John Kerry has warned that the summit will not deliver a treaty that legally requires countries to cut their carbon emissions Read more
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John Kerry has warned that the summit will not deliver a treaty that legally requires countries to cut their carbon emissions Read more
The UK prime minister offers to scrap his contentious plan to impose a four-year ban on EU migrants Read more
The US has accused China of illegally subsidising the production of wind power equipment Reuters reports, with officials saying they were concerned that Chinese manufacturers of wind turbines and related parts and components could have received several hundred million dollars in questionable government grants in 2008. The US has asked for talks at the World Trade Organisation, which is the first step in filing a trade case. “Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules,’’ said Ron Kirk, the US trade representative, in a statement. “These subsidies effectively operate as a barrier to US exports to China.”
Airgas has rejected another takeover offer from Air Products, Reuters reports, after the sweetened $5.9bn bid was deemed not enough by the industrial gas producer. Meanwhile Air Products reiterated that its $70 per share cash offer is “best and final.” Airgas’ board wants at least $6.5bn, or $78 per share, and all ten directors were united in urging shareholders not to accept Air Products’ tender offer, which expires on 14 January. Air Products approached Airgas about a takeover in late 2009, but talks have stumbled over the price. Dealbook analyses the Airgas rejection.
Six regional banks have repaid funds that the US Treasury supplied during the financial crisis, returning $2.7bn to taxpayers, the FT reports. More than two years have passed since the US government invested $389bn in a financial system which was frozen by crisis . Many of the nation’s largest banks and insurers have since repaid their bail-out funds, underlining the weaknesses of those still in its programme. The diverging path of the industry’s haves and have-nots has helped spur a pick-up in merger activity among regional banks. The latest crop includes four of the top 25 largest remaining Tarp recipients. The US Treasury said on Wednesday that Huntington Bancshares, First Horizon National, Wintrust Financial, Susquehanna Bancshares and Heritage Financial each bought back all of the government’s outstanding preferred shares and paid out dividends. A sixth lender, Bank of Kentucky Financial, repurchased half of the Treasury’s preferred shares.
On Capitol Hill and in the White House, Rahm Emanuel enjoyed the reputation of a political rottweiler who inspired fear and loathing in Washingtom, the FT reports. All that changed when Mr Emanuel quit his job as President Barack Obama’s chief of staff this year to run for mayor of Chicago. He has now undergone a transformation. Pugnacity has been replaced by affability, aggression by geniality, and the famously quick temper has given way to seemingly endless patience. Indeed, the main barrier between Mr Emanuel and the mayor’s office has not been another candidate but a legal challenge to his status as a Chicago resident for the past year – a prerequisite for mayoral candidates. A hearing officer has said that Emanuel meets the residency requirement to run for mayor of Chicago, Bloomberg reported today. However the recommendation is non-binding and must be considered by the Board of Election Commissioners later today.
Global stocks are brushing their best levels in nearly 27 months, before the collapse of Lehman Brothers, as investors continue to place bets that better economic growth in 2011 will power risky assets yet higher, the FT’s global market overview reports. The FTSE All-World equity index was up 0.2 per cent to 216.7, commodities were mixed and the dollar lower. Markets were unfazed as South Korea began a large-scale military exercise near the border with the North. The Kospi index fell just 0.03 per cent on soft technology stocks. Hopes that an improvement in the US economy will add an extra boost to growth in 2011 is continuing to buoy sentiment, pushing the FTSE Asia Pacific index up 0.4 per cent, close to the best levels since July 2008. Australia’s S&P/ASX 200 rose 0.4 per cent to a six-week high, after Riversdale Mining climbed as much as 2.2 per cent to A$16.84 on the back of Rio Tinto’s formal $3.9bn offer. China’s Shanghai Composite was down 0.8 per cent as oil refiners lost ground on concerns that operating costs would increase following recent gasoline and diesel price hikes. Hong Kong’s Hang Seng was off 0.1 per cent and India’s Sensex was down 0.2 per cent. The FTSE 100 has tickled the 6,000 level in early skirmishing, up 0.2 per cent at 5,998 as resources stocks continue their storming run. The FTSE Eurofirst 300 index was up 0.1 per cent. The dollar index was down 0.3 per cent at 80.45, while the Korean won was up 0.4 per cent to the greenback as traders brushed off any worries surrounding Seoul’s military exercises.
A Christmas flirtation between US shopping centres, social media and Handel’s Messiah has suffered a setback after fire officials in northern California shut down an impromptu performance of the oratorio amid safety concerns, the FT reports. An estimated 5,000 people crowded into the food-court of the Roseville Galleria shopping mall outside Sacramento on Monday night for a planned “flash mob” performance of the Messiah’s Hallelujah chorus by local choral singers. But fire officials ordered the closure and evacuation of the steel-framed building before the performance could begin, after loud cracks and popping noises were heard from the second floor. Westfield, which runs the centre, said the response to the event “was far greater than anticipated by organisers” and the building closed “out of an abundance of caution”. The event was the latest in a series of retail-centre Messiahs and other pieces that have erupted across North America this year, with local musical groups using social media such as Twitter and Facebook to pull in “flashmob” crowds.
Hispanic voters’ apparent disenchantment with Republicans is likely to become a growing problem for the party after US census results showed that population gains in mostly Republican “Sun Belt” states were driven by Latino voters, the FT reports. Texas, a solid “Red” state that supported John McCain in the 2008 presidential election, is gaining four new seats in the House of Representatives. according to census results. But two of them could well be won by Democrats, analysts say, marking the beginning of a gradual shift that could favour Democrats in states such as Nevada, Arizona and Colorado.
President Barack Obama sealed a big foreign policy victory after months of effort when the US Senate ratified an arms control agreement with Russia, the FT reports. Wednesday’s 71-26 vote to approve the Start treaty, which Mr Obama personally negotiated with Dmitry Medvedev, his Russian counterpart, marks the latest in a series of successes for the US president following large Republican gains in Congressional elections last month. “This is the most significant arms control agreement in nearly two decades,” Mr Obama declared after the ratification, which was backed by 13 Republicans. Mr Medvedev said Russia would proceed to approve the treaty “in parallel” with the Senate ratification.
Our national pastime of guessing house prices pauses for no cold breath in the run-up to Christmas. The RICS 2011 Housing Forecast released today brings the estimate that house prices will be 2 per cent lower than present levels at the end of 2011. Essentially, the report articulates the view that ropey mortgage availability and fewer properties coming onto the market (interest rates supporting current mortgage-holders) will temper a dramatic plunge in prices. The report also mentions plans afoot, via the New Homes Bonus Scheme, to encourage local authorities (through payments equal to council tax for each property for several years) to boost available housing stock.
Time for the ‘however’: Read more
Vince Cable, UK business secretary, has been humiliatingly stripped of his role in regulating the media as he paid the price for telling undercover reporters that he had “declared war on” Rupert Murdoch, the media tycoon the FT reports. The fact that Mr Cable has a quasi-judicial role over Mr Murdoch’s bid for outright control of BSkyB made the comments to total strangers all the more remarkable; Labour suggested he should be sacked on the spot. News Corp, whose stable of newspapers includes The Sun and The Times, issued a statement saying it was “shocked and dismayed” by his comments. The company added: “They raise serious questions about fairness and due process.” Mr Hunt, who now has jurisdiction, has previously indicated he saw nothing wrong with the News Corp bid, but added he would not second-guess the regulatory investigation. However the FT also reports that transferring the power to decide whether News Corp can take full control of British Sky Broadcasting from Vince Cable to Jeremy Hunt will make little difference to the outcome, say analysts and lawyers.
Intel has won approval from the Federal Trade Commission for its proposed $7.68bn acquisition of McAfee, Reuters reports. The chipmaker said it would continue to cooperate with the European Commission’s review of the deal, following concern that McAfee could gain privileged access to security features on Intel’s microprocessor chips, as reported in the WSJ last week. The EU had previously levied a record fine of €1.06bn ($1.39bn) against Intel in 2009 for shutting out rival Advanced Micro Devices.
It looks like the Santa Rally is flagging, but then the old boy has had a good run, the FT’s global market overview reports. Bourses in Europe opened flat, the FTSE All-World index was up just 0.06 per cent, US stock futures were little changed and many industrial commodities were weaker. The FTSE Asia-Pacific index was up 0.1 per cent. Japan’s Nikkei 225 dipped 0.2 per cent, though in earlier trading exporters got a lift from figures showing a 9.1 per cent rise in Japan’s exports in November compared with a year earlier. South Korea’s Kospi Composite was 0.1 per cent higher after investors remained largely unruffled by South Korea’s announcement that it would conduct a live-firing drill on Thursday near the border with the North. Hong Kong’s Hang Seng index rose 0.1 per cent, with oil-related shares benefiting from Beijing’s increase in gasoline and diesel prices. But on the mainland the Shanghai Composite fell as the rally in property stocks faded. India’s Sensex was up 0.2 per cent and Australia’s S&P/ASX 200 rose 0.1 per cent. The FTSE Eurofirst 300 was up just 0.1 per cent, while London’s FTSE 100 was flat as the oil and gas sector shed some of its recent gains.The euro has reclaimed the 200-day moving average around the $1.31 level, though judging from moves in other crosses this is as much about a period of dollar weakness than it is of single currency strength. The euro was up 0.3 per cent to $1.3132, while the dollar index, which tracks the buck against a basket of peers, was down 0.2 per cent to 80.50.
The US Federal Communications Commission has set down its first rules of the road for internet traffic, after a split vote that left critics at both ends of the political spectrum warning the decision could be challenged by Congress or the courts the FT reports. The “net neutrality” ruling prohibits broadband providers from blocking any lawful content, applications and services, though it would allow “reasonable network management” and permit operators to manage congestion by charging heavy users more. In one of its most divisive provisions, the FCC agreed by a 3-2 vote that mobile broadband should be regulated differently from fixed-line internet access, imposing fewer restrictions on wireless companies such as AT&T and Verizon. Julius Genachowski, chairman of the FCC, said consumers should expect few changes Reuters reports.
Convention centres, sports venues and other US public facilities that do not provide essential services are a source of potential defaults in the $2,900bn municipal bond market, Fitch Ratings said in a report to be released on Tuesday. In better times, cities and counties guaranteed the financing for these projects, but, in a downturn, they may struggle or decide not to support them, the rating agency said. Schools and courthouses are considered to be among municipalities’ core services, the FT reports. But bonds backed by so-called “non-core” services make up about 10 to 15 per cent of the market, estimates Matt Fabian, managing director at Municipal Market Advisors, a research group. Most are small and relatively obscure, but they have already led to high-profile distress.
The US Securities and Exchange Commission is to determine whether Mark Hurd, the former Hewlett-Packard chief executive, told then-contract employee Jodie Fisher that the company planned to buy Electronic Data Systems and if any laws or rules were violated as a result. The information would have been worth a great deal to an investor who acted on it, setting the stage for a classic insider trading investigation, the FT reports. People familiar with the inquiry, which was confirmed by HP late on Monday, said on Tuesday that the agency was looking into whether anyone traded as a result of Mr Hurd’s alleged words. Ms Fisher has denied any such trading and told others that she only passed the information on to her mother, who likewise did not trade, according to people familiar with her account.
The US population grew 9.7 per cent to 308.7m in the first decade of the millennium, the slowest rate of growth since the Great Depression, according to the US census, but still robust compared with other developed nations. The new population data are expected to help Republicans and make Barack Obama’s re-election prospects marginally more difficult because of changes to the electoral college, the FT reports. States that generally support Republicans, such as Texas, Arizona and Georgia, will gain seats in the Congress because of increases in their population, while “Blue” states that voted for Mr Obama, such as New York and Ohio, will lose representatives in the 435-member House. Every state redraws its congressional districts every 10 years de-pending on census results. The FT notes that population growth was fastest in Nevada – up by 35 per cent from 2000 – followed by other southern and western states such as Arizona, up 25 per cent; Utah, up by 24 per cent; and Texas up by 21 per cent. The population fell in only one state, Michigan, where it dropped by 0.6 per cent to 9.9m. It was all but stagnant in north-eastern states such as Massachusetts, up only 3.1 per cent, and New York, where it rose by only 2.1 per cent.
President Barack Obama has won the support of enough Republicans to ensure the ratification of the Start treaty – his most prominent foreign policy deal, the FT reports. Just a few weeks ago, prospects for the arms control agreement with Russia were uncertain at best. But a concerted push by the White House has left Mr Obama poised to win ratification and cap a series of legislative successes in the current “lame duck” session of Congress. The Senate voted by 67 to 28 on Tuesday to proceed to a final decision on the treaty as early as today. The votes in favour, which included 11 Republicans, would be enough to reach the two-thirds majority of the chamber needed for ratification. The FT also reports that the US has unveiled new sanctions against Iran, in a move that highlights Washington’s drive to keep pressure on the Islamic Republic ahead of a new round of negotiations with Tehran next month.
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: The eurozone needs more than discipline from Germany
Germany rules, the FT columnist writes. It will determine how well the eurozone prospers, maybe even whether it survives. It is the central European power – geographically, politically and economically. France knows this. The question is how Germany will use its power. The answer will depend not just on how it sees its interests but on how it understands events. I am much more concerned about the latter than the former. Read more
Adobe Systems has issued an earnings forecast above Wall Street projections, Reuters reports, in sharp contrast to the pessimistic outlook three months ago due to sluggishness in the US and Japanese markets. The manufacturer of design software forecast on Monday that it will post current-quarter profit, excluding items, of 54 to 59 cents per share, ahead of analyst forecasts of 51 cents per share, according to Thomson Reuters. It also projected revenue of $1bn to $1.05bn, ahead of the average forecast of $992m.
Toronto-Dominion Bank is close to reaching a deal to buy Chrysler Financial from Cerberus Capital Management for $6.3 bn, Reuters reports. A source said that a deal could be announced as early as today. The move would help Cerberus recoup some of its $7.4 bn purchase of Chrysler Group and help Toronto-Dominion build its East Coast assets. The Wall Street Journal reported that Cerberus would retain about $1bn of assets under the deal, although TD and Cerberus declined to comment, the news agency added. DealBook takes a closer look, saying that a deal would help Cerberus break a series of unfortunate auto-related investments.
An easing of tensions between North and South Korea and supportive comments on the eurozone from the Chinese government has emboldened the bulls, the FT’s global market overview reports. The FTSE All-World equity index was higher by 0.5 per cent, copper was leading commodities as the red metal hit a fresh record, and the dollar was slipping as risk appetite picked up. The FTSE Asia Pacific index was up 1.1 per cent, and South Korea’s Kospi index gained 0.8 per cent as the tensions on the Korean peninsula eased. Japan’s Nikkei 225 rose 1.5 per cent, after the Bank of Japan left its ultra-loose monetary policy unchanged, as widely expected. China’s Shanghai Composite added 1.8 per cent, as funds picked up property stocks that have had a difficult time of late on worries over Beijing’s drive to cool speculative activities. Hong Kong’s Hang Seng advanced 1.5 per cent, with energy stocks in good form as the winter draws in. Australia’s S&P/ASX 200 index advanced 0.7 per cent and India’s Sensex was up 0.8 per cent. The FTSE Eurofirst 300 was up 0.5 per cent and London’s FTSE 100 was higher by 0.5 per cent, with miners and energy again in the driving seat. The dollar is suffering from the improved mood across the market as its haven attractions wilt. The dollar index, which tracks the buck against a basket of peers, was down 0.5 per cent to 80.27.
US companies have won a series of high-profile deals in Saudi Arabia during the past six months, underlining the confident return of US business to the kingdom, the FT reports. The revival of trading ties that degraded markedly in the wake of the September 11 attacks of 2001 is being strongly supported by the US administration, with Saudi Arabia and other Gulf states seen as a key element of President Barack Obama’s initiative to double US exports in five years. Francisco J. Sanchez, undersecretary of commerce for international trade, this month visited the kingdom for the second time in less than six months, heading a delegation of 16 companies looking to participate in the $400bn five-year plan by the kingdom to develop infrastructure and expand oil production. “I have chosen to lead two missions here to underscore the importance of American companies reaching out, strengthening our ties, and offering to be partners in the development, particularly the infrastructure development,” Mr Sanchez told the Financial Times.
The US deficit commission’s contentious recommendations to slash $3,900bn from budget deficits by 2020 received a boost when two senators said they would introduce legislation early next year mirroring the panel’s proposals, the FT reports. The move by Saxby Chambliss, a Georgia Republican, and Mark Warner, a Virginia Democrat, is an attempt to rally Congress towards a difficult bipartisan consensus on steps to tackle the long-term debt problem in the US. It could add pressure on the Obama administration to come up with its own deficit reduction plan ahead of the state of the union address and the 2012 budget proposal, expected in February.
The US Congress is looking to impose a tax on government contracts with companies from countries such as China and India, as it tries to cover the $6bn cost of proposed legislation to pay for the medical care of the workers who responded to the 9/11 terrorist attacks the FT reports. As one of the last items on the agenda in the “lame duck” session of Congress, the Senate has been preparing to vote on a bill to bolster health coverage for those who became ill from taking part in 9/11 rescue and clean-up operations. In a last-minute shift, the version of the legislation being considered in the Senate includes a 2 per cent tax on government procurement contracts with countries that have not signed up to the World Trade Organisation’s Government Procurement Agreement. It also extends visa fees for outsourcing groups such as Infosys and Wipro of India that have more than half of their US workers on H-1B and L-1 visas.
The US Federal Communications Commission looks set to pass “net neutrality” rules at a meeting on Tuesday after its chairman secured cautious support from two Democratic commissioners who had hoped for stronger regulation of internet traffic, the FT reports. Statements from commissioners Michael Copps and Mignon Clyburn on the eve of a meeting to approve an “open internet” order pave the way for a compromise that will prevent broadband network operators from blocking legal content, while allowing them to manage traffic on their networks by charging heavy users more. Their approval, though hedged, should allow Julius Genachowski, the FCC’s Democratic chairman, to overcome opposition from the commission’s Republican members, Meredith Baker and Robert McDowell, who have expressed concern that unnecessary regulation will deter investment in broadband infrastructure.
The FT reports that the new Start arms control treaty with Russia, President Barack Obama’s signature foreign policy goal, is on the verge of winning US Senate ratification, say supporters and detractors. On a day in which the treaty’s prospects of approval appeared to grow steadily, senator John McCain submitted an amendment that looked likely to increase support for the measure among Republican ranks. Earlier, it had appeared more probable the administration would win just enough votes for ratification. With one absence due to illness, the Democrats and associated independents have 57 votes and 66 are needed for ratification.