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27. Feb. 2010
Lithium and China
Over the last decade, China has led the world in battery exports for laptop computers, cell phones, and other electronic devices. In China there are hundreds of companies, both small and large, that are involved in development of Ni-MH, lead-acid, and lithium-ion batteries. In the past 3 to 4 years, many multinational companies have brought advanced battery technologies to China and set up partnerships and/or joint ventures to manufacture batteries for these and other applications (such as electric bikes, electric vehicles, and hybrids) to take advantage of low labor costs in China and incentives provided by the Chinese government.
While China does have domestic sources of lithium, the country does not have sufficient reserves to cope with the expected demand of consumer electronics, hybrids and electric vehicles. It therefore has no choice but to import lithium. In 2008 China imported roughly 4,300 tons of lithium (mainly from Chile).
What many people don’t realize is that next to Chile, Argentina and Bolivia, China is one of the countries with the largest lithium reserves in the world. China's lithium reserve base is 2.7 million tons (other estimates peg it at 3.35 million tons), ranking the country 3rd in the world in terms of salt lake brine lithium reserves, and 4th in terms of total lithium ore resources.
China has three major salt lake deposits: (a) Taijinaier Salt Lake (Qinghai Province), (b) Dangxiongcuo, or DXC (Tibet), and (c) Zhabuye (Tibet). The Qaidan Basin, where Tiaijinaier is located is supposedly the largest salt bed lithium reserve in China. The main operator in the area is CITIC Guoan, who is purportedly building the largest lithium carbonate plant in the world.
One issue facing Chinese lithium deposits is a lack of infrastructure. Similar to their Andean counterparts, the dry salt lakes in China are in very remote and inhospitable places. Trains and highways are crucial if the lithium is to be transported to end users at the right price.
The bottom line is that China does not want to be left behind. If it wants to be the leader in consumer electronics, electric vehicles, and by extension batteries, it needs to do several things: further develop its domestic lithium deposits, beef up the physical infrastructure that lead to those deposits (i.e. roads, rail), and opportunistically look for acquisitions abroad.
Conclusion
Latin America and China have a special bond when it comes to lithium. While China does have reserves of lithium in Qinghai and Tibet, the growth of the hybrid and electrical vehicle markets will dwarf current global production (an electric automobile uses a quantity of lithium equivalent to 700 cell phones). Latin America, especially Chile, Argentina and Bolivia may hold a key.
China is the world’s largest auto market but the country lags the United States and Europe in technology for gas-powered vehicles. As a result, Chinese leaders are now focusing on electric cars. They plan to turn China into one of the leading global producers of hybrid and all-electric vehicles in the next few years. A clear winner could be BYD (BYDDF.PK), a firm relatively unknown outside of China. BYD is the world’s 2nd largest cell phone Li-ion battery manufacturer and in 2008 it received $230 million for a 10% stake from Warren Buffett’s MidAmerican Energy Holdings. David Sokol, Chairman of MidAmerican, said he thought that BYD's technology was a "potential game changer if we're serious about reducing carbon-dioxide emissions." Today BYD has roughly 12,000 engineers working on battery technology in the southern Chinese city of Shenzhen.
From our vantage point in Shanghai, we think that the “road to riches” in the 21st century may not necessarily be paved with gold, but with a silvery metal known as lithium. And as fate would have it, this road to riches may also inexorably bind two regions of the world that have a lot to gain from each other: China and Latin America.
[Seeking Alpha]
21. February. 2010
Oil prices continued to rise as a refinery strike in France and worries over Iran's nuclear program suggested petroleum supplies may tighten in the future.
Benchmark crude added 32 cents to USD 79.38 a barrel on the New York Mercantile Exchange. Oil prices have increased more than 11 per cent in the past two weeks.
Energy prices dipped overnight after the Federal Reserve announced that it will bump up the so-called ‘discount’ lending rate. That sent the dollar to its highest level since May.
Crude, which is priced in US currency, tends to fall in price as the dollar rises and makes oil barrels tougher to buy for investors holding foreign money.
A Labour Department report today morning though said consumer prices excluding food and energy fell in January for the first time since December 1982. That tempered concerns of future inflation, analyst Phil Flynn said.
[IndianExpress]
18. February. 2010
Michael Pettis, a professor and China expert at the Carnegie Endowment for International Peace, has put together a thorough and informative look at all things U.S.-China trade. It’s well worth reading and watching the entire thing, but here’s a few highlights that jump out:
* We’re likely to see a significant increase in global trade tensions
* China will probably allow the renminbi currency to rise, but not by a lot
* There is a way to resolve those huge global imbalances but it will be painful and the chances of mustering the political will — in China, the United States and Europe — look slim.
A bit more on that last point: Pettis thinks that those three players need to “come to some kind of grand agreement.”
“China needs to recognize that the trade surpluses it needs to absorb its excess capacity are politically unacceptable in countries suffering from high unemployment.
“Europe and the United States need to understand that China simply can’t adjust quickly enough. In an ideal world, the leadership of the three economies would get together and work out a plan—six years, eight years, however long it took—in which China committed to taking the necessary steps.
“Most importantly, raising the value of the currency, liberalizing interest rates, and liberalizing the banking system, that would go a long way to rebalancing the Chinese economy. It will be painful and it will be difficult, but it’s what China will need to do one way or another.
“In exchange, in order to make the difficulty much less, the United States and Europe would commit to slowing down their own adjustments. The United States would continue to run large fiscal deficits in order to slow down the increase in savings in the United States. And they would commit to keeping their markets completely and totally open to Chinese goods, so that the adjustment in China could be slowed down over a seven or eight year period. ”
Pettis says he’s a “little bit pessimistic” that the key players can get to that point.
[Reuters]
11. February. 2010
Australia urged China to deal quickly and transparently with the trials of four Rio Tinto staff accused of bribery and stealing commercial secrets, amid growing investor concern over dealing with Beijing.
China is embroiled in a series of trade disputes with other countries, while Internet search engine Google (GOOG.O) has said it is getting harder to operate in China and has threatened to pull out of the country over censorship and hacking concerns.
China expert Hui Feng at the University of Queensland in Australia said the Rio case was a sign Beijing was determined to play tough with foreign firms to gain a commercial advantage.
"China's increased economic and financial prowess has made the government feel it has more leverage in dealing with foreign business," Hui told Reuters on Thursday.
"I think the (Rio) arrests and allegations are part of the overall strategy to put pressure on Rio Tinto to come to the negotiation table for future talks," he said.
At the centre of the Rio case is Beijing's demands for a lower yearly fixed price for iron ore, an essential commodity to drive Chinese steel plants, and Rio's refusal to lower the benchmark price it had reached with Japanese and Korean mills. China on Wednesday indicted the four China-based Rio employees, including Australian Stern Hu, it's top iron-ore negotiator at the time of his arrest last year.
The four are set to stand trial in Shanghai. If found guilty, they could face up to seven years in jail on the commercial secrets charge and up to 20 years on the bribery charge, said Zhang Peihong, a lawyer for one of the accused Chinese nationals.
"We continue to emphasise to the Chinese authorities the need for the case to be handled transparently and expeditiously," a spokesman for Australia's Foreign Minister Stephen Smith.
Rio Tinto was yet to comment on the indictments on Thursday, but has previously said its staff are innocent.
INVESTOR UNCERTAINTY
The indictments will add to investor uncertainty about the power Chinese authorities can wield over business in the world's third-biggest economy.
Hui agreed with Google founder Sergey Brin that it was getting harder to operate in China in recent years. "How to deal with the political risk is the real issue," she said.
Foreign investors have called for China to clarify its complex laws to make it easier to conduct business.
"I think this is a clear signal to foreign business that the government is serious about cracking down on what they see as illegal activities," Hui said. "In the past the government largely turned a blind eye to such activities."
China is Australia's biggest trade partner. Australia exported $15 billion worth of iron ore to China in 2008, or 41 percent of China's iron ore imports.
Resource-hungry Chinese firms have been behind several tie-ups with Australia firms in the past year.
In January, Australia approved China's biggest-listed gold miner Zijin Mining Group's (2899.HK) $498 million bid for Australia's Indophil Resources NL (IRN.AX), clearing the way for Zijin's dream of becoming a top global copper producer.
But the Rio case and several high profile failures by China to buy into the country's resource sector in 2009 have strained ties diplomatically and commercially.
The collapse of a bid by China state-owned aluminium group Chinalco to invest $19.5 billion in Rio, which would have been China's biggest overseas investment, left China vulnerable to just two suppliers -- the Rio/BHP (BHP.AX)BHP.L combination and Brazil's Vale (VALE5.SA) -- which control 70 percent of global iron ore trade.
The Rio case poses election-year difficulties for Australian Prime Minister Kevin Rudd, who is a China expert and under pressure from media and political opponents at home to use his relationship with Beijing's leaders to help free Hu.
Australian opposition lawmakers and key minor-party senators have pointed to the Rio case as reason for the government to limit Chinese investment in Australian resource firms.
[Reuters]
11. February. 2010
Sweden took the number one spot from the United States to top the annual rankings on the usage of telecommunications technologies such as networks, cellphones and computers, a report released on Thursday shows.
The Connectivity Scorecard, created by London Business School professor Leonard Waverman in 2008, measured 50 countries on dozens of indicators, including technological skills and usage of communications technology.
"Sweden not only has the best current mix of attributes, but it also shows few signs of losing its lead," said Waverman.
"By contrast, there is the beginning of a gap in what was once the essence of U.S. leadership in most industrial and service sectors - education and skills."
Sweden was second in the last survey behind the United States. Norway placed third, up from fifth spot last year.
Researchers say the new indicator -- commissioned by telecom gear maker Nokia Siemens Networks -- is already used by several countries in developing innovation strategies.
"Economic recovery and government stimulus packages aimed at boosting broadband deployment and ICT development should provide room for optimism in the coming years," Waverman said.
Countries in eastern and southern Europe -- including Italy, Spain, Greece and Poland -- took the last spots on the list of 25 developed countries.
Malaysia, helped by good co-operation between the public and private sectors, continued to top the list for developing countries, while South Africa rose to second spot, helped by strong corporate spending on IT hardware, software and services.
Following are the ratings for top 10 "innovation driven economies" measured in the study, scale 1-10, with last year ranking in the brackets:
1 Sweden 7.95
2 United States 7.77
3 Norway 7.74
4 Denmark 7.54
5 Netherlands 7.52
6 Finland 7.26
7 Australia 7.04
8 United Kingdom 7.03
9 Canada 7.02
10 Japan 6.73
Following are indexes for top 10 "efficiency and resource driven economies," scale 1-10, but not comparable with indexes for innovation-driven economies, with last year ranking in the brackets:
1 Malaysia 7.14
2 South Africa 6.18
3 Chile 6.06
4 Argentina 5.90
5 Russia 5.82
6 Brazil 5.32
7 Turkey 5.09
8 Mexico 5.00
9 Colombia 4.76
10 Ukraine 4.67
[Reuters]
7. February. 2010
GWEC
The Global Wind Energy Council today announced that the world’s wind power capacity grew by 31% in 2009, adding 37.5 GW to bring total installations up to 157.9 GW. A third of these additions were made in China, which experienced yet another year of over 100% growth.
“The continued rapid growth of wind power despite the financial crisis and economic downturn is testament to the inherent attractiveness of the technology, which is clean, reliable and quick to install. Wind power has become the power technology of choice a growing number of countries around the world,” said Steve Sawyer, GWEC’s Secretary General. “Copenhagen didn’t bring us any closer to a global price on carbon, but wind energy continued to grow due to national energy policy in our main markets and also because many governments in prioritised renewable energy development in their economic recovery plans,” he said.
Wind energy is now an important player in the world’s energy markets. The global wind market for turbine installations in 2009 was worth about 45 bn EUR or 63 bn US$. GWEC estimates that around half a million people are now employed by the wind industry around the world.
The main markets driving this significant growth continue to be Asia, North America and Europe, each of which installed more than 10 GW of new wind capacity in 2009.
China was the world’s largest market in 2009, nearly doubling its wind generation capacity from 12.1 GW in 2008 to 25.1 GW at the end of 2009 with new capacity additions of 13 GW.
“The Chinese government is taking very seriously its responsibility to limit CO2 emissions while providing energy for its growing economy. China is putting strong efforts into developing the country’s tremendous wind resource. Given the current growth rates, it can be expected that the even the unofficial target of 150 GW will be met well ahead of 2020,” said Li Junfeng, Secretary General of the Chinese Renewable Energy Industries Association.
Newly added capacity of 1,270 MW in India and some smaller additions in Japan, South Korea and Taiwan make Asia the biggest regional market for wind energy in 2009, with more than 14 GW of new capacity.
However, the US continues to have a comfortable lead in terms of total installed capacity. Against all expectations, the US wind energy market installed nearly 10 GW in 2009, increasing the country’s installed capacity by 39% and bringing the total installed, grid-connected capacity to 35 GW. In early 2009, some analysts had foreseen a drop in wind power development of as much as 50%, but the implementation of the US Recovery Act with its strong focus on wind energy development in the summer reversed this trend.
“The U.S. wind energy industry shattered all installation records in 2009, chalking up the Recovery Act as a historic success in creating jobs, avoiding carbon, and protecting consumers,” said AWEA CEO Denise Bode. “But U.S. wind turbine manufacturing is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow.”
Europe, which has traditionally been the world’s largest market for wind energy development, continued to see strong growth, also exceeding expectations. In 2009, 10.5 GW were installed in Europe, led by Spain (2.5GW) and Germany (1.9 GW). Italy, France and the UK all added more than 1 GW of new wind capacity each.
“It is a remarkable result in a difficult year” said Christian Kjaer, CEO of the European Wind Energy Association. “The figures, once again, confirm that wind power, together with other renewable energy technologies and a shift from coal to gas, are delivering massive European carbon reductions, while creating much needed economic activity and new jobs for Europe’s citizens.”
“Wind energy is already making a significant contribution to saving CO2 emissions. The 158GW of global wind capacity in place at the end of 2009 will produce 340 TWh of clean electricity and save 204 million tons of CO2 every year,” concluded Sawyer. “As we see in Europe and the US, wind power is now often the most attractive option for new power generation, both in economic and environmental terms, and for improved supply security.”
5. February. 2010
OECD Report
The outlook for recovery in most of the world's major economies improved in December but the indicator for China dipped slighty, according to an OECD survey released on Friday.
The Organisation for Economic Cooperation and Development's Composite Leading Indicator for 29 developed countries rose to 103.1 in December from 102.2 the previous month and 10.1 points higher than a year ago.
"OECD composite leading indicators (CLIs) for December 2009 provide stronger signals of an expansionary economic outlook than last month," the report said.
"CLIs for the G7 economies as well as China, India, Russia and Brazil, are now all close to, or above their long term trends. In all these countries, industrial production ... has now reached its trough."
The CLI for the Group of Seven -- Japan, the United States, Canada, Italy, France, Germany and Britain -- rose to 103.1 from 102.1 in November. That was 10.4 points higher than a year earlier.
The improvement was slightly less marked in four large emerging market countries. They are not members of the OECD and are not covered by the overall OECD indicator.
The CLI for Russia rose to 101.0 from 100.8 in November, for Brazil it rose to 99.1 from 99.0 while the outlook for China eased to 103.1 in December from 103.2.
( To read the full report of OECD, click here )
5. February. 2010
Reuters
Gold posted its biggest one-day loss since 2008 on Thursday, hitting a three-month low as a wave of risk aversion swept through global markets, triggering massive technical selling in the metal.
Bullion tumbled more than 4 percent in heavy trade, briefly falling below $1,060 an ounce as escalating sovereign debt fears in Europe prompted investors to bid up the dollar and unload riskier assets.
Other precious metals also fell. Silver slid nearly 7 percent to its lowest since September, platinum dropped more than 4 percent and palladium fell 6 percent.
Scott Meyers, senior analyst at Pioneer Futures, a unit of MF Global, said gold has slid below technical support levels.
"There is not a lot of technical support in gold right now. It is more of a function of how the market reacts to whatever stimulus is forcing the market lower right now," Meyers said.
Risk-averse economic sentiment pummeled world stock markets, pressuring gold, oil and other commodities.
Wall Street fell more than 3 percent on an unexpected increase in the number of Americans claiming jobless benefits, and as fiscal worries in euro-zone countries led investors to buy safe-haven U.S. Treasury debt.
Spot gold hit a low of $1,059.10 an ounce, the weakest since November 3. It was last at $1,064.30 an ounce at 4:07 p.m. EST, sharply lower than $1,108.85 late on Wednesday.
Spot bullion's 4.2 percent decline was its biggest one-day percentage loss since December 1, 2008, when it tumbled 5.6 percent, Reuters data showed.
U.S. gold futures for April delivery settled down $49 at $1,063 on the COMEX division of the NYMEX.
"If you are short, you stay short, because there is no real reason to be a buyer unless the market sold off more," said Rick Bensignor, chief market strategist at broker-dealer Execution LLC.
The euro plunged to a seven-month low against the dollar. European Central Bank President Jean-Claude Trichet predicted many members in the bloc will have large, sharply rising fiscal imbalances.
Strength in the U.S. dollar makes dollar-priced commodities more expensive for holders of other currencies.
Among other commodities, oil prices fell nearly $4 to about $73 a barrel amid a global sell-off, as Reuters-Jefferies CRB index .CRB also fell 2.5 percent.
TECHNCIALLY VULNERABLE
The sharp decline sent spot gold well below its 14-, 50- and 100-day moving averages. Technical analysts said gold could fall further after the sell-off pushed it below major support levels, but it should hold above $1,000 an ounce.
With U.S. January non-farm payrolls data due Friday, all eyes will focus on whether the jobs report will rejuvenate gold through its influence on the dollar.
"This is a broken chart, at least short term. Unless tomorrow's job numbers somehow change the entire picture on the dollar and gold turns around, I am in the bear camp here," Bensignor said.
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust on Wednesday reported its first outflow this month. Its holdings declined 1.6 tonnes that day, after falling 21.7 tonnes in January.
In other precious metals, silver touched a low of $15.16, lowest since September, tracking gold's losses, and was last at $15.26 an ounce against $16.34. Platinum was at $1,504.50 an ounce versus $1,572.50, and palladium at $408 versus $434.50.
5. February
Reuters
Global shares hit three-month lows and the euro fell to an eight-month low against the dollar on Friday as euro zone sovereign debt problems and nerves ahead of U.S. jobs data led investors to dump riskier assets.
The dollar hit an eight-month high as investors sought safety in the greenback. Commodities and oil, which fell sharply on Thursday, stayed under pressure ahead of the key U.S. non-farm payrolls report seen as an indicator of the strength of U.S. economic recovery.
European shares fell to two-month lows, following sharp falls in New York and Tokyo markets. The MSCI global index hit its lowest since early November.
A Reuters survey predicted U.S. employers added 5,000 jobs in January but an unexpected rise in U.S. weekly job claims on Thursday added to investor nervousness.
"It's clear that the market is shifting from extremely risk-loving to once again becoming risk-averse and this is an environment to be extremely cautious," said Philippe Gijsels, senior equity strategist at BNP Paribas Fortis in Brussels.
The euro hit its weakest level against the dollar in more than eight months as widening government bond spreads highlighted concerns over the ability of some euro zone governments to pay their debts.
"Widening euro zone CDS and bond spreads over German Bunds are making investors less confident, which is weighing on the euro and putting pressure on equity markets," said Jeremy Stretch, strategist at Rabobank.
The euro, which fell as low as $1.3649, has been under pressure all week as investors handed out a hammering to bonds of heavily-indebted euro zone countries, including Greece, Portugal and Spain.
The concern over sovereign credit has also begun to knock confidence in markets beyond the euro zone.
Emerging markets equities have fallen sharply in the past two weeks, with a key index at a three-month low.
The cost of insuring Greek, Portuguese and Spanish debt against default both hit record highs on Friday.
PORTUGUESE VOTE
Portugal's parliament will on Friday vote on an opposition bill that the government wants to block to avoid increasing the budget deficit, as it fights growing fiscal woes.
"The euro remains on a downward trend for the longer term unless there is a convincing prospect of an improvement in the euro zone fiscal troubles," said Minoru Shioiri, chief manager for FX trading at Mitsubishi UFJ Securities.
The dollar rose, hitting an eight-month high against a currency basket as investors sought a safe haven and the Japanese yen also benefited.
The euro's sharp fall in Asian trade saw the Swiss franc hit a 15-month high against the single European currency and traders said the Swiss central bank stepped in to buy euros and push the franc lower.
Benchmark German government debt rose in price as bond investors fled the lower-rated, so-called peripheral issuers. The Bund future hit its highest since April and the yield on the two-year note hit its lowest since the euro was launched in 1999.
U.S. stock futures pointed to a lower open in New York. The Dow Jone Industrial average fell 2.6 percent, dipping below the 10,000 mark, on Thursday on anxiety over the euro zone debt problems and after the U.S. weekly jobs data.
Tokyo shares fell almost 3 percent, although shares in Toyota rose despite the carmaker's troubles over recalls.
Spot gold, extended Thursday's falls, touching a three-month low of $1,049.50 an ounce, compared with $1,062 in New York.
Crude oil stood at $73 a barrel, having hit an intraday low of $72.42 on Thursday.
5. February. 2010
Reuters
Troubled Swiss bank UBS, which has been battered by a U.S. tax evasion probe, is reorganizing its U.S. wealth management division in an attempt to stem outflows.
The Swiss bank, the world's second largest wealth manager, said on Friday the recently appointed heads of its wealth management unit, Robert McCann and Robert Mulholland, had outlined broad plans for a restructuring and management reshuffle.
News of the changes drew initial skepticism from the market. They are part of a months-long process McCann has undertaken to revive an 8,000-strong brokerage force caught in the firing line of the U.S. Internal Revenue Service investigation.
"They are implementing a plan that was effectively announced when McCann presented at the investor conference in November. He said then he needed ... to turn things around," said Kepler Equities analyst Dirk Becker.
McCann, who joined UBS as head of the Americas wealth management unit in October 2009, said then he would unveil his strategy to create a nimbler business early in 2010.
In the past year, hundreds of brokers have left the bank and clients have yanked billions in assets.
McCann and Mulholland, both ex-Merrill Lynch employees, said UBS is consolidating its U.S. wealth business into two units from three, led by David McWilliams and Michael Schweitzer.
One analyst, who asked not to be named, was not convinced the new measures could help turn the tide, offering two words: "Deckchairs. Titanic."
UBS shares shed 1.7 percent to 13.71 Swiss francs by 4:29 a.m. EST, broadly in line with the Dow Jones Stoxx European banks index and beating home rival Credit Suisse, which was down 2.5 percent.
UBS reports 2009 results on Feb 9 and Credit Suisse on Feb 11.
4. February. 2010
Reuters
Monster Worldwide Inc (MWW.N) said on Wednesday that it will buy Yahoo Inc's (YHOO.O) HotJobs site for $225 million in cash, citing an improving job market.
The deal, which comes as the U.S. unemployment level remains around 10 percent, would take Yahoo out of the online recruitment business, leaving Monster with only one major competitor, Careerbuilder.com.
Monster, which controls about one-third of online jobs postings in the United States, does not expect the deal to raise significant issues with antitrust regulators, since HotJobs has a smaller share of the market.
Careerbuilder, owned by U.S. newspaper publishers Gannett Co Inc (GCI.N), McClatchy Co (MNI.N) and Tribune Co (TRBCQ.PK), as well as software maker Microsoft Corp (MSFT.O), has the largest part of the online job ads market.
It is too soon to say whether Monster will cut jobs as a result of the deal, Chief Executive Sal Iannuzzi told Reuters.
The deal comes as the U.S. economy shows signs of recovering from a protracted slump. The government's January jobs data due on Friday is expected to show only the second monthly jobs gain since the recession began in 2007, though the unemployment rate is expected to remain above the key 10 percent level.
Monster's monthly index of online jobs demand weakened in December, suggesting a broad recovery was not yet under way.
Under the terms of the deal, Monster will pay Yahoo $20 million to $31 million a year for Yahoo to redirect traffic to its site.
Yahoo acquired HotJobs in 2002 for roughly $445 million in cash and stock. J.P. Morgan analyst Imran Khan said that unique users on the HotJobs site in December declined 32 percent year over year, in a note to investors citing data from comScore.
Yahoo's sale of HotJobs, which had been rumored for months, is the latest example of the Internet company's reorganization under CEO Carol Bartz who took the helm in January 2009.
Bartz has shed various assets including last month's sale of the Zimbra email business to VMware Inc (VMW.N), and struck a deal to let Microsoft Corp (MSFT.O) handle its site's Internet search technology, in an effort to refocus the company on Internet media and advertising and reignite growth.
Monster also will double the number of newspapers that it works with to about 1,000, Iannuzzi said. Monster and HotJobs each have deals with newspaper websites for displaying online job ads.
The HotJobs deal is expected to close in the third quarter. Monster said the deal will be accretive to earnings next year.
HotJobs generates annual revenue of about $100 million. Monster's 2009 revenue totaled $905 million.
The deal overshadowed Monster's quarterly results, also released on Wednesday. They largely matched expectations.
Monster's net loss came to $2.1 million, or 1 cent per share, matching forecasts. Revenue fell 27 percent to $213 million, slightly ahead of Wall Street expectations. Deferred revenue, which Monster will recognize over a long period, rose 15 percent sequentially to $305 million.
Monster shares were trading at $16.50 after hours, up from their closing price of $16.42. Yahoo was up slightly from the close at $15.50.
4. February. 2010
Reuters
President Barack Obama vowed on Wednesday to address currency rates with economic partners such as China and to get tougher with them on trade to ensure that U.S. goods do not face a competitive disadvantage.
Sino-U.S. relations are already troubled by Washington's planned arms sales to Taiwan, a likely meeting between Obama and exiled Tibetan spiritual leader the Dalai Lama, and a spat over Internet freedoms.
Here are some facts about the main points of contention over the yuan:
* The United States complains that China keeps its currency artificially undervalued, thus unfairly helping exporters.
China has held the yuan in a de facto peg to the dollar since the worsening of the global financial crisis in mid-2008, meaning its currency has weakened against those of other trade partners as the value of the dollar has slid over the past year.
* China has repeatedly said that its currency policy has been an important source of stability during a period of international financial turmoil, benefiting both the Chinese and global economic recovery.
* During the most intense phase of the financial crisis, from September 2008 to March 2009, the dollar peg actually meant that the yuan appreciated strongly against virtually all other currencies in the world.
* Obama, during a visit to China last November, urged the country to let the yuan rise in value, but Chinese President Hu Jintao avoided mentioning either the yuan or the dollar during a joint appearance before the press.
* It's not only the United States pressing China on the yuan. Top European officials have asked China to let the yuan resume its rise. The International Monetary Fund and some large developing countries, including Brazil and India, have also urged Beijing to get a move on.
* Concern about an overheating economy was the catalyst for Beijing's landmark yuan reform in July 2005, when the central bank revalued the yuan by 2.1 percent, breaking a decade-long dollar peg. It let the yuan rise by a further 19 percent over the next three years before freezing it in place again in mid-2008 when the financial crisis began to hit Chinese exports.
* Analysts polled by Reuters and investors in the key offshore non-deliverable forward market expect the yuan to resume appreciation in the next 12 months, gaining about 3 percent. The main driver is expected to be domestic concerns about rising inflation, not foreign pressure.
* Yuan weakness is far from the only reason for China's massive trade surplus with the United States. Economists often describe China's surplus as structural, referring to the country's cheap capital and over-investment, which generate excess production that is cleared through exports.
The implication is that deeper reforms to China's economy such as building up a social safety net, and not just yuan appreciation, are necessary to stimulate domestic demand and rein in its yawning trade surplus.
4. February. 2010
Reuters
U.S. business bankruptcy filings rose 7 percent in January from a year ago, according to a bankruptcy data provider on Wednesday, as the sluggish economy hurt sales and hindered businesses' ability to refinance heavy debt obligations.
Companies from a range of industries including educational publishing group Haights Cross Communications Inc HAIGH.UL, financial company FirstFed Financial Corp (FFEDQ.PK) and airline Mesa Air Group (MESAQ.PK) MESA.O were among the 6,502 companies that filed for bankruptcy protection in January, compared with 6,055 in the same month last year, according to Automated Access to Court Electronic Records (AACER), a database of U.S. bankruptcy statistics used by attorneys and lenders.
"(The numbers) indicate that there's going to be more filings in 2010 than in 2009," said Mike Bickford, president of AACER.
Still, he said, bankruptcy data from the next three months will provide a better prediction for the year to come.
"February, March and April (data). That's what's going to tell the tale," Bickford said. "That's when filings historically reach the level that you can make some reasonable judgments about what's going to happen in the year."
Per day, 342 companies sought protection from creditors in bankruptcy court, compared with 303 last year.
AACER's count of commercial cases includes bankruptcy filings from companies, as well as individuals who say they are running a business.
Though economic conditions appear to be improving -- the economy grew at a faster-than-expected 5.7 percent annual pace in the last quarter of 2009 -- Bickford said bankruptcy filings will not slow in the near future.
"You don't see a recovering economy in bankruptcy numbers until 12 to 18 months after the economy has actually begun to recover," he said.
4. February. 2010
Reuters
Federal Reserve Governor Kevin Warsh said on Wednesday that regulatory improvements alone would not prevent future financial crises and the government must be willing to let firms fail.
"Regulation is too important to be left to regulators alone. We need a system in which insolvent firms fail," Warsh told the New York Association of Business Economics.
In response to an audience question, Warsh said it was "essential" that the United States coordinate regulatory reform with other members of the Group of 20 rich and emerging countries.
Given the global nature of financial markets, the overall "policy prescription has to be global," even as countries make different choices about specific reforms, he said.
Warsh's comments come as Congress mulls an overhaul of financial regulations after the worst banking crisis in decades.
The Fed itself has been severely criticized for what lawmakers and many observers see as the failure to check risky lending practices and to rein in a house price bubble that led to the collapse.
Lawmakers are considering stripping the Fed of the authority to oversee banks and responsibility for protecting consumers, leaving monetary policy as its sole function.
But Warsh said the U.S. central bank should continue to play a critical function in the supervision of financial firms and that the blame for the crisis cannot be laid at the feet of regulators alone.
He said the mortgage finance system, particularly the roles of government-sponsored mortgage finance agencies Fannie Mae and Freddie Mac, should be examined. The federal government took Fannie and Freddie into conservatorship at the height of the crisis.
4. February. 2010
Reuters
The first few weeks of this year brought a surge of U.S. companies dropping the shackles of bankruptcy to emerge with lighter debt loads, a fresh business plan and new owners.
The improving U.S. economy, capital markets and a rise in prearranged bankruptcy plans have held the door open for companies to exit bankruptcy court, but turnaround experts warn that emergence is only the beginning.
"Emergence has nothing to do with turning the corner," said Alan Cohen, chairman of Abacus Advisors, a turnaround and restructuring firm. "You can correct a balance sheet by manipulating debt into equity, or reducing debt, but unless the entity focuses on improving operations, they're going to have a tough time."
RUSH TO EXIT
Some 11 formerly publicly traded companies have come out of bankruptcy so far this year, compared with just four in the same period last year, according to bankruptcy statistics provider BankruptcyData.com.
In 2008, only one company emerged in the first six months of the year.
Some firms, such as music and entertainment provider Muzak Holdings LLC MUZKH.UL, have been able to take advantage of more welcoming capital markets to fund their exit.
Others, such as RH Donnelley Corp, now known as Dex One Corp (DEXO.N), have sped through the process after working out a restructuring deal with lenders before the bankruptcy filing.
"The prepacks are pushing people out much more quickly," said Ed Albert, a managing director at investment firm Macquarie Capital (USA) Inc. He added that the sheer volume of companies that filed for Chapter 11 bankruptcy over the past few years contributed to the new year's rush.
Some 210 public companies filed for bankruptcy last year, up 52 percent from the year before and the largest number since the previous U.S. downturn in 2001, according to BankruptcyData.com
"The timing of the filings, the velocity of the bankruptcy process and more prepackaged solutions have resulted in a wave of emergence," said Albert.
TROUBLE AHEAD?
An improving economy has helped loosen capital markets, allowing companies to refinance debt or reach deals with new lenders. Indeed, the economy grew at a faster-than-expected 5.7 percent annual pace in the last quarter of 2009.
"You can't save companies in a bad economy," said Richard Mikels, a partner with law firm Mintz Levin. "But when the economy starts to get a little better, you have a real chance of saving these companies."
But Mikels warned that an improving economy would bring more new bankruptcies, not less. That's because more creditors will foreclose on the assets of troubled companies now because those assets have slightly more value than the year before. In addition, credit markets are offering more loans to companies seeking Chapter 11 protection, he said.
And companies still need to fix the problems that sent them to bankruptcy court in the first place.
"Investors should "look at how long it took companies to emerge - did they do a balance sheet restructuring only, or a balance sheet restructuring as well as an operational restructure? Did they correct their operations?" said Cohen.
"When you have an ache, you take a Tylenol, you feel better for a while but you didn't determine what caused the ache," he said. "It's just a Band-Aid."
Once-public companies to emerge so far this year, according to BankruptcyData.com, include Muzak, R.H. Donnelley (Dex One), Teton Energy Corp, Vermillion Inc (VRML.PK), Simmons Bedding Co SIMMB.UL , Merisant Worldwide Inc MERWO.UL, CanArgo Energy Corp, Fairchild Corp (FCHDQ.PK), Lenox Group, Edge Petroleum Corp and Building Materials Holding Corp.
3. February. 2010
Reuters
Enjoy $9.99 electronic books while you can -- for they soon may be a thing of the past.
News Corp Chief Rupert Murdoch, who oversees a media empire than includes HarperCollins books, home to authors like Michael Crichton and Janet Evanovich, made clear on Tuesday his displeasure with the low price Amazon.com Inc has set for electronic books.
In order to raise prices, Murdoch wants to renegotiate the current deal with Amazon, and said the world's largest retailer appears "ready to sit down with us again" to talk about new terms.
"We don't like the Amazon model of selling everything at $9.99," Murdoch said when asked about electronic books during a conference call with analysts on Tuesday.
"They pay us the wholesale price of $14 or whatever we charge," he said. "But I think it really devalues books and it hurts all the retailers of the hard cover books."
Amazon did not immediately respond to request for comment.
If Murdoch's HarperCollins manages to work out a new deal, it would deal a major, and perhaps final, blow to Amazon's current pricing. Just days ago, the world's largest online retailer bowed to pressure from another major publisher, Macmillan, which insisted on charging $12.99 to $14.99 for its books.
Book pricing has been key to pushing growth of Kindle e-reader since its launch in 2007, since cheap e-books help consumers justify the cost of purchasing the device. It has also put Amazon at odds with publishers, however, who say that the low prices will cannibalize sales of higher-priced hardback copies.
Fresh competition from Apple Inc -- which is rolling out the iPad -- has only cast more attention on pricing. Publishers are more anxious than ever to protect their profit margins, and now have some leverage in negotiating against Amazon.
Murdoch, while keeping mum on the exact deal with Apple, suggested the terms of are more favorable to HarperCollins than Amazon's.
"Apple, in its agreement with us, which is not been disclosed in detail, does allow for a variety of slightly higher prices," he said.
3. February. 2010
Reuters
Microsoft Corp's 10-month-old search engine Bing, which has struggled to make headway against Google, can be a viable runner-up and make money online eventually, according to one of its top executives.
The world's biggest software company has lost more than $5 billion over the past four years trying to build an online business, but hopes to reverse that trend once it completes a search advertising partnership with Yahoo Inc.
"As soon as we close and implement the Yahoo deal, we have achieved a milestone: for advertisers, we are a credible No. 2," Yusuf Mehdi, senior vice president of Microsoft's online audience business, said in an interview on Tuesday.
"Really now, the goal is about share gain. If we grow share, we will grow our way into profitability, and we have confidence we can do that," said Mehdi, who is charged with making Bing and the MSN portal a financial success.
Microsoft now has 10.7 percent of the U.S. search marketplace, according to ComScore, up from 8 percent before Bing's launch in June. But it still trails Google's 65.7 percent and Yahoo's 17.3 percent.
Assuming U.S. regulators soon approve a deal that makes Bing the underlying search engine for Yahoo, Microsoft will then effectively control almost 30 percent of the search market: a key number for advertisers.
"At 30 points we are now a credible option, so that number matters," said Mehdi. "The nice thing is we can say (to advertisers) you can be close to 30 percent share in one easy buy. That 30 percent carries a lot of weight in the marketplace."
Once advertisers start to catch on, Mehdi said, Microsoft will be on its way to making money online, a goal that has eluded the company for many years.
"There's no question we intend to make a profit," said Mehdi, speaking at the gleaming new office tower in Bellevue, Washington, six miles from Microsoft's campus in Redmond, that serves as Bing's headquarters.
"Clearly there's a huge return in the search marketplace that can more than make up the investments we've put in to this point."
PROFIT IN SIGHT
The exact size of the global search ad marketplace is hard to gauge, but Google's annual revenue of more than $23 billion indicate that it is large and growing.
The biggest part of moving into profit "is just getting the scale," said Mehdi. "We're built out to be a much larger player. We've spent the money and built out in such a way that we can be a player at scale. Every day that we grow a tenth of point of share, that moves us further up the curve."
Mehdi declined to comment on whether Microsoft would attempt to strike a deal with newly independent AOL Inc on powering its searches, which are now done by Google, but said he was always talking to potential partners.
He said the Bing application was a hit on Apple Inc's mobile devices, but refused to be drawn on recent reports that Apple is considering making it the default search application on its iPhone.
And he added that Microsoft has no plans to spin off or sell MSN, saying there was a "great synergy" between Bing and MSN for advertisers.
A long-planned relaunch of MSN -- cleaning up the look of the portal and offering the choice of custom home pages focusing on entertainment, news, sports, money or lifestyle -- had been postponed to March from earlier in the year.
"To get that right, it takes some time, so we've delayed it a little bit to make sure we get the features right," he said.
Mehdi did not say what constitutes success in the search marketplace for Microsoft. The company has internal goals, but he said there was no "magical number" that Bing has to hit to survive.
"Its very early. We have a very long way to go before we have what I think of as the success we want to have."
Mehdi acknowledged that Bing's gains have not so far reduced Google's hold on the market, which has actually increased 0.7 percentage points since Bing's launch.
"Ultimately we want to be a major player at scale, so we're going to have to grow against Google at some point," said Mehdi.
But "we're still outmanned and outgunned by Google, they still have way more engineers than we do."
2. February. 2010
Reuters
International Monetary Fund Managing Director Dominique Strauss-Kahn on Sunday urged the United States, Britain and other countries to cooperate on new policies and regulations in the wake of the financial crisis.
He told the annual Herziliya Conference that at the onset of the crisis, world leaders were "scared" and agreed to work together to end the crisis. But now, countries are formulating policies on their own.
"That doesn't work. The lesson of co-operation is still necessary," Strauss-Kahn said, citing U.S. President Barack Obama's plans to curb activities at major banks, particularly betting in financial markets with their own money.
"It is absolutely impossible to get out of the crisis without global solutions," he said. "I am not sure that's the route on which we are."
He also said Britain was also committed to pressing ahead with financial regulations.
The global economic recovery is recovering faster than expected, leading the IMF to revise its growth estimates higher. But growth is being led by Asia and emerging markets, Strauss-Kahn said, noting that growth in West was being fueled largely by public spending, .
"Until private demand is strong, it is difficult to talk about a real strong recovery," he said.
Still, Strauss-Kahn cautioned against countries unwinding stimulus measures aimed at combating the downturn. Exiting too late can lead to higher debt but exiting too early may increase the risk of a double-dip recession, he said.
Such a case would pose large problems since policymakers have already used all their tools, he said.
Also, it wasn't yet clear who would replace the decline in U.S. consumer spending. Strauss-Kahn said that emerging market countries would not be able to compensate for lower U.S. spending as consumers have started to save more.
Strauss-Kahn praised Israel's response to the crisis, saying the government and central bank reacted quickly with policies that limited the impact of the crisis.
31. January. 2010
Reuters
Nigeria's main militant group said on Saturday it was ending a three-month-old ceasefire and threatened to unleash an "all-out onslaught" against Africa's biggest energy industry.
The rebel group was severely weakened after its senior leaders and thousands of others accepted clemency and disarmed under a presidential amnesty which ended last October.
It is unclear who is now running the group.
Here are some details on the three main former Movement for the Emancipation of the Niger Delta (MEND) field commanders who accepted amnesty and the genesis of the group.
ATEKE TOM
A former gang leader in Rivers State in the eastern Niger Delta for around a decade, Ateke Tom set up the Niger Delta Vigilante (NDV), one of several groups to enjoy strong backing from politicians who used them to help rig elections.
The NDV was involved in some of the heaviest clashes in years in the oil hub of Port Harcourt in July and August 2007, when more than 100 people died in fighting with a rival gang involving automatic weapons and rocket-propelled grenades.
Tom had largely operated independently of MEND, the umbrella militant group in the region, but his faction has claimed some significant attacks against the oil industry.
Security sources say he was also heavily involved in oil bunkering, a lucrative trade in industrial quantities of stolen crude smuggled onto the international market.
FARAH DAGOGO
Also based in Rivers state, Dagogo started out as a top commander loyal to former militant leader Mujahid Dokubo-Asari, whose Niger Delta People's Volunteer Force turned over thousands of weapons in return for amnesty in 2004.
Dagogo then set up camp on his own before becoming one of the founding field commanders of MEND, which knocked out a quarter of Nigerian oil output when it burst onto the scene with a series of attacks in early 2006.
Dagogo is loyal to Henry Okah, the suspected leader of MEND who was on trial for gun-running and treason before being released last July after accepting President Umaru Yar'Adua's amnesty offer.
GOVERNMENT TOMPOLO
Full name Government Ekpemupolo, he was one of the leaders of the Federated Niger Delta Ijaw Communities (FNDIC), based in the western city of Warri and responsible for shutting down a large chunk of oil output from the western delta in 2003.
Tompolo is believed to have been key to drawing together the factions which went on to form MEND.
He was responsible in particular for attacks on Chevron (CVX.N) and thought to be a major oil bunkerer. Security forces used helicopters and gunboats to attack his camps around Warri, capital of Delta state, last May.
30. January. 2010
arabianBusiness
Existing and new companies to be set up in the next five years in Abu Dhabi are estimated to invest over AED45bn, according to a report.According to newswire WAM, Khaleej Times daily quoted an independent economist as predicting that the emirate will remain the favourite place for investors as it is pursuing a strong reform-agenda.
Despite the strong impact of the global downturn on economies around the globe, the Abu Dhabi economy has not been much affected and continued growing steadily, he said.
“Abu Dhabi has won investor's confidence as it attracted more [capital] investments due to the several policy initiatives launched in recent years," said Riad Mattar, an independent economist, who has worked with the public sectors for several years.
The economy was strong enough to minimise the challenges posed by global economic crisis, he said.
According to Khaleej Times, Abu Dhabi attracted new capital investment by 11,357 private companies - estimated capital of over AED5.7bn. This is a growth of 40 per cent over the year before, when the count of firms stood at 8,124, as per an official report.
The commercial sector attracted capital investment in excess of AED4.9bn. Investment in the professional, industrial and handicraft segments of economy stood at AED271m, AED453m and AED132m respectively, Al Khaleej said.
In terms of the increase in the number of firms, the industrial sector topped the ranking with a growth rate of 112 per cent, taking the total number of firms to 188 in 2009 up against 89 in the previous year, according to the daily.
The professional sector came on the second place recording a rise of 44.5 percent to 479 in 2009 from 332 in 2008. With a growth rate of 41 percent the firms in the commercial sector grew to 7962 while companies dealing in handicraft sector grew by 30 percent, Khaleej Times added.
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