Farmers say they have long feared the legal might of Creve Couer-based Monsanto Co., the world’s largest seed company, and its pursuit of farmers who violate the company’s patents on genetically modified seeds.
Now a group of them is making a pre-emptive maneuver of sorts.
The New York-based Public Patent Foundation, a group that describes its mission as representing the public’s interest in freedom from unjustified patent restraints, filed suit in a Manhattan district court Tuesday, challenging the company’s patents on genetically modified seeds.
The lawsuit was filed on behalf of 60 farmers, organic agriculture organizations and seed companies, including Baker Creek Heirloom Seeds, based in Mansfield, Mo., about 200 miles southwest of St. Louis.
“This case asks whether Monsanto has the right to sue organic farmers for patent infringement if Monsanto’s transgenic seed should land on their property,” said Dan Ravicher, the group’s executive director, in a statement.
“It seems quite perverse that an organic farmer contaminated by transgenic seed could be accused of patent infringement, but Monsanto has made such accusations before and is notorious for having sued hundreds of farmers for patent infringement, so we had to act to protect the interest of our clients.”
The lawsuit says the company’s claims that genetically modified seeds have increased production and reduced weed killer are false, and, therefore, the company’s patents on genetically modified seed are invalid because they don’t meet the “usefulness” requirement of patent law.
In a news release, Monsanto said it has never sued farmers over inadvertent presence of its patented traits in their fields and has committed to not do so.
“(The foundation’s) approach is a publicity stunt designed to confuse the facts about American agriculture and we will vigorously defend ourselves. It is well established that biotech crops have provided significant benefit to farmers and the environment, including increased yields.”
The company has said it pursues farmers who violate patents by illegally planting its seed. Most of the cases are settled without going to trial.
The company has filed 144 lawsuits for patent infringement since 1997 through April 2010. Nine of those have gone through a full trial, and in every case a judge or jury decided in the company’s favor, according to a company spokeswoman.
In the past two months, regulators have approved the planting of Monsanto’s genetically modified alfalfa and sugar beets despite ongoing court challenges.
Japan said radiation levels in spinach and milk from farms near its tsunami-crippled nuclear complex exceeded government safety limits, as emergency teams scrambled Saturday to restore power to the plant so it could cool dangerously overheated fuel.
The food was taken from farms as far as 65 miles (100 kilometers) from the stricken plants, suggesting a wide area of nuclear contamination.
While the radiation levels exceeded the limits allowed by the government, Chief Cabinet Secretary Yukio Edano insisted the products “pose no immediate health risk.”
Firefighters also pumped tons of water directly from the ocean into one of the most troubled areas of the Fukushima Dai-ichi nuclear complex _ the cooling pool for used fuel rods at the plant’s Unit 3. The rods are at risk of burning up and sending radioactive material into the environment.
The news of contaminated food came as Japan continued to grapple with the overwhelming consequences of the cascade of disasters unleashed by a 9.0-magnitude earthquake on March 11. The quake spawned a tsunami that ravaged Japan’s northeastern coast, killing more than 7,300 people and knocking out backup cooling systems at the nuclear plant, which has been leaking radiation.
Nearly 11,000 people are still missing.
The tainted milk was found 20 miles (30 kilometers) from the plant, a local official said. The spinach was collected from six farms between 60 miles (100 kilometers) and 75 miles (120 kilometers) to the south of the reactors.
Those areas are rich farm country known for melons, rice and peaches, so the contamination could affect food supplies for large parts of Japan.
More testing was being done on other foods, Edano said in Tokyo, and if tests show further contamination then food shipments from the area would be halted.
Officials said it was too early to know if the nuclear crisis caused the contamination, but Edano said air sampling done near the dairy showed higher radiation levels.
Iodine levels in the spinach exceeded safety limits by three to seven times, a food safety official said. Tests on the milk done Wednesday detected small amounts of iodine 131 and cesium 137, the latter being a longer lasting element and can cause more types of cancer. But only iodine was detected Thursday and Friday, a Health Ministry official said.
Officials from Edano on down tried to calm public jitters, saying the amounts detected were so small that people would have to consume unimaginable amounts to endanger their health.
Edano said someone drinking the tainted milk for one year would consume as much radiation as in a CT scan; for the spinach, it would be one-fifth of a CT scan. A CT scan is a compressed series of X-rays used for medical tests.
“Can you imagine eating one kilogram of spinach every day for one year?” State Secretary of Health Minister Yoko Komiyama said. One kilogram is a little over two pounds.
Meanwhile, just outside the bustling disaster response center in the city of Fukushima, 40 miles (60 kilometers) northwest of the plant, government nuclear specialist Kazuya Konno was able to take only a three-minute break for his first meeting since the quake with his wife, Junko, and their children.
“It’s very nerve-racking. We really don’t know what is going to become of our city,” said Junko Konno, 35. “Like most other people, we have been staying indoors unless we have to go out.”
She brought her husband a small backpack with a change of clothes and snacks. The girls _ aged 4 and 6 and wearing pink surgical masks decorated with Mickey Mouse _ gave their father hugs.
Low levels of radiation have been detected well beyond Tokyo, which is 140 miles (220 kilometers) south of the plant, but hazardous levels have been limited to the plant itself.
Nuclear reactors at the Fukushima plant began overheating and leaking radiation into the atmosphere in the days after the March 11 quake and the subsequent tsunami overwhelmed its cooling systems. The government admitted it was slow to respond to the nuclear troubles, which added another crisis on top of natural disasters, which officials believe killed more than 10,000 people and displaced more than 400,000 others.
There were signs of progress in bringing the overheating reactors and fuel storage pools under control.
A fire truck with a high-pressure cannon was parked outside the plant’s Unit 3, about 300 meters (yards) from the Pacific coast, and began shooting a stream of water nonstop into the pool for seven straight hours, said Kenji Kawasaki, a spokesman for the nuclear safety agency.
A separate pumping vehicle will keep the fire truck’s water tank refilled. Because of high radiation levels, firefighters will only go to the truck every three hours when it needs to be refueled. They expect to pump about 1,400 tons of water, nearly the capacity of the pool.
Edano said conditions at the reactors in units 1, 2 and 3 _ all of which have been rocked by explosions in the past eight days _ had “stabilized.”
Holes were punched in the roofs of units 5 and 6 to vent buildups of hydrogen gas, and the temperature in Unit 5’s fuel storage pool dropped after new water was pumped in, Tokyo Electric Power Co. said.
“We more or less do not expect to see anything worse than what we are seeing now,” said Hidehiko Nishiyama of the Nuclear and Industrial Safety Agency.
Although a replacement power line reached the complex Friday, workers had to methodically work through badly damaged and deeply complex electrical systems to make the final linkups without setting off a spark and potentially an explosion. Company officials hoped to be able to switch on the all the reactors’ power on Sunday.
Even once the power is reconnected, it is not clear if the cooling systems will still work.
The storage pools need a constant source of cooling water. When removed from reactors, uranium rods are still very hot and must be cooled for months, possibly longer, to prevent them from heating up again and emitting radioactivity.
More workers were thrown into the effort _ bringing the total at the complex to 500 _ and the safety threshold for radiation exposure for them was raised two-and-a-half times so that they could keep working.
Officials insisted that would cause no health damage.
Nishiyama also said backup power systems at the plant had been improperly protected, leaving them vulnerable to the tsunami.
The failure of Fukushima’s backup power systems, which were supposed to keep cooling systems going in the aftermath of the massive 9.0-magnitude earthquake, let uranium fuel overheat and were a “main cause” of the crisis, Nishiyama said.
“I cannot say whether it was a human error, but we should examine the case closely,” he told reporters.
A spokesman for Tokyo Electric Power Co., which owns and runs the plants, said that while the generators themselves were not directly exposed to the waves, some electrical support equipment was outside. The complex was protected against tsunamis of up to 5 meters (16 feet), he said. Media reports say the tsunami was at least 6 meters (20 feet) high when it struck Fukushima.
Spokesman Motoyasu Tamaki also acknowledged that the complex was old, and might not have been as well-equipped as newer facilities.
People evacuated from around the plant, along with some emergency workers, have tested positive for radiation exposure. Three firefighters needed to be decontaminated with showers, while among the 18 plant workers who tested positive, one absorbed about one-tenth tenth of the amount that might induce radiation poisoning.
As Japan crossed the one-week mark since the cascade of disasters began, the government conceded Friday it was slow to respond and welcomed ever-growing help from the U.S. in hopes of preventing a complete meltdown.
The United States has loaned military firefighting trucks to the Japanese, and has conducted overflights of the reactor site, strapping sophisticated pods onto aircraft to measure radiation aloft. Two tests conducted Thursday gave readings that U.S. Deputy Energy Secretary Daniel B. Poneman said reinforced the U.S. recommendation that people stay 50 miles (80 kilometers) away from the Fukushima plant. Japan has ordered only a 12-mile (20-kilometer) evacuation zone around the plant.
The government on Friday raised the accident classification for the nuclear crisis, putting it on a par with the Three Mile Island accident in Pennsylvania in 1979, and signifying that its consequences went beyond the local area.
This crisis has led to power shortages and factory closures, hurt global manufacturing and triggered a plunge in Japanese stock prices.
Police said more than 452,000 people made homeless by the quake and tsunami were staying in schools and other shelters, as supplies of fuel, medicine and other necessities ran short.
On Saturday evening, Japan was rattled by 6.1-magnitude aftershock, with an epicenter just south of the troubled nuclear plants. The temblor, centered 150 kilometers (90 miles) northeast of Tokyo, caused buildings in the capital to shake.
The euro fell to its lowest level in almost three weeks against the yen on speculation a new Irish government will seek to share the burden of rescuing the country’s financial system with senior bank bondholders.
The common currency retreated from a more than three-week high against the dollar with the Irish election result following a defeat this month for German Chancellor Angela Merkel’s party that threatens to limit her scope to tackle the region’s debt crisis. The yen touched a three-week high against the dollar on concern civil unrest spreading through the Middle East and North Africa will derail a recovery in the global economy.
“We’ve got a political shift in Ireland and Germany and a banking system that’s hooked on European Central Bank cash,” said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp., Australia’s second-largest lender. “The euro is looking expensive.”
The euro fell to 112.01 yen as of 9:28 a.m. in Tokyo from 112.35 in New York last week, when it completed a 1.4 percent weekly drop. It touched 111.99 yen, the least since Feb. 8. The common currency declined to $1.3718 from $1.3754 on Feb. 25, when it reached $1.3838, the most since Feb. 2. The yen was at 81 one hour payday loan.65 against the dollar from 81.68 and traded as strong as 81.62, the most since Feb. 4.
Enda Kenny may lead a new coalition Irish government after the collapse of the banking system and an external bailout pushed the Fianna Fail party to a record election defeat. As of 10:30 p.m. in Dublin, 154 lawmakers had been elected to the 166- seat Dail, as the Irish parliament is known, according to broadcaster RTE’s website. Fine Gael had won 70 seats, Labour won 36 seats, Fianna Fail had 18 and Sinn Fein had 13.
Ireland Election
The Fine Gael leader wants to re-negotiate the interest rate on the emergency loans, speed up spending cuts to narrow the budget gap and share the cost burden with lenders’ senior bondholders.
U.S. officials will meet foreign counterparts in Geneva today to discuss the fate of Libya, including measures to pressure Muammar Qaddafi out of power while building ties to opposition leaders. U.S. Secretary of State Hillary Clinton said for the first time yesterday that the U.S. has begun “reaching out” to Libyans organizing for a post-Qaddafi era.
Another round of corporate earnings reports will likely be the focus Tuesday on Wall Street.
Homebuilder Beazer Homes USA Inc. said that new orders declined last quarter. The company missed estimates and its shares fell 3.3 percent in pre-market trading.
Avon Products Inc.’s fourth-quarter earnings fell 15 percent and missed expectations. Its shares dropped 4 percent in pre-market trading.
Sara Lee Corp. said Tuesday that higher commodity costs cut into its profits. The food maker, which said last month that it is splitting into two companies, missed estimates and fell 0.3 percent in pre-market trading.
There is little scheduled economic news this week. China announced Tuesday that it will raise interest rates for the third time since October in an effort to tame inflation. The country’s economic boom has resulted in higher prices, forcing some poor families to spend up to half of their incomes on food low rates payday advance.
Ahead of the opening bell, Dow Jones industrial average futures rose 6 points, or less than 0.1 percent, to 12,114. S&P 500 futures fell less than a point to 1,315. Nasdaq 100 futures fell 1 point, or less than 0.1 percent, to 2,344.
Several big acquisitions and a strong earnings report from Loews Corp. pushed stocks higher Monday.
The Dow Jones industrial average rose 69.48 points, or 0.6 percent, to 12,161.63. The Dow has now risen for six straight days, its longest streak of gains since November.
The Standard & Poor’s 500 index rose 8.18, or 0.6 percent, to 1,319.05. The Nasdaq composite gained 14.69, or 0.5 percent, to 2,783.99.
Financial companies rose 1.5 percent, the largest gain of any of the 10 company groups that make up the S&P index.
“Freedom lies behind a door closed shut,” the great Egyptian poet Ahmed Shawqi wrote in the last century. “It can only be knocked down with a bleeding fist.” More than that is bleeding in the Arab world at the moment.
The uprisings we are witnessing in Egypt have been a rude awakening for all those who imagined that the despots of the Arab world could be kept in place provided they continued to serve the needs of the West and their harsh methods weren’t aired on CNN and BBC World. But while Western establishments lull themselves to sleep with fairy tales, ordinary citizens, who are defeated and demoralized, mull their revenge.
The French government seriously considered sending its paratroopers to save former President Zine El Abidine Ben Ali in Tunisia. Israeli Prime Minister Benjamin Netanyahu is pleading with officials in Washington to delay Hosni Mubarak’s departure from Egypt so that Israel has time to prepare for the likely outcome. Former U.K. Prime Minister Tony Blair is even describing the Egyptian dictator as a “force for good.”
The almost 200 pro-democracy citizens who have been killed don’t bother him too much. That’s small beer compared with the tens of thousands dead in Iraq. And a desperate Palestine Liberation Organization is backing Mubarak and repressing solidarity demonstrations in Ramallah on the West Bank.
Hated Figures
In Yemen, another strongman in power for 30 years is beginning to totter. President Ali Abdullah Saleh is a hated figure, again backed by the West, as I discovered when I visited the country last year.
If Tunisia was a tremor, the Egyptian uprising has become an earthquake that is spreading throughout the region. The generals in Cairo are still refusing to disperse the crowds with tanks and bullets. A full-scale Tiananmen Square option, which Mubarak and his friends would have appreciated, becomes difficult in these conditions.
So what will they do? As the crisis moves a step further, Vice President Omar Suleiman, not trusted by many people as the former director of intelligence, is hoping to divide the opposition, clear the streets and negotiate a deal, offering Amr Moussa, the toothless head of the Arab League, the interim presidency. They want someone who will retain the remnants of the old institutions and, in particular, the apparatuses of the secret state that have been so useful in helping the West’s policy of renditions in the war on terror, which has so far only succeeded in engendering more terror.
Total Overhaul
The millions of people in the streets of Egypt are demanding a total overhaul. They want, as in Tunisia, a new constitution that guarantees political and social rights. They want an independent foreign policy that is decided in Cairo, not Tel Aviv or Washington. They want to lift the blockade of Gaza so that its people can live as normally as possible.
This week, the Egyptian regime, shaken by the mass mobilizations, threatened counter-revolution. Pro-Mubarak forces, a combination of the security cops out of uniform and gangsters released from prison, attacked protesters, creating mayhem in Tahrir Square. The military, which pledged to defend public safety, failed to do so.
In Alexandria, there were clashes between Mubarak’s desperate supporters and the anti-government protesters. The coming weekend is decisive. The planned march by several hundred thousand people on the presidential palace might drive Mubarak to get a helicopter to the airport. One assumes the Saudis are preparing a palace for him as is their wont.
Plan B
A post-Mubarak Egypt is difficult to predict with exactitude. What we can say is that it won’t be a repeat of the 1979 Iranian Revolution. The iron will of the Ayatollah doesn’t exist in Cairo. Instead there is a decent, amiable technocrat, Mohamed El Baradei, more known abroad than at home, as a possible Plan B for the White House.
Lurking behind El Baradei is the Muslim Brotherhood. It, too, is divided, with a dominant wing composed of young, modernist Muslims who want to mimic Turkey. If the North Atlantic Treaty Organization’s favorite Islamists in Istanbul can do business with Washington, why not their Egyptian equivalents? They have been engaged in private discussions with informal emissaries from the U.S. for more than a decade.
Nonetheless, a regime propelled into office via an uprising from below can’t be as cavalier in disregarding public opinion, and nor is this a time for the U.S. to start preaching the virtues of liberal capitalism: The recent fate of Iceland, Ireland and Greece should be enough on that score.
Internally, what is required is to rebuild the abandoned social safety net, providing elementary health, education and housing for the poor.
Externally, Egypt’s relationship with the U.S. and Israel will have to be modified, regardless of who succeeds Mubarak. A peace treaty that benefits Israel alone was never accepted by the Egyptian people.
Only then will Egypt be able to stop the bleeding.
(Tariq Ali is a London-based writer, filmmaker and author of the 2010 book “The Obama Syndrome.” The opinions expressed are his own.)
WASHINGTON
Retail sales and industrial production both rose in December, indicating that the U.S. economic recovery is picking up as the new year begins.
Purchases climbed 0.6 percent, capping the biggest annual increase in more than a decade, Commerce Department figures showed today in Washington. Output at factories, mines and utilities increased 0.8 percent, the most in five months, according to data from the Federal Reserve.
Americans this year are forecast to boost the spending that accounts for 70 percent of the economy as tax cuts put more money in their pockets, increasing demand for Ford Motor Co. cars and Apple Inc. iPads. At the same time, an unexpected drop in consumer confidence indicates that rising gasoline prices and unemployment stuck above 9 percent pose a risk for sales.
“The expansion should no longer be described as fragile,” said Dean Maki, chief U.S. economist at Barclays Capital in New York, who today raised his forecast for fourth-quarter growth to 3.5 percent from 3 percent. The pickup in sales “is an important signal that consumers are more comfortable spending than they have been.”
Stocks rose, sending the Standard & Poor’s 500 Index to its longest weekly rally since 2007 as JPMorgan Chase & Co. reported record profits. The S&P 500 increased 0.7 percent to 1,293.24 at the 4 p.m. close in New York. Treasury securities fell, pushing up the yield on the benchmark 10-year note to 3.34 percent from 3.30 percent late yesterday.
Sentiment Slips
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for this month dropped to 72.7, the lowest since November, from 74.5 in December. Economists surveyed by Bloomberg News projected a gain to 75.5, according to the median forecast.
Americans anticipated stagnant incomes this year along with rising inflation, a product of the highest gasoline prices at the pump since October 2008.
The cost of living climbed 0.5 percent in December, led by higher fuel and food prices, figures from the Labor Department also showed today. For all of 2010 the consumer-price index rose 1.5 percent compared with a 2.7 percent increase the prior year.
The so-called core rate of inflation, which excludes volatile food and fuel costs, rose 0.1 percent for a second month. That held last year’s increase to 0.8 percent, the smallest annual gain since records began in 1958.
For all of 2010, retail sales increased 6.7 percent, the biggest one-year advance since an 8.2 percent jump in 1999.
Less Than Forecast
Last month’s gain in purchases fell short of the 0.8 percent median forecast of 83 economists surveyed by Bloomberg. Forecasts ranged from a decline of 0.1 percent to a gain of 1.3 percent cash till payday.
Eight of 13 major retail categories showed increases last month, led by a 2.6 percent jump at non-store retailers, which include Internet vendors. The increase was the biggest in more than two years. Demand at auto dealers climbed 1.1 percent.
Apple sold 7.5 million iPads as of the end of September, making it the best-selling tablet, and the device has generated almost $5 billion in revenue. The Cupertino, California-based company will provide an update on sales when it reports fiscal first-quarter earnings next week.
President Barack Obama signed into law an $858 billion bill on Dec. 17 extending Bush-era tax cuts for two years. The measure also renewed emergency jobless benefits for the long- term unemployed and cut 2011 payroll taxes by two percentage points. Economists such as John Herrmann at State Street Global Markets LLC in Boston said the tax package will boost consumer spending in early 2011.
Projected Pickup
Household spending this year will climb 3 percent, the most since 2005, according to the median forecast of economists surveyed this month. That’s up from a 2.6 percent median estimate in the December, before the legislation was signed.
Auto sales in December reached a 12.53 million annual pace, the highest since the government’s so-called cash-for-clunkers incentive program in August 2009, according to industry data.
Ford said Jan. 10 it plans to hire more than 7,000 workers in the next two years, including engineers with expertise in battery-powered cars. The Dearborn, Michigan-based company will hire 4,000 factory workers and 750 engineers this year and add 2,500 hourly workers next year, Mark Truby, a company spokesman, said in an interview in Detroit.
The University of Michigan’s confidence survey’s gauge of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, decreased to a three-month low of 79.8 this month from 85.3 in December.
Rising Expectations
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, increased to 68.2, the highest since June 2010.
“Rising gasoline prices are definitely hurting people’s wallets,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “The more important thing is to focus on the expectations index, which shows consumers are feeling a little better about their finances in coming months and that will guide spending patterns up.”
Also today, inventories at U.S. companies rose 0.2 percent in November, the smallest gain in six months as companies struggled to keep up with increasing sales, according to another report from the Commerce Department. Companies may need to keep placing orders or pick up production to meet demand and restock shelves in coming months, sustaining the rebound in manufacturing into 2011.
Stocks started 2011 with a lift Monday thanks to better news on the economy.
Manufacturing activity and construction spending both rose more than analysts were predicting. The Institute of Supply Management’s index of manufacturing activity rose in December for the 17th straight month. Separately, the Commerce Department said construction spending rose 0.4 percent in November.
The Dow Jones industrial average jumped 125 points, or 1.1 percent, to 11,703 in afternoon trading.
The Standard and Poor’s 500 index gained 17, or 1.4 percent, to 1,275. The Nasdaq composite rose 48, or 1.8 percent, to 2,701.
The gains were broad. All 10 company groups that make up the S&P index rose. Financial companies led the way with a 2.2 percent jump.
Bank of America Corp. shot up 5.3 percent to $14.05 after the bank settled a dispute with Fannie Mae and Freddie Mac over soured mortgage investments. That was the best performance among the 30 stocks that make up the Dow index. McDonalds Corp. had the largest fall, losing 0.1 percent to $76.70.
The better economic news dimmed the appeal of safer assets. The yield on the 10-year Treasury note, which rises as its price falls, moved up to 3.34 percent from 3.29 percent late Friday.
Small companies, which are considered riskier investments, surged. The Russell 2000, which tracks the performance of smaller stocks, jumped 1.9 percent.
Traders on Wall Street see early gains in January as a sign that that stocks will rise throughout the year. A gain in the S&P index during the first five days of January has preceded annual gains nearly 90 percent of the time, according to the Stock Trader’s Almanac.
At the same time, smaller companies tend to do better early in the year than large ones, a phenomenon known as the January effect. Some of that has to do with traders buying the shares of risker small companies in a new year after selling underperforming shares in December to reap tax benefits, said Jeffrey Hirsch, the editor of the Stock Trader’s Almanac.
In corporate news, Goldman Sachs Group Inc. gained 2.6 percent to $172.58 after the New York Times reported that it bought a stake in Facebook in a deal that valued the company at $50 billion. Facebook remains a private company, though its shares are traded on private stock exchanges.
Shares rose throughout Europe earlier in the day after a report showed that manufacturing in countries that use the euro expanded faster than analysts had forecast. The Euro Stoxx 50 index rose 0.6 percent. Benchmark indexes in France and Belgium each rose more than 2 percent.
The dollar was flat against an index of six heavily traded currencies.
Stocks in the U.S. ended mixed on Friday, which marked the last day of trading in 2010. For many investors, 2010 turned out better than expected. Every major stock market index in the U.S. increased by double digits.
The S&P 500, the market measure used by most professional investors, returned 15.1 percent after dividends. Historically, the index has returned an average of 10.01 percent a year, including dividends.
Stocks ended 2010 especially strong. The S&P gained 20 percent over the last four months of the year, capped by a 7 percent jump in December.
Peabody Energy Corp. said Thursday that severe flooding in Queensland has prompted it to declare force majeure on some Australian coal shipments.
The St. Louis-based coal producer didn’t specify the volume of shipments that have been interrupted or provide additional details.
Force majeure is a contract clause that frees a party from fulfilling obligations because of circumstances outside of its control, such as extreme weather check cash advance.
Peabody sold 20 million tons of coal through the first three quarters of 2010, or just over 10 percent of the company’s total. However, that production represented more than a third of the company’s total revenue and profit.
Japan may extend a capital-gains tax break by a year after the Financial Services Agency opposed ending it in 2011 as scheduled, according to two government officials familiar with the matter.
Vice Finance Minister Fumihiko Igarashi, who moderates the tax panel that will make policy recommendations to Prime Minister Naoto Kan, said last month he wanted to end the 10 percentage point break for levies on dividends and capital gains. Japan’s banking regulator has rejected the proposal, citing the potential effect on stocks, said the officials, who spoke on the condition of anonymity because the talks were private.
The discussions reflect policy makers’ dual objectives of reining in the world’s largest public debt burden while sustaining confidence in a recovery from Japan’s deepest postwar recession. Igarashi has favored bringing the tax back to 20 percent from 10 percent, a step that might make it easier to avoid having to sell more deficit-financing bonds next year.
“This is good news for investors but it’s important to keep in mind is that it’s not clear the tax break has been encouraging people to buy stocks,” said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo. “Japan’s fiscal situation is so severe that they are going to need to end the tax break eventually.”
‘Severe State’
Toshiharu Mashita, an FSA spokesman, confirmed that his agency wants an extension of the reduced tax rate. “We are asking to extend the equities tax break because of concerns with the outlook for economy, which remains in a severe state, as well as finance,” he said.
Igarashi told reporters today that the panel hasn’t made a decision about the tax break, adding that the Finance Ministry has presented alternatives to the FSA, without elaborating.
The benchmark Nikkei 225 Stock Average has advanced 9 percent so far in the fourth quarter, helped by a halt to the yen’s appreciation against the dollar and signs of stabilizing growth in the U.S. and China. The index added gains after the news on the tax-policy discussions, and was up 0.8 percent at 10,293.89 as of 3:28 p.m. in Tokyo.
Japan’s government has previously extended the tax break, in the wake of the global financial crisis, a move that pushed its expiration to 2011 from 2008. Implemented in 2003, the measure was originally scheduled to last five years. The government tax panel plans to compile tax guidelines for the year starting in April 2011 this month.
Small Investors
The Finance Ministry had proposed bolstering tax benefits for small investors to help offset the effect of repealing the tax break.
Kan’s government is struggling to halt growth in a government debt level estimated by the International Monetary Fund at 226 percent of gross domestic product in 2010. His party lost ground in an upper house of parliament election in July after Kan favored discussing an increase in sales taxes.
Japan’s new bond issuance of 44.3 trillion ($527 billion) for the fiscal year through March 2010 is expected by the finance ministry to exceed tax revenue.
The tax panel is also debating a reduction in income-tax deductions and an inheritance tax break, and scaling back the scope of a pledge to increase childcare handouts. A further area for potential changes is corporate taxes, where officials are discussing a reduction to help make Japan more competitive.
Finance Minister Yoshihiko Noda said this month it would be “difficult” to reduce the effective corporate tax rate by 5 percentage points without coming up with revenue sources to compensate for the lower income.
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