a ninth straight year of declining production. Since 2001, Mexico’s proven reserves -- oil commercially recoverable under current conditions -- have fallen by 41 percent. Put more bluntly, at the present rate of extraction, Mexico’s existing reserves will last for only nine years. Mexico has much more oil to find, but Pemex lacks the technology and knowledge to tap new and complex deepwater fields. And because its finances and management are tightly controlled by the government, which relies on Pemex for about one-third of its revenue, it can’t make strategic investments. One analysis says that the money needed to exploit current opportunities is equivalent to 30 years of Pemex’s 2013 investment budget. Passage of the reforms could unlock tens of billions in needed investment and lift Mexico’s annual growth by as much as two percentage points. A less-heralded but in some ways equally disruptive element of Pena Nieto’s proposal would break the electricity distribution monopoly of the state power company CFE, whose grip on power has left Mexicans with some of the highest electricity costs in the developed world. Among his party, its allies and the opposition National Action Party (known as PAN), Pena Nieto has enough votes to make the constitutional change his proposal requires. He has another goal, however: preserving his Pact for Mexico , a remarkable alliance among the country’s three major parties that has enabled ground-breaking reforms in education and telecommunication. He delayed introducing his energy proposal last week to try to bring its opponents on board, or at least to keep them off the streets. From a purely economic standpoint, it would make more sense -- and PAN has actually proposed -- to sell shares in Pemex. From a political standpoint, however, Pena Nieto’s moderate course is more likely to succeed and sustain the momentum for reform. Next on Pena Nieto’s agenda, after all, is a contentious plan to broaden Mexico’s tax base and lessen the state’s reliance on Pemex’s revenue. U.S. intervention in this process would be about as welcome as last year’s U.S. soccer victory against Mexico. It can be most helpful on the margins: The U.S. Senate could ratify the Transboundary Hydrocarbon Agreement , already ratified by Mexico, which sets rules for handling potential oil reserves along the dividing line between the two countries in the Gulf of Mexico. The U.S. has a strong shared interest with Mexico in building up cross-border energy infrastructure. Remarkably, the two countries have fewer than a dozen electricity transmission connections between them. Mexico also needs U.S. technological know-how to exploit its abundant shale gas reserves and build the necessary pipelines. Lower energy costs for Mexican consumers and businesses, in turn, will strengthen the country’s role as a market and a manufacturing platform. Immigration reform in the U.S. is both a moral and an economic necessity, as we’ve argued , and is a key to the continent’s future prosperity. Mexico’s energy revolution is at least as significant. In fact, the best way to ensure North America ’s prosperity may be to invest in cross-border transmission lines and pipelines instead of a longer and stronger fence. To contact the Bloomberg View editorial board: view@bloomberg.net .

Germany Frankfurt Airport July Traffic Figures

http://www.bloomberg.com/news/2013-08-12/germany-frankfurt-airport-july-traffic-figures-table-.html

Following is a summary of Frankfurt Airport July passenger and freight statistics from Fraport in Frankfurt: To contact the reporter on this story: Zoya Shilova in Moscow at zoya@bloomberg.net To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

Late August Warm-Up May Spur Energy Use in Northeast

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Higher-than-normal temperatures in the second half of August may spur an increase in energy demand across the northern U.S., according to MDA Weather Services. The Northeast and Midwest are expected to have temperatures 3 to 5 degrees Fahrenheit (1.7 to 2.8 Celsius) above the norm from Aug. 22-26, said MDA , based in Gaithersburg, Maryland. Ontario, Quebec and the Canadian Maritime provinces may reach 8 degrees above normal. While highs will be well below the peaks earlier in the summer, much of the hotter weather will be “focused across many of the key demand centers of the north,” MDA said. Higher-than-normal temperatures in the large cities of the eastern U.S. and Canada tend to increase energy consumption because more people seek air conditioning. In New York, the normal average temperature for Aug 22 is 75 degrees, according to the National Weather Service. In Boston and Chicago it’s 72; in St. Louis , 78; Dallas, 85; and in Seattle, 66, according to the weather service. To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Blackstone Said to Acquire GE Apartments for $2.7 Billion

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Blackstone Group LP (BX) , the largest manager of private-equity real estate funds, agreed to buy 80 U.S. apartment properties from General Electric Co. (GE) for about $2.7 billion, a person with knowledge of the deal said. The firm is acquiring the properties from the conglomerate’s GE Capital unit, said the person, who asked not to be identified because the transaction isn’t public. GE has been paring its real estate holdings as part of a strategy to shrink its finance division. The deal represents one of the largest investments by Blackstone in apartments in the U.S., where surging rental demand has sent vacancies to the lowest level in a decade, according to Reis Inc. (REIS) In residential real estate, New York-based Blackstone has focused on buying single-family homes to rent, spending more than $5 billion to acquire more than 30,000 U.S. houses in the aftermath of the foreclosure crisis. The firm’s latest purchase comes as apartment stocks, one of the best performers during the recovery in commercial real estate since the credit crisis, have fallen from their highs. The Bloomberg Apartment Real Estate Investment Trust Index has declined 1.4 percent during the past 12 months, compared with a gain of 9.6 percent for the broader Bloomberg REIT Index and a 23 percent return for the Standard & Poor’s 500 Index, after the reinvestment of dividends. Blackstone had been in talks in 2011 to buy all or parts of Archstone, the U.S. apartment landlord that ultimately was sold by Lehman Brothers Holdings Inc. to Equity Residential (EQR) and AvalonBay Communities Inc. (AVB) Carlyle Purchases Carlyle Group LP, the second-largest private-equity firm by assets, has been one of the most active buyout companies in the apartment market. As of March, Washington-based Carlyle had invested in about 50 multifamily projects in the past two years, spending about $2.5 billion to bet on rising residential rents. Blackstone is stepping up wagers on apartments as it sells its biggest hotel, office and retail holdings. The company has filed for initial public offerings of its Brixmor Property Group shopping center unit and Extended Stay America hotel chain. It hired bankers for an IPO of Hilton Worldwide Inc. and possible IPO or sale of its La Quinta limited-service hotels, people with knowledge of the plans have said. Blackstone is the largest owner of hotel rooms in the country, and the second-biggest owner of office buildings, according to National Real Estate Investor. The firm also is a major holder of industrial and retail assets. Christine Anderson , a spokeswoman for Blackstone, and Patrick Brennan, a GE Capital spokesman, declined to comment. The deal was reported earlier today by the Wall Street Journal. To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Emaar Quarterly Apartment Revenue Doubles Amid Dubai Recovery

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Emaar Properties PJSC (EMAAR) said second-quarter revenue from apartment and land sales doubled as the developer of the world’s tallest tower in Dubai benefits from a property market recovery in the Persian Gulf business hub. Revenue from the sale of condominiums, commercial units and plots of land climbed to 1.63 billion dirhams ($443 million) in the three months ended June 30 from 815.6 million dirhams a year earlier, according to Emaar’s financial statement posted on Dubai’s stock market today. Income from villa sales dropped to 322.3 million dirhams from 325.7 million dirhams. Emaar, Dubai’s biggest developer by market value, said on July 29 that second-quarter earnings rose 10 percent to 675 million dirhams, beating analysts’ estimates, as the company completed projects that were delayed by the 2008 property slump. Trade receivables fell to 413.9 million dirhams at the end of June from 958.6 million dirhams at the end of last year, the company said in its full financial results today. The stock declined 2.2 percent, the most since July 24, to close at 6.14 dirhams in Dubai today. It has climbed 64 percent this year. To contact the reporter on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

Indian Stocks Gain Most in a Month as Drugmakers Rally on Profit

http://www.bloomberg.com/news/2013-08-12/indian-stocks-gain-most-in-a-month-as-drugmakers-rally-on-profit.html

Indian (SENSEX) stocks climbed the most in a month as drugmakers rallied on higher earnings and metal companies advanced. The government will release data on consumer prices and factory output later today. Sun Pharmaceutical Industries Ltd. (SUNP) , India’s biggest drugmaker, jumped the most since 2009 after posting a 56 percent gain in net income before a one-time charge. Tata Steel Ltd. (TATA) paced advances for metal shares. State Bank of India led declines for lenders as policy makers announced steps to drain cash from the financial system to boost the rupee. The S&P BSE Sensex rose 1.3 percent to 19,038.82 at 2 p.m. in Mumbai. Earnings and economic data are setting the tone for the market along with concern about the rupee, said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. (GBNP) The government may announce measures to boost the currency today such as higher import duties , CNBC-TV18 reported, without saying where it got the information. “A rally in drugmakers is overshadowing the decline in bank stocks,” Mathews said by telephone from the southern city of Kochi. “Investors are also buying beaten-down sectors like metals.” Sun Pharmaceutical surged 7.2 percent to 542.6 rupees, the most since May 2009. The exporter’s profit jumped after sales of its generic drugs in the U.S. climbed. Cipla jumped 2.3 percent to 418.75 rupees after its first-quarter earnings beat analyst estimates. Earnings Outlook Tata Steel, which is scheduled to report earnings tomorrow, soared 8.7 percent to 237.8 rupees amid speculation lower raw material costs will boost profit. The company will benefit from a fall in contract prices of iron ore and coking coal, said Giriraj Daga, an analyst at Nirmal Bang Equities Pvt. Jindal Steel & Power Ltd. (JSP) advanced 7 percent to 222 rupees. Sterlite Industries (STLT) (India) Ltd. increased 4.7 percent to 79.8 rupees. The S&P BSE Metal Index rallied 3.4 percent, extending last week’s 5.3 percent surge. About 43 percent of Sensex companies that have reported earnings so far for the June quarter missed analyst estimates. That compares with 27 percent companies that missed forecasts for the March quarter and 43 percent in the three months through December, data compiled by Bloomberg show. The Sensex has retreated 1.9 percent this year and trades at 13.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10. Weak Rupee The Reserve Bank of India said on Aug. 8 that it will sell cash management bills every Monday, stepping up efforts to bolster the rupee by curbing supply of the currency. The RBI plans to sell 220 billion rupees ($3.6 billion) of cash management bills each week, according to an e-mailed statement. The measure, which follows a review of the impact of earlier measures to steady the currency, is for “effective liquidity management,” it said. The Indian currency fell to an all-time low of 61.805 per dollar on Aug. 6. The rupee has slumped about 12 percent against the dollar in the past six months even as the monetary authority restricted banks’ access to cash, curbed trading in currency derivatives and raised two interest rates. State Bank of India (SBIN) tumbled 2.8 percent to 1,618.3 rupees. The nation’s biggest lender may say profit declined to 34.2 billion rupees in the quarter ended June, compared with 37.5 billion rupees a year ago, according to the median of 42 analyst estimates compiled by Bloomberg. HDFC Bank (HDFCB) fell 0.6 percent to 607 rupees. The S&P BSE Bankex fell 1.1 percent to the lowest level since June 2012. India will release industrial production data for June at 5:30 p.m. in New Delhi. Factory output probably dropped 1.1 percent, a second straight month of declines, according to the median of 27 estimates in a Bloomberg survey. Consumer price inflation probably slowed to 9.7 percent in July from 9.87 percent the previous month, according to the median of 17 estimates in a Bloomberg survey. The CNX Nifty (NIFTY) Index on the National Stock Exchange gained 1.2 percent to 5,633.25. India VIX, which gauges the cost of protection against losses in the Nifty, fell 3.7 percent. To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

The Eight-Minute Test That Can Reveal Your Effectiveness as a Leader

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How can I determine if I am a good leader, or perhaps even a great one? What are my strengths, and do any rise to the very highest levels? I know I have some weaknesses (as everyone does), but are any of them so appalling as to derail my career? Many people have asked us those questions over the years. For a truly comprehensive answer, we always recommend a well-constructed 360 evaluation, in which your own views of your strengths and weaknesses are enriched by those of your boss, your direct reports, your colleagues, and other associates. But as a first step that you can do on your own, we've developed an abbreviated self-assessment which you can take here. That will give you some sense of what your leadership skills may be and how they compare to others, right now. It will take you about eight minutes, and you will promptly receive a feedback report, which will compare the way you've rated yourself with similar self-scores of 45,000 leaders in our global database. The survey will also measure your current level of engagement and satisfaction in your leadership role. Obviously, a brief self-assessment is not as valid as a more-extensive assessment that includes feedback from 10 or more of your colleagues, but it will help you understand which of the 16 leadership competencies we measure — such fundamentals as thinking strategically, displaying integrity, focusing on results, taking initiative, developing others, championing change, exhibiting expertise — are your likely strengths. A score in the 90th percentile means you have an outstanding strength. A score in the 10th percentile (meaning you're worse than 90% of the people taking the test) may indicate a flaw so profound it could derail your career. We expect most of your scores will be somewhere in the middle. But the answers may surprise you. You may think, for example, that your strong points are your technical skills only to find your own responses score you far higher on inspiring others than you might have believed. With such an understanding you might embark on a personal development plan in which you move toward the goal of becoming an outstanding leader by developing a few of your middling strengths to the very highest levels. Sadly, we've found that fewer than 10% of leaders take the initiative to create a personal development plan with the explicit goal of becoming a better leader. Yet without a plan you are relying on luck and circumstance to make yourself more effective. More's the pity since, as is often the case, we find a straightforward approach to be most effective: Once you identify your strengths, we've found, the surest path to improving your overall leadership effectiveness is to pick one and focus on improving that. Which one should you start with? Think about which of the leadership competencies you have the passion and energy to pursue. Working to improve a competence that you're passionate about makes the possibility of change much more likely. At the same time, though, consider what your current organization both expects and needs from you. The intersection of your strengths, your passion, and your organization's needs defines the ideal place for you to target your development. Once you identify a competence that meets those criteria, what's the next step? Can you turn a moderately scoring competency into a profound strength? The answer is yes, though perhaps not in the way you'd expect. To improve a weakness, people typically use a linear approach. If you were a novice, for instance, who wanted to gain some technical expertise, you might take a class at the local university, read up on the subject, or ask an expert in your firm to be your mentor. But if you're already strong technically you won't get very much better with further classes or reading more than you already do. Instead, you might use your already-strong technical skills to improve your leadership effectiveness if you learned, say, to communicate your expertise more effectively or teach those skills to your team. That is, you could strengthen your strength by developing skills that complement it, just as elite athletes do when they improve their already formidable talents through cross-training. We have discovered in our research that between eight and 12 of these companion behaviors are associated with each competency. (You can see the entire set for all 16 differentiated competencies, and a fuller explanation of how to apply them, in the October 2011 HBR article "Making Yourself Indispensable.") By focused attention to applying these companion behaviors, leaders can and do make striking improvements. What are your own greatest competencies? We look forward to hearing your thoughts about the results you discover.

Air Travel Is Worse Than a Hummer With Wings

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Christie Aschwanden decided to stay home for a year. Not because she doesn’t like to travel, but because she doesn’t like what travel does to the environment: Why does air travel get left out of the mix when we’re talking about reducing our carbon footprint? One could argue, because cars matter more -- they’re the largest single contributor to climate change in the transportation sector. Air travel accounts for about 10 percent of all carbon emissions in the U.S., versus 36 percent for passenger cars -- and some of that is air freight. However, the majority of flight departures and air tonnage seem to be passenger travel, not freight. And although many car trips are hard to avoid, given 60 years of infrastructure development, a lot of the air travel is unnecessary -- and concentrated among the so-called one percent. Only about half the country takes as much as one flight a year; I’m willing to bet that virtually every U.S. citizen gets in a passenger car at least once per annum. And while most of those car trips are the business of everyday life -- getting to work, procuring food, etc. -- most of those flights are either vacations, or elite workers flitting to conferences and business meetings. Those trips are simultaneously less necessary and more carbon intensive; almost eight times as many passenger miles are traveled by car as by plane, but passenger car travel only accounts for 3 to 4 times as much greenhouse gas emission. Moreover, while we may eventually wean cars off of gasoline, air travel will, I’m told, pretty much always require hydrocarbons; nothing else can contain so much energy in so little weight, which means they’re the only way to get the plane off the ground. Air travel is not only bad for the environment now, but also will be bad for the environment 30 years from now. So why, pray tell, do we spend so much time talking about suburban sprawl and sport utilities, and so little time talking about FedEx and European vacations? The question answers itself, doesn’t it? Giving up air travel and overnight delivery is much more personally costly for the public intellectuals who write about this stuff than giving up a big SUV. If you live in one of the five or six major cities that contain virtually everyone who writes about climate change, having a small car (or no car), is a pretty easy adjustment to imagine. On the other hand, try to imagine giving up far-flung vacations, conferences, etc. -- especially since travel to interesting locales is one of the hidden perks of not-very-well remunerated positions at universities, public policy groups, nongovernmental organizations, and yes, news organizations. If we’re going to get serious about greenhouse gasses, we need to get serious about air travel. Going to a distant conference should attract the kind of scorn among the chattering classes that is currently reserved for buying a Hummer.

SAC’s Parameter Trading Unit Is Said to Close Amid Probe

http://www.bloomberg.com/news/2013-08-12/sac-s-parameter-trading-unit-is-said-to-close-amid-probe.html

SAC Capital Advisors LP, the hedge-fund firm that’s facing federal insider-trading charges and a money-laundering lawsuit, shuttered one of its trading units, according to a person with knowledge of the matter. Parameter Capital, which was started by Anil Stevens and Glenn Shapiro three years ago to trade financial stocks, managed about $300 million, said the person, who asked not to be named because the information is private. Stevens, 41, plans to start his own firm and take as many as nine people with him, the person said. Shapiro won’t be joining Stevens in his new venture, the person said. Stevens and Shapiro couldn’t immediately be reached for comment. Reuters earlier today reported the closing of Parameter. Billionaire Steven A. Cohen has vowed to keep SAC open for business as investors have pulled billions of dollars from its funds. Remaining clients have until Aug. 16 to ask to redeem their capital for the third quarter. Executives at SAC, which oversaw about $14 billion at the start of July, expect to end the year with about $9 billion in assets, the person said. SAC was granted court approval last week to continue operating until the cases are resolved. The Stamford , Connecticut-based firm was accused by the U.S. government in a July 25 indictment of engaging in an unprecedented insider-trading scheme lasting more than a decade. Regulators last month in an administrative action said Cohen failed to supervise two employees who have been charged with insider trading. Martoma’s Arrest The multi-year government probe intensified in November when a former portfolio manager, Mathew Martoma, was arrested and charged with securities fraud. SAC employees have been searching for new jobs, hoping to land new roles for next year after Cohen has paid their bonuses. SAC employs about 1,000 globally in offices from New York to Hong Kong. SAC’s Parameter unit was based in New York and started in 2010 with 12 employees. Stevens and Shapiro rejoined SAC at that time after working at Chicago-based hedge-fund firm Balyasny Asset Management LP. To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

Smiles Posts Record Two-Day Advance as Profit Exceeds Estimates

http://www.bloomberg.com/news/2013-08-12/smiles-posts-record-two-day-advance-as-profit-exceeds-estimates.html

Smiles SA (SMLE3) , the frequent-flier unit of Gol Linhas Aereas Inteligentes SA, is posting the biggest two-day rally since first selling shares in April after earnings beat analysts’ estimates. The shares surged 7.1 percent to 27.75 reais at 12:42 p.m. in Sao Paulo , pushing gains in the past two sessions to 14 percent. The Ibovespa (IBOV) stock benchmark climbed 2.2 percent today. Smiles reported adjusted net income of 48.3 million reais ($21.3 million) in the second quarter, compared with an average estimate for profit of 38.9 million reais, according to data compiled by Bloomberg. The “strong” second-quarter results at the Sao Paulo-based company boost the outlook for the rest of the year, Rafael Frade and Carlos Firetti, analysts at Banco Bradesco SA’s brokerage unit, wrote in a note to clients today. “We expect the company to post strong growth in the coming quarters,” they wrote. Smiles rose 6.1 percent on Aug. 9 as competitor Multiplus SA (MPLU3) , which reported results for the three months ended in June on Aug. 8 after the market close, beat estimates for the first time in three quarters, according to data compiled by Bloomberg. Smiles has nine buy recommendations and two sells, according to data compiled by Bloomberg. Multiplus has six buys, eight holds and one sell. To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Canadian Stocks Climb, Led by Gold Producers, BlackBerry Shares

http://www.bloomberg.com/news/2013-08-12/canada-stocks-rise-as-gold-producers-rally-and-blackberry-soars.html

Canadian stocks rose after three weeks of losses as China boosted purchases of precious metals and BlackBerry (BB) Ltd.’s board said it is considering selling the company. BlackBerry jumped 10 percent, the most since March, as it announced it will form a special board committee to consider options for the company including joint ventures and partnerships. Barrick Gold Corp. and Eldorado Gold Corp. surged at least 4.1 percent as the metal capped the longest rally in four weeks. Silvercorp Metals Inc. and Silver Wheaton Corp. advanced more than 5.2 percent as silver prices gained. Alliance Grain Traders Inc. (AGT) , a seller of specialty crops such as lentils, gained 5.1 percent after reporting better-than-estimated earnings. The Standard & Poor’s/TSX Composite Index (SPTSX) rose 52.14 points, or 0.4 percent, to 12,594.27 at 4 p.m. in Toronto. Trading volume was 8.3 percent higher than the 30-day average at this time of the day. “You’re starting to see a bit of outperformance in the TSX on the back of strength in China ,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages C$220 million ($214 million). “The Chinese are aggressively buying precious metals, so gold import numbers were quite healthy and that’s leading to a rally in materials.” China’s domestic purchases of gold jumped 54 percent to 706.4 metric tons in the first half of 2013, compared with a year earlier, the China Gold Association said in a report today. Buying of gold-bar purchases surged 87 percent and jewelry demand increased 44 percent. Gold Surges Barrick Gold advanced 4.1 percent to C$18.74 and Eldorado Gold surged 7.6 percent to C$8.76 as all 24 companies in the S&P/TSX Gold Index advanced. The gauge jumped 5.8 percent to 1,649.24, its highest close since July 23. Gold prices rose 1.7 percent to settle at $1,334.20 an ounce in New York. Gold climbed for a fourth straight day, the longest rally since July 11. Silvercorp Metals (SVM) jumped 10 percent to C$3.52 and Silver Wheaton added 5.2 percent to C$25.26. Silver for September delivery soared to a seven-week high. Torex Gold Resources Inc. (TXG) surged 12 percent to C$1.57. Killian Charles, an analyst at Industrial Alliance Securities Inc., began coverage of the stock today with a buy rating and a price target of C$1.80. The company’s Morelos gold mine in Mexico is expected to begin production in 2015 and “will work in any gold price environment,” Charles said in a note to clients. Strategic Alternatives BlackBerry, based in Waterloo, Ontario, rose 10 percent to C$11.10, the biggest gain since March 13. The announcement today builds on a move last year when BlackBerry hired JPMorgan Chase & Co. and RBC Capital Markets to advise the company on strategic alternatives. At the time, Chief Executive Officer Thorsten Heins said a sale wasn’t the “main direction” he was considering. Prospects have worsened since then, with the new BlackBerry 10 -- the linchpin of a turnaround strategy -- meeting scant demand. Aimia Inc. (AIM) climbed 4.1 percent to C$15.93, the highest close in three months. The loyalty program manager said today Toronto-Dominion Bank will become the primary credit-card issuer for its Aeroplan loyalty cards. The deal ends a 22-year allegiance between Aimia and Canadian Imperial Bank of Commerce. CIBC didn’t match TD Bank’s June conditional agreement with Aimia by an Aug. 9 deadline and is now negotiating a sale of half its Aerogold credit-card portfolio to the other bank. CIBC gained 2 percent to C$78.47 while TD Bank slipped 0.3 percent to C$86.41. Alliance Grain Traders increased 5.1 percent to C$16.48, the most in three months. The Regina, Saskatchewan-based company, which buys, processes and sells food ingredients including pasta and rice, reported second-quarter adjusted earnings of 24 Canadian cents a share, ahead of analysts’ estimates for 16 cents. The company said it is “optimistic” as it heads into the North American harvest period. To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

Indian Rupee Forwards Touch One-Week High on RBI Auction Plan

http://www.bloomberg.com/news/2013-08-12/indian-rupee-forwards-touch-one-week-high-on-rbi-auction-plan.html

Indian rupee forwards touched a one-week high after the central bank pledged to curb the supply of cash in a bid to stem an unprecedented slide in the currency. The Reserve Bank of India will auction 220 billion rupees ($3.6 billion) of cash-management bills every Monday, it said in an e-mailed statement on Aug. 8. The move follows a review of the impact of earlier measures to steady the currency and is for “effective liquidity management,” the RBI said. Indian financial markets were closed for a holiday on Aug. 9. One-month non-deliverable forwards touched 60.87 per dollar, the strongest level since Aug. 2, before trading little changed at 60.93 as of 9:46 a.m. in Singapore, data compiled by Bloomberg show. The rupee fell to an all-time low of 61.805 on Aug. 6 and has lost 9 percent in the past year. Its three-month historical volatility rose to 11.94 percent on Aug. 8, the highest level since 2009. “The RBI’s move is to ensure that the short-term rates stay high to make it expensive for investors to short the rupee,” said Khoon Goh, a strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “The fundamental issue facing India has not changed though. With growth slowing and deficit countries getting overlooked by investors, the rupee will continue to come under depreciation pressure.” A short position is a bet a currency or security will decline. Bill Auctions The central bank last month cut its economic growth forecast for the year through March 2014 to 5.5 percent from 5.7 percent, and said India’s record current-account deficit remains the biggest risk to Asia’s No. 3 economy. Gross domestic product rose 5 percent last year, the slowest pace in a decade. The sale of cash-management bills, which typically mature within 91 days, is in addition to about 150 billion rupees of bonds auctioned each Friday as part of the government’s budgeted borrowing program. The Finance Ministry also issues about 120 billion rupees of treasury bills, which mature in at least 91 days, every Wednesday. The central bank will sell 220 billion rupees of 35- and 34-day cash-management bills in two separate auctions on today and Aug. 13, it said on Aug. 8. Finance Minister Palaniappan Chidambaram is likely to announce measures to reduce the shortfall in the broadest measure of trade, the Economic Times reported today, citing people it didn’t identify. Possible measures may include a special drive to raise non-resident deposits, bond sales by state-run companies, and cutting imports of “non-essential” consumer goods, the newspaper said. In July, The RBI capped lenders’ borrowing through daily repurchase auctions and tightened cash-reserve-ratio requirements. It also asked foreign investors to prove they aren’t speculating on the currency and barred banks from proprietary trading in currency futures and exchange-traded options. The Securities and Exchange Board of India raised margin requirements and limited open positions in such contracts. To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

FSB Extends Too-Big-to-Fail Bank Resolution to Insurers

http://www.bloomberg.com/news/2013-08-12/fsb-extends-too-big-to-fail-bank-resolution-to-insurers.html

The Financial Stability Board said an extended version of its guidance on the resolution of systemically important banks will apply to non-bank financial institutions, such as Allianz SE (ALV) and other large insurers. The Basel, Switzerland-based body set up by the Group of 20 nations has developed “annexes” to its advice for local regulators of financial institutions that aren’t lenders, according to an e-mailed statement today. The FSB asked for responses from market participants by Oct. 15. The FSB, led by Bank of England Governor Mark Carney, is coordinating the global regulatory response to the worst financial crisis since the Great Depression to prevent a repeat of the turmoil that followed the collapse of Lehman Brothers Holdings Inc. and bailout of American International Group Inc. “The standards as originally conceived were meant to cover all types of systemic institutions,” Eva Huepkes, a Basel-based adviser to the FSB secretary, said in a telephone interview. While the FSB originally focused on the biggest banks, “today’s consultation sets out how the resolution standards apply specifically to non-banks,” she said. Last month, the FSB published a list of nine too-big-to-fail insurers, including Allianz, American International Group Inc. (AIG) , MetLife Inc. (MET) , Prudential Financial Inc. (PRU) and Axa SA. (CS) The FSB “set out the core elements considered necessary to make feasible the resolution of financial institutions without severe systemic disruption and without exposing taxpayers to losses,” it said today. To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

California Wine Growers Facing Threat From Stinkwort, Bee Says

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Wine growers in California are facing a threat to their grapes from Stinkwort, an invasive weed which is spreading along roadways in Napa Valley and other areas of the state, the Sacramento Bee said on its website. While the weed has yet to become a problem at any vineyard, its turpentine-like odor may pose a danger if it penetrates grapes growing nearby, the Bee cited John Roncoroni, a science adviser for Napa County, as saying. The plant, resembling tumbleweed and with small, yellow flowers, made its first appearance in California in 1994, the Bee reported. Click here for web link To contact the reporter on this story: Guy Collins in London at guycollins@bloomberg.net To contact the editor responsible for this story: Peter Torday at ptorday@bloomberg.net

EuroCCP Offers Netting of Settlement Fees for U.K. Stocks

http://www.bloomberg.com/news/2013-08-12/euroccp-offers-netting-of-settlement-fees-for-u-k-stocks.html

EuroCCP , the European unit of Depository Trust & Clearing Corp., began offering a service to cut settlement fees charged to clients buying or selling U.K. or Irish stocks over several different alternative trading venues. The clearinghouse will allow so-called netting of transactions across the different trading systems it services from today, the London-based company said in an e-mailed statement. Customers can combine trades in the same security across multiple venues into a single settlement obligation, saving each client as much as 2 million euros ($2.7 million) a year, EuroCCP said. Clearinghouses act as central counterparties for every buy and sell order executed by their members, protecting them if other traders default. Netting enables market participants to pay a settlement fee based on the net effect of all their buy and sell orders, rather than paying to process every trade individually. The service “illustrates the focus of trading firms on reducing settlement and other post-trade costs,” Diana Chan, chief executive officer of EuroCCP, said in the statement. “Cross-platform netting is an essential prerequisite to realising the full benefits of a pan-European equities trading market. Settlement obligations for trading firms are reduced into a single net receipt or delivery per day for each U.K. and Irish security traded.” EuroCCP clears stocks across 19 markets, including Bats Chi-X Europe Ltd., Stockholm-based Burgundy and London Stock Exchange Group Plc (LSE) ’s Turquoise. The company is merging with European Multilateral Clearing Facility NV to form the biggest pan-European clearinghouse for stocks. Alternative trading systems such as London-based Bats Chi-X have pushed so-called interoperability, which offers traders a choice of who processes their transactions, to trim the cost of post-trade services. To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net or @NandiniSukumar on Twitter To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Steinbrueck Says Merkel’s Euro Mess Has to Be Cleaned Up

http://www.bloomberg.com/news/2013-08-12/steinbrueck-says-merkel-s-european-mess-has-to-be-cleaned-up.html

German Social Democratic chancellor candidate Peer Steinbrueck said he’s going to have to clean up the mess created in Europe by Angela Merkel ’s “one-sided” solution to almost four years of crisis in the euro region. Steinbrueck, 66, speaking in an interview on the eve of Merkel’s return to official engagements in Berlin today, said the “therapy” of budget cutting prescribed by the chancellor against the debt crisis that began in Greece in late 2009 has prompted a European rift, with “a downward spiral above all in southern Europe.” “Many countries have the impression that Germany is using its economic and political clout to impose its crisis management on other states,” Steinbrueck said yesterday at the SPD’s headquarters, Willy-Brandt-Haus, named after the chancellor known for his Ostpolitik, the policy of pursuing rapprochement with Eastern Europe. “Germany must contribute much more strongly to the stabilization of Europe,” he said. Steinbrueck, whose SPD trails Merkel’s Christian Democratic bloc by 13-17 percentage points in polls, is attempting to turn Merkel’s handling of the crisis to his advantage at the Sept. 22 ballot. While surveys suggest voters back the chancellor’s crisis-fighting efforts, Steinbrueck, her first-term finance minister, says she isn’t telling the electorate the truth about the costs that will need to be borne. “Merkel is lulling the voters, she isn’t challenging them,” he said. “Who wants to be confronted with challenges in summer? That’s tiresome. I’m tiresome, the SPD is tiresome.” ‘Chief Mistake’ A policy of consolidation and economic “impulse” is needed similar to that pursued by the grand coalition government in which he served from 2005-2009, Steinbrueck said. “That’s missing,” he said. “That’s the chief mistake.” European structural and cohesion funds must be concentrated on southern Europe, with revenue from the proposed financial transaction tax used to create “a kind of Marshall Program 2.0,” he said. As Merkel returns to the campaign trail with a live television interview at Deutsche Bank AG’s Berlin offices, Steinbrueck may struggle to lure voters with his message, according to Holger Sandte, chief European economist at Nordea Bank AB. He compares Merkel’s relationship with the electorate during the crisis as one of a trusted doctor and her patients. Doctor Merkel “They don’t exactly understand the diagnosis and the treatment not at all,” Sandte said in a note to clients today. “But they do trust that the woman doctor acts to the best of her knowledge.” That means “one needs very strong reasons to change the doctor,” he said. Latest polls suggest opinion may be hardening. Backing for Merkel’s CDU and its Christian Social Union Bavarian sister party held at 39 percent, while the SPD’s 26 percent support was also unchanged in a weekly INSA poll for Bild newspaper today. The SPD’s Green party allies had 14 percent and Merkel’s Free Democratic Party coalition partner 5 percent, both also unchanged. The Left Party had 8 percent. INSA surveyed 2,121 voters on Aug. 9-12. No margin of error was given. In the interview, Steinbrueck said that any Greek exit from the euro must be averted since it would carry “incalculable” risks as contagion rippled out to engulf Spain, Italy or France. He spoke after the Finance Ministry under his successor, Wolfgang Schaeuble , dismissed a report in Der Spiegel magazine citing a Bundesbank document as saying that Europe may need to provide more aid for Greece as soon as this year. Risks to the Greek aid program continue to be “extraordinarily high” and “considerable doubts” remain about Greece’s ability to implement reforms, the Bundesbank paper said, according to Der Spiegel. “To let a country like Greece go isn’t like a chemistry experiment in a lab that can be at some point be regretted as a shame when it goes wrong,” Steinbrueck said. To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net ; Brian Parkin in Berlin at bparkin@bloomberg.net To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Bershidsky's View From Europe

http://www.bloomberg.com/news/2013-08-12/bershidsky-s-view-from-europe.html

Here's today's look at some of the top stories on markets and politics in Europe: Europe faces further credit squeeze to meet Basel III. Royal Bank of Scotland published research showing that European Union banks will need to shed a further 3.2 trillion euros ($4.3 trillion) of assets by 2018, if they are to meet requirements for the new Basel III international banking regulations. That is exactly 10 percent of their current asset base. And, according to RBS, most of the cuts -- about 2.6 trillion euros -- will have to come from smaller banks, not the large ones that have been the focus of regulatory attention since the 2008 crisis. The titans, either nationalized or aided by EU governments, have already absorbed painful cuts and learned at least to limit their expansionist ambitions. The rest of the industry, however, hasn't done as much and therein lies a danger for Europe's small and medium-sized businesses. Their troubles are only just beginning, as the banks that have traditionally financed them start tightening their purse strings. Britain's Cameron defends fracking. U.K. Prime Minister David Cameron published an article in the Daily Telegraph in which he tells Britons that the country "cannot afford to miss out on shale gas." Hydraulic fracking, the technology used to extract natural gas from shale, was suspended in the UK last year after it was linked to small earthquakes in the northeastern county of Lancashire, but the suspension was later lifted. France has banned use of the technology outright, reflecting environmental concerns across the crowded European continent. Cameron argues that shale gas extraction won't damage England's rural landscapes and would bring money to neighboring communities, as well as cheap energy to the country as a whole. He says Britain shouldn't follow the French example, because the UK's estimated shale gas reserves are large. "Even if we extract just a tenth, that is still the equivalent of 51 years' gas supply," according to Cameron. It makes sense that economic considerations should triumph over environmental ones in the UK France can do without shale gas, because it has developed such a large supply of nuclear power. Yet if environmentalists had their way, they would ban nuclear energy, too -- Germany, for example, is phasing it out. It's just a matter of choosing one's poison. France predicts zero growth in 2013. France's gross domestic product will either drop 0.1 percent or grow 0.1 percent this year, according to the country's finance minister, Pierre Moscovici. Despite this less-than-optimistic prediction, Moscovici is certain that the nation's recession is over: "2014 will be the first year of real growth in three years," he said. French industry is indeed making something of a recovery, especially in the transport machinery and automobile sectors. The latter grew by 9.2 percent in the second quarter. Yet with consumer spending stagnating, a return to growth looks uncertain. Madrid sells 3,000 apartments to Goldman Sachs. In what the Spanish press is calls the biggest real estate deal in Spain this summer, the city of Madrid has sold 3,000 small apartments to a Goldman Sachs-led investment fund for $267 million. It is a condition of the deal that the new owner cannot change the rents currently charged for the properties, which range from $500 to $700 per month. The apartments are part of Madrid's youth housing program and the deal should open the way for the cash-strapped city to build more social housing. Even with Spain's rampant unemployment -- 57 percent among those under 25 -- managing youth housing appears to be an attractive business proposition. Ten funds initially expressed an interest in the property package, offered at a starting price of $224 million, and three placed bids. Basic necessities such as cheap housing may be the safest bets for investors in an economy suffering as badly as Spain's. Norwegian Prime Minister drives taxi in re-election stunt. Jens Stoltenberg, leader of Norway's Labor Party and the current prime minister, revealed on Facebook that he spent a day in June driving a taxi in the capital, Oslo. Stoltenberg donned a taxi driver's uniform and drove around the city picking up passengers. "If there's one place where people say what they really mean about most things, it's in a taxi," Stoltenberg said. Many passengers recognized the prime minister, and some scolded him for his bad driving -- he hadn't been behind the wheel of a car for eight years. Stoltenberg didn't charge for the rides and is hoping the stunt will pay off in a different way, helping him to win elections scheduled for Sept. 9. Labor is trailing its Conservative party opponents in opinion polls. Whether or not Stoltenberg holds on to the top job, his cab-driving experience speaks volumes about how relatively safe, economically sound and down-to-earth Norway is. It's hard to imagine a Greek or Spanish prime minister driving fares around the streets of Athens or Madrid without a full detail of bodyguards. (Leonid Bershidsky, and editor and novelist, is a Bloomberg View contributor. He can be reached at bershidsky@gmail.com.)

Republican Primaries Risk Repeat Misfires in Senate Majority Bid

http://www.bloomberg.com/news/2013-08-12/republican-primaries-risk-repeat-misfires-in-senate-major.html

Kentucky, Wyoming and South Carolina should be easy wins for incumbent Republicans trying to regain the U.S. Senate majority in 2014. Instead, the primary challenges they face threaten to drain resources, sharpen campaign trail rhetoric and build division for a party struggling to find its way after a demoralizing 2012 election. In Georgia, the Republican primary is jammed with seven candidates, pitting one wing of the party against the other -- as is the case in the other states. Meanwhile, Democrats are unifying behind one candidate. The infighting has raised Democratic expectations that they can keep control of the chamber and perhaps capture seats in Republican-leaning states. They did that in Indiana and Missouri in 2012 against inexperienced candidates backed by the small-government Tea Party branch of the party. Democrats control 54 Senate seats, compared with 46 held by their partisan adversaries. Republicans need a net gain of six seats to win the 100-member chamber, because Democratic Vice President Joe Biden also serves as president of the Senate, and Democrats are defending seven seats in states won by Republican Mitt Romney in the 2012 presidential election: Alaska, Arkansas, Louisiana, Montana, North Carolina, South Dakota and West Virginia. “It’s those primary challenges that shot down the Republican effort to win the Senate in the last two elections,” said David Redlawsk , a political science professor at Rutgers University in New Brunswick, New Jersey. “The Tea Party brought in what turned out to be very weak candidates.” RNC Meeting The intramural bickering is the environment that confronts Republican National Committee Chairman Reince Priebus as he meets with state party leaders this week in Boston to discuss how best to turn around the party’s electoral course. At the top of their agenda will be a woman who potentially represents their biggest obstacle to regaining the White House in 2016: Hillary Clinton. Priebus has threatened to block presidential primary debate partnerships with NBC and CNN if the television networks don’t cancel planned Clinton documentaries that he calls free advertising for a potential Democratic presidential candidate. During the four-day meeting, RNC members will also hear privately from New Jersey Governor Chris Christie , a potential 2016 presidential candidate, and Newt Gingrich , a former House speaker and a 2012 presidential candidate. The brewing Republican primary contests are battles that reflect divisions that have burdened the party nationally since 2010, when some incumbents facing relatively easy re-elections were challenged because they were viewed as too willing to compromise or not vocal enough in their opposition to Democrats. 2012 Loss In most of the states, the Republican primary winner will have a distinct advantage going into the general election, given the partisan tilt of the state. That’s not always the outcome, though. In 2012, for example, Indiana’s Senator Richard Lugar lost an intra-party fight that ultimately resulted in Democrat Joe Donnelly winning. “If any of these challenges succeed, it suggests that the party will remain at war with itself,” Redlawsk said. “It’s also a pretty good signal for the 2016 race and the attention that the early candidates will receive.” Jennifer Duffy , an analyst with the nonpartisan Cook Political Report in Washington, said the race in Georgia is the one that best encapsulates the issues facing Republicans. “Georgia is really going to be telling,” she said. “Republicans have the potential of nominating a candidate who cannot win statewide.” Georgia Race The Republican field to replace retiring Senator Saxby Chambliss includes three U.S. House members -- Paul Broun, Jack Kingston and Phil Gingrey. Also running is former secretary of state Karen Handel, who resigned in 2012 as an executive at the Susan G. Komen foundation, a breast cancer charity, amid controversy over pulling funding from Planned Parenthood , which provides women’s health screenings and abortions. Broun, trained as a physician, could face difficulties in a general election because of his comments about evolution. “All that stuff I was taught about evolution, embryology, Big Bang theory, all that is lies straight from the pit of hell,” he told an audience in October 2012. “It’s lies to try to keep me and all the folks who are taught that from understanding that they need a savior. You see, there are a lot of scientific data that I found out as a scientist that actually show that this is really a young Earth. I don’t believe that the Earth is but about 9,000 years old. I believe that it was created in six days as we know them.” Run-Off Contest A runoff election will be held in Georgia if none of the candidates wins more than 50 percent of the primary vote. That could drain additional Republican resources for the general election battle against Democrat Michelle Nunn, the daughter of former U.S. Senator Sam Nunn. Earlier this year, Republican strategist Karl Rove helped form a new political action committee, the Conservative Victory Project, that plans to back candidates in primaries that it deems to be the most electable in a general election. The Georgia race is one that the group is monitoring, according to a person familiar with their strategy who wasn’t authorized to talk publicly about it. In South Carolina, Republican Senator Lindsey Graham faces multiple primary challengers, although a favorable general election environment if he clears the early hurdles. “He has three primary opponents, which bodes pretty well for him because it divides up any anti-Graham vote that exists and none of these other candidates is especially well known,” said Duffy. Graham Challenge Still, South Carolina also has a run-off rule so Graham may be vulnerable if he can’t avoid a one-on-one showdown. Senate Minority Leader Mitch McConnell of Kentucky, facing a Tea Party-backed Republican primary opponent, is also a top target for Democrats. His immediate challenger is Louisville businessman Matthew Bevin, a wealthy investor who has criticized the six-term incumbent as being out of touch with the party’s grassroots and voters. Alaska also carries risk for Republicans trying to unseat Democratic Senator Mark Begich , if they fail to nominate a candidate who can win statewide. Republican candidates so far include Lieutenant Governor Mead Treadwell and Joe Miller , a Tea Party favorite who unsuccessfully ran in 2010. Sarah Palin, the state’s former governor and the 2008 Republican vice presidential nominee, has also said she’s considering the race. In Wyoming, Republican Liz Cheney, the elder daughter of former Vice President Dick Cheney , is running against Senator Michael Enzi, a fellow Republican who is well-liked by both Tea Party activists and more traditional Republicans. “I don’t consider that much of a Tea Party challenge,” Duffy said. “I consider that an impatient candidate. But it will get a lot of attention because of who Liz Cheney is.” -- With assistance from Greg Giroux in Washington. Editors: Jeanne Cummings, Mark Silva To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net. To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

Group Five Swings to Profit on Contract Growth, Mideast Exit

http://www.bloomberg.com/news/2013-08-12/group-five-swings-to-profit-on-contract-growth-middle-east-exit.html

Group Five Ltd. (GRF) , a South African construction company, returned to profit in the year through June as the builder’s order book grew and it closed an unprofitable Middle East unit. Net income for the 12 months through June was 272.7 million rand ($27.7 million), compared with a 278.4 million rand loss a year ago, the Johannesburg-based company said in a statement today. Sales rose 27 percent to 11.1 billion rand. Losses from the Middle East operations narrowed to 50.8 million rand, compared with 200 million rand a year ago, Chief Financial Officer Christina Teixiera said on a conference call. The company is exiting the region after almost a decade to focus on Africa , she said. Group Five’s construction order book rose 5 percent to 14.2 billion rand compared with December, and about 26 percent from the previous June. About 32 percent of sales in fiscal 2013 came from outside South Africa, within an acceptable range for the company, according to Teixiera. The dividend was raised by 86 percent to 67 South African cents a share. Group Five has advanced 41 percent in Johannesburg this year compared with a 4.2 percent drop in the 7-member FTSE/JSE Africa Construction & Building Materials Index. It fell 1.3 percent today to 39.50 rand, the lowest level since July 31. The company said talks continue with the Competition Commission over a possible fine for collusion in the South African construction industry, and it made a provision to cover any charge. The regulator agreed to a combined levy of 1.46 billion rand with 15 other companies in June. “We offer our unreserved apology and we understand that the country demands an ethical, competitive and transformed construction industry,” Group Five said. To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

Pegatron Second-Quarter Profit Misses Analyst Estimates

http://www.bloomberg.com/news/2013-08-12/pegatron-second-quarter-profit-misses-analyst-estimates.html

Pegatron Corp. (4938) , a maker of devices for Apple Inc. (AAPL) and Microsoft Corp., posted second-quarter profit that missed analyst estimates. Net income was NT$1.39 billion ($46 million) in the three months ended June 30, the company said in statement today. That missed the NT$1.72 billion average of 14 analyst estimates compiled by Bloomberg. Pegatron, which makes Apple’s iPad Mini and devices for Dell Inc. and Sony Corp., will supply Apple’s new low-cost iPhone, according to analysts including Arthur Liao at Fubon Financial Holding Co. The Taipei-based contract electronics manufacturer makes Surface tablets for Microsoft, which last month wrote down the value of unsold inventory and cut prices as the device struggled to lure customers from Apple. “We think the high dependency on Apple is an increasing risk for Pegatron,” Bamboo Lin, an analyst at SinoPac Securities Co. in Taipei, said in a July 23 report. Apple is Pegatron’s biggest customer, accounting for 27 percent of sales, followed by Asustek Computer Inc. (2357) and Lenovo Group Ltd. (992) , according to data compiled by Bloomberg. Pegatron competes with Hon Hai Precision Industry Co., the flagship of billionaire Terry Gou’s Foxconn Technology Group, to assemble devices for Apple. Pegatron company was spun off from Asustek in 2010. China Labor Watch, an advocacy group, last month alleged factories run by Pegatron use underage workers, pay insufficient wages and force employees to work overtime. Pegatron Chief Executive Officer Jason Cheng and Apple both said they will investigate the China Labor Watch accusations. To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net ; Cindy Wang in Taipei at hwang61@bloomberg.net To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

Bond Risk Increases in Japan, Credit-Default Swaps Prices Show

http://www.bloomberg.com/news/2013-08-12/bond-risk-increases-in-japan-credit-default-swaps-prices-show.html

The cost of insuring corporate bonds from non-payment in Japan rose, according to credit-default swap traders. The Markit iTraxx Japan index climbed 1 basis point to 94 basis points as of 9:33 a.m. in Tokyo , Citigroup Inc. prices show. The measure is set for its first increase in three trading days after touching an almost three-week low on Aug. 9, according to data provider CMA. The Markit iTraxx Australia index was little changed at 118 basis points as of 10:31 a.m. in Sydney, according to National Australia Bank Ltd. The gauge last closed lower at 115.9 on Aug. 6, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was also little changed at 142 as of 8:45 a.m. in Singapore , Australia & New Zealand Banking Group Ltd. prices show. The benchmark, which recorded its first weekly decrease in three in the period through Aug. 9, has ranged from 99.5 and 177.8 this year, according to CMA. Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite. The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements. To contact the reporter on this story: Foster Wong in Hong Kong at fwong94@bloomberg.net To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

CMBS Holders Face 109% Loss on California’s Shops at Dos Lagos

http://www.bloomberg.com/news/2013-08-12/cmbs-holders-face-109-loss-on-california-s-shops-at-dos-lagos.html

Losses on soured debt linked to a California shopping center that was foreclosed on more than three years ago surpassed 100 percent, spurring ratings cuts on one of the last bond deals before the property-market collapse. The Shops at Dos Lagos was sold for $30 million last month, prompting Fitch Ratings to downgrade almost a quarter of the original $1.16 billion commercial-mortgage backed securities offering from JPMorgan Chase & Co. in 2008, the rating company said in an Aug. 9 report. The Corona, California, property was valued at $170 million in April of that year, according to data compiled by Bloomberg. The mortgage on the 351,000 square-foot retail outlet went bad seven months after it was sold to investors as part of JPMorgan’s $1.16 billion transaction, sending bond buyers fleeing from the $550 billion market on concern that the loan portended a surge in defaults on boom-era deals. Late payments reached a record 9.01 percent in July 2011, according to Fitch. Delinquencies on commercial-mortgages contained in bonds are declining, falling 40 basis points to 6.78 percent last month, according to Fitch. The rate on transactions sold in 2007, when Wall Street arranged a record $232 billion of the bonds, is 13.7 percent, Wells Fargo & Co. analysts led by Marielle Jan De Beur said in a July 31 report. Limited History The outstanding loan on the Riverside County property was $124 million, accounting for 12.4 percent of the JPMorgan bond offering, Credit Suisse analysts led by Roger Lehman said in a report today. The building’s sale will lead to a 109 percent loss after fees and other expenses, according to Fitch. The shopping center, constructed in 2006 and 2007, had a limited history when the mortgage was taken out and was financed assuming revenues would rise. So-called pro-forma lending was common during the property-market boom. The retail property was part of a two-stage development that included a residential section, golf course, hotel and a 135-acre wildlife preserve, according to Fitch. The loan was sent to a servicer that deals with troubled mortgages in November 2008 when the borrower indicated that the housing crisis in Southern California had slowed the development’s progress and eroded revenues. To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

Mongolia Wants Mine Stage 2 Funded by Cash Amid Talks

http://www.bloomberg.com/news/2013-08-12/mongolia-wants-oyu-tolgoi-second-stage-funded-from-mine-cashflow.html

(Corrects headline in story published yesterday to clarify the proposed funding arrangement would be an interim measure while talks continue.) Mongolia wants the planned $5.1 billion expansion at Rio Tinto Group’s Oyu Tolgoi mine to be financed from cash flow until a dispute over the cost of the biggest foreign investment in the nation is resolved. Cost overruns at the copper and gold mine, 34 percent owned by Mongolia, are increasing the debt the government owes to Rio’s Turquoise Hill Resources Ltd. (TRQ) unit, which operates the project, Minister of Mining Davaajav Gankhuyag said on Aug. 9. Rio delayed work on the underground expansion last month amid the dispute over financing that contributed to production delays at the first stage of the mine. Outstanding issues that need to be resolved include taxes and the right to a royalty stream from the project. “The positions are still far away from each other, there is still a lot of work to do,” said Dale Choi, the founder of Independent Mongolian Metals and Mining Research. “There needs to be substantial political will to reach an agreement but at the moment there are a lot of arguments against the project financing ,” Oyu Tolgoi, located 550 kilometers (340 miles) south of Ulaanbaatar in the Gobi Desert, began shipping concentrate last month and is forecast to be a key revenue earner for Mongolia, where foreign direct investment slumped 43 percent in the first half. ‘High Risk’ “Until the project financing is resolved I think it is proper to continue the underground mine with revenues from concentrate,” Gankhuyag said in a letter to Rio Tinto that he showed reporters on Aug. 9. “The costs specified in the feasibility study are creating a high risk of reducing profits to the Mongolian side,” he told reporters. David Luff , a Melbourne-based spokesman for Rio Tinto, declined to comment on the mine minister’s letter, and referred to last week’s remarks by Chief Executive Officer Sam Walsh , who said both parties “want phase two to go ahead.” Since deliveries began last month, Oyu Tolgoi has shipped 4,000 metric tons of concentrate, Gankhuyag said. The company plans to export 300,000 tons of concentrate this year with revenue of $1 billion, Gankhuyag said. The project finance package, with funding from the International Financial Corporation, among other lenders, must be approved by the Oyu Tolgoi board of directors, which includes three Mongolian nationals. Royalty Dispute Another point of dispute is a royalty on production to be collected by Rio Tinto, he said. “Mongolia believes that only the state has the right to take a royalty,” he said. When construction is complete, including the tunnels that will make up the underground portion of the mine, the total cost to build Oyu Tolgoi may exceed $24 billion, significantly higher than the $14 billion that Mongolia had first anticipated, Gankhuyag said. To pay for its 34 percent stake, Mongolia borrowed $800 million from Rio Tinto and pays interest of 7 percent to 8 percent a year, said Chuluuntseren Otgochuluu, the Director-General of the Mining Ministry’s Department of Strategic Policy and Planning. Mongolia is also concerned about cost overruns on infrastructure for the mine which Otgochuluu said have topped $1 billion. A planned power station for the project hasn’t yet been built, he said. “We don’t understand why the main jobs are not yet done but the financial overrun is so high,” said Otgochuluu. A task force is currently conducting an audit of $2 billion spent during the first phase. The results of the audit will be available in two to three weeks, Otgochuluu said. To contact the reporter on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

Philippines to Host Talks on U.S. Troops Amid China’s Rise

http://www.bloomberg.com/news/2013-08-12/philippines-announces-talks-for-more-u-s-troops-amid-china-rise.html

The Philippines will hold talks with the U.S. on boosting American troop levels there as the Southeast Asian nation seeks to counter southern insurgents and China ’s push for more influence in the region. The two sides will discuss rotating more U.S. troops through the Philippines, joint military exercises and stationing equipment in the country to address natural disasters, Defense Secretary Voltaire Gazmin said at a briefing yesterday in Manila. The talks will start tomorrow, Foreign Affairs Assistant Secretary Carlos Sorreta said. The Philippines is strengthening its U.S. alliance and modernizing its military to counter what it sees as a Chinese move for greater sway in a region rife with disputes over the ownership of fish and gas-rich waters of the South China Sea. The government also wants to contain an insurgency in the southern Mindanao region, where U.S. troops have conducted counter-terrorism training since 2001. “As an American ally, the Philippines would benefit from increased U.S. presence,” said Rommel Banlaoi, executive director of the Philippine Institute for Peace, Violence and Terrorism Research. “Expect China to react negatively.” The U.S. supports the Philippines in its desire “to build a credible defense and respond rapidly during times of humanitarian crisis and natural disasters,” the U.S. Embassy in Manila said in an e-mailed statement today. “We are optimistic that the first round of negotiations will result in positive outcomes.” Asia Rebalance Asked about the negotiations on Aug. 8, White House spokesman Jay Carney declined to comment, though he cited a move by President Barack Obama ’s administration to rebalance its foreign policy toward a focus on the Asia-Pacific region. “We need to be fully engaged throughout the region, both economically and when it comes to security matters,” Carney said. The Philippines plans to spend 75 billion pesos ($1.7 billion) in five years to buy ships, helicopters, and weapons to bolster defense, Aquino said in December after enacting amendments to a 17-year-old military modernization law. In June, the Philippines protested what it called “the massive presence of Chinese military and paramilitary ships” around territory it claims in the South China Sea. Territorial Integrity “At the front lines of ensuring the security of our people and the territorial integrity of our nation is the profound partnership between diplomacy and defense,” Foreign Affairs Secretary Albert del Rosario said at yesterday’s briefing in Manila. “We have to strengthen both if we are to secure our people and our nation and to improve its response to natural disasters.” At least 16 people were killed and scores injured by bombings in Mindanao in the past month, police and military said. An improvised bomb exploded in Maguindanao on Aug. 10 as troops clashed with members of the Bangsamoro Islamic Freedom Fighters, a group that had separated from the Moro Islamic Liberation Front that’s in peace talks with the government. Groups trying to derail the peace agreement may be behind the bombings and the government will offer a reward for their capture, Aquino said Aug. 8. The Philippines topped a list of 10 countries most affected by natural disasters in 2012, with 2,360 deaths, according to a report by Brussels-based Center for Research on the Epidemiology of Disasters. To contact the reporters on this story: Joel Guinto in Manila at jguinto1@bloomberg.net ; Clarissa Batino in Manila at cbatino@bloomberg.net To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

Oil-Sands Industry Turns to Algae to Appease Obama

http://www.bloomberg.com/news/2013-08-12/oil-sands-industry-turns-to-algae-to-appease-obama.html

Canada ’s response to President Barack Obama ’s challenge to reduce emissions of global-warming gases from the oil sands starts with sewage and algae. The paste-like crude extracted from oil sands is softened by heat and steam to make it flow though pipelines. Burning natural gas to process the fuel creates carbon dioxide that researchers say can be mixed with waste water and fed to algae, which can be processed into cattle feed and other products. “We’re taking CO2 and making it into a valuable product,” said John Parr, vice president at Canadian Natural Resources Ltd. (CNQ) , the country’s third-largest oil-sands producer by market value. “There’s a business case that can be made for it.” Such efforts by Canadian Natural and rival oil producers, including Imperial Oil Ltd. (IMO) and Suncor Energy Inc. (SU) , are partly aimed at convincing U.S. decision makers that the industry can mitigate the climate-change impact of TransCanada Corp. (TRP) ’s proposed Keystone XL pipeline to the Gulf Coast from Alberta. Obama has said he won’t issue the permit TransCanada Corp. needs to build the $5.3 billion pipeline to link Alberta with refineries on the Gulf of Mexico if it would significantly worsen global warming. In a July 28 interview with the New York Times (NYT) , Obama said that Canada “could potentially be doing more to mitigate carbon release.” Canada’s Edge Following Obama’s comments, consulting company IHS CERA published a study indicating the Keystone pipeline won’t have any material impact on U.S. greenhouse-gas emissions. Canada’s Natural Resource Minister Joe Oliver is also quick to point out that the nation is ahead of the U.S. in reducing carbon. Canada has committed to cutting greenhouse gas emissions by 17 percent by 2020 from 2005 levels, in line with U.S. promises made in 2009 at United Nations climate-change talks. Prime Minister Stephen Harper ’s government says the country is almost half-way to the target. Canada has achieved this with tighter rules on coal-fired power plants , as well as new methods to account for how forests absorb carbon and slower economic growth. Provinces including Ontario and Nova Scotia are also boosting the use of renewable energy like wind and hydropower to cut reliance on fossil fuels. Some provinces, including Alberta, have imposed a tax on carbon emissions while Manitoba says it will be the first North American jurisdiction to ban the use of petroleum coke and coal for heating, starting in 2014. Emissions Increase The booming oil sands , which attract more than C$20 billion ($19.4 billion) in annual investment, represent a challenge, however. Studies show a gallon of fuel produced from the oil-sands crude, known as bitumen, releases 8 percent to 37 percent more carbon than conventionally produced fuel, according to a production-to-final-consumption review by the Calgary-based environmental consultants Pembina Institute. That’s because it takes more energy to extract and refine than lighter crudes. Alberta, where most of the 170 billion barrels of recoverable reserves of bitumen are located, collects C$15 per ton of carbon from industrial emitters who don’t meet mandatory reduction targets established by the provincial government. Even with that, emissions from the oil sands have increased 62 percent since 2005. A carbon tax in neighboring British Columbia has resulted in a 19 percent decline in per-capita fuel consumption since 2008, according to a study by Ottawa-based think tank Sustainable Prosperity. Even as emissions from the oil-sands industry are rising faster than any other source, Harper has delayed imposing tougher regulations on the oil and gas industry. ‘Wrong Direction’ Greenhouse gas output will continue to go in the “wrong direction” without better policies, said P.J. Partington, a policy analyst at the Pembina Institute. “Our biggest customer is asking good questions and our government isn’t providing good answers,” said Partington, who’s based in Ottawa. “If you look at the current trajectory, emissions are going way up” from oil-sands production. Many look to science for help. University of Calgary Professor Pedro Pereira-Almao and Nexen Inc., an oil-sands producer owned by Cnooc Ltd. (883) , are testing the use of nano-particles to process bitumen before it’s pumped to the surface. This “underground refinery” would result in less combustion of natural gas and lower emissions by eliminating at least one heating cycle for the fossil fuel. Other efforts by industry include using geothermal heat, solvents and electricity to replace natural gas. Most remain in the pilot-project stage. Canadian Natural Canadian Natural expects the algae project to be operating by the first quarter and plans to share the technology with competitors, Parr said. The technology may be able to reduce carbon emissions at the company’s Horizon oil-sands mining site in northern Alberta, where the first algae pond is being built, by 15 percent and by as much as 30 percent at the Primrose facility which uses a steam-injection process, Parr said. The company is already lining up customers for the dried algae and is counting on the technology to be applied across Canada and the world. Canadian Natural’s shares gained 9.6 percent this year through Aug. 9, beating the Standard & Poor’s/TSX Composite index’s 0.9 percent gain. “The grander plan for this technology would be that it would be employed in a lot of places across Canada, North America and the world eventually,” Parr said. ‘Public Relations’ Leaving industry to come up with solutions on its own will result in failure to curb emissions on the scale needed to halt climate change , said Danielle Droitsch, a director at the Natural Resources Defense Council , a New York-based environmental group that opposes the Keystone pipeline. Better to leave the bitumen in the ground, she said. “Until policy is in place, technology won’t drive emissions reductions,” she said in an interview. “These efforts are being used as more of a public-relations exercise and don’t represent a serious effort to reduce emissions.” Canada, the world’s seventh-largest emitter of greenhouse gases , increased CO2 emissions from oils-sands production by 1.8 percent to about 47.1 million tons in 2011, the most recent figures available, according to a report from the Canadian Association of Petroleum Producers. Emissions of carbon from oil-sands output has risen to about 6.5 percent of Canada’s total from about 1 percent in 1990, the Pembina Institute estimates. High Bar Production of bitumen is poised to double from last year to 3.8 million barrels a day by 2022, according to Alberta’s energy regulator. With output rising faster than per-barrel emissions are falling, total emissions are set to climb. Canada has made few efforts to curb rising emissions from the oil-sands industry, said Andrew Logan, director of the oil and gas program at Ceres, an investor network promoting sustainable business practices. That will make approval of Keystone more difficult, he said. “The president made a much clearer statement of the hurdles the project will have to overcome,” he said in a phone interview from Washington. “It set a high bar and it’s not a foregone conclusion that he will approve the project.” Ceres represents investors with $11 trillion worth of assets. With uncertainty about Keystone XL’s future, regardless of efforts the industry is making, and the U.S. boosting energy output, some chief executives in Canada are already casting an eye elsewhere for customers. “The U.S. is a good market today, but I don’t think it’s the natural market for future growth because there is a lot of increased production down there,” Sveinung Svarte, chief executive officer of Athabasca Oil Corp. (ATH) , said in an interview. “The Pacific Rim should be the Canadian target for export.” To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net To contact the editors responsible for this story: Susan Warren at susanwarren@bloomberg.net ; David Scanlan at dscanlan@bloomberg.net

Patriot Coal Reaches Accord With Labor Union on Retiree Benefits

http://www.bloomberg.com/news/2013-08-12/patriot-coal-reaches-accord-with-labor-union-on-retiree-benefits.html

Patriot Coal Corp. (PCXCQ) , the miner that filed for Chapter 11 reorganization in July 2012, reached an agreement with the United Mine Workers of America on collective bargaining and healthcare benefits for union retirees. Patriot commented today in a statement. To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

Saudi Court Condemns Editor to 600 Lashes With Breaks

http://www.bloomberg.com/news/2013-08-12/saudi-court-condemns-editor-to-600-lashes-with-breaks.html

A Jeddah criminal court judge has sentenced Saudi Arabian journalist Raif Badawi to seven years in prison and 600 lashes for the crime of “insulting Islam.” It could have gone worse for Badawi: Had the judge not thrown out the charge of apostasy, he would have received a death sentence. He’ll probably survive the whipping only because it comes in four sessions with planned hospitalizations in between. He has until Sept. 6 to file an appeal. Badawi, 30, is the co-founder and editor of the website saudiliberalnetwork.com, which encouraged people to post their thoughts about the role of religion and politics, among other things, in their lives. (No longer, however: The site has been shut down.) He was arrested on June 17, 2012, and sent to Jeddah’s Buraiman prison. The conviction and sentence were announced two weeks ago. Since being jailed, Badawi hasn’t seen his wife and three children, who are living in exile in Lebanon. “He’s extremely depressed at the judgment,” Badawi’s wife, Ensaf Haidar, told me in an interview last week. “Based on things the judge was saying in court, Raif really thought he might be released.” Horse Whip Can any human being survive 600 lashes? I asked Waleed Abu al-Khair, a Saudi Arabian human-rights lawyer who is handling Badawi’s case, to tell me about this particular form of punishment. “The lash is like a horse whip,” he said during a telephone interview from Jeddah. “You stand with your face to the wall. They lash his back from top to legs. 150 lashes are given at a time. Then he will need to go to the hospital.” Badawi was given five years for “insulting Islam.” Two more are for insulting both Islam and Saudi Arabia’s Committee for the Promotion of Virtue and Prevention of Vice. According to the global watchdog group Human Rights Watch, a popular cleric, Sheikh Abdulrahman al-Barrak, called for Badawi to be charged with apostasy for allegedly saying that “Muslims, Jews, Christians and atheists are all equal.” Parental Disobedience The judge, Faris al-Harbi, tacked an additional three months onto the sentence, al-Khair told me, for “parental disobedience.” Badawi’s father, he says, went on TV to condemn his son’s statements and the website. Badawi has repeatedly claimed that he never attacked Islam and that he only sought to provide a forum for open debate. He even convinced al-Harbi of his own faith, which led to the dismissal of the apostasy charge. Nevertheless, Al-Khair is pessimistic about the prospects for an appeal. “We don’t believe they will change,” he said. “We hope they will look at the pressure from the outside regarding dialogue among religions. “To be honest with you,” he continued, “the majority of people here believe he should be punished for being a liberal.” The lawyer knows something about this: His wife, who is Badawi’s sister, spent seven months in a Saudi prison. Her crime: “Parental disobedience” that included advocating for the right of women to drive. Al-Khair said that he fears he too will be arrested for his role in the Badawi case. How is Raif doing since the conviction? I asked. “He is just afraid,” al-Khair replied. “He said, ‘I just care about my family, that no one will hurt them.’” Broader Crackdown Ensaf Haidar spoke to me from Beirut , where she is living with Najwa, 10; Tirad, 9; and Miriam, who is 6. She answered my questions through an interpreter, Adam Coogle, a Middle East researcher for Human Rights Watch, one of several organizations that has turned a spotlight on free-speech cases in Saudi Arabia. Coogle called Raif Badawi’s arrest and conviction “part of a much larger crackdown on free speech in Saudi Arabia.” I asked Ensaf how she thinks her husband is doing. She was slightly more optimistic than al-Khair. “He’s pretty resilient,” she said. “The Saudis would love him to apologize and show him mercy. But he stands by his beliefs. He won’t back down.” (Jeremy Gerard reports on human-rights issues for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.) Muse highlights include Elin McCoy on wine and Hamptons Scene. To contact the writer of this column: Jeremy Gerard in New York at jgerard2@bloomberg.net. To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net .

IVG Creditors Submit Plan to Restructure $4.3 Billion Debt

http://www.bloomberg.com/news/2013-08-12/ivg-s-creditors-submit-plan-to-restructure-4-3-billion-of-debt.html

IVG Immobilien AG (IVG) , the German property company seeking to restructure 3.2 billion euros ($4.3 billion) of debt, said creditors submitted a proposal that would wipe out most of its share capital. The shares fell as much as 26 percent. Under the proposal, new shares would be issued in a debt-for-equity swap, the Bonn-based company said in a statement on Saturday evening. That would cut its share capital to 0.5 percent of the current value, IVG said. “The company will shortly assess these results, conduct further negotiations on this basis and, in case of an overall agreement on a detailed level,” invite shareholders and holders of a hybrid bond to vote on the plan, IVG said. IVG, once Germany ’s biggest listed property company, has seen its market value plummet since 2007 after demand for its office buildings fell in the wake of the financial crisis. The shares fell 36 percent to 14 cents in Frankfurt trading. The stock reached a high of about 35 euros in 2007. The company owns about 5 billion euros of office buildings in Europe , including The Squaire in Frankfurt, which was valued at 800 million euros in the company’s 2012 annual report. IVG manages 15 billion euros of property for private and institutional clients, including a fund that owns a 50 percent stake in London ’s Gherkin tower. IVG reduced the value of the assets on its balance sheet by 350 million euros, according to the statement. These assets include offices, caverns, shareholdings and money owed to the company. Cerberus, BlackRock IVG’s creditors include Cerberus Capital Management, BlackRock Inc. (BLK) , Third Avenue Management LLC, Morgan Stanley (MS) and Apollo Global Management LLC (APO) , according to two people with knowledge of the talks. Aurelius Capital Management LP is also a creditor, according to a July 23 statement from Aurelius. This year, distressed-debt investors bought IVG bonds and loans at a discount from the original bank lenders in the hope of profiting from a restructuring, according to the two people. If the plan succeeds, about 2.15 billion euros of debt will be exchanged. Holders of the 1.35 billion-euro syndicated loan I will receive 80 percent of the new shares and holders of a 400 million-euro convertible loan will receive 20 percent. Investors in a 400 million-euro hybrid bond will split 0.5 percent of the existing stock with shareholders. In addition, syndicated loan I creditors have offered IVG a bridge loan of about 140 million euros to help cover expenses, including restructuring costs, according to the statement. Averting Courts The plan would enable IVG to avoid a court-supervised restructuring, which the company began considering after creditors failed to offer an alternative by a July 30 deadline, a person with knowledge of the plan said. IVG’s debt equals more than 80 percent of the value of its assets and the company plans to bring it closer to 60 percent, according to the person. The company owes money to more than 200 lenders, the person said. IVG is being advised by financial consultants at Rothschild and represented by law firms Freshfields Bruckhaus Deringer LLP and Goerg Partnerschaft von Rechtsanwaelten. To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

U.S. Retail Sales, SAC, Wal-Mart, Cisco: Week Ahead Aug. 12-17

http://www.bloomberg.com/news/2013-08-12/u-s-retail-sales-sac-wal-mart-cisco-week-ahead-aug-12-17.html

In the U.S., retail sales probably rose for a fourth straight month and industrial production climbed for a second month in July. The euro-area is likely to have exited a recession in the second quarter after a record six quarters of contraction, data may show. Investors in SAC Capital Advisers LP face a deadline to redeem money for the third quarter from founder Steven Cohen ’s hedge fund, which has been indicted for perpetrating what the U.S. calls an unprecedented insider-trading scheme. Wal-Mart Stores Inc. (WMT) , Cisco Systems Inc. (CSCO) and A.P. Moeller-Maersk A/S (MAERSKB) will be among companies releasing results. MONDAY, AUG. 12 To contact the reporters on this story: Heather Langan in London at hlangan@bloomberg.net ; Greg Miles in New York at gmiles1@bloomberg.net ; Jim McDonald in Tokyo at jmcdonald8@bloomberg.net To contact the editor responsible for this story: Dick Schumacher at dschumacher@bloomberg.net

San Miguel Reports First Quarterly Loss Since 2008 on Weak Peso

http://www.bloomberg.com/news/2013-08-12/san-miguel-reports-first-quarterly-loss-since-2008-on-weak-peso.html

San Miguel Corp. (SMC) , the largest Philippine company, posted its first quarterly loss since the period ended December 2008 as a weaker peso led to a foreign-exchange deficit. Net loss was 6.6 billion pesos ($151 million) in the second quarter ended June 30, compared with a profit of 5.65 billion pesos a year earlier, according to figures derived from first-half results announced today by the Manila-based company. Sales fell 4.4 percent to 179.2 billion pesos. The strengthening of the dollar against the local currency resulted in an “unrealized” foreign-exchange loss in the first half, the company said today in a statement. The company and its units have 243 billion pesos of debt due by 2018, about 149 billion pesos of which are denominated in dollars, according to data compiled by Bloomberg. “It could only be the debt,” said Astro del Castillo, managing director at Manila-based First Grade Holdings Inc. “The company needs to re-strategize to address that debt issue.” San Miguel shares fell 0.5 percent to 84 pesos at the close in Manila, before the results were released. The shares have fallen 20 percent this year, compared with the benchmark Philippine stock index’s 11 percent gain. San Miguel is the second-worst performer among 30 companies in the Philippine Stock Exchange Index this year. Falling Peso The peso has fallen 6 percent this year and is the worst-performing currency in the region after the yen and the Indian rupee. It fell 5.5 percent in the three months ended June, halting five quarters of gains, according to Tullett Prebon Plc. The drop last quarter was the most in five years. First-half loss was 2.4 billion pesos on sales of 357.5 billion pesos, San Miguel said in its statement today, without giving year-earlier numbers. First-half profit last year was 13.89 billion pesos on sales of 329.5 billion pesos, according to data compiled by Bloomberg. Excluding foreign-exchange losses, recurring net income was “sustained” at 7.8 billion pesos in the first half, the company said. Operating income increased 19 percent to 28.9 billion pesos, it said. “Forex losses mask the solid performance we had in our business,” Chairman Eduardo Cojuangco said in the statement. “We remain bullish about our underlying performance.” San Miguel, which started as a brewer more than a century ago, has made more than $5.6 billion worth of purchases since 2008 as it expanded into industries such as airlines, oil and power to triple the return it used to get from food and drinks. The Southeast Asian nation’s most acquisitive company plans to raise about $4 billion by selling power assets, to help fund its transformation from a brewer and foodmaker into an investor in energy, mining, airlines and roads, President Ramon Ang said in a July 12 interview. The company is seeking to increase revenue to $50 billion pesos in five years after last year’s 30 percent gain to $16 billion, missing a $20 billion goal. The sale of 64.3 million Manila Electric shares last month resulted in a gain of 9.6 billion pesos, San Miguel said. To contact the reporter on this story: Cecilia Yap in Manila at cyap19@bloomberg.net To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net ; Colin Keatinge at ckeatinge@bloomberg.net

The East is Cracking Down on E-Money, Too

http://www.bloomberg.com/news/2013-08-12/the-east-is-cracking-down-on-e-money-too.html

Governments are finally coming to terms with the reality of e-money, and the U.S. court case against an alleged Bitcoin Ponzi scheme is only one example. Russia and Ukraine are also struggling with Internet currency controversies. On Aug. 12, the Russian Prosecutor General's Office said in a statement that it had found that Alexei Navalny, an opponent of President Vladimir Putin now running for mayor of Moscow, received foreign funding for his election campaign. "It has been established that 300 foreign persons and companies, as well as anonymous donors from 46 countries and 347 IP addresses, used the electronic payment system Yandex Money" to transfer funds for Navalny's campaign, according to the statement. Yandex Money is as law-abiding as electronic-payment systems come: It is part of Yandex, one of the biggest Russian Internet companies with a market cap of almost $11 billion, and trouble with the authorities is the last thing the company wants. It reacted quickly to the prosecutors' statement. Yandex Money spokesman Asya Melkumova explained that the foreign IP addresses of Navalny's would-be donors only meant that they were physically outside Russia when the transfers were made. As the payments were made in Russian rubles, however, the donors were Russian residents. "If, instead of requesting user data, the Prosecutor General's Office draws conclusions from IP addresses during the holiday season, it means that people there don't understand a thing about technology or the difference between IP address and citizenship," popular blogger Anton Nosik told the Web magazine Cityboom. The prosecutors aren't likely to recognize their mistake, apologize and go away. "They will start chewing over this on TV all day, hoping to sway retirees who believe an IP address is something akin to a spy radio transmitter," Navalny predicted in his blog. Navalny is currently out on bail as he waits to appeal a transparently politicized fraud conviction. The foreign-financing allegations could be used to strike him off the ballot if the Kremlin deems it necessary. The allegations against Navalny's campaign funding may be disingenuous, yet electronic-payment systems do operate in a financial twilight zone. Yandex Money, for all its efforts at compliance, allows users to open anonymous accounts. By Russian law, transfers from these accounts are limited to about $1,300 per month and $500 per day, yet a money launderer could open and use multiple accounts. Yandex Money isn't popular with international cyber-criminals because it is a ruble-only service and they prefer harder currencies. Yet some Russian hackers involved in illegal activities do use Yandex as well as other systems, such as Bitcoin and Webmoney. The latter is a Moscow-based company, which has created a number of electronic currencies exchangeable one-to-one for money issued by states, including rubles, U.S. dollars and Ukrainian hryvnia. Webmoney has attracted people involved in shadowy online commerce since its launch in 1998. "I loved using it back in my carding days," wrote one self-professed credit-card fraudster in a forum thread now only available in the Google cache. "It is easy to fund, anonymous, stable, it is based in Russia." Webmoney, which claims to have 22 million users, has done its best to clean up its image, introducing several levels of identification and severely restricting activity for users who don't provide proof of identity. That wasn't enough for the Ukrainian authorities, which closed down the local Webmoney operation in June. More than $8 million in users' accounts was blocked on the grounds that Webmoney didn't have permission from the central bank to operate a money-transfer service. "The system was used by e-commerce sites, telecom providers and private individuals trying to conceal illegal financial operations," the Ukrainian Ministry of Revenues said in a statement. Now, Ukrainian users can use their frozen Webmoney accounts to buy goods or take money out, but they cannot add to the accounts. Webmoney says it doesn't move money but "title units," which are used to keep a record of property rights to valuables. Governments and courts have tolerated such opaque language for years, but the window of opportunity for these payment systems appears to be closing. In the U.S. Ponzi scheme case , a judge has ruled to recognize Bitcoin as a form of money. The Ukrainian authorities didn't bother with a court order to make the same judgment about Webmoney. Bitcoin, Webmoney and Yandex Money differ significantly: The first is decentralized, its emission algorithmically limited; the second is its own central bank; and the third uses real fiat currency. Governments, however, are suspicious of all systems that allow people to move money anonymously. The dangers are clear to bureaucrats in Moscow, Washington and Kiev alike, and they are all bearing down on e-money systems to regulate them as stringently as banks. Paradoxically, whereas banks have retained some shred of client privacy, the newer online services are likely to make fuller disclosures precisely because they aren't financial institutions and want to avoid attracting scrutiny. To survive in the newly intolerant environment, these e-money services will have to become completely transparent to intelligence services, prosecutors and tax inspectors. So if your goal is to hide money, use them at your own risk. (Leonid Bershidsky, an editor and novelist, is Moscow correspondent for World View. Follow him on Twitter.)

Ravens Agree on Contract With Pro Bowl Tight End Clark

http://www.bloomberg.com/news/2013-08-12/colts-agree-on-contract-with-pro-bowl-tight-end-dallas-clark.html

(Corrects team name in headline.) The Baltimore Ravens agreed in principle on a contract with former Pro Bowl tight end Dallas Clark after losing Dennis Pitta and Ed Dickson to injuries. Clark, 34, spent nine of his 10 National Football League seasons with the Indianapolis Colts, where he was a favorite target of quarterback Peyton Manning. While in Indianapolis, he also played under former Colts coach Jim Caldwell, who is now the Ravens’ offensive coordinator. Clark spent last season with the Tampa Bay Buccaneers, catching 47 passes for 435 yards and four touchdowns. He had a career-high 100 receptions for 1,106 yards and 10 touchdowns for the Colts during the 2009 season. To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

Blackstone Gets $1 Billion From Fidelity for Mutual Fund

http://www.bloomberg.com/news/2013-08-12/blackstone-gets-1-billion-from-fidelity-for-mutual-fund.html

Blackstone Group LP (BX) , the money-management firm seeking to attract more individual investors, raised almost $1 billion from Fidelity Investments for its mutual fund that will invest in hedge funds , Fidelity said. Fidelity, based in Boston , is offering the Blackstone Alternative Multi-Manager Fund as part of its Portfolio Advisory Service, which manages money on behalf of wealthy clients. Blackstone has an exclusive agreement with Fidelity for an undisclosed period covering individual investors, and can offer the fund of funds to its institutional clients, according to a person briefed on the deal, who asked not to be identified because the information is private. Blackstone, based in New York, joins peers Carlyle Group LP and KKR & Co. in starting offerings that can be marketed to individuals as the leveraged-buyout industry seeks to broaden its client base. The firm, which oversaw $229.6 billion in assets as of the end of the second quarter, said in June it was planning a mutual fund aimed at smaller investors. “In the three years we have been planning for this product launch, we have built a very solid relationship with Fidelity,” Tom Hill, chief executive officer of Blackstone Alternative Asset Management, said today in an e-mailed statement. “Like Blackstone, Fidelity is a leader in the asset-management industry and has a history of providing great value to its clients,” said Hill, who declined to comment beyond the statement. The fund has an annual expense ratio of 3.25 percent, which includes a management fee of 1.95 percent, according to a filing with the U.S. Securities and Exchange Commission. Alternatives Allocation Money managers with allocations from Blackstone are Two Sigma Advisers LLC, Cerberus Sub-Advisory I LLC, Credit Suisse Hedging-Griffo Servicos Internacionais SA, HealthCor Management LP, Caspian Capital LP, Boussard & Gavaudan Asset Management LP, Wellington Management Co., Good Hill Partners LP, BTG Pactual Asset Management U.S., Chatham Asset Management LLC and Nephila Capital Ltd., according to a fund filing last month. Fidelity managed about $104 billion through its portfolio advisory service as of June 30, said Nicole Goodnow, a spokeswoman. Fidelity has discretion over the management of the accounts, which require a minimum investment of $50,000, and the allocation to alternatives is typically 3 percent to 5 percent, she said. The Blackstone partnership is the second such multistrategy, multimanager alternative mutual fund offered through Fidelity’s managed-account program, which last year started investing in the $989 million Arden Alternative Strategies Fund. The Fidelity program charges clients an annual advisory fee ranging from 0.25 percent to 1.7 percent of “eligible assets invested,” according to the firm’s website. To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net ; Margaret Collins in New York at mcollins45@bloomberg.net To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

Hungary Alleged Nazi-Era War Criminal Csatary Dies Age 98

http://www.bloomberg.com/news/2013-08-12/hungary-alleged-nazi-era-war-criminal-csatary-dies-age-98.html

Laszlo Csatary, a Hungarian who’d been convicted by Slovakia for aiding the deportation of Jews to Nazi death camps and who was awaiting trial in his home country, died at age 98. Csatary died Aug. 10 from pneumonia at a hospital in Budapest, his lawyer, Gabor B. Horvath, said today by phone. His trial was scheduled to start in the fall, Horvath said. Csatary denied the allegations against him. A Slovakian court sentenced Csatary in absentia to death in 1948, with the punishment later commuted to life imprisonment. Hungarian prosecutors detained him last year after pressure from the Simon Wiesenthal Center, which tracks Nazi-era war criminals. About 6 million Jews were killed in the Holocaust, including more than 500,000 from Hungary, according to the Budapest-based Holocaust Memorial Center. “We didn’t expect to see justice served in this world,” Lucia Kollarova, a spokeswoman for the Federation of the Jewish Communities in Slovakia, said today by e-mail. “However he didn’t escape higher judgment.” In 1944, Csatary worked as a Hungarian policeman in charge of 12,000 Jews held in a brick factory in Kosice, now part of Slovakia. He beat detainees with a dog leash “regularly and without justification and without regard to the detainees’ gender, age or health,” according to a June 18 statement from Hungary ’s prosecutor’s office. On June 2 of that year, as Jews were forced into trains for deportation to Nazi death camps, Csatary rejected a request to have a window cut in a wagon where 80 people were crammed to let in air, according to the charges. A Slovakian court had been due to decide next month on where he should serve his life sentence, Marcela Galova, a court spokeswoman, said today by phone. Csatary lived in Canada after the war and returned to live in Hungary in 1996, Horvath said. To contact the reporters on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net ; Radoslav Tomek in Brussels at rtomek@bloomberg.net To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Palm Oil Climbs Most in Two Weeks as Price Slump Attracts Buyers

http://www.bloomberg.com/news/2013-08-12/palm-oil-climbs-most-in-two-weeks-as-price-slump-attracts-buyers.html

Palm oil rallied the most in two weeks as a decline to the lowest price in a week boosted exports from Malaysia, the world’s second biggest producer. The contract for October delivery gained 1.5 percent to 2,241 ringgit ($690) a metric ton on the Bursa Malaysia Derivatives, the biggest advance for most active futures since July 30. Futures fell 2.3 percent last week to close at the lowest price since July 29. The exchange was closed on Aug. 8 and Aug. 9 for the Eid festival. Palm oil slumped to the lowest since October 2009 last month, extending losses to 8.1 percent this year, on concern that global supplies will exceed demand. Exports from Malaysia jumped 18 percent to 417,414 tons during in the first 10 days of this month from the same period in July, Intertek said today. “Prices have seen a technical rebound as in the last few days poor fundamentals had weakened palm oil,” said Han Qiang Sim, an analyst at Phillip Futures Pte. in Singapore. “There was an improvement in exports as a weaker ringgit had been making palm oil cheaper.” Output in Malaysia expanded 10 percent to 1.56 million tons in July from a month earlier, while reserves held at 1.65 million tons, according to a Bloomberg survey. The Malaysian Palm Oil Board will release the data on Aug. 14. Futures climbed as traders closed their bets on further declines ahead of the MPOB data, said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. Soybean oil for delivery in December advanced 0.7 percent to 42.19 cents a pound on the Chicago Board of Trade. Soybeans for November gained 0.8 percent to $11.915 a bushel. Refined palm oil for January delivery rose 1.1 percent to end at 5,414 yuan ($884) a ton on the Dalian Commodity Exchange. Soybean oil climbed 0.8 percent to close at 6,974 yuan a ton. To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Paris Rapeseed May Climb 7.2% in Retracement: Technical Analysis

http://www.bloomberg.com/news/2013-08-12/paris-rapeseed-may-climb-7-2-in-retracement-technical-analysis.html

Rapeseed futures may rebound to 385 euros ($513) a metric ton in Paris after halting a downward trend, implying a 7.2 percent gain from the Aug. 9 close, according to technical analysis by French farm adviser Agritel. The chart for the November contract shows a support level at about 355 euros, and the price is close to rising above the 20-day moving average, a bullish signal, said Sebastien Techer, an analyst at Agritel. The attached chart shows 385.47 euros would be a 38.2 percent retracement of the drop from June 3 to July 31, a level singled out in so-called Fibonacci analysis. “Clearly there are signals of a small rebound,” Techer said. “We’ve done a double bottom. We could test the 20-day moving average, and if we break it we could go to 385.” A double bottom is a charting pattern term to describe a drop, a rebound, a similar drop to the original one and another rebound. The oilseed may rebound to that level in the next month, according to the Agritel analyst. Rapeseed for November delivery, the contract with the biggest open interest, has declined 16 percent since the start of the year on prospects for rising U.S. production of soybeans, which like rapeseed are crushed to produce cooking oil and animal feed. The November contract fell 1 percent to 359.25 euros a ton on Aug. 9. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on a theory that prices tend to drop or rise by certain percentages after reaching a high or low. The numbers are based on a sequence published by 13th century Italian mathematician Leonardo Fibonacci. A support level indicates a price at which buy orders may accumulate when a security is falling. To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

USDA Boxed Beef Cutout Midday Prices for August 12

http://www.bloomberg.com/news/2013-08-12/usda-boxed-beef-cutout-midday-prices-for-august-12-table-.html

August 12 (Bloomberg) -- This table details boxed beef cutout prices supplied daily by the U.S. Department of Agriculture. Prices and loads traded are as of 11:30 a.m. U.S. central time. Prices are determined from cuts in dollars a hundredweight and vary between higher-quality choice cuts and select beef cuts for sale f.o.b. Omaha, Nebraska. CHOICE SELECT 600-900 600-900 ------------------------------------------------------------------------------- Current Cutout Values: 190.03 182.63 Change from prior day: 1.04 0.63 ------------------------------------------------------------------------------- Choice/Select spread: 7.40 Total Load Count (Cuts, Trimmings, Grids): 99 ------------------------------------------------------------------------------- COMPOSITE PRIMAL VALUES Primal Rib 296.89 274.16 Primal Chuck 159.46 156.65 Primal Round 160.72 159.71 Primal Loin 246.02 229.76 Primal Brisket 138.76 132.60 Primal Short Plate 141.08 142.60 Primal Flank 122.72 118.78 -------------------------------------------------------------------------------- LOAD COUNT AND CUTOUT VALUE SUMMARY FOR PRIOR 5 DAYS CHOICE SELECT Date Choice Select Trim Grinds Total 600-900 600-900 08/09 60 62 9 22 153 188.99 182.00 08/08 79 64 9 38 190 188.31 182.05 08/07 85 73 15 39 212 188.66 181.67 08/06 73 45 1 24 144 187.17 180.90 08/05 58 38 6 22 123 186.46 180.54 -------------------------------------------------------------------------------- Current 5 Day Simple Average: 187.92 181.43 -------------------------------------------------------------------------------- NATIONAL BOXED BEEF CUTS - NEGOTIATED SALES FOB Plant basis negotiated sales for delivery within 0-21 day period. Prior days sales after 1:30pm are included. CURRENT VOLUME - (one load equals 40,000 pounds) Choice Cuts 58.14 loads 2,325,512 pounds Select Cuts 16.96 loads 678,248 pounds Trimmings 15.27 loads 610,672 pounds Ground Beef 8.74 load 349,772 pounds ------------------------------------------------------------------------------- Choice Cuts, Fat Limitations 1-6 (IM) = Individual Muscle IMPS/FL Sub-Primal # of Total Price Weighted rades Pounds Range Average ------------------------------------------------------------------------------- 109E 1 Rib, ribeye, lip-on, bn-in 21 207,077 552.00 580.00 554.94 112A 3 Rib, ribeye, bnls, light 8 12,277 610.00 640.00 618.89 112A 3 Rib, ribeye, bnls, heavy 14 31,661 575.00 617.39 600.41 113C 1 Chuck, semi-bnls, neck/off 114 1 Chuck, shoulder clod 7 58,164 180.74 192.00 188.16 114A 3 Chuck, shoulder clod, trmd 23 119,357 195.94 211.00 200.98 114D 3 Chuck, clod, top blade 6 5,204 281.00 308.00 287.49 114E 3 Chuck, clod, arm roast 12 126,536 225.00 262.06 227.37 114F 5 Chuck, clod tender (IM) 7 9,356 415.19 443.00 419.48 115 1 Chuck, 2-piece, boneless 116A 3 Chuck, roll, lxl, neck/off 36 238,557 220.00 242.00 235.20 116B 1 Chuck, chuck tender (IM) 11 22,878 211.06 220.00 214.94 3 Chuck roll, retail ready 0 0 120 1 Brisket, deckle-off, bnls 15 35,605 195.00 215.00 200.76 120A 3 Brisket, point/off, bnls 7 16,525 352.74 365.00 355.93 123A 3 Short Plate, short rib 17 41,327 429.00 466.00 442.01 130 4 Chuck, short rib 10 16,724 305.00 345.00 330.70 160 1 Round, bone-in 161 1 Round, boneless 3 Round, bnls/peeled heel-out 167A 4 Round, knuckle, peeled 30 129,588 211.70 233.00 226.37 168 1 Round, top inside round 8 29,454 194.00 198.00 195.10 168 3 Round, top inside round 16 100,721 200.00 225.00 209.74 169 5 Round, top inside, denuded 22 108,741 234.00 247.00 238.76 3 Round, top inside, side off 0 0 170 1 Round, bottom gooseneck 171B 3 Round, outside round 24 141,490 200.00 229.60 211.43 171C 3 Round, eye of round (IM) 30 83,587 195.74 225.00 209.77 174 1 Loin, short loin, 2x3 174 3 Loin, short loin, 0x1 15 100,733 440.00 458.00 450.70 175 3 Loin, strip loin, 1x1 180 1 Loin, strip, bnls, heavy 1 Loin, strip loin bnls. 1x1 9 8,920 415.00 448.93 415.55 180 3 Loin, strip, bnls, 0x1 23 96,694 468.00 520.00 488.57 184 1 Loin, top butt, bnls, heavy 7 12,220 295.00 298.25 296.07 184 3 Loin, top butt, boneless 30 137,494 315.00 330.60 326.32 185A 4 Loin, bottom sirloin, flap 11 50,612 326.00 348.50 336.93 185B 1 Loin, ball-tip, bnls, heavy 15 64,232 200.00 232.00 204.68 185C 1 Loin, sirloin, tri-tip (IM) 3 2,213 243.50 245.00 243.69 185D 4 Loin, tri-tip, pld (IM) 13 98,705 318.00 352.50 322.98 189A 4 Loin, tndrloin, trmd, heavy 24 38,714 900.00 947.00 910.89 191A 4 Loin, butt tender, trimmed 8 11,664 839.00 950.00 856.17 193 4 Flank, flank steak (IM) 6 4,562 450.00 485.00 473.70 ------------------------------------------------------------------------------- Select Cuts, Fat Limitations 1-6 (IM) = Individual Muscle IMPS/FL Sub-Primal # of Total Price Weighted Trades Pounds Range Average ------------------------------------------------------------------------------- 109E 1 Rib, ribeye, lip-on, bn-in 112A 3 Rib, ribeye, bnls, light 5 10,896 570.00 585.00 581.42 112A 3 Rib, ribeye, bnls, heavy 11 26,204 541.41 599.00 573.50 113C 1 Chuck, semi-bnls, neck/off 0 0 114 1 Chuck, shoulder clod 6 14,125 180.74 192.39 187.45 114A 3 Chuck, shoulder clod, trmd 5 47,725 193.85 204.39 194.83 114D 3 Chuck, clod, top blade 114E 3 Chuck, clod, arm roast 114F 5 Chuck, clod tender (IM) 4 3,091 340.00 370.00 352.92 115 1 Chuck, 2-piece, boneless 0 0 116A 3 Chuck, roll, lxl, neck/off 12 157,999 223.00 242.00 228.18 116B 1 Chuck, chuck tender (IM) 5 38,586 206.00 210.00 209.67 3 Chuck roll, retail ready 0 0 120 1 Brisket, deckle-off, bnls 120A 3 Brisket, point/off, bnls 123A 3 Short Plate, short rib 5 6,987 395.94 461.00 420.10 130 4 Chuck, short rib 3 9,745 305.00 330.00 309.81 160 1 Round, bone-in 0 0 161 1 Round, boneless 0 0 3 Round, bnls/peeled heel-out 0 0 167A 4 Round, knuckle, peeled 3 7,767 205.00 224.06 220.81 168 1 Round, top inside round 4 16,045 194.00 198.00 195.09 168 3 Round, top inside round 4 7,294 206.00 217.00 209.50 169 5 Round, top inside, denuded 3 Round, top inside, side off 0 0 170 1 Round, bottom gooseneck 0 0 171B 3 Round, outside round 3 2,100 212.00 222.50 218.50 171C 3 Round, eye of round (IM) 174 1 Loin, short loin, 2x3 174 3 Loin, short loin, 0x1 5 4,636 432.34 475.00 443.15 175 3 Loin, strip loin, 1x1 0 0 180 1 Loin, strip, bnls, heavy 0 0 1 Loin, strip loin bnls. 1x1 180 3 Loin, strip, bnls, 0x1 4 2,347 449.00 468.00 457.06 184 1 Loin, top butt, bnls, heavy 184 3 Loin, top butt, boneless 8 34,510 255.00 265.00 262.18 185A 4 Loin, bottom sirloin, flap (M) 185B 1 Loin, ball-tip, bnls, heavy 6 59,074 200.65 215.00 209.32 185C 1 Loin, sirloin, tri-tip (IM) 4 1,944 235.00 247.00 245.28 185D 4 Loin, tri-tip, pld (IM) 189A 4 Loin, tndrloin, trmd, heavy 6 12,065 853.10 870.00 865.18 191A 4 Loin, butt tender, trimmed 193 4 Flank, flank steak (IM) 5 12,381 434.94 456.00 439.83 ------------------------------------------------------------------------------- CHOICE, SELECT & UNGRADED CUTS FatLimitations 1-6 (IM) = Individual Muscle ------------------------------------------------------------------------------- 124 4 Rib, Back Ribs, Fresh 124 4 Rib, Back Ribs, Frozen 6 13,500 100.00 119.61 116.68 121D 4 Plate, Inside Skirt (IM) 15 31,021 364.70 405.00 375.95 121C 4 Plate, Outside Skirt (IM) 10 16,318 398.53 431.50 405.30 121E 6 Outside Skirt, pld (IM) 9 21,674 510.00 563.00 524.51 Cap, Wedge Meat & (IM) Lean 17 57,627 230.00 252.50 235.12 Pectoral Meat 14 24,946 228.74 265.50 243.46 ------------------------------------------------------------------------------- GB - STEER/HEIFER SOURCE - 10 Pound hub Basis - Coarse and Fine Grind ------------------------------------------------------------------------------- Ground Beef 73% 12 107,141 163.00 180.00 173.06 Ground Beef 75% Ground Beef 81% 15 91,509 174.00 193.00 182.02 Ground Beef 85% Ground Beef 90% 0 0 Ground Beef 93% Ground Beef Chuck 80% 8 52,706 183.60 191.00 185.32 Ground Beef Round 85% 3 12,776 213.05 219.39 213.29 Ground Beef Sirloin 90% 0 0 ------------------------------------------------------------------------------- BLENDED GB - STEER/HEIFER/COW SOURCE- 10 Pound Chub Basis - Coarse & Fine Grind ------------------------------------------------------------------------------- Blended Ground Beef 73% Blended Ground Beef 75% 0 0 Blended Ground Beef 81% Blended Ground Beef 85% Blended Ground Beef 90% 0 0 Blended Ground Beef 93% Blended Ground Beef Chuck 80% 0 0 Blended Ground Beef Round 85% Blended Ground Beef Sirloin 90% 0 0 -------------------------------------------------------------------------------- BEEF TRIMMINGS - STEER/HEIFER SOURCE - Fresh Combos & Frozen Boxed -------------------------------------------------------------------------------- Fresh 50% lean trimmings 21 610,672 106.14 113.00 110.44 Frozen 50% lean trimmings 0 0 -------------------------------------------------------------------------------- FAT LIMITATIONS (FL) DESCRIPTION Maximum Average Fat Thickness Maximum Fat at any point 1. 3/4" (19mm) 1.0" 2. 1/4" (6mm) 1/2" 3. 1/8" (3mm) 1/4" 4. Practically free (75% surface lean exposed) 1/8" 5. Peeled/Denuded 1/8" 6. Peeled/Denuded, surface membrane removed 1/8" -------------------------------------------------------------------------------- Items that have no entries indicate there were trades but not reportable because they did not meet the daily 3/70/20 guideline. Please refer to weekly LM_XB459 as the item may qualify. -------------------------------------------------------------------------------- A cutout value is an average of the prices tallied for cuts of beef from cattle carcasses weighing 550-850 pounds. Cutout values are separated into three main product types. Fabricated loads are beef cuts taken from an animal's ribs, chuck, round, loin, brisket, short plate and flank; 50 percent loads are 50 percent lean beef trimmings. Ground loads may contain 73, 75, or 80 percent ground beef. A typical refrigerated truckload carries 40,000 pounds. Choice 1-3 grade is a better grade than Select 1-3, partly because Choice cuts have more fat, or marbling, than Select cuts. Grade quality is determined using a 1-5 yield grade scale. A rating of 1 is the highest ratio of muscle to fat, while 5 is the lowest. Marbling is an important flavor factor.

Central Bank of India: Indian Money Market

http://www.bloomberg.com/news/2013-08-12/central-bank-of-india-indian-money-market.html

Following is a table showing certificate of deposits issued by Indian banks. The data has been provided by Derivium Tradition Securities Pvt. Ltd., NVS Brokerage Ltd., SPA Securities Ltd. and Trust Financial Consultancy Services. T = Tentative C=Confirmed Date Security Mty Date Qnty(Cr.) Rate Buyer Contributor Status 12-Aug-13 CBI 1 YEAR 10.35 NVSB T 12-Aug-13 CBI 1 YEAR 200 10.35 BKS and MFS TFCS T 12-Aug-13 CBI 1 YEAR 150 10.35 DCAP T 12-Aug-13 CBI 1 YEAR 200 10.35 LKPS T 12-Aug-13 CBI 1 YEAR 250 10.35 SPAS T 12-Aug-13 CBI 1 YEAR 250 10.35 MFS & CORPS CBOI C Contributed via: Bloomberg Publisher WEB Service Provider ID: d00dd820dddb4a57906630160c774306

S. African Yellow Corn Falls to Lowest Since May on Estimates

http://www.bloomberg.com/news/2013-08-12/s-african-yellow-corn-falls-to-lowest-since-may-on-estimates.html

South African yellow-corn futures declined to the lowest level in nearly three months after the Crop Estimates Committee increased its forecast for the grain last month. “Yellow will be lower as the Crop Estimate Committee increased the yellow maize for South Africa by 2.9 percent,” Benjamin Swanepoel, a trader for Trademar Futures (Pty) Ltd., said in an e-mailed response to questions today. The most active yellow corn contract for delivery in September, dropped 0.8 percent to 2,109 rand ($214) a metric ton, the lowest since May 13, by the close in Johannesburg on the South African Futures Exchange. The white variety for delivery in December fell 0.8 percent to 2,303 rand a ton. The Crop Estimates Committee raised its forecast for yellow corn production by 2.9 percent to 5.65 million tons, it said in a July 25 report. Exports of the grain since the season began on April 27 were 58 percent higher than for the whole of the prior marketing year, according to the Grain Information Service. South Africa is the continent’s largest producer of the grain. Yellow corn, also called maize, is mainly used as animal feed , while the white variety is used to make one of the nation’s staple foods. Wheat for December delivery dropped 0.1 percent to 3,323 rand a ton. To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Thames Water Seeks Higher Bills to Buy Super-Sewer Land

http://www.bloomberg.com/news/2013-08-12/thames-water-seeks-higher-bills-to-buy-super-sewer-land.html

Thames Water Utilities Ltd., Britain’s biggest water and waste company, wants to increase customer bills by about 8 percent to help buy land to build London ’s “super-sewer” project. Thames Water asked Ofwat, the U.K. industry regulator, if it can charge customers an extra 29 pounds ($45) in 2014-2015, the London-based utility said today in a statement on its website. To avoid a spike in bills, it’s recommending the “one-off” cost be spread over more than a year. The regulator expects to make a decision by November. The money will help the utility buy land to build its 4.1 billion-pound Thames Tideway tunnel, a sewer project that would follow the course of the capital’s river. It expects to spend about 273 million pounds purchasing the land, it said in the statement. It also needs the funds to service a rise in bad debt and to cover an increase in Environmental Agency charges. The U.K. government is reviewing water-bill legislation that if passed aims to spur competition in the retail market for non-household customers by allowing businesses to choose their supplier. It’s also introduced social tariffs that offer rebates to low-income households in areas of high water charges. Thames said the new application would add a further 8 percent, or about 29 pounds, to the average household bill. The average annual Thames Water bill is about 354 pounds, which it says is among the lowest in the country. To contact the reporter on this story: Louise Downing in London at ldowning4@bloomberg.net To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Citigroup Warns of Restructuring on Local Debt: Argentina Credit

http://www.bloomberg.com/news/2013-08-12/citigroup-warns-of-restructuring-on-local-debt-argentina-credit.html

Argentina’s plummeting foreign reserves are a sign to Citigroup Inc. (C) that the least-creditworthy borrower in emerging markets may decide to impose losses on bondholders of $5.8 billion of debt. Dollar-denominated bonds due in 2015 and sold under Argentine legislation have risen to 17-month high of 95.86 cents as investors switched from notes governed by New York law on speculation the local debt will be insulated from holdout creditors suing in U.S. courts. Citigroup says bondholders, which include AllianceBernstein LP and MFS Investment Management , are underestimating the risk of losses after reserves that are used for debt payments fell at the fastest pace in more than a decade to a six-year low of $37 billion. The probability that Argentina, which defaulted on $95 billion in 2001, will seek debt relief by either paying holders of the local-law bonds in pesos at the official rate, offering a smaller amount in dollars, or swapping them into notes with longer maturities means that fair value is closer to 87.2 cents, according to Jeff Williams , a strategist at Citigroup. The New York-based bank estimates the central bank’s reserves will fall below $25 billion by the end of 2015. “Things are moving in that direction,” Jorge Piedrahita, chief executive officer at Torino Capital LLC, said in a telephone interview from New York. “This is a risk investors should definitely be considering. It’s a significant possibility and those probabilities are increasing day by day.” Capital Outflows Citigroup’s Williams estimates that the likelihood Argentina will restructure the 2015 bonds is now 37.5 percent, according to a report to clients dated Aug. 9. Norma Madeo, a spokeswoman for the Economy Ministry, declined to comment on whether Argentina is considering restructuring the local-law notes. AllianceBernstein, MFS and Fidelity Investments are among holders of the 2015 notes, according to June 30 filing data compiled by Bloomberg. With investors demanding an average 13 percent to hold their dollar-denominated notes -- the highest in emerging markets -- Argentina hasn’t sold bonds internationally since its 2001 default. Argentina relies on its international reserves to make debt payments, including those to bondholders that agreed to take 70 percent losses in two restructurings in 2005 and 2010. Default Swaps Argentina already has the highest probability of default in the world, according to five-year credit-default swaps. The contracts that protect holders of the nation’s debt against non-payment rose 35 basis points to 2,404 basis points at 9 a.m. in New York, according to data compiled by CMA Ltd. Since her re-election, Fernandez has tightened restrictions on access to foreign currency after the nation lost $21.5 billion in capital outflows in 2011. Still, reserves have continued to drop at the fastest pace since the default. During its financial crisis over a decade ago, Argentina converted dollar deposits and loans into pesos, a move dubbed pesofication. In June 2012, speculation lawmakers were planning to convert dollar-denominated contracts into pesos pushed the yield on the bonds due 2015 to a three-year high of 21 percent. Four months later, the northern province of Chaco repaid its dollar-denominated bonds in pesos because the central bank denied its request to buy foreign currency. ‘Legal Risk’ A U.S. appeals court said Oct. 26 Argentina can’t make payments on its overseas bonds unless it repays holdout investors from the country’s default. The ruling pushed the yields on New York-law bonds above those on Argentine-law debt, which isn’t affected by the ruling, for the first time ever. Before then, local-law bonds due 2017, known as bonars, yielded an average 1.67 percentage points more than similar-maturity bonds sold under New York law. “All eyes shifted to the legal risk, but the underlying risks of a potential restructuring on the Boden 15s and Bonar 17s has not disappeared,” Citigroup’s Williams wrote in the report. “If anything those risks are now greater.” Citigroup estimates by the end of 2015, the central bank’s net reserves, which exclude dollar deposits, could fall to $12.5 billion and cover just two months of import demand. If a restructuring were to occur today, investors could lose half of their principal should the government decide to repay them in pesos at the official exchange rate , Williams wrote. Investors would be left having to buy dollars in a parallel market, where the peso could be as much as 53 percent weaker than in the official market due to restructuring concerns, he wrote. The dollar cost 5.5415 pesos in the official market and 8.5104 pesos in the parallel market on Aug. 9. ‘Better Jurisdiction’ The government has an incentive to stay current on its local law bonds if it is ultimately prevented from making bond payments on New York law bonds, according to Steffen Reichold, an economist at Stone Harbor Investment Partners LP. The appeals court is now deciding if Argentina must pay holdouts in full, which the country has vowed never to do, and if third parties should be barred from distributing payments. “They would want to make the case that Argentina is a better jurisdiction for bonds than the U.S. is,” Reichold, whose firm oversees $60 billion in assets including Argentine bonds, said in a telephone interview from New York. “They would love to make that political statement and that investors are better off holding local law than being subject to some jurisdiction which delivers questionable rulings.” For investors in Argentine government bonds , it’s become impossible to find a haven, according to Russ Dallen, head bond trader at Caracas Capital Markets in Miami. The push into local law bonds is “meant to make Argentina investments immune from any adverse U.S. court ruling,” Dallen said in an e-mailed response to questions. “At the same time, sadly, it makes them more susceptible to the vagaries of Argentina’s shifting needs and policies.” To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net To contact the editors responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net ; Michael Tsang at mtsang1@bloomberg.net

Fed Funds Open at 0.10%, Within Target Range, According to ICAP

http://www.bloomberg.com/news/2013-08-12/fed-funds-open-at-0-10-within-target-range-according-to-icap.html

Fed funds, the U.S. overnight inter-bank lending rate , opened at 0.10 percent, within the Federal Reserve ’s target of zero to 0.25 percent. Fed funds closed at 0.09 percent on Aug. 9 after trading from 0.04 percent to 0.25 percent and averaging 0.07 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement. The central bank will acquire Treasuries $1.25 billion to $1.75 billion Treasuries maturing from February 2036 to May 2043. The purchases are the part of the Fed’s quantitative easing program aimed at keeping long-term rates low. To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Cantor, Fired Trader Sue Over Alleged Blackmail Threat

http://www.bloomberg.com/news/2013-08-12/cantor-fired-trader-sue-over-alleged-blackmail-threat.html

Cantor Fitzgerald LP accused a fired Singapore-based derivatives trader of making a blackmail threat in an exchange of lawsuits between the brokerage and its former employee over his dismissal. Gavin White, the former trader, sued in Singapore’s High Court for wrongful dismissal, claiming unspecified damages. Cantor, the New York-based independent broker-dealer, countersued for a repayment of a loan and a return of a portion of his wages. A closed hearing is scheduled for Aug. 15. White, who had refused a 20 percent pay cut proposal in October, had said he might complain about alleged breaches by the brokerage in Australia , Cantor’s Singapore unit said in its counterclaim. Cantor denied there had been any breaches and said it had a right to fire him for gross misconduct. White threatened to damage the firm’s reputation which amounted to a threat of blackmail, the brokerage said. “Mr. White strenuously denies that he made any such threat as alleged by Cantor,” his lawyer Pradeep Pillai said in a phone interview today. “He is eager to have his name cleared of the allegation of gross misconduct.” In addition to denying having made the statements attributed to him, White said that any comments he made in October meetings to discuss his pay with his supervisor weren’t supposed to be used against him. Cantor breached a three-year employment contract by firing him in November, he said in the complaint. Robert Hubbell, a spokesman for Cantor, declined to comment on the litigation. High Salaries Cantor proposed to cut White’s pay in October because his division was underperforming and the brokerage couldn’t sustain the “extremely high salaries” on the team, the firm said in court papers. White was paid S$580,000 ($461,000) a year at Cantor. Cantor is seeking the return of S$297,576. Moody’s Investors Service lowered Cantor’s credit rating to junk in October, citing “stubbornly high” compensation expenses and its expansion which has failed to sufficiently boost profit. Cantor said in November it disagreed with Moody’s conclusion as its financial performance had improved. White joined Cantor in November 2011 as head of contracts for difference in Singapore. A contract for difference is a financial derivative that allows traders to take advantage of price differences in the underlying instruments. He had previously been head of foreign exchange and contracts for difference trading Asia at MF Global Singapore Pte and started work with an Australian firm in June, according to court papers. Cantor, run by Howard Lutnick, has sought to diversify revenue sources aside from its inter-dealer brokerage franchise. The case is Gavin Charles White v Cantor Fitzgerald (Singapore) Capital Markets Ltd. S139/2013. Singapore High Court. To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

Rupee Clouds Monsoon Silver Lining on India Inflation

http://www.bloomberg.com/news/2013-08-12/rupee-clouds-monsoon-silver-lining-on-india-inflation.html

The rupee’s plunge to a record threatens to dash the Reserve Bank of India ’s hope that monsoon rains will boost farm output and help ease the fastest inflation among the world’s largest emerging markets. India’s consumer-price index rose 9.64 percent in July, official data showed yesterday, compared with 6.3 percent in Brazil , 6.5 percent in Russia and 2.7 percent in China. The interbank overnight call money rate closed at 10.25 percent yesterday, the highest since March 2012, after the central bank tightened cash-supply to support the currency. Governor Duvvuri Subbarao said July 30 the monsoon is a “silver lining” as the slumping rupee kept him from adding to three cuts in the benchmark repurchase rate this year. The agriculture ministry forecasts that the grain harvest may climb to a record. The July-September rainy season, the main source of irrigation for India’s 235 million farmers, had its best start since 1994, according to the weather office. “The stark rupee depreciation has pulled the plug on the monetary-easing cycle,” Radhika Rao, an economist at DBS Bank Ltd. in Singapore , said in a phone interview. “Global oil prices and local food-supply disruptions mean there’s unlikely to be a significant pullback in retail inflation.” Inflation Outlook Rao predicts India’s CPI will quicken to 9.8 percent this month. Gains in wholesale prices, the RBI’s benchmark inflation gauge, accelerated to 5 percent last month from 4.86 percent in June, according to the median of 34 economists in a Bloomberg survey before data due tomorrow. The RBI last month lowered its growth forecast for Asia ’s third-largest economy to 5.5 percent from 5.7 percent for the year ending March 2014 and said that, assuming a normal distribution of monsoon rains, it will try to ensure a 5 percent WPI inflation rate at the end of the fiscal year. Analysts estimate that a 10 percent rupee depreciation boosts inflation by one percentage point, Raghuram Rajan , the finance ministry’s top adviser who will take over as RBI chief when Subbarao’s term ends next month, said June 20. The currency has fallen 10.5 percent in 2013, Asia’s second-worst performance. Depreciation fuels inflation in a country that imports about 80 percent of its oil, and DBS Bank’s Rao says an unchecked decline could compel the monetary authority to raise lenders’ cash-reserve ratios and even its key repurchase rate. Fuel Costs Brent crude prices have risen 6.7 percent since the end of June as a political upheaval in Egypt heightened concern that unrest in the most populous Arab nation will spread, disrupting regional oil supplies. Energy costs contribute about 15 percent to India’s wholesale-price index and 9.5 percent to consumer prices. Food comprises 24 percent of the WPI basket. In an attempt to steady the currency, the RBI last week added to measures to restrict cash supply. The central bank will sell 220 billion rupees ($3.6 billion) of cash-management bills each week, it said on Aug. 8, supplementing steps taken in July to cap lenders’ access to funds through daily repurchase auctions, tighter daily cash-reserve ratio balances and higher emergency funding costs. “In the classic growth-inflation tradeoff, the angle of a sharply depreciating rupee has made currency management an imperative,” Sandesh Kirkire, who oversees 377 billion rupees of assets as chief executive officer at Kotak Mahindra Asset Management Co. in Mumbai, said in an Aug. 8 e-mail interview. “A more robust and coordinated policy response is needed to address the problem.” ‘Evenly Matched’ The rupee, which touched a record low of 61.8050 per dollar on Aug. 6, weakened 0.3 percent to 61.4250 today, according to prices from local banks compiled by Bloomberg. The yield on the benchmark 10-year government bonds rose four basis points, or 0.04 percentage point, to 8.34 percent. Gains in wholesale prices are likely to stay around 4.5 percent to 5 percent as supply and demand are “evenly matched,” according to Glen Levine, a senior economist at Moody’s Analytics. “The economy is still growing well below potential, but supply is limited, especially of food, which supports prices,” Sydney-based Levine wrote in an Aug. 8 research report. “Rising agricultural yields will cool food inflation towards the end of 2013.” Output of monsoon-sown grains in India may climb to a record this year, Tariq Anwar, the junior agriculture minister, told reporters in New Delhi July 30. Bond risk in India has risen. Government-controlled State Bank of India (SBIN) ’s credit-default swaps insuring the lenders’ bonds against non-payment for five years have climbed 96 basis points from this year’s low of 174 on May 17, according to data provider CMA. ‘Fragile’ Currencies The rupee is among five “fragile” emerging-market currencies partly due to relatively high inflation, according to Morgan Stanley. Price pressures will necessitate further depreciation to prevent an erosion of external competitiveness, the investment firm said in an Aug. 5 report. The Brazilian real, Indonesian rupiah, Turkish lira and the South African rand are the other four. Global funds cut holdings of Indian debt by $8.4 billion since the start of June, worsening the currency’s decline, on concern the U.S. will pare stimulus that fueled demand for emerging-market assets. The weak rupee leaves India vulnerable to a current-account deficit, which official data show widened to an unprecedented 4.8 percent of gross domestic product in the last fiscal year. “India has fallen victim to a perfect storm,” Nicholas Spiro , managing director at consulting firm Spiro Sovereign Strategy in London , said in an Aug. 11 research note. The nation is “caught in a vicious circle in which severe balance of payments weaknesses, ineffective measures to shore up the tumbling rupee, a sharp decline in growth and persistent foreign outflows from its local currency debt market are all feeding on each other,” he wrote. To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

CIBC Seeks to Sell Card Portfolio as TD Wins Aimia Deal

http://www.bloomberg.com/news/2013-08-12/td-wins-aimia-aeroplan-partnership-ending-22-year-cibc-alliance.html

Canadian Imperial Bank of Commerce is in talks to sell about half its Aerogold credit-card portfolio to Toronto-Dominion (TD) Bank, the lender that’s taking over as the main card partner for Aimia (AIM) Inc.’s rewards program. Toronto-Dominion, Canada’s second-largest bank by assets, agreed to become the primary credit-card partner for Aimia’s Aeroplan program, the companies said today in a joint statement. The accord ends a 22-year alliance the Montreal-based loyalty-program operator had with CIBC, the country’s fifth-biggest bank. Canadian Imperial is in “ongoing active discussions” to sell about 50 percent of its Aerogold portfolio, primarily comprised of credit-card only clients, to Toronto-Dominion, CIBC said in a statement. CIBC would retain Aerogold card accounts of customers with broader relationships at the bank, the Toronto-based firm said. The three companies said they aim to reach a deal by Aug. 26. “While there are no guarantees that a deal will be finalized, the framework for these discussions would see CIBC retain the right to continue to issue Aerogold credit cards for at least the next 10 years,” Kevin Dove, a Canadian Imperial spokesman, said in an e-mailed statement. A sale is a “common sense approach” that should benefit both CIBC and Toronto-Dominion, John Aiken , a Barclays Plc analyst in Toronto, said in a note. ‘Fulsome Relationship’ “This should defray some of the retention costs anticipated to be incurred by CIBC as it can focus on retaining the customers it has a more fulsome relationship with,” Aiken said. “For TD, it alleviates some of the risk that current Aeroplan card holders will move to an alternative platform.” Canadian Imperial rose 2 percent to C$78.47 at 4:09 p.m. in Toronto and Aimia jumped 4.1 percent to C$15.93. Toronto-Dominion fell 0.3 percent to C$86.41. TD has increased its push into cards through acquisitions, including its purchase of Bank of America Corp.’s Canadian MasterCard portfolio in December 2011 and October’s agreement to buy the $5.9 billion U.S. credit-card holdings of Target Corp. (TGT) Under its agreement with Aimia, TD will offer a variety of co-branded Aeroplan Visa credit cards that offer miles for flights and other rewards. The Toronto-based bank said it also expects to include a card for Canadian small business owners and U.S. residents. ‘Solid Contribution’ Toronto-Dominion said the Aeroplan arrangement won’t have a material impact on 2014 earnings, while making a “solid contribution” in 2015. The bank said it doesn’t expect a significant change in that outlook as a result of the proposed deal. Andre-Philippe Hardy, an analyst at Royal Bank of Canada, said in a note today that the Aerogold portfolio accounts for an estimated 5 percent to 15 percent of CIBC’s annual earnings. Canadian Imperial didn’t match Toronto-Dominion’s June conditional agreement with Aimia by an Aug. 9 deadline, saying the accord wasn’t valid because it failed to comply with Aimia’s obligation under an existing arrangement. The bank said it retains the right to pursue legal options if it doesn’t reach a deal with Toronto-Dominion and Aimia on the portfolio sale. Canadian Imperial’s two-decade partnership with Aimia made the CIBC Aerogold Visa its most popular card. CIBC buys Aeroplan miles from Aimia to give to cardholders on purchases, including flights with Air Canada , the country’s biggest carrier. Aimia, which owns and manages rewards programs including Nectar in the U.K. and Italy , counts CIBC as its biggest partner. Air Canada Aeroplan began in 1984 as a promotional tool for business travelers on Air Canada. CIBC Aerogold Visa was started in 1991, according to Aimia. The card allows users to collect Aeroplan points for travel on Air Canada and get goods from retailers. CIBC has been preparing to go it alone with its own card. CEO Gerald McCaughey, 57, said on a May 30 conference call that the bank is spending more than C$50 million ($48.6 million) over four quarters to create an alternative card if the Aimia agreement isn’t renewed. Canadian Imperial also has its Aventura Gold Visa card, which it introduced in 2003 to offer lifestyle and travel rewards with purchases. “CIBC is still faced with the C$50 million expenditure to develop the new card offering, with additional marketing and retention costs after the new cards are issued,” Barclays’s Aiken said. “As well, the lost revenues from the potential portfolio sale will still weigh on the bottom line.” To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net ; David Scanlan at dscanlan@bloomberg.net ; Christine Harper at charper@bloomberg.net

Martin Currie Reports First Loss in 132 Years on China

http://www.bloomberg.com/news/2013-08-12/martin-currie-reports-first-loss-in-132-years-on-china.html

Martin Currie Investment Management Ltd., an Edinburgh-based fund manager , posted a loss last year for the first time since it was founded in 1881 after clients withdrew money amid misconduct at a China fund. The fund manager had a loss of 9.3 million pounds ($14 million) before tax, interest and other items compared with a profit of 7.7 million pounds in 2011, Martin Currie said in an e-mailed response to questions today. Revenue fell to 33.8 million pounds from 65.5 million pounds in 2011. Martin Currie was fined about $14 million in 2011 by finance regulators in the U.S. and the U.K. for manipulating a client to aid a hedge fund it managed. The firm advised The China Fund Inc. to invest in its struggling hedge fund with a “largely illiquid exposure” to a Chinese company, according to the Securities and Exchange Commission. The scandal resulted in the departure of Chris Ruffle , a fund manager that U.K. regulators said invested about 15 million pounds on behalf of one client in an unlisted convertible bond. The firm’s assets under management have dropped to 5.5 billion pounds at the end of July from 10.1 billion pounds in mid-2011. The company suffered “shrinkage” in its Chinese business as a result, which added to “legacy issues of investment performance ” in 2008 and 2009, Chief Executive Officer Willie Watt said in the e-mail, without elaborating. “While we continued to manage costs carefully in 2012, it would have been possible to reduce the loss -- and indeed be profitable -- had we taken more aggressive action to control costs,” Watt said. “However, this would have compromised both our ability to deliver for our clients and our long-term strategy.” Martin Currie has returned to profitability in the first half of this year, and sales are up 50 percent from a year earlier, according to the CEO. To contact the reporter on this story: Tim Farrand in Edinburgh at tfarrand@bloomberg.net To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

Hang Seng Bank Ex-Chairman Li Quo-Wei Has Died at Age 95

http://www.bloomberg.com/news/2013-08-12/former-hang-seng-bank-chairman-lee-quo-wei-dies-in-hong-kong.html

Lee Quo-wei, the former chairman of Hong Kong’s Hang Seng Bank Ltd. (11) who fended off a bank run, helped peg the local currency to the U.S. dollar and rebuilt the reputation of the city’s stock exchange, has died. He was 95. Lee died on Aug. 10 at Prince of Wales Hospital in the city’s Shatin district, the unit of HSBC Holdings Plc (HSBA) said in an e-mailed statement on behalf of his family yesterday, without giving a cause of death. After joining the lender in 1946, Lee was among those who transformed Hang Seng into the second-largest Hong Kong-based lender from a money-changing shop founded 13 years earlier. Lee helped Hang Seng end a bank run in 1965 with a capital injection from Hongkong & Shanghai Banking Corp., later to become HSBC. Four years later he was part of the team that created the Hang Seng Index (HSI) , the city’s benchmark stock gauge. Lee was appointed executive chairman of Hang Seng Bank in 1983, according to a statement from current Chairman Raymond Ch’ien. He retired in 1998, becoming honorary chairman and later honorary senior adviser, Ch’ien said in the statement. After guiding Hang Seng Bank through the crisis in 1965, Lee helped steer Hong Kong through several periods of financial and political upheaval, receiving the Grand Bauhinia Medal , the city’s highest award, in 1997. Dollar Peg Lee in 1983 assisted Financial Secretary John Bremridge in establishing the city’s linked exchange rate system, which is still in place, the Chinese-language Apple Daily newspaper reported today. A member of Hong Kong’s legislative council and executive council, Lee met with China’s paramount leader Deng Xiaoping in 1984, as China and the U.K. were discussing the return of sovereignty over the city, Apple Daily said. Lee and other business and political leaders expressed Hong Kong people’s concerns that the handover would make them worse off, and were criticized by the mainland’s official Xinhua News Agency for obstructing negotiations, Apple Daily said. He was appointed by the Hong Kong government in 1988 to lead the city’s stock exchange, charged with increasing professionalism and transparency, Fung Bong-yin wrote in his book “A Century of Hong Kong Financial Development.” Lee “contributed greatly to the development of Hong Kong’s banking industry,” Norman Chan , chief executive of the HKMA, the city’s de-facto central bank and banking regulator, said in an e-mailed statement. Joseph Yam , Chan’s predecessor, called Lee his “most respected senior in the financial sector,” the South China Morning Post reported today. Lee is survived by his wife Helen and three children, Annie, George and Wendy; his son Philip predeceased him, according to the statement from his family. To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

Australia Needs 299 to Win Fourth Cricket Test Against England

http://www.bloomberg.com/news/2013-08-12/australia-needs-299-to-win-fourth-cricket-test-against-england.html

Australia needs 299 runs to win the fourth Ashes cricket Test after Ryan Harris took seven wickets to limit host England to 330 all out at Chester-le-Street. James Anderson was out without scoring to leave England 298 runs ahead just before lunch on day four. Tim Bresnan ’s 45 and Graeme Swann’s 30 not out helped push England close to a lead of 300 at the end of its innings. Ian Bell topscored with 113 runs before being bowled by Harris, who took 7-117. The hosts started the day with a 202-run lead as they seek the draw needed to win the series. Ian Bell resumed on 105 and Bresnan was on four. Bell faced 210 balls and hit 11 boundaries. Yesterday, Australia resumed on 222-5 and added 48 runs to reach 270 in response to England’s 238, a lead of 32 runs. Stuart Broad finished with 5-71, while Swann and Anderson took two wickets each yesterday. Australia’s top scorer, Chris Rogers , was dismissed by Swann on 110, his first Test century. England retained the Ashes trophy with a draw in the third Test after wins in the first two games of the five-match contest. The best Australia can now do is draw the series 2-2. To contact the reporter on this story: Christopher Elser in London at celser@bloomberg.net To contact the editor responsible for this story: Peter-Joseph Hegarty at phegarty@bloomberg.net

U.S. Soybean Crop Seen Smaller as Midwest Rains Reduce Yields

http://www.bloomberg.com/news/2013-08-12/u-s-soybean-crop-seen-smaller-as-midwest-rains-reduce-yields.html

Soybean production in the U.S., the world’s biggest producer and shipper, will be smaller than the government forecast last month after excessive rain in May and June reduced planted acreage and damaged yields. U.S. farmers will harvest 3.26 billion bushels this year, compared with 3.42 billion (93.01 million metric tons) estimated in July and last year’s drought-damaged crop of 3.015 billion, the U.S. Department of Agriculture said today in a report after completing its first surveys of farmers and fields. Analysts surveyed by Bloomberg expected 3.357 billion. Harvested acreage will fall to 76.4 million acres, compared with 76.9 million estimated in July and up from 76.1 million a year earlier, the agency said. Yields were forecast at 42.6 bushels an acre compared with 43.7 bushels expected by analysts. Last month, the government said yields would rise to a record 44.5 bushels, up from 39.6 bushels a year earlier. Reserves on Aug. 31, 2014, will total 220 million bushels, up from this year’s projection of 125 million, the agency said. The average estimate of 30 analysts surveyed by Bloomberg was 262 million bushels. Global output in the crop year that begins Oct. 1 will be 281.72 million tons, down from 285.89 million forecast last month, the USDA said. Worldwide inventories at the end of the marketing year will be 72.27 million tons, down from 74.12 million predicted in July, the USDA said. Traders expected reserves to rise to 74.39 million, on average. Through Aug. 9, soybean futures on the Chicago Board of Trade tumbled 28 percent in the past year to $11.8225 a bushel. To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Egypt Islamist Warns Against Moves on Pro-Mursi Protest Camp

http://www.bloomberg.com/news/2013-08-12/egypt-islamist-warns-against-moves-on-pro-mursi-protest-camp.html

A leading Egyptian Islamist said forcefully breaking up a sit-in by backers of ousted President Mohamed Mursi could lead to a “massacre,” as an official said no date has been set for action. “They will not be able to disperse the sit-in at Rabaa al-Adawiya except through a massacre of tens of thousands of peaceful protesters,” Mohamed El-Beltagy, an official with the Muslim Brotherhood’s Freedom and Justice Party, told Al Jazeera’s Egypt channel, speaking of one of two sites in Cairo where Mursi’s supporters have been camped out. “Instead of Rabaa al-Adawiya there will be a hundred other squares where open-ended sit-ins and peaceful resistance to this military coup will start.” The sit-ins have emerged as a main point of contention in the standoff between Mursi’s supporters, who vow to stay there until he is reinstated, and the interim administration backed by the army, which toppled the elected president on July 3. Officials have urged protesters to leave and the cabinet has authorized police to take action, raising fears of violence. Interior Ministry spokesman Hany Abdel Latif said today no date has been set for a move against the sit-ins. While police are ready to move, “the state is now exerting its utmost efforts to end the crisis without a security intervention,” he said by phone. “We hope that people respond.” Earlier this month, Prime Minister Hazem El Beblawi said the government’s decision to clear the sit-ins was final and asked protesters to leave. He made his comments shortly after the interim presidency said international diplomatic efforts to help ease the crisis have failed. The government says the sit-ins are a threat to national security. At least 130 Mursi supporters have already been killed by security forces since his ouster, which followed mass protests against his rule. To contact the reporter on this story: Mariam Fam in Cairo at mfam1@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Michigan Safety Net for Boomers Frays on Bankrupt Detroit

http://www.bloomberg.com/news/2013-08-12/michigan-safety-net-frays-as-detroit-s-bankruptcy-tests-boomers.html

There’s a made-in- Michigan quality to Art Reyes, a third-generation autoworker with a pension, retiree health benefits and income that enabled him to send three of his four children to college. He’s a product of the old Michigan, which gave birth to organized labor, worker protections and wages that propelled the middle class. That Michigan is almost gone. Now overseeing the nation’s largest municipal bankruptcy in Detroit, the state is at the forefront again, this time playing host to the unraveling of the homemade fabric that cloaked and comforted working families for generations. “I’m literally one of the last at my facility to have a defined pension and health care as a retiree,” said Reyes, 45, a General Motors Co. employee and president of UAW Local 651 in Flint. His unit has 800 members, down from 9,000 when he joined in 1991. Just as the bankruptcy of Detroit, the city that put the nation on wheels a century ago, is a symbol of urban decay, the effort to fix it through cost-cutting measures may set a stricter made-in-Michigan standard for the rest of the U.S. Related: The $1M Check That Sat in a Drawer: How Detroit Went Bust “Other major cities are not too far behind, and they are going to be watching,” said John Mogk, a professor at Wayne State University Law School in Detroit. “This could set the template.” Wild Swings While Michigan has ridden the wild swings of auto-industry fortunes for more than 75 years, it has struggled to recover from the economic swoon that began in 2008. The eighth-largest U.S. state, with 9.9 million people, Michigan was the only one whose population dropped in the last decade. It lost almost 550,000 jobs as unemployment stayed above 10 percent -- reaching a high of 14.2 percent -- from December 2008 through October 2011. Bonds from Michigan issuers have lost about 4 percent this year, more than the 3.8 percent drop for the broader $3.7 trillion municipal-debt market, according to Barclays Plc data. Only 11 states have had bigger declines, the data show. Union members made up 26 percent of the workforce in 1989, according to the Bureau of Labor Statistics. The number dropped to 16.6 percent last year, including the loss of 42,000 employees. While the predecessors of Chrysler Group LLC and GM that filed for bankruptcy in 2009 and emerged last year are now profitable, they’ve succeeded with smaller workforces and wage contracts for new hires cut by as much as half. Comeback Kid The auto industry recovery has helped Michigan’s economic growth exceed all states except North Dakota since 2010, according to the Bloomberg Economic Evaluation of States. “We’re the comeback state in the United States ,” Republican Governor Rick Snyder said in a July 26 interview. He also said Michigan wouldn’t bail out Detroit. The comeback involves a redefinition of a state whose identity remains tied to motor vehicles and the union members who build them. The United Automobile Workers was born in Michigan after the historic Flint sit-down strike of 1937. Along with two major transportation arteries leading into Detroit -- the Edsel Ford and Chrysler freeways -- is Interstate 696, named after Walter P. Reuther, who led the UAW from 1946 to 1970. Snyder, 54, the former chairman of the computer company Gateway Inc., was elected in 2010. The Republican-controlled legislature gave him the right to appoint emergency financial managers in distressed cities and school districts. That led to his selecting Kevyn Orr in March to oversee the operation of Detroit. Unraveling Net In a move packing a symbolic wallop, Snyder signed into law a measure prohibiting mandatory union dues in government workplaces, making Michigan the nation’s 24th -- and most unlikely -- right-to-work state. “Starting in the 1930s, Michigan defined itself as a state that provided security for working people -- that was unprecedented,” said Kevin Boyle, a Detroit native, history professor and author of “Arc of Justice: A Saga of Race, Civil Rights and Murder in the Jazz Age.” “Now that has unraveled. The question is what replaces that?” said Boyle, a professor at Northwestern University in Evanston, Illinois. Orr said he expects Detroit to emerge from bankruptcy by the fourth quarter of 2014. How the financial solution will affect wages of workers, pensions of retirees and services to 700,000 residents is up to the bankruptcy court. Orr has proposed eliminating defined-benefit pensions for new employees or those with less than 10 years’ service, and moving retirees to federal programs from a more generous city-paid plan. ‘Death Rattle’ Detroit’s population, which peaked at 1.85 million in 1950, has plummeted to about 700,000, according to Census data. Manufacturing jobs fell to fewer than 27,000 in 2011 from about 296,000 in 1950. About 60,000 properties in the city, or 15 percent of all parcels, were barren, and at least 78,000 buildings were vacant, including 38,000 deemed potentially dangerous, Orr said in a report this year. To some, the Detroit bankruptcy filing proves the economic formula that supported the state and its largest city no longer works. “We all suffered through the death rattle of big government, big business and big labor,” said Patrick Anderson, principal and chief executive officer of Anderson Economic Group, in East Lansing, Michigan. “It was a terrifically successful model from about 1920 to 1974. That model hasn’t worked for at least 20 years.” New Road The economic outlook for Michigan is one that will be hampered by a disproportionate share of baby boomers , manufacturing job losses and slow income growth, according to a report from the University of Michigan’s Institute for Research on Labor, Employment and the Economy. “We do appear to be emerging from the tunnel that was the most catastrophic period for the Michigan economy in our lifetime,” the report said, adding a caveat: “We won’t be traveling the same route as before, however, after exiting the tunnel.” Although Boyle said it’s difficult to determine how much Detroit’s emergence from bankruptcy will redefine the city and the state, whatever happens will likely spill beyond Michigan’s borders. “Detroit is such an extreme case,” Boyle said. “But watching from here out, it should provide an indication of the future for an awful lot of Americans.” To contact the reporter on this story: Tim Jones in Chicago at Tjones58@bloomberg.net To contact the editor responsible for this story: William Glasgall at wglasgall@bloomberg.net

Facebook’s Sandberg Sells $91 Million in Shares After Surge

http://www.bloomberg.com/news/2013-08-12/facebook-s-sandberg-sells-91-million-in-shares-amid-stock-surge.html

Facebook Inc. (FB) Chief Operating Officer Sheryl Sandberg sold about $91 million worth of shares in the social network after the stock topped its $38 initial public offering price for the first time since May 2012. Sandberg sold 2.37 million Facebook shares on Aug. 7, two days after Facebook closed at a record high of $39.19, according to a regulatory filing. With the latest sale she has sold more than 7 million shares, or about 12 percent of her total, since the IPO. The holdings include unvested restricted stock units as of end-2012 and options. “There’s no denying that she has tremendous amounts of equity skin in the game,” said David Larcker, a professor of accounting at the Stanford Graduate School of Business in Stanford, California. “I think it’s prudent for diversification and other kind of purposes to take advantage of the value that she has, and put it into alternative things.” Facebook stock has surged 44 percent this year, buoyed by the company’s increasing success in generating revenue from advertising on mobile devices. After one of the worst IPOs in a decade, the world’s largest social network has focused on ads for smartphones and tablets, and is now projected to reach sales of more than $16 billion by 2017. The shares fell less than 1 percent to $38.22 at the close in New York today. Sandberg, who joined Facebook in 2008, has periodically sold stock in the Menlo Park, California-based company since the IPO last year. Tucker Bounds, a spokesman for Facebook, declined to comment. In the past year, Sandberg has sold a total of 7.3 million shares for a total value of $221.5 million, according to InsiderScore.com, which monitors insider transactions. All of the sales were completed under trading regulations that allow executives to cash out a portion of their holdings when stocks reach predetermined prices. Chief Executive Officer Mark Zuckerberg pledged in September 2012 that he wouldn’t sell shares for at least a year. To contact the reporters on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net ; Brian Womack in San Francisco at bwomack1@bloomberg.net To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

Abe Threatens Ministries With Power Shift Rivaling MacArthur

http://www.bloomberg.com/news/2013-08-12/abe-threatens-ministries-with-power-shift-rivaling-macarthur-era.html

The bureaucracy that oversaw Japan ’s postwar economic boom and a two-decade stagnation faces the biggest threat to its power since the U.S. occupation as Prime Minister Shinzo Abe seeks to seize control of ministries’ most senior appointments. Chief Cabinet Secretary Yoshihide Suga, 64, is leading the initiative, years after he got an education in civil servants’ sway when they frustrated his move as internal affairs minister to shift revenue between regions. The proposal in debate in the ruling Liberal Democratic Party would give the Cabinet Secretariat oversight of top bureaucrats’ promotions. The plan would open a path to accelerating change as Abe, 58, readies steps from strengthening the military to bringing Japan into the U.S.-led Trans Pacific Partnership trade bloc and paring agriculture regulation. Enacting it could usher an end to promotions influenced by tenure and support from bureaucratic peers in a system cemented over decades when politicians relied on civil servants to nurture exports and dole out public works. “When you want to change the direction of national strategy, it becomes very important to rein in the bureaucracy,” said Kenneth Pyle, a University of Washington professor of Asian studies in Seattle , who has been teaching Japanese history since the 1960s. “Abe realizes that if he’s going to succeed he has to be able to centralize policymaking.” Wielding Power The civil service wields power over the 92.6 trillion yen ($957 billion) budget, from approving construction projects to bestowing foreign aid. Seniority often trumps merit in deciding appointments, said Hiroaki Inatsugu, a professor at Waseda University’s Okuma School of Public Management, who has served on a panel advising Abe on the revamp. Success isn’t certain -- three similar attempts in the past five years unraveled as officials, along with some lawmakers, pushed back against change. The former ruling Democratic Party of Japan swept into office in 2009 on a platform that included a vow to wrest power from the ministries, only to end up enacting the first legislation to raise the national sales tax since 1997 -- something long sought by the Finance Ministry. DPJ lawmaker Hirohisa Fujii said in August 2009 it was “outrageous” that bureaucrats had a prime role in crafting the budget. Three years later, his colleague Yoshihiko Noda pushed the consumption-levy increase through parliament after backing the move while finance minister. The step triggered a split in the party and the collapse of Noda’s administration, setting up the December 2012 election that ushered Abe into office as prime minister for the second time. New Legislation “The new legislation will not work unless there is a strong disciplinarian in charge to control it,” said Jun Okumura, senior adviser to the Eurasia Group in Tokyo. “Regardless of that, Abe has been making some very interesting senior appointments to push through his agenda, starting with Bank of Japan governor Haruhiko Kuroda , who was plucked from outside the mainstream,” Jun said. The government dumped the head of Japan Post Holdings Co., a Finance Ministry insider selected days before Abe took office, and replaced him with Taizo Nishimuro, the former chairman and chief executive of Toshiba Corp. (6502) The new head of the Japan Coast Guard is the first chosen from within the ranks, rather than someone from the Transport Ministry. The Health and Welfare Ministry has its first female vice minister, a step in keeping with Abe’s push to put women in 30 percent of leadership positions. Suga’s Book “Bureaucrats will do anything they can to stop something new from happening,” Suga wrote in “A Politician’s Determination -- Dealing With Bureaucrats,” a book prompted by his ultimately successful battle to let people pay a proportion of their taxes to their home town. Bureaucrats said it would be “hard to define what someone’s home town is,” Suga wrote. Reducing opposition to the reform would aid Abe’s efforts to reshape the nation’s economy, as his administration prepares legislation on industries from health care to agriculture and energy. The bill on appointing the top officials is also planned this year. “Political control of the bureaucracy will strengthen sharply, as incentives for civil servants shift to serving the government, rather than the personnel departments of their own agencies,” Robert Feldman , head of Japan economic research at Morgan Stanley MUFG Securities Co. in Tokyo, wrote in a note to clients last month. Ending Deflation The Abenomics campaign to end 15 years of deflation through monetary easing, stimulus spending and structural change helped drive the Topix index of stocks up about 44 percent since the December election. The yen has fallen about 14 percent against the U.S. dollar in that period, helping exporters’ profits. Abe’s ruling coalition strengthened its position last month by winning a majority in the upper house of the Diet, enabling passage of legislation without opposition support. Abe’s bigger source of concern is now internal dissent -- something he faces with the civil-service appointment proposal. “Resistance comes from both bureaucrats and lawmakers,” LDP deputy policy chief, Yasuhisa Shiozaki, who has pushed for change since Abe’s first administration in 2006-2007, said in an interview last month. “The details are yet to be decided and there are extremes of opinion on both sides.” Cabinet’s Power Among opponents within the ruling LDP is former Transport Minister Makoto Koga, who says “I don’t think the cabinet should have this power -- I think each minister should have the right to pick the top officials, as in the past. If you’re not right in the thick of things, you won’t know what abilities a person has and what experience they have built up as a bureaucrat. Will you be able to pick the right person every time?” While criticized for inflexibility and infighting between ministries, Japan’s bureaucrats are generally dedicated, often working through the night to brief ministers, said Inatsugu at Waseda. “It’s not about the money. They could get more in the private sector. It’s seen as a pure way of life,” he said of their motivation. The bureaucracy saw some change during the American occupation led by General Douglas MacArthur, when tests for the civil service were altered “to break the near-monopoly of Tokyo University graduates and to facilitate the entrance of those with more heterogeneous preparation,” political analyst Kazuo Kawai wrote in his 1960 book “Japan’s American Interlude.” New Agency A new agency, the National Personnel Authority , was established to oversee recruitment and training, and set standards for appointments and dismissals. Even so, the bureaucracy “largely maintained its traditional position of importance,” Kawai wrote. During the 1960s economic boom, bureaucrats honed the practice of gyosei shido, or administrative guidance. Ministry for International Trade and Industry staff would give direction to manufacturers, and the Finance Ministry would offer the same to banks, according to Gary Alinson in his 2004 book “Japan’s Postwar History.” MITI also controlled the allocation of foreign exchange and imported technology, according to Alinson. Bureaucratic influence also was cemented through the practice of amakudari, or descending from heaven, when senior career staffers would retire in their 50s to take top posts in public corporations or private businesses, according to “Japan: A Country Study,” published by the Federal Research Division of the U.S. Library of Congress in 1994. Others went into politics, with most of the LDP’s postwar prime ministers until the late 1980s being ex-civil servants, according to the study. Prime Minister Abe’s grandfather Nobusuke Kishi rose through the ranks of the Ministry of Commerce and Industry -- which became MITI, and is now known as the Ministry of Economy, Trade and Industry -- before entering politics and serving as prime minister in the late 1950s. This background may offer Abe perspective on how to approach bureaucratic reforms, making him less likely to adopt a directly confrontational stance, Pyle said. Civil-service power has waned in recent decades from its heyday, with the rise of LDP policy groups and repeated efforts by administrations to strengthen the role of politicians. “Bureaucrats can be obstructive, but I don’t think anyone in Japan worries that they hold all the power these days -- that’s no longer a concern,” said Takeshi Sasaki, a former president of Tokyo University who served on bureaucratic reform panels under Prime Minister Junichiro Koizumi and Abe during his first stint as premier. Top Appointments Even so, the proposal to wrest top appointments away from the ministries may require politicians relying on bureaucrats themselves to write the legislative language for the change. The impact of past reform -- such as attempting to reduce the sway of the Finance Ministry over the annual budget process through a new panel under the Cabinet Office -- has been limited, according to political scientist Koichi Nakano. “If the move to centralize appointments under the prime minister’s office were to succeed, it would be the biggest blow to bureaucratic power since the end of the U.S. occupation,” said Nakano, a professor at Sophia University in Tokyo. “This legislation will doubtless also be opposed by all the ministries. I think it will end in compromise.” To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net ; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

Snooping Garbage Bins in City of London Ordered to Be Disabled

http://www.bloomberg.com/news/2013-08-12/snooping-garbage-bins-in-city-of-london-ordered-to-be-disabled.html

The City of London ordered its supplier of space-age trash cans to immediately cease using technology in the bomb-proof bins that collects data from mobile devices of people walking in the capital’s Square Mile. “Data collection -- even if it is anonymized -- needs to stop,” the City of London Corp., which acts as the local government authority in the financial district, said today in a statement on its website. The corporation asked supplier Renew to stop collecting data and referred the issue to the Information Commissioner’s Office, an independent body set up by the U.K. government to enforce data privacy. Renew Chief Executive Officer Kaveh Memari said the reaction to the “Orb” technology in the Renew Pod bins is “understandable,” though he defended the technology as merely a “glorified counter” of people. “During our current trials, a limited number of pods have been testing and collecting anonymized and aggregated MAC addresses from the street and sending one report every three minutes concerning total footfall data from the sites,” he said in a statement on the company’s website. “It is very much like a website,” Memari said. “You can tell how many hits you have had and how many repeat visitors, but we cannot tell who, or anything personal about any of the visitors.” Technology in the bins “detects smartphones by proximity, speed, duration and manufacturer,” London-based Renew said in a June press release. “The device has been installed to measure variables in market share between mobile handheld providers within the City’s Square Mile,” it said. Shopping Habits The City’s actions came after the Independent newspaper reported that Renew’s bins are tracking passers-by, intending to study shopping habits in order to target advertising. “Irrespective of what’s technically possible, anything that happens like this on the streets needs to be done carefully, with the backing of an informed public,” the City said in today’s statement. The bins, which have LCD screens with public information and advertising, were first installed in the run-up to the 2012 Olympics. The trash barrels cost 30,000 pounds ($46,500) each to install, according to the Independent. Further development will depend on “people being comfortable with interactive technology,” CEO Memari said. The company will discuss additional advancements publicly, he said. “A lot of what had been extrapolated is capabilities that could be developed and none of which are workable right now,” he said. To contact the reporter on this story: Rachel Savage in London at rsavage10@bloomberg.net To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

Samsung Losses to Apple Give IPhone Maker Edge in Talks

http://www.bloomberg.com/news/2013-08-12/samsung-losses-to-apple-give-iphone-maker-edge-in-talks.html

Apple Inc. (AAPL) ’s patent-infringement victory over Samsung Electronics Co. could go far in bolstering its claim of copying and providing an advantage in any settlement between the world’s two top smartphone manufacturers. The U.S. International Trade Commission on Aug. 9 said Samsung infringed two Apple patents and issued an order banning imports of products using the iPhone maker’s multitouch features and headphone jack detection. President Barack Obama ’s administration could overturn the import ban on public policy grounds, as it did Aug. 3 in an order against older iPhones. “These results give Apple a bit of an edge in the settlement negotiations that are going on,” said Susan Kohn Ross , a lawyer with Mitchell Silberberg & Knupp in Los Angeles. “Assuming this order becomes final, the question that arises is how important are these models of phones and other electronic gadgets to the overall portfolio of Samsung products.” The companies are spending hundreds of millions of dollars in legal fees for some sort of victory that gives them the upper hand in a final, negotiated solution. Apple, which initiated the legal fight in 2011, is seeking to limit the Galaxy maker’s increasing share of the U.S. smartphone market, where Apple is No. 1 and Samsung No. 2. “We now have enough court decisions that pretty soon the parties are going to understand their relative strengths against each other and their weaknesses against each other,” said Jeff Lewis of Patterson Belknap Webb & Tyler in New York. Four Continents Apple filed its first patent-infringement case against Samsung in April 2011, saying the Korean company “has chosen to slavishly copy Apple’s innovative technology.” Samsung responded a week later with its own patent claims, and the fight has escalated into a legal battle on four continents with no clear winner and no end in sight, despite negotiations that have included direct talks between chief executives of both companies. At stake is an increased share of a smartphone market that rose 34 percent to $293.9 billion last year, according to data compiled by Bloomberg. At the same time, the average price of a smartphone has plunged to $375 from $450 since the beginning of 2012, IDC estimates. Samsung rose 0.2 percent to 1,232,000 in Seoul, paring this year’s decline to 19 percent. Apple rose 1.3 percent to $460.26 at 9:44 a.m. in New York, and had dropped 15 percent this year before today. “Investors are turning away from legal issues because it hardly has any impact on their businesses any more,” said Marcello Ahn, a Seoul-based analyst at Quad Investment Management. “What they really want to find out is where Samsung and Apple will make cash over the next two years or so.” Innovation Fatigue Cupertino, California-based Apple has claimed that many of the phones running on Google Inc. (GOOG) ’s Android operating system copied unique features of the iPhone, introduced in 2007. Its first suit, in March 2010 against Taiwan’s HTC Corp. (2498) , resulted in a settlement that included a pledge by HTC that it wouldn’t make “cloned” copies of Apple products. In the global marketplace, Android has grown to become the most popular operating system, running 80 percent of the almost 230 million smartphones sold worldwide in the second quarter, compared with Apple’s 14 percent, according to an Aug. 1 report by Boston-based researcher Strategy Analytics. Samsung and Apple both disappointed analysts in their most recent earnings. Samsung missed estimates as market saturation curbed sales growth for its flagship Galaxy S4, and Apple had to rely on sales of its iPhone 4 -- including versions that were almost blocked last week -- to top estimates. Finding new, exciting things to add to the phones is getting harder, said Will Stofega , program director at researcher IDC in Framingham, Massachusetts. New Measures “The designs and capabilities of some of these premium devices -- you’re really scratching your head to find something new,” Stofega said. Samsung, Asia’s biggest technology company, sells about one of every three smartphones in the world. The Suwon, South Korea-based company applauded the decision clearing it of infringing Apple’s design patents, which would have been harder to work around. “Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners,” said Adam Yates , a spokesman for Samsung. “We have already taken measures to ensure that all of our products will continue to be available in the United States .” Samsung’s three biggest markets are China , North America and Europe , Kim Young Chan, a Seoul-based analyst at Shinhan Investment Corp., said in a telephone interview. U.S. Verdict “Samsung’s market share in the U.S. was the lowest among those markets, but it has been on the rise because there were no new products released by Apple during the first half,” Kim said. “When the new models come out in late third quarter or in the fourth quarter, the market rivalry will again intensify, and it won’t be as easy as before for Samsung to extend its market share.” Apple won a $1 billion jury verdict last year in California , though a new trial was ordered to determine damages on about half of the award. Samsung won an ITC import ban against Apple, only to have it vetoed by the Obama administration on public policy grounds regarding patents on fundamental technology that’s used throughout the industry. That veto and Aug. 9 verdict lowered Samsung’s bargaining power and made it even harder to bring Apple back to the negotiation table, SU Intellectual Property patent lawyer Jung Dong Joon said. “The latest two results have pushed Samsung into a far corner despite the more than two-year-long legal fight,” Jung said. “After seeing Samsung being smacked on the face two times straight, it will only help Apple keep its high-handed posture in any negotiation talks.” Apple Bullets For both reputation purposes and settlement negotiations, hindering the other company’s sales is often more important than money. The $1 billion California verdict equals one-seventh of Samsung’s second-quarter profit and less than two weeks’ worth of iPhone sales. Even though Samsung “has successfully convinced consumers that all this business about copying is vastly overdone,” that may not help it in the legal arena considering how the two types of patents are treated, said Carl Howe , an analyst with Boston-based market researcher Yankee Group. “My guess is Apple will amass a lot more bullets before it’s over,” Howe said. “Samsung’s bet is that at the end they’ll have to pay, but, in the meantime, they’ll have amassed a lot of money and mindshare and market share. And that’s why Apple is insisting on import bans.” The Apple ITC case against Samsung is In the Matter of Electronic Digital Media Devices, 337-796, and Samsung’s case is In the Matter of Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, 337-794, both U.S. International Trade Commission (Washington). The Apple appeal is Apple Inc. v. Samsung Electronics Co. (005930) , 13-1129, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California ( San Jose ). To contact the reporters on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net ; Dina Bass in Seattle at dbass2@bloomberg.net To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net ; Michael Tighe at mtighe4@bloomberg.net

Commercial Papers Reported: India Money Markets

http://www.bloomberg.com/news/2013-08-12/commercial-papers-reported-india-money-markets.html

Following is a table showing commercial papers reported by Companies. The data has been provided by the Fixed Income Money Market & Derivatives Association of India. ISIN Security Mty Avg Px Avg Yld LT Yld Trds Trds(Crs) 12:10 GMT 12-Aug-13 INE001A14IS8 HDFC LTD 4 99.88 11.24 11.00 5 550.00 16AG13 INE523E14JA9 L T FIN LTD 18 99.43 11.58 11.50 6 315.00 30AG13 INE020B14185 RURAL ELEC CORP 353 91.09 10.11 10.13 4 277.00 31JL14 INE001A14IU4 HDFC LTD 11 99.65 11.50 11.50 3 250.00 23AG13 INE514E14ES1 EXIM BANK 7 99.79 11.15 10.75 2 250.00 19AG13 INE148I14AF4 INDIABULL 10 99.69 11.35 11.35 1 150.00 22AG13 INE580B14AE6 GRUH FIN LTD 44 98.66 11.28 11.28 1 145.00 25SP13 INE438A14HM7 APOLLO TYRES 227 93.16 11.81 11.81 1 100.00 27MR14 INE158O14129 IDFC PRIMARY LTD 8 99.75 11.64 11.64 1 100.00 20AG13 INE289B14426 GIC HSG FIN 2 99.93 12.84 12.84 1 100.00 14AG13 INE860H14LQ0 ADITYA BIRLA FIN 4 99.87 11.75 11.75 2 100.00 16AG13 INE114A14857 SAIL 39 98.88 10.63 10.63 1 55.00 20SP13 INE140A14423 PIRAMAL ENTERPR 6 99.80 12.10 12.10 1 50.00 19AG13 INE148I14AG2 INDIABULL 14 99.57 11.35 11.35 1 50.00 26AG13 INE148I14AH0 INDIABULL 16 99.50 11.35 11.35 1 50.00 28AG13 INE091A14261 NIRMA LTD 4 99.88 11.29 11.29 1 50.00 16AG13 INE660A14IW3 SUND MF 17 99.46 11.75 11.75 1 50.00 29AG13 INE691I14AD8 L&T INFRA. 18 99.42 11.75 11.75 1 50.00 30AG13 INE763G14932 ICICI SEC 2 99.93 12.03 12.03 1 50.00 14AG13 INE860H14LV0 ADITYA BIRLA FIN 14 99.55 11.75 11.75 1 50.00 26AG13 INE909H14DG3 TATA MOTORS FIN 130 96.15 11.25 11.25 1 50.00 20DC13 INE301A14934 RAYMOND LTD 8 99.75 11.30 11.30 1 40.00 20AG13 INE233A14BQ6 GODREJ IND 29 99.14 10.91 10.91 1 25.00 10SP13 INE720G14692 JINDAL POWER LTD 8 99.75 11.30 11.30 1 25.00 20AG13 INE532F14LA3 EDELWEISS FIN 16 99.44 12.95 12.95 1 25.00 28AG13 INE055A14811 CENTURY TEX 1 99.97 11.25 11.25 1 25.00 13AG13 INE013A14MY3 RELIANCE CAP 67 97.69 12.88 12.88 1 25.00 18OT13 INE016A14AD5 DABUR INDIA LTD 21 99.34 11.50 11.50 1 25.00 02SP13 INE148I14AR9 INDIABULL 7 99.78 11.35 11.35 1 25.00 19AG13 INE140A14AC5 PIRAMAL ENTERPR 16 99.50 11.50 11.50 1 25.00 28AG13 INE121A14IB0 CHOLA 29 99.12 11.23 11.23 1 25.00 10SP13 INE909H14DO7 TATA MOTORS FIN 8 99.74 11.75 11.75 1 25.00 20AG13 INE916D14OQ3 KOTAK PRIME 162 95.14 11.50 11.50 1 19.00 22JN14 INE523E14JJ0 L T FIN LTD 53 98.29 11.95 11.95 1 10.00 04OT13 INE148I14AU3 INDIABULL 44 98.57 12.05 12.05 1 7.00 25SP13 INE140A14AP7 PIRAMAL ENTERPR 121 96.02 12.50 12.50 1 5.00 11DC13 INE094O14118 DAIMLER FIN 42 98.59 12.46 12.46 1 4.00 23SP13 INE148I14AW9 INDIABULL 22 99.34 11.01 11.01 1 2.00 03SP13 INE540L14264 ALKEM LABS LTD. 46 98.53 11.82 11.82 1 2.00 27SP13 INE597H14AD9 TGS INV & TRADE 42 98.53 12.93 12.93 1 2.00 23SP13 INE804I14EO6 ECL FIN LTD 14 99.53 12.44 12.44 1 1.00 26AG13 INE244L14057 INDIABULLS INFRA 43 98.46 13.30 13.30 1 1.00 24SP13 Contributed via: Bloomberg Publisher WEB Service Provider ID: ab1dfb24914d4eea8b09f48cfb4d0311

Holder Mandates Changes to Sentences for Some Drug Charges 

http://www.bloomberg.com/news/2013-08-12/holder-to-seek-u-s-criminal-justice-system-changes.html

U.S. Attorney General Eric Holder has ordered changes across the Justice Department to eliminate what he called “draconian” mandatory minimum sentences for certain non-violent drug offenders. Holder, in a speech today in San Francisco , laid out proposals to reduce the U.S. prison population. He questioned the effectiveness of the more than 40-year-long “war on drugs” and announced support for bipartisan efforts in Congress and at the state level to move away lengthy sentences in favor of other punishments. “We must face the reality that, as it stands, our system is in too many respects broken,” Holder said at the American Bar Association ’s annual conference. “The course we are on is far from sustainable.” The Justice Department has been working on a review of the U.S. criminal justice system at Holder’s direction since the start of this year. Lawmakers in Congress have sought to identify ways to reduce a prison system that held more than 1.5 million people in 2012 at federal, state and local levels. Speaking in April to the National Action Network, a civil rights advocacy group, Holder contended that mandatory minimum sentences often “breed disrespect for the system and are ultimately counterproductive.” Sidestepping Sentences U.S. prosecutors will now sidestep the statutorily required mandatory minimums by charging low-level, nonviolent offenders “with offenses for which the accompanying sentences are better suited to their individual conduct,” Holder says in his prepared remarks. Senators Richard Durbin of Illinois , the chamber’s No. 2 Democrat, and Mike Lee , a Utah Republican, introduced a bill this month to give federal judges more discretion in sentencing non-violent drug offenders. Senate Judiciary Committee Chairman Patrick Leahy , a Vermont Democrat, and Senator Rand Paul, a Kentucky Republican, in March introduced legislation that would give federal judges increased discretion with all federal crimes subject to mandatory minimum penalties, providing authority to use sentencing flexibility under certain conditions. In the House, lawmakers have put together a task force to investigate and hold hearings on “over-criminalization” in the U.S. and release a report on their findings. Prison Population While the total U.S. prison population declined 1.7 percent in 2012 from 2011, the federal prison population increased by approximately 1,500. Durbin, in a statement today, said that the mandatory minimum laws “played a huge role in the explosion of the U.S. prison population.” In a Senate floor speech last month, Leahy attributed the significant growth of the prison population over the past two decades -- something that cost more than $80 billion in 2010 -- in part to the proliferation of mandatory minimum sentences. The federal prison population has grown by almost 800 percent since 1980 and currently stands at more than 219,000. “This one-size-fits-all approach to sentencing never made us safer, but it has cost us plenty,” Leahy said. Holder cited both bills in his remarks today, saying they would “save our country billions of dollars” and he would work with lawmakers to “refine and advance” the legislation. Sequestration Cuts Holder’s focus on federal savings comes as all branches of government are facing pressure from the mandated automatic budget cuts, known as sequestration, that began in March. The Justice Department ’s annual report to the U.S. Sentencing Commission, released in July, pointed to the combined effects that growing prison costs and sequestration would have on the criminal justice system across the U.S., including fewer federal and state partnerships, diversion programs and investigations. “If the current spending trajectory continues and we do not reduce the prison population and prison spending, there will continue to be fewer and fewer prosecutors to bring charges, fewer agents to investigate federal crimes,” Jonathan J. Wroblewski, the director of the Office of Policy and Legislation in the department’s criminal division, said in a July 11 letter to the commission. New Guidelines Holder has directed U.S. Attorney’s offices across the country to develop new guidelines for determining when federal charges should be filed, with a focus on targeting “the most serious offenses” and “the most dangerous criminals.” The Justice Department is in the process of identifying and implementing new diversion programs -- an effort to find alternatives -- such as drug treatment and community service -- designed to halt the flow of individuals into the prison population. Holder is seeking to capitalize on state-level efforts in places such as Kentucky, Texas and Arkansas -- that regularly vote against Democrats -- for support and ideas, according to his remarks. The Justice Department will expand the federal compassionate release framework, something that began earlier this year when the Bureau of Prisons changed the criteria for non-violent inmates facing serious medical problems. The framework will now be expanded for elderly inmates who didn’t commit violent crimes and have served significant portions of their sentences. “The bottom line is that, while the aggressive enforcement of federal criminal statutes remains necessary, we cannot simply prosecute or incarcerate our way to becoming a safer nation,” Holder said. To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

Merkel Economy Scorecard Shows Steinbrueck Struggle

http://www.bloomberg.com/news/2013-08-12/merkel-economy-scorecard-shows-steinbrueck-struggle-euro-credit.html

German economic figures show the uphill struggle Peer Steinbrueck faces to unseat Chancellor Angela Merkel in Sept. 22 elections. Since Merkel succeeded Gerhard Schroeder in 2005, unemployment has dropped to near a post-reunification low, the budget deficit has been virtually eliminated and workers have more money in their pockets. Investors are accepting negative real returns to lend money to the federal government. All that is serving Merkel’s bid for a third term. Her Christian Democratic Union bloc leads Steinbrueck’s Social Democrats by about 17 points in the polls. Even after eight years of her rule and her decision to bail out struggling euro nations to keep the 17-nation currency union intact, Germans see little need for a new leader, says Manfred Guellner, director of the Berlin-based pollster Forsa. “For the man on the street there’s every reason to feel good and that of course works always to the benefit of the incumbent,” Commerzbank AG chief economist Joerg Kraemer said by telephone. “Real wages are rising and have unlocked consumer spending.” Germany’s 10-year government bond yield will be 1.76 percent by the last quarter of this year from 3.31 percent in 2005 and 3.38 percent in 2009, according to the weighted average of 24 forecasts compiled by Bloomberg. The 10-year note now yields about 1.8 percent. Inflation will remain below 2 percent through 2014, according to the median of 84 estimates collected by Bloomberg. Shrinking Deficit Declining borrowing costs, along with spending curbs, have helped Merkel shrink the budget deficit. The shortfall exceeded the European Union ceiling in 2005 when it stood at 3.3 percent of gross domestic product. It fell to 3.1 percent in 2009, even amid an economic contraction. It’s forecast to drop to 0.2 percent this year according to the median of 32 predictions. “The government has overachieved on some key fiscal targets,” Fitch Ratings said Aug. 7 when it affirmed Germany ’s rating at AAA with a stable outlook and said the country’s debt as a percentage of the economy has peaked. “Germany has all the ingredients of a declining public debt path.” The country’s unemployment rate will fall to 6.9 percent this year compared with 8.1 percent in 2009, when Merkel was in a so-called grand coalition with the Social Democrats, according to Bloomberg-compiled forecasts. It was 11.7 percent the year she took over from Schroeder. Merkel’s decision in 2009 to extend labor-cost subsidies to businesses hit by collapsing orders allowed companies to hold on to skilled workers and supported a recovery from the deepest slump since World War II. DAX Gains Germany’s benchmark DAX (DAX) index returned more than 60 percent since the end of Schroeder’s rule, compared with losses for France ’s CAC 40 (CAC) and for Italy ’s FTSE MIB (FTSEMIB) gauge. Net wages grew 3.6 percent year-on-year on average per quarter during Merkel’s current term, compared with 0.3 percent during Schroeder’s final three years. Hit by a two-year recession in the euro region that curbed its exports, Germany’s economy will expand 0.3 percent this year, the Bundesbank said June 7. Germany will grow 1.5 percent in 2014, in line with its potential, the central bank said. “The economy of Germany is dependent on exports and data we’ve got from its key markets suggested the country is doing fine in terms of growth,” said Soeren Moerch, the head of fixed-income trading at Danske Bank A/S (DANSKE) in Copenhagen. “If data on growth and sentiment maintains its momentum, Merkel will probably have a good chance of winning the election.” Rising Confidence German 10-year bonds fell today after the ZEW Center for European Economic Research said its index of investor and analyst expectations rose to 42 this month, the highest level since March. The yield rose 8 basis points to 1.78 percent at 1:35 p.m. in Berlin. Six weeks before the election, support for Merkel’s Christian Union bloc fell one point to 40 percent, according to a weekly Forsa poll for Stern magazine and RTL television. Backing for the SPD rose a percentage point to 23 percent, with its Green party ally also up a point at 14 percent. Merkel’s Free Democratic Party coalition partner held at 5 percent while the Left Party dropped one point to 7 percent. The SPD’s election manifesto calls for a “new social balance” and says it’s Merkel’s fault that the lesser qualified face growing risks of poverty. Steinbrueck said in an Aug. 8 speech in Hamburg that he would act quickly to implement a statutory minimum wage and put a brake on labor leasing. The SPD also aims to raise the top tax rate to 49 percent from 42 percent progressively from 64,000 euros ($85.357) to 100,000 euros, whereby those earning 100,000 euros or more per year would pay 49 percent income tax. Tax Plans Merkel’s Christian Union bloc has rejected tax increases and vowed instead to reduce the effects of “bracket creep” that occurs when wage gains subject workers to higher tax rates. It would also leave it to collective bargaining partners to set minimum wages in their respective sectors and plans to reduce government debt gradually to 60 percent of GDP from around 82 percent last year. Whereas former SPD chancellor Helmut Schmidt was an economic expert and Schroeder had the clout of an economic “man of action,” voters see Steinbrueck as a “financial technocrat,” said Guellner. “There is no appetite for a change in government because there is a lack of faith in the SPD’s abilities,” Guellner said Aug. 9 by telephone. “Steinbrueck isn’t seen as somebody who could do the job any better than the incumbent chancellor.” To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Jason Dufner’s PGA Championship Win Boosts CBS Ratings by 13%

http://www.bloomberg.com/news/2013-08-12/jason-dufner-s-pga-championship-win-boosts-cbs-ratings-by-13-.html

Jason Dufner’s victory in the PGA Championship boosted television ratings in the biggest U.S. markets by 13 percent for CBS. The CBS Corp. (CBS) unit said yesterday’s telecast drew a 4.4 overnight rating in major markets, compared with 3.9 for Rory McIlroy’s victory last year in the final major tournament of the men’s golf season. Top-ranked Tiger Woods and No. 2-ranked Phil Mickelson played earlier in the day after poor showings in the first three rounds. Dufner won his first major title by two strokes over Jim Furyk at Oak Hill Country Club near Rochester, New York. To contact the editor responsible for this story: Larry Siddons at lsiddons@bloomberg.net

Abe’s Japan Is Blind to Scary Nuclear Reality

http://www.bloomberg.com/news/2013-08-12/abe-s-japan-is-blind-to-scary-nuclear-reality.html

Forget Abenomics. Ignore Shinzo Abe’s efforts to rejuvenate Japan ’s diplomatic and military clout. Look past the quest to rewrite the constitution. History will judge this prime minister by one thing alone: what he did, or didn’t do, to end the worst nuclear crisis since Chernobyl. It’s mind-boggling how disengaged Japan’s leaders have been since their “BP moment” -- the March 2011 near-meltdown at the Fukushima Dai-Ichi nuclear plant. Abe’s predecessors Naoto Kan and Yoshihiko Noda virtually ignored the radiation leaks and spent fuel rods sitting 135 miles (217 kilometers) from Tokyo. In December, Abe became the third prime minister to pretend all was well at Fukushima after a devastating earthquake and tsunami that flooded the plant. The official line on Fukushima is depressingly familiar: The folks at Greenpeace International are trouble makers bent on scaring Japanese; the alarmists at the World Health Organization should mind their own business; the international news media needs to discover decaffeinated coffee. Nuclear power is clean, safe and -- most important, now that a weakened yen has driven up energy bills -- cheap. Reality made an inconvenient reappearance last week. Mounting evidence that radioactive groundwater is gushing into the Pacific Ocean forced Abe to admit that plant owner Tokyo Electric Power Co. Inc. isn’t up to the task of containing the disaster. Under international pressure, he pledged the government would “make sure there is a swift and multifaceted approach in place” to stop the leak. Abe’s Seriousness Pardon me for doubting Abe’s seriousness. It’s not just the sketchiness of the suggested remedy: freezing the ground around Fukushima, a tactic scientists fear will prove inadequate. It’s not the fact that nuclear regulators remain more focused on restarting reactors than on neutralizing the one that’s polluting North Asia. It’s not that no one at Tepco has gone to jail or been shamed. (BP Plc’s former chief executive officer, Tony Hayward , was fired and sued over the 2010 oil spill in the Gulf of Mexico .) Tepco is leaking something far worse and lying through its teeth. Yet it hasn’t been nationalized, and its executives remain in their offices. No, my real worry is that official Japan is still stuck on “how” Fukushima become synonymous with Chernobyl, not “why” it happened or “what” it means for the world. The “how” is the stuff of the gods, according to conventional wisdom. The event Japanese call 3/11 was an act of the heavens that no one could have foreseen. There was no way to plan for it, no way Tepco could have known not to place all of its backup generators in the same place underground, just steps away from the sea in a tsunami-prone nation. This storyline ignores the “why.” Fukushima was a preventable, man-made disaster stemming from the worst conformist tendencies of Japan Inc. Look, if executives got together globally and created a Hall of Shame for the greedy, corrupt and clueless along them, Tepco would deserve its own wing. All Enron Corp. and Bernie Madoff did was manufacture fake profits. Tepco fudged its safety record and put the lives of tens of millions of people at risk. But it takes a village to breed such a corrupt and dangerous system. Tepco got away with its negligence for years because of the cozy ties between power companies and the regulators, bureaucrats and researchers that champion the industry -- the “nuclear village.” Backed by its connections, money and control of the media, Tepco has brazenly continued to cook its radiation data for the last two and a half years. It matters little that the government is finally commandeering Tepco’s cleanup: The government is Tepco. Dollar Signs Abe’s Liberal Democratic Party is blinded by dollar signs. In May, Abe visited Turkey to help close a $22 billion deal for Japan to build nuclear power plants in that seismically active nation. That kind of cash makes power companies virtually untouchable. And it raises doubts about Tepco’s admission that 300 tons of water laced with strontium and other particles is pouring into the Pacific each day. One can’t help but wonder if the leak is of a much greater magnitude. It’s time for the government to face reality and do six things: decommission Fukushima; invite independent auditors from overseas to assess the magnitude of the damage; admit the surrounding area might not be safe for inhabitants, fishing or farming for decades; scour the world for innovative solutions; break up the nuclear village; and level with the Japanese about cleanup costs that will be in the hundreds of billions of dollars. That brings us to the “what.” Fukushima is a growing embarrassment for Japan on the international stage. Oceans don’t have boundaries. Radioactive traces have been found in bluefin tuna -- not to mention on secondhand cars and auto parts imported by Russia from Japan. Another earthquake -- a live possibility -- could damage Fukushima anew or take out another reactor between now and the 2020 Summer Olympics that Tokyo hopes to host. The world won’t give Japan a pass twice on what would have been a perfectly preventable disaster. Analysts are rating Abe on his success in cleaning up Japan’s finances. Posterity will judge him on whether he cleaned up the mess Tepco and the nuclear village have created. (William Pesek is a Bloomberg View columnist.) To contact the writer of this article: William Pesek in Tokyo at wpesek@bloomberg.net. To contact the editor responsible for this article: Nisid Hajari at nhajari@bloomberg.net .

Gatwick Airport July Traffic Figures: Summary

http://www.bloomberg.com/news/2013-08-12/gatwick-airport-july-traffic-figures-summary-table-.html

Following is a summary of the July traffic figures from Gatwick Airport: To contact the reporter on this story: Mark Evans in London at mevans8@bloomberg.net To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

QSC Gains as Commerzbank Sees Change of Strategy On Track

http://www.bloomberg.com/news/2013-08-12/qsc-gains-as-commerzbank-sees-change-of-strategy-on-track.html

QSC AG (QSC) rose to a 2 1/2-year high after Commerzbank AG said the German company’s second-quarter earnings indicate that a strategy shift to providing information technology from operating telecommunications is still on track. QSC increased as much as 11 percent to 3.35 euros, the highest intraday price since January 2011, and traded up 10 percent at 12:58 p.m. in Frankfurt, valuing the company at 412 million euros ($548 million). Volume was almost quadruple the three-month daily average. Second-quarter earnings , before interest, taxes, depreciation and amortization rose 6.1 percent from a year earlier to 19.2 million euros, the Cologne-based company said in a statement today, reiterating its forecasts for 2013. That beat the 18.7 million-euro average of six analyst estimates compiled by Bloomberg. New orders at the direct-sales unit jumped 2.5 times to 30.5 million euros. The figures “indicate sound execution of QSC’s transition path” to information communications technology, Heike Pauls, a Frankfurt-based analyst at Commerzbank, said in a report today. “Taken together with a sound order entry, results seem to support our view of returning headline growth as of next year” after revenue fell in the first two quarters of 2013. She recommends buying the stock, and estimates the share price will reach 3.40 euros. QSC bought German companies IP Partner AG and INFO AG in 2011 to help with its strategy move to activities including cloud-computing services. To contact the reporter on this story: Weixin Zha in Frankfurt at wzha2@bloomberg.net To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Tepco Doubles Coal Consumption in July After Starting New Units

http://www.bloomberg.com/news/2013-08-12/tepco-doubles-coal-consumption-in-july-after-starting-new-units.html

Tokyo Electric Power Co. (9501) , Japan ’s biggest power company by generation capacity, nearly doubled its coal consumption in July from a year earlier after starting new units that use the cheaper fuel. The utility, known as Tepco, used 745,000 metric tons of coal last month, the most since at least April 2003 , the earliest data available on the company’s website. Crude and fuel oil consumption fell by about 18 percent and 30 percent, respectively, the figures show. Tepco has been increasing its use of coal since it began test operations of two coal-fired units, with a combined capacity of 1,600 megawatts, in April. All of the company’s 13 nuclear reactors have been shut after the 2011 Fukushima atomic disaster, forcing it to rely on coal, oil and natural gas to meet demand. Coal-fired power generation cost 9.5 yen (10 cents) per kilowatt hour, while liquefied natural gas and oil cost 10.7 yen and 36 yen, respectively, a government panel said in December 2011. The following table shows Tepco’s consumption and purchases of fuel oil, crude, LNG and coal for July. Fuel oil and crude volumes are in kiloliters, while LNG and coal are in tons. To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

Soros Said to Support J.C. Penney CEO in Ackman Feud

http://www.bloomberg.com/news/2013-08-12/soros-said-to-support-j-c-penney-ceo-in-ackman-feud.html

J.C. Penney Co. (JCP) investors Soros Fund Management LLC and Glenview Capital Management LLC support Chairman Tom Engibous and Chief Executive Officer Mike Ullman in their battle against Bill Ackman , according to people familiar with the situation. The funds told J.C. Penney they support the current management team after Ackman criticized the executives in letters last week, said the people, who asked not to be identified because the discussions were private. Soros owned about 7.9 percent of J.C. Penney’s stock as of April while Glenview held about 4.3 percent as of March, according to data compiled by Bloomberg. Engibous and Ullman are working to turn around the retailer after sales in its most recent year slid 25 percent to the lowest in more than two decades. Ackman, whose Pershing Square Capital Management LP owns about 18 percent of the company’s shares, asked his fellow J.C. Penney directors last week to expedite the CEO search and later to replace Engibous, saying the board isn’t functioning effectively. Ackman won an ally last week in hedge fund Perry Capital LLC, which disclosed a 7.3 percent stake in J.C. Penney and said it agreed with replacing Ullman and Engibous. J.C. Penney, based in Plano, Texas , rose 2.3 percent to $13.17 yesterday in New York after earlier climbing as much as 4.4 percent. The shares have slid 33 percent this year, compared with an 18 percent gain for the Standard & Poor’s 500 Index. Ullman Return Ullman returned to J.C. Penney at age 66 in April, about a year and a half after being replaced by former Apple Inc. executive Ron Johnson , Ackman’s handpicked choice for the retailer’s top job. Since taking over, Ullman has revived price cutting and brought back merchandise to attract core customers alienated by Johnson’s strategy, which centered on ending discounting and remaking the stores into collections of boutiques. Ullman also shored up J.C. Penney’s cash balance, negotiating a $2.25 billion loan and borrowing $850 million from a revolving credit facility. The board began a search to find a long-term CEO last month, Engibous said in a letter on Aug. 8. Ackman is pushing to find someone by mid-September since there are only a few candidates, a person familiar with the matter said then. Ackman Letter Ackman told board members in his letter that he persuaded former J.C. Penney CEO Allen Questrom to agree to return as chairman if he approves of the department-store chain’s next CEO. In an interview last week, Questrom, 73, called returning as chairman “a long shot” that hinged on directors forming “a positive board and an aggressive board to help solve the problems” and a new CEO with retail experience being hired. Ackman plans to back off the push to replace Ullman, the New York Post reported yesterday, citing people it didn’t name. Ackman declined to comment to Bloomberg News in an e-mail. Kristin Hays, a J.C. Penney spokeswoman, also declined to comment. Soros, which disclosed its stake in J.C. Penney in April, has previously clashed with Ackman. The New York-based firm opposed Ackman’s short on Herbalife Ltd. (HLF) by taking a position of less than 5 percent of that company, a person with knowledge of the purchases said on July 31. Late last year, Soros asked to pull the money it had invested with Ackman’s Pershing Square, a little less than $250 million, because of disappointing returns, according to a person briefed on the matter. The redemptions are staggered over several quarters and will be complete next year. Glenview, based in New York , disclosed its J.C. Penney stake in November. J.C. Penney is scheduled to report second-quarter results, the first full quarter under Ullman, on Aug. 20. Sales may decline about 8 percent to $2.78 billion, according to the average of 18 analysts’ estimates compiled by Bloomberg. The adjusted loss may widen to $1.07 a share, analysts project. To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net ; Beth Jinks in New York at bjinks1@bloomberg.net ; Katherine Burton in New York at kburton@bloomberg.net To contact the editors responsible for this story: Kevin Orland at korland@bloomberg.net ; Jeffrey McCracken at jmccracken3@bloomberg.net

Aluminum Stockpiles in Japan Drop to 234,000 Tons in July

http://www.bloomberg.com/news/2013-08-12/aluminum-stockpiles-in-japan-drop-to-234-000-tons-in-july.html

Aluminum stockpiles in Japan declined 6.3 percent in July, the third straight month of decrease, trading company Marubeni Corp. said by e-mail today. Inventories held in Yokohama, Nagoya and Osaka ports fell to 234,000 metric tons at the end of last month from 249,600 tons on June 30, according to Marubeni. A breakdown of stockpiles data follows: To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

CIA Says Syria Is No. 1 Threat. What's Obama's Plan?

http://www.bloomberg.com/news/2013-08-12/cia-says-syria-is-no-1-threat-what-s-obama-s-plan-.html

The Central Intelligence Agency's number two, Michael Morrell, ranked Syria -- not Iran's nuclear program, al-Qaeda or China -- as the top current threat to U.S. national security in an interview with the Wall Street Journal as he retired from office on Friday. What he didn't say was that President Barack Obama has failed to deal with it. Morrell is right to rank Syria so high, even though other security threats are bigger long-term issues for the U.S. to confront. The breaking of Syria into a failed state, and its concomitant sucking-in and spewing-back out of radical jihadis from around the region, is happening fast. This is opening new, potentially bad situations by the month. Morrell's assessment came without comment on U.S. policy, but it supports my own view that Obama's handling of the conflict in Syria will be seen as his largest foreign policy failure, made in part as an overreaction to his predecessor's monumental error in invading Iraq. That isn't to say that Senator John McCain was right in wanting a Libya-style U.S. intervention in Syria from the get-go in 2011, back when President Bashar al-Assad's troops were shooting unarmed pro-democracy protesters in the streets. Syria's civil war wasn't, and isn't, a conflict that the U.S. should try to own. But the Obama administration's resistance to doing anything at all to influence events on the ground inside Syria is likely to come at a future cost. The administration has been reluctant to get involved in any of the events that have unfolded with the turmoil of the Arab Spring uprisings (even in the Libyan case, the U.S. was bounced into action by France). So Syria isn't the exception, it is the rule. This is an understandable response to the massive overreach committed by the administration of George W. Bush in Iraq in 2003. It is also fully supported by most Americans, who have zero interest in any further Middle East entanglements. Still, the U.S. can't pretend to be Belgium: Like it or not, it has big assets and commitments in the Middle East. There were never any good options for the U.S. in Syria, but Obama should have gone with the advice of his chiefs at the Pentagon, the CIA and Department of State last year, when they recommended arming the Free Syrian Army in an effort to build up those factions on the battlefield that were most compatible with U.S. goals. Opponents of arming Syria's rebels like to refer to the Afghanistan precedent, when the U.S. armed the Mujaheddin in their fight against the Soviet military in the 1980s, only to see some of those people and their weapons turn against the U.S., in the form of al-Qaeda. True, but here is another use of the Afghanistan comparison: Al-Qaeda was able to train, develop and organize, because the U.S. simply walked away from Afghanistan after the Soviets were driven out, leaving it to be torn apart by a civil war fueled by neighbors. The country became a failed state and a haven for Islamist radicals, who used it as a launch pad for attacks on the U.S. Eventually, the U.S. was forced to invade, at enormous cost. This is the risk in Syria, a country in a neighborhood far more important to U.S. interests than Afghanistan, given Syria's borders with Iraq, Israel, Jordan, Lebanon and Turkey. Syria also has a greater potential for the misdirection of weapons, both conventional and chemical. Those weapons don't have to come from the U.S.; Assad has plenty of Russian ones to distribute or lose control of, while the radical Islamists have their own sources. By doing nothing when advised to take some risk by arming and building up the Free Syrian Army, the administration left a vacuum that al-Qaeda and its affiliates have willingly filled. The recent U.S. decision to provide small arms is probably too little and too late to have any impact. The window to shape events without having to commit large numbers of troops has probably closed. No one can know whether earlier U.S. action would have made the difference, but U.S. policy has lost the allies it might have had in Syria and, I suspect, opened the door to worse outcomes and a much larger possible U.S. military intervention down the road. (Marc Champion is a Bloomberg View editorial board member. Follow him on Twitter.)

Copper Declines as Japan’s Economy Expands Less Than Estimated

http://www.bloomberg.com/news/2013-08-12/copper-declines-as-japan-s-economy-expands-less-than-estimated.html

Copper fell after the best weekly gain in almost 11 months as Japan ’s economy grew less than expected. Aluminum, zinc and lead declined. Copper for delivery in three months on the London Metal Exchange dropped as much as 0.8 percent to $7,220 a metric ton and was at $7,229 at 11:09 a.m. in Seoul. The metal is down 8.9 percent this year. The contract for delivery in September fell 0.5 percent at $3.29 a pound on the Comex in New York. Second-quarter gross domestic product rose an annualized 2.6 percent in Japan, the world’s third-biggest economy, after gaining 3.8 percent the previous quarter, the Cabinet Office reported today. That compares with the median estimate of a 3.6 percent gain in a Bloomberg News survey. “The weak Japan GDP number is weighing on the market,” said Park Jong Beom, a senior trader at Tong Yang Securities Inc. in Seoul. “The data probably provided some investors with a good excuse to take profits after the recent rally.” Copper rose 3.9 percent last week as a jump in industrial output added to signs of economic optimism in China, the biggest user. Metal for delivery in November rose 0.8 percent to 51,950 yuan ($8,486) a ton on the Shanghai Futures Exchange. On the LME, nickel advanced as tin fell. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

Pound Approaches One-Month High Against Euro Amid Growth Signs

http://www.bloomberg.com/news/2013-08-12/pound-little-changed-versus-dollar-before-u-k-house-price-data.html

The pound approached the strongest level in a month against the euro after an industry report showed British banks boosted mortgage approvals in June, adding to evidence the recovery is gathering pace. The U.K. currency advanced for a second day against the common currency before a government report tomorrow that economists said will show consumer-price inflation stayed above the Bank of England ’s 2 percent target. The central bank will release the minutes of this month’s policy meeting on Wednesday. U.K. government bonds were little changed. “Economic data is pointing in the right direction,” said Neil Jones , head of European hedge-fund sales at Mizuho Bank Ltd. in London. “The U.K. recovery will outperform the euro zone. I expect to see more demand for the pound than I do for the euro in the weeks and months to come.” The pound appreciated 0.1 percent to 86.01 pence per euro at 4:42 p.m. London time after advancing to 85.79 on Aug. 7, the strongest level since July 10. The U.K. currency weakened 0.1 percent to $1.5476. Sterling has gained 0.5 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The euro weakened 0.2 percent, and the dollar slipped 2.2 percent. The number of U.K. home loans increased 15.7 percent in June from a year earlier, the Council of Mortgage Lenders said in an e-mailed report. Mortgages climbed 1.1 percent to 55,400 from the previous month, the Council said. Consumer Prices British consumer prices rose 2.8 percent last month from a year earlier, after advancing 2.9 percent in June, according to a Bloomberg survey before the Office for National Statistics releases the data tomorrow. The number of Britons claiming jobless benefits fell for a ninth month in July, a separate Bloomberg survey showed before the report on Wednesday. The benchmark 10-year gilt yield was at 2.47 percent after increasing to 2.56 percent on Aug. 7, the highest level since June 25. The price of the 1.75 percent bond maturing in September 2022 was 94.19. “The underlying trend of economic recovery is seen very much in place, that’s going to be a negative for gilts this week,” said Jason Simpson, a U.K. rates strategist at Banco Santander SA in London. Investors will watch the jobs data and the minutes of the bank’s latest policy meeting “for any sign of dissent, hints that some members were unhappy about tying down interest rates for such an extended period.” Pound Bears Sterling’s advance to a seven-week high last week after Bank of England Governor Mark Carney reiterated his commitment to curb inflation is failing to convince companies from Standard Chartered Plc to Nomura Holdings Inc. that the pound is on the cusp of a sustained rally against the dollar. The U.K. currency will weaken to $1.41 by year-end, according to four of the most-pessimistic forecasters in a Bloomberg survey. The pound strengthened to $1.5574 on Aug. 8, the highest level since June 19. The central bank released its Inflation Report on Aug. 7. “People are very excited about an uptick in U.K. growth that’s at a very early stage, but in the global context growth is very, very lagging,” Ned Rumpeltin , head of Group of 10 currency strategy at Standard Chartered in London, said in an Aug. 8 telephone interview. “The natural center of gravity for the pound against the dollar is lower.” The Bank of England said last week it planned to keep the benchmark rate at 0.5 percent until the jobless rate falls to 7 percent, something it doesn’t forecast will happen before the fourth quarter of 2016. Unemployment based on an International Labour Organization measure was 7.8 percent in the second quarter, according to a Bloomberg survey before the data is released on Aug. 14. The Debt Management Office said it may hold at least one bond sale through banks in the third quarter, according to a statement on its website. The DMO, which manages debt sales for the Treasury, said it would be seeking investor views on the type of security and potential timing of such a transaction. It will also use its Aug. 19 meeting with investors to gauge demand for super-long bonds, according to the statement. To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net ; Morgane Lapeyre in London at mlapeyre@bloomberg.net To contact the editor responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net

Ex-Fernandez Ally Massa Wins Argentina Primary Election

http://www.bloomberg.com/news/2013-08-12/ex-fernandez-ally-massa-wins-argentina-primary-election.html

Former Cabinet Chief Sergio Massa yesterday beat Cristina Fernandez de Kirchner’s leading candidate in a primary to choose contenders for October mid-term congressional elections. Massa, who heads a group of dissident Peronist Party members, took 35 percent of votes in Buenos Aires , the country’s most populous province, compared with 30 percent for Martin Insaurralde with 97 percent of voting centers counted, according to partial results posted on the Interior Ministry ’s website. “Looking ahead to the mid-term elections, Massa’s support will grow as voters who oppose the government rally behind him,” Federico Thomsen, a Buenos Aires-based economic and political analyst with research company E.F. Thomsen, said in a telephone interview. Fernandez needs to secure two-thirds majorities in both houses of congress to push through constitutional changes that would allow her to seek a third term in 2015. Confirmation of Massa’s popularity would make him a potential presidential candidate, according to Mariel Fornoni, managing director of pollster Management & Fit. The election was a “significant blow” for Fernandez and should be seen as positive for investors, wrote Barclays Plc. analysts Sebastian Vargas and Alejandro Grisanti in a report today. Yields of Argentine government dollar bonds due 2015 dropped 22 basis points, or 0.22 percentage point, to 10.75 percent at 2:23 p.m. in Buenos Aires , the lowest since October, according to data compiled by Bloomberg. “Insecurity, Inflation” “Analyzing the results, we find people support our fight against insecurity, inflation and taxes that are squeezing workers and retirees,” Massa told a crowd of supporters in Tigre last night. “We offer a path to the future and propose to keep the courts autonomous and respect the constitution to make sure it isn’t modified in any way.” About 31 million Argentines were obliged by law to vote in the primaries to choose candidates for 127 seats in the lower house and 24 in the senate. Massa and Insaurralde are among those seeking to contest the 35 lower house vacancies for representatives from Buenos Aires province. Nationwide, Fernandez’s ruling Frente Para la Victoria party secured 26 percent of the total vote with 98 percent of votes counted. Fernandez, whose spending on education, highways and handouts for the poor helped her win re-election in 2011 with 54 percent of votes, is banned by the constitution from seeking a third consecutive term. ‘Change’ Policies The 26 percent represents the worst national election for the coalition since 2003, when Fernandez’s late husband and predecessor Nestor Kirchner took office with 22 percent of the votes, according to political analyst Rosendo Fraga, who runs Nueva Mayoria research firm. “The ruling party needs to acknowledge that it needs to change its policies as they don’t have people’s support,” Fraga wrote in a statement on his website. “They can’t talk anymore about that 54 percent for her re-election, it has to assume the 26 percent of these primaries.” Fernandez called on supporters to work harder ahead of the October election. Her party remains the most voted nationwide, she said. ‘Intensify’ Efforts “We’ve always worked hard and will continue to do so,” Fernandez told a crowd of supporters in Buenos Aires last night. “We’re going to intensify our efforts over the next few months.” In the city of Buenos Aires, where 13 lower house and three senate seats will be contested in October, Fernandez’s candidate Juan Cabandie came in third place with 19 percent of votes, behind an opposition coalition with 35.6 percent and Sergio Bergman of City Mayor Mauricio Macri ’s PRO party, who took 28 percent, with almost all votes counted. Massa was elected mayor of Tigre, a sprawling, riverside municipality on the northern outskirts of the capital, in 2007. The following year, Fernandez chose him to head her cabinet, firing him in 2009 in the wake of the ruling coalition’s losses in mid-term elections. Massa resumed his mayoral duties and was re-elected in 2011. Massa told business leaders in Buenos Aires on Aug. 7 that Argentina ’s isolation from international capital markets has caused it to miss the opportunity to secure cheap financing to develop South America ’s second-biggest economy. Market Reaction Argentina hasn’t sold debt abroad since defaulting on a record $95 billion of debt in 2001. The nation’s average borrowing costs of 13.01 percent, are the highest of 56 emerging market economies, according to JPMorgan Chase & Co.’s EMBI Global index. The bond market may react positively to the Massa victory if he looks poised to present a strong challenge to the government candidate in 2015 presidential elections, Credit Suisse Group AG analyst Casey Reckman wrote in an Aug. 6 report. Fernandez said neither she nor her candidates will make promises they can’t keep ahead of the October election like completely resolving crime since the government has never lied to the people. “Our struggle is like David versus Goliath having to deal with media attacks and giving people answers to their problems on a daily basis,” Fernandez said. “My responsibility is to make the country governable.” To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

Keystone Foes Protest at State Department Over Contractor

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More than 100 Keystone XL pipeline critics protested outside the State Department for the first time today, arguing that the government’s analysis of the project is biased and flawed. The protestors were among 70,000 people who pledged online to conduct civil disobedience to stop the $5.3 billion pipeline by TransCanada Corp. (TRP) , according to the environmental group Credo, which organized the demonstration against the project from the oil sands of Alberta to refineries along the Gulf of Mexico. The complaints focused in part on ERM Group Inc., the contractor hired by the State Department for an environmental impact statement, and its work on a joint venture that included TransCanada as a partner. “The State Department just got caught in bed with big oil in their environmental assessment,” John Sellers, founder of one of the groups protesting, the Other 98%, said in an interview at the protest site today. Outside the State Department headquarters, police set up gates to prevent the collection of 60 grandparents, gardeners and students who were prepared to be arrested from blocking the doors. The demonstrators had set a plan with police to block the doors and get arrested, Sellers said. Instead, with the gates in place, they remained in front of the building and chanted for an hour. Then they marched off without any police intervention. Obama, Kerry The State Department is conducting an environmental review of the project, which will incorporate more than 1.2 million public comments, Marie Harf, a State Department spokesman, said at today’s briefing, held after the protesters left. No date has been set for releasing the final report, she said. “We are doing this in a rigorous, transparent and efficient manner,” Harf said. “It’s just a process that takes a little while to incorporate all of the public comments.” The department must then determine that the project is in the nation’s interest before the pipeline is built. President Barack Obama has the final say, and before today the protests focused on the president, raising the issue at political appearances, fundraisers and on the sidewalk outside the White House. The protestors today singled out Obama, who is on vacation in Martha’s Vineyard, Massachusetts, and not Kerry, who is in Bogota, Colombia. ‘Getting Message’ “More and more, we think Obama’s getting the message,” Elijah Zarlin, campaign manager for Credo Action, the activist network funded by a mobile telephone company, said in an interview. “We know the president is the ultimate decider.” The State Department inspector general’s office is studying the conflict-of-interest complaints against ERM. Environmental groups criticized a draft analysis released in March that found Alberta’s oil sands would be developed with or without Keystone, meaning the project would have little impact on the climate. Friends of the Earth and The Checks and Balances Project, a watchdog group, allege the London-based ERM didn’t disclose a financial tie to TransCanada through its venture with Exxon Mobil Corp. (XOM) in Irving, Texas , called the Alaska Pipeline Project. The project , under way since 2009, is developing a natural gas pipeline. Keystone critics, energized by Obama’s pledge for federal action on climate speech, were further emboldened by comments in a July 30 speech in Chattanooga, Tennessee , dismissing the pipeline as a job creator, an argument made by Republican supporters. Once completed, the project will create only about 50 permanent jobs, Obama said. “Hey, Obama, liked your speech,” the activists shouted today. “Now it’s time to practice what you preached.” To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

Rio Tinto to Decide on Bauxite Expansion Within Year, Cote Says

http://www.bloomberg.com/news/2013-08-12/rio-tinto-to-decide-on-bauxite-expansion-within-year-cote-says.html

Rio Tinto Group, the world’s second-largest mining company, will decide within the next year on whether to expand its Weipa bauxite mining operation in Australia to help capture rising demand from China. Bauxite is “the healthiest” of the three products sold by Rio Tinto Alcan, Jacynthe Cote, chief executive officer of the company’s aluminum unit, told reporters today after a speech at the World Mining Congress in Montreal. In addition to mining bauxite, Rio Tinto Alcan refines alumina and produces aluminum. Australia’s federal government conditionally approved in May plans to expand mining and extend the life of the 50-year-old project. The Queensland facility last year produced 23.7 million metric tons of metal-grade bauxite, a source of aluminum, according to the company’s website. Rio began studies on the development in 2008, a year after the company acquired bauxite, aluminum and alumina assets as part of its $38 billion takeover of Canada’s Alcan Inc. “ China imports a great deal of bauxite and output is constrained,” Cote said. “When we think about the next project we could seriously take a look at, it’s definitely the expansion of our Weipa bauxite mine.” Rio Tinto Alcan had sales of $5.29 billion in the first six months of 2013, equivalent to about 20 percent of the company’s revenue. Rio Tinto expects to produce 34 million metric tons of bauxite, 7.3 million metric tons of alumina and 2.5 million metric tons of aluminum in 2013, it said last week. The price of bauxite imported to China gained about 15 percent this year through the end of June to about $53 a metric ton, Lloyd O’Carroll, an analyst at Davenport & Co. in Richmond, Virginia , said in an Aug. 7 report. BHP Billiton Ltd. is the largest mining company. To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

Abe Should End the War Over Yasukuni Shrine

http://www.bloomberg.com/news/2013-08-12/abe-should-end-the-war-over-yasukuni-shrine.html

Every year around this time, in the run-up to the Aug. 15 anniversary of Japan ’s surrender in 1945, feverish speculation ensues about whether Japan’s top politicians will visit the Yasukuni Shrine in central Tokyo. Chinese and South Koreans -- not to mention many Japanese -- abhor such visits because the shrine honors the souls of 14 Class A war criminals. Visitors say they have every right to honor the 2.5 million other Japanese war dead celebrated at Yasukuni; they compare the shrine to the U.S. war cemetery at Arlington. This is dangerous nonsense. Yasukuni is ground zero for an unrepentant view of Japan’s wartime aggression. During World War II, the shrine served as the “command headquarters” of State Shinto, a religion that deified the emperor and mobilized Japanese subjects to fight a holy war at his behest. The private foundation that runs Yasukuni only added the 14 most controversial “souls” -- surreptitiously -- in 1978. The shrine’s political mission is on blatant display at the adjacent Yushukan museum, run by the same foundation. There, the Class A war criminals are portrayed as martyrs. Japan’s war in China is supposed to have suppressed banditry and terrorism, while its invasion of the rest of Asia is represented as a war of liberation from Western colonialism. Missing from the extensive exhibits are any mentions of the Rape of Nanjing, the awful experiments conducted by Unit 731 on prisoners of war, or the suffering endured by tens of thousands of “ comfort women .” Sly Reinterpretation The museum presents a selective and sly reinterpretation of Japan’s shared history with Asia -- one that is antithetical to reconciliation, convinces few Japanese, and offends neighboring nations that endured the brunt of Japan’s imperial aggression. Politicians who insist that they are only paying tribute to those who died for their country when they visit Yasukuni are not telling the truth. If that’s all they wanted to do, they could walk five minutes down the road to Chidorigafuchi National Cemetery, which is, like Arlington, Japan’s officially designated war cemetery. It is telling that Emperor Showa (Hirohito), once the head priest of State Shinto, confided to an aide that he stopped visiting Yasukuni after 1978 precisely because the shrine had been tainted by the presence of the Class A war criminals. This explicit politicization of the site also explains why his son, current Emperor Akihito, has maintained the imperial household’s embargo on visits. Though he has refused to confirm that he won’t visit Yasukuni this week, Prime Minister Shinzo Abe plans to spend Aug. 15 with the emperor. Abe aides have used this convenient excuse to suggest that a visit to the shrine is highly unlikely: Such a gesture would be a deliberate insult to the imperial family. Of course, Abe also knows firsthand that Yasukuni visits are a diplomatic dead end. His mentor, former Prime Minister Junichiro Koizumi, caused great damage to Japan’s regional interests by repeatedly going to Yasukuni between 2001 and 2006. Trying to repair relations with Beijing and Seoul , Abe himself stayed away from the shrine during his first stint as prime minister in 2006-2007. He has said he regrets that decision. But he also knows that his legacy will be determined by his ability to revive Japan’s dormant economy -- a task that will not be made any easier by alienating trade partners China and South Korea. Aside from stumbling over a question about aggression in Parliament, Abe has done himself and the nation a service by keeping history

Rohani Parries Lawmakers’ Criticism of Iran Cabinet Nominees

http://www.bloomberg.com/news/2013-08-12/iran-s-rohani-says-merit-moderation-basis-for-cabinet-choices.html

Iran ’s new president, Hassan Rohani, defended his cabinet nominees before parliament, trying to deflect concerns that some have ties to opposition figures who led protests against the regime four years ago. “The people I have nominated are the most qualified, and in line with the policies of the government,” Rohani told lawmakers today in a session aired live on state television. Parliament is reviewing the qualifications of his proposed ministers this week and will hold a vote for each. Rohani, a trained lawyer and cleric, was elected in June on pledges to improve Iran’s economy and world standing, battered by U.S.-led sanctions over the country’s nuclear program. The penalties have accelerated inflation, weakened the national currency and cut Iran’s oil exports, the country’s main source of revenue. Cabinet nominees include former United Nations ambassador Mohammad Javad Zarif, tapped to become foreign minister; Hossein Dehghan, a former commander of the Revolutionary Guard Corps air force, for minister of defense; and Bijan Namdar Zanganeh, chosen to retake his previous position as oil minister. Rohani said he ignored the nominees’ political affiliations, choosing them instead on the basis of their abilities and experience. Several of his 18 nominees served under former presidents Mohammad Khatami and Ali Akbar Hashemi Rafsanjani, whose support helped him to win the election. ‘Strong Allegiance’ All proposed ministers “sympathize” with the Islamic Republic, “have strong allegiance” to Supreme Leader Ayatollah Ali Khamenei and “will do all they can for the country,” said Rohani, who was inaugurated last week. Rohani’s emphasis on the nominees’ loyalty appeared directed at lawmakers who have criticized some of his nominees, including Zanganeh. Legislator Ataollah Hakimi accused some of the president’s Western-educated candidates of ties to the “sedition,” a term some officials use to describe the opposition movement that emerged after the 2009 re-election of Mahmoud Ahmadinejad. The balloting was tainted by allegations of fraud and sparked protests the government quelled with violence, saying the unrest was engineered by Western nations to undermine the Islamic Republic. ‘Old People’ “The pre-election Rohani is different from the post-election one,” Hakimi said. “Do you plan to forget your promises and give away your values to the West?” Another parliamentarian, Ahmad Bakhshayesh, criticized Rohani for using ministers from previous administration rather than nominating promising individuals from a younger generation. “Your government is one of old people,” Bakhshayesh said. About 148 lawmakers signed up today to speak in favor of Rohani’s program and his government, while 18 registered to voice their disagreement, state-run Fars news agency reported. In his address today, Rohani said he will follow a dual track by trying to halt “the negative trend” in Iran’s nuclear diplomacy while at the same time “seeking to diversify economic revenues and improve the allocation of existing ones.” Rohani said one of the priorities of his government is to curb liquidity growth in order to control inflation, which will boost investment and stabilize the economy. The government will push forward with a program of subsidy reforms started under Ahmadinejad, though it will be carried out more efficiently, ensuring that poorer Iranians are adequately compensated for higher food and energy prices, Rohani said. To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

China Southern Airlines July Load Factor: Changes

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Following are year-on-year changes of traffic and capacity figures for July released by China Southern Airlines Co. To contact the reporter on this story: Ailing Tan in Singapore at atan193@bloomberg.net To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

Deadly Irish Humor Spikes Doyle’s ‘Commitments’ Update

http://www.bloomberg.com/news/2013-08-12/deadly-irish-humor-spikes-doyle-s-commitments-update.html

“D’yeh do the Facebook thing?” is the opening question of “The Guts,” Roddy Doyle’s new novel. The dilemmas of social-media relationships form the very-2013 backdrop to this update of “ The Commitments ,” Doyle’s first book, which shot him to literary stardom in 1987. That tale about a working-class Dublin band was made into a film in 1991 and will have its debut as a musical at London ’s Palace Theatre in September. Jimmy Rabbitte, the Irish hustler who shaped the soulful Commitments, is now 47. He’s still in Barrytown, a fictionalized version of the north Dublin suburb of Kilbarrack, where Doyle grew up, and still in the record business. He has strong tastes, which make him a “music fascist” according to his family. He has a nice house, a loving wife and four children. None of this makes for a very dramatic read, so Doyle stirs things up. Jimmy drops the bombshell on page 10: He needs treatment for bowel cancer. That would be plot enough, but there’s more. He runs into former band mates, including the still-sexy singer Imelda Quirke. His son Marvin’s band plays at a rock festival. He’s learning the trumpet and has a mission to find old Irish music. The text races along. Jimmy was last seen in “ The Van ” in 1991. Freed from his 1980s time warp, he wrestles with iPads, smartphones and YouTube. The novel’s going to date as fast as the technology. Rabbitte v. Rabbit Doyle has now written as many novels about the Rabbitte family as John Updike did about Rabbit Angstrom. He pares his writing to little more than the dialogue. He hates what James Joyce called “perverted commas” and gives pages of straight speech like a play script: -- Will we go for a pint? To celebrate. -- Grand. Good. Yeah. Jimmy says “grand” all the time, even when he’s suffering from chemotherapy. We wonder that he really thinks, but all inner thoughts and descriptions are left off the page, as is the meticulously detailed backstory. Doyle is 55. This is his midlife crisis book. The key phrase comes when he writes of a guy wanting to return to his roots as a punk musician, like “the howling kid inside every middle-aged man.” It’s also Doyle’s recession book, after setting previous works in the Irish booms of the past. “Nostalgia’s always big in a recession,” he has one character remark. The author loves his music as much as Rabbitte and there are constant references to rock: the Who, the Stooges. “Every half-decent band should have a dead guitarist,” the musician Outspan says at the end. It’s a bittersweet comment, because Outspan is sick with an illness likely to be terminal. The best thing is that Irish humor: deadpan, earnest, often spot on. As the Commitments would put it, “deadly.” “The Guts” is published by Jonathan Cape in the U.K. (328 pages, 12.99 pounds.) It will be published in the U.S. by Viking in January. To preorder this book in North America, click here. (Mark Beech writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.) Muse highlights include Jeremy Gerard on theater and Amanda Gordon ’s Hampton’s Scene. To contact the writer on the story: Mark Beech in London at mbeech@bloomberg.net or http://twitter.com/Mark_Beech. To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net .

Emerging Stocks Rise as China Data Lifts Gold Producers

http://www.bloomberg.com/news/2013-08-12/emerging-stocks-climb-for-third-day-as-china-developers-advance.html

Emerging-market stocks rose to a two-week high as confidence in China’s economy grew and gold producers lifted South Africa ’s benchmark gauge to a record. The MSCI Emerging Markets Index added 0.7 percent to 957.82, the highest level since July 26. The FTSE/JSE Africa All Shares Index climbed 1.8 percent as Harmony Gold Mining Co. (HAR) rallied the most since 2008 amid a jump in the precious metal. Mining company Vale SA helped drive Brazil ’s Ibovespa to the highest level in two months. Mexico’s peso reversed an earlier advance after President Enrique Pena Nietounveiled his plan to boost private investment in the state-controlled oil industry. Raw-material companies in the emerging-market measure increased 1.8 percent to lead gains among 10 groups. China ’s yuan halted a two-day decline on optimism the world’s second-largest economy is stabilizing after data released last week showed rebounding exports and manufacturing. The nation’s developers gained as speculation grew that the government will relax a ban on companies raising funds through share sales. “There’s a general sense that the global deceleration has abated,” Chad Morganlander, a Florham Park , New Jersey-based fund manager at Stifel Nicolaus & Co., said in a phone interview. His firm oversees about $130 billion. “That, coupled with economic data points that point to stabilization within China, has put a floor under valuations.” A three-day rally in the MSCI Emerging Markets Index trimmed this year’s slump to 9.2 percent, compared with a 14 percent surge in the MSCI World Index. The broad measure of developing nations is trading at 10.1 times estimated earnings, below the valuation of developed markets of 13.8. Emerging ETF The iShares MSCI Emerging Markets Index exchange-traded fund added 0.9 percent to $39.73. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 4.7 percent to 21.74. The Ibovespa rose the most among major equity gauges in the Americas after Vale rallied for a fourth day. Oil company Petroleo Brasileiro SA reversed earlier gains that were driven by better-than-estimated earnings. The real retreated 0.7 percent, snapping a two-day advance. Mexico’s IPC index slid 1.2 percent, led by Alfa SAB (ALFAA) , which controls the nation’s largest publicly-traded petrochemical company. The peso depreciated 0.5 percent. South Africa The FTSE/JSE Africa All-Share Index advanced to the highest level since at least 1995 (JALSH) , led by Harmony, which soared 21 percent. Gold capped the longest rally in four weeks. Russia’s Micex Index (INDEXCF) rose a second day, led by OAO RusHydro. Benchmark gauges in Turkey and Poland added more than 1 percent, while stocks in Hungary were little changed. The Shanghai Composite Index advanced 2.4 percent, the most since July 11. China Shenhua Energy Co., the nation’s biggest coal producer, rallied 6.1 percent and Jiangxi Copper Co. (358) , the largest copper producer, had its biggest gain in a month. Poly Real Estate Group Co. soared 5 percent. Indian stocks climbed as Sun Pharmaceutical Industries Ltd. (SUNP) , India ’s biggest drugmaker, jumped after posting a 56 percent gain in net income before a one-time charge. The rupee weakened 0.7 percent per dollar. The premium investors demand to own emerging-market debt over U.S. Treasuries slid 0.06 percentage point to 323 basis points, according to JPMorgan Chase & Co. To contact the reporters on this story: Maria Levitov in London at mlevitov@bloomberg.net ; Julia Leite in New York at jleite3@bloomberg.net ; Jessica Summers in New York at jsummers17@bloomberg.net To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

"Feminine" Values Can Give Tomorrow's Leaders an Edge

http://www.bloomberg.com/news/2013-08-12/-feminine-values-can-give-tomorrow-s-leaders-an-edge.html

A Pew Center study released in May revealed that working mothers are the sole or primary provider in a record 40 percent of U.S. households. Only a few days before, hedge fund billionaire Paul Tudor-Jones created a stir by remarking at a conference that women will never rival men as traders because babies are a "focus killer". Here we have the dynamics of a new economy colliding with the old establishment like tectonic plates. But as developed nations restructure from manufacturing to knowledge and services, my bet is on the moms, or more specifically, women — and men who can think like them. Survey data my colleague Michael D'Antonio and I gathered from 64,000 people in nationally representative samples in 13 countries — from the Americas and Europe to Asia — point to widespread dissatisfaction with typically "male" ways of doing business and a growing appreciation for the traits, skills and competencies that are perceived as more feminine. The results, published in our new book The Athena Doctrine , reveal that 57% of people were dissatisfied with the conduct of men in their country, including 79% of Japanese and South Koreans and more than two-thirds of people in Indonesia, Mexico, U.K and the United States. This sentiment is amplified among the millennial generation (young men and women age 18-30) of whom nearly 80%are dissatisfied — most notably in highly masculine societies like Brazil, South Korea, Japan and India. If people have grown cold on male-dominated structures and leadership, they offer a solution: Two-thirds of survey respondents felt that "The world would be a better place if men thought more like women", including 76% of the French and Brazilians and 70%of Germans. Those stats include majorities of men who equate masculine incumbency with income disparity, continuing high levels of unemployment and political gridlock. Curious as to how leaders could "think more like women," we asked half our sample — 32,000 people around the world — to classify 125 different human characteristics as either masculine, feminine or neither, while the other half rated the same words (without gendering) on their importance to leadership, success, morality and happiness. Statistical modeling revealed strong consensus that what people felt was "feminine" they also deemed essential to leading in an increasingly social, interdependent and transparent world. We next visited 18 countries, interviewing over 100 innovative women and men in medicine, politics, education, start-ups, NGOs and other sectors of the economy. Here are two of many examples we came across that show how anyone can lead with a more feminine ethos: Empathy Is Innovation. While leaders spend considerable time and effort trying to envision markets and pushing out innovation, empathy can often generate simple, yet breakthrough ideas. In her years working as an advocate for charities in Britain and abroad, Anna Pearson noticed a pattern: there were many people who wanted to volunteer — but were too busy (or had schedules too varied) to commit to a cause. To bridge the gap between what volunteers could give and what people need, Anna re-imagined volunteering on a very small scale. Her London-based non-profit Spots of Time connects organizations with people who can give an hour or so at a time, and often at a moment's notice. The lesson? Anna trained her empathy not just on beneficiaries of charity but also on volunteers. That kindness and sensitivity to others was the catalyst for creativity. Vulnerability Is Strength. You can't read a business article today without hearing about "learning from failure". (A Google search for the phrase yields 129 million results.) But maybe there'd be less failing if we were willing to admit what we don't know in the first place. In Berlin we met Dr. Ijad Madisch, a Harvard-trained virologist who kept "getting stuck" in his experiments. When he asked his colleagues for help, he was chastised. Big-time scientists were supposed to project an image of supreme competence. Madisch realized that science needed a global community where the work took precedence over egos. So he started ResearchGate , a social network for scientists, which now has some 3 million members across 200 countries. The lesson? By letting down his guard and showing candor and humility, Madisch not only helped himself but also inspired others to join his cause. This advanced research far more rapidly than the old approach of working in cubicles and meeting at conferences. Today's work requires a new leadership paradigm. Look at the list of competencies above and — whether you're a man or a woman — start working on them.

BB- TRADING TO RESUME AT 9:30

http://www.bloomberg.com/news/2013-08-12/bb-trading-to-resume-at-9-30.html

BB- TRADING TO RESUME AT 9:30

Aldar Retreats for a Second Day After Earnings: Abu Dhabi Mover

http://www.bloomberg.com/news/2013-08-12/aldar-retreats-for-a-second-day-after-earnings-abu-dhabi-mover.html

Aldar Properties PJSC (ALDAR) had the biggest two-day drop since June as Abu Dhabi’s largest developer reported a drop in revenue and after the stock surged in July. The shares fell 2.1 percent to 2.75 dirhams at the close in Abu Dhabi today, bringing the two-day retreat to 4.2 percent, the worst since June 24. Aldar surged 24 percent last month, almost three times as fast as Abu Dhabi’s benchmark index , which lost 0.6 percent today. Aldar had a one-time gain of 2.6 billion dirhams ($708 million) from its merger with Sorouh Real Estate Co. as it posted second-quarter earnings on Aug. 7, the first day markets in the United Arab Emirates closed for an Islamic holiday. The company said revenue dropped 73 percent to 1.26 billion dirhams. “It’s a realistic correction based on people realizing that 2.6 billion dirhams of profits came from the revaluation of assets post-merger with Sorouh and won’t be a recurring item.” Mohammed Ali Yasin, managing editor of Abu Dhabi Financial Service Co., said by phone. Abu Dhabi’s government backed the combination of the two developers, which are both part of the state’s drive to diversify its oil-based economy through office and leisure projects. Aldar received more than $9.8 billion in bailouts from the government in 2011. One analyst recommends investors sell the shares, while five say hold and two advise buying the stock, according to data compiled by Bloomberg. To contact the reporter on this story: Deena Kamel Yousef in Dubai at dhussein1@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

F1 Builder With $10 Billion Debt to Sell Assets: Corporate India

http://www.bloomberg.com/news/2013-08-12/f1-builder-with-10-billion-debt-to-sell-assets-corporate-india.html

Jaypee Group, owner of India ’s most indebted cement maker, plans to sell some of its plants and real estate in a bid to cut liabilities by about 25 percent. The builder of India’s only Formula One racing track seeks to reduce debt by 150 billion rupees ($2.5 billion) by selling its cement plants in southern and western India, some of its power generation units and property in a year, Suren Jain, managing director at Jaiprakash Power Ventures Ltd. (JPVL) said in an interview. The flagship Jaiprakash Associates Ltd. (JPA) has $10 billion of total debt, according to data compiled by Bloomberg. The group’s liabilities increased fivefold in five years as Chairman Manoj Gaur took on debt to expand the cement maker’s power, sports and construction businesses. Gaur is selling assets to cut costs and revive profit, which has fallen for two straight years, as a central bank engineered cash crunch prompts lenders to raise interest rates for the first time in two years. “The cash flows from operations won’t be sufficient in the next one to two years to bring down the debt,” said Anubhav Gupta, an analyst at Kim Eng Securities Pvt. in Mumbai. If the company had sold a cement plant “12 months back the troubles might not have been what they are today.” Jaiprakash Associates had a net debt of about 612 billion rupees, the highest among Asian makers of the construction material after China National Building Material Co., according to data compiled by Bloomberg. Worst Performing The Indian company will need 81 billion rupees to service its debt in the year ending March 31, Ankur Kulshrestha, an analyst with HDFC Securities Ltd., said in a note to clients on July 30. Jaiprakash Associates’ shares have dropped 68 percent this year, making them the worst performing stock in the CNX Nifty index. They surged 4.5 percent to 32.85 rupees in Mumbai today, the highest since July 31. The company’s convertible bonds yield 14 percent, said Hemant Dharnidharka, the Bangalore-based head of credit research at SJS Markets Ltd. An index tracking eight Indian convertible debt had an average yield of 4.66 percent on Aug. 9, according to Barclays Plc. “The higher yield shows that the investors want a higher return for the comparatively higher risk for the name,” Dharnidharka said. The group plans to sell about 30 percent of its cement capacity of 35 million metric tons, Jain said without elaborating. Gaur is looking to cut debt at Jaiprakash Associates and its two subsidiaries Jaiprakash Power Ventures and Jaypee Infratech Ltd. (JPIN) , he said. Enterprise Value Billionaire Kumar Mangalam Birla is in talks to acquire the Gujarat cement unit of Jaiprakash Associates, three people with direct knowledge of the matter said in November. Talks with Birla were revived after it terminated talks with CRH Plc in October. Jaiprakash Associates has a 4.8 million ton capacity in Gujarat and a 5 million ton capacity in South India. The company may sell the factories for about $120 a ton of enterprise value , calculated as a sum of market capitalization, debt and minority interest minus cash, lower than the asset’s replacement cost, Ashutosh Narkar, an analyst with HSBC Holdings Plc in Mumbai wrote in a report to clients on Aug. 2. Jaiprakash Power is in talks to sell some of its hydro power plants , two people with knowledge of the matter said, asking not to be identified as the information is private. Jaiprakash Power generates 1,300 megawatt from hydel plants and has 500 megawatts of thermal capacity. Jain declined to identify assets the company plans to sell. The company plans to start generating power from a 1,320 megawatt thermal power plant this year and refinance loans for the unit, which will be “cheaper as the projects would have started operations,” Jain said. Hockey Team The group also plans to sell about 200 acres of land owned by Jaypee Infratech for around 10 billion rupees, Jain said. It sold 300 acres of land for around 15.5 billion rupees, he said. It is also targeting home sales of around 10 billion rupees each quarter this financial year. Founder Chairman Jaiprakash Gaur, who started as a civil contractor, expanded into hotels in 1981 and started producing cement five years later. In the past five years, Jaiprakash Associates added 15 subsidiaries from air transport services and a company to process soya and mustard to managing a hockey team, according to the company’s annual report. The company has also developed a 5.13-kilometer (3.19-mile) Formula One track called the Buddh International Race Circuit, built on the outskirts of India’s capital, New Delhi. The inaugural race was held in 2011. Formula One Chief Executive Officer Bernie Ecclestone told the Indo-Asian News Service the race will be dropped from the 2014 calendar and return in early 2015. ‘Retain Faith’ “We retain our faith in the asset portfolio quality,” HDFC’s Kulshrestha wrote in the report. “But remain cautious given the tough macro environment. The company will not be able to meet its funding requirements through operations alone.” Money managers including Birla Sun Life Asset Management Ltd. and Sundaram Mutual Fund have cut their holdings in the company, data show. “We are avoiding companies with high debt,” said Jaya Rao Venkatesan, a Chennai-based fund manager at Sundaram Mutual. “The interest-rate reduction cycle, which we thought will happen this year, will get delayed. To that extent such companies will be hard pressed,” particularly during an economic slowdown, he said. Economy Slows India’s industrial production in June fell for a second straight month, while the central bank cut its forecast for Asia ’s third-largest economy to 5.5 percent from 5.7 percent. The Reserve Bank of India raised two rates on July 15 and has capped cash injections into the banking system and tightened lenders’ reserve ratios to curb the supply of rupees in a bid to reverse a slide in the currency. The measures triggered an unprecedented 223 basis points jump in the three-month interbank rate in July to 10.75. “Today our leverage looks high because the economy is not doing well,” Jain said. Jaiprakash Associates’ profit fell 27 percent to 4.6 billion rupees in the year ended March 31 after a 65 percent drop a year earlier. Interest expense climbed 56 percent to a record 43.4 billion rupees, data show. For Jaiprakash Associates asset sales “are no longer just a desirable outcome but a necessity,” said HSBC’s Narkar. “However, in the current market scenario, potential buyers will like to squeeze JPA on valuations making it difficult to sell off.” To contact the reporter on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

BTG’s Lower Bonuses Portend More Bank Cuts on M&A Decline

http://www.bloomberg.com/news/2013-08-12/btg-s-lower-bonuses-portend-more-bank-cuts-on-m-a-decline.html

Grupo BTG Pactual (BBTG11) , the Brazilian investment bank led by billionaire Andre Esteves , is cutting bonuses amid sliding revenue and the slowest market for mergers and acquisitions in six years. Provisions for bonuses, which are paid to all employees of the Sao Paulo-based bank, fell 31 percent to 426 million reais ($188 million) in the first half of 2013 from a year earlier, the company said in a statement last week. They dropped 45 percent in the second quarter from the first. BTG, Brazil ’s biggest M&A adviser, predicted in January that merger volume would surge as much as 40 percent this year. Instead, takeovers through July plunged to the lowest level since 2007 as the outlook for economic growth worsened. Goldman Sachs Group Inc., UBS AG and Barclays Plc have responded with staff reductions in Brazil, and more lenders may follow BTG in lowering bonuses, according to Renata Fabrini, a partner at executive-search firm Fesa. “When one bank starts to pay less, the others tend to follow, because they aren’t afraid anymore of losing executives to the competition,” Fabrini said in an interview from Sao Paulo. BTG’s revenue fell 17 percent in the first half to 2.7 billion reais. The revenue figure BTG uses to calculate bonuses declined 46 percent from the first quarter to the second, when the bank lost 106 million reais on proprietary trading and 149 million reais on real estate investments, according to last week’s statement. Revenue Link BTG’s bonuses, which get paid in a lump sum at the start of the year, are “highly correlated to revenue,” Fabrini said. The company declined to comment on bonuses. Shares rose 1.8 percent to 28.55 reais at 5:06 p.m. in Sao Paulo. Investment-banking fees industrywide in Brazil dropped 13 percent this year through July from a year earlier, to $506 million, the lowest since 2009, according to London-based research company Dealogic. At BTG, investment-banking revenue in Brazil fell 39 percent to $70 million, the data show. Business slowed amid speculation the U.S. Federal Reserve would trim its $85 billion monthly bond-buying program and as Eike Batista ’s commodities empire collapsed, contributing to a decline in Brazilian shares and M&A volume. The benchmark Ibovespa (IBOV) index has lost 18 percent since the start of 2013. “Higher volatility in the markets is reducing returns for Brazilian corporate and investment banks, and they’re increasing the focus on cost reduction and efficiency,” said Ricardo Amatto, a partner at headhunter firm Amrop Panelli Motta Cabrera in Sao Paulo. ROE Decline BTG’s annualized return on equity, a gauge of profitability, fell to 17 percent in the first half from almost 31 percent last year. The firm’s revenue from investment banking rose 56 percent to 279 million reais in the first half of 2013 even with the slowdown in Brazil, as international acquisitions completed since last year added to the total. The bank concluded its takeover of Bolsa y Renta SA, Colombia ’s biggest brokerage by trading volume, in December, and acquired Celfin Capital SA, Chile ’s biggest brokerage, in November. BTG held on to its top ranking among M&A advisers in the first half of 2013, data compiled by Bloomberg show. The bank ceded the No. 1 position on Brazil investment-banking fees to Itau BBA through July, the wholesale arm of Itau Unibanco Holding SA, according to Dealogic. Sao Paulo-based Itau, the biggest Latin American bank by market value, generated $81 million of fees, up 8 percent, Dealogic said. Credit Suisse Group AG ranked third with $60 million, and Banco Bradesco BBI SA was fourth, with $51 million. Officials at the banks declined to comment on bonuses. Bonus Gap U.S. and European banks have been shrinking bonuses since the 2008 financial crisis and were paying less to executives than their local competitors in Brazil, Fesa’s Fabrini said. That gap may narrow this year because U.S. banking profits are rising, she said, adding that it’s “too early to say.” Even with the drop in bonus expenses, BTG’s cost-to-income ratio, which measures total revenue and operating expenses, was 50 percent last quarter, still above the 40 percent average for the past two years, Mario Pierry , an analyst at Deutsche Bank AG, said in a report. BTG’s management has said several “cost-optimization initiatives are under way following its recent acquisitions,” according to Pierry. ‘Value Destruction’ BTG eliminated about 60 people from Celfin last November, leaving the firm it acquired with about 600 employees, a person with direct knowledge of the matter said at the time. The “value destruction” in emerging markets and the “flight to quality” from international investors will probably keep bonuses falling at Brazilian banks, according to Amatto at Amrop. That’s what BTG is preparing for, Esteves, the bank’s chief executive officer, said on a conference call last week with analysts. “We reduced our risk exposure in general,” Esteves, 45, said. “We increased our liquidity to confront a more difficult environment, to be prepared for opportunities that appear in moments of crisis.” To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net ; Christine Harper at charper@bloomberg.net

Washington Plans $99 Million Sale for Cop Museum: Muni Deals

http://www.bloomberg.com/news/2013-08-12/washington-plans-99-million-sale-for-cop-museum-muni-deals.html

The District of Columbia plans to sell $99.4 million of revenue bonds to build a museum dedicated to U.S. law enforcement that will include artifacts such as Pat Garret’s badge and Al Capone ’s bullet-proof vest. The 57,000-square-foot museum will be built in the Judiciary Square section of Washington , across from the National Law Enforcement Officers Memorial. The tax-exempt debt, with a final maturity of July 2048, will be repaid through law-enforcement and corporate donations, merchandise sales and federal grants, according to offering documents. “We expect a high interest level,” said Craig Floyd, chief executive officer of the National Law Enforcement Officers Memorial Fund. “We’ve already had a number of interest calls about the deal.” The museum, expected to open in January 2016, will be mostly underground. It will feature interactive exhibits and a collection of historical and contemporary artifacts that will tell the story of American law enforcement , said Steve Groeninger, a spokesman for the fund. Among the exhibits will be the badge and gun of Garret, the Old West lawman who killed Billy the Kid in 1881. Washington’s debt falls into the category known as industrial-development bonds. Local agencies sell the securities for companies, hospitals and nonprofit organizations, whose credit backs the obligations. The bonds have lost 4.2 percent in 2013, more than the 3.8 percent for the broader municipal market, Barclays Plc data show. Industrial development revenue bonds have accounted for the most defaults in the $3.7 trillion municipal market, according to Federal Reserve data. Washington last came to market in June, data compiled by Bloomberg show. The negotiated deal isn’t backed by insurance, and the bonds aren’t rated. To contact the reporter on this story: Emily Freeman in New York at efreeman14@bloomberg.net To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

USDA Boxed Beef Cutout Closing Prices for August 12

http://www.bloomberg.com/news/2013-08-12/usda-boxed-beef-cutout-closing-prices-for-august-12-table-.html

August 12 (Bloomberg) -- This table details boxed beef cutout prices supplied daily by the U.S. Department of Agriculture. Prices and loads traded are as of 3:00 p.m. U.S. central time. Prices are determined from cuts in dollars a hundredweight and vary between higher-quality choice cuts and select beef cuts for sale f.o.b. Omaha, Nebraska. CHOICE SELECT 600-900 600-900 ------------------------------------------------------------------------------- Current Cutout Values: 190.28 182.85 Change from prior day: 1.29 0.85 ------------------------------------------------------------------------------- Choice/Select spread: 7.43 Total Load Count (Cuts, Trimmings, Grids): 182 ------------------------------------------------------------------------------- COMPOSITE PRIMAL VALUES Primal Rib 295.62 273.92 Primal Chuck 160.58 157.42 Primal Round 160.66 160.03 Primal Loin 246.35 229.49 Primal Brisket 138.90 132.91 Primal Short Plate 141.04 142.64 Primal Flank 122.63 118.41 -------------------------------------------------------------------------------- LOAD COUNT AND CUTOUT VALUE SUMMARY FOR PRIOR 5 DAYS CHOICE SELECT Date Choice Select Trim Grinds Total 600-900 600-900 08/09 60 62 9 22 153 188.99 182.00 08/08 79 64 9 38 190 188.31 182.05 08/07 85 73 15 39 212 188.66 181.67 08/06 73 45 1 24 144 187.17 180.90 08/05 58 38 6 22 123 186.46 180.54 -------------------------------------------------------------------------------- Current 5 Day Simple Average: 187.92 181.43 -------------------------------------------------------------------------------- NATIONAL BOXED BEEF CUTS - NEGOTIATED SALES FOB Plant basis negotiated sales for delivery within 0-21 day period. Prior days sales after 1:30pm are included. CURRENT VOLUME - (one load equals 40,000 pounds) Choice Cuts 91.88 loads 3,675,205 pounds Select Cuts 33.87 loads 1,354,906 pounds Trimmings 21.28 loads 851,372 pounds Ground Beef 34.55 load 1,381,914 pounds ------------------------------------------------------------------------------- Choice Cuts, Fat Limitations 1-6 (IM) = Individual Muscle IMPS/FL Sub-Primal # of Total Price Weighted rades Pounds Range Average ------------------------------------------------------------------------------- 109E 1 Rib, ribeye, lip-on, bn-in 32 224,200 549.38 602.00 558.05 112A 3 Rib, ribeye, bnls, light 14 24,497 597.28 651.00 619.10 112A 3 Rib, ribeye, bnls, heavy 33 107,768 575.00 650.00 610.50 113C 1 Chuck, semi-bnls, neck/off 5 70,992 188.00 212.00 191.19 114 1 Chuck, shoulder clod 10 71,563 180.74 201.00 188.92 114A 3 Chuck, shoulder clod, trmd 27 143,076 195.94 211.00 201.17 114D 3 Chuck, clod, top blade 13 47,588 264.00 293.00 276.24 114E 3 Chuck, clod, arm roast 26 275,284 224.00 262.06 226.18 114F 5 Chuck, clod tender (IM) 8 10,496 415.19 443.00 419.11 115 1 Chuck, 2-piece, boneless 116A 3 Chuck, roll, lxl, neck/off 51 308,736 220.00 243.00 234.53 116B 1 Chuck, chuck tender (IM) 19 42,925 208.00 220.00 214.86 3 Chuck roll, retail ready 120 1 Brisket, deckle-off, bnls 25 99,330 195.00 215.00 202.53 120A 3 Brisket, point/off, bnls 20 41,960 350.00 389.00 354.61 123A 3 Short Plate, short rib 33 88,884 421.00 466.00 434.07 130 4 Chuck, short rib 16 22,848 305.00 345.00 329.21 160 1 Round, bone-in 161 1 Round, boneless 5 29,865 201.00 207.00 202.92 3 Round, bnls/peeled heel-out 167A 4 Round, knuckle, peeled 47 210,313 211.70 234.90 226.31 168 1 Round, top inside round 12 50,908 194.00 213.67 196.80 168 3 Round, top inside round 22 155,794 200.00 225.00 209.51 169 5 Round, top inside, denuded 30 111,964 234.00 248.00 238.89 3 Round, top inside, side off 170 1 Round, bottom gooseneck 171B 3 Round, outside round 53 308,730 200.00 229.60 208.21 171C 3 Round, eye of round (IM) 49 180,110 195.74 226.00 208.34 174 1 Loin, short loin, 2x3 174 3 Loin, short loin, 0x1 31 191,579 440.00 509.50 457.95 175 3 Loin, strip loin, 1x1 180 1 Loin, strip, bnls, heavy 1 Loin, strip loin bnls. 1x1 9 8,920 415.00 448.93 415.55 180 3 Loin, strip, bnls, 0x1 46 149,256 468.00 521.00 494.80 184 1 Loin, top butt, bnls, heavy 8 13,281 295.00 309.50 297.15 184 3 Loin, top butt, boneless 40 180,539 315.00 335.80 326.57 185A 4 Loin, bottom sirloin, flap 15 55,722 326.00 356.00 337.67 185B 1 Loin, ball-tip, bnls, heavy 18 66,356 198.00 233.00 204.62 185C 1 Loin, sirloin, tri-tip (IM) 5 2,440 243.50 264.99 244.83 185D 4 Loin, tri-tip, pld (IM) 25 107,140 318.00 359.00 325.18 189A 4 Loin, tndrloin, trmd, heavy 31 53,240 884.00 951.89 907.46 191A 4 Loin, butt tender, trimmed 11 12,393 839.00 950.01 861.42 193 4 Flank, flank steak (IM) 20 12,936 450.00 485.00 470.66 ------------------------------------------------------------------------------- Select Cuts, Fat Limitations 1-6 (IM) = Individual Muscle IMPS/FL Sub-Primal # of Total Price Weighted Trades Pounds Range Average ------------------------------------------------------------------------------- 109E 1 Rib, ribeye, lip-on, bn-in 11 46,697 496.00 533.00 510.98 112A 3 Rib, ribeye, bnls, light 9 60,879 547.00 585.00 571.09 112A 3 Rib, ribeye, bnls, heavy 21 56,873 541.41 601.00 571.61 113C 1 Chuck, semi-bnls, neck/off 114 1 Chuck, shoulder clod 10 28,941 180.74 198.00 189.65 114A 3 Chuck, shoulder clod, trmd 8 54,520 193.85 208.00 195.71 114D 3 Chuck, clod, top blade 114E 3 Chuck, clod, arm roast 114F 5 Chuck, clod tender (IM) 5 3,690 340.00 370.00 354.88 115 1 Chuck, 2-piece, boneless 116A 3 Chuck, roll, lxl, neck/off 23 272,145 221.66 242.00 226.85 116B 1 Chuck, chuck tender (IM) 6 38,650 206.00 220.00 209.69 3 Chuck roll, retail ready 0 0 120 1 Brisket, deckle-off, bnls 8 38,847 195.29 221.66 200.71 120A 3 Brisket, point/off, bnls 123A 3 Short Plate, short rib 8 8,600 395.94 461.00 421.30 130 4 Chuck, short rib 8 21,200 305.00 340.00 316.48 160 1 Round, bone-in 0 0 161 1 Round, boneless 0 0 3 Round, bnls/peeled heel-out 0 0 167A 4 Round, knuckle, peeled 4 9,380 205.00 227.00 221.87 168 1 Round, top inside round 11 106,888 194.00 208.97 196.06 168 3 Round, top inside round 8 25,427 206.00 223.00 216.78 169 5 Round, top inside, denuded 3 Round, top inside, side off 0 0 170 1 Round, bottom gooseneck 171B 3 Round, outside round 5 20,089 205.63 222.50 208.04 171C 3 Round, eye of round (IM) 8 18,713 207.39 220.00 210.82 174 1 Loin, short loin, 2x3 174 3 Loin, short loin, 0x1 13 9,473 432.34 475.00 444.87 175 3 Loin, strip loin, 1x1 0 0 180 1 Loin, strip, bnls, heavy 0 0 1 Loin, strip loin bnls. 1x1 180 3 Loin, strip, bnls, 0x1 14 26,901 421.98 468.00 430.09 184 1 Loin, top butt, bnls, heavy 6 12,197 242.70 257.00 246.45 184 3 Loin, top butt, boneless 16 44,609 249.10 270.00 261.86 185A 4 Loin, bottom sirloin, flap 6 39,612 325.59 340.00 327.91 185B 1 Loin, ball-tip, bnls, heavy 9 117,196 200.65 215.00 207.09 185C 1 Loin, sirloin, tri-tip (IM) 5 4,209 235.00 250.00 247.82 185D 4 Loin, tri-tip, pld (IM) 189A 4 Loin, tndrloin, trmd, heavy 7 15,752 853.10 881.00 868.88 191A 4 Loin, butt tender, trimmed 8 4,612 820.00 867.00 826.70 193 4 Flank, flank steak (IM) 9 37,757 433.79 470.00 437.79 ------------------------------------------------------------------------------- CHOICE, SELECT & UNGRADED CUTS FatLimitations 1-6 (IM) = Individual Muscle ------------------------------------------------------------------------------- 124 4 Rib, Back Ribs, Fresh 124 4 Rib, Back Ribs, Frozen 8 14,402 96.00 119.61 115.97 121D 4 Plate, Inside Skirt (IM) 23 45,630 364.70 405.00 379.72 121C 4 Plate, Outside Skirt (IM) 14 23,589 398.53 440.00 408.83 121E 6 Outside Skirt, pld (IM) 11 30,804 510.00 563.00 522.15 Cap, Wedge Meat & (IM) Lean 33 97,435 230.00 253.00 235.21 Pectoral Meat 18 33,931 228.74 265.50 244.86 ------------------------------------------------------------------------------- GB - STEER/HEIFER SOURCE - 10 Pound hub Basis - Coarse and Fine Grind ------------------------------------------------------------------------------- Ground Beef 73% 27 290,023 158.98 180.00 172.41 Ground Beef 75% Ground Beef 81% 24 248,250 174.00 204.00 182.05 Ground Beef 85% Ground Beef 90% 0 0 Ground Beef 93% Ground Beef Chuck 80% 19 281,597 183.60 209.00 192.04 Ground Beef Round 85% 5 33,601 213.05 220.00 215.41 Ground Beef Sirloin 90% 0 0 ------------------------------------------------------------------------------- BLENDED GB - STEER/HEIFER/COW SOURCE- 10 Pound Chub Basis - Coarse & Fine Grind ------------------------------------------------------------------------------- Blended Ground Beef 73% Blended Ground Beef 75% 0 0 Blended Ground Beef 81% 16 391,816 184.10 208.00 207.48 Blended Ground Beef 85% Blended Ground Beef 90% Blended Ground Beef 93% Blended Ground Beef Chuck 80% Blended Ground Beef Round 85% Blended Ground Beef Sirloin 90% 0 0 -------------------------------------------------------------------------------- BEEF TRIMMINGS - STEER/HEIFER SOURCE - Fresh Combos & Frozen Boxed -------------------------------------------------------------------------------- Fresh 50% lean trimmings 33 851,372 102.00 113.00 109.18 Frozen 50% lean trimmings 0 0 -------------------------------------------------------------------------------- FAT LIMITATIONS (FL) DESCRIPTION Maximum Average Fat Thickness Maximum Fat at any point 1. 3/4" (19mm) 1.0" 2. 1/4" (6mm) 1/2" 3. 1/8" (3mm) 1/4" 4. Practically free (75% surface lean exposed) 1/8" 5. Peeled/Denuded 1/8" 6. Peeled/Denuded, surface membrane removed 1/8" -------------------------------------------------------------------------------- Items that have no entries indicate there were trades but not reportable because they did not meet the daily 3/70/20 guideline. Please refer to weekly LM_XB459 as the item may qualify. -------------------------------------------------------------------------------- A cutout value is an average of the prices tallied for cuts of beef from cattle carcasses weighing 550-850 pounds. Cutout values are separated into three main product types. Fabricated loads are beef cuts taken from an animal's ribs, chuck, round, loin, brisket, short plate and flank; 50 percent loads are 50 percent lean beef trimmings. Ground loads may contain 73, 75, or 80 percent ground beef. A typical refrigerated truckload carries 40,000 pounds. Choice 1-3 grade is a better grade than Select 1-3, partly because Choice cuts have more fat, or marbling, than Select cuts. Grade quality is determined using a 1-5 yield grade scale. A rating of 1 is the highest ratio of muscle to fat, while 5 is the lowest. Marbling is an important flavor factor.

BRF Said to Names Galeazzi as CEO in Diniz’s First Staff Shakeup

http://www.bloomberg.com/news/2013-08-12/brf-said-to-names-galeazzi-as-ceo-in-diniz-s-first-staff-shakeup.html

BRF SA (BRFS3) , the world’s largest meat processor by market value, plans to appoint Claudio Galeazzi as chief executive officer in billionaire Abilio Diniz’s first management change since becoming chairman in April. Galeazzi, a former CEO of the Cia. Brasileira de Distribuicao Grupo Pao de Acucar supermarket chain founded by Diniz, will replace Jose Antonio Fay, according to a person with direct knowledge of the matter who can’t be named because the changes aren’t public. Jose Eduardo Cabral, BRF’s vice-president for the domestic market, and Wilson Newton de Mello Neto, vice-president of institutional affairs, are leaving the company, the person said. Diniz, 76, is seeking to cut costs and lead the company’s international expansion since taking over as chairman on April 9. BRF rose 1.2 percent to 51.10 reais at 12:51 p.m. in Sao Paulo , heading to its highest close since the start of trading in 1997. Fay, at the helm since October 2008, will work with Galeazzi until the end of the year, the person said. BRF’s press office declined to comment on the management chances. To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Christie Won’t Renominate N.J. Supreme Court Justice Hoens

http://www.bloomberg.com/news/2013-08-12/christie-won-t-renominate-n-j-supreme-court-justice-hoens-1-.html

New Jersey Governor Chris Christie said he won’t nominate state Supreme Court Justice Helen Hoens for a new term because he expected Democratic lawmakers to deny tenure to the Republican jurist. Christie appointed Faustino Fernandez-Vina, 61, who he said is a fellow Republican, to take Hoens’s place on the bench. Hoens, 59, who was nominated by former Democratic Governor Jon Corzine , has served since 2006. Her term ends in October, a month before Christie faces re-election. Nominations to New Jersey’s highest court require Senate confirmation. Democrats, who control both legislative houses, have resisted Christie’s effort to reshape the bench. The Senate Judiciary Committee refused to approve two of his Republican nominees: Bruce Harris, who is black and openly gay; and Phillip Kwon, who would have been the first Asian justice. “Let me be clear: Helen Hoens deserved renomination; she deserved tenure,” Christie, 50, said today at a press briefing in Trenton. “Given the political situation in this state at the moment caused by the majority in the Senate, I was not in a position to offer to her the opportunity to be renominated.” Senate Grilling Christie said that if he renominated Hoens, he would be “ignoring the reality of what’s been happening for the past three-and-a-half years.” Committee members had grilled Kwon about his family’s liquor business and Harris on his same-sex marriage philosophy before rejecting both. “I was not going to let her loose to the animals,” he said of Hoens. “I was not going to allow another person to be subjected to the awful treatment that was given to both Phil Kwon and Bruce Harris .” Hoens, in a statement, said she was saddened to leave “this extraordinary professional calling.” Ralph Lamparello, president of the state Bar Association, said in a statement that Hoens didn’t “deserve to be treated as a political pawn in the battle between the governor and the legislature over our courts.” New Jersey’s highest court is composed of seven members. At the end of an initial seven-year term, the governor may nominate a member for tenure, which allows them to serve until mandatory retirement at 70. Court Standoff Christie has accused the court of legislating, rather than ruling, on issues affecting state spending. He has cited examples such as the Abbott v. Burke school-funding cases and Mount Laurel affordable-housing rulings. “Even before I officially became governor I made clear it was my intention to reshape the court,” he said today. “It’s my belief that the New Jersey Supreme Court has repeatedly strayed from its purview and overstepped its role.” Christie in 2010 denied reappointment to John Wallace , the court’s only black justice. That sparked a standoff with Democrats that lasted a year and delayed hearings on Anne Murray Patterson, Christie’s Republican nominee. The governor and Senate President Stephen Sweeney later agreed to let Patterson replace Justice Roberto Rivera Soto, who retired in September 2011. The court is operating with five permanent members; Chief Justice Stuart Rabner, a Democrat; Barry Albin, a Democrat; Jaynee Lavecchia, who Christie has characterized as an independent and Democrats have said is a Republican; Patterson and Hoens. Christie said the “court is being damaged” by a group of acting judges appointed by Rabner. He likened them to temporary helpers acting beyond New Jersey’s constitutional process for confirmation. Hardball Move The governor said he made his decision not to reappoint Hoens based on remarks made by Senator Raymond Lesniak, a Democrat from Elizabeth who is vice-chairman of the judiciary panel. Lesniak told the Star-Ledger on July 21 that Christie “plays hardball” with the nominees, and Democrats should reject Hoens as a hardball tactic of their own. “Justice Hoens deserved to leave with her professional reputation intact,” Christie said. “Given everything they’ve done before and the very bold and arrogant announcement by Senator Lesniak, I had to take them at their word. I had no choice but to do that.” Lesniak, reached by telephone after the governor’s remarks, said Christie “gives me too much credit” for orchestrating the outcome of nominations. “It really is up to the Senate president and the other members on the committee to make the determination,” he said. He declined to speculate on how Fernandez-Vina will fare, saying the committee must review his credentials. Nominees Rejected Lawmakers had unanimously backed Fernandez-Vina’s Superior Court assignment, the governor said, and would have “no reason to delay” this nomination. “No one can question his skill, experience and competence,” Christie said. The Senate committee voted against Kwon after Democrats questioned a $160,000 payment his family made to settle a U.S. civil lawsuit over cash deposits from their liquor store. The panel voted against Harris’s nomination after he said that while he was an advocate of gay marriage, he would remove himself from the issue if it came before the court. Christie offered the names of two more justices in December, calling the nominations of Superior Court Judge David Bauman, a Republican, and Board of Public Utilities President Robert Hanna, an independent, a “political compromise.” The Senate hasn’t scheduled hearings to consider the nominations. Fernandez-Vina was born in Cuba and was appointed to be a judge in 2004 by former Governor James McGreevey, a Democrat. A resident of Barrington in Camden County, he is a Rutgers Law School graduate. The Senate unanimously voted in 2011 to give him lifetime tenure on a lower court, Christie said. Fernandez-Vina said he was “humbled and honored” by the nomination. Christie said the nominee wouldn’t discuss judicial philosophy with reporters and will make his remarks when he goes before the Senate committee. To contact the reporter on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net

Hedge Funds Boost Brent Crude Net-Longs to Two-Week High

http://www.bloomberg.com/news/2013-08-12/hedge-funds-boost-brent-crude-net-longs-to-two-week-high-1-.html

Hedge funds and other money managers raised bullish bets on Brent crude to the highest level in two weeks, according to data from ICE Futures Europe. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 188,789 lots in the week ended Aug. 6, the London-based exchange said today in its weekly Commitments of Traders report. The increase of 7,454 contracts brings net-longs, which fell the previous week, to their highest since July 23. Bearish positions by producers , merchants, processors and users of Brent outnumbered bullish positions by 394,676, an increase of 4.1 percent that brings their net-short position to the largest since July 16. Brent advanced 1.2 percent in the week to Aug. 6 to $108.18 a barrel and traded at $106.20 as of 12 p.m. local time. ICE publishes, usually each Monday, aggregate numbers for long and short positions for speculators and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices. Swaps dealers bolstered net-long positions for the first time in five weeks, by 1 percent to 232,355. In the previous week their net-long position had slumped to the lowest since April 23. Money managers’ net-long bets on European gasoil futures fell for a second week, slipping by 4.1 percent to 59,050 contracts in their biggest drop since June 25. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net