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Monthly Archives: February 2013

JAL Would Like to Discuss Compensation With $BA Over Grounding of Dreamliners

“TOKYO (Reuters) – Japan Airlines Co Ltd said it will talk to Boeing Co about compensation for the grounding of the 787 Dreamliner, adding that the idling of its jets would cost it nearly $8 million from its earnings through to the end of March.

The carrier, which operates seven of the 50 Dreamliners in service around the world, said robust demand on European, North American and Southeast Asian routes would help offset the impact of the 787’s grounding, and it increased its annual operating profit forecast by almost 13 percent.

“Rather than negotiations with Boeing, the important thing now is getting the 787 flying again safely as soon as we can,” said JAL’s president Yoshiharu Ueki. “However, when the situation has settled down we can and are preparing to begin those talks.”

Rival All Nippon Airways, which has more 787s than JAL, said last week it would seek compensation from Boeing once the amount of damages was clearer….”

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$APKT Halted as $ORCL Will Buy Them for $1.9 Billion

Source 

“(Reuters) – Oracle Corp said it agreed to buy network gear maker Acme Packet Inc for about $1.9 billion.

The $29.25 per share offer is at a 22 percent premium to Acme Packet’s Friday close on the Nasdaq.”

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The IMF Censures Argentina for Under Reporting Inflation

“The International Monetary Fund’s historic rebuke of Argentina is likely to cement its outcast status among global investors while failing to persuade the government to boost the credibility of its economic data.

Argentina on Feb. 1 became the first nation to be censured by the IMF after the Washington-based lender said that President Cristina Fernandez de Kirchner’s government isn’t addressing concerns that it’s underreporting inflation, which analysts forecast is more than double the 10.8 percent official rate. While the move won’t have an immediate effect, it takes the country a step closer to sanctions that include expulsion.

“This official action makes it quite apparent to those who may want to invest in Argentina that there’s trouble,” said Albert Fishlow, a former top U.S. diplomat to Latin America.

Still, Argentina’s feuding with foreign investors dates back to its 2001 financial meltdown, which Fernandez blames on the fund, and she is unlikely to change the course of policy that is being shaped by other influences, such as the price of soybeans, he said. Argentina is the world’s third-largest exporter of the crop, which is the nation’s biggest source of hard currency.

“It’s a big drama and this isn’t the final act,” Fishlow said in a phone interview from New York.

Argentina has been locked in a battle with the IMF and investors since its 2001 default on $95 billion of debt. The government hasn’t allowed the fund to review its finances, as required of all members, since 2006, the same year it paid off its entire debt with the IMF to end what Fernandez’s late husband and predecessor, Nestor Kirchner, called the lender’s “dictatorship.” Relations grew even more tense after Kirchner replaced senior staff at the Indec statistics institute.

Disputed Data….”

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Commerzbank Posts its Largest Loss in Three Years

Commerzbank AG (CBK), Germany’s second- biggest lender, posted its biggest quarterly loss in three years after taking charges related to the sale of Bank Forum and a tax asset writedown.

The fourth-quarter loss of 720 million euros ($976 million) compares with a profit of 320 million euros in the year-earlier period, the Frankfurt-based bank said today in a statement. Bank Forum charges totaled 185 million euros, while Commerzbank wrote down 560 million euros on deferred tax accruals….”

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Precious Metals Retreat From Early Upside in Europe

“Zinc fell from a one-year high in London and copper erased a gain as European equities slid amid concern about a revival of the region’s sovereign-debt crisis.

The Stoxx 600 Europe Index of shares declined as much as 0.6 percent and the euro weakened against the dollar. Spanish and Italian bonds retreated amid signs of political turmoil in the countries. A gauge of euro-area manufacturing released Feb. 1 by Markit Economics was below the level of 50 separating contraction and expansion for an 18th month in January.

“Obviously there are key risks, such as the potential for another sovereign crisis in Europe,” Nicholas Brooks, head of research and investment strategy at ETF Securities, said by phone today.

Zinc for delivery in three months dropped 0.4 percent to $2,167.50 a metric ton on the London Metal Exchange by 7:52 a.m. New York time. Prices reached $2,190, the highest since Jan. 27, 2012. Copper for delivery in three months declined 0.1 percent to $8,271 a ton, while the metal for delivery in March fell 0.5 percent to $3.767 a pound on the Comex in New York….”

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Rising Yields for Spain and Italy Take the Euro Lower

“The euro fell the most in two weeks against the dollar as Italian and Spanish bonds slumped amid political turmoil in the euro-area’s third- and fourth-largest economies, damping demand for the shared currency.

The 17-nation euro dropped versus all except one of its 16 major peers as Spanish Prime Minister Mariano Rajoy faced calls to resign after newspaper reports alleged he accepted illegal cash payments. A poll showed former Italy’s premier Silvio Berlusconi closed the gap on front-runner Pier Luigi Bersani even as he appeals a four-year prison sentence for tax fraud. The yen weakened beyond 93 per dollar for the first time since May 2010. European Central Bank policy makers meet this week.

“It doesn’t help that the political background is a little bit more uncertain,” said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. The ECB meeting will “be a negative background for the currency this week.”

The euro declined 0.6 percent to $1.3564 at 7:14 a.m. in New York, the biggest decline since Jan. 18. The common currency slipped 0.5 percent to 126.01 yen. The yen dropped 0.1 percent to 92.90 per dollar after sliding to 93.18, the weakest level since May 13, 2010.

The euro will depreciate to $1.30 by year-end, RBC’s Cole said. His prediction matches the median of 60 estimates compiled by Bloomberg. Implied volatility from options trading shows the chance of it ending the year below that level is 28 percent.

Spanish Bonds

Spain’s 10-year bond yield climbed as much as 22 basis points, or 0.22 percentage point, to 5.42 percent, the highest since Dec. 18. Rajoy, who says the allegations published in Spain’s biggest newspaper El Pais are unfounded, travels to Berlin today to meet German ChancellorAngela Merkel.

Italian 10-year yields jumped seven basis points to 4.40 percent. The additional yield investors demand to hold the securities instead of German bunds increased for a fourth day after Prime Minister Mario Monti said the spread may widen if Berlusconi is elected this month.

Barclays Plc raised its forecasts for the euro against the dollar…”

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Political and Market Turmoil Erase Early Gains in Europe

European stocks declined, erasing an earlier advance, as Spanish and Italian lenders retreated with the nations’ government bonds amid signs of political turmoil. U.S. index futures fell while Asian shares advanced.

Banco Santander SA, Spain’s largest bank, dropped 2.9 percent as Prime Minister Mariano Rajoy denied corruption allegations. UniCredit SpA, the biggest lender in Italy, sank 4.4 percent as former premier Silvio Berlusconi gained in opinion polls before elections this month. Julius Baer Group Ltd. (BAER) fell 3.1 percent after the wealth manager reported declining revenue margins. Swatch Group AG rose 2.8 percent as profit topped estimates.

The Stoxx Europe 600 Index (SXXP) retreated 0.4 percent to 287.07 at 12:14 p.m. in London after earlier climbing as much as 0.2 percent. The gauge has still increased 2.6 percent this year as U.S. lawmakers agreed to a compromise budget to prevent automatic spending cuts and tax increases that threatened to push the world’s largest economy into a recession.

“Spanish yields have blown up in the past hour to their highest levels since December as concerns about the Spanish government mount,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “In addition to the growing corruption scandal in Spanish politics, the Italian elections towards the end of the month are also a concern.”

The volume of shares changing hands in Stoxx 600 companies was 9.6 percent lower than the 30-day average, according to data compiled by Bloomberg. The gauge is trading at 12.3 times its companies’ estimated earnings, compared with a valuation of 9.75 times profit in June, data shows….”

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China Services Industries Expand as Retailing Improves

China’s services industries grew at the fastest pace since August as gains in retailing and construction aid government efforts to drive a recovery in the world’s second-biggest economy.

The non-manufacturing Purchasing Managers’ Index rose to 56.2 in January from 56.1 in December, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.

The Shanghai Composite Index rose, extending gains after last week posting the biggest weekly rally since October 2011 on optimism that China can sustain its expansion, with new home prices rising in January by the most in two years. Strength in services may assist a shift to a consumption-driven economy as the government targets more sustainable growth and factory output contributes to record pollution.

“A mild growth rebound appears on track,” said Ding Shuang, senior China economist with Citigroup Inc. in Hong Kong. “With downside risks to growth significantly reduced and inflation expectations rising, policies may shift away from an easing bias to a more neutral position.”

The Shanghai stock gauge rose 0.4 percent as of 10:12 a.m. local time. The MSCI Asia Pacific Index of shares gained 0.7 percent as of 11:11 a.m. in Tokyo.

Ding estimates consumer-price gains will pick up to 3.5 percent by the end of the year from 2.5 percent in December while economic expansion in the first half will accelerate to more than 8 percent due to the impact of last year’s government policies to support investment and infrastructure spending.

Growth Pickup…”

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Platinum Rallies to Four Month Highs as Worries Mount Over Output

“Platinum rallied to the highest price in almost four months on concern output in South Africa continues to struggle amid rising demand. Gold fell as the U.S. dollar strengthened.

Anglo American Platinum Ltd. (AMS), the world’s biggest producer, today reported a loss for 2012 as output of refined metal dropped 8.8 percent while costs surged and warned “supply challenges” will continue this year. Global platinum supply fell 10 percent last year because of strikes, stoppages and shaft closings in South Africa, which accounts for 72 percent of global output, Johnson Matthey Plc estimates.

“The South African supply pipeline will remain rather unreliable over the course of the year,”Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a report e- mailed today. “More importantly, platinum is expected to be in deficit this year, with demand expected to remain strong on account of strong car sales we are seeing in a number of markets.”

Platinum for immediate delivery increased 0.9 percent to $1,698.28 an ounce by 10:44 a.m. inLondon. It jumped as much as 1.5 percent to $1,708.19 an ounce, the highest price since Oct. 9. Gold for immediate delivery fell 0.1 percent to $1,665.49 an ounce.

Platinum and related metals may have so-called price spikes this year and next on growing demand and a lack of investment in mines, JPMorgan Chase & Co. said on Jan. 31. Autocatalysts account for 33 percent of global demand, while industrial applications make up 28 percent of usage, according to Johnson Matthey.

Car Sales…”

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$HMY Posts Higher Profits on Lower Costs and Higher Prices

Harmony Gold Mining Co. (HAR)Africa’s third-largest producer, said profit rose 28 percent as costs dropped and prices received for the metal climbed even as its biggest operation was shut due to strikes. The stock rallied.

Earnings excluding one-time items advanced to 680 million rand ($77 million), or 1.58 rand a share, in the quarter through December from 529 million rand, or 1.23 rand a share, in the prior three months, the Johannesburg-based company said in a statement today. The average estimate of five analysts surveyed by Bloomberg was for earnings of 1.05 rand a share.

Gold output dropped 9 percent in the December quarter from the previous three months because of work stoppages and violence at Harmony’s Kusasalethu mine, its largest. The operation, which is in Carletonville, South Africa, has been shut since then for safety, and Harmony has until March 7 to complete a review with unions that may lead to the mine’s closure.

“It’s very difficult not to agree to law and order and safety no matter what side of the fence you are on,” Chief Executive Officer Graham Briggs said on a call today. The agreement Harmony and labor unions are working on should allow for “lasting and sustainable engagement,” he said.

Harmony rallied 6.5 percent, the most on an intraday basis since Nov. 7, to 61.10 rand by 9:27 a.m. in Johannesburg….”

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Rising Costs and Strikes Hurt Anglo American Platinum’s Earnings

Anglo American Platinum Ltd. (AMS), the biggest producer of the metal, reported a loss for 2012 and continues to suspend its dividend as sales of refined platinum fell and cash operating costs rose.

Anglo American Platinum had a so-called headline loss excluding one-time items of 1.47 billion rand ($166 million), or 5.62 rand a share, from a profit of 3.57 billion rand, or 13.65 rand a share, the Johannesburg-based company said in a statement today. The average estimate of seven analysts surveyed by Bloomberg was for a loss of 5.59 rand a share. The company last year skipped its interim dividend.

The company, controlled by Anglo American Plc (AAL) and known as Amplats, last month proposed to shut four mine shafts to curb costs and stem losses spurred by a two-month strike last year. The plan, which would cut about 7 percent of global output, was put on hold following criticism from the South African government. The postponement allows for talks with the Department of Mineral Resources and unions.

“We need to take action to turn this business around,” Chief Executive Officer Chris Griffith said on a conference call today. “Primary supply challenges will continue in 2013.”

Local analysts use headline earnings as the benchmark measure of company performance. Amplats reported an attributable loss of 6.68 billion rand compared with a profit of 3.59 billion rand. Cash operating costs increased 21 percent to 16,364 rand per refined ounce, it said….”

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China Looks to Install a Ninja to Compete With Samurai Abe for the Central Bank of China

“China signaled it’s preparing for its first new central bank chief since 2002 as an official newspaper said Zhou Xiaochuan will step down from his position next month.

The China Securities Journal, published by the state-run Xinhua News Agency, didn’t attribute the information to anyone in its Feb. 2 profile of Zhou, governor of the People’s Bank of China. The ruling Communist Party previously indicated in November that Zhou would leave, without saying when, by omitting him from its central committee list.

The successor to Zhou, 65, whose decade of service makes him the longest-tenured PBOC chief, will help decide the pace of loosening controls on interest rates and capital flows. China’s benchmark stock gauge, the Shanghai CompositeIndex (SHCOMP), has gained 24 percent since Dec. 3 on optimism the world’s second- largest economy is rebounding from growth at a 13-year low last year.

“The central bank governor change will be part of China’s government reshuffle in March,” with Zhou reaching retirement age, said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. The successor “has to follow Zhou’s uncompleted reforms in liberalizing China’s interest rates and opening up the capital account,” Zhu said.

The PBOC news office didn’t immediately respond to faxed questions from Bloomberg News about how much longer Zhou will serve. Under Chinese law, China’s central bank governor must be named by the premier and endorsed by the National People’s Congress. The annual gathering of the full legislative body is in March….”

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Japan’s Largest Pension Fund Will Begin to Reduce Bond Exposure as Samurai Abe Goes Wild

Japan’s public pension fund, the world’s biggest manager of retirement savings, is considering the first change to its asset balance as a new government’s policies could erode the value of $747 billion in local bonds.

Managers of the Government Pension Investment Fund, which oversees about 108 trillion yen ($1.16 trillion) in assets, will begin talks in April about reducing its 67 percent target allocation to domestic bonds, President Takahiro Mitani said in a Feb. 1 interview in Tokyo. The fund may increase holdings in emerging market stocks and start buying alternative assets.

The GPIF, created in 2006, didn’t alter the structure of its holdings during the worst global financial crisis in 80 years or in response to the 2011 earthquake and nuclear disaster. Prime Minister Shinzo Abe and the Bank of Japan (8301) have pledged to restore economic growth and spur inflation, which will mean higher interest rates, Mitani said.

“If we think about the future and if interest rates go up, then 67 percent in bonds does look harsh,” said Mitani, who was appointed in 2010 after serving as an executive director at the Bank of Japan. “We will review this soon. We will begin discussions for this in April-to-May. Any changes to our portfolio could begin at the end of the next fiscal year.”

GPIF, one of the biggest buyers of Japanese government bonds, held 69.3 trillion yen, or 64 percent of total assets, in domestic debt at the end of September, according to its latest quarterly financial statement. That compares with 12 trillion yen, or 11 percent, in Japanese stocks; 9.6 trillion yen, or 9 percent, in foreign bonds; and 12.6 trillion yen, or 12 percent, in overseas stocks.

Relative Yield

The fund, which took over management of government employee retirement savings when it was set up, returned to profit in the three months ended Dec. 31 from a 1.4 percent loss in the first six months of the fiscal year, Mitani said. He declined to be more specific. It needs to raise about 6.4 trillion yen this fiscal year through March 31 to meet payments.

The yield on Japan’s 10-year government bond climbed 3.5 basis points to 0.8 percent as of 4:35 p.m. in Tokyo today. By comparison, the projected dividend yield for the Topix Index (TPX), the country’s broadest measure of equity performance, is 2.05 percent. The Topix added 1.4 percent today.

Japan’s bonds handed investors a 1.8 percent return in 2012, according to a Bank of America Merrill Lynch Index, compared with the 18 percent surge in the Topix….”

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Asian Markets Touch Eighteen Month Highs

“Asia’s benchmark stock index rose to the highest level in 18 months as U.S. payrolls expanded and China services industries grew at the fastest pace since August, adding to optimism in the global economic recovery.

Rio Tinto Group (RIO), the world’s second-largest mining company, advanced 1.2 percent in Sydney, leading gains among companies with earnings closely tied to economic growth. Sony Corp. (6758), trying to reverse a two-year decline in PlayStation sales, surged 7.5 percent in Tokyo amid speculation the firm is prepping a new version of the home console. Panasonic Corp. (6752), Japan’s second-largest TV maker, soared 17 percent after reporting an unexpected third-quarter profit.

The MSCI Asia Pacific Index (MXAP) added 0.5 percent to 133.4 as of 7:24 p.m. in Tokyo, with five stocks advancing for every four that fell. Japan’s Nikkei 225 Stock Average rose 0.6 percent after capping a 12-week winning streak on Feb. 1., the longest run of weekly gain since 1959, according to Nikkei Inc.

“Economic news was universally good,” said Matthew Sherwood, head of investment markets research at Perpetual Investment, which manages about $25 billion in Sydney. “Corporate leaders are becoming more confident about the growth outlook. Investors are starting to feel the same way, even though questions remain about the strength of corporate earnings growth.”

Sale Cleared

Hong Kong’s Hang Seng Index (HSI) fell 0.2 percent with volume about 76 percent higher than normal for the time of day as HSBC Holdings Plc’s $7.4 billion sale of its stake in Ping An (2318)Insurance (Group) Co. to Thai billionaire Dhanin Chearavanont was cleared by regulators. Shanghai Composite Index rose 0.4 percent and Singapore’s Straits Times Index rose 0.2 percent. Taiwan’s Taiex Index gained 0.9 percent.

Australia’s S&P/ASX 200 Index slid 0.3 percent with trading volume 9.1 percent below average, according to data compiled by Bloomberg. South Korea’s Kospi Index lost 0.1 percent with 26 percent fewer shares changing, the data show. Standard & Poor’s 500 Index futures were little changed….”

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Deep Forest

[youtube:http://www.youtube.com/watch?v=lJHTuh5wXkU 450 300]

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The Super Bowl of Super Bowl Prop Bets

 Source 

“That’s how much money gamblers wagered at legal sports books in Nevada on last year’s Super Bowl between the New York Giants and New England Patriots, according to USA Today. When the wagers placed with offshore, online sports books and corner store, back-room bookies are factored in, then the number must truly be staggering. At least some of that whopping total amount was wagered on the multitude of “prop bets.”

While a bettor can still wager on the actual outcome of the game, there are also plenty of specific “proposition bets” that don’t necessarily have anything to do with the final result. Will the coin toss land on “heads” or “tails” or will a player other than the starting quarterbacks attempt a pass? How many rushing yards will the fullback rack up? These bets can bring drama to almost every single aspect of the game — and even the broadcast.

Will Alicia Keys pull a Christina Aguilera and screw up the National Anthem? What will be the color of the Gatorade that gets dumped on the winning coach? How long will the postgame hug between the Harbaugh brothers last?

If you have an insatiable urge to make virtually every play or occurrence a win-loss situation, then here are some of the prop bets for Super Bowl XLVII.

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