News That Matters
Wall Street’s concern over the latest public outcry at Goldman Sachs was underscored when the head of one of its biggest rivals warned his senior staff not to exploit the “alleged issues” surrounding the investment bank. In response to a stinging article on Goldman Sachs’s business practices written by a departing derivatives salesman at the bank, Jamie Dimon, chief executive of JPMorgan, emailed his colleagues on the bank’s operating committee. “Today’s New York Times op-ed by a Goldman Sachs executive is generating a lot of discussion around the street. I want to be clear that I don’t want anyone here to seek advantage from a competitor’s alleged issues or hearsay ever,” he wrote. “It’s not the way we do business … We respect our competitors, and our focus should be on doing the best we can to continually strengthen our own standards.”
Asian stock markets were mixed in choppy trading Friday, as many investors took to the sidelines ahead of the weekend, mulling conflicting implications of stronger U.S. economic data and slowing growth signals from China. Japan’s Nikkei Stock Average fell 0.1%, Australia’s S&P/ASX 200 fell 0.1% and South Korea’s Kospi Composite gave up 0.3%. Hong Kong’s Hang Seng Index was off 0.2%, China’s Shanghai Composite Index rose 0.4%, while India’s Sensex tacked on 0.4%. Dow Jones Industrial Average futures were down two points in screen trade.

Adverse factors will weigh on economic activity in the euro zone in the first half of this year, but real gross-domestic-product growth is expected to pick up modestly in the second half, the European Central Bank said Thursday. GDP growth should improve further next year, assuming the financial crisis doesn’t escalate again, the ECB said. “Overall, the recovery is expected to be slow,” ECB staff projected in the central bank’s monthly bulletin.


Spanish house prices tumbled at their fastest pace on record in the fourth quarter, a sign that a long-running property bust will continue to weigh on Spanish households and banks. House prices fell on average by 11.2% in the fourth quarter from the same period a year earlier, well below the 7.4% decline in the third quarter, while prices of used homes was down 13.7% in the period, the country’s statistics agency INE said Thursday. Both readings are by far the worst since INE started recording countrywide prices in 2007, the peak year for Spain’s decade-long property boom. Previously, annual price declines had bottomed out at 7.7% in 2009, and analysts say house prices have only rarely fallen year-to-year since at least the 1970s.

Shoppers began lining up to purchase Apple Inc.’s third-generation iPad on Friday, as the technology giant tries to widen its lead in the fast-growing tablet market. Crowds were expected at Apple retail stores from Australia to Switzerland to become one of the first to buy the new iPad. The new tablet computer, priced starting at $499 in the U.S., has a higher-resolution screen and faster networking capabilities than its predecessor, which has dominated the market to date.  Apple stores in 10 countries, including Japan, France and the U.S., were opening at 8 a.m. local time Fridayin some cases, hours before

A growing appetite for risk is prompting some Wall Street banks and investment firms to show interest in buying the most complex and troubled assets tied to the bailout of American International Group Inc. The $47 billion face value in assets, held by the Federal Reserve Bank of New York, are the same kinds of financial instruments that were at the heart of the financial crisis and caused record losses across the financial industry. Plunging values of the securities, called collateralized debt obligations, or CDOs, caused AIG’s near collapse and a government rescue in 2008. The $182 billion bailout was

The U.S. nuclear industry seemed to be staging a comeback several years ago, with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board. What killed the revival wasn’t last year’s nuclear accident in Japan, nor was it a soft economy that dented demand for electricity. Rather, a shale-gas boom flooded the U.S. market with cheap natural gas, offering utilities a cheaper, less risky alternative to nuclear technology.  “It’s killed off new coal and now it’s killing off new nuclear,” says David Crane, chief executive of NRG Energy Inc., a

The European Union said it was banning any kind of financial transactions with blacklisted Iranian financial firms, but U.S. policy makers made it clear they would keep up pressure for wider action. The Belgium-based Society for Worldwide Interbank Financial Telecommunication, or Swift, a financial communication and clearing system used by most of the world’s major banks, said it would comply with the EU order. The ban applies only to Iran banks that the EU has placed on a sanctions blacklist. They include Iran’s central bank and more than a dozen other firms.

Chevron Corp. said Thursday that oil was seeping from the ocean floor near its operations off the coast of Brazil, the second such leak in recent months and a significant setback for the oil giant in a region crucial for its growth. The new seep amounts to less than a barrel of oil a day and is being captured by a subsea device, Chevron said. It is about two miles from where the company reported another seeptotaling around 2,400 barrelsin November, which it said was caused by its drilling. The latest seep is likely to further inflame the controversy sparked

The fall of a Communist Party leader who led a Maoist revival could inflame an increasingly public struggle for China’s top leadership, as two opposing wings of the party elite angle for dominance. In an apparent victory for the party’s liberal reformists, the removal of Bo Xilai as party chief of southwestern megacity Chongqing ended the political career of a man seen until recently as a front-runner for promotion to the party’s very top. But the ouster of Mr. Bo doesn’t automatically pave the way to the party top for a more liberal figure like Guangdong province party chief Wang Yang, who won plaudits recently for his peaceful handling of a village revolt over alleged land appropriation.
Brent crude rebounded above $123 on Friday after a sharp sell-off in the previous session, as rising tensions between Iran and the West fuelled an oil rally that has forced Western leaders to prepare a release of their strategic oil reserves. Brent crude rose 48 cents to $123.08 a barrel by 0520 GMT, after settling down nearly $2 the previous session following a Reuters report that Britain and the United States were preparing to tap into their oil reserves. U.S. crudeclimbed 36 cents to $105.47.

Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year. A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected “shortly” following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said.

Economic growth showed signs of becoming more self-sustaining as the number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing activity in the Northeast picked up this month. But the impact of higher oil prices also was starting to be seen in data on Thursday. Producer prices racked up their biggest increase in five months in February, while manufacturers in New York state reported a surge in input costs in March. The recent gains in oil and gasoline prices have raised concerns the higher costs could start to squeeze businesses and consumers and put a dent in the recovery.

The S&P 500 closed above 1,400 for the first time since the 2008 financial crisis on Thursday as stocks resumed the upward climb that has produced a steady stream of gains this year. The benchmark index is up for six of the past seven sessions and is on target for its best week since early February. Financial stocks .GSPF, which have dragged lately, led the day with the S&P sector index up 1.9 percent as another round of better-than-expected economic data bolstered investors’ enthusiasm.
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’s moves to develop oil- and gas-rich northern areas of the South China Sea violates Vietnam’s sovereignty, the Vietnamese Foreign Ministry said.  China’s biggest offshore oil explorer opened bids to foreign companies last year for 19 blocks near the disputed Paracel Islands, according to its website. Vietnam singled out Block 65/24, which it said sits one nautical mile from one of the Paracels, in denouncing a range of Chinese actions that violate its territory.  Foreign Ministry spokesman Luong Thanh Nghi asked China to “cease all activities that violate Vietnam’s sovereignty” and make a “substantive contribution to maintaining peace and stability” in the South China Sea, according to a statement posted on the ministry’s website yesterday.

Li Ka-shing, Hong Kong’s richest man, said he will “definitely” vote for Henry Tang in the city’s leadership election, even as the candidate’s popularity has plummeted after a series of personal scandals. Tang has city government experience and his election would benefit Hong Kong, Li said in an e-mailed statement today. Tang, Hong Kong’s former chief secretary, saw his popular support fall after he acknowledged the construction of an illegally built basement and an extramarital affair.

Malaysia’s government is discussing the possibility of an early election in May or June, ahead of the due date in early 2013, according to four officials who spoke on condition of anonymity because the talks are private. Prime Minister Najib Razak is scheduled to speak on March 26 to as many as 4,000 information ministry staff, who help oversee elections, the government officials said. One date proposed for the contest is June 3, according to three of the officials.

Treasu 30-year bonds were poised for their biggest weekly drop in 31 months before U.S. data forecast to show consumer sentiment improved and factory output increased in the world’s largest economy. Yields on U.S. government debt with maturities ranging from two years to 30 years have gained this week after the Federal Reserve raised its assessment of the economy on March 13 and refrained from adding to so-called quantitative easing to lower borrowing costs. Fed Bank of Richmond President Jeffrey Lacker said today the U.S. central bank would likely need to raise interest rates next year.
When people talk about Europe’s “government debt problem” they mean something easy to describe: countries that borrowed more money than they can easily pay back. In India, it’s a bit more complicated. Here, where the government is grappling with national debt and a growing budget deficit, the state might play the part of the delinquent debtor, the imperiled lender or the foot-dragging regulator or may play all three roles in a single set of tail-chasing transactions. The private company Hindustan Construction, for instance, is trying to renegotiate its $1.3 billion debt, some of it owed to government banks, to avoid defaulting. The company says its financial problems are partly a result of the government’s slow payments for road and highway projects, as well as government delays in giving final go-ahead on other projects already tentatively approved.  Bad loans now pose “the most significant risk to the financial system” in India, according to a recent survey of 100 bankers by the Reserve Bank of India.
Make no mistake, the presidential campaign is well under way for the Democrats as well as the Republicans. Vice President Joe Biden called out Mitt Romney and other GOP rivals as being “dead wrong” about the auto bailout, a feisty ramping-up by President Barack Obama’s top political surrogate even as the Republicans battle each other through the primaries. Biden’s sharply worded attack marked a new offensive by Obama’s re-election team as it seeks to set the terms for the general election while Romney and his GOP rivals are still mired in their party’s nominating process.
China’s statistics bureau said local officials forced some hotels, coal miners and aluminum makers to report false numbers, highlighting flaws in data tracking the world’s second-largest economy. Statistics officials in Hejin city in northern Shanxi province gave companies “seriously untrue” numbers to submit for 2011, the Beijing-based National Bureau of Statistics said in a statement on its website dated March 12. China aims to boost confidence in its statistics system, by cracking down on leaks of market-moving numbers and limiting opportunities for provincial officials to massage data. Discrepancies between national and local numbers for gross domestic product indicate that officials have more work to do.
An Irish company says it has found the Republic’s first viable oil well. Oil exploration company Providence Resources says it has made the discovery 70km off the Cork coast. The firm said its exploratory Barryroe oil well delivered double the amount of oil needed for future full-scale extraction to make commercial sense. The exploratory well yielded almost 4,000 barrels of oil a day. Providence Resources Plc also has drilling permits in Northern Ireland. The company will now seek international investors to help it exploit the well and the surrounding field, which the firm hopes will contain many further viable wells.
Two of Britain’s leading businessmen have raised serious questions over the Government’s growth plans just as ministers gear up to deliver next week’s Budget. Willie Walsh, chief executive of British Airways owner International Airlines Group, and Stephen Hester, chief executive of the Royal Bank of Scotland, have warned that UK companies lack the confidence to invest.  Mr Walsh mocked the Coalition, saying it changed its policy for growth “every other week”. He accused ministers of being more “Norse than Inuit” referring to the Greenland community which failed to adapt to environmental changes with ministers refusing to recognise the power shift from West to East.

Britain must learn to be self-reliant again before the country’s triple-A rating is lost because of excessive public spending on an ageing population. With a second credit rating agency, Fitch, threatening to strip Britain of its prized triple-A rating, George Osborne needs to show real progress in his Budget next week towards the goal of putting the public finances back on a sustainable basis. On this front at least, the Chancellor has so far shown himself to be reasonably sure-footed. As promised, the Government is on track to eliminate the structural deficit in five years. Yet dealing with Gordon Brown’s disastrous legacy of unfunded spending is unfortunately only one part of the public finance challenge. Fast approaching is the much bigger problem of how to address the burgeoning costs of an ageing population.
Residential real estate sales have been tumbling in British Columbia’s Kootenay region and Greater Vancouver this year, according to statistics released Thursday by the British Columbia Real Estate Association. The drop in MLS sales has coincided with a 5 per cent drop in the average price in the Kootenays, which runs from Cranbrook to Grand Forks, while the average price for MLS listings in Vancouver remained almost flat, increasing marginally by 0.6 per cent.
Local economists have further downgraded their growth forecast for 2012, with the depressed economic situation in the euro zone showing no signs of abating. The survey of 23 economists by the Monetary Authority of Singapore (MAS) cut their forecast to 2.5 per cent, down from the 3 per cent in the previous survey. Growth forecasts were also downgraded for most sectors, including manufacturing, financial services and construction.
Foreign direct investment (FDI) shrank in February from a year earlier, the fourth straight fall, while investment from Europe witnessed a sharp decline, according to the Ministry of Commerce.  Experts were not optimistic about the inflow of foreign investment into China as the European debt crisis continues and domestic economic growth slows down.  FDI last month dropped by 0.9 percent year-on-year to $7.73 billion, following a 0.3 percent drop in January.  “This is not good news, it reflects the gloomy global economy,” said Wang Zhile, director of the research center for transnational cooperation at the ministry.

New claims for U.S. unemployment benefits fell sharply last week to a four-year low, which was seen as a fresh sign of improvement in the country’s troubled job market. The Labor Department said Thursday that the advance figure for seasonally adjusted initial claims for jobless benefits was 351,000 in the week ending March 10, a drop of 14,000 from the previous week’s revised figure. In addition, the four-week moving average, which helps iron out weekly fluctuation, kept unchanged at 355,750. Initial jobless claims have declined 14 percent since October.

Premier Wen Jiabao said Wednesday that the 7.5 percent GDP growth target for 2012 is a result of the government’s proactive macro-control and can not be viewed as low. China’s GDP has reached 47 trillion yuan (7.46 trillion U.S. dollars). On this basis, the growth rate of 7.5 percent can not be counted as low, not to mention the economy would keep expanding at this pace, Wen told a press conference after the conclusion of the annual parliamentary session. Indeed, the Chinese economy faces slowing trend due to impacts from the European debt crisis and contracting overseas demands, Wen noted.
Under such circumstances, to lower the growth mainly aims to facilitate economic restructuring, the premier said.
Finance Minister Pranab Mukherjee on Friday said the growth of the Indian economy estimated at 6.9 per cent during this fiscal year was “disappointing” as he started presenting what was his seventh federal budget in the Lok Sabha.  “The global crisis has affected us. India’s gross domestic product (GDP) was expected to grow at 6.9 per cent in 2011-12, after having grown at 8.4 per cent in each of the two preceding years,” the finance minister said.  “Though we have been able to limit the adverse impact of the slowdown in our economy, this year’s performance has been disappointing. But it is also a fact that in any cross-country comparison, India still remains among the front-runners in economic growth.”
Iraq has promised to provide crude oil to South Korea if U.S-led sanctions against Iran disrupt the global supply of the critical resource, the Seoul government said Friday. The Ministry of Knowledge Economy said the understanding was reached at a Thursday meeting between Vice Energy Minister Cho Seok and Iraq’s Deputy Prime Minister for Energy Hussain al-Shahristani in Baghdad. “The senior official commented that if Seoul has trouble importing oil and requests assistance, Iraq can give priority to shipments headed for South Korea,” the ministry in charge of the country’s industrial and energy policies said.
Prime Minister Vladimir Putin on Thursday announced a change in the May national holiday schedule that could shatter plans to hold a large opposition rally around the day of his inauguration as president. He ordered an extended break for the Victory Day holiday, a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air. A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy. Instead of one day off on Wednesday, May 9, people will have four days that week to celebrateand tend to their dachas.