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krisluke
    02-Mar-2012 22:48  
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Putin declines to back Syria’s Assad
(AFP)

2 March 2012
MOSCOW — Prime Minister Vladimir Putin stopped short of backing Bashar al-Assad in the Syrian crisis, saying Russia had no special relationship with his regime and refusing to predict that the president would stay in power.

 


 

With pressure mounting on Moscow to harden its line against Assad, Putin called on both the Damascus regime and opposition rebels to agree a ceasefire but also criticised the West for backing the rebels in the conflict.

“We have no special relationship with Syria,” Putin told foreign news executives late Thursday at a meeting at his suburban Moscow residence ahead of Sunday’s presidential elections in Russia.

Asked whether Assad had a chance to survive the crisis, he added: “I do not know this, I can give no kind of assessments.”

“It’s clear that there are very serious internal problems. The reforms that they (the regime) have offered clearly should have been carried out long ago,” said Putin in comments published on the government website Friday.

Alluding to Assad’s future, he said both sides in the conflict had to sit down and agree “what reforms there will be and what will be the consequences of these reforms.”

“But now we have to get them to stop killing each other,” he added.

Russia in February outraged the West by vetoing — along with its diplomatic ally China — a UN Security Council resolution condemning the Assad regime for the violence.

Some saw the Security Council veto as a warning from Putin to Western states that Russia would pursue a tough foreign policy if, as expected, he returns to the Kremlin after Sunday’s presidential elections.

Russian analysts said that Putin’s latest comments did not represent a switch to a position more accommodating to the West but were a sign that Russia would not prop up Assad at any cost.

“I don’t think that we can expect changes in the Russian position,” said Fyodor Lukyanov, editor of the journal Russia in Global Politics.

“As for Assad himself, Russia is hardly going to betray him. But Russia is emphasising that his situation is very serious,” he said, adding that Foreign Minister Sergei Lavrov had given such a warning to Assad on a visit to Damascus this year.

Putin said Moscow had to vote against the resolution as it would have compelled the Syrian government to pull out its forces from cities and enabled the rebels to move in themselves.

“You can show emotions about this as much as you like. But let’s lead taking account not of emotions but of realities,” he said.

But Putin rejected the idea that Moscow was taking sides in what he described as an “armed civil conflict” and accused the West of worsening the crisis by helping arm the rebels and putting pressure on Assad.

“If you are going to only increase supplies of weapons (to the rebels) and step up pressure on Assad, the opposition will never sit at the negotiating table,” he said.

“Our principle is not to encourage the sides in an armed conflict but make them sit down at the negotiating table and agree acceptable terms for a ceasefire and to stop the human losses,” Putin added.

He commented: “A ‘bad peace’ is always better than a ‘good war’”

Syria is a major arms client of Moscow, which has kept strong ties with Damascus going back to the alliance between the Soviet Union and Assad’s father and predecessor Hafez al-Assad.

“I don’t know how much weaponry we are selling to Syria,” said Putin. “We have economic interests in Syria, but likely no more than Britain or any other European country,” he added.

Putin made clear that Russia did not want to see a repeat of the situation in Libya, where a NATO-led air campaign in support of rebels led to the ousting and killing of Moscow’s old ally Moamer Kadhafi.

He conceded that Kadhafi’s regime was “somewhat crazy” but said his death was like a “medieaval execution”.

“We do not want something similar to happen in Syria... we want them to find a consensus and that they stop killing each other.”

 
 
krisluke
    02-Mar-2012 22:34  
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Talk of Israel strike on Iran soars but is it bluff?
Iranian students hold up their hands as a sign of unity as they form a human chain around the Uranium Conversion Facility (UCF) to show their support for Iran's nuclear program in Isfahan
By Peter Apps, Political Risk Correspondent

  LONDON (Reuters) - As tension rises over Iran's disputed nuclear program, chatter indicating a potential Israeli strike on Iranian nuclear targets has never been higher.

  But in the smoke-and-mirrors world of Middle East geopolitics, such talk can often be a diplomatic weapon in its own right and sometimes an alternative to genuine action.

  To an extent, the recent storm of speculation and newspaper stories are just an escalation in a long-running game of words. Tehran says its program is purely peaceful, not designed to yield nuclear weapons, but U.S., Israeli and other Western officials have often warned that, if it continues unabated, Israel might take unilateral action and bomb key facilities.

  But the United States and Israel in particular have never gone to such lengths to suggest that a strike might be imminent.

  Discussion of potential military and other options - and an increasingly public discussion between the United States and Israel over what to do next - will move further into plain sight Monday with Israeli Prime Minister Benjamin Netanyahu's visit to Washington to meet President Barack Obama.

  While U.S. officials say they want to dissuade Israel from striking, Obama's Republican opponents are eager to paint him as too tough on Israel and too soft on Iran ahead of November's presidential election. Netanyahu wants more U.S. support, including endorsement of any action Israel might take.

  " The drumbeat for military action is getting louder," says Michael Denison, research director for London-based consultancy Control Risks and a former senior adviser in Britain's Foreign Office. " But that doesn't necessarily mean it will happen soon."

  U.S. officials have repeatedly briefed journalists - including those from Reuters - to say that they no longer know what those in charge in Israel might be planning, and that Washington does not expect advance warning of an attack.

  European officials say they too are pushing hard to restrain Israel from action that might spark a wider regional conflict, but increasingly fear they will be unable to do so.

  Israeli officials have been more reticent, and many recent stories in the Israeli press may in part be lifted from European and U.S. media. But recently, Israeli officials too have held background briefings in London with businesses and think tanks.

  Some have gone beyond the usual threatening statements, usually on no options being ruled out, that have come to be expected from Netanyahu and Defense Minister Ehud Barak.

  The precise message has varied, particularly over the time it might take Tehran to genuinely be able to build a nuclear bomb. But the thrust is clear: As Iran's nuclear enrichment and wider development moves forward and its facilities are dug ever deeper into the ground, time is running out.

  Israel, widely believed to harbour the Middle East's only nuclear arsenal, sees Iran's atomic campaign as a mortal threat.

  A USEFUL BLUFF?

  Trailing an attack in advance might have certain advantages, analysts say. Financial markets would be largely prepared, reducing the economic shock.

  Benchmark Brent crude oil prices have gained some $15 a barrel over the last month to around $125. Almost all of that, oil experts say, has been down to escalating tensions with Tehran: partly speculation of an Israeli strike, partly the loss of Iranian crude supply due to tightening Western sanctions.

  But the real agenda, some suspect, is much more about shaping the diplomatic battlefield.

  " Barak and Netanyahu think that this (talk of an Israeli attack) is the only tool that gets the players moving," Udi Segal, diplomatic correspondent for Israel's top rated Channel Two television news, said in a commentary last week.

  " And even if this is a bluff, it is a bluff that should not be allowed to be ruptured because it makes the Iranians feel fear, the Americans take action, the Europeans impose sanctions, and everyone worry."

  If Netanyahu and those around him had genuinely decided to strike, many experts say they would simply do so rather than pre-briefing the media.

  Few doubt Israel does have the ability to strike targets deep inside Iran, using either jets, long-range drones or submarine- or land-launched launched missiles.

  But in reality, it finds itself hugely constrained.

  A strike could provoke a massive backlash, both diplomatic and through Iranian-backed groups such as Hezbollah in Lebanon and Hamas in the Gaza Strip. Tehran might make good threats to hit international oil tankers in the Strait of Hormuz.

  Even were such a conflict relatively brief, it could send oil prices rocketing and jeopardise a fragile global economy.

  " NO GOOD OPTIONS"

  And few experts believe an Israeli strike would put the Iranian weapons program back more than a few months or years.

  Worries about the broader impact - particularly from Washington - are seen as having deterred Israel from a strike in 2008-9, another period of heightened speculation. Instead, Israel, perhaps working with the United States, is believed to have gone for a more covert approach including the computer worm Stuxnet, which affected Iranian nuclear technology.

  But such attacks are only ever partially effective, experts say, and assassinations of nuclear scientists widely blamed on Israel - which has made no comment on the matter - have also proved increasingly controversial.

  " The Israelis do not have any good options and so they are simply sending every signal under the sun," Anthony Cordesman, a veteran former U.S. intelligence official and now chair of strategy at the Washington-based Center for Strategic and International Studies, told Reuters last month.

  Some experts question to what extent an Iranian bomb would truly be a strategic game changer.

  Tehran is already believed to have ballistic missiles with chemical warheads able to strike Tel Aviv. Even if Iran successfully assembled the four bombs that Israel says it has the uranium to build, Israel would still have many more, and the ability to inflict much more catastrophic damage.

  Intelligence experts and officials, some of them Israeli, say it is still far from clear that Tehran has made a final decision to build a nuclear warhead.

  But the further the nuclear program moves forward, the quicker Iran could have one should it make that final decision. For a country that has had to fight several times for its survival in the 65 years since it was founded by the survivors of a genocide, the risks may simply be too high.

  " The important thing is that the Israelis believe it would be an existential threat," said one Western official heavily involved with the Iran issue. " That is the point. That's really what it has always been about."

  (Additional reporting by Dan Williams in Jerusalem and Mark Hosenball in London Editing by Kevin Liffey and Mark Heinrich)
 
 
krisluke
    02-Mar-2012 22:32  
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Iran parliament vote seen bolstering Supreme Leader
By Parisa Hafezi and Zahra Hosseinian

  TEHRAN (Reuters) - Iranians voted on Friday in a parliamentary election likely to reinforce Supreme Leader Ayatollah Ali Khamenei's power over rival hardliners led by President Mahmoud Ahmadinejad.

  Iranian leaders were looking for a high turnout to ease an acute crisis of legitimacy caused by Ahmadinejad's re-election in 2009 when widespread accusations of fraud plunged the Islamic Republic into the worst unrest of its 33-year history.

  Iran also faces economic turmoil compounded by Western sanctions over a nuclear programme that has prompted threats of military action by Israel, whose leader meets U.S. President Barack Obama in the White House on Monday.

  The vote in Iran is only a limited test of political opinion since leading reformist groups stayed out what became a contest between the Khamenei and Ahmadinejad camps.

  " Whenever there has been more enmity towards Iran, the importance of the elections has been greater," Khamenei, 72, said after casting his vote before television cameras.

  " The arrogant powers are bullying us to maintain their prestige. A high turnout will be better for our nation ... and for preserving security."

  The vote will have scant impact on Iran's foreign or nuclear policies, in which Khamenei already has the final say, but could strengthen the Supreme Leader's hand before the presidential vote next year. Ahmadinejad, 56, cannot run for a third term.

  Iranians may be preoccupied with sharply rising prices and jobs, but it is Iran's supposed nuclear ambitions that worry the outside world. Western sanctions over the nuclear programme have hit imports, driving prices up and squeezing ordinary Iranians.

  OBAMA-NETANYAHU TALKS

  Just days away from the talks between Obama and Israeli Prime Minister Benjamin Netanyahu, their aides were scrambling to bridge differences over what Washington fears could be a premature Israeli attack on Iran's nuclear sites.

  Netanyahu will press Obama, who is facing a presidential election campaign, to stress publicly the nuclear " red lines" that Iran must not cross, Israeli officials say.

  Global oil prices have spiked to 10-month highs on tensions between the West and Iran, OPEC's second biggest crude producer.

  The election took place without two main opposition leaders. Mirhossein Mousavi and Mehdi Karoubi, who both ran for president in 2009, have been under house arrest for more than a year.

  No independent observers are on hand to monitor the voting or check the turnout figures that officials will announce.

  Former president Hashemi Rafsanjani made a pointed reference to the outcome of the 2009 vote, which he questioned at the time. " If the election outcome turns out to be what the people cast in the ballot boxes, God willing we will have a good parliament," the elder statesman said after voting in Tehran.

  Ahmadinejad also voted, but state media did not immediately show this or report any comment he might have made. The outgoing parliament is due to grill him next week on his handling of the economy and other issues - an unprecedented humiliation for an incumbent president, but one he may use to hit back at his foes.

  Polling stations opened at 8 a.m. (4:30 a.m. British time) and were due to close at 6 p.m., but might stay open longer. Ballots are counted manually and Iran may have to wait three days for full results.

  Voting was slow at first in affluent northern Tehran but picked up later. Voters queued up in poorer parts of the capital and in provincial cities, Reuters witnesses said.

  " I am here to support my establishment against the enemies' plot by voting," said Mahboubeh Esmaili, 28, holding her baby in a queue of about 50 people at a central Tehran polling centre.

  SLAP IN FACE

  Khamenei has told Iranians that their vote would be a " slap in the face for arrogant powers" such as the United States.

  A U.S. official said Iran had clamped down on dissent since the turbulent presidential election nearly three years ago.

  " Since then, the regime's repression and persecution of all who stand up for their universal human rights has only intensified," U.S. Under Secretary of State Mario Otero told the United Nations Human Rights Council in Geneva.

  U.N. human rights chief Navi Pillay said in her report to the council she was alarmed at a " surge in executions" reported in Iran in the past year. She gave no figures.

  The two main groups competing for parliament's 290 seats are the United Front of Principlists, which includes Khamenei loyalists, and the Resistance Front that backs Ahmadinejad.

  The president, a blacksmith's son, has long appealed to Iran's rural poor with his humble image and cash handouts from state funds, but spiralling prices have dented his popularity.

  Energy and food imports have been hit by sanctions aimed at forcing Iran to halt sensitive nuclear work that the West suspects is a cover for a drive to build atomic bombs. Tehran says it has only peaceful aims, such as generating electricity.

  Prices of staple goods, many of them imported, have soared because the Iranian rial's value has sunk as U.S. and European Union sanctions on the financial and oil sectors begin to bite.

  Ahmadinejad's critics accuse him of making things worse for low-income Iranians, saying his decision to replace food and fuel subsidies with direct monthly payments since 2010 has fuelled inflation, officially running at around 21 percent.

  ALLIES FALL OUT

  The president enjoyed solid support from Khamenei in the months of " Green Movement" protests that followed the 2009 election, but the two men have fallen out badly since then.

  For Khamenei, the parliamentary election could reinforce his grip on power against a president seen as trying to undermine the clergy's central role in Iran's complex political hierarchy.

  Ahmadinejad and his " deviant current" allies have alarmed Khamenei's conservative camp by emphasising nationalist themes of Iranian history and culture over the Islamic ruling system introduced by revolutionary leader Ayatollah Ruhollah Khomeini.

  Khamenei succeeded Khomeini, who died in 1989.

  Some Iranian media reports said Ahmadinejad hoped to secure the election of his chief of staff, Esfandiar Rahim-Mashaie, to succeed him. Khamenei will want to install one of his own loyalists to prevent further divisions within the ruling elite.

  Powerful establishment groups, including senior clerics, the elite Revolutionary Guards and bazaar merchants, formed an alliance to back Khamenei loyalists in the parliamentary vote.

  Not everyone can run in Iranian elections. The hardline Guardian Council, made up of six clerics and six jurists who vet candidates, approved more than 3,400 out of 5,382 applicants.

  Some politicians said the council barred many established Ahmadinejad supporters, forcing him to pick political unknowns.

  The rift between Khamenei and Ahmadinejad broke into the open in April 2011 when the Supreme Leader forced the president to reinstate an intelligence minister he had insisted on firing.

  Khamenei has kept up the pressure in recent months. Dozens of Ahmadinejad allies have been detained or sacked for links to the " deviant current."

  Most strikingly, the president's media adviser, Ali Akbar Javanfekr, has received a one-year jail term for insulting Khamenei, which an appeal court upheld on Wednesday.

  The authorities suggested that malign foreign hands were trying to disrupt the election.

  " So far, 10 saboteurs who came to Tehran from outside the country have been arrested and are now in detention," Mohammad Taqi Baqeri, a Tehran election official was quoted as saying by the semi-official Fars news agency. He gave no details.

  (Additional reporting by Hashem Kalantari in Tehran, Marcus George in Dubai and Matt Spetalnick in Washington Writing by Alistair Lyon Editing by Mark Heinrich)
 

 
krisluke
    02-Mar-2012 22:31  
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Captain of capsized liner could be in danger at hearing-lawyer
Bruno Leporatti lawyer of Costa Concordia cruise ship captain Francesco Schettino leaves the Florence court
By Hanna Rantala

  GROSSETO, Italy (Reuters) - The captain of a giant cruise liner which capsized off Italy, killing at least 25 people, could be in danger if he attends a pre-trial hearing on Saturday into the disaster, his lawyer said.

  Prosecutors have accused captain Francesco Schettino of causing the accident by bringing the multi-storey Costa Concordia too close to the shore of the Mediterranean island of Giglio in January, where it was torn open by rocks.

  He has already been held up to condemnation and ridicule around the world.

  Seven people are unaccounted for and divers are still looking for bodies in the capsized and partly submerged vessel.

  A hearing will be held in a theatre in the Tuscan town of Grosseto on Saturday, when judges will question experts about the wrecking of the 114,500 tonne liner.

  Lawyer Bruno Leporatti told Reuters Television in Grosseto that the captain " is a man who has feelings, who is pained over what happened. He feels pain for the victims, naturally and is stunned by all that is going on."

  Schettino, who spent three decades at sea, is under house arrest in his home in Meta di Sorrento, near Naples.

  " Captain Schettino will not attend the pre-trial hearing because it is not of use or any help if he embarks on a return trip of 850 km from where he is held under house arrest, just to be present, which would be unnecessary and perhaps with this climate that has been created around him, also a little dangerous for him," Leporatti said in the interview this week.

  Schettino is accused of a string of charges including multiple manslaughter and abandoning ship before the evacuation of more than 4,200 passengers and crew.

  First officer Ciro Ambrosio and seven other ships' officers and executives of the ship's owners, Costa Cruises, are also under investigation.

  SECOND COSTA LINER IN TROUBLE

  The hearing will come after 627 passengers disembarked in the Seychelles on Thursday from another Costa liner, the much smaller Costa Allegra, which had to be towed for three days by a French fishing boat in the Indian Ocean after a fire knocked out its engines.

  Leporatti said the Grosseto hearing starting on Saturday, whose duration is unclear, would confirm what Schettino had said about the disaster from the start.

  " The new results from the investigations, the new visual evidence, show a completely different reality from what was originally claimed ... immediately after the incident."

  " We have seen a completely different take on things from what everyone has been trying to make us believe," he said.

  Leporatti said Schettino, who is blamed for bringing the Costa Concordia to within a stone's throw of shore in a display manoeuvre known as a " salute" to islanders, had always said he should not be the only one blamed for the tragedy.

  He said investigations were showing that " there are also others, whose actions are currently being evaluated by the investigators and hopefully there will be even more."

  Among those under investigation are the vice president of Costa, Manfred Ursprunger, and the head of its crisis unit, Roberto Ferrarini, with whom Schettino was in contact during the evacuation.

  The company, a unit of the world's largest cruise operator, Carnival Corp, has blamed Schettino for the accident.

  Many townspeople in Meta di Sorrento have been supportive of Schettino since his arrest, in contrast to media treatment elsewhere in Italy and abroad.

  " Let's wait to hear what the trial will say before we condemn him. This man has been executed before the trial has even started and you (the press) have executed him," said resident Rosa Tito on Friday.

  Another man in Meta, who asked not to be named, told Reuters: " I know from people who have known him and who have sailed with him that he has always been an excellent officer ... I don't know why he made the choices he did. I really don't know what may have gone through his head."

  Hundreds of Italian and foreign journalists, together with television satellite trucks, are gathering in Grosseto, which is the centre of the investigation into the shipwreck.

  Judges will be ordering tests on the black box recorders from the ship when the hearing opens on Saturday. Local media said around 70 lawyers and their teams, representing survivors and relatives of victims, among others, were expected to attend Saturday's hearing.

  The theatre where it is being held can hold more than 1,000 people but the hearings will not be open to the public or journalists.

  (Additional reporting by Eleanor Biles Writing by Barry Moody Editing by Alison Williams)
 
 
krisluke
    02-Mar-2012 22:19  
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Introducing the 24/7 Wall St. Wire

Breaking news that can move the market, real-time and in context!

Real-time Company News, Economic Reports, Analyst Calls, Upgrades, Downgrades, Initiations and Key Industry News as it happens.

Visit the 24/7 Wall St. Wire here.

--------------------------------------------

Americans are not any happier than they were last year. In fact, they are slightly more miserable. At least, that’s what the recent Gallup-Healthways Well-Being Index shows. The annual index measures six areas of well-being, including life evaluation, physical health and work environment. In 2011, the national well-being score declined slightly from 2010 and was the lowest since the survey began in 2008. These are America’s most miserable states.

The most important financial news affecting the markets today (AT& T data plan, Spain’s unemployment, Bridgewater pay day). And here is the Morning Wire — US Stock-Index Futures Dropping.

As always, here are the top major media headline summaries from WSJ, FT, Bloomberg, and more. Today's top analyst upgrades and downgrades were in shares of ALU, AWK, BLK, CMA, DPZ, KBH, LOW, PCS, MWW, MSI, RF, TAL, TCBI, TRV and UNM.

The big question to ask after huge rallies... Are Apple and Microsoft gains peaking after massive runs in teh last 60 days?

Dividend investors have bought up REITs chasing that yield and a very positive industry report came out on apartment REITs and their prospects. We took a closer look for income investors.

For the market to keep rising, Dow Theory hinges on the transport stocks having to rise as well. They are a drag today, so we took a closer look.

Demand for the Toyota Prius has risen rapidly, and supply, previously hurt by the Japanese quake, is not the reason.

An oil embargo is not the only way to hurt Iran financially. The effect on unemployment and GDP could be harse enough so that another route will be necessary.

With unemployment above 23.3%, the idea that Spain's economy can recover without stimulus is crazy.

 

Have a great day!

JON C. OGG
 
 
krisluke
    02-Mar-2012 22:13  
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Crude oil falls below $125, Saudi supply fears ease
* Prices off 11-month high as Saudi supply fears wane

  * Saudi denies incident but market remains jittery

  * IMF says probability of sharp economic slowdown has eased

  * Enough spare capacity to make up for Iran -U.S. energy sec (Adds quotes para 10, 13, updates prices)

  By Zaida Espana

  LONDON, March 2 (Reuters) - Crude oil futures slipped below $125 a barrel on Friday, after surging 5 percent to an 11-month high a day earlier, as fears of a supply disruption from Saudi Arabia eased, calming investors who now expect oil demand to fall in coming weeks.

  Oil prices soared on Thursday after an Iranian media report of a pipeline fire in top exporter Saudi Arabia, although prices later dipped back after CNBC cited a Saudi oil official saying the report was untrue.

  By 1321 GMT, front-month Brent crude was down by $1.31 to $124.89 a barrel, after settling the previous session at highs not seen since April 2011 of $126.20.

  Brent topped $128 a barrel in late post-settlement trade on Thursday, reaching levels last seen in July 2008, when oil hit a record of more than $147 a barrel.

  " Most people believe the retracements to the downside are all going to be pretty limited in the short term," said Tony Machacek, an energy broker at Bache Commodities.

  Top oil exporter Saudi Arabia said on Friday there had been no attack in the kingdom, but traders are jittery about any potential disruptions to its production or infrastructure at a time of setbacks to global supplies.

  " The general belief is that the market is going to remain relatively tight and relatively well supported: the underlying long term fundamentals remain good on demand from China and India. Throw into the mix a bit of geopolitical tension, and obviously Iran, and that's enough to keep people not wanting to go short into the weekend," Machacek said.

  U.S. crude oil futures were down 77 cents to $108.07 a barrel, after settling $1.77 higher at $108.84.

  Markets have been on edge this year due to threats of supply disruptions from the West's standoff with Iran over its nuclear program and production losses from South Sudan, Yemen, Syria and the North Sea.

  " Even after the return of a tranche of Libyan output, the system is still highly exposed to relatively minor variations in output elsewhere," Barclays Capital analysts said in a note.

  " Combine that lack of inventory cover with an upstream system that is running rather hot at more than 98 percent of sustainable capacity, and the result is that supply-side fluctuations are felt faster and have larger impacts on physical differentials."

  Commerzbank's analyst Carsten Fritsch noted that despite Saudi's denial, a large portion of yesterday's price increase is still intact.

  " Even if the original story came from Iran and no doubt was spread deliberately, the market clearly believes there to be an increased risk of supply shortfalls. This price reaction reveals how selectively market players are willing to take information on board - a typical feature of phases of exaggerated speculation," Fritsch said.

 

 

  IRAN STRUGGLING TO SELL CRUDE

  Iran, OPEC's second biggest producer, has been struggling to sell its crude in the face of tightening U.S. sanctions and a European Union embargo that kicks in on July 1. This has threatened to tighten global crude supplies.

  However, U.S. Energy Secretary Steven Chu said global oil producers have enough spare production capacity to make up for a drop in Iranian exports.

  Oil prices have also been underpinned this week by positive manufacturing data out of China, easing fears of a sharp drop in demand from the world's second biggest oil consumer, and by a flood of cheap funds from the European Central Bank.

  The probability of a sharp global slowdown has eased due to recent policy measures adopted in the euro zone to tackle its debt crisis, the International Monetary Fund said on Thursday, but it warned risks to world growth remain " squarely to the downside" . (Reporting by Zaida Espana in London and Francis Kan in Singapore editing by Anthony Barker and Keiron Henderson)
 

 
krisluke
    02-Mar-2012 22:12  
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European shares fall on Spain deficit softening
Dramatic storm clouds over the towering edifice of the European Central Bank and Euro currency symbol surrounded by the yellow stars of the European Union flag in downtown Frankfurt, Germany
* FTSEurofirst 300 index drops 0.2 percent

  * Spain's budget target weighs on sentiment

  * Bank shares remain cheap despite rally (Updates)

  By Harro Ten Wolde

  FRANKFURT, March 2 (Reuters) - European shares retreated on Friday afternoon after Spain signalled a higher deficit this year than previously agreed with the European Union, ending a rally that followed the ECB's funding exercise this week.

  The FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,084.38 points at 1305 GMT, retreating from 1,090.12, its highest level since Feb. 21.

  Prices fell after Prime Minister Mariano Rajoy said Spain will base its 2012 budget on a deficit target of 5.8 percent of gross domestic product.

  " This is clearly less ambitious than the market was expecting," a German trader said, adding that the official EU-agreed objective was 4.4 percent.

  " It seems investors are just waiting for excuses for a correction," another German trader said.

  Rajoy made his remarks on the sidelines of the two-day European summit that ends on Friday, where leaders have been arguing over the right balance between budget austerity and recapturing lost growth.

  Finance ministers gave provisional approval to a second bailout for Greece, while leaders of 25 of the 27 countries are expected to sign a German-driven fiscal compact treaty to enforce EU deficit-cutting and debt reduction rules more strictly.

 

  BANKS STILL CHEAP

  Banking shares shed most of its early gains, leaving the STOXX Europe 600 Banking index up just 0.4 percent. The index has gained about 25 percent since mid-December when the ECB launched its first long-term refinancing operation (LTRO).

  Analysts said that with so much liquidity in the financial system, the fear of an outright credit crunch had eased and expectations had grown grew that a recession in some European countries would be limited in depths and duration.

  Still, banking shares remain cheap despite their recovery.

  Since the ECB's first LTRO, Societe Generale has risen 50 percent, BNP Paribas has gained 27 percent, Commerzbank has added 50 percent and KBC is up 78 percent.

  However, SocGen trades at 6.6 times 2012 expected earnings, Commerzbank at 7.2 times, BNP Paribas at 6.8 times, KBC at 4.8 times, well below a 10-year average price-to-earnings ratio of 10 for the sector, according to Thomson Reuters Datastream.

  Barclays was up 3.1 percent after it said it tapped the ECB for 8.2 billion euros.

  ING shares added 2.3 percent after a court victory which means it may sell fewer assets than expected.

  Belgacom, down 4.2 percent, was the steepest faller on the STOXX 600 Index after Belgium's dominant telecom operator said its profit decline would accelerate in 2012. ($1=0.7501 euros) (Additional reporting by Blaise Robinson in Paris Editing by David Cowell)
 
 
krisluke
    02-Mar-2012 22:11  
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US STOCKS-Futures slip as oil prices, Yelp IPO eyed
Times Square, New York
(Corrects first paragraph to clarify nine weeks of gains on S& P futures, not major indexes)

  * S& P futures on track to close on 9th week of gains

  * Consumer website Yelp IPO prices at $15 a share

  * Futures off: Dow 35 pts, S& P 6 pts, Nasdaq 8.25 pts

  By Rodrigo Campos

  NEW YORK, March 2 (Reuters) - Futures on the S& P 500 edged lower in sparse volume on Friday in a light day on the economic calendar but were still on track to close their ninth straight week of gains, the longest such run since January 2004.

  Futures have traded in a tight range in the past two weeks, mostly holding on to gains of nearly 10 percent since the beginning of the year.

  " This has been a straight up move in prices, and it is unusual for that to continue," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.

  " In order to avoid (a pullback) we need a continued flow of good news, and there aren't many earnings forecasts coming in right now, which could be the next push," Meckler said. " People will focus on possible negatives and right now the biggest out there is oil prices."

  U.S. crude oil futures hovered near $108 a barrel a day after hitting a 10-month high above $110 on supply concerns in the Middle East.

  Aides to U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu are scrambling to bridge differences over what Washington fears could be an Israeli attack on Iran's nuclear sites, a concern at the heart of the recent spike in oil prices. Both leaders will meet on Monday.

  New York's Institute for Supply Management February index of regional business activity is due at 9:45 a.m. (1445 GMT).

  S& P 500 futures fell 6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dipped 35 points and Nasdaq 100 futures lost 8.25 points.

  Yelp Inc's initial public offering of class A common stock priced at $15 a share, above the expected price range, valuing the U.S. consumer review website at nearly $900 million.

  Close-out retailer Big Lots Inc posted a higher quarterly profit, helped by strong demand for its discounted products. (Reporting by Rodrigo Campos Editing by Padraic Cassidy)
 
 
krisluke
    02-Mar-2012 22:03  
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Spain Says It Will Miss Its 2012 Deficit Target

spain spanish youth unemployment

Getty

MADRID (AP) — Spain's prime minister said Friday that his recession-ridden country will miss its deficit goal for this year, risking sanctions from the European Union.

 

The announcement came as the government reported more grim economic news: a big rise in claims for jobless benefits last month and a new forecast that Spanish economic output will fall 1.7 percent this year, worse than the 1 percent forecast recently by the EU and the 1.5 percent predicted just week ago by Madrid itself.

Spain's government deficit will reach 5.8 percent of economic output this year, Prime Minister Mariano Rajoy said after an EU summit in Brussels. That is much higher than the 4.4 percent Madrid had promised to the other states in the 27-nation bloc.

However, Rajoy said Spain still aims to cuts its deficit to 3 percent in 2013, which would bring the country back in line with the bloc's fiscal rules. He didn't say how his EU counterparts reacted to the higher deficit, but insisted that he was committed to austerity.

Rajoy's acknowledgment doesn't come as a surprise, as Spain sailed far past last year's deficit target. Instead of 6 percent of gross domestic product, the 2011 deficit reached 8.5 percent.

However, it puts Madrid on collision course with the EU and its partners in the euro currency union, which have focused on austerity as the best way of fighting off a crippling debt crisis.

Rajoy spoke in Brussels after a summit of eurozone leaders. On the new deficit goal, he said " I did not consult other European leaders and I will inform the Commission in April," he said. " This is a sovereign decision by Spain."

In Madrid, Economy Minister Luis de Guindos announced the 1.7 percent GDP contraction forecast and said the economy will shrink in the first two quarters of this year and possibly in the third too, before starting to pick up. He blamed subdued domestic consumption, higher oil prices and a slower world economy.

A spokesman for the European Commission said Friday that the EU's executive had not softened this year's goal.

" The excessive deficit procedure foresees a target of 4.4 percent in 2012," said Amadeu Altafaj Tardio. " Therefore our assessment is based on that target."

He also warned that Madrid, which currently has an unemployment rate of nearly 23 percent and a shaky banking sector, could come under renewed market pressure if it fails to rein in its deficit.

" There is an issue of confidence at stake here," Altafaj Tardio said. He added that the Commission still wants Madrid to provide details on why last year's deficit was so much higher than expected — and what it plans to do about it this year — before the end of the month.

The Commission's reluctance to give Spain more leeway means the country risks being slapped with financial sanctions of up to 0.2 percent of GDP.

---

Steinhauser reported from Brussels.

 
 
krisluke
    02-Mar-2012 21:51  
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TRUE CONFESSION: I Left My Banker Husband After He Buried Me In Debt

hannah

Hannah Shapiro

When Hannah Shapiro, 33, met her future husband, Brian*, he made no bones about being a high-roller.

 

He pulled in a six-figure salary at a major investment firm and loved surprising her with luxury gifts – a BMW after her son's birth (big red bow and all) and an upgrade to her Mercedes after her daughter's.

But it wasn't long before she found herself caught in a web of money lies so complex she's still clawing her way out two years later.

" When you begin to realize the person you thought you married isn't really who he said he was, then you start having doubts about every other part of your life," she said. " If I can use my experience to prevent another woman from making the same mistake, then it's had some positive effect."

*Name as been changed to protect privacy.


He was impulsive from the get-go

Shapiro, a native Londoner, met Brian on an online dating site in her early 20s. He didn't blink an eye before flying out to take her on their first date.

 

" Now, at the time that sounded incredibly romantic," Shapiro recalls. " But it took a very impulsive person to jump on a plane and meet someone in a foreign country."

Flattering? Sure. But even if you've got ample funds (as Brian claimed), impulse spending is certainly a sign of financial irresponsibility.

He was financially controlling

At age 25, Shapiro had already earned three degrees and had a six-figure salary of her own when she married Brian. Clearly, she was more than capable of managing the checkbook.

 

But he never let her touch it, not even the spreadsheets he supposedly used to track their household expenses.

" It was frustrating because I had always worked since I was 16," she says. " I saw my job as running the home and taking care of the kids, and I thought that could be managing the books."



She relied on a weekly allowance just to keep food on the table

Shapiro needed some kind of cash on hand to keep their fridge stocked and her small children in clean diapers. So, they worked out an arrangement:

 

He doled out weekly allowances of about $1,000, which she used to pay the nanny, buy groceries for a family of five, manage the household and stash whatever was left over in savings.

" Slowly, that amount was reduced to about $400 per week," she says.

Then came the secret banking and credit card accounts

The couple had a joint bank account, but Brian opened a second one behind her back.

 

" I never saw the balance, bank statements, anything," she says.

It wasn't until debt collectors started ringing her phone off the hook that she realized he'd also used her stellar credit score to finagle at least five new lines of credit.

By the time they divorced, he'd racked up $30,000 in charges she's now responsible for – and her phone is still ringing.

Cash for bills mysteriously went missing

After her daughter's birth, Shapiro received a much-needed check from the insurance company to cover the cost of her epidural – about $3,500.

 

" But it was never sent to a doctor," she says. " I only found out it hadn't been sent to the doctor when I started getting letters from debt collectors."

His family acted like they knew something she didn't

" There were so many secrets, and when we were with his family...I always felt like there was something going on that I couldn't quite grasp," she says.

 

But she hesitated to ask, especially since Brian was adamant that his finances were none of her concern.

" When we decided to get married, there should have been a conversation (about this)," she says. " But I was just young and naive. Every time I tried, I was told it was none of my business."

The verbal abuse was almost worse than the financial abuse

" My ex-husband knew how to get me to shut up," Shapiro says.

 

" He threatened me. He made me feel like no one would ever want me, and it sounds sound ridiculous now even saying it. It was an emotionally and verbally controlling relationship."

But she had no one to turn to

Far from her friends and family back in London, Shapiro found herself even less capable of getting out from under her husband's thumb.

 

" Had I been at home, I don't think anyone would have let me continue the relationship with him," she says. " They would have snapped me out of it. But I didn't have them."

 

 

Eventually, they lost the roof over their heads

When they married, Shapiro's parents helped them with the down payment on their first home.

 

With that burden off their shoulders and a supposedly healthy income, finances shouldn't have been an issue. But " there never seemed to be any money," she recalls. " It was always tight."

Finally, one night as she was making dinner, there was a knock at the front door.

Their home was in foreclosure.

Having a daughter changed everything

" I think the one thing is that once I had my daughter, I looked at myself and I thought, 'How can I be a role model when I've lived with this?" she says.

 

" I don't want her to ever think that it's OK for a man to treat her that way. That was a real turning point for me mentally."

She finally filed for divorce in 2009, five years into their marriage and more than $50,000 in debt.

The deceit continued even after the divorce

In what she says was a very calculated move, Brian filed personal bankruptcy without telling her.

 

While his debts were all washed away, she was left to pay off everything else: $30,000 in credit cards and a $20,000 tax bill he never paid.

" We could have filed bankruptcy together, which meant that the marital debt was erased, but he went and did it individually," she says.

Since he was laid off when they filed for divorce, he's been off the hook for child support payments as well.

He stripped their home of all their assets

He stripped their home of all their assets

John Moore / Getty

In her naivete, Shapiro took nothing from the home after they separated but appliances from the kitchen she'd remodeled, thinking it was best to wash her hands of everything else.

 

Now she wishes she'd done otherwise.

" (Brian) took out all our appliances down to the copper wire and sold them," she says. " He was perfectly fine with my taking 50 percent of the debt he acquired throughout our marriage, but 50 percent of our possessions acquired during our marriage he didn't split with me."

She watched her once stellar credit score plummet to the 500s

Two years after her divorce, Shapiro launched her own marketing and branding business and decided to make a fresh start.

 

But " I can't even get a line of credit to make initial investments," she says.

" I went from having a stellar credit score before I married him ... to know having a credit score in the 500s and trying to rebuild my financial life. I'm working with the IRS to resolve tax issues. Those types of things are the daily challenges."

Hindsight is 20/20

Coming from a privileged family, Shapiro says she never had cause to distrust anyone before, which made believing all the lies even easier.

 

" You have to remember that when someone gets under your skin and isn't nice to you, it sounds like a clicheé, but you do begin to believe it," she says. " Those red flags were all there and I chose to ignore them."

Sometimes even the smallest lies can hurt us ...

 

 
krisluke
    02-Mar-2012 21:41  
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Everything That Happened At Today's EU Summit

EU leaders met in Brussels today for the second day of their EU summit.

All 17 eurozone leaders and 8 non-euro EU leaders signed the fiscal compact (pdf) that they first discussed in December--a plan that would impose sanctions on countries with deficits exceeding 3% of GDP per year and requires countries to bring debt-to-GDP ratios down to 60%.

However ratification of this new Treaty is not to be taken for granted, as each signatory will have to ratify the agreement at home. If this happens, then the agreement will go into effect on January 1, 2013.

However, the bigger issue right now is the European Stability Mechanism--the permanent European bailout fund that currently has a capacity of 500 billion euros ($665 billion). Many leaders have called for the fund's capacity to be increased--generally by running the fund in tandem with the European Financial Stability Facility (the fund already in place).

While Germany is now spearheading the effort to make the ESM go into effect sooner, it has vehemently opposed any proposals to expand the fund's capacity. Meanwhile, Eurogroup president Jean-Claude Juncker said that the IMF will only agree to increase its participation in the European stability effort if leaders can agree to expand the size of the bailout fund firewalls.

By the end of the summit, EU leaders had made little progress on actually expanding the funding available to construct a firewall around vulnerable eurozone economies, but promised that finance ministers would address the issue later in March.

 


 


" The other major discussion--reinforcing the strength of the firewalls--will now most probably be debated at the            Eurogroup on March 12, with a positive outcome before the IMF spring meetings on April 22. In turn this should                        pave the way for wider G20 support the general increase in the IMF's resources at that time. Instead, tomorrow's              meeting will debate the EU's growth agenda, although nothing of substance is expected to materialize on that front                        at this time."


That was short-lived. We're waiting for post-meeting press briefings to begin here: http://video.consilium.europa.eu/


 

He affirms that France is in line with all its deficit goals.

 


 

While it is fair to point to spreads as a mark of stability, Sarkozy appears to be giving (undue) credit to the EU summits for accomplishing          this and " turning the page in the crisis."

In reality, spreads only began to come down after the European Central Bank embarked upon some landmark liquidity measures to relieve tension in the banking system.

 


He was tapped for and accepted a second term in this role.


He is likely referring in particular to their next meeting on March 12.


 

Barroso says that the " send[s] a very clear message on the stability of the euro."

 


That confirms its timetable, and a plan that has been circulating in the press for the last few months.


 

That would combine the outstanding 250 billlion euros from the EFSF with the 500 billion euro capacity of the ESM.

This is the plan Germany appears to be vehemently opposing.

 


Leaders emphasized that they've taken a stronger stance against human rights violations by promising to hold those guilty for such crimes accountable. They were, on the whole, displeased with the U.N. Security Council decision not to take stronger measures, and directed        pointed criticisms towards Russia and China.


They're reading a lot into positive market sentiment right now. Only time will tell if this continues.




 
 
 
krisluke
    02-Mar-2012 21:37  
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The Market Just Saw A Rare Bullish Inside/Outside Day Combo



We posted Wednesday that the S& P500 was set up for a pullback after carving out an outside day (higher high and lower low than previous day) at strong resistance and looked for follow through selling today. Didn’t happen.

In fact, the S& P500 followed Wednesday’s outside day with an inside daywith Thursday’s high/low lower/higher than Wednesday’s. This reflects a lack of sellers and nervous buyers

An inside day following an outside day is a relatively rare three-day pattern and has initially happened on six times since the current bull market began on March 6, 2009. In every case, the post 5-day return on the S& P500 was positive, averaging 2.08 percent.

Thursday’s pattern and run up looks very similar to the one made on January 31, 2011. The S& P500 rallied 22 percent in 108 trading days from the August 26, 2010 low into the inside/outside three-day pattern. It added another 4.4 percent in the next 14 trading days before correcting.

As of Thursday’s close, the S& P500 is up 25 percent in the 103 trading days since the October 4th low. The market does feel like it lacks sellers and needs a real catalyst to knock it down, in our opinion. Interestingly, there are 13 trading days to the March 20th Greek bond maturity, which could suffer complications and provide the catalyst for a global equity correction.

Like many — maybe too many – we remain cautious and do look for a pullback after such a big move but do respect the trend            and history.

Good luck out there!

.

 

chart

chart


chart

Read more posts on Global Macro Monitor »
 
 
krisluke
    02-Mar-2012 21:29  
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TREASURY: Here's Everything You Need To Know About The US Economy In 13 Slides

Everyone wants to know where the U.S. economy heading.

 

To figure that out, it helps to see where the economy stands and where it is coming from.

The U.S. Treasury Department recently published this brief presentation that does a surprisingly elegant job of capturing the entire U.S. economy in a series of charts.

There isn't much sugar coating here. The presentation shows both where the economy is improving and where it is struggling.

Here's the Treasury Department's statement that accompanied the presentation:

After the worst financial crisis since the Great Depression, America’s economy is gradually getting stronger. Despite the lingering effects of the crisis, despite severe cutbacks by state and local governments, despite all the headwinds from global markets, the economy has grown for 10 straight quarters.

Private employers have added 3.7 million jobs over the last 23 months. Businesses are ratcheting up investments and boosting productivity. Exports, from agriculture to manufacturing, are growing. Meanwhile, the cost of the government’s emergency response to the financial crisis is dramatically lower than anyone expected, which is welcome news for taxpayers.

However, we still face very significant economic challenges, particularly for households and families. And we face two interrelated fiscal imperatives: cutting deficits to stabilize the nation’s debt by the middle of the decade and making critical, targeted investments to fuel economic growth.

Earlier this month, in testimony before Congress on the President’s Budget, Secretary Geithner provided an update on the nation’s economic and financial health. Today, we offer you a more in-depth look – in charts – at the data behind many of the key points he discussed and look forward to sharing similar briefings in the future.


Payrolls and GDP are on an upswing

Growth is being driven by the private sector

Growth is coming from many corners of the economy

However, US consumers continue to struggle

And a lot of our problems had been building up for a while

The Government stepped up in many ways

The projected cost of TARP has plummeted

Thank goodness we rescued the auto sector

Here's a historical look at the US deficit

Proposed budgets cuts are projected to bring down debt as a percentage of GDP

Things aren't too different from the way they were in 1983

Discretionary spending has been shrinking

But we still need to take a hard look at entitlements

Now for the rest of the world...

Now for the rest of the world...


Read more: http://www.businessinsider.com/us-treasury-economy-charts-2012-3?op=1#ixzz1nxwKU1Dl
 
 
krisluke
    02-Mar-2012 21:24  
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Q& A: When And How Israel Will Attack Iran



A very big question mark hanging over the global table is what the hell is going to happen between Iran and Israel. I spoke with a fellow in Europe I know who has an informed opinion. There were no secrets discussed, but his thoughts on some of the variables including Syria, bunker bombs and timing were interesting.

Will Israel allow Iran to develop a nuke?

Not a chance in hell.

What is the “over - under on timing”?

Certainly less than two years.

Does Israel have the capacity to take out concrete hardened facilities in Iran?

Yes, but this is by no means an easy task.

Explain?

chartIt is not possible for the Israel Air force to attack without going over some other country’s border. The choices are Turkey (Iraq then Iran), Jordan (Saudi Arabia, Iraq then Iran), Syria (Iraq then Iran) or Saudi Arabia (Direct to Iran).

Which route will Israel choose?

It will go over Syria. There would be hell to pay if Israel went over Turkey or Jordan. If the Saudis “permitted” it, the Iranians would retaliate by assassinating Saudis all over the world. So it will be Syria. This is especially true as the country is in chaos today.

Will Syria attempt to shoot down Israeli aircraft flying over its territory?

Yes, it has surface-to-air capability and it also has MiG-23 and MiG-27 fighters. The Israelis will escort their bombers over Syria with their F16s. These fighters will wipe out anything that Syria puts up. The ground-based defenses are old, and no doubt poorly manned these days.

Is it a problem if Israeli attack bombers fly over Iraqi territory?

No one gives a shit about Iraq anymore.

What happens when the Israeli bombers get over Iranian air space?

This question has no answer. If it happens, this would be the most advertised air attack in history. The Iranians have sophisticated radar and surface to air capability they bought from China. It would be a mistake to assume that an attack can be made without losses.

How would the attack take place?

Israel will use its F15s. Each plane will be armed with a single laser-guided bunker buster bomb. It will use their F16s as escorts.

As of today, Israel “officially” has only thirty of these bunker bombs. It has a total of 100 F15 attack bombers, so it needs more bombs to fully utilize their strike capability. Look for a sign on this. If the U.S. agrees to supply more bombs, the timing is close.

What is your guess on the outcome?

It is not possible to predict what will happen in Syria. The chaos today creates the best opportunity for Israel. Who knows what can happen in six months? Every week Iran's defenses get stronger. This will be resolved, one way or the other, in less than six months.
 
 
moneycow
    02-Mar-2012 18:44  
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  Some good prediction - stocks pick !!!

  By Frankie Ho


The December-quarter earnings season in Singapore has just ended. Disappointments were plentiful, but some analysts believe the worst may be over, and that the stock market could be poised for more gains even after the strong run-up in the last two months.

Of the more than 300 companies that announced 4Q2011 results by the end of the trading day on Feb 29, those that turned in weaker numbers outnumbered those that reported an improvement by about 1.6 to one.
According to Deutsche Bank, 28% of the companies under its coverage turned in results that were below its expectations, while 42% were inline and 30% outperformed. This, it says, was an improvement from 3Q2011 and 4Q2010, when 40% and 39% of companies, respectively, missed expectations.

Companies that underperformed in 4Q2011 included Wilmar International, which continued to face margin pressure in several business segments Neptune Orient Lines, which turned in a US$320 million ($400 million) net loss Genting Singapore, whose casino continued to lose market share to Marina Bay Sands and United Overseas Bank, which was hurt by higher impairment charges, Deutsche Bank points out.

For UOB KayHian, 31% of the companies it covers fell short in their 4Q2011 performance. This was better than the 34% in 3Q2011, although worse than the 25% in 4Q2010. Still, it notes that almost two-thirds of all the companies turned in 4Q2011 results that were within expectations. “This is one of the highest percentages in the last two years.”

What this points to, as far as Deutsche Bank is concerned, is that companies could be looking at better days ahead. “The weak 4Q reporting season could mark the trough of the earnings cycle.” Meanwhile, it expects the Singapore economy to bottom out in 1Q2012 but avoid a technical recession, based on recent better-than-expected local exports data.

Reflecting its improved outlook, Deutsche Bank has raised its end-2012 target for the Straits Times Index to 3,250 from 3,100. It expects earnings to increase 7% this year and 13% in 2013. Among sectors, its favourites are offshore and marine, banking, and sea transport. It has an “underweight” call on telecommunications and is “neutral” on commodities. Its top stock picks include DBS Group Holdings, Ezra Holdings, Fraser & Neave, Keppel Corp and Neptune Orient Lines.

Credit Suisse has also bumped up its end-2012 STI target, to 3,400 from 3,038. The recent fall in US jobless claims to their lowest since early 2008 was a key factor behind its upgrade. Even at 3,400, the Singapore market’s price-to-book valuation stands at 1.68 times, still below its historical average of 1.75 times since 2000, it notes. Its top picks are cyclical stocks, such as Olam International, Noble Group, STX OSV Holdings and Keppel Corp.

CIMB Research is also among those that are less bearish, although it advocates that investors adopt a trading stance. It says while current market conditions appear favourable, supported in large part by the ECB’s recent moves to inject liquidity into European banks, the real challenges could surface later in the year.

In particular, there is a high probability of Greece failing to honour its debt commitments as its economy struggles, CIMB says. An oil shock stemming from tensions in the Middle East should also not be ruled out, it adds. “We think there are enough interested parties to keep tensions from erupting, but this means that a ‘risk premium’ will be attached to oil for 1H2012. Back when commodity prices boiled in 2007, the world went into recession in 2008.”

CIMB has a target of 3,340 for the STI by end-1H2012 and 2,865 by year-end. Its top 10 stock picks are CapitaLand, CDL Hospitality Trusts, DBS, Ezion Holdings, Genting, Global Logistic Properties, Indofood Agri Resources, Overseas Union Enterprises, Sakari Resources and Sembcorp Industries.

The STI gained 13.1% in the last two months, in line with the MSCI Asia Pacific Index’s 13.3% rise.

1

Disclaimer: The Edge Publishing Pte Ltd does not accept any liability whatsoever for any direct, indirect or consequential losses or damages that may arise from the use of information or opinions in this newsletter. The information and opinions are not to be considered as an offer to buy or sell any of the companies discussed. If you do not wish to receive any further emails, please click here.
 

 
krisluke
    02-Mar-2012 17:29  
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Business News

Geithner defends Obama's Wall Street reforms
Posted: 02 March 2012 1638 hrs

Geithner defends Obama's Wall Street reforms
Posted: 02 March 2012 1638 hrs

WASHINGTON: US Treasury Secretary Timothy Geithner defended the financial sector overhaul enacted after the 2008 meltdown, saying the safeguards could have gone a long way toward averting the crisis.

" Some people seem to be suffering from amnesia about how close America came to complete financial collapse under the outdated regulatory system we had before Wall Street reform," he wrote in a Wall Street Journal op-ed published late Thursday.

He went on to say that President Barack Obama and the June 2010 bill's authors, Senator Christopher Dodd and Representative Barney Frank, deserve " enormous credit for pushing for tough reforms quickly."

" If these reforms had been in place a decade ago, then the rise in debt and leverage would have been less dangerous, consumers would not have been nearly as vulnerable to predation and abuse, and the government would have been able to limit the damage that a financial crisis could have on the broader economy."

The Republican candidates vying to take on Obama in November's presidential election accuse him of burdening the economy with cumbersome regulations and have slammed his $787 billion economic stimulus plan enacted in 2009.

Geithner said his wife looks up from the newspaper with " bewilderment" when she reads about Wall Street firms and lobbyists complaining about the reforms or saying they didn't need the massive bank bailouts of 2008 and 2009.

" She reminds me of the panicked calls she answered for me at home late at night or early in the morning in 2008 from the then-giants of our financial system," he said.

Obama has defended the government's intervention in the wake of the 2008 crisis, saying it helped save the country from another Great Depression.

His Republican rivals have slammed his policies, saying they cost too much and have failed to get Americans back to work.

- AFP/de

 
 
krisluke
    02-Mar-2012 17:17  
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Stocks extend rally in wake of ECB yen slips
Graph with stacks of Australian dollars
* FTSEurofirst 300 up 0.2 pct early, Nikkei ends up 0.7 pct

  * Yen slips to nine-month low versus dollar

  * Brent crude futures falls below $126

  * Bund futures inch higher

  By Blaise Robinson

  PARIS, March 2 (Reuters) - European and Asian stocks climbed on Friday as appetite for risky assets continued to improve following the European Central Bank's huge cash injection, while the yen hit a nine-month low versus the dollar and Japanese importers sold yen.

  The FTSEurofirst 300 index of top European shares was up 0.2 percent in early trade, led by a rally in banking shares such as Commerzbank and Societe Generale .

  " The ECB's action does appear to have made a significant difference and people are more relaxed now. The fact that Italian bond yields have been on a decline in recent days is certainly a helpful factor," said Keith Bowman, equity analyst at Hargreaves Lansdown.

  The ECB's half a trillion euros in cheap, 3-year loans added to the banking system this week has helped fuel a 2-1/2 month recovery rally in risky assets, driving down bond yields of debt-stricken euro zone governments such as Italy.

  However, the rally that had been sparked by the ECB's first long-term funding operation in mid-December was showing signs of exhaustion on Friday, with European stock indexes failing to convincingly break above key resistance levels while the euro fell below $1.33.

  German Bund futures rose, with higher-yielding euro zone government debt looking vulnerable to profit-taking after the ECB's latest cash injection drove Italian two-year yields to their lowest levels in 15 months.

  " Periphery has had a very good run. I just wonder if it's done a little bit too much too quickly. Italy has tightened this much at the front end, we might see a bit of profit taking and core markets stabilising as well," a trader said.

  The dollar rose to a nine-month high against the yen on Friday on reported yen-selling by Japanese importers, the dollar rose 0.7 percent on the day to 81.718 yen on trading platform EBS, its highest level since late May.

  The Japanese currency has taken a hit after the Bank of Japan's surprise monetary easing in February, while the dollar found some reprieve this week after U.S. Federal Reserve Chairman Ben Bernanke stopped short of signalling more stimulus.

  Japan's Nikkei average reached a seven-month closing high on Friday, but it failed to hold above 9,800 for a third day as market players warned of a potential correction in the cards.

  Brent crude futures slipped below $126 a barrel after surging 5 percent to an 11-month high a day earlier, as concerns over a supply disruption from Saudi Arabia eased.

  " Oil prices have overshot in the short-term, and with warmer temperatures as we move from winter to spring, oil demand could start to fall, starting in March," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong. " Brent could fall back below $120 if Iran doesn't flare up." (Additional reporting by Atul Prakash and Emelia Sithole-Matarise in London)
 
 
krisluke
    02-Mar-2012 17:04  
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S& P: Italy must target growth, tackle debt -paper
* S& P cut Italy rating to +BBB in January

  * Italian yields back away from record highs

  * Says focus on growth, debt (Adds quotes, details, background)

  MILAN, March 2 (Reuters) - Italy must lay the foundations for economic growth and get its debt under control to return to a sovereign 'A' rating, a Standard & Poor's official told newspaper Il Sole 24 Ore for its Friday edition.

  Market confidence in Italy has improved after Italian banks, awash with cheap ECB funds, bought domestic bonds at recent sales, but Rome still has to roll over a mountain of debt in the first quarter alone.

  In January S& P downgraded Italy's sovereign debt by two notches to 'BBB+' with a negative outlook, citing concerns over the euro zone debt crisis.

  " The first step for Italy will be to take the outlook from negative to positive. And this will depend on the trend of debt, growth and the impact of the reforms implemented by the Monti government," Myriam Fernandez de Heredia, S& P's managing director for sovereign ratings in Europe, the Middle East and Asia, told the newspaper.

  " Reforms alone are not enough. It is important that they have a long-term impact on growth" , she said.

  " The timeframe of our negative outlook is two years. This means Italy's outlook can change over the next 24 months. If Italy goes in the right direction, we will take this first step," she said.

  The arrival of the government led by Mario Monti had avoided a downgrade worse than the one S& P had carried out, she said.

  Italian Prime Minister Monti's government has launched austerity measures and a deregulation package meant to cut costs and boost growth in the euro zone's third-largest economy.

  Also in January, rating agency Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain, indicating there was a 1-in-2 chance of further cuts in the next two years.

  Fernandez de Heredia said S& P was not negative on the euro and the euro zone.

  " What disappointed us was the response of European policies to the crisis," she said. (Reporting By Stephen Jewkes, Antonella Ciancio)
 
 
krisluke
    02-Mar-2012 16:33  
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Indonesia's proposed fuel subsidy cut needs encouraging: Clyde Russell
-- Clyde Russell is a Reuters market analyst. The views expressed are his own. --

 

  By Clyde Russell

  SINGAPORE, March 2 (Reuters) - It's encouraging to see Indonesia taking tentative steps towards cutting its overly generous fuel subsidies, a move that will hopefully inspire other Asian nations to do the same.

  While China grabs the headlines as the main driver of rising global oil consumption, demand in other Asian nations is also climbing in contrast to steady-to-lower usage in North America and Europe.

  However, it's too early to get excited and say the growth in non-China Asia's oil demand is about to slow because governments are feeling the fiscal pinch of providing subsidies.

  But it is worthwhile to encourage the trimming, or even the elimination, of subsidies so that Asian consumers can feel the effects of the movements in global crude prices.

  Currently, adjusting the global supply-demand balance in response to changes in prices is largely left to consumers in North America and Europe, but this would change if Asians were fully exposed to crude prices.

  This would help the market adjust quicker by making demand destruction appear earlier when prices spike, as they have done in recent weeks with investors fretting about the potential loss of Iranian supplies.

  Looking specifically at Indonesia, the government has two proposals before lawmakers: the first would increase prices by a flat 33 percent and the second would allow floating prices with a fixed subsidy of 2,000 rupiah (22 cents) a litre.

  The first option is said to be the front runner, and would lift the gasoline price to 6,000 rupiah, or 66 cents, a litre.

  However, this would still be a heavily subsidised price: 92-RON gasoline in Singapore traded at the equivalent of 83 cents a litre yesterday, which is a free-on-board price that doesn't take into account the cost of transportation and any retail margin.

  Even after trimming the subsidy, Indonesia would still have the second-cheapest gasoline in Asia behind Malaysia at 60.7 cents a litre.

 

  China has lowered subsidies in recent years and its gasoline price as of Feb. 8 was equivalent to 106 cents a litre, probably enough to ensure that refiners were able to squeeze a small profit from producing the fuel.

  India's gasoline price is also more market-related at 139 cents a litre, but its main fuel is diesel, which costs 91.1 cents a litre, just above the Singapore price of 83.7 cents but not enough for refiners to break-even once transport costs and retail margins are added.

  In Indonesia, India and Malaysia the rationale for subsidies to aid the poor has been eroded by the rise of the middle class and their love affair with cars.

  The subsidies mainly end up benefiting people who don't really need them, and this makes them even more difficult to remove as the middle class exercises more political hegemony than the poor.

  But even if the subsidies were trimmed or removed, how much would demand get crunched?

  Indonesia consumed about 1.3 million barrels of oil a day in 2010, according to the BP Statistical Review of World Energy.

  However, there is an incredibly wide range of estimates as to what the price elasticity of fuel demand is, and most research focuses on developed economies, making its relevance to fast-growing developing nations in Asia questionable.

  Some put the elasticity as high as 50 percent, some as low as 2 percent, and the impact of price changes also varies over time.

  This means estimating how much demand will fall because of Indonesia's proposed 33 percent fuel price hike is tricky and little better than guesswork.

  However, in the interests of debate, let's assume that the price hike goes ahead and elasticity is 20 percent, that is, for every 10 percent increase in the price, demand falls by 2 percent.

  A 33 percent hike in fuel prices would therefore imply a 6.6 percent drop in Indonesia's fuel demand, equivalent to a decline of about 86,000 barrels a day.

  This potential drop is fairly significant, given that the International Energy Agency expects demand from Asia, excluding China, to grow by 200,000 barrels a day to 10.9 million in 2012,

  Even though this is all speculation, the reaction of Indonesians to any fuel subsidy cuts will be key to working out the impact on demand.

  It's also certain that politicians from countries such as Bangladesh and Vietnam will be watching to see if Indonesia can trim subsidies without copping too much public anger.
 
 
krisluke
    02-Mar-2012 16:32  
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BOJ says deflation fight on track, some not convinced
* Boosting fund supply alone won't beat deflation-Shirakawa

  * Group of lawmakers submit list of demands to BOJ

  * BOJ seen extending loan scheme for growth sectors (Adds lawmaker proposal, deputy governor quotes)

  By Leika Kihara and Rie Ishiguro

  TOKYO, March 2 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said consumer prices will gradually rise in the coming years, but that has not kept a group of ruling party lawmakers from demanding a higher price goal and further monetary stimulus in March.

  Shirakawa said that while consumer inflation is currently flat, it will gradually pick up as the economy recovers due to a rebound in global growth and domestic fiscal spending for reconstruction from last year's earthquake and tsunami.

  " We will continue with monetary easing until consumer inflation of 1 percent is in sight," he told a parliamentary committee on Friday, adding that price rises driven by temporary factors such as a spike in crude oil costs alone would not trigger a reversal of the bank's ultra-loose policy.

  He also stressed that while monetary policy eventually determines the long-term trend for prices, boosting central bank fund supply alone would not immediately push up prices and that deregulation and other measures to lift productivity were also needed.

  The yen fell and Tokyo stock prices rose after the BOJ increased asset purchases by 10 trillion yen ($123 billion) and set an inflation goal of 1 percent in the face of political pressure, signalling a more aggressive monetary policy.

  But some politicians are keeping up the pressure. A group of ruling party lawmakers on Friday submitted to Deputy Governor Kiyohiko Nishimura a list of proposals including calls for it to ease policy again in March and set a higher inflation goal of 2 percent.

  It handed the same proposals to Seiji Maehara, the ruling party's policy chief, on Thursday.

  The list by the 75-member group, which includes former cabinet members, is unlikely to make much headway given Prime Minister Yoshihiko Noda has welcomed February's BOJ action and appears in no mood to pile fresh pressure on the bank.

  But it shows that despite February's action, some lawmakers feel the BOJ is not doing enough to address deflation. Many analysts expect the bank to come under even more pressure for action if the yen renews its rise or the economy loses steam.

  Japan's core consumer prices fell an annual 0.1 percent in January, marking the fourth consecutive month of declines, suggesting mild deflation may persist this year as lacklustre wage growth curtails domestic demand.

  Having just eased policy last month and with the yen off record highs, the BOJ prefers to stand pat on monetary policy at its next rate review on March 12-13. It is instead expected to extend a separate loan programme aimed at encouraging banks to lend more to industries with growth potential.

  Deputy Governor Nishimura, appearing in the same parliamentary committee as Shirakawa, said the loan scheme proved effective as an impetus for banks to seek and nurture companies with potential.

  " The BOJ recognizes that boosting Japan's growth potential is extremely important so it will continue to implement the scheme appropriately," he said, signalling readiness to keep it in place beyond the March deadline.

  BOJ board member Hidetoshi Kamezaki also said on Wednesday that the scheme had been successful in nudging banks into lending more to sectors with potential such as clean energy and nursing care.

  In its latest long-term projections issued in January, the BOJ forecasts core consumer inflation of 0.1 percent in the year beginning in April and 0.5 percent the following year. It will review these forecasts in April. ($1 = 80.9800 Japanese yen) (Reporting by Leika Kihara Editing by Michael Watson)
 
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