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[sandi66]

Queen Elizabeth II to address UN General Assembly, visit ground zero

Queen Elizabeth II and Prince Philip will be in New York on Tuesday. The British monarch is set to address the UN for the second time in her 57-year reign.

July 5, 2010

Queen Elizabeth II will visit the United States Tuesday for the seventh time in her 57-year reign as Britain’s monarch, addressing the United Nations General Assembly in New York and touring the partially reconstructed site at ground zero.

The first time the queen visited New York – in 1957, just four years into her reign – “Leave It to Beaver” was making its American television debut, President Eisenhower had recently ordered federal troops to Little Rock, Ark., to enforce desegregation of Central High School, and the Soviet Union had just launched Sputnik.

Her address to the United Nations then “highlighted the U.N.'s importance and expressed her wish that it would carry out the ideals set out in its founding charter,” according to a CBS News report. The UN at the time was barely a decade old.

IN PICTURES: Top 10 longest-serving leaders

Her Majesty’s speech on Tuesday is expected to appeal for world unity and peace. A former aide says it will include some of her personal thoughts from her long observation of world affairs, though it will have been penned with government officials, Associated Press reports.

"It will be a strong message coming from the British head of state. She will be delivering it on behalf of the British government," Dickie Arbiter, a former press secretary to the queen, told AP.

The queen’s half-day visit Tuesday will be a whirlwind affair, coming at the end of a nine-day tour in Canada in connection with Canada Day. She is accompanied by her husband, Prince Philip, the Duke of Edinburgh.

Her first stop will be at the UN General Assembly. From there, she will make her first visit to ground zero, laying a wreath at the site of the World Trade Center towers where nearly 2,900 people perished in the 9/11 attacks. Govs. David Paterson of New York and Christopher Christie of New Jersey will accompany her.

Her last stop will be in Lower Manhattan at the British Garden in Hanover Square. The garden is a memorial to British subjects who died on 9/11, and some 50 families of victims will greet the queen during a ribbon-cutting ceremony to officially open the site.

One of the most-traveled government representatives ever, the octogenarian queen is known in the four corners of the globe – from China and Russia to South Africa, Thailand, and dozens of places in between. She has been to the United States six times previously – in 1957, 1959, 1976 (for America’s bicentennial celebration), 1983, 1991, and 2007.

Though Americans just celebrated their Declaration of Independence 234 years ago from the British monarchy, they seem to hold a soft spot in their hearts for this particular royal. Since 1948, Queen Elizabeth II has appeared on Gallup’s annual Top 10 list of most admired women more often than any other – 42 times.

In the most recent poll, in December 2009, the queen was the American public’s sixth most-admired woman, behind Secretary of State Hillary Rodham Clinton, former Alaska Gov. Sarah Palin, talk-show diva Oprah Winfrey, first lady Michelle Obama, and former Secretary of State Condoleezza Rice.

“At a time when monarchies are not in fashion she has preserved Britain's own particular brand for future generations by adroitly adapting and modernising the institution to the times,” observes Britannia.com.

Americans, it would seem, agree.


www.csmonitor.com/USA/Foreign-Policy/2010/0705/Queen-Elizabeth-II-to-address-UN-General-Assembly-visit-ground-zero

[sandi66]

Queen Elizabeth II to visit NYC, pay tribute to 9/11 victims and address U.N.

Published: Tuesday, July 06, 2010, 8:45 AM
Updated: Tuesday, July 06, 2010, 8:57 AM

Queen Elizabeth II will honor the victims of the 9/11 attacks and address the United Nations during a five-hour visit to New York City today. She's expected to appeal for world unity and peace.

The queen, expected to arrive in the city at 2:20 p.m., also is scheduled to lay a wreath at ground zero to pay tribute to victims of the 2001 terrorist attacks. She will also open the British Garden of Remembrance in nearby Hanover Square to honor the 67 British citizens killed on 9/11.


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Share The 84-year-old monarch was 31 years old when she last addressed the U.N. in 1957. That was four years after she was crowned queen. The Monday, October 21, visit to the city lasted 14 hours. The queen arrived on Staten Island from Washington by train, then, after a brief parade, rode the ferryboat Lt. Samuel Coursen to Manhattan, escorted by some 50 vessels, including water-spraying fireboats, on a route that took the monarch near the Statue of Liberty, en route to a ticker-tape parade along the Canyon of Heroes.

Her husband, the Duke of Edinburgh, is traveling with her.

www.silive.com/news/index.ssf/2010/07/queen_elizabeth_ii_to_visit_ny.html

[sandi66]

Congress fixes Wall Street - and orders up 68 studies

By Jennifer Liberto, senior writerJuly 6, 2010: 8:37 AM ET


WASHINGTON (CNNMoney.com) -- In Washington, there's a code phrase for the middle ground that lawmakers find after a torrent of industry lobbying or partisan debate: "Let's do a study."

The Wall Street reform bill may be the most extreme example: The legislation, which could become law later this month, orders government officials to conduct some 68 studies, according to a CNNMoney analysis.

Instead of toughening up ethical and marketing standards for financial planners, Congress studies the issue in the financial overhaul bill. Instead of making it easier to sue lawyers, accountants and bankers who help commit securities fraud, Congress studies the issue.

The bill also studies, among other things: short selling, reverse mortgages, improved insurance regulation, private student loans, oversight of carbon markets and the "feasibility of requiring use of standardized algorithmic descriptions for financial derivatives."

Financial sector lobbyists say the bill's sweeping nature -- even more than the health care bill, which mandated about 40 studies -- leads to the studies.

"A lot of the topics the new bill deals with are very complex and interconnected, and one change in one area can set off a domino effect," said Scott Talbott, senior lobbyist with the Financial Services Roundtable, a bank lobbying group. "It's better to take the time to do a study and do it right then to do something in haste to get it wrong."

Sometimes lawmakers turn to studies to sidestep a thorny issue they aren't ready to deal with. Take the study of the increasingly troubled government-owned mortgage lenders Fannie Mae and Freddie Mac, which Sen. Christopher Dodd, D-Conn., recently compared to "kicking the can down the road."

Dodd spokeswoman Kirstin Brost suggested that the bill's reforms focus on more immediate ways to strengthen the economy, while its studies lay the "groundwork for future reforms."

Among the bill's immediate reforms: It creates a new unwinding process so the government can take down and break up failing Wall Street firms. It requires giant banks to keep more cash-like assets on hand, as a safeguard against troubled times. And it creates a new consumer financial protection agency to regulate disclosures and fees on credit cards and mortgages.

The House passed the bill last Wednesday. The Senate is expected to pass and send President Obama the bill in mid-July. (Read 'What's so tough about this financial reform bill?' by Allan Sloan.)

Studies galore
It's not clear how much all the studies would cost, because Congress didn't appropriate specific resources for them. Lawmakers task federal regulators and its own investigative arm with the job of carrying out the studies.

And Congress' budget arm didn't break out the cost of such studies when it priced the bill.

Congressional veterans who watch financial legislation say they can't remember a banking bill that commissioned more studies. Former Republican Senate Banking staffer Mark Calabria said the large number of studies reflects the wrangling strategy, chasing 60 Senate votes needed to get the bill passed.

"Studies help provide sufficient cover to sometimes gain a vote," said Calabria, who directs financial regulation studies at the Cato Institute, a libertarian think tank.

A couple of studies may have helped woo particular lawmakers. Take the study on the independence of presidentially appointed inspectors general, which highlights an issue championed by Sen. Chuck Grassley, R-Iowa. In May, Grassley voted with three other Republicans to support the bill, although his vote on the final version is still in play.


0:00 /4:48Whitney: Reform will hurt banks
One study came about in the late-night hours of final negotiations, after months of tough fighting between industry and consumer groups. Congress had been considering measures to force brokers to act in the best interests of their clients when giving investment advice.

Different financial industry groups, ranging from investment firms to life insurers, tried to kill it all together. But it ended up as the subject of a six-month study, with a mandatory follow-up to carry out the recommendations.

"That study was a save," said Ed Mierzwinski, national consumer program director at Public Interest Research Groups. "But, the general theme of studies is to delay or kill -- it's a strategy taught on K Street," the Washington thoroughfare synonymous with lobbying.

Some studies are worse than others, congressional watchers say. Studies that don't require any follow-up or deadlines can be dead ends.

A multi-agency study to combat mortgage foreclosure scams has no deadline nor follow-up rules. A study on executive compensation consultants and another on financial literacy among investors must meet deadlines, but doesn't require Congress or regulators to act on the findings.

Much more useful is a study on financial firms' hedge funds and trades made on banks' own accounts. That study has a deadline and is followed up with mandates: regulators must limit so-called proprietary trades and bank ownership of hedge funds.

"There's no question that research done at the mandate of Congress is a real addition," said Raj Date, executive director of the Cambridge Winter Center for Financial Institutions Policy. "But it's only a real addition if Congress pays attention when the results come back."

money.cnn.com/2010/07/06/news/economy/Wall_Street_reform_studies/index.htm?section=money_latest

ty pebbles

[sandi66]

Dems May Feel Wall Street's Backlash

Updated 9:00 AM EDT, Tue, Jul 6, 2010

With the financial reform bill likely to hit President Barack Obama’s desk in coming weeks, Wall Street’s top political players are warning Democrats to brace themselves for the next phase of the fight: the fundraising blowback.

Democrats who backed the bill are finding big banks far less eager to host fundraisers and provide campaign cash heading into the tightly contested midterm elections this fall, insiders say.

Some banks, in fact, have discussed not attending or hosting fundraisers at all for the next few months. Goldman Sachs is already staying away from all fundraisers, according to two sources. The company would not comment.

“I think at least in the short term there is going to be a great deal of frustration with people who were beating the hell out of us — then turning around and asking for money,” said a senior executive of a Wall Street bank.

One member coming in for special criticism: Sen. Kirsten Gillibrand (D-N.Y.), viewed as largely unwilling to publicly defend her home state’s top industry but who continues to make fundraising requests, according to Wall Street insiders.

“Sometimes their chutzpah just has no bounds,” an executive said, referring to Gillibrand, who is on the ballot this fall. “People like her who didn’t stand up for us at all during the debate are certainly going to feel some pushback.”

Gillibrand’s office didn’t respond to requests for comment.

“The fact is that the ink is not even dry on this bill, and everyone in town is still getting fundraising requests from members of the conference committee and all sorts of other people who were beating up on Wall Street,” an official at a large bank said, citing Reps. Carolyn Maloney (D-N.Y.) and Paul Kanjorski (D-Pa.) as two conference committee members who recently sought Wall Street contributions. Maloney and Kanjorski would not comment.

“It’s unseemly at best, and right now we are just not inclined to say ‘yes,’” the official said.

While the final Wall Street reform bill turned out to be less onerous than banks feared, there are still hard feelings, especially over the rhetoric used to slam banks such as Goldman Sachs, Morgan Stanley and JPMorganChase.

And that’s threatening to blunt further the fundraising inroads Democrats have made into the financial community, which historically has steered more money to Republicans.

Signs of the shift of Wall Street cash away from Democrats this election cycle began to emerge this spring. In an analysis in April, the Wall Street Journal found that 52 percent of political giving by the 12 largest banks on Wall Street went to Republicans, a reversal from last year.



In the first 15 months of the most recent midterm cycle, in 2006, the Democratic and Republican parties — including candidates and campaign committees — each received $20 million from employees of securities and investment firms, according to an analysis done for POLITICO by the Center for Responsive Politics.

During the first 15 months of the current cycle, Democrats raised close to $27 million from the industry — an increase probably attributable in part to the fact that Democrats hold the White House and both houses of Congress. But, despite being largely shut out of power, Republicans have raised $19.5 million this cycle, the CRP study found.

According to the center’s executive director, Sheila Krumholz, the Democrats’ recent advantage with Wall Street money could shrink further because the GOP is now viewed as having a better shot at taking back the House and because of blowback from the financial reform bill.

The Dodd-Frank bill would, among other things, limit banks’ ability to make money trading with their own capital and would require them to spin off a portion of their lucrative derivatives businesses into separately capitalized subsidiaries.

“Financial reform is happening at an interesting time, when Republicans are already feeling the winds in their sails,” Krumholz said. But she added that the effects of financial reform on fundraising could be temporary. “This could be the [GOP’s] opportunity and once it’s passed, things should kind of return to normal, which is the majority party having a slight advantage.”

Still, feelings in the financial industry are very raw, especially toward moderate and New York-area Democrats who, the industry feels, did not do enough to ease the potential impact of the financial overhaul.

Some of those Democrats are clearly aware of the danger. After the House passed financial reform, Rep. Mike McMahon, a Democrat who represents Staten Island and part of Brooklyn, issued a statement highlighting his work to make sure the bill would “benefit New York City.”

“I have consistently stated that we need to reform our financial markets to provide greater stability, accountability and oversight, but this does not mean crippling those very markets which are vital to New York City and to the entire country’s economy,” McMahon said.

McMahon was one of the leaders of an effort by New Yorkers and moderate Democrats to water down Arkansas Democratic Sen. Blanche Lincoln’s tough derivatives provision — and his statement said he was pleased to partner with House Financial Services Committee Chairman Barney Frank (D-Mass.) to create a “workable” compromise in the bill.



That compromise hasn’t stopped the financial community from singling out Lincoln for scorn.

“She told us she knew Congress had to be sensible in its approach to dealing with derivatives, and then she went and hit us with her amendment,” a financial executive said. “It was pretty amazing.”

Lincoln says she’s not worried, despite facing a difficult reelection fight this fall.

“Sen. Lincoln has made it clear that campaign contributions do not govern her public policy decisions, and she is unconcerned about Wall Street reform’s impact on her fundraising efforts,” Lincoln’s spokeswoman, Katie Laning Niebaum, said. “She has led the fight to rein in Wall Street banks’ reckless behavior because fixing our nation’s broken financial system is critical to getting our economy back on track and putting Arkansans back to work.”

Since 2005, Lincoln has raised $511,482 from employees of securities and investment firms — second among her contributors only to lawyers and law firms, according to CRP figures. In that period, Gillibrand has raised $789,800 from the securities industry, also her second-biggest contributors after lawyers and law firms, the CRP data show.

Other industry officials said the distaste can go both ways. Some members of Congress, especially Democrats pushing for strong financial reform legislation, have been reluctant to take money from financial firms, wary of being seen as in the back pocket of an industry in serious disfavor with the public since the meltdown of 2008 and the subsequent recession.

For instance, after Goldman Sachs was charged with civil fraud by the Securities and Exchange Commission, the bank’s support for Democrats from the president on down became a significant and uncomfortable issue. Lincoln said at the time she would take no more contributions from Goldman.

“You have a combination right now where some members are wary of taking our money, while many in the industry are now reluctant to give money to people who are trying to inflict such damage on us,” said a senior financial industry lobbyist. “Those two factors together will just reduce the amount of industry money going to policymakers.”

Other industry officials said they did not see much reluctance on the part of members who supported the Dodd-Frank bill to ask for contributions — especially ahead of the recent deadline for second-quarter fundraising.

The second-quarter numbers, due out later this month, could give an early look at whether the Democrats’ zeal for financial reform has hit them in the wallet.

www.nbcnewyork.com/news/politics/Dems_may_feel_Wall_Street_s_backlash-97836489.html

[sandi66]

Obama Administration Will Sue Arizona Over Controversial Immigration Law

10:04 am
July 6, 2010

by David Gura

Later today, after months of preparation, the Department of Justice will file suit against Arizona, NPR's Carrie Johnson reports.

The Obama administration will argue that S.B. 1070, the state's controversial immigration law, set to take effect later this month, is unconstitutional.

President Obama, Attorney General Eric Holder, and Secretary of State Hillary Clinton have publicly criticized the law, which would give police officers the authority to question people they suspect are illegal immigrants.

Civil rights groups say the law could lead to widespread racial profiling, but Arizona says it is giving law enforcement officers training on how to avoid potential pitfalls.

Jerry Markon, of The Washington Post, outlines the government's legal argument:

The lawsuit ... will invoke for its main argument the legal doctrine of "preemption," which is based on the Constitution's supremacy clause and says that federal law trumps state statutes.
Here is Article VI, Section 2, in all its glory:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

www.npr.org/blogs/thetwo-way/2010/07/06/128333916/the-obama-administration-will-sue-arizona-over-controversial-immigration-law

[sandi66]

Justice Department Suit Against Arizona Imminent, Official Says

Published July 06, 2010
| FoxNews.com

The Justice Department could file a lawsuit challenging Arizona's immigration law as early as Tuesday, an official tells Fox News.

The potential court action comes just days after President Obama delivered a speech calling on Congress to tackle a comprehensive overhaul of the nation's immigration system. In the speech, he criticized Arizona's law and warned that national legislation is needed to prevent other states from following suit.

The president did not mention the lawsuit, but one was widely expected. After the administration initially said it would take the law under review, Secretary of State Hillary Clinton revealed last month in an interview with a foreign television network that the administration intended to challenge the Arizona policy. The Justice Department would do so on the grounds that federal responsibility for border enforcement preempts any state law on the issue.

The Arizona law, passed in April and set to go into effect at the end of July, makes illegal immigration a state crime and requires local law enforcement to question anyone they suspect of being an illegal immigrant on their residency status.

Obama and other top officials have criticized the law as misguided, while Arizona Gov. Jan Brewer has slammed the administration for pursuing a lawsuit. She claims the administration has not done enough to secure the border -- a charge the administration denies.

Brewer told Fox News in June that Arizona would not back down from its law.

"We'll meet them in court ... and we will win," she said, calling the administration's actions a "disappointment."

The Arizona law has touched off an intense national debate over immigration. The results of any court challenge would have wide-ranging implications, as a number of other states and jurisdictions have taken up tough immigration policies similar to Arizona's.

The Obama administration has meanwhile tried to use the law as the impetus to prod Congress into tackling an immigration bill. While Arizona lawmakers defend their law as necessary to patrol the border, Obama described it last week as "unenforceable" and a vehicle for civil rights abuse. He said a "national standard" is needed and that he won't "kick the can down the road" any longer.

Republicans bristled at the speech, though, and continued to urge the administration to better secure the border before tackling a comprehensive bill -- which would likely include a pathway to legal status for millions of illegal immigrants.

www.foxnews.com/politics/2010/07/06/justice-department-file-suit-arizona-early-tuesday/

[sandi66]

Feds to file lawsuit over Arizona immigration law
By BOB CHRISTIE (AP) – 28 minutes ago

PHOENIX — The U.S. Justice Department is filing a lawsuit challenging the constitutionality of Arizona's new law targeting illegal immigrants, setting the stage for a clash between the federal government and state over the nation's toughest immigration crackdown.

The planned lawsuit was confirmed to The Associated Press by a Justice Department official with knowledge of the plans. The official didn't want to be identified before a public announcement planned for later Tuesday by Attorney General Eric Holder and Homeland Security secretary Janet Napolitano, a former Arizona governor.

The lawsuit will argue that Arizona's law requiring state and local police to question and possibly arrest illegal immigrants during the enforcement of other laws such as traffic stops usurps federal authority.

The government will likely seek an injunction to delay the July 29 implementation of the law until the case is resolved.

The government contends that the Arizona law violates the supremacy clause of the Constitution, a legal theory that says federal laws override state laws. It is already illegal under federal law to be in the country illegally, but Arizona is the first state to make it a state crime and add its own punishment and enforcement tactics.

State Sen. Russell Pearce, the principal sponsor of the bill co-sponsored by dozens of fellow Republican legislators, denounced the reported lawsuit as "absolute insult to the rule of law" as well as to Arizona and its residents.

"It's outrageous and it's clear they don't want (immigration) laws enforced. What they want is to continue their non-enforcement policy," Pearce said. "They ignore the damage to America, the cost to our citizens, the deaths" tied to border-related violence.

State Rep. Kyrsten Sinema, a Phoenix Democrat who opposes the law, said the suit should help settle questions over what states can do when they don't think federal laws are being adequately enforced.

"I hope this galvanizes Congress to gain the moral courage they need to address this (immigration) crisis," Sinema said.

Tuesday's action has been expected for weeks. President Barack Obama has called the state law misguided. Supporters say it is a reasonable reaction to federal inaction on immigration.

Prior to seeing the lawsuit or receiving any official notification, Gov. Jan Brewer's spokesman called the reported decision to sue "a terribly bad decision."

"Arizona obviously has a terrible border security crisis that needs to be addressed, so Gov. Brewer has repeatedly said she would have preferred the resources and attention of the federal government would be focused on that crisis rather than this," spokesman Paul Senseman said.

Three of the five Democrats in Arizona's congressional delegation, who are facing tough re-election battles, had also urged Obama not to try to block the law from going into effect.

Republican Sens. Jon Kyl and John McCain of Arizona also lashed out at the administration's decision, saying "the American people must wonder whether the Obama Administration is really committed to securing the border when it sues a state that is simply trying to protect its people by enforcing immigration law."

The law requires officers, while enforcing other laws, to question a person's immigration status if there's a reasonable suspicion that they are in the country illegally.

Arizona passed the law after years of frustration over problems associated with illegal immigration, including drug trafficking and violent kidnappings. The state is the biggest gateway into the U.S. for illegal immigrants, and is home to an estimated 460,000 illegal immigrants.

Obama addressed the Arizona law in a speech on immigration reform last week. He touched on one of the major concerns of federal officials, that other states were poised to follow Arizona by crafting their own immigration enforcement laws.

"As other states and localities go their own ways, we face the prospect that different rules for immigration will apply in different parts of the country," Obama said. "A patchwork of local immigration rules where we all know one clear national standard is needed."

The law makes it a state crime for legal immigrants to not carry their immigration documents and bans day laborers and people who seek their services from blocking traffic on streets.

The law also prohibits government agencies from having policies that restrict the enforcement of federal immigration law and lets Arizonans file lawsuits against agencies that hinder immigration enforcement.

Arizona State University constitutional law professor Paul Bender said the federal government's involvement throws a lot of weight behind the argument that federal law pre-empts Arizona's measure.

"It's important to have the federal government's view of whether state law is inconsistent with federal law, and they're the best people to say that," Bender said.

Kris Kobach, the University of Missouri-Kansas City law professor who helped draft the Arizona law, said he's not surprised by the Justice Department's challenge but called it "unprecedented and unnecessary."

He noted that the law already is being challenged by the American Civil Liberties Union and other groups opposed to the new statute.

"The issue was already teed up in the courts. There's no reason for the Justice Department to get involved. The Justice Department doesn't add anything by bringing their own lawsuit," Kobach said in an interview.

www.google.com/hostednews/ap/article/ALeqM5jup3stJNgod5yvfvOU1IInU0erAwD9GPMHIO0

[sandi66]

Top Yuan Forecaster Wells Fargo Says Buy Forwards Before Rally
July 06, 2010, 11:47 AM EDT

July 6 (Bloomberg) -- Wells Fargo & Co., the top forecaster for China’s yuan, said investors should buy one-year non- deliverable forwards on the currency as its rally outpaces what the contracts have already priced.

The yuan will probably appreciate to 6.5 against the dollar in 12 months from 6.78 today, outpacing the advance to 6.6775 priced into forwards of similar maturity, according to Wells Fargo predictions. The contracts, settled in dollars, allow traders to bet on the currency’s direction without access to it.

“There’s a buying opportunity in the NDFs,” said Nick Bennenbroek, global head of currency strategy at Wells Fargo in New York. “Once the appreciation starts to pick up more speed, that’s when the expectations for gains are going to be built into the NDFs.”

Bennenbroek, 39, joined Wells Fargo in 2007 to build the bank’s currency research department and was the most accurate forecaster for the yuan in Bloomberg data covering as many as 48 firms. The San Francisco-based lender placed third in overall currency forecasting for the six quarters ended June 30. TD Securities Inc. in Toronto and Standard Chartered Plc in London ranked first and second.

The People’s Bank of China said on June 19 it would allow the yuan, also known as the renminbi, to trade more flexibly in a 0.5 percent daily trading range after holding it at a 6.83 peg against the dollar for two years.

Renminbi Trends

“The key to the renminbi was to monitor the economic and financial backdrop to identify trends that would support the decision to adjust the peg,” Bennenbroek said in a July 2 interview. “Half the equation was getting the economic and financial conditions in place to support a change in currency policy. We then were looking for events that would provide a natural window for a change in China’s currency policy.”

U.S. Treasury Secretary Timothy F. Geithner said on April 3 he would delay a report due two weeks later on exchange-rate policies, opening a “window” for China to change its currency policy. Members of Congress had demanded Geithner use the report to label China a currency manipulator.

www.businessweek.com/news/2010-07-06/top-yuan-forecaster-wells-fargo-says-buy-forwards-before-rally.html

[sandi66]

British queen to address United Nations

January 22, 2010 1:50 p.m. EST


United Nations (CNN) -- Britain's Queen Elizabeth II will address the U.N. General Assembly in July, the British Mission to the United Nations announced Friday.

Queen Elizabeth last addressed the General Assembly in 1957, it said.

The queen's July 6 speech will come at the conclusion of a nine-day trip to Canada with her husband, the Duke of Edinburgh.

She will address the United Nations in her capacity as head of state of 16 U.N. member states, the mission said in a news release.

Queen Elizabeth is head of state for the United Kingdom, Antigua and Barbuda, Australia, the Bahamas, Barbados, Belize, Canada, Grenada, Jamaica, New Zealand, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, the Solomon Islands and Tuvalu.

www.cnn.com/2010/WORLD/europe/01/22/uk.queen.united.nations/index.html

[sandi66]

Companies Market Debt as Speculative-Grade Defaults Slide: New Issue Alert

Jul 6, 2010

Companies are marketing $4.22 billion of debt in the U.S. as default rates for high-yield, high-risk U.S. borrowers slide.

The rate at which U.S. speculative-grade borrowers default on their debt fell to 6 percent at the end of June, an 85 basis- point drop over the past month and down from the 11.3 percent peak in November 2009, Standard & Poor’s said in a report today. Planned debt sales have risen 44 percent from the level two weeks ago, according to data compiled by Bloomberg.

The build-up in potential issuance comes amid rising risk aversion that pushed the 10-year Treasury yield below 3 percent last week for the first time since April 2009 on concerns of slow economic growth. The July 2 employment data fueled concerns the economic recovery is sputtering. Martin Fridson, the global credit strategist for BNP Paribas Asset Management in New York, said he expects default rates to continue to fall despite what he calls “slow economic progress” in the second half of 2010.

“The trend over the next 12 months is default rates will go lower and spreads will contract,” Fridson said in an interview on June 29.

The extra yield investors demand to own high-risk, high- yield debt instead of Treasury bonds narrowed 4 basis points to 713 basis points, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index. The index widened 17 basis points last week.

Narrowing Spread

Fridson said he expects the spread on high-yield debt to fall to below 500 basis points by the end of this year. Speculative-grade bonds are rated below Baa3 by Moody’s Investors Service and BBB- by S&P. A basis point is 0.01 percentage point.

The spread on investment-grade debt narrowed 1 basis point to 208 basis points, according to indexes compiled by Bank of America Merrill Lynch.

High-yield issuers sold $1.66 billion last week, down from $2.68 billion the week before. Investment-grade companies issued $5.93 billion last week, including more than $4 billion June 30. That followed $16.9 billion of high-grade sales the prior week.

“Corporate liquidity remains very healthy,” Fitch Ratings analyst Mark Oline said in a June 29 report. Capital markets recently have been “very accommodating to issuers across the rating spectrum.”

Following is a description of at least $4.22 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

CHILE plans to sell $1 billion of 10-year bonds, along with warrants and peso debt, according to a filing with the U.S. Securities and Exchange Commission. Chile will use the proceeds for general purposes, the filing said. The country, which hasn’t sold international bonds in six years, is seeking financing for repairs after a Feb. 27 earthquake and subsequent tsunami killed more than 400 people and caused as much as $30 billion of damage.

DOHA BANK QSC, Qatar’s third-largest bank, may raise as much as $1 billion from bond sales, its chief executive officer said. The money is likely to be raised for five years and is meant to “fix the maturity mismatch” on the bank’s balance sheet, Raghavan Seetharaman said in a June 16 telephone interview from Doha. The bank hasn’t decided which currency to sell the bonds in, he said. The lender said in April that it planned to sell senior notes in dollars in a statement on the Qatari bourse, without disclosing the size of the offering.

FORETHOUGHT FINANCIAL GROUP INC. plans to sell $150 million of 10-year bonds, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. S&P assigned the notes a grade of BBB- in a March 24 report.

Not Rated

POSTMEDIA NETWORK INC. plans to sell $275 million of eight- year notes, according to a person familiar with the offering. Proceeds will be used to acquire assets of Canwest LP, said the person, who declined to be identified because terms aren’t set.

OXEA FINANCE & CY S.C.A. plans to sell the equivalent of 500 million euros of seven-year bonds in dollars and euros, according to two people with knowledge of the offering. Proceeds will be used to repay debt, shareholder loans and a payment to shareholders, and for general corporate purposes, the people said.

The PROVINCE OF CORDOBA, Argentina, plans to sell as much as $350 million of bonds in international markets once the federal government completes a restructuring of defaulted debt, Banco de Cordoba said.

SENSIENT TECHNOLOGIES CORP. said it entered into an agreement with a group of four financial institutions for the issuance of $110 million in fixed-rate, senior notes, according to a Nov. 19 statement distributed by Business Wire. The company plans to issue seven-year debt to repay existing indebtedness, Sensient said in a March 1 regulatory filing.

High Yield

GENTIVA HEALTH SERVICES INC., the U.S. home-nursing company that is buying Odyssey HealthCare Inc., plans to sell $305 million of eight-year notes, the Atlanta-based company said in a May 24 regulatory filing, without specifying the timing of the transaction. Proceeds will be used to help fund the takeover, according to the filing. Standard & Poor’s assigned the unsecured notes a B- credit rating on June 29. Moody’s Investors Service rated the notes a grade of B2 and ranked $925 million of loans three steps higher at Ba2, it said in a report.

UNIVERSAL HEALTH SERVICES INC., the operator of more than 100 U.S. medical facilities that’s buying Psychiatric Solutions Inc., plans to sell $400 million of senior unsecured debt to help finance the acquisition, it said in a filing with the Securities and Exchange Commission.

PROMSVYAZBANK OJSC, Russia’s third-largest private bank, plans to sell $200 million of six-year loan participation notes at a yield of 11.25 percent, according to two people with knowledge of the sale.

CKE RESTAURANTS INC. may sell $600 million of eight-year notes, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

AKBANK TAS, the Turkish bank part-owned by Citigroup Inc., plans to sell five-year, dollar-denominated eurobonds worth up to $1 billion, according to a filing with the Istanbul Stock Exchange.

CEDAR FAIR ENTERTAINMENT CO., the operator of amusement parks that called off a takeover by an Apollo Management LP affiliate, said it plans to sell $500 million of senior unsecured notes due in 2020. Proceeds will be used to repay existing debt, the Sandusky, Ohio-based company said in a May 20 statement distributed by PR Newswire. Moody’s Investor Service rated the company’s senior notes B2, citing the refinancing meaningfully improves the company’s liquidity position and provides the company flexibility to reduce debt and manage through a period of attendance-constraining high unemployment notwithstanding the increase in cash interest costs resulting from the refinancing.

IRSA INVERSIONES Y REPRESENTACIONES SA, Argentina’s biggest real-estate company, extended an offer to sell $250 million in 10-year bonds until June 24, the company said in a regulatory filing in Buenos Aires on June 14. S&P assigned the notes a grade of B-, six steps below investment quality.

TITAN INTERNATIONAL INC., the maker of tire and wheel systems for off-highway equipment, said it plans to sell at least $150 million of senior unsecured notes. Proceeds will be used to repurchase the 8 percent senior unsecured notes due in 2012 and for general corporate purposes, the Quincy, Illinois- based company said in a May 13 statement distributed by Business Wire.

INVENTIV HEALTH INC., the provider of sales and marketing services to science companies that is being acquired by Thomas H. Lee Partners, may sell $275 million of senior notes to back the purchase, it said in a regulatory filing.

Offerings in Pipeline

NOMURA HOLDINGS INC. Japan’s largest brokerage, plans to sell dollar-denominated sukuk, or Islamic bonds, in Malaysia, according to a media invitation in Kuala Lumpur. Kuwait Finance House (Malaysia) Bhd., a unit of Kuwait’s biggest Islamic bank, will arrange the sale, which will be “the first dollar- denominated sukuk” issued by a Japanese company, according to the invitation.

OAO GAZPROMBANK, the lending unit of Russia’s gas export monopoly, hired Barclays Capital, Royal Bank of Scotland Group Plc, and UBS AG to organize meetings with investors in Europe and Asia starting July 5, according to two people with knowledge of the transaction.

CORPORACION FINANCIERA DE DESAROLLO S.A. Peru’s state development bank known as Cofide, plans to sell as much as $250 million of dollar-denominated bonds, according to Chief Financial Officer Carlos Linares. Linares said in an interview in Lima, that the lender is selling long-term debt as it boosts lending to local infrastructure projects. “Peru’s need for infrastructure is huge,” Linares said. “The government is trying to promote foreign investment in a long list of projects.”

SRI LANKA plans to sell dollar-denominated bonds, according to its central bank. The South Asian country’s third-ever overseas offering is likely after August, Central Bank of Sri Lanka Assistant Governor C.J.P. Siriwardena said in a telephone interview on June 30.

GEORGIAN RAILWAY LTD. hired Bank of America Corp. and JPMorgan Chase & Co. for a sale of bonds in dollars, according to a banker involved in the transaction.

JORDAN plans to sell about $500 million of bonds, Finance Minister Mohammad Abu Hammour said in an interview on June 23. The sale will be denominated in U.S. dollars “as it’s a stable currency and the Jordanian dinar is pegged to it,” Abu Hammour said.

BANK OF EAST ASIA LTD. hired Citigroup Inc. and JPMorgan Chase & Co. to help it sell subordinated 10-year bonds in dollars, according to a person with direct knowledge of the matter. The banks are meeting potential investors in Hong Kong and Singapore, the person said.

URUGUAY may sell as much as $1 billion of bonds in 2011, including $500 million of dollar-denominated debt, Carlos Steneri, director of public credit at Uruguay’s Ministry of Economy and Finance, said June 3 at a LatinFinance conference in London. The dollar-denominated bonds may have a maturity of 20 years or more, Steneri said.

MALAYSIA plans to raise about $1 billion from its first sale of conventional dollar bonds in eight years after drawing bids for five times the Islamic debt it offered, a finance ministry official said. The government may hire the same banks, including CIMB Group Holdings Bhd. and HSBC Holdings Plc, to arrange the sale by Sept. 30, said the official, who declined to be named as the discussions are private. Malaysia raised $1.25 billion from a Shariah-compliant dollar bond on May 27. Malaysia is rated A3 by Moody’s and A- by S&P.

INDOSAT PALAPA CO., a unit of Indonesia’s second-largest phone operator, delayed a planned dollar bond sale until market conditions improve, a person familiar with the matter said May 26. Indosat began meetings with investors in Asia, the U.S. and Europe on May 12 to gauge demand for a global bond sale, according to a company statement sent to the Indonesian stock exchange that day. Moody’s assigned a provisional Ba1 rating to the notes and S&P rated them BB, one step lower.

SABIC CAPITAL, a unit of Saudi Basic Industries Corp., will sell bonds when market conditions and rates are favorable, its vice president for corporate finance Mutlaq al-Morished told al- Arabiya television in Dubai on June 16. Sabic delayed a bond sale because of unfavorable spreads, al-Morished said in a May 26 telephone interview. Sabic Capital had hired HSBC Holdings Plc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to manage a benchmark-sized offering.

GHANA is considering selling its second dollar bond in 2011 to tap investor demand as the start-up of oil production boosts economic growth and narrows the budget deficit, Deputy Finance Minister Fifi Kwetey said. The government is considering a “no- deal roadshow” as early as the fourth quarter to gauge international investors’ appetite, Kwetey said in a May 26 interview in Abidjan. Ghana sold its first global bond in 2007, raising $750 million to help fund the construction of roads and power plants.

ANGOLA received credit ratings from Moody’s, S&P, and Fitch Ratings that put it on par with Nigeria, Lebanon and Belarus, and paved the way for a planned sale of international bonds. The southern African nation’s creditworthiness was rated at B+ by S&P and Fitch, four levels below investment grade. Moody’s assigned an equivalent ranking of B1.

EURASIAN NATURAL RESOURCES CORP., a London-based iron ore and alumina producer with operations in China and Russia, said it delayed its first dollar bond sale. The company is “postponing meetings with investors regarding a potential bond issuance under its Euro Medium Term Note program until further notice,” Charlotte Kirkham, a spokeswoman for ENRC, said in an e-mail. The company had hired Deutsche Bank AG and Morgan Stanley to manage the sale, according to a person familiar with the transaction.

KAZAKHSTAN plans to sell between $500 million and $750 million in bonds to investors abroad in the autumn, Kazakh Finance Minister Bolat Zhamishev said in a May 14 interview. The bonds will probably be denominated in dollars and will be used to set a benchmark for corporate borrowing, Zhamishev said.

QATARI DIAR REAL ESTATE INVESTMENT CO. may raise about $1.5 billion by selling global bonds backed by Qatar, according to a person familiar with the sale plan. The developer may offer 10- year conventional bonds and 5-year Islamic securities, said the person who declined to be identified because details of the transaction haven’t been completed. HSBC Holdings Plc and Barclays Capital are among banks expected to manage the sale, according to the person.

CHINA ORIENTAL GROUP CO. plans to sell senior notes to provide working capital and possibly to finance the purchase of steel mills and iron ore assets in China. Deutsche Bank AG will manage the sale with ING Groep NV, according to a statement to the Hong Kong stock exchange.

BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM received approval from the central bank to issue 7 trillion dong ($369 million) of notes and another 3 trillion dong of dollar- denominated notes in 2010, according to a statement on State Bank of Vietnam’s Web site.

BOLIVIA plans its first international bond sale in more than 70 years as early as the end of 2011, Finance Minister Luis Arce said. He didn’t disclose the size of the offering.

KOREA FINANCE CORP. hired BNP Paribas SA and Standard Chartered Plc to help it sell dollar bonds backed by Korean residential mortgages, according to a person familiar with the transaction. The banks will help arrange meetings with investors in Asia, Europe and the U.S., the person said. Edaily reported in April that the company planned to sell $100 million to $200 million of foreign-currency bonds in its first overseas debt sale since October, without citing anyone. The state-run agency also plans to sell $1 billion of global bonds in the U.S., the Korean-language online newspaper said.

PTT EXPLORATION & PRODUCTION PCL, the Thai oil explorer, hired Credit Suisse Group AG and Royal Bank of Scotland Group Plc to help it sell global bonds, according to two people familiar with the matter who asked not to be identified as the plan is private.

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP. of the Philippines may sell between $750 million and $1.5 billion of dollar-denominated bonds “anytime” to help refinance maturing debt through next year, Vice Chairman Jose Ibazeta said. The company manages the finances of state utility National Power Corp.

BRISBANE AIRPORT CORP., owner of Australia’s third-busiest airport, may sell bonds in the U.S. later this year as it pursues new markets to help refinance debt and pay for a new runway. The company is considering a 10- or 15-year U.S. private placement and a five- to seven-year Australian dollar bond sale in late 2010 or early 2011, Chief Financial Officer Tim Rothwell said in a phone interview from Brisbane.

VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP, the state- owned coal producer known as Vinacomin, plans to sell as much as $500 million of bonds overseas this year to fund mining and energy projects, according to Deputy Chief Executive Officer Nguyen Van Hai.

FINLAND may sell five-year bonds denominated in dollars this year, the Finnish Treasury said in a document posted on its Web site.

POLAND may sell dollar bonds if markets stabilize, Deputy Finance Minister Dominik Radziwill said. The European Union member earlier planned to sell $1 billion in five-year debt denominated in the U.S. currency as early as April.

MONGOLIA plans to raise $500 million selling bonds this year and the remainder of a planned $1.2 billion program will be sold according to market conditions, Batbayar Balgan, director general of the financial and economic policy department of Mongolia, said at a forum in Ulan Bator on June 16. The government scaled back its plans for global bond sales this year after Europe’s debt crisis drove up borrowing costs. Investment banks are advising Mongolia to issue debt with maturities of 5 to 10 years, Bayartsogt said in a Feb. 9 interview. The securities may yield between 8 percent to 11 percent, he said.

www.bloomberg.com/news/2010-07-06/companies-market-debt-as-speculative-grade-defaults-slide-new-issue-alert.html

[sandi66]

Saturday, July 03, 2010
Bank of Baghdad to Open in Mosul [Iraq]
13th Sustainment Command (Expeditionary)Story by Sgt. Chad Menegay

07.02.2010 MOSUL, Iraq — In an effort to decrease the use of U.S. currency and stabilize the Iraqi economy, Gen. Raymond T. Odierno, commander of U.S. Forces – Iraq, has directed leadership on all enduring bases in Iraq to solicit, select and establish Iraqi banks on their installations.

In accordance, Maj. Tommie Stevens, Contingency Operating Base Marez/Diamondback, Iraq mayor and executive officer with the Regional Fires Squadron, 278th Armored Cavalry Regiment, 13th Sustainment Command (Expeditionary) and a Sherwood, Tenn., native, came to an agreement with Leila Anan Yeyia, executive manager for the Bank of Baghdad board, June 22 at COB Marez.

“This is an effort to reduce the amount of dollars that the United States has got floating around here in Iraq and to strengthen the Iraqi dinar,” Stevens said. “It’s important for Iraq to strengthen its currency.”

The Bank of Baghdad, a U.S. Treasury-approved bank
that operates 25 branches across the country, chose a pre-existing building at COB Diamondback to renovate. The location is near the Mosul International Airport.

“Once the (Hercules Engineering Solutions Consortium) barriers and ‘T-walls’ are removed, it will be a very well-placed location for that bank to operate for the citizens of Mosul,” Stevens said.

Yeyia said it might take only a couple months to open the bank’s doors to the COB Marez/Diamondback public.

“The bank opening will create jobs,” she said. “There will be a lot of people involved in this facility. This is an opportunity for the economy to grow in the city of Mosul,” Yeyia said.

Stevens said the bank will give the the local nationals and foreign nationals the opportunities to make safe deposits, electronic funds transfers, electronically wire money home, open lines of credit, buy goods and electronically sell those goods.

“In Iraq we have a huge problem in how we manage our cash flow,” Yeyia said. “The facilitation of credit to vendors and local people is important, as are ATMs, EFTs, and point of sale devices. We use these systems to ensure the security of money. To facilitate the cash flow and economy of Iraq is one of the most needed things to do in our country.”

Stevens said there is no doubt that the opening of this bank will have an impact on stabilizing Iraq.

“I care how this benefits the citizens of Mosul,” Stevens said. “I think any soldier who serves the U.S. military cares about what our initiatives are, what our goals are, what we’re doing here. I think strengthening the Iraqi dinar is very important for the stability of Iraq. Everything we do at this point is to strengthen the government and people of Iraq, to get them unified and get that national identity back that they need to exist as a country.”

waronterrornews.typepad.com/home/2010/07/bank-of-baghdad-to-open-in-mosul-iraq.html

[sandi66]

List of state visits made by Queen Elizabeth II

Since aceeding to the throne in 1952, Queen Elizabeth II has undertaken a number of state and official visits as well as trips throughout the Commonwealth, making her, one of the most widely travelled monarchs in history. So far she has made visits to 56 different sovereign states. As the sovereign of more than one independent state, Elizabeth has represented both Canada and the United Kingdom on state visits, though the former on just two occasions. For the countries where Elizabeth is sovereign, other than the United Kingdom, the relevant governor-general will usually carry out state visits on Elizabeth's behalf.

As Queen of Canada
Date Days Country Host
17 October 1957 5 United States of America President Dwight David Eisenhower
July 1959 6[1] United States of America President Dwight David Eisenhower

As Queen of the United Kingdom
Date Days Country Host
29 November 1953 2 Panama President José Antonio Remón Cantera[2]
1 May 1954 1 Libya King Idris I[3]
24 June 1955 3 Norway King Haakon VII
8 June 1956 3 Sweden King Gustaf VI Adolf
18 February 1957 4 Portugal President Craveiro Lopes
8 April 1957 4 France President René Coty
21 May 1957 3 Denmark King Frederick IX
25 March 1958 3 the Netherlands Queen Juliana
26 February 1961 4 Nepal King Mahendra
2 March 1961 5 Iran Shah Pahlavi
2 May 1961 4 Italy President Gronchi
5 May 1961 1 Holy See Pope John XXIII
23 November 1961 1 Liberia President Tubman
1 February 1965 8 Ethiopia Emperor Haile Selassie
8 February 1965 5 Sudan President Dr. Tijani al-Mahi
18 May 1965 11 Germany (Federal Republic of) President Lübke
9 May 1966 5 Belgium King Baudouin
5 November 1968 7 Brazil President Costa e Silva
11 November 1968 8 Chile President Frei
5 May 1969 6 Austria President Jonas
18 October 1971 8 Turkey President Sunay
10 February 1972 6 Thailand King Bhumibol Adulyadej
13 March 1972 2 Maldives President Nasir
15 May 1972 5 France President Pompidou
17 October 1972 5 Yugoslavia President Tito
15 March 1974 8 Indonesia President Suharto
24 February 1975 6 Mexico President Echeverría
7 May 1975 6 Japan Emperor Hirohito
25 May 1976 4 Finland President Kekkonen
6 July 1976 6 United States of America President Ford
8 November 1976 5 Luxembourg Grand Duke Jean
10 February 1977 1 Samoa Malietoa Tanumafili II
22 May 1978 5 Germany (Federal Republic of) President Scheel
12 February 1979 2 Kuwait Emir Jaber III
14 February 1979 3 Bahrain Emir Isa
21 February 1979 3 Qatar Emir Khalifa
24 February 1979 3 United Arab Emirates Emir Zayed
27 February 1979 2 Oman Sultan Qaboos
1 March 1979 2 Saudi Arabia King Khalid
16 May 1979 4 Denmark Queen Margrethe II
29 April 1980 4 Switzerland President Chevallaz
14 October 1980 3 Italy President Pertini
17 October 1980 1 Holy See Pope John Paul II
21 October 1980 3 Tunisia President Bourguiba
25 October 1980 3 Algeria President Chadli
27 October 1980 4 Morocco King Hassan II
5 May 1981 4 Norway King Olav V
27 February 1983 10[4] United States of America President Reagan
25 May 1983 4 Sweden King Carl XVI Gustaf
26 March 1984 4 Jordan King Hussein
25 March 1985 5 Portugal President António Ramalho Eanes
17 February 1986 4 Nepal King Birendra
12 October 1986 7 China President Li Xiannian
17 October 1988 5 Spain King Juan Carlos
25 June 1990 3 Iceland President Vigdis Finnbogadóttir
14 May 1991 13[5] United States of America President George H. W. Bush
9 June 1992 3 France President Mitterrand
19 October 1992 4 Germany President von Weizsäcker
4 May 1993 3 Hungary President Göncz
17 October 1994 4 Russia President Yeltsin
25 March 1996 3 Poland President Kwaœniewski
27 March 1996 3 Czech Republic President Havel
28 October 1996 4 Thailand King Bhumibol Adulyadej
19 April 1999 3 South Korea President Kim Dae-jung
16 October 2000 3 Italy President Carlo Ciampi
17 October 2000 1 Holy See Pope John Paul II
30 May 2001 2 Norway King Harald V
5 April 2004 3 France President Jacques Chirac
2 November 2004 3 Germany President Horst Köhler
17 October 2006 2 Lithuania President Valdas Adamkus
18 October 2006 2 Latvia President Vaira Vike-Freiberga
19 October 2006 2 Estonia President Thomas Ilves
3 May 2007 6 United States of America President George Walker Bush
13 May 2008 4 Turkey President Abdullah Gül
21 October 2008 2 Slovenia President Danilo Tuerk
23 October 2008 2 Slovakia President Ivan Gašparoviè

References
^ Canadian Heritage: Official visits to Canada
^ The Times - 30 November 1953
^ "Episode 4". On Tour with the Queen. Channel 4. 2009-08-31. 1:50 minutes in.
^ "Queen Returns to London". New York Times. Reuters: p. Section 1, Page 4. 1983-03-12. "Her 10-day stay on the West Coast was marred by bad weather."
^ De Witt, Karen (1991-05-19). "Americans Find Royal Visit Moving Some to Adulation, Others to Outrage". New York Times: p. A10. "As she and her husband make their stately way through a 13-day visit to the United States..."




en.wikipedia.org/wiki/List_of_state_visits_made_by_Queen_Elizabeth_II

[sandi66]

Just One ETF: Safe-Haven Concerns Favor Gold Producers, Inflation or Not

July 07, 2010 |

Ryan Darwish of Eugene, Ore.-based Darwish Capital Management is a CFP and RIA and has been in the industry as an investment manager and financial planner for more than 20 years.

Which single asset class are you most bullish (or bearish) about in the coming year? What ETF position would you choose to best capture that?

In my analysis, precious metals would be the asset class I am most bullish about for the coming year. The ETF position I find most attractive to best capture the potential return is Market Vectors Gold Miners ETF (GDX).

How does this ETF fit into your overall investment approach?

My overall investment approach is laid out in my book, The Emperor’s Clothes: Megatrends Affecting Your Financial and Investment Decisions. My view is that consideration of global political and economic events are critical in coming to sound financial and investment decisions. These factors are what create the structural context for the investment environment.

Tell us about the sector. What makes this your top pick?

One of the basic functions of money is as a store of value. If the viability of this function becomes impaired, it is important to consider where economic value will be best preserved, or even increased. When making investment decisions, the objective is, at a minimum, to preserve value - and if we choose wisely, to increase the real value of our net worth. Implicit in the idea of value is what preserves and increases our purchasing power.

Because of the privileged position the U.S. dollar has held as the reserve currency of the world, the mystique of power and safety has become an assumed fact in the perception of most financial players. In my opinion, it would be an error of judgment to assume that the United States has been divinely exempted from the laws of economics, or that the dollar has any value other than a faith-based presumption of economic entitlement.

There is a growing awareness that a fundamental structural shift has occurred, or is in the process of occurring, in the power arrangement of the global economy. Events of recent years should have served as a wake-up call that placing blind faith in institutions such as investment banks, banks, insurance companies and governments is likely to be hazardous to an investor’s financial health. One thing that should be abundantly clear is that financial imprudence at all levels of our society, and throughout the world, has became institutionalized into an acceptable form of conduct. Imprudent lending, and imprudent borrowing, has created a vicious destructive cycle of over-consumption and over-indebtedness. As with many extreme indulgences, when the party is over, we are left with a big hangover and a big cleanup job. Right now the United States in particular - and the world economy in general - has one gigantic hangover, and a daunting clean up job.

With a $1 trillion-plus budget deficit, the United States will likely need to borrow over $70 billion per month from foreign sources in order to continue funding its operations. The question that must be asked now is: How willing and how able will these foreign funding sources be to continue loaning money to the United States to fund its budget deficit? Many of these countries are having a more difficult financial time themselves. Many of these countries were, prior to this financial turbulence, considering reducing the amount of money being loaned to the U.S. In addition, because of the crisis the creditworthiness of the United States has deteriorated, and there are alternative places where these countries can deploy their financial resources which may be more directly beneficial to themselves. The conclusion is inescapable that a potential funding crisis will be one of the major consequences of the current attempt to contain this financial crisis.

Governments of the world have made massive commitments toward maintaining financial and economic stability. On a global scale, trillions of dollars have been committed to financial and economic stabilization. Each time a government responds to a financial crisis in an industry, business, another sovereign county, or municipality, the financial hole gets deeper.

What are the bigger threats?

Looking forward to what pending financial crises of global significance crises are likely to emerge, there is no shortage of candidates. On the front burner is the unfolding European financial meltdown. A prudent view would be to assume that as bad as it looks, it is likely to be much worse when one factors in the amplification effect of derivative positions likely held by systemically important institutions. On the back burners, waiting for their chance to emerge are the rapidly deteriorating conditions of the pension systems, the FDIC, as well as state and local municipalities.

The biggest player is the U.S. Government itself. The $1 trillion-plus budget deficit projected indefinitely into the future does not even take into consideration expensive contingencies which seem to inevitably arise, such as natural and manmade disasters, wars, and other Black Swan events which will necessitate additional funding requirements. How will all the unfunded liabilities and current operating expenses be paid for? One might argue that incurring these expenses is necessary, but there are also consequences.

That there will be increasing insolvency, massive economic displacement, and economic restructuring is appearing to be more and more a given. We are at a global economic watershed point. A recent book, This Time Is Different, by two eminent economists, professors Carmen Reinhart and Kenneth Rogoff, is based upon a compilation and analysis of data looking at government’s financial behavior over the past 800 years. Among their conclusions is a pattern which emerges as a constant. Governments overspend, overborrow, and then default. The two basic methods of default are an outright refusal to pay their debts, or an implicit default. In an implicit default the intent is to debase the currency with the objective of repaying existing indebtedness with a lower value currency, in effect, an attempt to inflate away the real value of a currency.

Given the current operating deficits, as well as future liabilities, the United States is on a trajectory that is financially unsustainable. Considering the position of the U.S. dollar as the reserve currency of the world, the question of default must be addressed by an investor who considers that somehow events occurring in the world matter to the investing results achieved. In my view, an outright default by the United States of its debt is a probability so small as to be insignificant. On the other hand, an implicit default, where the United States attempts to inflate its way out of its financial hole is extremely likely, especially when there is no limit as to how much money the government can create.

What will that mean for allocations?

If we assume, for purposes of discussion, that this is the direction in which economic history will move, it becomes useful to consider some of the implications of this scenario for asset deployment purposes. While there is a great deal of discussion regarding the demise of the U.S. dollar, it is often followed by consideration of other currencies as a safe harbor refuge. This may be a false sense of security. One of the reasons for the U.S. dollar's problem is the lack of monetary discipline because of the fiat nature of the currency; the same problem exists with other currencies. There appears to be an inherent instability with a fiat monetary system. Consequently, in my opinion, it is a mistake to believe that other currencies might be anything other than a temporary refuge.

It is the consequences that follow which will provide both the hazards and the long-term opportunities, from an investment and financial planning perspective. It is exactly here that both the risks and the opportunities reside. In my estimation, the outcome of these circumstances will result in escalating interest rates, which is another version of credit availability reduction, and a damper on economic growth. This would be an unacceptable outcome for our government, whose interests are critically tied to economic growth. The policy response will be an attempt to create vast amounts of money in order to effectively devalue debt, and consequently the dollar.

Current economic policy discussion focuses on a debate as to whether we are looking at a deflationary or inflationary future. In my opinion, while I harbor the view that we will experience a severe hyperinflationary and stagnant economic future, I consider this to be somewhat of a secondary consideration. A primary consideration, which will continue to shape investor behavior, will be the economic uncertainty and dislocation which arises, whether the future is inflationary or deflationary. This economic instability is already creating a greater shift in the view of what is perceived as a more desirable asset class to act as a reserve of reservoir of economic value.

Considering assets which might best retain or increase in value: Current market behavior suggests there is growing recognition that investors have started voting with their feet. One investment area which has highlighted these opportunities is precious metals, in particular gold. The evidence, from reports of shortages of gold coins to the increase in bullion reserves by central banks such as China, India, Russia and Saudi Arabia, makes a compelling case that we are not witnessing merely a speculative thrust at a trading position, but rather a sustainable shift in perception of an asset that will withstand the rigors of the economic storms we are facing.

In these interviews when gold comes up, we've been talking about whether the inverse relationship between the dollar and gold prices holds up in today's market. So do you share the opinion that investing in gold producers is a good deal regardless of a deflationary cycle?

Yes, I do. Whether we are in an inflationary or deflationary cycle is only one factor. In my mind, we are entering a period where questions of systemic solvency will weigh more heavily on investor sentiment and the search for a "safe harbor."

Are there alternative ETFs that could be used to capture the same theme? What makes this specific ETF your first choice?

Aside from owning gold directly, there are now opportunities with ETFs such as SPDR Gold Trust (GLD), to take positions that very much mimic the economic characteristics expected of a currency. In my analysis, this provides a compelling reason to expect the demand for gold to continue to increase. It follows that if one expects the demand for gold to increase, those entities which hold reserves of gold, as well as the productive capacity to bring it to market, can be expected to be beneficiaries of these circumstances. It is from that perspective that if I had to choose only one investment, I would select GDX, an ETF of gold miners as my investment of choice. As an additional factor, it has a lower than category average expense ratio and turnover which I also find attractive.

One thing that leads some to invest in the miners rather than bullion ETFs is a concern about market manipulation, or that there's not enough physical gold behind the bullion ETFs' market cap; does that at all inform your choice of producers over investing in the metal itself?

While I'm aware of this concern, it is not really a major concern of mine with regard to this choice. A bigger factor is the leverage gained from having producers with proven reserves, of an asset for which demand is growing due to conditions that are likely to persist, at the very least.

How does your view differ (if at all) from the consensus sentiment on the sector?

While there are always mixed opinions on investment positions, with observation of the behavior of precious metals pricing, one cannot help but come to the conclusion of a growing bullish sentiment. I would not say there is a current consensus. However, the reports of very large positions in gold being taken by large hedge funds certainly suggest that knowledgeable and sophisticated investors are increasingly recognizing the importance of this asset class.

What catalysts, near-term or long-term, could move the sector significantly?

We live in a world of extreme uncertainty and instability. Anything which affects these conditions can and will move this sector. War, a terrorist attack, a natural disaster such as hurricanes, earthquakes, or erupting volcanoes - or for that matter if some miraculous breakout of peace, or a rash of prudent economic policy decision-making were to occur, one could expect to see this reflected in precious metals pricing.

One should be clear about what one’s reasons are for taking a position in this ETF. Taking a position for trading purposes would lead one to take into consideration sentiment factors that are very fluid, whereas taking a position as a core part of one’s assets would call for an investor to try to sort out market “noise” from a compelling structural analysis of attractive investment conditions.

What could go wrong with your pick?

One thing I have learned from over 20 years of investment decision making, and corroborated during the experiences of my younger years working in research laboratories, is that no matter how well thought out and rational a position is, it does not necessarily mean that is what is. As a consequence, it is important to examine and identify where the potential risks lie in our expectations. The year 2008 gives provides us with a great opportunity to examine what happened to gold during that time of extreme financial duress.

Deleveraging caused massive indiscriminate selling pressure. Institutions were forced to raise capital to meet their regulatory requirements. At the same time the credit markets froze up, making capital very difficult to acquire. This made the situation even worse. Hedge funds are investments for institutions and very wealthy individuals. They operate by borrowing huge amounts of money using their invested positions of stocks, bonds, and the more esoteric derivative investments as collateral. Some of these funds borrow 30-40 times the amount of actual dollars directly invested in them by their investors. The lenders who provide this money to the hedge funds have lending requirements which require the hedge funds to come up with more money if the value of their investments drops too much.

During the financial turmoil, the decline of the investments in these hedge funds forced the hedge fund managers to start selling their investments whether they considered them good investments or not. This amplified the overall selling pressure and made a bad situation even worse. It did not matter whether an investment had merit or not, it was going down, and gold did likewise. It is certainly possible for this to occur again. It should also be noted that GDX seems to trade more like a stock than GLD, hence one might expect higher volatility. One of the only assets which did well in 2008 in comparison was U.S. Treasury debt, due to the perception of safety.

If we fast forward to the emerging European crisis of 2010 and examine market conditions, we can see growing investor perception recognizing gold as a safe harbor. Additionally, the gut reaction of flocking to the U.S. dollar as a safe harbor seems to be becoming somewhat more muted. In my view, I see this as a growing trend that will greatly benefit GDX over time. By the same token, does this suggest to me that it would be appropriate to bet the family farm on this position? Absolutely not! Even if an investor sees merit in my analysis, each individual investor needs to evaluate his own risk tolerance and circumstances to arrive at an appropriate allocation to GDX even if it is the only investment position they are taking.

seekingalpha.com/article/213381-just-one-etf-safe-haven-concerns-favor-gold-producers-inflation-or-not?source=hp_wc

[sandi66]

UPDATE 1-China won't dump U.S. Treasuries or pile into gold

Wed Jul 7, 2010 2:36am EDT

* China eschews "nuclear option" of dumping U.S. debt

* FX manager urges U.S. to be responsible in overseeing dlr

* Big role for gold in China's portfolio ruled out

By Zhou Xin and Alan Wheatley

BEIJING, July 7 (Reuters) - China on Wednesday ruled out the "nuclear" option of dumping its vast holdings of U.S. Treasury securities but called on Washington to be a responsible guardian of the dollar.

In the third in a series of statements explaining its work to the Chinese public, the State Administration of Foreign Exchange sought to allay concerns in the outside world that arise whenever Beijing shifts its holdings of U.S. government debt.

"Any increase or decrease in our holdings of U.S. Treasuries is a normal investment operation," SAFE, the arm of the central bank that manages China's official currency reserves, said.

It said it constantly adjusts its portfolio to maximimise returns, and any changes to its U.S. Treasury portfolio should be seen in that light and not interpreted politically.

In a series of questions and answers posted on its website, www.safe.gov.cn, SAFE asked rhetorically whether China would use its $2.45 trillion stockpile of reserves, the world's largest, as a "nuclear weapon".

SAFE said such concerns were completely unwarranted.

"The U.S. Treasury market is the world's largest government bond market, and U.S Treasury bonds deliver fair good security, liquidity and market depth with low transaction costs.

"The U.S. Treasury market is a very important market for China," the agency said.

China held $900.2 billion in U.S. Treasuries at the end of April, according to U.S. Treasury data released on June 15.

Bankers say China's total holdings of dollar-denominated assets are much greater, accounting for perhaps two-thirds of its reserves.

GOLD NOT THE ANSWER

SAFE also gave a qualified vote of confidence to the dollar.

The agency acknowledged that financial markets were very concerned at one point that massive U.S. government borrowing would drive the U.S. currency lower.

But it said economic conditions elsewhere were also a factor in determining the dollar's trend. The euro zone, for instance, was struggling with high government debt levels.

"We must recognise that any depreciation of the dollar is relative to other countries, and other countries or regions also have this or that problem," SAFE said.

One of the prime concerns of Chinese Internet commentators is that a long-term decline in the dollar or euro will erode the value of SAFE's portfolio.

To that end, SAFE called on the United States and other major countries to take "responsible measures" to maintain the value of their currencies. This meant withdrawing monetary stimulus in a reasonable manner and relying less on deficit spending.

SAFE was lukewarm about gold as an investment.

"It cannot become a main channel for investing our foreign exchange reserves," the agency said, noting the size of the gold market was limited and prices were volatile.

Buying more gold would also not help much in diversifying China's reserves.

China has increased its gold holdings by more than 400 tonnes in the past few years to 1,054 tonnes. Even if it doubled that amount gold's share of SAFE's portfolio would increase by only one or two percentage points.

SAFE is an easy target for domestic critics who question why China has amassed a mountain of reserves instead of investing more at home. The elucidations on its website appear primarily aimed at disarming those critics.

"SAFE will never be a speculator. It mainly seeks to protect the safety of China's FX reserves and ensure a stable investment return," it said.

The agency said it was a financial investor and did not seek management control when it made equity investments.

Answering its own question on whether it has bought into stocks, private equity funds or any other higher-risk instruments, SAFE said its never excludes any investment.

"It depends on whether a product meets SAFE's demand for safety, liquidity and a stable yield for its FX reserves, and whether it can help SAFE diversify risks," the agency said.

www.reuters.com/article/idAFTOE66604R20100707?rpc=44

[sandi66]

Obama bypasses Senate for new Medicare chief

By ERICA WERNER

July 7, 2010, 11:12AM ET

President Barack Obama bypassed the Senate Wednesday and appointed Dr. Donald Berwick, a Harvard professor and patient care specialist, to run Medicare and Medicaid.

The decision to use a so-called recess appointment to install Berwick as administrator of the Centers for Medicare and Medicaid Services drew immediate fire from the GOP. Republicans have raised concerns about Berwick's views on rationing of care and other matters and said it was wrong for Obama to go around the normal Senate confirmation process, even though the recess appointment is a tool used by presidents of both parties.

Berwick has wide support in the medical community but Democrats feared the GOP would use his confirmation hearings as an opportunity to reopen last year's divisive health care debate. Obama defended the decision to appoint Berwick and two other officials, one to a pension board and the other to a White House science post.

"It's unfortunate that at a time when our nation is facing enormous challenges, many in Congress have decided to delay critical nominations for political purposes," Obama said in a statement Wednesday. "These recess appointments will allow three extremely qualified candidates to get to work on behalf of the American people right away."

Senate Minority Leader Mitch McConnell accused Obama of trying to "arrogantly circumvent the American people" with Congress out of town for its annual July Fourth break. Berwick could serve through next year without Senate confirmation.

"Democrats haven't scheduled so much as a committee hearing for Donald Berwick but the mere possibility of allowing the American people the opportunity to hear what he intends to do with their health care is evidently reason enough for this administration to sneak him through without public scrutiny," said McConnell, R-Ky.

Berwick, 63, is a pediatrician, Harvard University professor and leader of a health care think tank, the Institute for Healthcare Improvement, that works to develop and implement concepts for improving patient care. The programs he will oversee -- Medicare and Medicaid for the elderly, poor and disabled, along with the Children's Health Insurance Program -- provide care to about 100 million people, or around 1 in 3 Americans.

The American Hospital Association was among the groups that weighed in to support Berwick Wednesday.

"Don has dedicated his career to engaging hospitals, doctors, nurses and other health care providers to improve patient care," said Rich Umbendstock, head of the hospital association. "A physician and innovator in health care quality, his knowledge of the health care system makes him the right choice."

Republicans have seized on comments like one Berwick made to an interviewer last year: "The decision is not whether or not we will ration care -- the decision is whether we will ration with our eyes open. And right now, we are doing it blindly."

Republicans say that shows Berwick would deny needed care based on cost. Supporters contend rationing already is done by insurance companies and Berwick simply wants transparency and accountability in medical decisions.

It's just those echoes of the health care debate that Democrats would prefer not to replay on the Senate floor.

Medicare has been without an administrator since 2006, and the White House says the need to fill the post is critical because of its role in implementing the new health care law. Medicare is to be a key testing ground for numerous aspects of the new law, from developing new medical techniques to trying out new payment systems, and the White House says a permanent leader is key with deadlines approaching.

Obama last made a batch of recess appointments in March. Also appointed Wednesday were:

--Philip E. Coyle III as associate director for national security and international affairs at the White House Office of Science and Technology Policy.

--Joshua Gotbaum as director of the Pension Benefit Guaranty Corporation.


www.businessweek.com/ap/financialnews/D9GQ9IPG0.htm

[sandi66]

President Obama official schedule and guidance, July 7, 2010. Geithner, Clinton, Biden

July 7, 2010 6:57 AM

THE WHITE HOUSE
Office of the Press Secretary
_______________________________________________________________________________________
FOR IMMEDIATE RELEASE
July 6, 2010

DAILY GUIDANCE AND PRESS SCHEDULE FOR
WEDNESDAY, JULY 7, 2010

In the morning, the President and the Vice President will receive the Presidential Daily Briefing in the Oval Office. The President will then meet with senior advisors in the Oval Office. These meetings are closed press.

Later in the morning, the President will deliver remarks in the East Room on the administration's commitment to export promotion to grow the economy and support new American jobs. The President's remarks are open press.

In the afternoon, the President and the Vice President will receive a briefing on the BP Deepwater Horizon oil spill in the Oval Office. This meeting is closed press. The President and the Vice President will then have lunch in the Private Dining Room. This lunch is closed press.

Later in the afternoon, the President and the Vice President will meet separately with Secretary of the Treasury Geithner and Secretary of State Clinton in the Oval Office. These meetings are closed press.


In-Town Travel Pool
Wires: AP, Reuters, Bloomberg
Wire Photos: AP, Reuters, AFP
TV Corr & Crew: CNN
Print: USA Today
Radio: NPR


EDT

9:30AM In-Town Travel Pool Call Time

10:00AM THE PRESIDENT and THE VICE PRESIDENT receive the Presidential Daily Briefing
Oval Office
Closed Press

10:30AM THE PRESIDENT meets with senior advisors
Oval Office
Closed Press

11:25AM THE PRESIDENT delivers remarks on the administration's commitment to export promotion to grow the economy and support new American jobs
East Room
Open Press (Pre-set 10:30AM - Gather Time 10:55AM - North Doors of the Palm Room)

12:00PM THE PRESIDENT and THE VICE PRESIDENT receive a briefing on the BP Deepwater Horizon oil spill
Oval Office
Closed Press

12:30PM THE PRESIDENT and THE VICE PRESIDENT have lunch
Private Dining Room
Closed Press

2:00PM THE PRESIDENT and THE VICE PRESIDENT meet with Secretary of the Treasury Geithner
Oval Office
Closed Press

3:30PM THE PRESIDENT and THE VICE PRESIDENT meet with Secretary of State Clinton
Oval Office
Closed Press



Briefing Schedule

1:30PM Briefing by Press Secretary Robert Gibbs


blogs.suntimes.com/sweet/2010/07/president_obama_official_sched_359.html

[sandi66]

Bloomberg Launches Derivatives Valuation Service To Bring Transparency

Provides end-of-day valuations and risk measurements for a full range of OTC derivatives and structured products.

July 07, 2010


Bloomberg Professional Service has rolled out a new valuation service for over-the-counter (OTC) derivatives designed to bring the transparency long sought by the financial market participants, as well as government regulatory agencies.
The launch comes at the same time that U.S. federal regulators are considering increasing regulations on OTC derivatives through the financial reform bill that is being finalized in the House and Senate.

The new Bloomberg Derivatives Valuation Service, which is an extension of Bloomberg Valuation Services (BVAL), provides comprehensive endofday valuations and risk measurements for a full range of OTC derivatives and structured products, the company stated in its release today.
The new service offers pricing for derivatives and structured notes of all levels of complexity across foreign exchange, interest rate, inflation, credit, equity and commodity markets, using highquality data and marketstandard models. The solution is fully integrated with the additional analysis tools on the Bloomberg Professional Service for enhanced transparency and flexibility.

“Bloomberg is uniquely positioned to help the financial community better manage its derivatives positions. Our new OTC derivatives valuations provide unparalleled independence, expertise and transparency so critical to investment and risk professionals, regulators and investors,” commented Tom Secunda, founding partner of Bloomberg L.P. and head of Bloomberg’s Financial Products and Services, in the release.

Bloomberg’s Derivatives Valuation Service uses marketstandard quantitative models and a portfolio of data that taps advanced validation and cleansing techniques to ensure accuracy and consistency, according to the release.

Users can access their evaluated positions via endofday data files and through a dedicated portfolio manager on the Bloomberg Professional Service, which provides extensive analytic, data, news and information. This additional delivery mechanism allows customers to analyze the terms of the deals as well as the data and models behind the prices. Experienced financial engineers, who are available 24 hours a day, seven days a week, are staffing the Bloomberg Derivatives Valuation Service to provide details into the models and methods used.

“Our mission is to deliver the tools that clients need to properly value their positions for trading, analytical and risk needs,” stated Andrea Danese, global head of data solutions for BVAL, in the release.

In addition to the new Derivatives Valuation Service, BVAL provides endofday valuations for over six million publicly available securities including bonds, mortgages and equities.

advancedtrading.com/infrastructure/showArticle.jhtml?articleID=225702525

[sandi66]

The Role of Derivatives in the Financial Crisis at Golden Networking's Derivatives Conference in New York

Release Date: 2010-07-07

Derivatives Leaders Forum 2010, "Strategies for Increasing Profits under an Evolving Regulatory Framework" (http://www.DerivativesLeadersForum.com), July 22nd, New York City

FOR IMMEDIATE RELEASE / PRURGENT

"The Role of Derivatives in the Financial Crisis" will be one of the main topics of debate at upcoming Golden Networking's Derivatives Leaders Forum 2010, "Strategies for Increasing Profits under an Evolving Regulatory Framework" (http://www.DerivativesLeadersForum.com), July 22nd, 2010, New York City, sponsored by UltraHighFrequencyTrading.com.

The University of Maryland reports that, while lawmakers were busy hammering out the final details of landmark financial regulatory reform legislation still to be approved by the Senate, the Financial Crisis Inquiry Commission (FCIC) held a public hearing to determine if derivatives, once referred to as "financial weapons of mass destruction" by no other than billionaire investor Warren Buffett, toppled large banking institutions and catalyzed the ongoing economic crisis. Derivatives are complex financial instruments used to hedge risk. Traditional futures contracts, where one party agrees to buy or sell a certain commodity for a certain price at a set date in the future, are thought to be the earliest sustained derivatives transactions in America. Those trades happen on exchanges under the watchful eye of regulators - unlike the unregulated, over-the-counter (OTC) derivatives trades discussed last week in Washington.

Legislation passed in 2000 exempted the OTC derivatives market from capital adequacy requirements, among other disclosure and regulatory rules. Without a requirement to back up guarantees, U.S. taxpayers became the lender of last resort when the housing market tanked and "too big to fail" financial institutions faced massive shortfalls. American International Group (AIG), for example, was able to underwrite nearly $80 billion in CDS with only $20 billion in reserves, a catastrophic gamble revealed only hours before the insurance giant was on the brink of collapse.

Derivatives Leaders Forum 2010 is produced by GoldenNetworking.net (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs, investors and diplomats, founded by former McKinsey consultant and Columbia Business School MBA Edgar Perez. Upcoming Golden Networking's Forums and Business Receptions include:

• High-Frequency Trading Happy Hour, (http://www.HFTHappyHour.com), July 13th, New York City

• Distressed Investing Experts Forum 2010, "Analyzing and Valuing Distressed Companies, Securities and Real Estate" (http://www.DistressedInvestingExpertsForum.com), September 23rd, New York City

• 2nd China Leaders Forum, "Challenges and Opportunities for China's Economic Juggernaut" (http://www.ChinaLeadersForum.com), October 7th, New York City

• Latin America Leaders Forum 2010, "Unlikely Oasis of Growth amid the Global Economic Crisis?" (http://www.LatinAmericaLeadersForum.com), October 21st, New York City

• 2nd Banking Leaders Forum, "Private Banking on the Brink of Transformational Change" (http://www.BankingLeadersForum.com), November 11th, New York City

• Global Energy Leaders Forum 2010, "Proposals and Solutions for Today's Global Energy Challenges" (http://www.GlobalEnergyLeadersForum.com), December 2nd, New York City

• 2nd Private Equity Leaders Forum, "Setting the Stage for Radical Transformation in 2011 and Beyond" (http://www.PrivateEquityLeadersForum.com), December 9th, New York City

Golden Networking has compiled the insights of top experts and industry practitioners and produced DVD Video Packages for its Leaders Forums, including:

• Distressed Investing Leaders Forum 2009 DVD Video Package, "The Most Comprehensive Guide for Any Investor in Distressed Assets", www.DistressedInvestingLeadersForum.com

• Distressed Investing Leaders Forum 2010 DVD Video Package, "Extraordinary Opportunities Investors Cannot Afford to Pass", www.DistressedInvestingLeadersForum.com

• High-Frequency Trading Experts Forum 2010 DVD Video Package, "Starting and Running a High-Frequency Trading Operation", www.HFTExpertsForum.com

• Hedge Funds Leaders Forum 2010 DVD Video Package, "Generating Alpha in Challenging Times", www.HedgeFundsLeadersForum.com

• High-Frequency Trading Experts Forum 2010 DVD Video Package, "Innovating and Profiting from High-Frequency Trading in 2010 and Beyond", www.HFTLeadersForum.com

Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to infogoldennetworking.net. Golden Networking has been frequently featured in the press, including recent articles in The New York Times, "Golden Networking Helps Job Seekers Make Overseas Connections" (http://www.nytimes.com/2009/11/07/nyregion/07network.html), Los Angeles Times, "Speed-addicted traders dominate today's stock market" (http://articles.latimes.com/2010/may/16/business/la-fi-new-exchanges-20100516), Reuters, "Revamp looms as trading experts huddle at SEC" (http://www.reuters.com/article/idUSTRE6504U820100601) and Columbia Business School's Hermes Alumni Magazine, "10 Under 10" (http://www7.gsb.columbia.edu/alumni/news/ten-under-ten).



Contact Info

Golden Networking
New York, NY

Phone: [phone]

Website: www.DerivativesLeadersForum.com

www.prurgent.com/2010-07-07/pressrelease105603.htm

[sandi66]

US First Lady Thanks Treasury Employees, Says More To Be Done
Last update: 7/7/2010 12:39:20 PM

By Darrell A. Hughes
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--First Lady Michelle Obama thanked Treasury Department employees Wednesday for their service, but said there's much more to be done.

Obama, introduced by Treasury Secretary Timothy Geithner, told the employees she and the president were appreciative of all the work that went into implementing and then winding down government stimulus measures, keeping the auto companies afloat and crafting the "historic" financial-system reform, among others.

"This is very important work that you guys are accomplishing," Obama said.

Geithner also thanked his staff, noting the work put forth by Treasury employees is the primary reason the economy is healing from the crisis.

Still, he said, a full-fledged economic rebound is a long way off. "We still have a lot of challenges to meet," Geithner told the audience.

-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684; [e-mail]
(END) Dow Jones Newswires
July 07, 2010 12:39 ET (16:39 GMT)
custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={b93fa1c9-c2f4-4799-81f8-9e8ca692b453}

[sandi66]

Amid Biden visit, Iraq inches closer to forming a government

July 6, 2010

The formation of a new Iraqi government is proving as complicated as solving a Rubik’s cube, but at least Vice President Biden has a better sense now of how all the pieces might fit together.

Biden spent the July 4 three-day weekend in Iraq, meeting with nearly all that country’s major power brokers. It was the most active U.S. involvement in Iraqi politics since the Obama administration took office, and although it didn’t produce any breakthroughs, it gave a useful nudge to the Iraqis -- and a reminder to all factions that the United States has continuing interests there.

Biden brought two messages to all the Iraqi factions, a source said. First, “We have a long-term commitment. We are not disengaging. The nature of this commitment is changing from military involvement, but we’re not going away.” This was “well received by everyone,” the aide said.

Second, Biden told the Iraqis, “We’re not meddling in government formation, and we think you should resist meddling by anyone else,” such as the Iranians and other neighbors. “But if you want us to be helpful, we’re all ears.”

Biden came away hopeful that the long-delayed haggling over forming a new government may be accelerated by the July 14 constitutional deadline for naming a new speaker of the Iraqi parliament, which will then have been sitting for thirty days. Like everything else in Iraq, that rule can be fiddled -- but it does seem to have concentrated the minds of the Iraqi leaders. And they are not likely to name a speaker until the other key positions have been assigned, too.

Another factor accelerating the process is that the holdover incumbent Prime Minister Nouri al-Maliki seems to have decided that the waiting game he has been playing may not work in his favor any longer. Maliki and his Shiite “State of Law” party finished second in the balloting to former Prime Minister Ayad Allawi’s Iraqiya coalition, a secular group that was strongly backed by Iraqi Sunnis.

Maliki’s problem as incumbent is that he gets blamed for Iraq’s everyday problems -- including electricity shortages this summer that produced strikes and protests that were organized by some of the Shiite factions that Maliki needs to form a governing coalition.

This Shiite unhappiness with Maliki is a new factor -- and is said to be pushing him toward a possible deal with Allawi. The two factions have held intensive meetings over the past week. It’s still not clear who would be prime minister if such a deal could be hatched. But the U.S., which has worked reasonably well with both of them, would be pleased with that outcome.

The alliance of Kurds, who hold the swing vote, are said to be insisting that they hold onto the presidency, with a new term for incumbent President Jalal Talabani. Other key figures are Adel Abdul Mahdi, the head of the Shiite party known as ISCI, who is mentioned as a possible compromise prime minister, and Rafa al-Essawi of Iraqiya, a Sunni who is mentioned as a possible speaker of the parliament.

The Iranians are fighting to keep in power some version of the Shiite coalition that currently rules the country, in the expectation that it would be pliable to Iranian demands. But many of the Shiite politicians have shown increasing willingness to buck Tehran’s tutelage -- at least during this long period of political jockeying and horse trading since the March election.

The Saudis and the Turks favor Allawi. The Saudis in particular are resistant to the idea of another term for Maliki -- and would probably prefer almost anyone else.

By David Ignatius | July 6, 2010; 5:08 PM ET

voices.washingtonpost.com/postpartisan/2010/07/amid_biden_visit_iraq_inches_c.html

[sandi66]

China: U.S. Treasury Market 'Very Important' (TUZ, CYB, GLD)..

07/07/10 at 1:58pm by

Stating that the "U.S. Treasury market is a very important market for China," the Chinese State Administration of Foreign Exchange Wednesday ruled out the "nuclear" possibility of dumping U.S. debt. The PIMCO 1-3 Year U.S. Treasury Index Fund (NYSE: TUZ) is up slightly in afternoon trading.

In a series of questions and answers posted on its website, Chinese leadership outlined its policy on $2.45 trillion in reserve holdings. Notoriously secretive in its investment strategy, China maintains a dominant role in a number of markets, including U.S. Treasury debt. It noted that the United States must maintain budgetary constraint, but reiterated its confidence in U.S. assets.

"The U.S. Treasury market is the world's largest government bond market, and U.S. Treasury bonds deliver good security, liquidity and market depth with low transaction costs.

China held over $900 billion in U.S. debt at the end of April. With such an elevated percentage of U.S. obligations held by the Chinese, budget hawks worry about the possibility of an economic "nuclear bomb." The untold implications of a debt dump by China would wreak havoc on the U.S. economy and world markets.

WisdomTree's Dreyfus Chinese Yuan Fund (NYSE: CYB), which provides exposure to movements in the Chinese Yuan relative to the United States dollar, is up today.

Concerning its investment policy in gold, China remained relatively tepid at increasing its holdings. "It cannot become a main channel for investing our foreign exchange reserves," noting that prices can be volatile.

The SPDR Gold Trust (NYSE: GLD) is trading up close to 1% this afternoon. Because the market for gold is supply limited, the State Administration of Foreign Exchange (SAFE) remains weary about boosting its gold reserves.

"SAFE will never be a speculator. It mainly seeks to protect the safety of China's [foreign exchange] reserves and ensure a stable investment return," it said.

www.benzinga.com/general/10/07/365357/china-u-s-treasury-market-very-important-tuz-cyb-gld

[sandi66]

JULY 8, 2010, 9:23 A.M. ET

WORLD FOREX: Euro, Growth Currencies Gain On Positive Jobs Data

NEW YORK (Dow Jones)--The euro gained to a near two-month high against the dollar Thursday after better-than-expected U.S. jobs data bolstered investor sentiment about the strength of the global recovery.

"Seems to be that the jobless claims have dominated," said Adam Cole, global head of foreign exchange strategy at RBC Capital Markets in London, leading to gains in currencies closely tied to the pace of global growth, such as the Australian dollar, which strengthened nearly 1.5% against the dollar by morning New York trading.

Strong Australian jobs data released overnight earlier had boosted confidence in global economies' march forward.

Meanwhile, the European Central Bank and the Bank of England both stood pat on ultra low key interest rates on Thursday. Thursday morning, Trichet answered questions during a press conference on upcoming stress tests of the European banking system, along with the bank's operations to drain some of the liquidity that had been pumped into the system to prop a sagging economy.

"This is not likely to be a press conference which is likely to be market moving," Cole said. "They're likely to get very little from Trichet about the stress tests, which is what is foremost in investor's minds," he said.

Thursday morning, the euro was at $1.2685 from $1.2648 late Wednesday, according to EBS via CQG. The common currency hit 1.2689, its highest level since May 12, as investors bid riskier currencies higher on the back of the better-than-expected U.S. data. The dollar was at Y88.38 from Y87.70, while the euro was at Y112.13 from Y110.93. The U.K. pound was at $1.5151 from $1.5201. The dollar was at CHF1.0496 from CHF1.0517.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 83.759 from 83.868.

In a hopeful sign for the labor market, the number of U.S. workers filing new claims for unemployment benefits fell last week by more than analysts expected.

In its weekly report Thursday, the Labor Department said the number of U.S. workers filing initial claims for jobless benefits declined by 21,000 to 454,000 in the week ended July 3. Economists surveyed by Dow Jones Newswires had expected claims would fall by 12,000. That last time claims dropped by so much was in mid-April.

Meanwhile, investor attention was focused on Europe, with investors searching in Trichet's press conference for additional details on stress tests for the region's banks.

The tests will look at how heavy losses at European banks would be if European economies pitch back into recession and in the face of a "sovereign shock" that would generate losses on banks' government bond portfolios.

According to a statement from Committee of European Banking Supervisors released late Wednesday, the London-based body that groups the EU's national authorities, the tests will examine an "adverse scenario" in which European growth is 3 percentage points of GDP slower than current EU forecasts over the next two years.

European governments are hoping the stress tests will settle uncertainty about the health of Europe's banks that have been heightened by the fallout from Greece's debt crisis. Banks remain highly dependent on funds provided by the European Central Bank.

On Thursday, the European Central Bank left its key interest rate unchanged at 1.00%, as widely expected.

The Bank of England's Monetary Policy Committee Thursday also left its key interest rate unchanged at an all-time low to help cushion the economy against the impact of deep cuts in government spending. It also left its government bond-buying program unchanged.

Canada Morning The Canadian dollar moved higher against its U.S. counterpart Thursday morning, as investors broadly gained confidence.

"Everyone is talking about the Australian number that obviously blew expectations to the topside, and wondering if that same correlation is going to hold true for the other commodity-based major currencies in the world," said Firas Askari, head of foreign exchange trading at BMO Capital Markets in Toronto.

The Canadian currency popped to a session high as U.S. weekly jobless claims fell more than expected, and as Canada's new house prices for May matched expectations, rising 0.3% over the previous month and 2.9% on the year.

The U.S. dollar was at C$1.0412, from C$1.0504 late Wednesday.

The Canadian dollar will likely trade in tandem with the euro on Thursday, but moves could be constrained somewhat, as investors await Canada's key employment report for June, due out Friday.

According to a Dow Jones Newswires survey, the median analyst estimate is for the jobless rate to hold steady at 8.1%, with a net gain of 10,000 jobs.

online.wsj.com/article/BT-CO-20100708-707504.html

[sandi66]

Gold Fluctuates in New York on Outlook for Dollar, Currencies

July 08, 2010, 9:39 AM EDT

July 8 (Bloomberg) -- Gold futures fluctuated between gains and losses amid speculation that the dollar will weaken, boosting demand for the precious metal as an alternative asset.

The dollar slipped 0.1 percent against a basket of six major currencies, heading for the fifth straight weekly decline. Gold traditionally has moved inversely to the dollar. The metal reached a record $1,266.50 an ounce on June 21 and rallied to all-time highs in euros, sterling and Swiss francs as investors sought a haven during Europe’s fiscal crisis.

“Gold is in transition,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. “You have a more traditional gold and dollar relationship coming back, but it’s very fragile.”

Gold futures for August delivery rose $1.50, or 0.1 percent, to $1,200.40 at 9:10 a.m. on the Comex in New York. The price fell as much as 0.2 percent and rose as much as 0.8 percent.

A rally in equities may also boost demand for the precious metal, McGhee said. Gold dropped 3.9 percent last week as investors sold gold to cover losses in the stock market. The Standard & Poor’s 500 Index lost 8.5 percent in the previous two weeks, before rebounding 3.7 percent this week through yesterday.

“If the relief rally in stocks holds, we’ll see gold start moving higher,” McGhee said. “If it doesn’t last, we’ll see people look to raise money again by selling gold.”

Silver futures for September delivery rose 4 cents, or 0.2 percent, to $18.04 an ounce on the Comex.

Platinum futures for October delivery rose $9.80, or 0.6 percent, to $1,536.20 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery rose $5.90, or 1.3 percent, to $448.25 an ounce.

www.businessweek.com/news/2010-07-08/gold-fluctuates-in-new-york-on-outlook-for-dollar-currencies.html

[sandi66]

Geithner on FinReg: No More Lehmans!

Thursday, 8 Jul 2010 | 1:13 PM E

Can proponents of the coming financial reform bill claim success if the five or 10 largest banks are still too big to fail? That’s the question Kudlow put to Treasury Secretary Timothy Geithner on Wednesday.

Geithner responded to criticism that the Obama administration had failed to remove the moral hazard of excessive risk taking by saying the new legislation will “constrain risk taking, limit leverage, force much more conservative capital requirements, liquidity requirements on these institutions, so they are much less vulnerable to mistakes, much more able to withstand the shocks that could come from the future.”

What the law also will allow – “And this is crucial,” Geithner said – is that if these banks can’t survive without government assistance, “then we will be able to put them out of existence safely.” In essence, the government could avoid a repeat of Lehman Brothers, or AIG [AIG 35.0908 -0.2492 (-0.71%) ] and Bear Stearns for that matter, without exposing the taxpayer to the risk of loss, and “without the fire spreading to a bunch of better-managed, solvent institutions,” Geithner said.

That still leaves questions about derivatives, though. While the banks will trade them regardless of how financial reform turns out, Kudlow noted, those who use derivatives to hedge, say, energy or currencies complain the bill could cost them an extra $1 trillion, meaning they are being unjustly penalized.

There is “no basis for those estimates or those concerns in my view,” Geithner said.

He said the bill preserves the capacity for banks and other companies to hedge the risks of their business. And it allows them to continue to do that “in ways that meet their specific needs, but to make sure the system as a whole is safer, that stuff happens in the light of day with transparency and disclosure.”

“That’s why these reforms are so important in derivatives,” Geithner said, “so that we don’t face the situation again where all this stuff operates in the shadows or firms like AIG can take on huge risks without the capital to back them.”

The Treasury Secretary already made news on Wednesday when he told the “Kudlow Report” that taxes on dividends and capital gains would be capped at 20%. But Geithner touched on a number of other important points as well during the interview, including the economy, Fannie and Freddie, tax cuts and his status as the country’s chief financial officer. Read on for those and more.

Outlook on the economy: “I think this economy is healing. We’re repairing the damage caused by the crisis. We’re growing, and we’ve been growing now for 12 months. We’ve had six months of sustained growth in private-sector jobs. Coming out of the last recession, it took us almost two years before we had a sustained set of month-to-month increases in private-sector jobs. So that’s very encouraging. And I think that the most likely thing is you’re going to see is an economy that is growing at a moderate pace, hopefully strengthening over time. And this growth now you’re seeing is being led by business investment, by exports, by manufacturing. That’s very encouraging too.”

On Fannie and Freddie: “We are going to propose a sweeping set of reforms that’ll end what was broken in that basic model, remove the moral hazard from it, fix the basic things that caused that risk, and we are going to move quickly to do that once we have this financial reform bill in place and behind us. We’ve had a very thoughtful team of people looking at alternatives, and we’re going to cast the net very broadly, across the aisle, to get the best ideas, so we can fix what’s broken … We couldn’t do everything at once, and we decided to try to fix these other problems first, but we’re going to move very quickly to reform Fannie [FNMA.OB 0.206 -0.0401 (-16.29%) ] and Freddie [FMCC.OB 0.254 -0.086 (-25.29%) ].”

On the “bad blood” between Administration and business community: “I think businesses are doing now what businesses always do, which is they want their taxes lower and they’d like to operate with less regulation, as they always do. Our job, though, is to make sure, again, we’re creating the conditions that make this economy work better for the country as a whole. Now just remember, when the president stepped into this job, business of America was out of business. People could not borrow. They were cutting deeply into the bone of the productive capacity of this country. They were completely out of commission; it was almost lights out. And what the president did is to take on the tough things early to bring stability to an economy that was falling off the cliff. And the businesses across this country are in a much, much stronger position today because of the actions he was willing to take. Now people don’t like change, they don’t like these reforms. But he took on things that are absolutely critical to our capacity to grow – in education, in health-care costs, and in the financial system – and by taking those tough choice early, we’re in a much stronger position now to make sure we can prosper going forward.”

On the viewpoint that US corporate taxes are too high: “We’re going to have to take a look at comprehensive tax reform for the corporate sector … now it’s important to recognize that the effective tax rate that US businesses pay now is about the average of what companies face around the world. Our priority right now, and this is what the president is doing, is to make sure that we’re extending tax cuts that go to benefit more than 95% of businesses in America. And as part of that, we want to make sure that businesses are getting continued incentives to invest.”

On the expiration of President George W. Bush’s tax cuts, specifically for the top 2% to 3% of the most affluent Americans: “As you know, we inherited kind of a big mess on the fiscal side. And part of growth in this country, part of making sure interest rates are low over time so people are able to invest is to make sure that people understand that we’re going to start to dig our way of that fiscal hole over time. So we think the responsible thing to do – and we don’t do this with pleasure – is to make sure we are beginning to take the steps that allow us to dig out of that fiscal hole. And part of that, we think it’s responsible to allow those tax cuts that benefited just those 2% to 3% of Americans to expire.”

On remaining Treasury secretary after the midterm elections: “As long as the president wants me to serve, it is my privilege and honor to help him fix what’s broken and make this country stronger. I’ll do it as long as he asks me to.”

www.cnbc.com/id/38150012

[sandi66]

JULY 8, 2010, 5:47 A.M. ET

UPDATE: China Yuan Up Late On Fixing, Dollar's Overnight Weakness

SHANGHAI (Dow Jones)--China's yuan was slightly higher against the U.S. dollar late Thursday afternoon, after the People's Bank of China set a slightly lower central parity rate and the dollar weakened against the euro overnight.

On the over-the-counter market, the dollar was at CNY6.7761 around 0930 GMT, down from Wednesday's close of CNY6.7772. It traded between CNY6.7754 and CNY6.7795.

"Trading has been quiet, as investors are wondering why the central parity fell only marginally after the dollar fell sharply against the euro," said a Shanghai-based local bank trader.

China's central bank set the dollar-yuan central parity rate at 6.7768, a tad lower from 6.7781 Wednesday.

Late Wednesday in New York, the euro was at $1.2648, up from $1.2619 late Tuesday. The euro was at $1.2659 at 0930 GMT.

"Traders are very cautious as they are concerned the yuan has appreciated too much in the last two weeks," said a Shanghai-based trader with another local bank.

The yuan appreciated 0.7% against the dollar in the two weeks from June 20, after the central bank announced on June 19 a decision to drop its nearly two-year-old currency peg to the dollar and promised to make the yuan exchange rate more flexible.

China's foreign exchange regulator's comments Thursday echoed market participants' concerns. The State Administration of Foreign Exchange said expectations for yuan appreciation have lessened as the euro-zone crisis has increased demand for U.S. dollar assets and overnight lending rates have risen in the U.S.

Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6687/6.6717, down from 6.6750/6.6800 late Wednesday.

online.wsj.com/article/BT-CO-20100708-703748.html

[sandi66]

China: Yuan to be kept 'basically stable'

(AP) – 52 minutes ago, July 8, 2010

BEIJING — China will keep its currency at a "basically stable and reasonable" level and financial pressure for the yuan to rise is easing due to Europe's debt woes, the country's foreign exchange regulator said Thursday.

Washington and other trading partners complain China's exchange rate controls keep the yuan undervalued, giving its exporters an unfair advantage. Beijing announced in June it would allow more flexibility but ruled out any big changes.

Market pressure for a stronger yuan is easing because investors are buying more dollars as a hedge against the European debt crisis, the State Administration of Foreign Exchange said in a statement. It said the inflow of currency has eased since May.

"We will dynamically manage and adjust the floating of the renminbi's exchange rate and keep it at a basically stable and reasonable level," the agency said, referring to the yuan by its other official name.

The yuan has gained about 0.8 percent against the U.S. dollar since Beijing's June announcement. It has risen rapidly against the euro as Europe wrestles with its debt crisis, gaining 4.5 percent since the start of June and 14.2 percent so far this year.

Thursday's comments came in the fourth of a series of statements by SAFE on its handling of China's foreign exchange. It announced no policy changes.

The Chinese government has rejected complaints the yuan is undervalued and says it is at an appropriate level. It says any changes in policy will be gradual.

The currency regulator also said China's trade surplus will stay "relatively big," but its growth rate will slow. The government is due to release its trade data Saturday for June and the first half of the year.

In Washington, the Obama administration had no comment on the new statement which continued a string of mixed signals out of China since Beijing's announcement on June 19 that it would allow for a more flexible exchange rate.

The Treasury Department has yet to issue its twice-a-year report making a determination on whether China or any other country is unfairly manipulating its currency to gain unfair trade advantages.

The latest report had been scheduled for release in mid-April. But Treasury Secretary Timothy Geithner announced it would be delayed until after the June 26-27 meetings of the leaders of the Group of 20 major industrial countries in Toronto. Geithner's action was widely seen as an effort to give China more time to resume allowing its currency to rise in value against the dollar without seeming to bow to outside pressure.

President Barack Obama met with Chinese President Hu Jintao in Toronto. Obama later told reporters that he expects China's currency will rise significantly in value as market forces come to bear. But Obama said the "proof of the pudding is going to be in the eating" on China's new pledge of a more flexible currency.

The United States believes that a stronger yuan against the dollar will boost U.S. exports to China by making U.S. products less expensive in that market.

Treasury said Thursday that no new date has been set for the release of the currency report.

Sen. Charles Schumer, who is pushing legislation to impose stiff penalties on Chinese imports if China does not revalue its currency, plans to push his measure to a vote at the first available opportunity once Congress returns from its July Fourth recess, Schumer spokesman Brian Fallon said Thursday.

www.google.com/hostednews/ap/article/ALeqM5i-U1bQxgH2wJzlhvl4VPAyH6JMnQD9GR1N4O0

[sandi66]

July 8, 2010, 6:35 a.m. EDT

China buys $7.9 billion of Japanese bonds in May

HONG KONG (MarketWatch) -- China purchased a net 694.8 billion yen ($7.9 billion yen) of Japanese bonds in May, more than doubling its purchases for the first four months of the year, preliminary data released by the Ministry of Finance showed Thursday. Data released earlier in the week showed China had bought 541 billion yen ($6.17 billion) worth of Japanese government bonds in the first four months of the year, reportedly more than twice the previous record of 253.8 billion yen made during the full year 2005. China's foreign exchange regulator said Wednesday that concerns it's mulling dumping its U.S. debt holdings are unfounded, and that its reserves are managed according to market principles.

www.marketwatch.com/story/china-buys-79-billion-of-japanese-bonds-in-may-2010-07-08

[sandi66]

Companies brace for end of cheap made-in-China era

By ELAINE KURTENBACH (AP) – 2 hours ago, July 8, 2010

SHANGHAI — Factory workers demanding better wages and working conditions are hastening the eventual end of an era of cheap costs that helped make southern coastal China the world's factory floor.

A series of strikes over the past two months have been a rude wakeup call for the many foreign companies that depend on China's low costs to compete overseas, from makers of Christmas trees to manufacturers of gadgets like the iPad.

Where once low-tech factories and scant wages were welcomed in a China eager to escape isolation and poverty, workers are now demanding a bigger share of the profits. The government, meanwhile, is pushing foreign companies to make investments in areas it believes will create greater wealth for China, like high technology.

Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West.

"China is going to go through a very dramatic period. The big companies are starting to exit. We all see the writing on the wall," said Rick Goodwin, a China trade veteran of 22 years, whose company links foreign buyers with Chinese suppliers.

"I have 15 major clients. My job is to give the best advice I can give. I tell it like it is. I tell them, put your helmet on, it's going to get ugly," said Goodwin, who says dissatisfied workers and hard-to-predict exchange rates are his top worries.

Beijing's decision to stop tethering the Chinese currency to the U.S. dollar, allowing it to appreciate and thus boosting costs in yuan, has multiplied the uncertainty for companies already struggling with meager profit margins.

In an about-face mocked on "The Daily Show with Jon Stewart," Wham-O, the company that created the Hula-Hoop and Slip 'n Slide, decided to bring half of its Frisbee production and some production of its other products back to the U.S.

At the other end of the scale, some in research-intensive sectors such as pharmaceutical, biotech and other life sciences companies are also reconsidering China for a range of reasons, including costs and incentives being offered in other countries.

"Life sciences companies have shifted some production back to the U.S. from China. In some cases, the U.S. was becoming cheaper," said Sean Correll, director of consulting services for Burlington, Mass.-based Emptoris.

That may soon become true for publishers, too. Printing a 9-by-9-inch, 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. The same book costs 65 to 68 cents to make in the U.S.

"If costs go up by half, it's about the same price as in the U.S. And you don't have 30 days on the water in shipping," he says.

Even with recent increases, wages for Chinese workers are still a fraction of those for Americans. But studies do show China's overall cost advantage is shrinking.

Labor costs have been climbing about 15 percent a year since a 2008 labor contract law that made workers more aware of their rights. Tax preferences for foreign companies ended in 2007. Land, water, energy and shipping costs are on the rise.

In its most recent survey, issued in February, restructuring firm Alix Partners found that overall China was more expensive than Mexico, India, Vietnam, Russia and Romania.

Mexico, in particular, has gained an edge thanks to the North American Free Trade Agreement and fast, inexpensive trucking, says Mike Romeri, an executive with Emptoris, the consulting firm.

Makers of toys and trinkets, Christmas trees and cheap shoes already have folded by the thousands or moved away, some to Vietnam, Indonesia or Cambodia. But those countries lack the huge work force, infrastructure and markets China can offer, and most face the same labor issues as China.

So far, the biggest impact appears to be in and around Shenzhen, a former fishing village in Guangdong province, bordering Hong Kong, that is home to thousands of export manufacturers.

That includes Taiwan-based Foxconn Technology, a supplier of iPhones and iPads to Apple Inc. Foxconn responded to a spate of suicides at its 400,000-worker Shenzhen complex with pay hikes that more than doubled basic monthly worker salaries to $290. Strike-stricken suppliers to Honda Motor Co. and Toyota Motor Corp., among many others, also have hiked wages.

Foxconn refused repeated requests for comment on plans to move much of its manufacturing capacity to central China's impoverished Henan province, where a local government website has advertised for tens of thousands of workers on its behalf.

But among other projects farther inland, Foxconn is teaming up with some of the biggest global computer makers to build what may be the world's largest laptop production hub in Chongqing, a western China city of 32 million where labor costs are estimated to be 20 to 40 percent lower than in coastal cities.

Given the intricate supply chains and logistics systems that have helped make southern China an export manufacturing powerhouse, such changes won't be easy.

But for manufacturers looking to boost sales inside fast-growing China, shifting production to the inland areas where many migrant workers come from, and costs are lower, offers the most realistic alternative.

"The new game is to find a way to do the domestic market," says Goodwin.

Many factories in Foshan, another city in Guangdong that saw strikes at auto parts plants supplying Japan's Honda, have left in the past few months, mostly moving inland to Henan, Hunan and Jiangxi, said Lin Liyuan, dean at the privately run Institute of Territorial Economics in Guangzhou.

Massive investments in roads, railways and other infrastructure are reducing the isolation of the inland cities, part of a decade-old "Develop the West" strategy aimed at shrinking the huge, politically volatile gap in wealth between city dwellers and the country's 600 million farmers.

Gambling that the unrest will not spill over from foreign-owned factories, China's leaders are using the chance to push investment in regions that have lagged the country's industrial boom.

They have little choice. Many of today's factory workers have higher ambitions than their parents, who generally saved their earnings from assembling toys and television sets for retirement in their rural hometowns. They are also choosier about wages and working conditions. "The conflicts are challenging the current set-up of low-wage, low-tech manufacturing, and may catalyze the transformation of China's industrial sector," said Yu Hai, a sociology professor at Shanghai's Fudan University.

www.google.com/hostednews/ap/article/ALeqM5iwVqhhmQBn_q_zyZFgi1zRBYhBaAD9GR026G4

[sandi66]

China's central bank to continue loose monetary policy during next 6 months

2010-07-08 21:54:11

BEIJING, July 8 (Xinhua) -- China will continue its relatively loose monetary policy during the latter half of the year to maintain the consistency and stability of macro economic policies, the People' s Bank of China (PBOC), the central bank, said Thursday.

We will apply multiple monetary tools to maintain an appropriate growth in money supply, and adjust the credit structure to reduce risks, the PBOC said in an online statement, which disclosed the consensus reached by its monetary policy committee during the second-quarter meeting.

The PBOC reiterated it would improve the yuan' s exchange rate mechanism and adjust its value regarding a basket of foreign currencies.

It also vowed to ramp up risk-prevention efforts, to prompt the stable and healthy development of the nation' s financial system.

The PBOC said China' s economy was heading in an expected direction as a coordinated growth in domestic spending, investment and exports has propped up the economic upturn, but China also needs to grapple with tough challenges, including managing inflation expectations, maintaining a steady and fast economic growth, adjusting economic structures and transforming the growth mode.

news.xinhuanet.com/english2010/china/2010-07/08/c_13390780.htm

[sandi66]

UPDATE 3-Wilbur Ross buying 25 pct stake in Sun Bancorp

Thu Jul 8, 2010 10:56am EDT

* Bank gets $100 mln cash injection

* Ross buys shares at $4

* Sun Bancorp shares jump as much as 47 pct (Adds share movement, details on capital measurements)

By Elinor Comlay

NEW YORK, July 8 (Reuters) - Billionaire investor Wilbur Ross is taking a 25 percent stake in Sun Bancorp (SNBC.O), the New Jersey bank said on Thursday, sending its shares up as much as 47 percent.

Ross, who in April invested millions in British entrepreneur Richard Branson's Virgin Money, has said he expects thousands of U.S. banks to fail as a result of the financial crisis. He has acquired stakes in banks in Florida and Michigan.

Ross's private equity firm, WL Ross & Co, and other investors agreed to invest $100 million in common stock as well as preferred shares that, with shareholder approval, will convert into common, Sun Bancorp said.

The other investors include the bank's largest shareholder, the Brown family.

The shares bought by WL Ross will represent 24.9 percent of holding company Sun Bancorp's outstanding shares on conversion. The investment was made at $4 a share.

Shares of Vineland, New Jersey-based Sun Bancorp, which has $3.5 billion in assets and 70 branches in the state, closed on Wednesday at $3.61, down 3.7 percent year to date.

The announcement sent the stock up as high as $5.30 on Thursday.

Ross will join the boards of Sun Bancorp and Sun National, the bank said.

In an interview with the New York Times on Wednesday, Ross said Sun National Bank -- Sun Bancorp's main subsidiary -- could be the first of many banks he acquires in New Jersey.

CAPITAL

Sun National said it would use the capital to "strengthen and expand current operations as well as to pursue growth opportunities throughout the state of New Jersey."

Analysts at Janney Capital Markets raised their rating on Sun Bancorp to "buy" from "neutral" after the announcement, noting the transaction should boost earnings per share slightly.

"We regard the investment by WL Ross as a stamp of approval for Chief Executive Officer Thomas X. Geisel," analysts Rick Weiss and David Peppard wrote in the report.

The cash injection would also raise Sun Bancorp's Tier 1 risk-weighted capital -- a common measure of capital strength -- to 13 percent or above. The bank said that level was above the 9.5 percent required by the Office of the Comptroller of the Currency under an April agreement

www.reuters.com/article/idUSN0825392520100708