Greek Parliament approves Austerity process; Greek concern eases

Thu, Jun 30 2011, 16:25 GMT
by Mauricio Carrillo

The Yorgos Papandreu's government has won the second crucial voting in two days as the Greek parliament passed the second austerity bill, focused on technical and processing aspects, today by 155 votes to 136. It means that Greece is now eligible to receive the fifth tranche of the bailout funds from the EU and IMF which will help the country avoid default. Market has received the news as fresh air and euphoria since the Greek concern seems to have finally eased.

The "positive resolution" has continued today with the approval of the 5-year austerity implementation process while protesters continued taking the streets against the unpopular plan.

On July 3, Eurozone finance ministers will be ready to discuss the details of a second more long-term, comprehensive support package for Greece at an extraordinary meeting. They will also give the green light to the €12bn tranche of aid due under the initial bailout. Greek government officials have said they are going to be running out of money past mid-July to pay wages and pensions unless the next tranche of funds is provided.

The IMF board is expected to have a meeting on July 8 to approve the disbursement of its tranche. Next, talks about a second longer-term bailout package are planned to be retaken on July 11 when the IFM, Greek government and the Euro leaders will speak about the fully covering of financing needs up to 2014.

The Euro continues rising against the Dollar after Greece concern eases

The Euro has climbed above 1.4500 level against the Dollar after the Greek Parliament positive decision. Currently the EUR/USD is trading around 1.4520.

After rejecting the 1.4520 level in a first attempt this morning and falling to set a daily bottom at 1.4450, the pair began to trade sideways just at the American opening bell to accelerate in the upside after the Greek approval. "This is why I was dubious about pressing shorts today," comments in his Twitter Boris Schlossberg, Currency Adviser at BK Forex. "$EUR/USD 1.4500 taken out, 1.4550 in view," Boris affirmed.

Gold edges lower, other metals extend gains

June 30, 2011, 12:06 p.m. EDT


SAN FRANCISCO (MarketWatch) — Gold inched lower Thursday, wavering between small gains and losses as it struggles to trade in the black after two days of solid gains.

Gold for August delivery declined $1.20, or 0.1%, to $1,509.50 an ounce on the Comex division of the New York Mercantile Exchange.

So far this month, gold has declined about 1.6%, which was preceded by losses around 1.2% in May.

It gained roughly 1% in the last two sessions.

Gold had gained as commodities in general caught a lift from heightened hopes for the global economy after Greece took the first step towards another tranche of financial aid and approved an austerity plan.

Greek lawmakers on Wednesday and Thursday passed legislation to implement the plan, which includes privatizations and selling assets.

While the Greek vote isn’t supportive of gold, which thrives in bad economic news, other market forces have worked to keep prices supported, such as worries about elevated inflation, said Dan Smith, a metals analyst with Standard Chartered Bank in London.

“We see a lot of confusion about the Greek situation. The whole situation in Europe is distorted,” he said. “There has been some safe haven buying because of Greece and it’s coming out of the market now ... But the long term story is still bullish for gold.”

“Investors are looking for protection against event risk,” he added.

Positive news about the U.S. economy also helped take away some of the safe-haven buying in gold. A survey of manufacturing activity in the Chicago area unexpectedly rose in June, to 61.1% from 56.6% in May.

The Chicago PMI is particularly watched as it comes ahead of the national Institute for Supply Management’s index due Friday. Read more about PMI.

Earlier Friday, the Labor Department said 428,000 workers filed new applications for jobless benefits, barely changed from the week before. Read more about weekly jobless claims.

Meanwhile, other metals were outperforming gold on Wednesday, as revived optimism about the economy joined better-than-expected May pending home sales reported in the U.S to push copper and silver higher.

The metals extended their gains on Thursday. Silver for September delivery added 4 cents, or 0.1%, to $34.81 an ounce. September copper advanced 6 cents, or 1.4%, to $4.28 a pound.

Claudia Assis is a San Francisco-based reporter for MarketWatch. Sara Sjølin is a MarketWatch reporter, based in New York.

UniCredit and Intesa hit by Greece and capital jitters

MILAN | Fri Jun 24, 2011 4:06pm BST

(Reuters) - Shares in Italian banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI) fell sharply on Friday on

worries about their capital positions and the deepening euro zone crisis.

Brokers cited a host of reasons behind the sell-off.

Factors included speculation that imminent stress test results may highlight capital shortfalls at Italian lenders, a European central banker saying the euro zone debt crisis was not over, German comments on a possible sovereign debt rollover, and a Moody's downgrade threat on Italian banks.

One Milan analyst, who asked not to be named, said macroeconomic factors were the main driver, as well as the threat of a credit rating downgrade by Moody's.

Shares in Italy's top two banks were briefly suspended for hitting the daily downward limit.

By 3:17 p.m., Intesa SP was down 4.7 percent at 1.699 euros, while UniCredit was down 5.3 percent at 1.366 euros.

Banking shares had recovered earlier in the day but deepened losses again in a volatile session amid high volume.

Banking sources familiar with the stress test process expressed confidence on the outcome of the health check for the five Italian banks under scrutiny -- UniCredit, Intesa, UBI Banca (UBI.MI), Banca Monte dei Paschi (BMPS.MI) and Banco Popolare (BAPO.MI).

"There is the utmost tranquillity in the banking sector," over the stress tests one of the sources said, adding the situation has not changed after the European Banking Authority requested a second round of data from banks.

Italian banks are adding to their capital, with UBI Banca's (UBI.MI) 1 billion euros rights issue closing on Friday, and Banca Monte dei Paschi di Siena (BMPS.MI) ongoing 2.15 billion euros issue running to July 8.

Intesa Sanpaolo recently completed a 5 billion euro capital increase while Banco Popolare raised 2 billion euro in fresh capital this year.

POSITIVE

A source close to UBI's rights issue told Reuters on Friday the offer was covered for more than 75 percent.

"The expectation is it will conclude positively by the end of the day," the source said.

A second source close to the bank said the capital increase would be "well more" than 90 percent covered.

There have been worries that an underwriting consortium led by Italian investment bank Mediobanca (MDBI.MI) would have to take on UBI shares, because UBI's share price in the market would slip below the rights issue price.

UBI's price slipped under the 3.808 euros rights issue price on Friday for the first time during the offer period, but by 3 p.m. it had recovered to 3.82 euros.

UniCredit is one of the few banks not to have carried out a capital increase, though domestic media has speculated it could announce one, with a business plan, later this year.

"UniCredit has a 9 percent Core Tier 1 ratio. (The stress test) is not a problem for UniCredit," a Milan-based analyst said, referring to end-March data.

The STOXX Europe 600 banks index .SX7P was down 1.5 percent. Italian banks were hit harder than elsewhere, although France's Natixis (CNAT.PA) also lost 3.9 percent.

(Additional reporting by Andrea Mandala, Valentina Za, Gianluca Semeraro, Michel Rose in Italy, Steve Slater and Dominic Lau in London; Writing by Nigel Tutt; Editing by Will Waterman and David Hulmes)

Gold futures drop by as much as $35 an ounce

By Myra P. Saefong

SAN FRANCISCO (MarketWatch) — Gold futures dropped by as much as $35 an ounce Thursday, tracking a broad commodities selloff and poised to break a seven-session winning streak as prices for crude oil fell below $90 a barrel and the U.S. dollar strengthened.
At last check, gold for August delivery — the most active futures contract — fell $28.40, or 1.8%,to $1,525.10 an ounce on the Comex division of the New York Mercantile Exchange.

Gold futures modestly pared their losses after the U.S. Commerce Department estimated that sales of new homes fell 2.1% in May.

Earlier, prices hit a low of $1,518.30. The contract hasn’t traded at levels this low since May 23. It had gained nearly $38 during a seven-session winning streak.
The benchmark July silver contract also sank, falling 3.8%, or $1.38, to $35.36.

“First and foremost, gold is reacting to the sharply higher U.S. dollar index,“ said Darin Newsom, a senior analyst at Telvent DTN. “Then there is the crude oil selloff.”

The International Energy Agency said Thursday that it will release 60 million barrels of oil into world markets in the coming month to counteract lost production in Libya.

“If we are getting 60 million barrels of new crude oil into the global market, then the inflationary story is really taking a beating today, thus gold indirectly gets hit, too,” said Richard Hastings, a macro strategist at Global Hunter Securities.

August crude fell $5.16, or 5.4%, to $90.25 a barrel on the New York Mercantile Exchange after tapping a low of $89.69.

“Commodities in general have been wanting to come down, and today may be the day,” said Newsom. “Safe-haven buying could emerge in gold soon. Even though the early loss is about $30, no chart damage has been done yet. The weaker DJIA could also provide support.

The dollar index, which measures the performance of the U.S. unit against a basket of six major currencies, rose to 75.699 from 74.791 late Wednesday. Strength in the greenback tends to lure investors away from gold. Read more about currencies action.

Gold investors also gauged comments by the Federal Reserve and lackluster results from a key Chinese manufacturing survey.

HSBC’s preliminary China manufacturing Purchasing Managers’ Index for June printed at 50.1, down from a PMI of 51.6 in May, and barely above the 50 level that separates contraction from expansion. See more on China manufacturing data.

Analysts said China’s inflation rate could peak in the 5%-6% range in the next few months, with deflationary concerns likely to come back in focus, and potentially setting the stage for Beijing to switch towards a neutral or even easy monetary-policy stance if global economic momentum cools.

Meanwhile, the Fed on Wednesday trimmed its view on economic growth and confirmed it will end its $600 billion bond-purchase program on June 30.

Myra Saefong is a MarketWatch reporter based in San Francisco. Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.

By Brett Arends, MarketWatch

BOSTON (MarketWatch) — Great news if you’re Apple.

Your rivals are immolating themselves. Your industry is settling down into a cosy duopoly.

And yet your stock is getting cheaper and cheaper. It’s starting to enter value territory.

What’s up with that?
Last week came the latest shocker from Research In Motion. The BlackBerry maker’s warning on sales and profits sent its stock plummeting to historic lows. RIM’s problems are in danger of becoming terminal. So, too, are those of ailing Nokia — the once brilliant Finnish mobiles giant. Things are so bad there, it is turning to Microsoft for salvation. That’s like an alcoholic turning to Charlie Sheen for help drying out. How bad can you get?

I know Apple fanatics like to think their company is some kind of miracle worker, the eighth wonder of the world. But its greatest asset has always been the competition. With enemies like Nokia and Research In Motion — let alone Microsoft — who needs friends?

James Cordwell, analyst at Atlantic Securities, expects Apple to sell 9 million iPads this quarter — nearly three times as many as it did a year ago.

This industry should be crowded with competing products. But if you want to see Apple’s rivals, walk into any computer store. Most of the tablets are a year late. Some feel like someone snapped off the upper half of a laptop. What a joke. RIMM’s Playbook is a flop.

Old time book chain Barnes & Noble managed to get a half decent Android tablet, the Nook Color, on the market by last November. The big tech companies are still doing pratfalls over each other.

Competence ought to be a given in the big leagues. But Apple keeps playing the Bad News Bears.

I am starting to wonder if the executives at all the other top technology companies secretly own fistfuls of Apple stock in their private portfolios. It’s the only explanation that makes any sense. Why else would, say, Microsoft have acted the way it has? Do you have a better explanation?

(Imagine what would have happened if Steve Jobs had allowed Apple to make an iPhone with a proper, physical keyboard. Jobs’ weird hostility to keyboards is the only thing that has saved his competitors from complete oblivion.)

The collapse of most of the competition is rapidly turning the mobiles market into a duopoly: Apple versus Google’s Android.

A duopoly is much better for investors than a free-for-all. And this situation may be even better for Apple than many realize. That’s because Android doesn’t really matter to Google . It’s a sideshow. So Google will never care anywhere near as much about updating and improving Android as Apple does about its own operating system.

After all, for Apple this is a matter of life and death.

It reminds me of the difference between being “involved” in a project and being “committed.” A businessman from Catalonia once described the difference to me. “Think of a plate of ham and eggs,” he said. “The chicken is involved. But the pig? The pig is committed!” Apple is committed.

But while the picture is looking bright, Apple is suddenly not getting much respect on Wall Street. All of a sudden, the world’s most worshipped stock isn’t getting any respect on Wall Street. It’s fallen more than 10% in the last few months, even while hot new tech stocks have been flying.

Apple has come down from $363 in February to $316 Monday. Furthermore, that masks the fact that the company is sitting on a ton of net cash. At the end of the last quarter, cash, securities and other liquid assets exceeded liabilities by $51 billion, or around $55 a share. This may top $60 by the end of this quarter.

So the cash-free stock price — the enterprise value of the business — may only be around $260.

That’s barely 10 times forecast earnings of $25 for the fiscal year ending in September. It’s just nine times next year’s forecast earnings. And it’s only around 2.3 times this year’s sales.

These are value-stock levels.

It’s true that Apple boasts very high profit margins, and competition ought to be bringing those margins way down. Economists will tell you high margins rarely last. But with this kind of “competition,” you never know.

The last time I urged people to buy Apple stock was in the crash of 2008-2009, when it hit $85. Later, I turned way too cautious, assuming — wrongly — that the competition would, er, compete. (It was still the sensible assumption.) Today, I’m nervous about the stock market overall, and this may be a bad time to take on risk. Nonetheless, it’s hard to argue Apple is an expensive stock these days. Especially when you look at who it’s competing with.

Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

Transocean report pins oil spill blame on BP

By Matt Daily

NEW YORK | Wed Jun 22, 2011 3:17pm BST

(Reuters) - Oil driller Transocean Ltd blamed BP Plc in a report released on Wednesday for last year's Gulf of Mexico spill in the latest skirmish between the two companies over paying the costs for the maritime oil disaster.

Transocean, the owner of the drilling rig that exploded and sank in the Gulf of Mexico last year, and BP are locked in a legal battle over which company was at fault in the disaster that killed 11 workers and gushed crude oil into the Gulf for three months.

Costs for capping the Macondo well, cleaning up the damage and paying claims for people hurt by the catastrophe are likely to top $41 billion, including an estimated $4 billion to $5 billion in fines.

BP has struck deals with a partial owner of the well and an oilfield service company that will give it about $1.2 billion to help cut its liability, but its dispute with Transocean centers over the key issues that led to the accident.

Transocean CEO Steven Newman has held discussions with BP and was keeping an "open mind" on reaching a financial settlement that could avert a courtroom battle, Chief Financial Officer Ricardo Rosa said last month.

One market analyst said the report would probably not affect those discussions, and said indemnity clauses contained in Transocean's contract with BP have good chance of shielding it from liability.

"If I was Newman I'd make a go at it and take my chances (in court)," said Joe Hill, analyst with Tudor, Pickering, Holt & Co in Houston.

Still, BP was also not likely to let Transocean settle the matter easily, and any deal would likely be in the billions of dollars, according to analysts.

In London, BP Chief Executive Bob Dudley, who took the helm from Tony Hayward after the spill, said ahead of the report's release BP was not the only party involved.

"We're certainly encouraging our partners, our other partners, to step up and meet some of the obligations from the accident," he told reporters at an industry event.

DANGER SIGNS MISSED

The Transocean report, which repeated many of the issues raised by U.S. government investigators, said BP failed to properly assess the risks around the troubled well and did not communicate the danger to Transocean.

BP also used a poor well design which led to the failure of cement around the well casing, allowing gas to escape and reach the rig, causing the explosion, the report said.

Transocean also said its blow-out preventer, a device designed as a last resort to close off a well, was properly maintained, but the extreme pressure from the well forced drill pipe to bend, preventing the shears from cutting the pipe.

Transocean workers did not see that gas was shooting up the well until too late, the report said.

BP has struck deals to cut its liability for the spill with partner Mitsui & Co, which will pay $1.1 billion toward the clean-up, and oilfield services company Weatherford International Ltd, which will pay $75 million.

It has said it is seeking deals with other partners in the well, including Anadarko Petroleum Corp, Transocean and Halliburton Co, to also contribute to clean-up costs.

Hundreds of spill-related lawsuits are expected to come to trial in February 2012.

U.S.-listed shares of Transocean rose 1.1 percent to $62.56 in early trading on the New York Stock Exchange, while BP shares were down 0.2 percent to 444.95 pence on the London Stock Exchange.

(Reporting by Matt Daily, additional reporting by Tom Bergin in London, editing by Gerald E. McCormick, John Wallace, Dave Zimmerman)

Japan has ideas, lacks leadership to bounce back

By Tomasz Janowski

TOKYO | Wed Jun 22, 2011 12:46pm BST


(Reuters) - Opening up to foreign goods and workers, deregulation, power sector overhaul, fiscal reforms and family-friendly policies is what Japan needs to emerge stronger from the March 11 earthquake and tsunami, executives, investors and economists say.

The nation's biggest crisis since World War Two has been touted as an opportunity to snap Japan out of two decades of economic stagnation and policy drift symbolized by its ceding the rank as the world's No. 2 economy to booming China.

But while the participants of the Reuters Rebuilding Japan Summit were not short of ideas, there is a sense of quiet exasperation at the politicians' failure to seize the moment.

More than three months after the disaster struck, the ruling Democratic party and the opposition are stuck in a Catch 22 logjam, with the opposition blocking passage of bills to force Prime Minister Naoto Kan out and Kan himself bent on staying long enough to get those bills through.

"In my view, the crisis has accentuated both the fundamental strength of Japan's companies, and the critical weakness of its government," said Kenneth Siegel, managing partner at Morrison Foerster Japan.

"On balance, I think the companies will overcome, but the government will be a drag on them and will undermine confidence in the economy in unfortunate ways."

Takeshi Niinami, president and CEO of convenience store chain Lawson (2651.T) operating outside the traditional big industry-bureaucracy nexus is one of the most vocal proponents of sweeping change.

"Japan should open itself. (The government) needs to explain to the public how important it is for Japan to open itself," he told Reuters reporters.

Niinami said that meant bringing in immigrants, capital and ideas and signing free trade agreements with Japan's trade partners in Southeast Asia and in the Pacific rim championed by Kan before the disaster but now on a back burner.

Deregulation and reforms of the farming and health sectors were other areas that had to be addressed.

The Japanese economy, in and out of deflation and recessions over the past decade, plunged into its second recession in three years after the disaster, shrinking 0.9 percent in the first three months of the year. It is expected to contract again this quarter and then start growing again and expand at a nearly 3 percent clip in the fiscal year starting in April 2012. But it is doubtful it can maintain that sort of pace for much longer.

A poll of more than 10,000 readers by the Reuters Japanese website showed that a third saw the economy returning to and surpassing pre-crisis activity levels within the next four years, while more than 40 percent thought it would take five years or more. More than a quarter believed it will struggle to ever match pre-disaster level.

With little in the way of domestic drivers of growth, Japan needs to adjust its policies so that it can "import" buoyant growth elsewhere in Asia, says Tomoya Masanao, head of portfolio management at PIMCO's Japan unit.

Policymakers should tackle regulatory issues and social security and revive free trade talks right after the government has secured funding for the rebuilding of the devastated areas and compensated those affected by the crisis at the tsunami-crippled Fukushima nuclear plant.

The crisis caused by the worst nuclear accident since Chernobyl is both a challenge and an opportunity.

Concerns about safety of nuclear energy, which has been developed as a reliable and affordable alternative to thermal power relying on imported fossil fuels may contribute to further hollowing out of Japanese manufacturing, prompting more companies to shift production abroad.

But it also offers Japan a chance to establish itself as a global leader in renewable energy and bring more competition to the sector dominated by regional monopolies such as Tokyo Electric Power, the operator of the Fukushima complex.

"There are many regulations that just exist for the sake of vested interests, especially in the power industry. Let's seize this opportunity and scale them back," said Taro Kono, lawmaker From Liberal Democratic Party and an advocate of a shift away from nuclear power.

However, there's widespread pessimism about political momentum for radical change and economists discussing Japan's prospects were united in predicting that a jolt from reconstruction spending later this year and next will be followed by years of sub-par performance.

"It is a hope that policymakers are going to be much better coordinated and they are going to demonstrate their a strong leadership," PIMCO's Masanao said.

"But reality might not be what we all wish to see. That suggests that Japan needs to see some form of crisis to trigger a right action or unite policymakers who have been just wasting their time every day."

(editing by Vidya Ranganathan)

Update on BP,Deutsche Tel & Banco Popolare

As this portfolio continues to strengthen,it has experienced the normal volatility of the market with BP going from the green at a 3% top 2 weeks ago and now touching a bottom at a 5.6% below the opening position.
This is explainable by the fact that the stock went ex-dividend right after we went long on 13th June.

Deutsche Tel has also touched lows in the last couple of weeks but has since recovered although it remains in the red.It has recently touched lows of 6% and is now testing a resistance at 2% down from the entry position.This stock also went ex-dividend in May and is now improving from the resultant sell-off.

Banco Popolare is performing magnificently and is the star attraction of the portfolio and currently stands at 33% in the green from the opening position.This set to improve due to the continuing Eurozone Debt crisis.
Wish you all good trades.

North Sudan army seen massing in border state

Mon Jun 20, 2011 5:56am GMT

By Alex Dziadosz

KHARTOUM (Reuters) - Satellite images showed the north Sudanese military massing in the Southern Kordofan border state, a monitor said, and rebels in Darfur accused Khartoum of attacking them with military vehicles and warplanes on Sunday.

Southern Kordofan, on the ill-defined border with the south, is among several flashpoints as Sudan's south prepares to secede on July 9, a move analysts say could embolden rebels in other parts of the country. The north's army is also battling armed groups in the western region of Darfur.

The Satellite Sentinel Project (SSP), which monitors Sudan, said new imagery from Friday showed the Sudan Armed Forces (SAF) controlled Kadugli, capital of Southern Kordofan, and that thousands of civilians had been displaced."

The images "show a massing of SAF artillery, light vehicles and heavy transports of the kinds used to carry tanks, troops, and munitions," it said.

Fighting between the northern military and southern-aligned groups has spread across the north-run oil state since June 5. Tens of thousands have fled, according to the United Nations.

Northern military spokesman Al-Sawarmi Khaled said the army was not planning any escalation in Southern Kordofan but would continue to fight to end an armed rebellion, saying: "We are now fighting harder to control all the area in Southern Kordofan."

Set up last year by Hollywood actor George Clooney and other activists, the SSP says it seeks to head off renewed fighting and atrocities in Sudan by publishing commercial satellite images collated and analysed with the help of a U.N. agency.

Southern Kordofan, the main oil-producing state that will be left in the north after the south secedes, is home to thousands of fighters who fought against Khartoum during the last civil war, many of them from the Nuba mountains region.

Officials with the south's dominant Sudan People's Liberation Movement (SPLA) say clashes started when the north tried to disarm fighters there. Northern officials blame southern-aligned groups for provoking the fighting after an official from the north's ruling National Congress Party was named winner of a state gubernatorial election last month.

The south voted to secede in a January referendum promised in a 2005 peace deal that ended decades of civil war.

DARFUR

In Darfur, the Sudanese army confirmed it had clashed with rebels in the mountainous Jabel Marra region but said it had not used aircraft and the fighting had not displaced civilians.

Violence in Darfur, where mostly non-Arab rebels are fighting government troops backed by largely Arab militias, has fallen from its peak in 2003 and 2004 but a surge in attacks since December has forced tens of thousands to flee.

Ibrahim al-Helwu, a spokesman for the Sudan Liberation Army (SLA) led by Paris-based Abdel Wahed Mohamed al-Nur, said the violence began when government troops advanced from the Darfur settlements of Kas and Nyala. He said 27 people, including 19 civilians, were killed and about 40 wounded after an assault with land troops and Antonov and MiG aircraft.

"From the morning, the government started to attack," Helwu said, speaking by phone from Paris. "More than 10,000 civilians are displaced from this area".

The government military spokesman said troops had fought SLA rebels in the Jabel Marra area on Sunday, causing an unconfirmed number of casualties on both sides. He denied aircraft were used and said civilians had not been harmed.

The International Criminal Court has issued an arrest warrant for President Omar Hassan al-Bashir on charges of masterminding genocide and war crimes in Darfur. Khartoum refuses to recognise the court. The United Nations says as many as 300,000 people have died during the conflict in Darfur. Khartoum puts the death toll at 10,000.

At least seven different rebel militias are also fighting the southern Juba government, according to the United Nations.

In Khartoum, 16 political activists said they were detained for about four hours on Sunday after attempting to stage a demonstration against violence in Southern Kordofan.

The United Nations has called on Khartoum to open up airspace above Southern Kordofan and said a campaign of aerial bombardment there has caused "huge suffering" to civilians.

Japan PM may set conditions for resignation on Monday: report

TOKYO | Mon Jun 20, 2011 3:20am EDT

(Reuters) - Japanese Prime Minister Naoto Kan may announce on Monday that he will resign on condition of key bills passing a divided parliament, Kyodo news agency reported, as the government struggles with a prolonged nuclear crisis.

Kan, already Japan's fifth premier in as many years, survived a no-confidence vote earlier this month after promising critics in his own party he would quit but declined to say when. Opposition parties have declined to cooperate on key bills unless the prime minister keeps his pledge.

Kyodo said that Kan, who has come under fire for his handling of his response to the world's worst nuclear crisis in 25 years, could announce that he would quit on condition of parliament passing a second extra budget and a bill to issue bonds for this year's budget, Kyodo said.

Hopes have risen that Kan's departure would clear the way for a coalition between the DPJ and its rival Liberal Democratic Party that could break the parliamentary logjam as Japan tries to rebuild from the March 11 quake and tsunami that triggered the nuclear accident at Tokyo Electric Power Co's (Tepco) Fukushima Daiichi plant.

In theory, a coalition could also make it easier to tackle longer-term policies including social security and tax reforms, including a sales tax rise, needed to rein in public debt already twice the size of Japan's $5 trillion economy.

But obstacles to any such coalition remain high, and momentum for the tie-up appears to have diminished of late.

Japanese media have said that Finance Minister Yoshihiko Noda, who backs Kan's calls for fiscal discipline, was a frontrunner to replace Kan in a DPJ leadership race that would be held after the premier steps down.

Other potential contenders include former foreign minister Seiji Maehara, a conservative expert on security issues.

(Reporting by Chisa Fujioka and Linda Sieg; Editing by Edwina Gibbs)

Euro to go up in smoke by 2015

June 20, 2011, 4:42 AM ET

The euro zone is on track to breakup within the next five years, according to new forecasts released today by Britain’s Centre for Economics and Business Research.

Without such a breakup, the economics consultancy has found, the nations of Southern Europe will see growth below 1.5% every year until 2015.

The forecasted average growth for Italy during this time is 1.2%; 1.0% for Spain; 0.6% for Portugal; and Greece will go backward at -0.5%.

Ireland is a standout. The nation’s weary economy is forecast to grow at an annual rate of 3.2% between now and 2015, although little of that growth will be passed on to the Irish consumer, Cebr said.

“Germany has no choice but to compromise in this round of bailout negotiations. The rewards of a stable euro outweigh the cost of further loans from Germany, even if these will not be repaid fully. So the currency is unlikely to collapse in the short term,” said Cebr economists.

But “sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a breakup of the currency union as Greece pulls out, probably followed by other countries.”

The Cebr economists said that the eventual breakup of the euro is likely to damage the solvency of various European banks, especially in France.

Late Sunday, the Eurogroup said that a new financing strategy for Greece would be unveiled by July.

Kim Hjelmgaard

Women are better investors, and here’s why

Commentary: Call it the Weiner principle: men self-destruct
By David Weidner, MarketWatch

NEW YORK
Why is it that men so often self-destruct? In the political world, Weiner joins Eliot Spitzer, Bill Clinton, John Ensign, Arnold Schwarzenegger and John Edwards as hypocritic slimeballs who let their pants set their personal policy.

But it’s not just politics. Todd Thomson, young, married, chief financial officer at Citigroup Inc. was embroiled in a scandal a few years ago with money honey Maria Bartiromo of CNBC. Her career survived. His didn’t.
There’s Dominique Strauss-Kahn of the International Monetary Fund, who’s accused of sexual assault. There’s James McDermott, who was CEO of Keefe Bruyette & Woods until a dalliance with a porn star named Marylyn Star embarrassed him out of the company.

We men just make bad decisions. We can't help it. We’re men.

Women, on the other hand, do almost everything better. We’ve known this intuitively for a long time. If you didn’t, just ask your wife or your mother. But now there’s a raft of evidence that suggests women are better at everything — including investing.

A new study by Barclays Capital and Ledbury Research found that women were more likely to make money in the market, mostly because they didn’t take as many risks. They bought and held. Women trade this way because they aren’t as confident — or perhaps as overconfident — as men, the study found.

“Women were more likely than men to have a greater desire for self-control,” the study concluded.

In other words, they trade less and earn more.

“Women tend to have lower composure and a greater desire for financial self-control, which is associated with a desire to use self-control strategies. Women are also more likely to believe that these strategies are effective.”

And you know what? They were.

The study supported previous findings that women tend to make more. A 2005 study by Merrill Lynch found that 35% of women held an investment too long, compared with 47% of men. Moreover, an academic study in 2009 found women made 1% more annually.

Chun Xia, a finance professor in Hong Kong and one of the researchers, wrote that women reported a greater desire for self-control in their approach to financial management. They are likely to get stressed out more easily, and their awareness partially accounts for their greater desire for financial discipline.

However, the report said, it is men who actually have a greater need for discipline when it comes to investment management, as they tend to be overconfident in investing.

This probably doesn’t come as a shock to anyone. A new body of evidence is emerging that shows women are better at just about everything — or, as Dan Abrams has titled his new book, “Man Down: Proof Beyond a Reasonable Doubt That Women Are Better Cops, Drivers, Gamblers, Spies, World Leaders, Beer Tasters, Hedge Fund Managers, and Just About Everything Else.”

As Abrams notes, women are better soldiers because they complain about pain less. They’re less likely to be hit by lightning because they’re not stupid enough to stand outside in a storm. They remember words and faces better. They’re better spies because they’re better at getting people to talk candidly.

Look at the evidence: Hillary Clinton has proved a more-than-capable secretary of state. Elizabeth Warren has been a leading champion against the banks. Sheila Bair, a chairman of the Federal Deposit Insurance Corp., has played hardball with the boys’ club.

And what about Sarah Palin? There were 24,000 emails released this weekend and not one crotch shot.

This is deflating news for us men, but there is hope. We still lead the field in self-destructing because of pride, overconfidence, hubris and ego.

So, go ahead, ladies. Make the money. You’re better at it. We men will just make inappropriate comments, send you lewd photos and make asses of ourselves.

That’s why we created Facebook and Twitter.

It’s what we’re good at.

Could Apple still surprise at its conference?

By Rex Crum, MarketWatch

June 3, 2011, 6:00 a.m. EDTSAN FRANCISCO (MarketWatch) — The normally secretive Apple Inc. did a rare thing and actually revealed ahead of time its plans for its worldwide developers conference keynote next week, which may leave some to wonder what else the company might have up its sleeve.

Apple will kick off its WWDC event with a keynote on Monday morning. In a statement earlier this week, the company said the keynote will feature CEO Steve Jobs — who has been out on medical leave for most of the year — as well as other Apple executives, with the focus to be on the next versions of its iOS and Mac OSX operating systems and a new service called iCloud.

Most analysts do not expect a new iPhone to be announced, which the company has done at past WWDC keynotes. But Apple is well known for springing last-minute surprises at its events.

Susquehanna analyst Jeff Fidacaro told clients on Thursday that he expects the main focus of the event “to be on Steve Jobs returning to give the keynote and highlighting the software updates for the Mac OS X Lion and iOS 5 and the launch of iCloud services” which could include streaming music and videos.

“Steve Jobs may also provide some hints as to the expected iPhone 4GS or iPhone 5 product cycles and new features and may disclose the company’s strategy for a low-priced iPhone that the Apple supply chain is working on and may be spec’d [designed] for emerging markets,” he wrote.

Jobs’ appearance at the event is noteworthy, since he has been on medical leave for several months. He last appeared in public for the company in early March to debut the iPad 2. His keynote on Monday may garner as much attention for his health and looks as it will for what he has to say about Apple’s upcoming slate of software offerings.

Jobs is on his second medical leave in a little more than two years, and after battling pancreatic cancer and going through a liver transplant.

The developers conference typically focuses on new software or updates to Apple’s line of Mac computers and this time around is no exception. Apple said it will show off the upcoming upgrade to its Mac OS X operating system. Continuing with naming its operating systems after the world’s big cats, the next version of Mac OS is called Lion.

Apple will also try to appeal to users of its iPhones, iPads and even iPod touches with the debut of iOS 5, the next upgrade to the company’s operating system for those mobile devices.

The item likely to get the most attention will be iCloud, what Apple calls its ”cloud services offering,” but what is mostly expected to be about is a cloud-based version of iTunes. Reportedly, iCloud will allow iTunes users easy access to their musical libraries and replace Apple’s Mobile Me service.

Most analysts expect the iPhone itself to be refreshed later in the year. Brian Marshall, who covers Apple for Gleacher & Co., took down his iPhone sales estimates for this year to 75 million units from 80 million, and lowered his forecast for 2012 to 95 million iPhones from 100 million. Marshall said the change was a result of a belief that the iPhone won’t be refreshed this summer, as has typically been done.

Marshall said he does believe Apple will put out a so-called “4s” version of the iPhone in the second half of this year, and an iPhone 5 in late 2012. Marshall has a buy rating and $450-a-share price target on Apple’s stock.

Gene Munster, of Piper Jaffray, also expects Apple to release its next generation of the iPhone, likely in September. Munster said in a recent research note that he believes Apple will sell 21 million iPhones in the company’s September business quarter.


Rex Crum is a reporter for MarketWatch in San Francisco.

Employment growth slows sharply in May

By Lucia Mutikani

WASHINGTON | Fri Jun 3, 2011 10:48am EDT

WASHINGTON (Reuters) - Employers hired far fewer workers than expected in May and the jobless rate rose to 9.1 percent, raising concerns the economy might be stuck in a painful slow-growth mode.

Nonfarm payrolls increased 54,000 last month, the weakest reading since September, the Labor Department said on Friday. Private employment rose just 83,000, the least since last June, while government payrolls dropped 29,000.

Economists had expected payrolls to rise 150,000 and private hiring to increase 175,000. The government revised employment figures for March and April to show 39,000 fewer jobs created than previously estimated.

The job creation slowdown confirmed the economic weakness already flagged by other data from consumer spending to manufacturing, and it stoked fears the economy could be facing a more troubling stretch of weakness than had been thought.

"There are plenty of reasons to expect the third quarter will be better. But the question is now becoming how much better?," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

Economists had pinned the economy's sluggishness largely on high energy prices, supply chain disruptions stemming from Japan's earthquake and tornadoes and flooding in U.S. Midwest and South. The department said it found "no clear impact" from weather on the jobs figures.

The employment report provides one of the best early reads on the health of the U.S. economy and it sets the tone for global financial markets.

U.S. stocks opened lower, while Treasury debt prices added to earlier gains and interest rate futures rose, signaling that traders believe mounting signs of economic weakness will lead the Federal Reserve to maintain an ultra-easy monetary policy.

The dollar fell against the yen and Swiss franc.

The sharp slowdown in job creation is troubling news for President Barack Obama, whose chances of re-election next year could hinge on the health of the economy.

RECESSION BOUND?

Economists said the report did not suggest the economy was heading into recession, but they said job growth could prove frustratingly slow.

"It is likely that this will be a soft patch in the coming months but overall it will probably be a soft patch rather than a double-dip recession or something worse," said Sean Incremona an economist at 4CAST in New York.

The data lent more fuel to talk about the need for the Fed to extend its asset purchasing program when it expires this month, but officials at the central bank have set a high bar for any further easing of monetary policy.

With the Obama administration and lawmakers discussing how best to trim the U.S. budget gap, the economy could be left to its own devices.

"The government changed our flat tire in 2008 and now we're driving around without a spare," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

High gasoline costs hurt consumer spending in the first quarter, restricting economic growth to a 1.8 percent annual pace after expanding at a 3.1 percent rate in the October-December period.

The economy has regained only a fraction of the more than 8 million jobs lost during the recession. Economists say payrolls growth above 300,000 a month is needed to make significant progress in shrinking the pool of 13.9 million unemployed Americans.

The rise in the unemployment rate from 9.0 percent in April reflected discouraged workers who had been inspired by the pick-up in hiring in April re-entering the labor market.

"There is so much slack in the labor market it's going to take a long time to get the unemployment rate down to between 6 and 7 percent. That's going to take years," said Stephen Bronars, a senior economist at Welch Consulting in Washington.

BROAD-BASED WEAKNESS

The employment report showed weakness across the board, with the private services sector adding 80,000 jobs last month after increasing payrolls by 213,000 in April.

Within the private services sector, leisure and hospitality fell, showing no boost from McDonald's recruitment of about 50,000 new staff in April, which was after the survey period for that month's payrolls. Spring is traditionally a strong hiring period for McDonald's.

Retail employment, which recorded its largest increase in 10 years in April, fell 8,500 last month. Manufacturing payrolls growth contracted 5,000 last month, the first decline since October, while construction employment rose 2,000.

The report showed the average work week steady at 34.4 hours and few signs of wage inflation, with average hourly earnings rising 6 cents.

(Additional reporting by Chris Reese in New York; Editing by Andrea Ricci)

Top 5 Best Performing China Mutual Funds

By: Zacks Investment Research
June 01, 2011

Despite the fact that China has embarked on a program of sustained monetary tightening to rein in inflation, the majority of economists believe that this will have little impact on the country’s growth momentum. According to the recent BCG Global Wealth Survey, China contributed the most to additions in millionaire households in 2010. This is clearly an indication of the country’s economic growth, rising savings and a strong currency. The nation’s economic fundamentals remain well in place and it continues to be an exciting investment destination.

Below we will share with you the 5 best performing China mutual funds year to date.

Mutual Fund                                                                   Zacks Rank                 Total Return YTD
ProFunds Ultra China                                                       #1 Strong Buy                     20.4%
Alger China U.S. Growth                                                  #1 Strong Buy                       9.5%
Direxion Monthly China Bull 2X                                        #1 Strong Buy                       8.8%
Columbia Greater China A                                                #4 Sell                                  7.2%
J Hancock Greater China Opportunities                             #3 Hold                                4.7%

ProFunds UltraChina (UGPIX) seeks to match the daily performance of the Bank of New York Mellon China Select ADR Index It invests the majority of its assets in securities which are similar to those included in this Index. The fund may use leveraged and sampling techniques to fulfill its stated investment objective. The China mutual fund returned 32.84% in the last one year period.

As of February 2011, this China mutual fund held 48 issues, with 9.06% of its total assets invested in Hsb .08% Rp, 3/2/2011.

Alger China US Growth A (CHUSX) invests the majority of its assets in companies with economic linkages to China, Hong Kong, Taiwan as well as the U.S. The fund seeks to purchase equity securities of such firms without regard to their size. This China mutual fund has a five year annualized return of 9.05%.

The China mutual fund has a minimum initial investment of $1,000 and an expense ratio of 2.12% compared to a category average of 1.49%.

Direxion Monthly China Bull 2X (DXHLX) seeks to return twice the monthly price performance of the FTSE/Xinhua China 25 Index on a monthly basis. A large proportion of the fund’s assets are utilized to purchase securities which are included in the index. The China mutual fund returned 21.16% in the last one year period.

The fund manager is Tony Ng and he has managed this China mutual fund since 2007.

Columbia Greater China A (NGCAX) invests heavily in equity securities of firms whose principal operations are conducted in China, Hong Kong, Taiwan and certain other nations. The fund may utilize synthetic instruments to manage risk or enhance portfolio returns. The China mutual fund has a ten year annualized return of 14.22%.

The China mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.62% compared to a category average of 1.90%.

J Hancock Greater China Opportunities A (JCOAX) seeks capital growth over the long term. At least 80% of its assets are invested in companies located in China, Hong Kong or Taiwan. Not more than 205 of its assets may be invested in companies located outside this region. The China mutual fund returned 19.64% in the last one year period.

The fund manager is Kai Chay and he has managed this China mutual fund since 2011.

Top 5 Energy Mutual Funds - Zacks.com

Top 5 Energy Mutual Funds - Zacks.com

Shares in Kenya's Uchumi fall on relisting

NAIROBI, May 31(Reuters) -
Shares in Kenyan retailer Uchumi fell to a low of 10.80 shillings from 15.90 shillings
at the open after relisting on the Nairobi Stock Exchange on
Tuesday.

At 0648 GMT, the retailer's share price traded at 11.20
shillings, down 22.8 percent from its closing price of 14.50
shillings on May 31, 2006 when the company was suspended from
the bourse because of its high debt levels.
(Editing by Richard Lough)

Jobless claims fall as labor costs tepid

WASHINGTON | Thu Jun 2, 2011 10:10am EDT

(Reuters) - New claims for unemployment benefits fell last week, but not enough to assuage fears the labor market recovery has taken a step back.

Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 422,000, the Labor Department said on Thursday, less than economists' expectations for a fall to 415,000.

The claims report falls outside the survey period for the government's closely watched data on nonfarm payrolls for May.

The government is expected to report on Friday that employers hired 150,000 last month, according to a Reuters survey, after increasing payrolls by 244,000 in April.

"Every indication we have had so far points to a slightly softer labor market in the U.S.," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

U.S. stock index futures held gains after the data, while U.S. bond prices extended losses. The dollar also extended losses against the euro.

There is a risk that May payrolls could come in below consensus after ADP, a payroll service company, reported private employers added only 38,000 last month, the smallest number since September.

However ADP has a poor track record at predicting nonfarm payrolls.

In a second report, the Labor Department said nonfarm productivity grew at a slightly faster 1.8 percent annual rate in the first quarter, rather than the 1.6 percent previously reported. Productivity was still slower than the 2.9 percent pace set in the fourth quarter.

Wage growth remained muted, with unit labor costs rising at a 0.7 percent rate rather than the previously estimated 1 percent rate. Unit labor costs dropped at a 2.8 percent rate in the fourth quarter.

Data ranging from consumer spending to manufacturing indicates the economy has taken a decisively weak tone -- at a time when the Federal Reserve is scheduled to wrap up its $600 billion government bond-buying program at the end of the month.

The bar is very high for an extension of the program and there is little or no political will for fiscal stimulus amid a ballooning budget deficit and high headline inflation.

Officials at the U.S. central bank generally view the soft patch that started early in the year, because of high commodity prices and supply chain disruptions, as temporary.

But there are some hopeful signs. A handful of U.S. retailers beat analysts' sales expectations for May, winning with strong selections of goods or drawing in shoppers looking for deals.

Warehouse club Costco Wholesale Corp and department store operator Macy's Inc posted better-than-expected sales.

While the labor market improvement has slowed, a host of temporary factors have been at play. Initial claims have been volatile in recent weeks as supply chain disruptions from the March earthquake in Japan caused temporary motor vehicle plant closures.

Claims have also been distorted by bad weather in some parts of the country and problems smoothing the data for seasonal variations.

A Labor Department official said there was nothing unusual in the state-level data.

He also said Missouri had indicated that floods were affecting claims in the state, but provided insufficient information to quantify the impact.

The four-week moving average of new jobless claims, considered a better gauge of labor market trends, fell 14,000 to 425,500.

Initial claims have now been perched above the 400,000 mark for eight weeks in a row. Analysts normally associate that level with steady job growth.

The number of people still receiving benefits under regular state programs after an initial week of aid slipped 1,000 to 3.71 million in the week ended May 21.

Economists had expected so-called continuing claims to dip to 3.67 million from a previously reported 3.69 million.

The number of people on emergency unemployment benefits rose 3,363 to 3.42 million in the week ended May 14, the latest week for which data is available. A total of 7.68 million people were claiming unemployment benefits during that period under all programs.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

Discover your Inner Economist

This book by Tyler Cowen was published in 1997.
I hope it makes a fantastic read,it's going for $5 only.
Post your reviews and comments if you please.