Hot!–DB Says Gold Backed Yuan to replace Dollar as World Currency
While it seems that the transition from the credit to the central bank money regime was managed reasonably successfully, it remains unclear how we can move from the central bank money regime towards a more sustainable new regime based on traditional money and hedge-credit relations.
So far, there has been no example of a successful exit from zero-rate-interest cum non-standard monetary policy regimes.
We can only speculate as to what may come after a loss of trust in the central bank money regime. A Chinese currency linked to gold or a commodity basket could emerge as the new standard in a post-crisis global money regime, in which China will be the dominant global economic power.
Google Engineering Director Resigns. Spills Beans on Madman Brin.
Did Cameron Tell Obama How Much He Could Charge Crown for BP Spill?
Brit-sh-ts Petroleum rejoices at 120 Oil price and how convenient the timing!
Peru Risk Falls as Humala backs Conga
March 15 (Bloomberg) — Peru’s bond risk fell below Brazil’s for the first time in three months as prospects President Ollanta Humala will push through record mining investment spurs the region’s biggest credit-default swap rally.
The cost of insuring Peruvian debt against non-payment for five years fell 29 basis points in the past month to 122.6, while Brazil slid 19 basis points to 122.8, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The last time Peru traded below Brazil was Nov. 28.
Peru outperformed regional peers after Humala, a former army rebel who once vowed to make the state a partner in all natural resource projects, took measures to quell protests that forced Newmont Mining Corp. to suspend construction of its Minas Conga gold mine. The cost to insure Peruvian debt jumped to a seven-week high on Nov. 25 as the protests threatened a pipeline of $50 billion in mining investments in the next decade.
“Concerns over whether Conga is going to go ahead or not have eased somewhat,” said Francisco Rodriguez, senior Andean economist at Bank of America in New York. “That reestablishes confidence.”
Humala, a one-time ally of Venezuelan President Hugo Chavez, won a June 5 runoff election on pledges to boost mining royalties and enlarge state control of the nation’s energy industry.
Peru’s stocks and bonds rallied after he asked central bank President Julio Velarde to remain in his post and appointed a cabinet of economists and businessmen.
Humala responded to the anti-mining protests by declaring a state of emergency, bringing in a former military instructor to lead a revamped cabinet and commissioning a project review to reassure residents that water resources won’t be depleted.
The Peruvian sol has gained 1 percent versus the dollar this year while the yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 has fallen 32 basis points, or 0.32 percentage point, to 5.43 percent on optimism European policy makers have contained the region’s debt crisis and as the outlook for U.S. growth improves. The benchmark stock index has surged 18 percent so far this year outpacing a regional gauge.
Foreign direct investment in the Andean nation rose 4.5 percent to a record $7.66 billion last year, the central bank said Feb. 28. The mining industry will account for more than half the $34 billion of private investment expected in Peru this year and next, according to the central bank. Peru is the world’s third largest copper and zinc producer and sixth in gold. Metals accounts for about two-thirds of its exports, which rose to a record $46 billion last year.
“As Humala continues to consolidate a moderate policy stance, that will benefit the CDS and give it more room to fall, in line or below Brazil and Mexico,” said Daniel Chodos, a strategist with Credit Suisse Group AG in New York.
Political opposition to Minas Conga is being led by the head of the Cajamarca regional government, Gregorio Santos, who plans further protests. Newmont is cutting 6,000 jobs at the stalled $4.8 billion project to reduce costs, Vice President of South American Operations Carlos Santa Cruz said yesterday.
The market isn’t ready to completely trust Humala, said Daniel Volberg, an economist at Morgan Stanley in New York.
“Investors are still pricing in a premium,” he said. “There’s still some doubt given President Humala’s history. It takes time to trust that he’s going to keep this orthodox stance.”
A deterioration in the investment climate would have implications for Peru’s credit rating, Aaron Freedman, senior analyst at Moody’s Investors Service, which raised the outlook on its Baa3 rating to positive from stable a year ago. Moody’s rates Peru’s foreign debt at the lowest investment grade level while Standard & Poor’s and Fitch Ratings both rate it BBB, the second-lowest investment grade.
“The biggest downside risk at the time the positive outlook was assigned was that Humala would end up taking the country in a very different direction that would prove disruptive to economic growth,” Freedman said. “Clearly he’s not done that which would suggest, barring something unexpected, there’s a good chance the country could be upgraded.”
Anglo Overlord John Chambers Massively Overpays for Israeli Software Firm
What bad deal for his shareholders. I will bet Ralph Nader is furious!!! They are paying 1.1 million dollars for each engineer at the firm if you toss in their massive debt load of 1 billion. So Chambers is paying 2x the going rate. Since Rupert was funded by the Crown, you know whose pockets the CSCO shareholders are going to enrich!! Their are much cheaper USA firms he could have purchased. British-Israel, screwing the common shareholders, one deal at time. That is why the Royals call you a commoner.
(Reuters) – Cisco Systems said on Thursday it will buy NDS, a developer of software for multi-channel television networks, for $5 billion.
Founded in Israel in 1988 and headquartered in London, NDS is 51 percent owned by private equity fund Permira and 49 percent by News Corp. It maintains a large research and development center in Jerusalem.
Cisco said it will pay about $5 billion, including the assumption of debt and retention-based incentives, to acquire all of NDS. The acquisition, which is expected to close during the second half of 2012, has been approved by the boards of both companies.
The deal’s value is about 35 percent higher than NDS’s value when it was delisted from the stock exchange in 2009.
NDS specializes in the development of interactive systems for secure delivery of entertainment and information to digital TVs, digital set-top boxes, PCs and mobile devices. It also provides electronic security systems for Web applications.
Its technology is expected to complement Cisco’s Videoscape video delivery technology..
Cameron Instructs Obama on SPR /War
Jobs Data Lifts The Street
Reuters) – Stocks edged higher on Thursday, putting the benchmark S&P 500 index on track for its sixth advance in the last seven sessions as a round of economic data pointed to a slowly improving domestic economy.
The S&P 500 snapped a five-day winning streak on Wednesday after advancing nearly 4 percent during the run, as investors found little reason to extend a rally that took the benchmark index to four-year highs.
Gains on Thursday were muted as the S&P approached the 1,400 level, which represents a technical resistance point the index needs to hurdle before additional gains could be triggered.
“If you looked at all the economic news today it actually came in better than expected, but the market is exhausted – it went all the way up to close to 1,400 and stalled,” said Ken Polcari, managing director at ICAP Equities in New York.
Labor Department data showed new claims for unemployment benefits fell back to a four-year low last week, and producer prices, excluding food and energy, were contained.
Manufacturing data in New York and the mid-Atlantic region also improved, according to regional Federal Reserve surveys.
“It is continued expansion in economic growth across the board,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.
“The claims obviously continue to improve, and that is the thing we are most encouraged by. The jobs continue to slowly improve, and this is clearly a step in the right direction,” Detrick said. “This is continued strength that we’ve seen the last eight weeks or so – economic growth grows higher.”
The Dow Jones industrial average .DJI gained 14.38 points, or 0.11 percent, to 13,208.48. The Standard & Poor’s 500 Index .SPX rose 3.34 points, or 0.24 percent, to 1,397.62. The Nasdaq Composite Index .IXIC added 9.60 points, or 0.32 percent, to 3,050.33.
Semiconductors moved higher, led by Advanced Micro Devices Inc (AMD.N), which jumped 5.9 percent to $8.22 after Jefferies upgraded the stock to a “buy” rating. The Philadelphia Semiconductor Index .SOX gained 1.9 percent.
Ross Stores Inc (ROST.O) reported a higher profit for the holiday quarter as shoppers sought out popular clothing brands at discount prices, and the off-price chain forecast “respectable” sales and profit gains for this fiscal year. Shares dropped 2.7 percent to $55.05. The Morgan Stanley retail index .MVR lost 0.4 percent.
Three initial public offerings made their debuts on Thursday: cloud computing-based software company Demandware Inc (DWRE.N), analog chipmaker M/A-Com Technology Solutions Holdings (MTSI.O) and Allison Transmission Holdings (ALSN.N).
Demandware surged 53.1 percent to $24.50, M/A-Com advanced 5.2 percent to $19.99 and Allison Transmission was flat at $23.
USA Wholesale Prices Rise
Wholesale prices in the U.S. climbed in February by the most in five months, reflecting a jump in fuel costs that Federal Reserve officials project will be temporary.
The producer price index rose 0.4 percent following a 0.1 percent increase the prior month, Labor Department figures showed today in Washington. Economists projected a 0.5 percent gain, according to the median estimate in a Bloomberg News survey. The core measure excluding volatile food and energy rose 0.2 percent, less than in the prior month…
USA Weekly -351k
Claims for jobless benefits dropped last week in the U.S., matching the lowest level in four years, more evidence the labor market is improving.
Applications for unemployment insurance payments fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed today. Economists forecast 357,000, according to the median estimate in a Bloomberg News survey. Claims reached the same level a month ago, the lowest since March 2008…
Don Corizine Burns The Big Boys-MFG Client List Revealed!-Hot!!
Reuters) – Oil major ConocoPhillips, billionaire investor Carl Icahn, Coca Cola and giant energy trader Mercuria are among a crop of previously unnamed, high-profile former clients of bankrupt futures brokerage MF Global, an examination of claims filed in the case shows.
Fifty of MF Global’s bigger former customers — including large hedge funds, multinational powerhouses, and other major traders — had about $1.2 billion lodged with MF Global when it collapsed, according to a Reuters analysis of about 10,000 of the nearly 28,000 claims in the case.
Together these top 50 accounted for more than a fifth of the broker’s total customer funds.
The claims shed new light on what was once one of the world’s most active commodity brokerages, showing it attracted big-ticket clients along with the farmers, ranchers and retail investors who have raised the loudest cry over its collapse. Five directors of exchange operator CME Group have also filed claims, an indication of how the company’s bankruptcy caught even well-informed investors by surprise.
“We had nothing against MF Global. We thought they were a good firm,” said Icahn, who has a claim but is not among the former clients baying for blood.
Like most traders with commodity accounts at MF Global, Icahn has gotten about 72 percent of his money back. Even if he never sees the rest of those funds, Icahn said he will have made $15 million or so during the year the account was open.
His account at MF Global backed a single options trader, a bit player in the scheme of Icahn’s $9 billion fund. It held $85 million on the broker’s final day of business, October 31.
Marathon Petroleum Corp, Nestle SA, General Mills Inc, Anheuser-Busch Inbev, energy giant Tesoro Corp and Spam-maker Hormel Foods Corp are among the companies still waiting on the return of at least $333 million, based on the analysis, which may not capture all of MF Global’s biggest former customers.
A spokesman for the trustee declined to identify the top MF Global claims, citing privacy concerns.
Investors were attracted to MF Global, run by former Goldman Sachs CEO Jon Corzine, for its relatively low trading fees, name recognition and specialization in commodities trading.
Nestle used its accounts in futures transactions for a mix of commodities, said Prashant Kulkarni, a risk management lead for the company. The chocolate maker has received back about 72 percent of the nearly $9.2 million in its accounts, he said.
Options trader Billy Hunt moved his money to MF Global after Goldman Sachs, his broker of many years, told him it would no longer back individual traders like him. He selected MF Global because he was a former client of its predecessor, Refco.
Hunt kept a large balance – $26 million when MF Global went under - in his accounts to back his specialized, high-margin trades.
He shifted money to MF Global just two months before it collapsed and has yet to recover about $7.9 million.
Other big traders were linked to MF Global because they worked with other brokerages that cleared trades through the firm.
Daniel Bowman, a cattle trader in Chicago, saw his accounts transferred to MF Global when it bought his longtime brokerage Dowd Wescott. He had his life savings at MF Global, including a $5 million Treasury bill and $2.5 million in cash, he said. He is still waiting for $1.5 million back.
“I’m at retirement age and he’s got all my money,” said Bowman, 74, referring to Corzine.
It was hard for even big traders to escape MF Global in the days before it imploded. Many became nervous after the broker disclosed it had made risky bets on European sovereign debt.
Magic Capital, a $25 million hedge fund that did its futures trading and kept virtually all its capital at MF Global, decided three days before the bankruptcy to pull its money out, said Jennifer Yu, a back-office manager at the Rockville, Maryland-based firm. But the transfer request did not go through in time.
Now Magic is 28 percent smaller, due to the amount the bankruptcy trustee has held back. Segregated accounts were supposed to keep customer funds safe, even if the broker failed.
MF Global’s European exposure also spooked Highridge Futures Fund, a hedge fund that had $50 million in accounts.
Highridge general partner Michael Recine said he also tried to empty the accounts three days before MF Global collapsed but “for some reason my bank couldn’t handle the whole transfer.”
DRW Holdings, one of Chicago’s biggest trading firms, is one firm that closed its accounts early enough.
It had about $5 million at MF Global when the broker disclosed on October 25 that it had put a $6.3 billion bet on European sovereign debt. DRW immediately withdrew all but about $9,500 from its MF Global account.
DRW chief Don Wilson says such debacles could be prevented through more transparency about where and how brokers invest their customers’ money.
“If we had been aware of the risks they were taking … we would have pulled our money much sooner,” he said.
Other firms pulled money from MF Global before the bankruptcy, as well.
MF Global had $8.8 billion in customer funds at the end of July and only $7.2 billion by the end of August, Commodity Futures Trading Commission data shows. By its collapse, the amount was $5.5 billion, according to CME Group.
Stricter rules — including holding CEOs accountable for safekeeping of segregated funds — and stricter punishments, including potential criminal sanctions, are among proposals under discussion by industry groups including the National Futures Association and the Commodity Customers Coalition, which represents former MF Global clients.
Industry insiders say it is not unexpected that MF Global — which was among the top 10 U.S. futures brokers — would have large hedgers as clients. Such companies were generally equipped to handle the collapse better than smaller investors.
To these titans, the money still tied up at the failed brokerage is fairly inconsequential. Unlike the smaller players who made up the majority of MF Global’s 30,000 customers, most of the big firms had accounts at several brokers and giant trading desks.
ConocoPhillips, the world’s No. 5 refiner which earned $3.4 billion in the fourth quarter, had accounts valued at $310 million with MF Global on October 31, including $195 million in letters of credit to guarantee its trades.
ConocoPhillips spokesman Aftab Ahmed said the bankruptcy “did not impact any of our underlying operations.” He declined to say how much of that balance had been returned to ConocoPhillips.
Global trading company ITOCHU International also said the impact on business operations was minimal. Yet, the collapse “changed our view that our accounts are fully secured,” in-house counsel Keisuke Nomura said. “We need to pay more attention to the credibility of the companies like MF Global,” he said.
THREAT TO CME?
Most large investors have kept their exposure to MF Global under wraps, while farmers, ranchers and individual traders have sounded off to the media, the trustee and Congress over the $1.6 billion in customer money still missing.
Yet these larger customers are critical to the futures industry, and to exchanges like CME Group Inc and IntercontinentalExchange Inc, which could suffer if big-name investors take their business off the exchanges to over-the-counter deals.
In contrast, farmers and ranchers have few options besides the regulated markets to hedge their products.
CME and ICE have been clearing more over-the-counter contracts, but their main futures business generates higher margins.
“What the exchanges care about is volume,” said Craig Pirrong, a professor at University of Houston. “If one or two of these big guys move to the over-the-counter markets or cuts down trading substantially, it could be a big deal.”
At a recent roundtable convened by the CFTC, players such as bond fund giant Pimco, mutual fund company Vanguard and the California Public Employees’ Retirement System made clear that their main concern was that their money would be as protected in the futures markets as it is in the over-the-counter markets.
CME has been working to hasten the return of, and protect, all customer funds, a spokeswoman said.
Former MF Global clients Coca Cola Co, Hormel, General Mills , Anheuser Busch, Tesoro and Marathon Petroleum declined to comment for this story or did not return calls for comment.
One measure of how MF Global’s bankruptcy caught even savvy investors by surprise is the five CME Group directors who filed claims.
Two of them — former vice chairman Charles Carey and director Joseph Niciforo — are suing the broker. Jack Sandner, a former CME chairman, and director Robert Corvino also had small claims, while director David Wescott had $2.1 million in an MF Global account. All declined to comment or did not respond to requests for comment.
Glenn Pankau, whose brother Ron is on the CME board, had banked some $650,000 at his MF Global account, much more than the $50,000 he needed to secure his personal trades.
“I was always told it was the safest place my money could be,” Pankau said.
On the Friday before the bankruptcy, Glenn Pankau had a conversation with Wescott, a CME director and MF Global officer. Wescott told Pankau he should take his money out of MF Global if he was uncomfortable.
Pankau tried, but the check bounced. To date Pankau has retrieved only 66 percent of his money from MF Global.
Wescott has received none.
Now, Pankau keeps only enough money at his new broker to back his trades. “I am not going to be victimized again,” he said.
Elite Global Mob Boss Jamie Dimon Fights Fed on Common Sense Regulation
Slimebag Blankfein stunned by 2.2 billion dollar drop in Market Cap
It should have dropped 50 billion or more. Time to fire Cohen/Blankfein.