Europe’s top financial officials said Friday that debt-ridden Portugal will need around euro80 billion ($114 billion) in rescue loans and that negotiations over a full, multiyear bailout program will begin immediately.
A final deal should be in place by mid-May, allowing the debt-ridden country to meet huge bond repayments in June, the EU’s Monetary Affairs Commissioner Olli Rehn said.
Rehn said the euro80 billion loan was based on “very, very preliminary estimates” and that nailing down a final amount will require several “weeks of empirical work.”
Portugal this week became the third country in the eurozone to request international help, after last year’s multibillion rescue packages for Greece and Ireland from the European Union and the International Monetary Fund.
While a rescue of Portugal had long been anticipated and its cash needs can easily be met by Europe’s existing financial backstops, the country’s political situation _ where a caretaker government is in charge until elections in early June _ makes reaching a final deal more difficult.
Prime Minister Jose Socrates resigned late last month after opposition parties rejected unpopular spending cuts and tax increases that the government said were necessary to get the country’s struggling economy back on track.
EU finance ministers, who are in Hungary for a two-day meeting, said Friday that the economic adjustment program that accompanies the rescue loans will have to go beyond the measures rejected by the opposition, heralding difficult negotiations ahead.
Rehn said it’s “essential” that a cross-party agreement is reached in Portugal and added that experts from the European Commission, the EU’s executive, the European Central Bank and IMF will travel to Lisbon soon to take a close look at the country’s books online payday loan lenders.
Any program will be based on strict conditions to ensure that Portugal will eventually be strong enough to repay its creditors and will most likely last for three years, Rehn said.
It will require not only cuts in government spending, but also reform measures designed to make Portugal’s economy more competitive, Jean Claude Juncker, the prime minister of Luxembourg and the main spokesman for the euro countries, said.
On top of that, the loans will most likely include a “special allocation” to shore up Portugal’s banks, Rehn said. Portugal’s banks have lent heavily to households and businesses and have relied on ECB emergency funding for months.
Rehn added that Lisbon will also have to sign up to an “ambitious privatization program” to help it meet its funding needs.
European officials hope that aid for Portugal will finally draw a line under the debt crisis that has crippled the continent for more than a year.
“The predominant view in markets is that this step ring-fences the three weaker economies of the euro area and therefore helps to avoid wider contagion,” said Klaus Regling, who manages the European Financial Stability Facility, the eurozone’s main bailout fund.
He said larger countries like Spain won’t be drawn into the crisis now, because financial markets now have a much better understanding of “the economic fundamentals in the different member states of the euro area.”
“The risk of contagion is much less than six or nine months ago,” Regling added.
Once a program for Portugal is in place, the EFSF, which issues bonds to finance rescue loans should be able to act within about ten days, Regling said.
Asian currencies gained, led by Singapore’s dollar and Malaysia’s ringgit, on speculation the Group of Seven nations’ efforts to curb the yen’s rally will stabilize markets and boost demand for emerging-market assets.
The yen weakened for a second day after the G-7 issued a joint statement on March 18 saying it would join Japan in concerted intervention in foreign-exchange markets. The currency reached a postwar high of 76.25 on March 17 on speculation Japanese companies and investors were repatriating funds after the country’s biggest earthquake on record. India, China, South Korea, Thailand and Indonesia have all boosted interest rates this year to combat rising prices.
“The G-7 action is giving a positive signal to the market and tempers the risk of an economic slowdown,” said Nik M. Khairul, a treasury dealer at Asian Finance Bank Bhd. in Kuala Lumpur. “The focus is back on efforts to tackle inflation in the region” which could benefit currencies, he said.
The Bloomberg-JPMorgan Asia Dollar Index climbed for a third day, up 0.1 percent to 116.45 as of 10:39 a.m. in Hong Kong. The Singapore dollar gained 0.5 percent to S$1.2690 against the greenback, according to data compiled by Bloomberg. The ringgit strengthened 0.4 percent to 3.0395 and the Philippine peso advanced 0.3 percent to 43.57.
China’s yuan reached a two-week high after policy makers raised banks’ reserve requirements for the third time this year on March 18. Consumer prices climbed 4.9 percent in February and January from a year earlier, according to official data. Prices are likely to increase at a rate of less than 4 percent in 2011, the official Xinhua news agency reported over the weekend, citing former central bank adviser Fan Gang.
Ringgit Rises
The yuan strengthened 0.06 percent to 6.5650 per dollar after reaching 6.5640 earlier, the strongest since March 7.
“The reserve-rate increase eases suspicion that China may use the Japan earthquake as an excuse not to allow faster appreciation,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “The move also shows Chinese authorities remain confident about its growth prospects and concerned with its inflation level.”
The ringgit rose for a fourth day, poised for its longest winning streak in a month, on speculation the central bank will allow more gains or raise interest rates to stem rising prices.
Inflation in Southeast Asia’s third-largest economy accelerated 2.6 percent in February from a year earlier, compared with 2.4 percent in January, according to the median estimate of economists in a Bloomberg News survey. The statistics department will report the data on March 25.
Indonesian Growth Forecast
Indonesia’s rupiah advanced to its strongest level in almost a week after the central bank said economic growth in the first quarter may beat its forecast. The rupiah strengthened 0.2 percent to 8,753 per dollar.
Gross domestic product may increase 6.6 percent in the three months through March, compared with an earlier estimate of 6.4 percent, Deputy Governor Hartadi Sarwono said last week. The currency rose for a second day after U.S. Energy Secretary Steven Chu said the Obama administration believes the worst of Japan’s nuclear crisis is over.
“Recent comments by Indonesian officials that gross domestic product may beat the initial forecast has set a positive backdrop for the rupiah,” said Joanna Tan, an economist at Forecast Singapore Pte. “There’s also positive developments in Japan.”
Elsewhere, the Thai baht strengthened 0.1 percent to 30.28 per dollar, according to data compiled by Bloomberg. South Korea’s won rose 0.2 percent to 1,124.70 and Taiwan’s dollar added 0.1 percent to NT$29.566.
The Federal Communications Commission and the Department of Justice on Tuesday approved — with several conditions — a merger of the country’s largest cable operator, Comcast, and broadcasting company NBC Universal.
The FCC voted 4-1 in favor of the deal.
"After a thorough review, we have adopted strong and fair merger conditions to ensure this transaction serves the public interest," FCC Chairman Julius Genachowski said in a statement.
The FCC said the Comcast-NBC Universal combination will be required to take steps to increase competition in the video marketplace. In addition, Comcast (CMCSA, Fortune 500) has committed to expanding local news coverage, expand programs for Spanish-speaking viewers and offer Internet access to schools and libraries.
The lone dissenter, Commissioner Michael Copps, expressed concern that the merger will limit communications choices and drive up costs to consumers.
"At the end of the day, the public interest requires more — much more — than it is receiving," Copps said in a statement.
Comcast also agreed to cease its management of the News Corp., (NWS, Fortune 500) NBC Universal, and Disney (DIS, Fortune 500)-owned video sharing site Hulu - though Comcast and NBC Universal can still maintain a financial stake in the site.
Assistant Attorney General Christine Varney said the move was essential so that, "Comcast cannot use NBCU’s partial ownership of Hulu to diminish its competitive significance."
Varney added that she’s confident in the settlement. "The conditions imposed will maintain an open and fair marketplace while at the same time allow the innovative aspects of the transaction to go forward," she said in a statement.
The merger should be complete by the end of January and the new venture will be managed by Comcast, according to a joint press release from both Comcast and NBCU. Comcast will own 51% of the company, NBC Universal will own 49%, the press release said.
Comcast CEO and Chairman Brian L. Roberts said the company was "proud" and "excited" about today’s FCC decision.
GE (GE, Fortune 500) Chairman and CEO Jeff Immelt said in a statement that he was confident that NBCU would be in "good hands" under Comcast’s leadership.
At a time when money managers’ concerns have swung between record government stimulus and the potential for a new recession, investors remain bullish on commodities that beat stocks and bonds for a second year.
The benchmark Standard & Poor’s GSCI gauge advanced 20 percent, more than the 9.1 percent gain in the MSCI World Index of stocks and 5.3 percent return on a Bank of America Merrill Lynch index of Treasuries. Currency traders are betting on a stronger dollar, sending a contrarian signal because commodities moved in an opposite direction to the currency in 16 of the past 20 quarters, data compiled by Bloomberg show.
Silver, an investment and an industrial material, will jump as much as 37 percent next year, leading gains in the 15 commodities covered in a Bloomberg survey of more than 100 analysts, traders and investors. Zinc, this year’s worst- performing metal, will appreciate 21 percent. Arabica coffee, which reached a 13-year high last week, will be the weakest performer, adding no more than about 7 percent.
The strength in demand “has been a surprise considering that we’ve just come out of the worst recession since the 1930s and carnage in most asset classes,” London-based Roxana Mohammadian-Molina, one of a team of 18 analysts at Barclays Capital who correctly called the bottom in oil and copper last year, said by phone Dec. 22. The bank says U.S. natural gas, will be the only one of the 25 commodity prices it follows that will average less next year.
Stocks Short
Global stocks are still about $11 trillion short of the record $62.6 trillion of market capitalization reached in October 2007, data compiled by Bloomberg show. Over the same period, commodity assets under management rose about 80 percent to $354 billion, and will attract a total of $60 billion in new money this year, the second most after 2009, Barclays estimates.
The S&P GSCI Index is extending last year’s 50 percent advance, which also beat the 27 percent jump in the MSCI World Index and the 3.7 percent loss on Treasuries.
Investors favored raw materials this year as China, the biggest user of everything from coal to iron ore to zinc, led the recovery from the first global recession since World War II. With economies now expanding, competition for raw materials is intensifying.
U.S. growth will rise to 3.25 percent in the fourth quarter of 2011, from 2.5 percent in the first, according to the median estimates of as many as 66 economists surveyed by Bloomberg. China’s will slow to 9 percent next year from 10 percent in 2010, still three times the rate of the U.S. and six times the speed of the euro zone, the surveys show. China on Dec. 26 raised interest rates to counter inflation.
Goldman’s Picks
Commodities gaining the most will be those in which China is least self-sufficient and with the smallest spare production capacity, according to Goldman Sachs Group Inc. analysts led by London-based Jeffrey Currie. Oil, copper, cotton, soybeans and platinum are the bank’s top picks.
Goldman on Dec. 13 forecast an 18 percent advance in raw materials in 12 months, led by a 28 percent gain in precious metals. That tallies with the results of the Bloomberg survey.
Silver, the precious metal most used in industry, will rise 37 percent to as high as $40 an ounce next year from $29.1238 an ounce Dec. 24 in trading in London, the survey shows. Palladium, used in catalytic converters for cars, will jump as much as 18 percent to $900 an ounce from $764 in trading in London Dec. 24.
Silver futures for March delivery rose 53 cents, or 1.8 percent, to $29.785 an ounce at 10:14 a.m. on the Comex in New York. Palladium futures for March delivery gained $11.90, or 1.6 percent, to $779 an ounce on the New York Mercantile Exchange.
Markets in London are closed for a second day today for public holidays.
Gold Outlook
“Investors will be cycling out of gold and into silver, platinum and palladium if financial and economic conditions improve,” said Jeffrey Christian, managing director of CPM Group, a research company in New York.
Christian correctly predicted in January that gold would reach $1,400 an ounce this year and is now forecasting prices to peak at $1,550 in the first quarter before declining as low as $1,200. The median forecast in the Bloomberg survey is for a 23 percent gain to as high as $1,700. Gold reached a record $1,431.25 Dec. 7 in London and closed at $1,381.47 Dec. 24.
Gold futures for February delivery rose $18.70 or 1.4 percent, to $1,401.60 on the Comex.
The popularity of precious metals suggests investors are seeking safety as governments and central banks pump money into economies to shore up recovery.
The Federal Reserve has kept its benchmark interest rate near zero since December 2008 and plans to inject $600 billion into the economy through June by purchasing government bonds through so-called quantitative easing. It already bought $1.7 trillion of securities in a first phase that ended in March.
Fiscal ‘Concern’
“I like gold because I’m concerned that our fiscal and monetary policies don’t make any sense,” David Einhorn, the president of Greenlight Capital Inc., which manages about $6.8 billion of assets, said in an interview in New York. “It leads potentially to a risk of greater instability later.”
Investors increased precious-metals holdings by 22 percent to a record 17,390 metric tons in the 10 months to Dec. 17, data compiled by Bloomberg show. That’s worth about $111 billion, of which 84 percent is in gold and 13 percent in silver, with the remainder in platinum and palladium.
GSCI Returns
Returns for commodity investors may be lower than the spot index suggests. The S&P GSCI Total Return Index, tracking the net amount received, rose 8.4 percent this year, reflecting the cost of maintaining positions in futures markets. When longer- dated contracts cost more than those for immediate delivery, a market structure known as contango, investors pay a premium to maintain their holdings as positions expire.
Gains in commodities may evaporate if currency traders’ bets that the dollar will strengthen are right.
Contracts on the dollar appreciating against the euro are at a three-month high and the U.S. Dollar Index gauge against six counterparts rose 6 percent since Nov. 4. The inverse relationship between the currency market and commodities last month reached the highest level in more than a year, data compiled by Bloomberg show.
Commodity experts in the Bloomberg survey are betting this time will be different amid surging demand and dwindling stockpiles.
Copper Deficit
Copper use will outpace supply by 825,000 tons next year, more than twice the inventory in LME-monitored warehouses, according to Barclays Capital. Prices which reached a record $9,392 a ton on Dec. 21 in London will rise to $10,475 next year, the Bloomberg survey shows. Zinc will be the best- performing industrial metal, advancing as much as 21 percent to $2,800 a ton from $2,308 in London on Dec. 24.
Copper futures for delivery in March rose 2.25 cents, or 0.5 percent, to $4.3025 a pound on the Comex. Earlier, the metal climbed to an all-time high of $4.3195.
Demand may also come from new exchange-traded products. ETF Securities Ltd. started offering investors ETPs backed by copper, tin and nickel this month, attracting about $25 million so far. JPMorgan Chase & Co., BlackRock Inc. and Credit Suisse Group AG also plan similar products.
Weather Markets
A stronger dollar may also be trumped by weather in agricultural markets. Wheat as much as doubled since June and corn jumped 83 percent as Russia’s worst drought in at least a half century, flooding in Canada and parched fields in Kazakhstan and Europe ruined crops.
While wheat should rise as much as 17 percent to $9.13 a bushel next year from $7.83 in Chicago on Dec. 23 and corn 14 percent to $7 a bushel from $6.14, coffee was picked as likely to be the worst performer in the Bloomberg survey. Analysts see a gain of no more than 7 percent to $2.53 a pound from $2.359 a pound in New York on Dec. 23.
Wheat futures for March delivery climbed 8.5 cents, or 1.1 percent, to $7.8875 a bushel today on the Chicago Board of Trade. Corn futures for March delivery rose 3.5 cents, or 0.6 percent, to $6.1875 a bushel, the eighth straight gain. Arabica- coffee futures for March delivery rose 1.05 cent, or 0.4 percent, to $2.385 a pound on ICE Futures U.S. in New York.
“We don’t see an imminent threat to commodity prices in 2011,” said Evan Smith, who helps manage $900 million at U.S. Global Investors Inc. in San Antonio. “You will still have concern over currency stability and in emerging economies there’s the wealth effect that’s driving demand.”
Victor Pauca will have plenty of presents to unwrap on Christmas, but the 5-year-old Winston-Salem boy has already received the best gift he’ll get this year: the ability to communicate.
Victor has a rare genetic disorder that delays development of a number of skills, including speech. To help him and others with disabilities, his father, Paul, and some of his students at Wake Forest University in Winston-Salem have created an application for the iPhone and iPad that turns their touch screens into communications tools.
The VerbalVictor app allows parents and caregivers to take pictures and record phrases to go with them. These become “buttons” on the screen that Victor touches when he wants to communicate. A picture of the backyard, for example, can be accompanied by a recording of a sentence like “I want to go outside and play.” When Victor touches it, his parents or teachers know what he wants to do.
“The user records the voice, so it’s something the child’s familiar with. It’s not robotic,” Paul Pauca said.
The app, which should be for sale for $10 in Apple Inc.’s iTunes store by early next week, is one of dozens of new software products designed to make life easier for people with a range of disabilities.
The category is expanding so fast that Apple now has a separate listing for it in the App Store. More apps are added every week, ranging from Sign4Me, a sign language tutor that uses an animated avatar, to ArtikPix, a flash card-like app that helps teachers and speech therapists improve their students’ articulation of words.
“It opens up his mind to us, because he can show us what he’s thinking,” said Victor’s mother, Theresa.
Victor has a rare genetic disorder called Pitt Hopkins Syndrome, a diagnosis he shares with about 50 other people in the U.S. The ailment causes delays in cognitive abilities, motor skills, social development and language skills. Victor’s progress, in many ways, has been good _ he could walk at age 2, whereas some children with the condition can’t walk until they’re 10 or older.
The Paucas tried a number of therapeutic devices designed to help people with similar disabilities communicate. These standalone devices are often low-tech _ the one the Paucas first tried required paper printouts. Or they are expensive: a top-of-the-line model similar to the one used by famed physicist Stephen Hawking can cost about $8,200.
Paul Pauca, a computer science professor, decided that he and some of his students could do better payday lenders. Starting in January, they worked to create an app that would use the versatility of the Apple devices to make communication easier.
Because the hardware already existed, and the work was done as part of a class, there were essentially no direct costs of development. The prototype was done by late spring.
“We’re not a big-budget operation, and that allows us to sell it for $10,” said Tommy Guy, who is one of Pauca’s students and is now a Ph.D. candidate at the University of Toronto.
Jim Tobias, president of consulting firm Inclusive Technologies and an expert on disability-accessible technology, points out that VerbalVictor takes advantage of general-purpose, mass-market gadgets that cost hundreds of dollars rather than thousands.
People who already own an iPhone or iPad need to pay only $10 more for the app, “instead of taking a risk with $1,000″ with specialized machines, said Tobias, who is not involved with the project.
There are dozens of apps designed to help people with a variety of disabilities, ranging from sign language aids to apps that play back text on the screen in a clear voice to help visually impaired people navigate their phones.
The apps also offer a rich experience with bright colors, high-definition photos and crisp sound recordings that weren’t possible before mobile computing technology, Tobias said. But a potential downside exists when people start to think of the apps as a magic wand. Not every app will help every person, he said.
“I’ve been contacted by about 100 eager and enthusiastic parents in the last three or four months about things like this,” he said, “and if it doesn’t work out, they’re a little bit at a loss as to what to do next. We still need to do more to help professionals understand what’s available and what might be best suited for individuals.”
For the Paucas, who founded the Pitt Hopkins Syndrome International Network to meet and share information with other families, something as seemingly commonplace as a smart phone app has added inexpressible richness to their family life.
“He has the most positive attitude and the brightest smile,” Theresa said about Victor. “He teaches us something new every day about what we need to be thankful for.”
Canada has taken a giant and long-awaited step in protecting consumers from unsafe products.
Bill C-36 received royal assent Dec. 15. It gives Health Canada the power to order recalls of dangerous products
The Dayton International Airport saw a significant bump in traffic in September.
The number of boardings increased more than 9 percent to nearly 108,000 passengers, up from less than 99,000 during the same month last year, according to airport officials.
American Airlines (NYSE: AMR) led the way with a 41.3 percent increase for the month. Among the others adding passengers were United Airlines (NYSE: UAL), which saw a 24.5 percent increase; US Airways (NYSE: LCC), which saw a 19.1 percent increase and Delta Airlines Inc. (NYSE: DAL), which saw a 3.8 percent bump. Boardings for AirTran Airways (NYSE: AAI) were down more than 8 percent.
Cargo traffic at the airport was down more than more than 30 percent compared to the same month last year.
Because of the spike in traffic, year-to-date airport boardings continue to creep closer to level with last year, but are still down 2.7 percent.
More than 932,000 passengers have flown out of Dayton this year so far, compared with about 958,000 in the first seven months of 2009.
Facebook Inc. sent out invitations Monday to a "special event" on Wednesday morning, but hasn't offered any indication about what it plans to unveil.
This has prompted speculation that it might be ready to talk more about the so-called Facebook Phone that it originally denied it was working on.
TechCrunch has also speculated that the event might be about an iPad app for the social network, a broader launch of Facebook Credits that are used to buy virtual goods, an expansion of Facebook Places or a persistent toolbar that users could add to their browsers paydayloans.
SJW Corp. on Friday named James P. Lynch chief financial officer and treasurer of the company.
San Jose-based SJW (NYSE:SJW) was formerly an audit partner at KPMG LLP. The company said he has extensive experience providing audit service and business advice to public and privately held companies, including publically held water utility companies.
He also assisted clients with accounting and financial reporting matters, SEC registration and compliance matters, and securities offerings.
Lynch is a certified public accountant.
Arizona Public Service Co. and the Phoenix Suns are teaming up on $50,000 grants for teachers and energy exploration.
The grants, to be doled out to kindergarten through 12th-grade teachers in $2,500 increments, are intended for projects that include energy exploration using science, technology, engineering and math.
Grant applications will be accepted online through Oct. 15.
For more: http://www.aps.com/main/community/dev/CommDev_8.html.
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