Sourcing goods from low cost world markets and selling it locally

• Business Opportunity: There are thousands of products available to source, you may find the best products which you can judge and ensure the quality will be liked by local buyers. For example if the product market price is 100, your cost price is 25 for buying 10000 quantity, so u may sell same at price 40-50, the buyer will sell at 75-95 or even 100 who buys the product from you. Its a simple fact that no retail buyer will buy 10,000 quantity of 1 product to reduce the cost, and the price gap in market will remain open. If we take a product example, mass volume can be of help like buying 10,000 laptops of 1 model.
• Process: You may order a single product, test the quality, use it for a sufficient period of time  Do a research with locals, friends and associates if they like the sample product which you have ordered,  and then once you are satisfied with it then order a large bulk order.
• Ordering: Ensure that the bulk order is done with escrow or bank guarantee so that your money is safeguarded from any fake sellers in the market. The goods can be purchased from manufacturers in asia & countries where the product price available is the best compare to global pricing competition.
• Custom Duties: You need to check locally if there are any custom duties applicable for import of the product in large scale.
• Selling the goods locally: The goods will be easily sold to distributors as the market price comparison will be in favor of your product as well as quality of goods with firm test done from your side in process of purchase. Do a thorough research that the goods available locally with your product make a better stand in the market.
• Financing the goods: Goods for purchase can be financed with 10-20 friends along in a group, or it can be done through bank , most banks where you have a bank account from long time and have a sufficient reputation will surely grant a finance for goods, moreover a 30% of funds finance has to be generated to provide to the seller, and if you get advance payments from your local buyers against the goods it could work really well.
• Foreign Exchange: Check the currency pricing at the time of purchase of goods, buy them at the best timing so that you earn in foreign exchange as well.
• Results: Finally it depends what products you bring in, what price, quality and quantity which will result in profit and key business for you

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Japan's retail sales dip less-than-forecast in May

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Retail sales in Japan fell less-than-forecast in May as the country starts to recover from the 11 March earthquake and tsunami.

Retail sales fell 1.3% in May compared with the same month last year, according to the latest government data.

However, compared with the previous month, retail sales rose by 2.4%.

Analysts said that the numbers were an indicator that the Japanese economy was starting to recover.

"The pace of decline has slowed, reflecting a quick recovery from the damage to supply chains," said Hioshi Miyazaki of Shinkin Asset Management Company.

Natural factor

While improving supply chain conditions have played their part in better output from Japanese factories, analysts said that natural factors such as the weather was also playing a part.

"Summer clothing seems to have sold well due to the hot weather in May," said Junko Nishioka of RBS Securities.

"This trend may continue in June and beyond," she added.

Mari Iwashita of SMBC Nikko Securities added that a change in weather may have a positive affect, not just on retail sales but also on other areas of the economy.

"A hot summer could result in more spending, especially with corporations allowing employees to take longer summer holidays." said Mr Iwashita.

"The picture may not be bad if summer bonuses are spent domestically, such as on travel," he added.

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Citigroup banker pleads not guilty to $19.2m theft

 

A former Citigroup banker has pleaded not guilty to charges that he stole $19.2m in the "ultimate inside job".

Prosecutors say Gary Foster, a 35-year old former vice president at Citigroup, moved the money from two separate accounts at the bank to his own account at JP Morgan Chase.

The offence is said to have taken place between May 2009 and December 2010.

Mr Foster, who left the bank in January this year, faces 30 years in prison if convicted.

The alleged 18-month fraud went unnoticed until a recent internal audit at the treasury department of the bank.

A Citigroup investigator then alerted the authorities, according to an affidavit from the Federal Bureau of Investigation.

Mr Foster is said to have made eight separate transfers of up to $3.9m (£2.5m) by putting in fake contract and deal account numbers before transferring them to his personal account.

US attorney for the Eastern District of New York, Loretta Lynch, said in a statement: "The defendant allegedly used his knowledge of bank operations to commit the ultimate inside job."

Citigroup said in a statement: "We are co-operating fully to ensure Mr Foster is prosecuted to the full extent of the law."

No date has been set for the next hearing in the case. Mr Foster has been released on $800,000 bail.

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Christine Lagarde named IMF chief

 

France's Christine Lagarde, 55, has been named the first woman to head the International Monetary Fund (IMF).

The announcement of her appointment came soon after she received the backing of the US and Russia.

Ms Lagarde, the French minister of finance since June 2007, was up against Mexico's Agustin Carstens. An IMF statement said that both candidates "were well qualified".

The post became vacant following the resignation of Dominique Strauss-Kahn.

"The results are in: I am honoured and delighted that the board has entrusted me with the position of MD of the IMF!" Ms Lagarde said via Twitter minutes after the announcement.

In a statement, the IMF said: "The executive board of the International Monetary Fund today selected Christine Lagarde to serve as IMF managing director and madame chairman of the executive board for a five-year term starting on July 5, 2011."

Ms Lagarde, it said, was "the first woman named to the top IMF post since the institution's inception in 1944".

The 24-member board called both Ms Lagarde and Mr Carstens, Mexico's central bank governor, "well-qualified candidates" and that it decided on Ms Lagarde "by consensus".

Mr Strauss-Kahn resigned abruptly on 18 May after being arrested in New York for an alleged sexual assault.

'Indispensable institution'

Ms Lagarde toured the world drumming up support for her candidacy.

There were initially reports that many IMF members wanted the next managing director to come from an emerging market economy.

The IMF's David Hawley announces Christine Lagarde's appointment

But in the end Ms Lagarde won over some powerful allies among developing nations, including Brazil and China.

The US, which along with Russia came out in favour of Ms Lagarde just hours before the appointment was announced, said her experience would be invaluable.

US Treasury Secretary Timothy Geithner said in a statement: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy."

Her immediate task will be to deal with the efforts of the IMF and European Union to resolve the Greek debt crisis and prevent contagion to other eurozone economies.

Before becoming France's finance minister, she was minister for foreign trade for two years.

Prior to moving into politics, Ms Lagarde was an anti-trust and employment lawyer in the US.

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Greece: Top Italian banker says Europe's banks can help

 

The boss of Italy's biggest bank says Europe's banks can work together with European institutions to help Greece.

"I think there is room for strong collaboration," said Corrado Passera, chief executive of Intesa Sanpaolo.

On Monday, French President Nicolas Sarkozy said French banks had agreed to extend their loans to Greece.

Eurozone officials are trying to find a way for banks to support Greece's bail-out without the country being judged to have defaulted on its debt.

Credit ratings agencies have warned that if banks agree to extend their loans to Greece, even voluntarily, they may judge it to be a debt default, which would cause even more problems for Greece.

President Sarkozy's idea was that when banks are repaid money they are owed by Greece, they should keep 30% of it, re-lend 50% of it to Greece for 30 years and put the remaining 20% into a special fund of high-quality bonds, which would insure them against a future Greek debt default.

French banks have the biggest exposure to Greek debt, while Italy has relatively low exposure.

The deal may be unpopular with Germany, because the new bonds would be insured by eurozone bail-out funds.

The French plan has yet to be agreed either with eurozone leaders or the Greek government.

BBC business editor Robert Peston says the real problem with the proposals is that there has been no attempt to reduce the amount of money that Greece owns, unlike in the Brady bonds for indebted countries such as Mexico, Argentina and Brazil, on which President Sarkozy's plans were based.

Nonetheless, German banks are reported to be very interested in the French model being discussed.

They were discussed by a group of international bankers, who met eurozone officials to discuss the crisis on Monday.

Also, the head of the eurozone's rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a second bail-out being considered a default.

European policymakers, notably the European Central Bank, are concerned that the bail-out could force European banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

Credit derivative contracts are, in this case, bets that Greece will default on its debt. They are used partly as insurance by banks that have bought Greek bonds.

The Greek parliament is discussing a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros (£7,142, $11,600), and is due to vote on the package later in the week.

The ruling party has 155 seats in a 300-seat parliament. Polls suggest the proposals are opposed by three quarters of Greece's 11 million population.

The austerity measures must be agreed before Greece can get its hands on the latest slice of the original 110bn euro support package.

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Free Business Start Up Ideas: Junk Removal

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Italy bank shares dive on credit rating alert

Unicredit was one of the banks whose shares fell sharply in the wake of the Moody's warning
Shares in leading Italian banks fell sharply after the credit ratings agency Moody's said it may downgrade their status.
Moody's report, published late on Thursday, put 16 Italian banks and two government institutions on review for a possible mark-down.
Shares in the country's biggest bank, Unicredit, lost 5.5%.
Intesa Sanpaolo, Italy's second-largest bank, and Monte Paschi also dropped. Trading was suspended in some banks.
Other factors weighing on bank shares included fears that Italian banks could be forced to raise more capital as a result of imminent stress tests.
Credit ratings help investors to determine the strength of an institution or company.
They affect the rate of interest a borrowing organisation must pay. The weaker the credit rating, the higher the cost of borrowing.
Moody's put Italy's public debt on review for possible downgrade amid concerns about low growth and high public debt, which at 120% of gross domestic product (GDP) is one of the highest in Europe.
Greece's debt is 150% of GDP.

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US consumer spending fails to rise in May

Falling car sales were partly blamed for the unchanged consumer spending

US consumer spending was unchanged in May, the first time there has been no growth since September 2009.

Adjusted for inflation, spending contracted by 0.1% compared with the month before, according to the Commerce Department.

Consumer spending accounts for about 70% of US economic activity.

Incomes grew by 0.3% in the month, which was 0.1% above the rate of inflation, reversing a 0.1% inflation-adjusted decline in April.

"While there are no major surprises, there is little good news in this report," said David Sloan at IFR Economics.

"The data does show that core inflationary pressures have gained some momentum."

Falling car sales were partly blamed for unchanged consumer spending, which may be partly connected to production shortfalls following the disruption to car parts producers caused by Japan's earthquake and tsunami.

Also, petrol prices peaked at more than $4 a gallon in May, but have since fallen back, which economists say may increase consumer spending in the following months.

"It was a little bit of a blow to consumers from the higher energy prices and the supply chain issues," said Stephen Stanley at Pierpont Securities in Stamford, Connecticut.

"We'll see a nice rebound in third-quarter GDP on the back of full production in the auto industry."

April's figure was also downgraded to show a 0.3% growth in spending, which equates to a 0.1% decline after inflation is taken into account

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Greece: French banks ready to roll over loans, Sarkozy

Nicolas Sarkozy is trying to forge a plan for French banks to give Greece longer to repay

French President Nicolas Sarkozy says his country's banks would help Greece by giving it 30 years to repay.

France's Figaro newspaper said banks are ready to relend - or roll over - 70% of loans they hold.

The plan is being worked out by the French government and bankers.

Greece, which has not yet exhausted all its first 110bn-euro (£98bn, $158bn) bail-out, is already standing by for further rescue loans expected to be up to 120bn euros.

Losses

However, the German government and others have been pressing for banks and other private-sector lenders to Greece to be involved this time round.

German banks are reported to be very interested in the French model being discussed.

A group of international bankers are currently meeting eurozone officials in Rome to discuss the crisis.

The matter is fraught because credit rating agencies, who determine the credit-worthiness of borrowers, have already said they will view any roll-over of loans by banks as a technical default, something that is tantamount to bankruptcy.

The head of the eurozone's rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a default rating.

European policymakers - notably the European Central Bank - are also concerned that the move could force Europan banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

'Restart the system'

Meanwhile, in earlier comments, Axel Weber, the former president of Germany's central bank, said the piecemeal approach to Greece's debt problems would not work.

Mr Weber said EU governments should accept that at some point they would need to "restart the system".

The ex-Bundesbank chief said the current options for Greece were either a default with debt writedowns, or for Europe to guarantee all Greece's debts.

He said that repeatedly offering aid would only work for a limited time.

Mr Weber - who was once seen as a likely candidate to run the European Central Bank - said: "There are, unfortunately, only very limited options: Either a default or partial haircuts or a guarantee for the outstanding amount of Greek debt."

He added that "the current piecemeal approach of repeated aid programmes inevitably leads to the latter solution. At some point you've got to cut your losses and restart the system."

Opposition

This week is another crucial one for the indebted country.

The Greek parliament will discuss a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros (£7,142, $11,600).

The ruling party has 155 seats in a 300-seat parliament and polls suggest the proposals are opposed by three quarters of Greece's 11 million population.

On Sunday, Greece's deputy prime minister said some of the key cuts and fundraising measures may not be passed.

They must be agreed before the country can get its hands on the latest slice of the 110bn euro support package.

The country cannot stay financially afloat without that.

Protestors were again out on the streets on Monday and a two-day national strike is planned for Tuesday.

Previous demonstrations have culminated in riots.

Contamination

Meanwhile, two major investors have warned of the gravity of the situation facing Europe.

The joint head of the world's biggest bond fund manager, Pimco, has said Greece's sovereign debt restructuring is inevitable.

And leading investor George Soros, who reportedly made £1bn when the pound crashed out of the euro's forerunner, the ERM, said the world was on the brink of another disaster.

"Let's face it: we are on the verge of an economic collapse which starts, let's say, in Greece but could easily spread," he said.

Mr Soros said it was almost inevitable that one or more eurozone country would exit the single currency.

Britain's "big four" banks - Lloyds , Barclays, Royal Bank of Scotland and HSBC - have a relatively small exposure to Greece.

They have a larger exposure to other struggling eurozone economies, particularly Ireland and Spain.

France's banks hold around 15bn euros in Greek government debt.

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Enterprise Investors tips IT, retail, manufacturing, finance

Cristian Nacu, president of South Eastern Europe’s Private Equity Association (SEEPEA) and partner in Polish investment fund Enterprise Investors provides some insight into the activity of both organizations, their plans for the future and the hot investment domains for private equity funds on the local market.

Otilia Haraga

Give me an example of when SEEPEA has lobbied the Romanian authorities during your term?

Recently, the EU introduced a law for the regulation of the private equity and hedge funds market. This must be implemented by all member states in their national legislation. We will try to contribute to the creation of this legislation, which should be done in conformity with the EU law but also adapted to the Romanian context. However, the main directions have not yet been defined.

What are the criteria for a company to become a member of SEEPEA?

It must be an investment fund which operates in the territory of eight countries that are part of SEEPEA: Romania, Bulgaria, countries from the former Yugoslavia. They can also be suppliers of services, consultancy firms, law firms or audit firms. More recently, we have been trying to attract banks as members.

What domains would be hot for a private equity firm in Romania?

Private equity firms generally focus on sectors in the consumer industry. They either offer financial services for the end user, are manufacturers or retailers. Generally, our firms are linked in one way or another to the end user. This is also because Romania is a relatively large market compared to the neighboring countries, which makes it more attractive, but also because these firms are generally more dynamic.

What is EI’s investment budget for 2011?

There is no allotted budget at the level of each country. Traditionally, let’s say we manage to invest up to EUR 150-200 million a year. From this sum, there are sometimes some investment projects in Romania. So far, over the last six years, we have invested around EUR 200 million in Romania, which is a ratio of probably 20 percent of the funds invested in the entire region.

We invest from two funds: one is a buyout fund which buys major stakes in large companies, which total EUR 20-25 million. From this fund, there is around EUR 60-70 million left to invest in the region.

The other is a venture capital fund where there is EUR 50-60 million left to invest. This fund generally targets minor stakes in small companies. Investments made from this fund are between EUR 1 million and EUR 5 million. In total there are ten target countries. Romania is the largest investment portfolio after Poland by proportion of the total funds that have been invested so far.

When EI decided not to invest in certain projects anymore, what were the reasons?

There are many reasons. Most of the time, we did not agree on the price. Other times, the business did not perform. Usually, it takes more than six months from the moment you start a transaction until it is concluded. Sometimes, the business did not perform as expected in that time span and ceased being attractive to us. The financial crisis was another reason.

What projects has EI invested in over the past year or two? What now?

In the past year we have only invested EUR 3 million in Smartree, which we bought in 2010. A year earlier, we bought the Profi store chain. These were the transactions we have made over the last 12-14 months. Our investment rate is probably two companies a year. We are looking at firms in retail, IT, manufacturing and financial services. But our policy is to announce it after we have carried out the transaction.

What would be interesting for an investment fund on the IT market in Romania?

There are many areas. The difference that the growth of the internet and the appearance of iTunes, iPhone and iPad have made is that it allowed any smart programmer with entrepreneurial spirit to become an international player overnight. Everyone is just a click away from the world market. There are tens of thousands of applications on iTunes, and some of them are Romanian applications. There are also opportunities in e-commerce, and other types of services such as financial services.

How quickly does EI make an exit from a firm?

The average rate of keeping an investment for us is four to four and a half years. Recently, this has been even longer because the crisis delayed some exits, so we may keep firms even for five or six years. We only want to sell when the business can turn in its deserved value and this can depend on the circumstances. In theory, it’s four to five years, but in practice it can go up to seven years. Of course, Romania was more affected by the crisis than elsewhere, but the difficult times were everywhere. 2009-2010 were poor years all over Europe and many exits were delayed even there, so the situation in Romania is not different.

What profits does EI make from an investment?

There are companies which we sold at a profit that was eight times the invested sum, others that we sold for a much lower profit. On average, we get back two and a half to three times the money we invest after this period of four or five years.

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Developer Oasis launches commercial property management division in Romania

Retail developer Oasis has launched its Shopping Center Services division, which will provide commercial management and technical administration services for the retail sector. The new division will be headed by Brigitte Schmitt (pictured), the former head of the property management division of DTZ Romania. The new division already administers a portfolio of 25,000 sqm of retail space in the projects developed by Oasis Development.

Oasis Shopping Center Services provides technical and commercial management services for retail developments, as well as analysis for tenants mix reconfiguration. The new division plans to have over 100,000 sqm of retail space in administration by the end of the year.

 “Once the Romanian retail market evolves and competition increases, there will be details making the difference in how shopping centers are managed and the tenants mix is chosen. For instance, administration costs of Romanian shopping centers are high, with situations when they are comparable with a second rent. In other European markets, these costs do not exceed 25 percent of the net rent. At the same time, commercial centers should carefully configure their tenants mix so that it is sustainable on the long term,” said Brigitte Schmitt, partner with Oasis Shopping Center Services.

The property and facility management market, which is concentrated mainly around Bucharest, was estimated at approximately EUR 200 million last year, up 10 percent since 2009.

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Bucharest Stock Exchange included in Dow Jones Global Exchanges Index

The Bucharest Stock Exchange BSE was included in the Dow Jones Global Exchanges index, which measures the performance of shares issued by stock exchanges and trading platforms across the world. BSE was effectively included in the index after the end of the June 17 2011 trading session.

The Dow Jones Global Exchanges index is revised quarterly and is calculated based on the price and total yield. On June 8^th of this year the BSE free-float capitalization was of USD 107.4 million.

There are 23 other stock exchanges included in the Dow Jones Global Exchanges Index: ASX Limited (Australia), BM&F Bovespa S.A. Bolsa de Valores Mercadorias e Futuros (Brazilia), Bolsa de Valores de Colombia (Columbia), Bolsa de Valores de Lima (Peru), Bolsa Mexicana de Valores (Mexic), Bolsas y Mercados Espanoles (Spain), Bursa Malaysia (Malaezia), CBOE Holdings (US), CME Group (US), Deutsche Boerse (Germany), Dubai Financial Market PJSC (Arab Emirates), Hellenic Exchanges Holdings (Greece), Hong Kong Exchanges & Clearing (Hong Kong),  Intercontinental Exchange (US), JSE Limited (South Africa), London Stock Exchange Group (UK), NASDAQ OMX Group (US), NYSE EURONEXT (US), NZX Limited (New Zeeland), Osaka Securities Exchange (Japan), Philippine Stock Exchange (the Philippines), Singapore Exchange Limited (Singapore), TMX Group (Canada).

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new 1st Annual Business Event Summit

About the First Annual Business Event Summit

Events are simply things that happen. In day-to-day business activity, Business Events happen everywhere, all the time. Many are orderly and highly repetitive, but others can be difficult to detect or predict, or rare. How can you manage and exploit all these Business Events more effectively? How can you respond to Business Events instantaneously and selectively in a manner that scales and supports your business processes? What do you need to know about Business Events to do your job better?

Technology to manage Business Events, called complex event processing (CEP), is entering the IT mainstream, opening exciting new opportunities for building better business capabilities. Early adopters have already demonstrated impressive ROI in terms of productivity, early discovery, customer response, consistency, security, and more.

Hear what leading practitioners and engineers are saying about what is possible. Learn how others have achieved Business Event Management and talk with the leading vendors in the space. Participate in shaping breakthrough business innovation and refining the analysis techniques needed to exploit Business Events to their fullest. Join us at the Business Event Summit, the first-ever conference of its kind.

• The business benefits of managed Business Events
• How Business Events support Business Rules and Decisions
• What Business Events can do for Business Analysts
• Business Processes – complementary or mutually exclusive?
• Trends and forecasts for complex event processing (CEP)

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Republicans bail on budget talks, blame Democrats

WASHINGTON – Republicans pulled out of debt-reduction talks led by Vice President Joe Biden with a flourish on Thursday, blaming Democrats for demanding tax increases as part of a deal rather than accepting more than $1 trillion in cuts to Medicare and other government programs.
"Let me be clear: Tax hikes are off the table," said House Speaker John Boehner, R-Ohio.
Boehner spoke shortly after the House GOP second-in-command, Majority Leader Eric Cantor, announced he would not attend a planned negotiating session and said it is "time for President Obama to speak clearly and resolve the tax issue."
White House spokesman Jay Carney quickly obliged, while announcing that the talks were "in abeyance." He said Obama supports a "balanced approach" to debt reduction.
"I would point that the president supports a balanced approach," Carney said. "He does not support an approach that provides for a $200,000 tax cut for millionaires and billionaires paid for by a $6,000 a year hike in expenses and costs for seniors."
Numerous officials have said in recent days that Obama and Boehner would soon take a more public role in the negotiations, as time grows short for confronting politically vexing questions over taxes and Medicare and other benefit programs.
As a result, it appeared that the day's events marked an eruption of political maneuvering rather than a blow-up that would jeopardize the success of negotiations.
In general, the negotiations are aimed at producing legislation to cut future deficits while simultaneously lifting the $14.3 trillion limit on Treasury borrowing.
Treasury Secretary Tim Geithner has said that without an increase in the debt limit by Aug. 2, the United States faces a first-ever default, with potentially catastrophic consequences for the economy.
Carney told reporters that Boehner had met unannounced with Obama at the White House Wednesday evening. The meeting was at the president's initiative, and the first known encounter between the two men since their widely publicized round of golf last weekend.
Nor was it likely Democrats were taken by surprise by the day's events, since Cantor informed Biden of his plans before making any public announcement.
Adding to the intrigue, one GOP leadership aide said Cantor did not inform Boehner of his plan to withdraw from the talks until shortly before he did so. Nor was Cantor aware of Boehner's trip to the White House the evening before, this aide said.
For his part, Cantor said the secretive Biden-led talks had "established a blueprint" for agreement on significant cuts in spending, but had reached an impasse because of the Democratic demand for taxes.
Sen. Jon Kyl of Arizona, the other Republican participant, also said he would not attend the scheduled session, and Senate Republican leader Mitch McConnell spoke in unusually biting terms of Democratic demands for new government spending as part of a debt-reduction deal.
"What planet are they on?" McConnell wondered aloud.
While accepting a need to raise the debt limit, Boehner has said that deficit cuts must exceed the size of any increase in borrowing authority — a position that neither Obama nor any other Democrat has challenged.
The president and Biden were meeting with House Democratic leaders at the White House when Cantor made his announcement.
One of the Democratic negotiators, Rep. Chris Van Hollen of Maryland, said at a news conference that Republicans "are playing with fire and really putting the very fragile economy at greater threat by playing the games that we've been seeing."
In several weeks of talks, Biden and congressional negotiators had largely completed a review of the federal budget, focusing at first on areas where the two sides were amenable to cuts.
They quickly identified higher pension contributions for federal employees as one area of savings, and cuts in farm programs and student loan subsidies as others. Additional items include a federal auction of parts of the spectrum and the sale of surplus federal property. Discretionary programs, which bore the brunt of an earlier agreement to cut spending by $38 billion, would be ticketed for additional cuts.
Other steps had been discussed to rein in future government spending automatically if deficit targets were not reached.
But in recent days, officials said, the two sides were increasingly at an impasse, with Democrats demanding higher taxes to accompany spending cuts, while Republicans ruled out tax hikes and pushed for deeper cuts in benefit programs.
The conflicts long predate the current negotiations.
Republicans long ago branded themselves as the party of lower taxes, while Democrats, looking to the 2012 elections, are already campaigning hard against a new Republican plan to turn Medicare into a system of private insurance coverage beginning with anyone currently under 55 years of age.
Privately, Republicans bristle at the suggestion that taxes be traded off for Medicare. They argue that official reports make it clear that without significant changes, the Medicare program is financially unsustainable.
Yet polls show that while there is general support for spending cuts, there is opposition to benefit cuts in Medicare.
The imperative to cut spending has gained impetus since Republicans won control of the House last fall, benefiting hugely from tea party activists demanding a smaller and less intrusive government.
In addition, sputtering recovery from the worst recession in decades and stubbornly high unemployment have helped form a bipartisan agreement that long-avoided steps are needed to reduce federal red ink.
The Congressional Budget Office warned on Wednesday that unless steps are taken to rein in deficits, the country risks a "sudden fiscal crisis," with investors losing faith in the U.S. government's ability to manage its fiscal affairs.

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Jobless claims data points to weak labor market

 

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits rose last week, suggesting little improvement in the labor market this month after hiring stumbled badly in May.
Initial claims for state unemployment benefits climbed by 9,000 to 429,000, the Labor Department said on Thursday. Economists had expected claims to come in at 415,000.
The claims report, which covers the survey period for the government's closely watched data on nonfarm payrolls for June, came a day after the Federal Reserve gave a downbeat assessment of the economy.
The government's employment report for June will be released on July 8. Claims for unemployment benefits increased by 15,000 between the May and June survey periods, implying another soft month for jobs after employment rose by only 54,000 in May.
"The labor market remains in a funk, it doesn't seem like it has improved much this month and the rise in claims will keep expectations for June nonfarm payrolls in check," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.
The Labor Department said it estimated jobless claims for six states because of technical problems. Economists said even if claims had been overstated as a result, that would not change the view that they were too high to be consistent with either stronger economic growth or hiring.
A separate report on Thursday highlighted one of the economy's weakest spots: housing. The Commerce Department said new single-family home sales fell 2.1 percent to an annual rate of 319,000 units in May. A report on Tuesday had shown sales of previously owned homes, a larger segment of the market, fell 3.8 percent to a six-month low.
"There is no sign that things are going to improve dramatically and that matches up with the economic conditions. Housing needs job growth to start to recover," said Jonathan Smoke, executive director for research at Housing IntelligencePro in Washington.
The data and economic fears sparked by an International Energy Agency decision to release emergency oil stockpiles, in a bid to drive down oil prices and spur economic growth, weighed on U.S. stocks, But equities clawed back the bulk of steep losses on news that Greece had agreed to a five-year austerity plan.
Prices for government debt rose and the dollar advanced against a basket of currencies.
SECOND HALF REVIVAL STILL EXPECTED
The jobless claims and new home sales reports were the latest in a long-running series of data to underscore the lingering weakness in the U.S. recovery.
The Federal Reserve, at the close of a two-day policy meeting on Wednesday, acknowledged the slowdown in the economy, but said it should be temporary.
The U.S. central bank cut its growth forecasts and downgraded its view of the labor market, but gave no indication of further monetary support. It confirmed it would shutter its $600 billion bond-buying program at the end of June.
Like the Fed, economists are cautiously optimistic that the recovery will regain momentum by the third quarter.
The decision to release 60 million barrels of oil from stockpiles held by industrialized oil-consuming nations, which brought oil prices down sharply, is aimed at easing the pressure on consumers and bolstering the recovery.
High gasoline prices are one of the factors that have weighed on growth. Benchmark Brent crude fell more than $8 to about $105.72 a barrel at one point on Thursday.
U.S. gasoline prices have already moved lower from their peak of $4.02 a gallon in early May, a drop analysts say should start paying a dividend for the economy in the third quarter.
Separately, the Chicago Federal Reserve's national activity index stayed in negative territory for a second straight month in May, indicating the economy continues to grow below trend.
"The soft patch has a little bit further to run, probably another month or two, then we are expecting in the second half of the year ... for there to be something of a pick-up. Not a boom, but pick-up," said Leo Abruzzese, global forecasting director at the Economist Intelligence Unit in New York.
Last week's rise in initial jobless claims left them well above the 400,000 mark for an 11th consecutive week. Analysts normally associate that level with a stable labor market.
The four-week average of new jobless claims, considered a better gauge of labor market trends, was unchanged.
The number of people still receiving benefits under regular state programs after an initial week of aid in the week ended June 11 was also little changed.

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LSE bid on knife edge as TMX battle heats up

TORONTO/LONDON (Reuters) – A brace of sweetened offers has failed to sway shareholders in the race to buy the operator of Canada's biggest stock exchange, and time is running out ahead of a June 30 shareholder vote.
Shareholders said the London Stock Exchange must raise its friendly bid for TMX Group significantly before they will back the proposal, which now includes a welcome cash element in the shape of a special dividend.
But anti-trust concerns could derail the second offer too, a now-sweetened proposal from a consortium of Canadian banks, pension funds and financial services firms.
"From a game perspective or a strategy perspective, they're now basically where they were before," said Alison Crosthwait, director of global trading strategy at Instinet, which runs Canada's second biggest alternative trading system.
She added: "What surprises me is that increasingly I'm hearing a little bit of 'Perhaps, neither of the bids will happen...' So there's still risk in this."
The battle for TMX Group is part of a global wave of consolidation of exchanges seeking to expand geographically and in terms of the products they offer.
LSE Chief Executive Xavier Rolet wants to beef up the London bourse to fight off rivals, nimble new market entrants and predators. He says his "merger-of-equals" will create a transatlantic powerhouse in mining and energy equities.
NET BENEFIT
The offer, if approved by shareholders from both companies at separate June 30 meetings, must still be approved by Canadian Industry Minister Christian Paradis, who has to decided if the deal is of net benefit to Canada.
The 13-member Canadian Maple Group consortium says the LSE proposal will leave a key Canadian asset in foreign hands.
In back-to-back sweeteners on Wednesday, the LSE added a cash component to its all-stock bid in the shape of dividends to shareholders of both exchanges, bringing the bid's value to just under C$49 a share.
Maple responded hours later by raising its cash-and-stock offer to C$50 a share, from C$48.
"I told (the LSE) they'd better bump the price or get off the deck," said Richard Fogler, a large TMX shareholder who said he met with the LSE on Wednesday.
Fogler, president of Kingwest & Company investment firm in Toronto, added: "If the LSE wants to win, they have to change their price."
ISS, a proxy advisory firm with influential shareholder clients, recommended the LSE proposal and said it would yield cost savings, new issuer listings and beef up the group's global position.
TMX stock was up 2.4 percent in Toronto at C$45.30 a share. LSE shares were broadly flat at 953.5 pence, bucking a weaker FTSE 250 index.
Nevertheless, market experts believe LSE Chief Executive Xavier Rolet has played his last card. Given he has to win two thirds of the Canadian investor vote next week, one banker said the prospects of a successful TMX deal "did not look good".
TMX investors quizzed by Reuters over the last week have tended to prefer Maple's offer, although they said the below-bid TMX share price reflects market uncertainty.
"These things are always decided on the basis of price," said Thomas Caldwell, chairman of Caldwell Securities. "Most traders will take one in the hand versus two in the bush."
ANTI-TRUST CONCERNS
Maple wants to wrap Alpha, Canada's largest alternative trading platform, and clearing house CDS, both of them largely owned by its members, into the new exchange.
That will give Maple more than 80 percent of Canadian stock trading and make the offer subject to anti-trust review.
Analysts said the LSE's special dividend -- 84.1 pence per LSE share and C$4.0 per TMX share -- added a welcome cash element to the bid. But it did not raise the offer and also meant the company would have to borrow to pay for it.
"The LSE dividend has nothing to do with the value of the deal, rather the dividend means only cash for shareholders and a more leveraged business. The tax benefit is the only way the dividend makes the offer more attractive," said Numis Securities analyst James Hamilton.
Michael Smedley, a TMX shareholder and chief executive of Morgan Meighen & AssociatesOne shareholder, said LSE's best strategy might be a bid for time while it regroups.
"It would seem incongruous that there would be a positive vote for the merging on the 30th, because if it were, it would end the process," said Smedley.
A spokeswoman for the LSE declined to comment on the latest developments. Analysts have long said the robust LSE share price reflects market hopes that the Canadian bid will fail, turning the LSE into a takeover target.

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Oracle hardware sales drop, shares fall

BOSTON (Reuters) – Oracle Corp shares dropped 6.3 percent as investors were disappointed that its profit beat estimates by a narrower margin than in recent quarters.
It released the disappointing results as Micron Technology reported quarterly revenue below expectations. The reports from the two companies don't bode well for other tech companies, which face shaky economies, especially in Europe. Most tech companies don't report until next month.
"IT spend has slowed down. Any company that is in technology is going to get impacted," said Trip Chowdhry, an analyst with Global Equities Research.
Oracle reported profit, excluding items, of 75 cents per share for the quarter ended May 31. That beat Wall Street estimates of 71 cents per share by 5.6 percent, according to Thomson Reuters I/B/E/S. On average it has exceeded profit estimates by 10 percent over the past six quarters.
"Traditionally in the fourth quarter they usually beat by a huge margin. This time they just managed just to beat," Chowdhry added.
Quarterly revenue rose 13 percent from a year earlier to $10.8 billion, in line with the average analyst forecast of $10.75 billion.
The world's No. 3 software maker reported that fourth-quarter new software sales rose 19 percent from a year earlier to $3.7 billion. That beat its own forecasts of 4 percent to 14 percent growth.
Yet sales in its hardware division, which it acquired with its purchase of Sun Microsystems, dropped 6 percent to $1.2 billion.
Oracle shares fell 6.3 percent to $30.40 in extended trade, down from their Nasdaq close of $32.46.
(Additional reporting by Bill Rigby, David Gaffen, Jennifer Saba and Liana B. Baker; Editing by Bernard Orr)

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Wall Street reverses sharp sell-off on Greek deal

  

 

 

NEW YORK (Reuters) – Stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove indexes mostly lower, keeping a downward trend in place.

The Nasdaq wiped out all its losses, ending the session higher and back in the black for the year.

The news out of Greece set the stage for a resolution to Athens' credit problems, which have hurt investor sentiment around the globe.

"Shorts will unwind some positions, but this isn't the whole story," said Rich Ilczyszyn, market strategist with Lind Waldock in Chicago.

The question now remains whether the late-day surge is a precursor to renewed buying interest or if it was just an interruption before selling returns in coming days.

The S&P 500 came within less than a half point of its 200-day moving average -- a line the bulls have been able to hold since last September. Technical analysts monitor that level as an indication of the long-term trend, and a consistent close below it could trigger more selling.

"We're at key support levels for everything, including the S&P," Ilczyszyn said.

Sources with knowledge of the talks told Reuters that Greece has won the consent of a team of European Union and International Monetary Fund inspectors for its new five-year austerity plan after committing to an additional round of tax increases and spending cuts.

The Dow Jones industrial average (.DJI) dropped 59.67 points, or 0.49 percent, to 12,050.00 at the close. The Standard & Poor's 500 Index (.SPX) lost 3.64 points, or 0.28 percent, to 1,283.50. But the Nasdaq Composite Index (.IXIC) gained 17.56 points, or 0.66 percent, to 2,686.75.

Earlier in the day, markets had sold off as oil's slide to a four-month low triggered declines in a fragile market after Federal Reserve Chairman Ben Bernanke's comments about a slowing economic recovery a day earlier.

Skepticism remained despite the Greek deal as details were not yet known and any agreement would still have to win a vote in Parliament.

"When it's 3 o'clock on a Thursday afternoon and short-sellers see that (Greece deal) headline, they cover first and ask questions later," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

He said since there is already a plan awaiting a vote, the difference could be a change in terms that could make it easier to pass in the Athens Parliament next week.

U.S. August crude oil futures settled at $91.02 a barrel, down $4.39, after the International Energy Agency said it will release 60 million barrels of oil from strategic stockpiles.

The slide in the price of oil was exacerbated by a 0.7 percent climb in the U.S. Dollar Index (.DXY), which tracks the greenback's performance against a basket of major currencies. In times of stress, the flight to safety that pushes the dollar higher makes oil more expensive, further sapping demand for crude and other commodities priced in dollars.

Giving some support to the market, tumbling oil prices lifted an index of airlines' stocks (.XAL) by 2.4 percent.

Bets that lower prices at the pump will open consumer's wallets boosted the S&P retail sector index (.RLX) by 1.4 percent.

The S&P 500's bounce off its 200-day moving average was the second in a week. Last Thursday, a brush with that level enticed buyers and the benchmark index closed in the black for the day. The 200-day moving average now coincides with the 2010 intraday high of 1,262.60, giving it extra technical support.

"What it means is that if you do momentum trading, you can place bets, and a lot of big money is doing momentum trading," said George Feiger, CEO of Contango Capital Advisors in San Francisco.

"But the big picture story remains the same. We are looking at small growth and very small return in equities for the coming years."

His view differs from the median of 46 equity strategists surveyed in the last week, which showed an expectation of an 11 percent gain in the S&P 500 for the year, which would take it to 1,400.

On the economic front, U.S. claims for unemployment benefits rose more than expected last week, suggesting little improvement in the labor market. Other data showed sales of new homes fell in May.

About 8.2 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the average so far this year of 7.57 billion. Volume got a late boost after the Greece headlines.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of more than 4 to 3. On the Nasdaq, the opposite trend prevailed: About seven stocks rose for every six that fell.

(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica and Edward Krudy; Editing by Jan Paschal)

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