Libya sends proposal list, looks for cease fire

The terms were sent to Spain.

Madrid (CNN) — The office of Libya’s prime minister sent a message to the Spanish government listing “a series of proposals that could lead to a ceasefire,” a spokesman for Spanish Prime Minister Jose Luis Rodriguez Zapatero said Thursday.

The message, from the office of Prime Minister Baghdadi al-Mahmoudi, was also sent to other European capitals, the spokesman said, adding that he could not name which capitals.

Spain has contributed military assets, including troops, to the NATO-led mission to enforce a no-fly zone and protect civilians in Libya.

WASHINGTON (AP) — More people applied for unemployment benefits last week, the first increase in three weeks and evidence that the job market is still sluggish.

The number of people seeking benefits rose by 10,000 to a seasonally adjusted 424,000, the Labor Department said Thursday. No states cited extreme weather as a factor in the increase, a department spokesman said. Tornadoes and floods have devastated several states in the Midwest and South in the past month.

Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession.

WASHINGTON (Reuters) – Corporate profits contracted in the first quarter for the first time in more than two years and the economy grew at the same pedestrian pace as previously estimated, government data showed on Thursday.

Signs of the economy’s struggle to regain speed were highlighted by an unexpected rise in the number of Americans applying for unemployment benefits last week.

“There is no doubt the economy has slowed. We will call the first half of 2011 as a soft patch,” said Robert Dye, a senior economist at PNC Financial Services in Pittsburgh. “We should see growth accelerate in the second half in the 3.0 percent to 3.5 percent area.”

After-tax corporate profits fell at a rate of 0.9 percent, the Commerce Department said, after rising at a 3.3 percent pace in the fourth quarter.

In a move that will surely help major grain operations in the country (including ADM, Cargill and BG), the Ukraine announced that they have removed grain quotas limiting the amount of agricultural products domestic operations could export out of the country.

European wheat prices are presently the equivalent of $345 per tonne for country’s anticipated harvest.

It is anticipated that the country will also move to enforce small taxes on grain exports in the coming days.

Read about it here.

NEW YORK (AP) — The nation’s crude oil and gasoline supplies increased last week as refinery capacity rose, the Energy Department said Wednesday.

Crude supplies rose by 600,000 barrels to 370.9 million barrels, the department’s Energy Information Administration said. The total is 0.2 percentage point more than a week ago and 1.6 percent more than a year ago.

Analysts expected a 1.6 million-barrel decrease in oil supplies, according to Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies rose 3.8 million barrels, or 1.8 percent, to 209.7 million barrels, the agency said. The total is about 5.4 percent less than year-ago levels. Analysts expected gasoline supplies to increase by 750,000 barrels.

Demand for gasoline over the four weeks that ended May 20 was 2.1 percent less than it was in the year-ago period, averaging nearly 9 million barrels a day.

The Energy Department said U.S. refineries ran at 86.3 percent of total capacity on average, which was an increase of 3.1 percent. Analysts had forecast refining capacity at 83.6 percent.

Supplies of distillate fuel, which include diesel and heating oil, declined by 2 million barrels, or 1.4 percent, to 141.1 million barrels. The total was 7.5 percent less than a year ago.

Analysts predicted distillate stocks would increase 500,000 barrels.

Benchmark crude rose 16 cents to $99.75 per barrel in morning trading on the New York Mercantile Exchange.

Break out the fudge and shoot off some fireworks, Michigan’s tourism industry is officially, positively, emphatically on the rebound.

After three down years, travel and tourism spending in the state rose 14% last year to $17.2 billion, up from $15.1 billion in 2009 — the biggest one-year jump in Michigan history, according to the latest annual national survey by D.K. Shifflet & Associates of McLean, Va.

Especially notable was a 21% spike in spending by out-of-state leisure visitors, quite likely linked to the cumulative impact of the state’s first-ever national cable TV buys of advertising time in 2009 and 2010 for the Pure Michigan campaign.

“We always believed we had a national quality product to sell, but we never had the budget before,” said George Zimmermann, vice president of Travel Michigan, the tourism arm of the Michigan Economic Development Corp.

On Tuesday May 24, 2011, 10:58 am EDT
By Kristina Cooke

PHILADELPHIA (Reuters) – Consumers are struggling with higher gasoline costs and a weak housing market, Federal Reserve Governor Elizabeth Duke said on Tuesday, in remarks that suggested she is unlikely to be pressing for higher interest rates soon.

Federal Reserve Bank of St. Louis President James Bullard struck a similar tone in a speech late Monday, saying a pause once the $600 billion quantitative easing program ends in June would give the Fed time to assess the strength of the economy. Bullard said U.S. economic growth had disappointed in the first half of the year.

The Fed cut interest rates to near zero in December 2008 and has kept them there since. Bullard said keeping monetary policy on hold signals no change to the Fed’s pledge to hold rates extremely low for an extended period.

Duke’s remarks, while focused primarily on financial literacy, offered a flavor of her views on the economy.

“The financial crisis and the slow recovery from it has obviously had a dramatic impact on the financial decisions made by American families. Many now have fewer financial resources and limited options,” Duke told a conference sponsored by the Boston Fed.

“Many families, particularly those with low-to-moderate incomes, are actually facing the decision between buying gas to drive long distances to work and paying their mortgage.”

After a retreat in crude oil prices, U.S. gasoline costs fell to $3.85 a gallon in the latest week, the lowest level in five weeks, the Energy Department said on Monday. Although prices are down 11.1 cents from the previous week, the national gasoline price is still $1.06 higher than a year ago.

National Factoring Co. Upgraded To ‘B’ On Positive Performance And Resilience To Market Conditions; Outlook Stable 24-May-2011
09:16 EST

Holly Corp. And Frontier Oil Corp. Ratings Remain On CreditWatch Positive 24-May-2011
08:56 EST

Postal Service Provider Poste Italiane Outlook Revised To Negative After Same Action On Italy; ‘A’ Rating Affirmed 24-May-2011
07:17 EST

Outlook On Cassa Depositi e Prestiti SpA Revised To Negative In Line With Republic of Italy; ‘A+/A-1+’ Ratings Affirmed 24-May-2011
07:14 EST

S&P Revises Outlooks On 12 Italian Local And Regional Governments To Negative After Same Action On Italy 24-May-2011
06:58 EST

Turkish Beverage Group Anadolu Efes Upgraded To ‘BB+’ On Continuous Discretionary Cash Flow Generation; Outlook Positive 24-May-2011
06:13 EST

Various Rating Actions Taken In Spanish SME CLO Transaction FTPYME Bancaja 6 24-May-2011
05:39 EST

Outlook On Four Italian Banks Revised To Negative Following A Similar Rating Action On The Sovereign 24-May-2011
05:21 EST

French Social Security Central Agency, ACOSS, ‘A-1+’ Ratings Affirmed 24-May-2011
05:21 EST

China Glass Rating Raised To ‘B+’ On Improved Capital Structure And Liquidity Position; Outlook Stable 24-May-2011
05:06 EST

Auckland Council Assigned ‘AA/A-1+’ Foreign Currency Ratings On Strong Fiscal Position, Sound Management; Outlook Stable 24-May-2011
01:56 EST

NTT’s Domestic Bonds Rated ‘AA’ 24-May-2011
00:38 EST

Outlooks On Six Brazilian Banks Revised To Positive After Action On Sovereign; Ratings Affirmed 24-May-2011
00:10 EST

New York, May 23, 2011 — US commercial real estate prices as measured by Moody’s/REAL National — All Property Price Index (CPPI) fell 4.2% in March, bringing the index down to its lowest level since its peak in October 2007. A recent pick-up in the volume of transactions, however, is a positive sign for the overall commercial real estate market and sets the stage for recovery. A high volume of distressed transactions are weighing on performance, says Moody’s.

In March, there were 182 repeat-sales transactions totaling nearly $2.5 billion, a significant increase by both count and balance over February, says Moody’s. It was second highest number of repeat-sale transactions since 2008, the total only exceeded by that of December, 2010, which benefitted from being the end of the year.

The index is now 47.0% below its October 2007 peak.

“The CPPI continues to bounce along the bottom as a large share of distressed transactions preclude a meaningful recovery of overall market prices at this time,” says Tad Philipp, Moody’s Director of CRE Research. “Indeed, the post peak low in price has been reached in the same period as a post peak high in distressed transactions has been recorded.”

In March nearly one third of all repeat-sales transactions qualified as distressed.

“Given that it may take 12 to 24 months to foreclose on a property and execute an REO sale there is a lag effect that results in fewer distressed transactions coming to market in the early stages of a downturn and an increased level in later stages (i.e., now),”says Moody’s Philipp.

In additional indices published this month, Moody’s quarterly national indices for the four property types all showed declines in first quarter 2011. Industrial recorded the largest decline, at -7.7%, followed by office, -7.1%, apartment, -4.7%, and retail, -4.5%.

In this month’s “From the Lab” section of the CPPI report, Moody’s analysts examine the price performance of major assets in major markets with and without the inclusion of distressed exchanges. Results suggest a trend of recovery in prices for these major assets and markets even when distressed exchanges are included, as these assets and markets outperform the overall CPPI. “This is consistent with liquidity in the commercial real estate sector first returning to prime assets in capital attracting cities,” added Philipp.

The report, “Moody’s/REAL Commercial Property Price Indices, May 2011,” is available on the company’s website, www.moodys.com. In addition, Moody’s publishes a weekly summary of structured finance credit, ratings and methodologies in “Structured Finance Quick Check” at www.moodys.com.

Another brilliant article by Mr. Jim Jubak, an absolute must read.

Here’s a quote from it:

At the end of April, gasoline sold for $3.03 a gallon in Moscow. When there was any to sell. Beginning in February, gas stations across Russia started to experience shortages. That’s a direct result of investigations launched by Prime Minister Vladimir Putin into steep price increases in gasoline. With the government cracking down on rising prices, effectively capping gasoline at a time when world oil prices had soared, Russian oil producers and refiners had started to ship more gasoline overseas. Prices for gasoline and diesel in Russia in March were $70 to $150 lower per metric ton than on world export markets, according to the Jonathan Muir, the CFO of the TNK-BP joint venture. The company, Muir said, would have earned $54 million more in the first quarter if it had exported the gasoline it instead sold in Russia.

So guess what? Russian refiners started to do just that — and fuel shortages emerged first in the country’s more remote areas, such as Siberia and the southern Altai region, and then in urban areas such as St. Petersburg. In the Altai, more than 700 gas stations have closed. In the Siberian city of Tomsk, gas stations limited customers, even city buses, to 25 liters a day. Because city buses need 80 to 100 liters a day to operate, you won’t be surprised if I tell you that 20% of buses didn’t run on April 28.

Japan’s economy shrank more than estimated in the first quarter after the March 11 earthquake and tsunami disrupted production and prompted consumers to cut back spending, sending the nation to its third recession in a decade.

Gross domestic product contracted an annualized 3.7 percent in the three months through March, following a revised 3 percent drop in the previous quarter, the Cabinet Office said today in Tokyo. The median forecast of 23 economists surveyed by Bloomberg News was for a 1.9 percent drop.

New York, May 17, 2011 — Recent elevated silver prices have pressured companies that make or purchase products with silver but will not boost mining companies’ credit ratings, according to a new report by Moody’s Investor Service.

Despite silver spot prices more than doubling since September 2010 and reaching a historical high of $48.70 per ounce on April 28, 2011, then plummeting to $34 per ounce earlier this month, mining companies are unlikely to see upwards rating pressure, says the report. That’s because silver makes up a relatively small component of their overall metals exposure.

Silver’s price swings stem largely from investment activity and macroeconomic factors and will persist, according to the report. Compared to the larger gold market, silver’s smaller trading volume means market activity can have a greater magnitude of impact, resulting in steeper price volatility on a day-to-day basis, according to the report.

“We believe the run-up in silver prices through late April 2011 was not a result of fundamental supply and demand factors but rather fund and other investment activity, safe-haven sentiments, and other more macroeconomic drivers,” says Carol Cowan, a Moody’s Senior Credit Officer. “Global markets remain concerned over sovereign-debt levels, political unrest, inflation, economic growth levels, and the strength of the U.S. dollar.”

However, the price increases are unlikely to greatly impact the top producing companies as other minerals and metals are larger drivers of earnings performance and cash-flow generation. Producers will enjoy a nice margin impact from the silver price increase but Moody’s does not consider silver prices about $40 per ounce as sustainable.

An excerpt from the article below:

Prices seem normal next to earnings, but history says earnings might plunge.

Asset bubbles typically form because of widespread denial, not a lack of obvious signs. In 2000, just before the dotcom stock crash, the S&P 500 index of large American companies traded near 30 times trailing earnings, about double its historic average, but the Internet, some said then, had made price-to-earnings ratios obsolete. In early 2007, before a 30% drop in U.S. house prices, the ratio of prices to rents was twice normal levels, but generous financing and subsidies had supposedly redefined affordability.

A new stock bubble might now be in the making, but this time the signs are less obvious. U.S. stocks, despite having racked up a decade worth of typical gains in the 26 months after their recessionary low, do not look expensive. The S&P 500 trades at 15.3 times trailing earnings, only a smidgen above its historic average of 14.5.

Those numbers might be luring investors toward a cliff, however. History suggests today’s corporate earnings are unsustainably high relative to the size of the economy. The real price-to-earnings ratio, based on a more normal level of earnings, is well over 20.

To see why, consider a broad measure of America’s prosperity called national income. It consists of corporate profits, worker wages, sole proprietor income and more. Corporations and workers compete against each other for income but also rely on each other for success. When profits and wages grow in tandem, the result is healthy economic expansion. When one grabs too large a slice of the nation’s income pie, it usually signals a downturn waiting to happen.

For example, corporations since 1929 have collected an average of 6.4 cents per dollar of national income as after-tax profits. In 1966 corporate profits swelled to 8.3 cents per dollar of national income; they then fell 19% by the end of the decade. In 1997 they were 8.6 cents per dollar of national income; by the end of that decade they were down 13%.

Workers, after all, are customers. If they’re not participating in the boom, then the boom might be a bubble.

NEW YORK (AP) — The nation’s oil supplies were flat last week, though gasoline supplies increased slightly, the government said Wednesday.

Crude inventories remained at 370.3 million barrels, which is 2.1 percent above year-ago levels, the Energy Department’s Energy Information Administration said in its weekly report.

Analysts expected an increase of 500,000 barrels for the week ended May 13, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories rose by 100,000 barrels, or 0.1 percent, to 205.9 million barrels. That was below analysts’ expectations and 7.2 percent below year-ago levels.

Demand for gasoline over the four weeks ended May 13 was 2.3 percent lower than a year earlier, averaging nearly 9 million barrels a day.

At the same time, U.S. refineries ran at 83.2 percent of total capacity on average, a rise of 1.5 percentage point from the prior week. Analysts expected capacity to rise to 81.98 percent.

Inventories of distillate fuel, which include diesel and heating oil, fell by 1.2 million barrels to 143.1 million barrels. Analysts expected distillate stocks to increase by 600,000 barrels.

Benchmark crude rose $2.74 to $99.65 per barrel in morning trading on the New York Mercantile Exchange.

NEW YORK (Reuters) – The dire condition of state and local finances threatens the country’s economic recovery and must be addressed immediately, prominent analyst Meredith Whitney wrote in an op-ed column in The Wall Street Journal on Wednesday.

In a separate interview on Bloomberg radio on Wednesday, she stuck by her prediction that more municipal bond defaults lie ahead, but added a qualification. “I never gave precise estimates or a specific period of time,” she told Bloomberg.

Whitney made her reputation by correctly predicting in 2007 that Citigroup would need a massive capital infusion. Last year, she rocked the $2.9 trillion municipal bond market by her forecast of massive numbers of bond defaults this year.

TRIPOLI, Libya (AP) — Another high-ranking Libyan official has defected and fled the country amid a widening NATO campaign of bombings as well as leafletting and other psychological warfare to persuade Moammar Gadhafi’s troops to stop fighting.
Shukri Ghanem, the Libyan oil minister and head of the National Oil Co., crossed into neighboring Tunisia by road on Monday, according to a Tunisian security official and Abdel Moneim al-Houni, a former Libyan Arab League representative who was among the first wave of Libyan diplomats to defect.

The defections suggest Gadhafi’s political structure is fraying, but it’s unclear whether there is enough internal strife to seriously undermine his ability to fight rebel forces as NATO airstrike pound Libyan military targets. Gadhafi appears to retain the backing of his core of military commanders.

Still, support for Gadhafi seems to be waning in the capital, Tripoli. Pro-regime demonstrations are sparsely attended, even when heavily advertised in advance.

And rebel forces have reported some gains in recent days. In Misrata, the main battleground in western Libya, opposition fighters claim they have driven back government troops from key access points and tried to push pro-Gadhafi gunners out of rocket range for the city.

And even there, it looks ripe to fail.

WASHINGTON (AP) — The Senate is taking up a bill Tuesday that would repeal about $2 billion a year in tax breaks for the five biggest oil companies, a Democratic response to $4-a-gallon gasoline that might fare better when Congress and the White House negotiate a deal later this year to increase the government’s ability to borrow.

The evening vote is expected to fail. But Democrats hope to build their case to include the measure in a deficit-reduction package being negotiated by key lawmakers and the Obama administration. Lawmakers from both parties are demanding deficit reduction as part of deal to increase the government’s ability to borrow and avoid an unprecedented default on U.S. Treasury bonds.

VOORHEES, N.J.–(BUSINESS WIRE)– American Water Works Company, Inc. (NYSE:AWK – News), the largest publicly traded U.S. water and wastewater utility company, announced today that its subsidiary, Missouri American Water, has completed the acquisition of 11 water systems and 59 wastewater systems in Missouri for approximately $3 million. The acquisition was part of an agreement with Aqua America, Inc. in which American Water purchased Aqua America’s regulated water and wastewater systems in Missouri and Aqua America purchased American Water’s regulated water and wastewater systems in Texas.

Both companies commended the agreement as a way to strengthen operations in their respective states, creating better economies of scale and providing additional opportunities for both companies to continue to provide excellent, local customer service.

WASHINGTON (AP) — Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.

The debt limit is the amount of money the government can borrow to help finance its operations. The nation has reached its debt limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate is that it borrows 40 cents for every dollar it spends.