Finance topics

November 22, 2009

JPMorgan takes control of Cazenove

Filed under: online — Tags: , — Gogo @ 7:28 am

JPMorgan Chase & Co is beefing up in Europe by buying the half of Cazenove it does not already own in a deal valuing the 190-year old UK brokerage at $3.4 billion.

J.P. Morgan Cazenove will become a wholly owned part of JPMorgan and its UK investment banking operations will continue to operate as J.P. Morgan Cazenove, the U.S. investment bank said on Thursday.

The deal, which will land windfalls for dozens of top London dealmakers, involves David Mayhew remaining chairman of J.P. Morgan Cazenove, while Chief Executive Naguib Kheraj will oversee the integration, the company said.

JPMorgan (JPM, Fortune 500), the second largest U.S. bank by assets, bought half of Cazenove five years ago to create a UK investment banking joint venture, and as expected took up the option to complete the deal.

JPMorgan has weathered the financial crisis better than most rivals and is now taking advantage of their problems and grabbing opportunities. It said it will pay 535 pence per Cazenove share, valuing the 50% stake at £1 billion ($1.67 billion).  

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November 18, 2009

World Bank’s Lin Says Global Recovery Still Fragile

Filed under: online — Tags: , , — Gogo @ 10:30 am

World Bank chief economist Justin Lin said the global recovery is still “fragile” and governments should maintain fiscal stimulus measures.

“It’s important to discuss the quality of the fiscal stimulus instead of an exit,” Lin told reporters in Seoul. Measures should be withdrawn when “we see private sector investment resume as well as unemployment decline to an acceptable level. So far I think we’re still in a fragile state of the economy and maintaining fiscal stimulus is important.”

Leaders of the 21-member Asia-Pacific Economic Cooperation group, including U guaranteed online payday loans.S. President Barack Obama and his Chinese counterpart, Hu Jintao, pledged in Singapore two days ago to maintain stimulus policies until a “durable” economic recovery is secure.

Lin said China’s economy may grow at an annual pace of between 8 percent and 10 percent in coming years. He declined to comment on China’s currency policy.

Source

October 9, 2009

ECB holds rates, to caution on economy

Filed under: marketing, online — Tags: , — Gogo @ 3:45 pm

The European Central Bank kept its interest rates at a record-low 1.0 percent on Thursday and its head Jean-Claude Trichet is expected to caution against hopes of a speedy economic recovery.

The decision met analyst expectations — all 82 economists in a Reuters poll had expected interest rates to stay on hold in October for the fifth month running, with most expecting them to stay unchanged until late next year.

“This was no surprise at all,” said Nomura economist Laurent Bilke. “The ECB has signaled there wouldn’t be any additional monetary policy stimulus but that they are not ready for a rate hike yet.”

Financial markets were largely unchanged after the decision.

The Governing Council’s Venice meeting was the second of two held annually outside its Frankfurt base and marks the first anniversary of coordinated rate cuts by major central banks in the aftermath of the Lehman Brothers collapse.

The Reserve Bank of Australia on Tuesday became the first Group of 20 central bank to raise rates after the recession hit.

While most analysts expect the next ECB rate move to be a hike, they forecast that it will not happen before the third quarter of next year. But tighter liquidity conditions may push up market rates before that, futures pricing shows.

The Bank of England also kept its rates on hold on Thursday, as was widely expected quick pay day loan.

Attention now turns to Trichet’s news conference, where he is seen confirming that current policy settings are appropriate. Markets will listen for any clues on the timing and order of the ECB’s exit strategy.

“Current rates are appropriate, that is a key sentence that will probably stay until well into next year,” Bank of America economist Holger Schmieding said.

The ECB is unlikely to detail its exit strategy, just to repeat that it can exit when needed, he added.

Trichet’s comments on how governments should wind back their extra spending and how the ECB will take fiscal exit into account in its monetary policy decisions will also be key.

“They will definitely not do any explicit coordination (between fiscal and monetary exit strategies),” Schmieding said, but added: “There might be actually be a case that if fiscal policy is tightened in 2011, the ECB may take that into account and thus have an indirect impact on its rate policy.”

DOLLAR WEAKNESS

Trichet’s comments on economic recovery will also face close scrutiny. The euro zone economy shrank by a revised 0.2 percent in the second quarter of the year, and analysts expect it to have grown 0.3 percent in the July-September quarter. 

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September 24, 2009

Intel CEO expects PC sales flat or slightly better

Filed under: online, term — Tags: , , — Gogo @ 1:09 am

Intel Corp Chief Executive Paul Otellini expects personal computer sales volume this year to “likely” at least match 2008’s, underscoring growing expectations that consumer spending is driving a mild recovery for the depressed market.

But with analysts expecting much of the fastest growth for Intel in future to come from non-PC arenas, Otellini stressed on Tuesday that software and embedded chip development would be crucial.

Intel plans to host a software applications development platform for its lower-end Atom microprocessor, which will allow developers to write programs that work across different devices and operating systems.

Otellini said Taiwan’s Acer and Asus, and PC maker Dell, would support the platform. Intel itself has no plans to get into the apps store business.

The company instead will provide the framework for developers to write software that can then be sold through others’ stores.

Otellini also talked about embedded electronics: microchips in car audio and communications systems, for instance, that can synchronize with computers and smartphones.

Intel has said that market represents a $15 billion opportunity. Otellini on Tuesday said BMW and Daimler would use a version of the Atom chip for in-vehicle information and entertainment devices beginning 2012.

On Intel’s core business, Otellini seemed to echo industry expectations of a flat to potentially better 2009 compared with last year, when PC sales fell off a cliff.

Otellini said the PC industry remains “alive and well” in the middle of the worst U.S. recession in 70 years, with unit sales seen at flat to slightly higher this year versus last.

Goldman Sachs this month raised its forecast for PC unit sales to “roughly flat,” compared with previous expectations for a 4 percent decline, citing resurgent consumer and government-education spending.

(Reporting by Clare Baldwin)

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September 8, 2009

Labor struggles as summer unofficially ends

Filed under: online — Tags: , , — Gogo @ 1:30 pm

It was never Christmas, Thanksgiving, the Fourth of July or even Halloween.

Be that as it may, the nation’s working men and women once got their due on the first Monday in September with well-attended parades and testimonials celebrating the strength of the middle class.

Today, labor leaders acknowledge, Labor Day is little more than the opposite bookend to Memorial Day, bracketing a summer season that, by the calendar, technically begins and ends about three weeks later.

For Mark Staffne, the annual Labor Day parade through downtown St. Louis has been a ritual for the better part of 47 years.

"I can’t say it was huge," said the business representative for the International Brotherhood of Electrical Workers Local 1439 in St. Louis. "But people used to watch it. Many people. Now, it’s dwindled down to union members sitting on the sidelines, watching it go by."

The meaning of Memorial Day has the benefit of patriotic reminders from educators and veterans.

Not so Labor Day which, in the estimation of University of Missouri-St. Louis business school lecturer Joy Dakich, "is lost on a population that has no connections to unions anymore."

The reasons start with the shift of the work force from union-held manufacturing jobs to nonunion jobs in the service sector.

In its latest monthly unemployment report, issued Friday, the Bureau of Labor Statistics estimates that 2 million manufacturing jobs have been lost just since the start of the current recession.

Close behind has been the depletion of the ranks by outsourcing, automation and exporting labor to offshore factories and offices.

Finally, blue collar workers themselves weakened the movement with good intentions.

"You had guys who worked in the factories for 30 years saying to their high school kids, ‘I don’t want you to go to the factory every day. I want you to go to college.’ They wanted something better for their kids. And something better never translated into a union job," said Paul Cole, executive director of the American Labor Studies Center in Troy, N.Y.

Dakich, active in the labor movement when she worked with the airline industry, has taught college-level courses on labor relations for 27 years.

She says labor’s failure to burnish its own image is pushing the movement toward irrelevance.

Students in Dakich’s classes are often surprised when she identifies Albert Pujols, Brad Pitt and Madonna as union members.

The idea that entertainment and sports icons are union people, Dakich says, runs counter to negative public perceptions about labor unrest, unruly picket lines, work slowdowns and notorious tales about James Hoffa, the late International Teamster’s Union president.

"If the unions are going to utilize Labor Day effectively, then they need to talk about people the average citizen recognizes and then bring it down to scale," said Dakich.

"They should show people like Albert Pujols and then show a union guy who has been (driving a truck) for 20 years and making $60,000 a year and a (nonunion) driver who isn’t making that kind of money."

Hugh McVey, president of the Missouri AFL-CIO, takes exception with Dakich and others who contend that time, economics and perception have diluted the importance of organized labor, and along with it, Labor Day.

"Perhaps you should talk to someone about trying to build in St. Louis without (organized labor)," McVey said. "They’ll tell you we’re relevant."

Still, McVey acknowledges labor has fallen short in promoting its attributes, particularly to young people.

"I didn’t even do a good enough job of telling my own kids what labor did for them," he admitted.

Cole says the younger generation needs to be told and the older generation reminded that without labor, the middle class as we know it would not exist.

A discussion that starts at home, Staffne maintains, should continue in history and current events classes and in counseling offices that guide high school students toward appropriate careers.

"Somehow, we have to make people know it’s not a disgrace to say, ‘Hey, I’m a blue collar worker,’" he said.

Dakich cautions that — whether in school or educating the general public about the reason for a federal holiday on the first Monday in September — labor needs to resist the temptation to live in the past.

"They shouldn’t use Labor Day to talk about old-time history, Mother Jones and people no one knows anything about today," Dakich said.

"They should talk about the true benefits of being represented (by organized labor), issues of due process and actual job protection" in dire economic times.

Or, perhaps, labor should start letting young people such as Terral Henderson do the talking.

Along with most of his classmates at the Construction Careers Center, a St. Louis charter school for young people interested in the trades, Henderson thought of Labor Day — if he thought of it at all — as the first three-day weekend of the academic year.

That changed after Henderson earned a diploma in 2007 that led to an apprenticeship with Local 1396 of the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers.

Ask Henderson, 20, what he’s doing now and the quick response is accompanied by a bright smile.

He’s helping to rebuild Highway 40.

Last year, at the behest of his new co-workers, Henderson attended his first St. Louis Labor Day parade as a spectator.

In 2009, he won’t be on the sidewalk.

Henderson may not have known what Labor Day was about before. But as he prepares to march through downtown Monday morning, he understands what it means now.

"It represents what I do," he said. "I labor every day."

Source

August 23, 2009

TSX sharply higher on recovery hopes

Filed under: online — Tags: , , — Gogo @ 2:21 pm

The Toronto stock market closed sharply higher as investors bought shares across most sectors after U.S. Federal Reserve chairman Ben Bernanke said the U.S. economy is on the verge of a long-awaited recovery.

The S&P/TSX composite index closed up 130.67 points to 10,831.18 as sentiment also improved in the wake of oil prices that hit 2009 highs and positive U.S. housing sector data.

Despite the strong showing Friday, the Toronto market lost slight ground for a second week, shedding 16.83 points amid lingering concern about how much support U.S. consumers and Asian economies can lend to a recovery.

During an annual Fed conference in Jackson Hole, Wyo., Bernanke said that "the prospects for a return to growth in the near term appear good."

He did warn, however, that lending is not back to normal, and that the difficulty consumers and businesses are having obtaining loans remain a challenge.

The energy sector rose 1.75 per cent as a strong advance on the main China market and good economic news from Europe helped send the October contract on the New York Mercantile Exchange up 98 cents to US$73.55 a barrel, after rising as much as US$74.72, the high for the year.

Oil prices have risen sharply since data was released Wednesday showing a large drawdown of U.S. crude inventories last week, raising hopes for demand.

Suncor Inc. (TSX: SU) improved $1.05 to $35.53 and Canadian Natural Resources (TSX: CNQ) rose $1.19 to $65.

The Canadian dollar rose 0.46 of a cent to 92.43 cents U.S. and the TSX Venture Exchange was ahead 7.56 points to 1,191.95.

In New York, the Dow Jones industrials surged 155.91 points to 9,505.96, gaining 184.56 points or 1.99 per cent on the week.

The Nasdaq composite index jumped 31.68 points to 2,020.9 while the S&P 500 index gained 18.76 points to 1,026.13.

Though Bernanke's positive assessment on the economy was encouraging, the market's challenges, including rising unemployment and sluggish consumer spending, are certainly far from over.

"You're still losing a quarter of a million jobs a month, you're losing income," observed Andrew Pyle, an investment adviser with Scotia McLeod in Peterborough, Ont.

"Until we stop losing jobs, I think it's ludicrous to talk about expansion in activity because you need something to expand with and if the consumer is still the bulk of the U.S. economy, how do you expect the consumer to deliver solid results without income growth free credit report online."

Meanwhile, a bigger-than-expected jump in U.S. home sales helped give stocks a boost. The National Association of Realtors said sales of existing homes rose 7.2 per cent to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. Sales had been expected to rise to an annual pace of five million.

It was the fourth straight monthly increase and the highest level of sales since August 2007. The rise in sales came amid a sharp decline in home prices.

The Toronto market also received support from other commodity prices that moved higher. The December bullion contract on the Nymex gained $13 to US$954.70 an ounce while September copper climbed 13 cents to US$2.8805 a pound.

The base metals sector climbed 2.15 per cent with Teck Resources (TSX: TCK.B) ahead 49 cents to $28.88.

The gold sector gained 1.3 per cent and Barrick Gold Corp. (TSX: ABX) moved ahead 59 cents to $37.60.

The financials sector was up almost one per cent ahead of earnings reports coming down next week from most of the big banks. TD Bank (TSX: TD) climbed 61 cents to $63.90 and Manulife Financial (TSX: MFC) advanced 61 cents to $22.01.

In other corporate news, German Chancellor Angela Merkel has offered renewed backing for a bid for General Motors Co.'s Opel unit from Canadian auto parts maker Magna International (TSX: MG.A), saying in an interview published Friday that it is "the better concept."

Magna, in a consortium with Russian lender Sberbank, is competing for a majority stake in Opel with Brussels-based investor RHJ International SA and its shares were ahead 89 cents to $51.05.

Switzerland's Lonza Group AG is making a friendly US$458.5-million bid for Canadian drugmaker Patheon Inc. (TSX: PTI). Patheon says the offer trumps a hostile bid from New York based investment firm JLL Partners Inc. But JLL and its affiliate, JLL Patheon Holdings, issued a statement later Friday indicating it would fight the Lonza bid. Patheon shares surged 80 cents or 31 per cent to $3.38.

Open Text Corp. (TSX: OTC) shares rose 21 cents to $41.51 even as it warned that revenues will be lower than expected from its newly acquired Vignette Corp. online software business, but said it remains on track to meet overall growth expectations.

Source

August 16, 2009

Recession slows Ontario Power Generation

Filed under: online — Tags: , , — Gogo @ 7:45 am

Ontario Power Generation's electricity output fell 19 per cent during its second quarter as lingering effects of the economic recession took their toll on power demand in the province.

The good news is that generation from OPG's fossil-fuel plants, primarily coal, plunged by two-thirds.

“This decrease was primarily due to lower electricity demand in Ontario and an increase in the electricity production from other Ontario generators,” the province-owned company said in a statement Friday.

Lower economic activity, a relatively cool and wet summer, and conservation programs in the province have combined to lower demand for electricity. The Ontario Power Authority has estimated that roughly 60 per cent of the fall in power demand is the result of reduced economic activity, with the rest coming from conservation and energy-efficiency initiatives.

The province also has new generation this year from wind and natural gas-fired plants that are easing reliance on coal-fired and nuclear power pay day loans.

OPG's electricity generation during the quarter was 20.9 terawatt-hours, of which 47 per cent came from regulated and unregulated hydroelecric generation and 44per cent from nuclear.

It means 91 per cent of OPG's generation during the second quarter was virtually free of greenhouse gases and other smog-causing emissions.

The company's profit for the period was $306 million, compared to $99 million a year earlier.

“In light of these conditions, we have intensified our efforts on prudent financial operations by instituting cost constraint measures and pursuing further cost reduction opportunities,” said OPG president and chief exective Tom Mitchell, in a statement.

Source

June 18, 2009

Nine months after reopening, Clayton on the Park is closing

Filed under: online — Tags: , — Gogo @ 9:18 am

CLAYTON — Nine months after a renovation costing $12.5 million and reopening, the Clayton on the Park luxury senior living high-rise confirmed Tuesday that it will suspend its operations.

A spokesman for Sunrise Senior Living, a partner in the project, said the facility will close Aug. 17. Letters were sent to residents on Monday, and the staff is meeting with each of them. Twenty of the 208 apartments now are leased and occupied, said Stacy Tew-Lavosz, executive director of Clayton on the Park.

On Tuesday, Sunrise, based in McLean, Va., released a statement saying it would do its best to make the transition "as easy and comfortable as possible for all of our residents." The company said it would work with its partner, Conrad Properties of Clayton, to determine the future of the building.

"At this time, we are not able to speculate on the future of the building or when, or if, operations will resume at the community," said Sara Krueger, spokesman for Sunrise.

Last year, Sunrise and Conrad completed transforming the then nine-year-old Clayton property from a luxury boutique hotel and apartments into an independent senior-living residence with top amenities. The building’s first three floors, including the area where the old Finale nightclub had been located, were gutted and refurbished into senior residences.

The remodeled high-rise boasted original art, a theater, wellness center, a spa, a rooftop veranda and top-flight dining. From the location at Bonhomme Avenue and Brentwood Boulevard, the building offers clear views of downtown Clayton’s business towers and Shaw Park’s public pool and gardens free credit score. Rents began at $2,800 a month for a studio up to $9,200 for the six three-bedroom, two-bathroom units.

Sunrise managed the senior living operation and has an ownership interest in the property. The company said it has no plans to close any of its 400 communities nationwide, including three others in the St. Louis area.

Despite the apparent failure of Clayton on the Park, the overall market for senior living is strong, said Maureen Smallwood, who specializes in marketing senior housing. Still, opening a luxury facility in a sour economy may have proven fatal, she added.

"For that high end a product, they just hit the market at the wrong time," Smallwood said Tuesday.

Smallwood serves on the Home Builders Association’s 50-Plus Housing Council, which was created because of the high demand for senior housing. Many senior independent living projects in the area at or over 90 percent occupancy, Smallwood said, adding that she expects demand to remain strong.

But the market for higher-end properties carries more risk, Smallwood noted, even for well-established senior-living companies like Sunrise. "In this climate, people are being more cautious," she said.

Source

June 15, 2009

Federal prying will run deeper for air travelers

Filed under: online — Tags: , — Gogo @ 11:12 am

Booking a flight is getting a little more personal these days.

Under a new federal security program, all airlines will be required to ask for your name as it appears on your government-issued ID. Eventually, they also will ask for your date of birth and gender in an effort to bolster security and minimize the frequency of misidentifying passengers with people named on suspected terrorist lists.

The Transportation Security Administration will compare the additional information against government watch lists to decide whether travelers need extra screening — or are barred from flying altogether. Some airlines, including AirTran Airways, already have begun phasing in the program, called Secure Flight.

At Lambert-St. Louis International Airport, many travelers haven’t encountered the new requirements because the airport’s dominant carriers, American Airlines and Southwest Airlines, haven’t implemented them.

American says it will be begin gathering full names, dates of birth and gender sometime this fall. Southwest plans to start collecting the additional information by October.

All airlines are expected to be asking for names as they appear on IDs, dates of birth and gender by early 2010 for every domestic flight, said TSA spokeswoman Carrie Harmon. Similar information will be sought for all international flights by the end of 2010.

Before the Secure Flight program, airlines were responsible for matching travelers against the lists. The 9/11 Commission called for improvements to the matching process in 2004. The commission decided that matching "should be performed by TSA and it should utilize the larger set of watch lists maintained by the federal government."

Travelers have logged more than 58,100 complaints with the Department of Homeland Security’s Traveler Redress Inquiry Program since February 2007, Harmon said. Many contend people have had trouble boarding a plane because of watch-list issues, or that they have been needlessly singled out for additional screening.

Critics say the new program has its drawbacks.

"Secure Flight causes a lot of problems because it’s expensive and requires more data to be collected on everyone," said Chris Calabrese, an attorney with the American Civil Liberties Union’s technology and liberty program. "It may help some people who are erroneously matched on the watch list."

The TSA uses a subset of the terrorist watch list — the no-fly and selectee lists — to identify travelers who either are not permitted to fly or are subject to additional screening cheapest car insurance.

Harmon said the no-fly and selectee lists contain about 16,000 people between them, with the no-fly list containing fewer than 2,500 individuals.

Auditors with the Government Accountability Office last month found that TSA had "made significant progress" toward reaching key Secure Flight milestones. But the TSA is still working on the system’s watch list matching capability, and cost and schedule estimates, the report found.

"Until these activities are completed," the GAO reported, "TSA lacks adequate assurance that Secure Flight will fully achieve its desired purpose and operate as intended."

TSA officials say traveler privacy will be protected. For instance, if a passenger’s name is not matched to watch lists, the data will be purged from the TSA systems after seven days.

Many passengers flying into Lambert recently said they weren’t troubled by the latest aviation security mandate.

Kate Spring of New Jersey said she was asked for her name as it appears on her ID when booking her flight to St. Louis on AirTran Airways. "If it’s for security, it doesn’t bother me a bit," Spring said while awaiting a ride outside Lambert’s Main Terminal.

The carrier, based in Orlando, Fla., began phasing in Secure Flight in mid-May, when it began asking travelers to furnish names in that manner, said AirTran spokeswoman Cynthia Tinsley-Douglas. AirTran will begin asking for dates of birth and gender information by Aug. 15.

Travelers have had questions about the name requirement but seem to be taking it in stride, Tinsley Douglas said. "We haven’t had too much push-back that I’m aware of."

But Bill Plachte of Denver said he doesn’t think the new security program will eliminate the problem of people being mistaken for those on watch lists.

"Because you’re not getting enough information," Plachte said after his Southwest Airlines flight arrived in St. Louis last week. "You’re not getting (Social Security) numbers. … They’re going halfway."

Source

May 22, 2009

Forest companies post $480M loss

Filed under: online — Tags: , , — Gogo @ 5:00 pm

VANCOUVER–Canada's 14 largest Canadian forest products companies lost a total of $480 million in the first quarter with B.C. firms hardest hit, a report shows.

The losses were $91 million more than the same quarter last year, when the overall losses were $381 million, as sales and prices continued to drop as a result of the recession.

Losses deepened in the most recent quarter despite a lower Canadian dollar compared to the U.S. currency, the consultancy said.

Western Canadian companies lost a total of $314 million in the January-March period, which was compared to losses of $312 million the same time last year faxless payday advances.

Losses in Eastern Canada widened to $166 million in the quarter compared losses of $77 million the year before.

By comparison, 10 of the largest public U.S.-based forest and paper companies posted cumulative losses of US$63 million in the first quarter of 2009.

That was a drop of US$429 million from earnings of US$366 million in the same period of 2008, the report said.

Source

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