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Monthly Archives: January 2013

$RIO Will Temporarily Suspend a Mining Project in Mongolia to Discuss Countries Want of Share

Rio Tinto Group (RIO), the second-biggest mining company, is considering a temporary halt to construction work at its $6.2 billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine, according to two people familiar with the plans.

The London-based company is discussing the suspension to protest the central Asian nation’s demands for a bigger stake in the project and new mining royalty rates, said the people, who asked not to be identified because they aren’t authorized to comment publicly. A suspension of work, which may halt mining and processing, isn’t certain and is among options that managers are discussing in London, one of the people said….”

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The Aussie Dollar Falls on the Risk Off Trade, While The Kiwi Pops on Recovery Talk

Australia’s dollar slid against most of its 16 major counterparts as Asian stocks declined, sapping demand for higher-yielding assets.

New Zealand’s dollar climbed toward a three-month high versus the so-called Aussie after the smaller nation’s central bank said it expects the economy to recover. Losses were limited in the New Zealand and Australian currencies ahead of a Chinese report tomorrow that economists predict will show manufacturing expanded this month in the world’s second-largest economy.

“Risk sentiment is deteriorating on the back of stock declines, weighing on the Australian and New Zealand dollars,” said Kengo Suzuki, a currency strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value.

Australia’s dollar dropped 0.3 percent to $1.0390 as of 3:58 p.m. in Sydney and is little changed this month. New Zealand’s currency, known as the kiwi, fell 0.1 percent to 83.50 U.S. cents, paring a monthly gain to 0.8 percent.

The MSCI Asia Pacific Index (MXAP) of shares lost 0.3 percent, snapping a two-day gain.

The kiwi strengthened 0.1 percent to NZ$1.2442 per Australian dollar. It reached NZ$1.2429 on Jan. 25, the strongest since Oct. 9. Two-year interest-rate swaps in New Zealand fell one basis point to 2.89 percent….”

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South Africa Posts First Trade Gap in December Since 2008

South Africa posted its first trade gap for December since 2008 as factories cut back on imports and a weaker rand boosted costs, threatening to widen the current- account deficit and undermine the currency.

The shortfall narrowed to 2.7 billion rand ($300 million) from 7.9 billion rand in November, the Pretoria-based South African Revenue Service said today in an e-mailed statement. The median estimate of 12 economists in a Bloomberg survey was 2.4 billion rand.

South Africa’s deficit in 2012 was more than six-fold larger than a year before at 117.7 billion rand as slower global growth and mining strikes curbed exports in Africa’s largest economy. That put pressure on the current account, the broadest measure of trade in goods and services, contributing to the rand’s slump to a four-year low.

While imports usually decline in December as factories and mines shut down, exports also fell in the month, contributing to the shortfall. Exports dropped 9.8 percent to 59.8 billion rand, led by a 32 percent slump in prepared foodstuffs and beverages, while shipments of base metals fell 23 percent.

Imports decreased 16 percent to 62.5 billion rand, led by a 42 percent plunge in shipments of original equipment components. Textile imports slid 33 percent.

The Reserve Bank has kept borrowing costs at the lowest level in more than 30 years….”

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Concerns Over Evaluations Take Chinese Stocks Down From Recent Highs

“Most Chinese stocks fell, led by property developers, amid concerns over equity valuations at a 10-month high. Miners and utilities advanced.

Gemdale Corp. (600383) and Poly Real Estate Co. sank more than 5 percent on speculation Beijing had submitted a property tax plan to the Chinese cabinet for approval. Health-care stocks dropped for the third day as technical indicators signaled the stocks are overbought. Jiangxi Copper Co. jumped to an eight-month high, pacing gains among material producers, while SDIC Power Holdings Co. led utilities higher.

The Shanghai Composite Index (SHCOMP) added 0.1 percent to 2,385.42 at the close, even as five stocks fell for every four that gained. The index rose 5.1 percent this month. The CSI 300 (SHSZ300) lost 0.1 percent to 2,686.88 today, while the Hang Seng China Enterprises Index (HSCEI) slumped 0.5 percent in Hong Kong. The Bloomberg China-US 55 Index (CH55BN) fell 0.3 percent yesterday.

“Some investors are worried the market will have a big correction after the big rally and sold some stocks with weak fundamentals and earnings,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “The upward momentum is still there because the macro-economy isn’t an issue.” ..”

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Outgoing Deputy Governor Yamaguchi Says BoJ Could Increase Stimulus Programs if Needed

“The Bank of Japan (8301) could add further stimulus if warranted by economic and price conditions, Deputy Governor Hirohide Yamaguchi said, while rejecting criticism of the impact of the bank’s policies on the yen.

“It could be the case that further accommodation will be pursued,” as the BOJ monitors the economy and prices, Yamaguchi, whose term ends in March, said in a speech in Nagasaki today. He later told reporters that the central bank’s policies aren’t aimed at directly weakening the yen.

The BOJ last week adopted a 2 percent inflation target without a deadline and said it would wait until 2014 to start open-ended asset purchases. Prime Minister Shinzo Abe today urged the bank to reach the target quickly, adding to his calls for more action that have helped weaken the yen more than 12 percent against the dollar in three months.

“This speech shows the BOJ is trying to escape from rising political pressure by signaling its willingness for more action,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former central bank official. “The BOJ may have to ease further in the next few months.”

European Central Bank governing council member Jens Weidmann warned this month against “politicizing” the yen exchange rate, and German Chancellor Angela Merkel said “I can’t say I’m completely free of worry when I look at Japan right now,” last week while speaking at the World Economic Forum in Davos.

‘Currency Wars’ …”

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Industrial Output In Japan Rises Less Than Expected

Japan’s industrial production rose less than economists forecast, suggesting that a recovery in the nation’s manufacturing sector is lagging a weakening yen.

Output rose 2.5 percent from November, when it declined 1.4 percent, the Trade Ministry said in Tokyo today. The median estimate of 25 economists was for a 4.1 percent gain. Production fell 7.8 percent from the previous year.

The outlook for the economy may improve this year as the depreciating yen and Prime Minister Shinzo Abe’s fiscal stimulus measures help to support corporate profits and stoke growth. Goldman Sachs Group Inc. last week raised its growth forecast for the year starting in April to 2 percent from 1.2 percent.

“We don’t need to be too pessimistic about the outlook,” said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo. “Production will probably return to a clear recovery track in the coming months.”

The yen has depreciated more than 12 percent against the dollar in the past three months, the most among 16 major currencies tracked by Bloomberg. It was 0.2 percent higher at 90.94 per dollar as of 11:23 a.m. in Tokyo. The Nikkei 225 Stock Average (NKY) was down 0.6 percent at the lunch break today after gaining for the last 11 weeks.

While the data showed that production of transport equipment rose 6.9 percent on a seasonally adjusted basis, Japan’s three largest automakers — Toyota Motor Corp. (7203), Honda Motor Co. and Nissan Motor Co. — reported falling domestic production in December from the previous month….”

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GDP Grows More Than Expected in Taiwan and Singapore

“The Philippine and Taiwan economies grew more than forecast last quarter, and Singapore’s jobless rate fell to a five-year low, signaling an upswing at the end of 2012 that underscoresAsia’s role leading a global recovery.

In the Philippines, gross domestic product grew 6.8 percent from a year earlier, while Taiwan reported a preliminary 3.42 percent gain and upgraded its full-year growth forecast. Singapore’s unemployment was 1.8 percent.

Asia’s resurgence as China rebounds contrasts with the U.S. yesterday reporting an unexpected decline in gross domestic product after defense spending plunged. Meantime, Japan’s economic outlook depends on Prime Minister Shinzo Abe reviving wages and spending, with less-than-forecast industrial output for December highlighting the challenge ahead.

“Asia is leading the global recovery,” said Glenn Levine, an economist at Moody’s Analytics in Sydney, who has covered Asian economies for almost eight years. “China has started to gather momentum as the various domestic stimulus policies kick in and that lifts the region. Southeast Asia is doing very well autonomously.”

Taiwan raised its forecast for this year’s growth to 3.53 percent from 3.15 percent as China’s economic rebound boosted its imports, underscoring President Ma Ying-jeou’s case for closer trade and investment ties. The island plans to allow more visitors and securities investment from the mainland, and let domestic lenders conduct business in yuan by early February.

China Shipments…”

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By The Numbers, The Last Trane

[youtube://http://www.youtube.com/watch?v=bHhpzqPKb1s 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=bHhpzqPKb1s

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67% Of Americans Polled Do Not Believe a Gun Ban Would Have Prevented Sandy Hook

“According to a new Reason-Rupe poll released today, just 27% of Americans believe that an assault weapons ban would have helped prevent the tragedy at Sandy Hook in Newtown, CT. 67% of Americans believe that the ban, which expired in 2004, would not have prevented the tragic shooting. Overall, the poll finds Americans far more skeptical of gun control laws than the Democrats and media assume.

Asked what the government’s response to the Newtown shooting should be, just 16% said “stricter gun control.” 21% said the federal government shouldn’t do anything in response, while 20% said the federal government should act to increase security in schools. Despite the wall-to-wall media coverage and the President’s bully pulpit, the American public understands that preventing tragic shootings like Newtown is far more complicated than simply passing new gun laws. ..”

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Is Obama’s Immigration Stance Originally a Conservative Proposal?

“For all the talk about President Obama’s liberalism, his immigration agenda is the last thing you might expect: conservative.

His enemies might deny it. His staff might not recognize it. But the argument Obama presented Tuesday for a path to citizenship for 11 million illegal immigrants is rooted in economic and social conservatism.

First, in a Las Vegas address that included the words “economy” or “economic” 10 times, Obama argued that immigration fuels corporate innovation. “It keeps our workforce young. It keeps our country on the cutting edge,” he said. “And it’s helped build the greatest economic engine the world has ever known.”

Immigrants founded one-quarter of high-tech start-ups in the United States, Obama said, and one-fourth of all U.S. small-business owners are immigrants. And yet the nation’s immigration laws make it difficult for foreign students who study in the United States to remain here after college.

“We’re giving them all the skills they need to [launch a business], but then we’re going to turn around and tell them to start that business and create those jobs in China or India or Mexico or someplace else?” Obama said. “That’s not how you grow new industries in America. That’s how you give new industries to our competitors. That’s why we need comprehensive immigration reform.”

Second, Obama cast amnesty as a matter of economic fairness. With 11 million illegal immigrants “woven into the fabric of our lives,” the United States has a shadow economy of under-the-table employees whose low wages and poor working conditions disadvantage law-abiding employees and companies.

“If we’re truly committed to strengthening our middle class and providing more ladders of opportunity to those who are willing to work hard to make it into the middle class, we’ve got to fix the system,” Obama said. He pivoted from that traditionally Democratic message to this more conservative appeal: “We have to make sure that every business and every worker in America is playing by the same set of rules.”

He said his immigration package, which includes penalties for legalized immigrants, would create a system in which “everybody is held accountable–businesses for who they hire, and immigrants for getting on the right side of the law.”

Finally, Obama cast immigration reform as part of the country’s aspirational narrative. All but calling America a “shining city upon a hill,” as President Reagan did, Obama declared, “Now is the time to find a better way to welcome the striving, hopeful immigrants who still see America as the land of opportunity.” …”

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$FB Posts $0.17 vs Consensus of $0.15 per share, Revenues Come in at $1.59b vs Consensus of $1.53b

“MENLO PARK, Calif., Jan. 30, 2013 /PRNewswire/ — Facebook, Inc. (FB) today reported financial results for the fourth quarter and full year ended December 31, 2012.

“In 2012, we connected over a billion people and became a mobile company,” said Mark Zuckerberg, Facebook founder and CEO. “We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company.” ..”

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Will $FB Destroy $OPEN and $YELP ?

“Instagram snaps of the delicious meal you’re about to eat are such a cliché, they played a starring role in CollegeHumor’s hilarious takedown of the Facebook-owned photo-sharing site.

But for restaurateurs, these pics are no joke: People are taking a massive number of photos of food, and Instagram’s Photo Map feature instantly shows what’s being served at a restaurant. That was the rationale behind OpenTable’s $10 million acquisition of Foodspotting this week.

New numbers reported by MomentFeed, a startup that helps brands manage location pages on services like Facebook and Foursquare, show what a huge phenomenon this is.

It’s not limited to fancy, upscale restaurants in San Francisco and New York; people are taking huge numbers of photos in chain restaurants like the Cheesecake Factory and PF Chang’s.

In an 18-day period studied at the end of 2012, users posted 4,899 photos tagged with a Cheesecake Factory location on Instagram. (MomentFeed only analyzed place-tagged photos, not comments or hashtags.)

Those numbers destroy what’s happening on Foodspotting, a service dedicated to this particular art form. Instagram had 40 times the number of photos taken at Chevy’s locations versus Foodspotting. At Texas Roadhouse, the ratio was 22 times. And those numbers are typical for most chain restaurants.

Yelp has long offered the ability to upload photos alongside reviews. But a spotcheck of the Cheesecake Factory location in downtown San Francisco, a Yelp stronghold, shows 564 photos posted over the past six years. The pace of posting has picked up recently, boosted by Yelp’s mobile app. Our rough estimate shows Instagram users posting two to three times more frequently at Cheesecake Factory locations.

“It’s obvious Instagram is the real Foodspotting,” MomentFeed CEO Rob Reed told Business Insider. “That’s why Foodspotting stalled and were acquired. Vertically focused apps don’t make it.”

We don’t think OpenTable bought Foodspotting for its photo database, of course—it’s more about bringing mobile and social talent into the company and setting them loose on OpenTable’s larger user base. But even then, Instagram has such a huge head start on food photos, we’re not sure how OpenTable will ever catch up.

What’s the implication for Facebook? Huge, if it can tie the photos together with Graph Search and location pages.

While Graph Search is currently limited, one thing it can do right now is show all the photos taken at a particular location….”
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Report: Three People Shot At Phoenix Office Complex

“A shooting has been reported at an office complex in Phoenix, Ariz., according to ABC 15.

Three people were shot and another two were hurt, according to The Arizona Republic.

One of the three shooting victims was taken to the hospital in extremely critical condition, according to ABC15.

Sgt. Tommy Thompson told AZFamily.com that an altercation happened inside the building before the shooting.

“It doesn’t appear at this point that this was a random act,” Phoenix Police Sgt. Tommy Thompson told MyFOXPhoenix.

The suspect, who reportedly fled the scene, has been described as a white man in his 60s, according to MyFOXPhoenix.

The shooting was reported around 10:45 a.m. local time. The Senate was holding a hearing on gun violence prevention Wednesday during the same time…”

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The Fed Will Maintain $85 Billion Worth of Security Purchases on a Monthly Basis

“The Federal Reserve will keep purchasing securities at the rate of $85 billion a month as the economy paused because of temporary forces including bad weather.

“Growth in economic activity paused in recent months in large part because of weather-related disruptions and other transitory factors,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. “Household spending and business fixed investment advanced, and the housing sector has shown further improvement.”

Chairman Ben S. Bernanke has unleashed the power of the central bank to buy unlimited amounts of Treasury and mortgage- backed securities in a bid to end a four-year long period of unemployment above 7.5 percent and bolster an economy that shrank 0.1 percent in the fourth quarter.

“Although strains in global financial markets have eased somewhat, the committee continues to see downside risks to the economic outlook,” the FOMC said.

The purchases will remain divided between $40 billion a month of mortgage-backed securities and $45 billion a month ofTreasury securities. The central bank also will continue reinvesting any Treasury securities that mature and will reinvest its portfolio of maturing housing debt into agency mortgage-backed securities.

The Fed repeated that the purchases will continue “if the outlook for the labor market does not improve substantially.”

The Fed also left unchanged its statement that it planned to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation remains below 2.5 percent.

Inflation Outlook…”

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Fed Keeps Rates Unchanged, Rates Will Remain Low Until Unemployment is At or Below 6.5%

Purchases of short and long term securities will sty at a rate of $40-$45 billion per month.

Economy has paused in recent months due to weather and transitory factors.

Inflation is running below expectations.

Growth is expected to proceed at a slow pace.

Dollar continues to be weak, markets pop briefly into green territory, but fall back quickly in slightly negative territory….

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Looking Into GDP Spin: Shrinkage Not Caused by Contraction in Government Spending

“The White House and its media didn’t even stop to take a breath. Before news of U.S. GDP shrinking 0.1 last quarter had even hit the cable airwaves, we were being told by both that this collapse was mostly due to the fact that the federal government didn’t spend enough during the last quarter of last year. Translation: Don’t blame Obama for this. Had we just grown the size and power of The State like he wants, we’d all be sitting in clover.

Except that simply isn’t true.

There was no decrease in government spending during the fourth quarter of last year. In fact, the government spent more money between October and December of 2012 than it did during the previous two quarters. So federal spending actually increased during the 4th quarter.

Would you like some facts to go with your media propaganda?

Federal outlays by quarter:

1st: 966,188

2nd: 884,957

3rd: 809,969

4th: 907,912

Now we’re being told the economic slide wasn’t due to an overall decrease in State spending, but that it was due to a specific decrease in federal spending, and, naturally, Hurricane Sandy:

“A likely explanation for the sharp decline in Federal defense spending is uncertainty concerning the automatic spending cuts that were scheduled to take effect in January, and are currently scheduled to take effect on March 1st,” explains Alan B. Krueger, the Chairman of the Council of Economic Advisers in a statement. “The decline in government spending across all levels reduced real GDP by 1.33 percentage points in the quarter.”

Here’s Ezra Klein, who the Washington Post still sells as an objective journalist…”

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