Friday, 25 November 2011

AT&T braces for T-Mobile deal collapse

The T-Mobile company logo in Bonn is pictured in this May 2008 picture

By Georgina Prodhan and Harro Ten Wolde

LONDON/FRANKFURT | Fri Nov 25, 2011 9:36am EST

(Reuters) - AT&T said it would take a $4 billion charge in case its takeover of T-Mobile USA fails, a tacit recognition of the dwindling chances that the deal will get through U.S. regulators who say it would destroy jobs and curb competition.

The U.S. telecommunications group and T-Mobile owner Deutsche Telekom, said they would continue to pursue anti-trust approval for the $39 billion takeover from the U.S. Department of Justice, but withdrew applications to the industry regulator, for now at least.

"AT&T Inc and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T," they said in a statement on Thursday, the Thanksgiving Day holiday in the United States.

The $4 billion sum includes $3 billion in cash and a book value of $1 billion for spectrum access.

Both the DOJ and telecoms watchdog the U.S. Federal Communications Commission oppose the deal, which would reduce the number of national mobile carriers to three.

A senior FCC official said on Thursday afternoon, "The record clearly shows that - in no uncertain terms - this merger would result in a massive loss of U.S. jobs and investment."

Withdrawal of the application is subject to approval by the FCC, which has the right to determine whether and how the companies could resubmit an amended application in the future.

In any event, FCC approval would be meaningless if the DOJ blocked the transaction, and AT&T and Deutsche Telekom said they would return to the FCC process if they secured approval from the DOJ.

The collapse of the merger would be a blow to AT&T Chief Executive Randall Stephenson who offered a massive break-up fee to Deutsche Telekom as a sign of confidence the deal, announced in March, would be approved.

Analysts said the merger, badly needed by sub-scale T-Mobile USA - the smallest of the four U.S. mobile operators - looked less likely than ever to succeed.

Espirito Santo analysts said AT&T's decision to take the $4 billion charge this quarter showed that the company's own assessment of the chances of success had fallen.

"It tells us something about timing too - suggesting that AT&T may decide to walk away at the first opportunity (March 20, 2012) rather than waiting for the ultimate September 20, 2012 deadline," they wrote in a note to clients.

Deutsche Telekom shares finished the day down 0.6 percent at 8.69 euros.

The companies' advisers stand to lose a total of $150 million in fees. T-Mobile's advisers Deutsche Bank, Credit Suisse, Morgan Stanley and Citigroup, and AT&T's banks Greenhill & Co, Evercore Partners and JPMorgan Chase were on course to earn between $18 million and $36 million apiece, according to earlier estimates from Thomson Reuters/Freeman Consulting.


Thursday's decision follows a blow earlier this week when the FCC said it would try to send the deal to an administrative law judge for review.

The DOJ has also said it would lead to higher wireless prices for consumers and businesses.

The DOJ has gone to court to block the deal and a trial in that case is due to begin on February 13. Any administrative hearing at the FCC, which is charged with evaluating the public-interest merits of the proposal, would begin after the anti-trust trial.

AllianceBernstein analysts said in a note that a pretrial settlement with the DOJ was not a "likely" prospect.

AT&T has 260,000 employees, mostly in the United States. Deutsche Telekom employs 36,000 at its U.S. unit.

AT&T argued that the T-Mobile merger could actually create tens of thousands of jobs during integration and network upgrades, and has pledged to bring back 5,000 jobs that it moved overseas -- but many observers are skeptical.

The break-up package includes $3 billion in cash as well as a commitment to give T-Mobile USA spectrum and let its customers roam on the AT&T network. Some sources have valued the total break-up package at $6 billion but AT&T has never confirmed this number.


Acquiring T-Mobile would vault No. 2-ranked AT&T into the leading position in the U.S. wireless market, overtaking Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.

It would also solve a years-long problem for Deutsche Telekom, whose U.S. unit has long ceased being a source of growth and is in urgent need of investment.

At least one analyst suggested that AT&T might instead end up trying to restructure its agreement with T-Mobile USA in the hope of appeasing regulators.

It could limit its purchase to T-Mobile USA's spectrum licenses and its network so that the Deutsche Telekom unit could keep its customer base and rent space on the AT&T network, Citi analyst Michael Rollins said in a research note after the FCC announced its plan on Tuesday.

Credit rating agency Moody's said it believed Deutsche Telekom would rather exit the U.S. market than go it alone.

However, the ratings agency believes that Deutsche Telekom will fight aggressively alongside AT&T to salvage the sale process to improve its weak position in the United States.

A failure would throw Deutsche Telekom Chief Executive Rene Obermann's strategy into disarray and may force him to throw money at a business he thought he was rid of.

Deutsche Telekom may be forced to sell assets closer to home and take a knife to its cost base, bankers told Reuters.

The company faces a long delay at best and may be driven back into the arms of No. 3 U.S. carrier Sprint Nextel -- a less suitable partner for whom T-Mobile USA would not be worth nearly as much now as it was to AT&T in March.

While according to sources, Sprint had also been courting T-Mobile USA before AT&T stole its thunder, there are huge questions about whether it could afford a T-Mobile USA purchase.

Sprint, which has been losing customers, recently tapped debt markets for $4 billion to help refinance maturing debts as it looks to pay for a $7 billion network upgrade of its own in the next two years and a $15.5 billion iPhone agreement with Apple Inc that spans four years.

(Additional reporting by Chris Steitz and Maria Sheahan in Frankfurt and Sinead Carew, Phil Wahba in New York and Roberta Rampton in Washington; Editing by Chris Wickham, Maureen Bavdek and Bernard Orr)

"Awful" Italy debt sale heightens euro zone stress

A Union workers' flag CGIL is seen in front of a Milan bank during a protest. November 25th, 2011
By Valentina Za

MILAN | Fri Nov 25, 2011 10:08am EST

(Reuters) - Italy paid a record 6.5 percent to borrow money over six months on Friday and its longer-term funding costs soared far above levels seen as sustainable for public finances, raising the pressure on Rome's new emergency government.

The auction yield on the six-month paper almost doubled compared to a month earlier, capping a week in which a German bond auction came close to failing and the leaders of Germany, France and Italy failed to make progress on crisis resolution measures.

Though Italy managed to raise the full planned amount of 10 billion euros, weakening demand and the highest borrowing costs since it joined the euro frightened investors, pushing Italian stocks lower and bond yields to record highs on the secondary market.

Yields on two-year BTP bonds soared to more than 8 percent in response, a euro lifetime high, despite reported purchases by the European Central Bank.

In a sign of intense market stress, it now costs more to borrow for two years than 10 on the secondary market and borrowing costs for whatever term are above the 7 percent threshold, over which Italy is likely to need outside help if they do not subside.

"The pricing is awful," said Padhraic Garvey, rate strategist with Dutch bank ING in Amsterdam. "The object of the exercise this morning was to get the job done and they've done that, but that's about the only positive thing to say."

Investors' attention will now turn to a bond sale of up to 8 billion euros that Italy is planning for next Tuesday.

"For the BTP auctions next week, we'll have more of the same they'll probably get it done at a concession," Garvey said.

Italy's new technocrat government, which took power last week, is at work on structural reforms to revive the stagnant economy but markets are looking for quick and effective responses from European policymakers, such as a greater involvement of the European Central Bank.

Traders said the ECB was buying Italian and Spanish bonds in an attempt to shore the market up. But given its reluctance to prop up high-debt euro zone governments, its bond-buying program has been conducted intermittently, and never powerfully enough to provide more than short-term stability.

New Bank of Italy Governor Ignazio Visco said short-term measures to tame Italy's budget deficit would not be enough to solve the country's economic problems and only structural reforms will generate growth.

At an annual average rate of just 0.3 percent over the past decade, the Italian economy has grown faster than only a handful of other countries across the world. Real purchasing power has fallen 4 percent in 10 years.


Since being thrust to the fore of the euro zone crisis in July, Italy has always managed to attract sufficient demand at its auctions.

But record high yields threaten Rome's planned gross issuance of 440 billion euros for 2012 as interest payments on the country's 1.9 trillion euro debt pile rise.

Analysts say that, at current yield levels, the euro zone third-largest economy risks losing market access as redemptions totaling a massive 150 billion euros for the February-April period approach.

The euro, already trading around a seven-week low, inched down after Friday's auction. European stock markets remained in negative territory for the day with the Milan stock-market the worst performer.

The six-month yield nearly doubled from an auction level of 3.5 percent a month ago.

By comparison, Spain paid 5.2 percent to sell six-month paper at a much smaller short-term auction earlier this week, after elections handed power to an austerity-committed conservative government.

Italy also sold 2 billion euros of zero-coupon CTZ bonds at a euro era record high yield of 7.8 percent, up from 4.6 percent at the previous sale.

(Reporting by London and Milan government bond desks; editing by Patrick Graham/Mike Peacock)

Wednesday, 23 November 2011

"Disastrous" bond sale shakes confidence in Germany

Angela Merkel, the German Chancellor speaks at the Bundestag, Germany's lower house of Parliament, November 23rd 2011

By Stephen Brown and Noah Barkin

BERLIN | Wed Nov 23, 2011 9:36am EST

(Reuters) - A "disastrous" German bond sale on Wednesday sparked fears that Europe's debt crisis was even beginning to threaten Berlin, with the leaders of the euro zone's two strongest economies still firmly at odds over a longer-term structural solution.

Financial markets were also unnerved by newspaper reports that Belgium may be pressing France for an expansion of a 90 billion euro ($120 billion) bailout of failed bank Dexia.

On top of this, a special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances like a new downturn in growth or support for banks without endangering its cherished AAA credit status.

After one of the least successful debt sales by Europe's powerhouse economy since the launch of the single currency, the euro fell and European shares sank to 7-week lows.

The Bundesbank was forced to retain almost half of a sale of 6 billion euros due to a shortage of bids by investors. The result pushed the cost of borrowing over 10 years for the bloc's paymaster above those for the United States for the first time since October.

"It is a complete and utter disaster," said Marc Ostwald, strategist at Monument Securities in London.

One senior ratings agency official said the rise in its own borrowing costs could even give Germany a pause to re-examine its refusal to embrace a broader solution to resolve the debt crisis.

"It's quite telling that there has been upward pressure on yields in Germany - it might begin to change perceptions in Germany," David Beers of Standard & Poor's told an economic conference in Dublin.

The new bond promised to pay out a 2.0 percent interest rate -- the lowest ever on an issue of German 10-year Bunds. The average yield at the auction was 1.98 percent, down from 2.09 percent at the last sale of the previous benchmark in October.

Signs that European banks are increasingly shut out of credit markets and reliant on the European Central Bank for funding have added to pressure for the bloc's leaders to find a broad and lasting solution to the crisis.

But Germany and France clashed again over whether the ECB should take bolder steps to ease the pressure on debt markets in Italy, Spain and others which is now at the heart of the crisis.


In a forceful speech to the Bundestag lower house of parliament, Chancellor Angela Merkel issued one of her starkest warnings yet against fiddling with the central bank's strict inflation-fighting mandate. She also hit back at proposals from the European Commission on joint euro zone bond issuance, calling them "extraordinarily inappropriate."

"The European currency union is based, and this was a precondition for the creation of the union, on a central bank that has sole responsibility for monetary policy. This is its mandate. It is pursuing this. And we all need to be very careful about criticizing the European Central Bank," Merkel said.

"I am firmly convinced that the mandate of the European Central Bank cannot, absolutely cannot, be changed."

Shortly before she began speaking, French Finance Minister Francois Baroin offered a polar opposite view on the ECB's role, telling a conference in Paris that it was the central bank's responsibility to sustain activity in the currency bloc.

"The best response to avoid contagion in countries like Spain and Italy is, from the French viewpoint, an intervention (or) the possibility of intervention or announcement of intervention by a lender of last resort, which would be the European Central Bank," Baroin said.


The very public jousting underscores just how divided European leaders are on how to resolve the turmoil which has accelerated to engulf big countries like Italy and Spain, and pushed out leaders in Rome and Athens.

Baroin pointed to market intervention by the U.S. Federal Reserve, Swiss National Bank and Bank of England as a model for the ECB. But Merkel said it was impossible to compare the role of the ECB, which sets monetary policy for 17 countries, with those of national central banks.

With time running out for politicians to forge a crisis plan that is seen as credible by the markets, the European Commission presented a study on Wednesday of joint euro zone bonds as a way to stabilize debt markets.

Some leading European politicians, including Luxembourg Prime Minister Jean-Claude Juncker, support the bonds. But Berlin has rejected them outright as a near-term solution to the crisis, saying they would raise Germany's borrowing costs and reduce incentives for other euro zone countries to get their fiscal houses in order.

In her speech, Merkel pointed to repeated violations of the EU's Stability and Growth Pact in the currency area's first decade, saying they had damaged market faith in the bloc's ability and willingness to crack down on fiscal rule-breakers.

"And this is why I find it extraordinarily inappropriate that the European Commission is suggesting various options for euro bonds today -- as if they were saying we can overcome the shortcomings of the currency union's structure by collectivizing debt. This is precisely what will not work," Merkel said.


The German leader also sent a clear warning to Antonis Samaras, the leader of conservative New Democracy in Greece, who has resisted pressure to join other political parties and make a written commitment to painful austerity measures.

Merkel said Greece would not receive an 8 billion euro aid tranche it needs to avert a default next month unless Samaras signed the pledge.

Merkel raised pressure on the bloc to finalize plans for a "leveraging" of its rescue fund and a recapitalization of vulnerable banks, saying guidelines were needed by the time European finance ministers meet on November 29-30.

"The fact that we have been talking about (bank recapitalizations) for weeks but still have no clarity is not very reassuring, and yesterday we saw with the example of one German bank how fragile the banks themselves are," Merkel said.

Shares in Germany's second-biggest lender, Commerzbank, tumbled on Tuesday after people close to the bank told Reuters it needs considerably more capital than previously expected to meet the core capital targets demanded by the EU by mid-2012.

(Reporting by Stephen Brown, Noah Barkin, Natalia Drozdiak, Veronica Ek, Eva Kuehnen; editing by Patrick Graham and Peter Millership)

Tuesday, 22 November 2011

Forex: USD/CHF rebounds after US data

Tue, Nov 22 2011, 14:38 GMT | (Córdoba) – The USD/CHF fell to 0.9107 during the European session, hitting the lowest price since last Friday but rebounded after the release of growth data in the US, that pushed the Dollar to the upside in the market on the back of deterioration in market sentiment. The pair rose to 0.9159, trimming losses.

At the moment, USD/CHF is trading around 0.9140, to the upside immediate resistance levels could be located at 0.9160, 0.9180/85 (daily high) and 0.9210 (Nov 21 high). Support might lie at 0.9125, 0.9105 (daily low) and 0.9080/85 (Nov 18 low / Nov 11 high).

In the US, 3Q GDP was revised down from 2.5% annualized rate to 2.0%. Market analysts had forecast a softer revision to 2.3%.

Thursday, 17 November 2011

The $200,000-a-Year Mine Worker

Resources Boom Fuels Demand for Underground Labor, Spurs Skyrocketing Pay; a $1,200 Chihuahua

The Wall Street Journal

MANDURAH, Australia — One of the fastest-growing costs in the global mining industry are workers like James Dinnison: the 25-year-old high-school dropout from Western Australia makes $200,000 a year running drills in underground mines to extract gold and other minerals.

The heavily tattooed Mr. Dinnison, who started in the mines seven years ago earning $100,000, owns a sky-blue 2009 Chevy Ute, which cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle. The price tag on his chihuahua, Dexter, which yaps at his feet: $1,200.

A precious commodity himself, Mr. Dinnison belongs to a class of nouveau riche rising in remote and mineral-rich parts of the world, such as Western Australia state, where mining companies are investing heavily to develop and expand iron-ore mines. Demand for those willing to work 12-hour days in sometimes dangerous conditions, while living for weeks in dusty small towns, is huge.

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"It's a historical shortage," says Sigurd Mareels, director of global mining for research firm McKinsey & Co. Not just in Australia, but around the world. In Canada, example, the Mining Industry Council foresees a shortfall of 60,000 to 90,000 workers by 2017. Peru must find 40,000 new miners by the end of the decade.

Behind this need for mine workers is a construction boom in China and other emerging economies that has ramped up the demand for iron ore, used to make steel, and other metals used in construction, such as copper, typically used for wiring buildings.

The manpower dearth comes with a hefty price tag. "Inflationary pressures are driving up costs and wages at mining hot spots like Western Australia, Chile, Africa," said Tom Albanese, CEO of Rio Tinto PLC the world's third-biggest miner by sales. "You're seeing double-digit wage growth in a lot of regions."

The shortage is particularly acute in Australia, the world's biggest source of iron ore and the world's second-biggest gold producer.

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The Minerals Council of Australia estimates the country needs an additional 86,000 workers by 2020, to complement a current work force estimated at 216,000. "It's a tight labor market and difficult cost environment," said Ian Ashby, president of BHP Billiton Ltd.'s iron-ore division. To attract workers, BHP and other companies are building recreation centers, sports fields and art galleries in hardscrabble company towns. BHP said rising manpower and capital costs reduced earnings by $1.2 billion during the first half of 2011, when the company posted profit of $11.2 billion.

Some workers in Australia commute from the Philippines and New Zealand. "It makes sense for me," says 47-year-old Ricky Ruffell. The New Zealander, who drives a grader at Port Hedland in northern Australia, flies home once a month on a $1,200 ticket, paying for the fare himself out of his $120,000 annual income.

Mr. Ruffell's employer, Welshpool, Australia-based NRW Holdings Ltd., said the company covers air fares only from within Australia. NRW declined to comment on individual workers but says it pays what the market demands.

The average salary in the Australian mining industry was about 108,000 Australian dollars, or about US$110,000, in 2010, which includes some part-time and lower-skilled workers and is well above the A$66,594 average for all Australians, according to the Australian government's Bureau of Statistics.

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William Boal, a professor at Drake University in Des Moines, Iowa, who studies the labor economics of mining, said the higher salaries reflect in part the higher expenses in isolated areas. "There's also inflation because people have never seen this kind of money before, and they're spending it," he said, referring to further increases in local prices as miners purchase more homes, cars and consumer goods.

Mr. Dinnison went into mining solely for the pay. While in high school, he said, he broke somebody's skull and teeth "in a bar fight that I deeply regret and have never repeated". He said the judge in his case told him that he could spend a year in prison or pay a $10,000 fine plus $16,000 compensation for the victim. "I needed the money, so I went to the mines," he said.

Barminco Ltd., a Western Australia-based mining-services company, hired him. Barminco CEO Neil Warburton didn't return calls seeking comment.

Mr. Dinnison, who has mined copper, tin, nickel and gold, drills holes that are then packed with explosives to extract ore. He wears a $5,000 gold chain crucifix. "I'm not religious, but I am conscious that what I do is serious," he said. "But then you come home and you have all that cash."

Despite having earned roughly US$1 million since he started, he has no savings and doesn't apologize. "The mines are so dull, that when you get back here, everything is stimulation and excitement," he said. "The money I spend supports other businesses because of the [stuff] I blow it on."

Mr. Dinnison proudly calls himself a Cub—a Cashed-up Bogan, a bogan referring to Australian slang for an uneducated blue-collar worker. Books and documentaries are coming out about this group, exploring the country's unease with the thought that conspicuous consumption by undereducated people is what is helping to keep the country afloat.

"I have civil-servant friends who talk about giving it all up and going to the work in the mines," says David Nichols, author of "The Bogan Delusion", a sociological book about the riches of blue-collar Australians. Jules Duncan, who filmed a short documentary called "Cashed-Up Bogans" that he is hoping to turn into a feature, admits jealousy prompted his curiosity. "But I've come to respect these people who are just doing what I'd be doing if I wasn't a self-indulgent filmmaker," he says.

Mr. Dinnison hopes to be promoted to another underground job paying $1,400 a day, up from $800 a day. Lina Mitchell, his 28-year-old fiancée, said she is committed to teaching Mr. Dinnison how to manage his money. "The miners will spend the money on cars, bikes, parties," she said. Mr. Dinnison, meanwhile, said he is committed to mining. "I'm qualified enough now that I'll always have a job," he said. "Without mining, I'd be an auto mechanic making $600 a week. I love mining, mate."

Write to John W. Miller at

Friday, 11 November 2011

Italy to vote on cuts, U.S. applies pressure

Italian Prime Minister, Silvio Berlusconi leaves the Quirinale Palace after meeting President Giorgio Napolitano on November 8th 2011

(Reuters) - Italy's Senate is set to vote on Friday on austerity measures demanded by the European Union to avert a euro zone meltdown, after U.S. President Barack Obama ratcheted up pressure for more dramatic action.

Obama spoke with German Chancellor Angela Merkel and French President Nicolas Sarkozy late on Thursday and also called Italian President Giorgio Napolitano. Treasury Secretary Timothy Geithner demanded fast action from Europe.

"The crisis in Europe remains the central challenge to global growth. It is crucial that Europe move quickly to put in place a strong plan to restore financial stability," Geithner said in a statement following a meeting with finance ministers from the Asia Pacific Economic Cooperation countries.

After months of dithering and delay, Rome appears to have got to the message after bond markets pushed it to the brink.

The Italian upper house is due to vote on a package of cuts later in the day. The law should pass easily, as it should in the lower house on Saturday.

Voting for the first time in the upper house will be Mario Monti, the former European Commissioner who has emerged as favorite to replace Silvio Berlusconi as prime minister.

Berlusconi, who lost his majority in a vote on Tuesday, has promised to resign after the financial stability law is passed by both houses of parliament.

If the votes pass smoothly, Napolitano may accept Berlusconi's resignation as early as Saturday night and formally mandate Monti to try to form a new government soon afterwards.

At first, Berlusconi had insisted that early elections were the only option. But he has since softened his stand and is said by sources to be open to a new government.

Markets were calmed at the prospect of an interim government, rather than a three-month vacuum before elections are held.

Monti, a highly respected international figure, has been pushed for weeks as the most suitable figure to lead a national unity government to push through painful austerity measures.

The euro held steady above its recent one-month low but investors were skeptical it would climb far, given that even a technocrat Italian government might struggle to make progress on long-promised, never-delivered fiscal reforms.

Safe haven German Bund futures extended the previous day's losses at the opening on Friday but again trade was cautious.

"Given how far we have widened out in some of these peripherals, we can have maybe two or three days of calm -- in inverted commas -- but nothing has really changed underneath," one bond trader said.


In Athens, Greece's prime minister designate was set to name a new crisis cabinet on Friday to calm the political turmoil that has threatened to bankrupt Athens and force it out of the euro zone.

Greece's two main parties agreed on Thursday to make Lucas Papademos head of a new unity government, ending a chaotic search for a leader to save the country from default. He must now fulfill the terms of a 130 billion euro bailout plan agreed with European partners in October.

"The path will not be easy but I am convinced the problems will be resolved faster and at a smaller cost if there is unity, understanding and prudence," Papademos said on Thursday.

He was left working alone in his new prime ministerial office on Thursday night after talks on the new government ended with no sign of an agreement.

Sources in the two parties -- the ruling Socialists and the opposition New Democracy -- said Evangelos Venizelos was likely to remain as finance minister when President Karolos Papoulias swears in the new cabinet, scheduled for 1200 GMT (7 a.m. ET).

With European leaders dithering over how to tackle the deepening crisis, pressure has mounted on the European Central Bank to act more forcefully.

Three senior ECB policymakers on Thursday rebuffed pressure from investors and world leaders to intervene massively as a lender of last resort on bond markets to shield Italy and Spain from financial contagion.

The euro zone's plan for a more powerful rescue fund may also be running into trouble.

Klaus Regling, the head of the 440 billion euro European Financial Stability Facility, was reported by the Financial Times as saying the recent market turmoil had made it more difficult to scale it up to 1 trillion euros, as planned by EU leaders.

Investors have fled from bonds issued by highly indebted countries. Luring them back by offering insurance on losses, the centerpiece of a plan agreed in Brussels on October 26, would now probably use up more of the fund's resources, Regling said.

"The political turmoil that we saw in the last 10 days probably reduces the potential for leverage. It was always ambitious to have that number, but I'm not ruling it out," the FT quoted him as saying.

(Writing by Mike Peacock)

Tuesday, 8 November 2011

Special Report: Mitt Romney's French education

By Alexandria Sage TALENCE, France | Tue Nov 8, 2011 2:08am EST
Republican candidate poses for a photograph with fellow Mormon missionaries outside Limoges police station, France in 1968 

(Reuters) - To understand why Mitt Romney persists in the face of rejection, opposition and indifference from his own party, look no further than the two and a half years he spent in France, getting up at 6:30 a.m. every day to venture forth and have doors slammed in his face for 10 hours.
The fresh-faced Latter-Day Saints who came to France in the late 1960s to preach the message of Jesus Christ -- of whom Republican presidential candidate Romney is the best known -- discovered a secular and skeptical populace, and few willing converts.
On bad days, the young Americans were greeted with guns, or barking dogs chased at their heels. Romney has said his mission, which took him through Le Havre, Paris and Bordeaux, was testing.
But it was precisely this challenge that helped cement Romney's tenacity and his faith, say current and former missionaries.
"Being a missionary was not an easy thing," said Christian Euvrard, director of the church-run Paris Institute of Religion, who remembers Romney as outgoing and enthusiastic in his work. "You can't go home without having learned a lot of lessons."
David Wood, who served at the same time as Romney, called their experience "character-building" and "life-changing."
"It was difficult work, we spent a lot of time going from door to door ... It was tough going," he said of the mission. "It solidified his beliefs in the church, certainly gave him ample opportunity to develop leadership skills, skills in motivating people."
The Church of Jesus Christ of Latter-Day Saints, or LDS church, today counts nearly 36,000 Mormons in France, many of whom are the product of the work of the missionaries who for decades have followed a similar path of rigorous proselytizing.
Missionary work is a central tenet of the Mormon faith. Some 52,000 missionaries currently serve in 350 missions around the world, from France -- where Mormon missionaries first showed up midway through the 19th century -- to more recent, far-flung frontiers like Papua New Guinea or Madagascar.
Using missionaries to boost international growth -- a goal wherever the political climate allows, regardless of the predilection of the local populace -- has helped make the LDS church a 14 million-member global church with more Mormons outside the United States than in.
"The main focus of a mission is to go out and help people find the joy of the gospel of Jesus Christ," said Kenneth Cope, a missionary in France in the 1980s. "But a very great by-product would be you grow into a man, you grow into a woman, you grow up."


During the course of his 30-month stay in France -- July, 1966 to December, 1968 -- Romney's people-skills landed him a plum assignment as assistant to the president of the mission in France, H. Duane Anderson.
It was a natural choice. People who knew Romney describe him as a well-spoken and charismatic young man who quickly showed himself to be a leader.
"A man of communication," said Euvrard. "And he was very simple. Although he was the son of the governor of Michigan, he was a missionary just like everyone else."
Alan Eastman, also a missionary at the time, remembers Romney as "an adaptable personality, kind of a born leader, and his mission positions reflected that. He was also one who was kind of gung-ho, 'this is what the rules are, we will abide by the rules 100 percent.'"
Those rules involved arising at 6:30 am and lights out by 10:30 pm; in between came a full day of prayer and proselytizing, a grueling schedule that has not changed much today.
Missionaries pay for their time abroad themselves, live in modest apartments, and travel in pairs with a same-sex companion -- a strategy that provides moral support but also, say cynics, keeps the potential for waywardness, theological or moral, in check. Male missionaries are instantly recognizable in their white shirts, ties and black trousers, women in their modest skirts.
Most time is taken up going door to door, following up on leads, or teaching potential converts. Missionaries study their Bibles, do charity work, and have one "free" day per week for laundry, letters home, or occasional sight-seeing. Missionaries do not go to parties. Sunday is church.
None of the former missionaries interviewed said they had ever been tempted to indulge in France's best-loved export, wine, nor to while away the time in a cafe, or jazz club.
"Missionaries avoid entertainment, parties, or other activities common to this age group as long as they are on their missions, so they can focus entirely on the work of serving and of teaching others the gospel of Jesus Christ," reads the LDS website.
Still, Romney helped organize an exhibition baseball game in the southwest city of Pau, and a talk about the United States at a youth club. One evening, he even ate a meal of coq au vin, the French country dish of stewed chicken in wine (while alcohol is banned, it boils off in cooking, so Mormons are divided on whether such a dish is taboo).
"The idea of being wooden, robotic, cold, calculating ... that is absolutely not Mitt Romney," said Michael Bush, who was paired with Romney for a time and described him as a "good, fun-loving guy" who was "incredibly smart."
Despite the strict and narrow path followed by most Mormons on their missions, it is nigh impossible to find a returned missionary -- whether still in the church or no -- who hasn't been altered by his or her experience, contends Carter Charles, who is writing his University of Bordeaux doctorate thesis on the role of Mormonism in U.S. politics.
"They have different world-views, they see the world in different ways," said Charles. "In that, you can say the Mormon church has something special that you don't see in other religious groups who send out missionaries. It is unique."


"Bonjour, we're here to share a message about Jesus Christ," is the perky message heard today by those who open their doors in Bordeaux to Sisters Bentley and Wiseman (female missionaries are called "Sisters" while males are ordained to be "Elders.")
"People say, 'No, that doesn't interest me,' right off. It goes pretty quick," said Allison Bentley, 23.
Nine times out of 10, missionaries say, the French will slam the door. Others recount having guns pulled on them, being chased by dogs, or having water dumped on their heads. But occasionally, someone will listen.
"We just appreciate that they stop and talk to us about God in the street," said Rebecca Wiseman, 22. "I know it's a stretch for them."
Once inside someone's home, Romney and fellow missionary Bush would recite a passage from their King James Bibles, using the New Testament to try to explain how LDS church founder Joseph Smith was visited in the 19th century by Christ, and later the angel Moroni. "And other sheep I have, which are not of this fold: them also I must bring, and they shall hear my voice; and there shall be one fold, and one shepherd." - John 10:16
Of the missionaries, Romney was the most successful at leaving the Book of Mormon, the second witness for Christ's message, with hosts, said Bush.
"He's very disciplined. He's a hard worker. There is no one who works harder than Mitt Romney," Bush said. "He would put in the hours, he would knock on the doors, he would talk to people."
The passage from John is often used to explain the Book of Mormon. It is also an apt metaphor for Mormons out in the world, endeavoring to increase their flock.
Mormons have had more difficulty convincing the local populace in France than in poorer countries such as the Pacific island nation of Tonga (where nearly half the population is now Mormon) or Nigeria, whose Mormon membership is now almost three times that of France despite the fact that proselytizing began there only in the late 1970s. In Europe, France's Mormon membership is well behind that of Britain and Spain.
The birthplace of free-thinking Voltaire, France is fiercely proud of its heritage, and, though nominally Catholic, has distrusted organised religion since its 1789 Revolution stripped the ecclesiastical hierarchy of its power.
Mormonism is little understood. The religion's adherents are viewed as a bit odd -- and rather quaint -- though serious and hard-working. David Arnold, who serves as bishop of the central Paris ward, or congregation, said he remembers the 1985 film "Witness," in which Harrison Ford goes undercover among the Amish. The French confused the Amish with the Mormons.
"They'd say, 'We've heard of Mormons, but where's your beard and hat?" said Arnold.
Still, the undaunted LDS church has steadily increased its numbers in France -- membership grew from about 1,000 in 1950 to 10,000 in 1975 -- and church officials recently announced plans for the country's first temple for the 36,000 French mainland Mormons today.
The early 1960s had seen a boom in conversions, helped by lingering post-World War Two goodwill to Americans, and despite a "French Mission apostasy" scandal in 1958 in which a handful of missionaries were excommunicated for teaching polygamy. Plural marriage has been banned in the church since 1890.
But things got harder as opposition to the Vietnam War strengthened in France -- "Yankee Go Home" was often seen scribbled in the Paris Metro -- and as the country exploded in student- and union-driven riots, challenging France's social hierarchy and sexual mores, and questioning its former status as a colonial power.
"At first they found it rather amusing, something to write in their (missionary) journals," said Euvrard. "Very quickly they were discouraged to go near where anything was happening."
The closest the missionaries got to the rebellions shaking up France was a tear gas canister former missionary Eastman found on the street and brought back to the apartment, where it exploded. (He admits his action would likely have been frowned upon by church officials.)
The young Americans tended to have little success with native French and more luck with recent immigrants, in particular the Pieds Noirs French colonists of Algeria, who came home disillusioned after its independence.
"France was then, and probably still is in a transitional emotional state, and the LDS church offered for many people some basic principles and some eternal truths they feel like they can grab hold of," Eastman said.
Sometimes, however, the missionaries -- eager to perform baptisms -- confronted situations for which their sheltered backgrounds had not prepared them. Utah church officials had to tell some missionaries they would not, in fact, be allowed to baptize a man who had just served time in prison for murder. Nor could they baptize a woman sharing her flat with a paramour until they had convinced him to hit the road.
Another faced the uncomfortable task of telling a recent immigrant from East Africa who was keen to be baptized that blacks in the LDS could not hold the priesthood, an authority given to adult male church members in good standing. In 1978, church leaders experienced a "revelation" and the policy was changed.


The small church in the Bordeaux suburb of Talence looks the same today as it did in the late 1960s, when Romney and fellow missionaries were photographed in front of it during a rare visit by then LDS church president, Howard Hunter.
The simple structure, complete with blond wood pews and light mauve carpeting, could have sprung forth from any American suburb -- a visual representation of the Mormon message originating in Utah being preached across the world.
Harvey Morgan, an ex-Mormon who did his French mission in the 1960s, said that despite lip-service paid to multiculturalism, missionaries still live in a "bubble," with the church showing little willingness to adapt to foreign cultures.
"Mormonism until recently was a Utah phenomenon," said Morgan. "A heartland of America phenomenon and they're damned provincial out there! The idea that France is different from America, that you'd preach the gospels differently ... never would occur to them."
But still the tenacious missionaries -- whether Romney decades ago or the 300 young Mormons who still come to France each year -- press on, preaching their message of faith, moral responsibility and service.
"I would certainly feel comfortable with him being president of the United States based on the things we shared and the way we grew," said Wood.
Romney's role as assistant to the president of the mission in France forced him to grow up more quickly than others. It also landed the 21-year-old in a life-threatening car accident.
One afternoon in June 1968, Romney was at the wheel on a gently twisting road in the tiny town of Bernos-Beaulac south of Bordeaux. His church-member passengers included mission head Anderson and his wife Leola. They were heading back from a meeting in a southern region when an oncoming car hit them head-on.
Leola, a well-liked mother-figure to the missionaries, was killed. Romney, originally pronounced dead at the scene, was taken to a nearby hospital, but fully recovered soon thereafter.
Suzanne Farel, now 87, was in the back seat, and still remembers the other car suddenly appearing in their lane. Witnesses at the time said the other driver, a priest who had been drinking, had just passed another car and was undeniably at fault.
"There he is," said Farel, leafing through her photo album to locate a picture of "Elder Romney" lying in a hospital bed with a black eye, his right arm in a cast. Another photo shows the smashed front ends of both vehicles. The LDS church never filed a lawsuit, said Farel.
The idea of a "President Romney" makes sense, she said.
"Why not? He's a member," said Farel. "He wouldn't lie, he wouldn't cheat. In politics, that's something that doesn't come around that often."
The departure of Anderson following the death of his wife put Romney and a fellow missionary temporarily in charge of the mission for several weeks.
People who knew Romney say his optimistic nature remained intact after the accident, despite the shock and grief.
"We had lots of work to do. He especially had a lot of responsibility, so not a lot of time to sit around and philosophize," said Wood, who had also been in the car but escaped with just a gash on his head.
It's that sense of discipline, Mormons say, that keeps missionaries focused, despite constant rejection, occasional homesickness, and, in Romney's case, sudden tragedy.
"There's nothing like hard work and time to heal the pain and sorrow of a tragic loss," Romney told the Boston Globe in 2007. "What we do with our time is not for frivolity, but for meaning."
(Edited by Simon Robinson, Lee Aitken and Sara Ledwith)

Friday, 4 November 2011

Global Resources: Trading in Commodities

Many investors have tried their hand at the lucrative international commodities market with varied success. But without the right training and education it may not be a good option for beginners whose only goal is to make quick profits. Most brokers in the commodities market are controlled by powerful regulators such as the SEC ( Securities and Exchange Commission) and this goes to minimize exposure to loss.
With the right information, an investor is able to recoup the initial capital outlay. The more popular commodities include wheat, cocoa, sugar and oil. Metals include copper, silver and of course gold.
It is important for investors to choose the right broker as there are many whose focus may not be the same. Some brokers choose to focus on metals while most do not actually specialize in any particular market dealing also in stocks and options.
Commodity prices depend on the respective economic conditions that  prevail in the commodity's market. For example, the wildfires that raged in Russia in mid-2010 caused an upsurge of prices in the wheat market. Russia is one of the largest producers of wheat in the world and due to the fires, the Moscow government decided to ban the export of wheat for a few months into December. This caused global wheat prices to go up from about $680 to more than $700. This year, the price of wheat front futures has been fluctuating between $800 and $600 on the global markets.
Oil is by far the most watched commodity and is volatility makes it attractive for investors with a high risk appetite. One of the major players is the Organisation of Petroleum Exporting Countries which can affect its price by announcing an increase in barrels produced per day.
Bullion gold is also a very attractive option for new investors due to the safe-haven value attached to it. It is used to hedge risk and its price fluctuates according to the economic sentiments in Wall Street and the other big financial markets. Once the economic outlook looks down, gold prices go up.

Groupon shares surge nearly 56 percent in debut

By Clare Baldwin and Alistair Barr

NEW YORK/SAN FRANCISCO | Fri Nov 4, 2011 11:19am EDT

Groupon CEO Andrew Mason walks outside Nasdaq, New York after his company's IPO, November 4th, 2011

(Reuters) - Shares of daily deals site Groupon Inc rose more than 50 percent in their stock market debut on Friday, but at least some of the early trading exuberance may have come from the small amount of shares offered.

The shares rose as high as $31.14, or 55.7 percent above the IPO price in early trading on the Nasdaq, at one point pushing the market value of the company up to $19.9 billion. The shares later eased back to $28.36.

Groupon sells Internet coupons for everything from spa treatments to nose jobs, and is one of this year's most closely watched IPOs.

The offering, one of the largest in recent years, is an important barometer of investor appetite for IPOs. A strong first few trading days may encourage other private Internet companies, such as Angie's List, Zynga and even Facebook to pursue their own IPOs.

There is a huge backlog of companies that filed to go public earlier this year. Most plans were put on hold when the stock market slumped in August. Groupon is the first major IPO since then.

On Thursday, Groupon sold 35 million shares for $20 each, raising $700 million, but that stake amounts to only about 5 percent of the company. The dollar amount raised was on the larger side for a U.S. IPO, but it was the second-smallest offering in the U.S. in the past decade, according to capital markets data provider Ipreo.

Underwriters on the IPO were lead by Morgan Stanley, Goldman Sachs and Credit Suisse.

(Reporting by Clare Baldwin in New York, Alistair Barr in San Francisco and James Kelleher in Chicago; Editing by Derek Caney)