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Jun 23, 2011

The Australian Business Briefing: Wall St falls on growing unemployment

Wall St falls on growing unemployment
110624, Wall St, US stocks, US sharemarket Brendan Conway US stocks fell in volatile trading but steep losses were cut back as Greek austerity plans offset a toxic mix of weak economic data.
Telstra's $11bn NBN headache
NBN Co chief Mike Quigley with Julia Gillard yesterday Tracy Lee MARKET reaction to Telstra's $11 billion agreement with NBN Co was a mix of elation on early access payments and concern for the hurdles ahead.
Optus sitting pretty with $800m deal
Optus CEO Paul O'Sullivan Mitchell Bingemann and Lauren Wilson OPTUS has signed an $800 million deal with NBN Co to shut down its cable network and transfer customers to the National Broadband Network.
Sinosteel move may sink Oakajee
Oakajee port Andrew Burrell and Amanda O'Brien CHINESE metals giant Sinosteel may have killed off the troubled $6 billion-plus Oakajee port and rail development in its present form.
Higher US jobless claims defy forecasts
US unemployment Luca Di Leo JOBLESS claims grew in US, surprising economists who had expected the number to fall and pointing to stubborn weakness in the labour market.
M&As on rise, but bankers still wary
Graham Mackay, chief executive of SABMiller Michael Bennet THE thought may cause some bankers to choke on their eggs benedict, but 2011 could prove a busier year for dealmaking than 2007.
BHP cops broadside on return to PNG
John Pundari, PNG mines minister Rowan Callick, Asia-Pacific editor PAPUA New Guinea Mining Minister John Pundari has made an extraordinary parliamentary attack on BHP Billiton.
Stowe's wind farm falls to APA
Wind farm Andrew Burrell APA Group will pay $170m to acquire the Emu Downs wind farm in WA from the ruins of fallen tycoon Ric Stowe's corporate empire.
Financial Markets
Oil dives to four-month low
oil pipeline Dan Strumpf OIL futures plunged to a four-month low on news that reserves would be released to counter disruptions to supply from war-torn Libya.
Wall St falls on growing unemployment
Telstra's $11bn NBN headache
Financial Markets Coverage
Mining & Energy
Rare-earths delay hits Arafura
Arafura Sarah-Jane Tasker RARE-EARTHS hopeful Arafura Resources has been punished by investors after delaying its Northern Territory project.
Sinosteel move may sink Oakajee
BHP cops broadside on return to PNG
More Mining & Energy Coverage

Gillard hangs tough on anniversary | The Australian Capital Circle

Capital Circle Newsletter
Gillard hangs tough on anniversary
The government says the NBN-Telstra deal is evidence it's getting on with the job, one year after Kevin Rudd lost his.

The PM's Diary: Julia Gillard appeared an ABC radio's AM program ahead of a flight to Perth later today. She'll address the WA Labor party's state conference over the weekend. On the one year anniversary of Kevin Rudd's removal as prime minister, Ms Gillard declared she will tough it out. "Anyone who thinks I'm going to fold because it's a bit tough out there has got me wrong,'' she said, "I judge myself and the government I lead by the difference we are making to the lives of Australians today.''
Ms Gillard defended her government's handling of asylum seekers and the mooted deal with Malaysia, the carbon tax and the minerals resource rent tax, and said "we all know'' Tony Abbott is "out there making ridiculous claims day after day''.
Tony Abbott is in Canberra until tomorrow afternoon for the Liberal Party's federal council. Mr Abbott told the Today show this morning that on the one year anniversary of Kevin Rudd's sacking, Australia was a great country with a lousy government. On his electoral prospects: "It's never easy to beat an incumbent government and I am just going to get on with my job and let the Labor party deal with its leadership problems''.
Also attending the council will Colin Barnett, Ted Baillieu and Barry O'Farrell will address the event, which will decide who the next Liberal president
Across the Shows: Julia Gillard is on Network Ten's Meet the Press on Sunday. She'll be interviewed by Paul Bongiorno, Malcolm Farr and Jessica Irvine.
Exit: Greg Hunt is losing key adviser Cathy Alexander, who is leaving her job with the opposition climate change spokesman after four months. Capital Circle hears a return to study is on the cards.
Budget: Wayne Swan and Penny Wong are heralding the passage of key bills for the 2011-12 Budget through the parliament last night.
 ***Click here to get Capital Circle. Email:

Kitco New York Market Report | Financial & Forex Info


New York Market Close Jun 23/11 05:23 PM EDT

NYT: Afternoon Business News: Stocks and Oil Prices Fall Sharply


Stocks and Oil Prices Fall Sharply

The Dow Jones and other market indexes fell on a combination of slow growth, Europe's debt crisis and the use of oil reserves.

Global Oil Reserves Tapped in Effort to Cut Cost at Pump

To replace some of the oil production lost during the Libya conflict, 60 million barrels will be released, with half coming from America's reserves.

Lawmakers Challenge Derivatives Rules

The lawmakers, Republicans and Democrats alike, argue that some proposed rules could force Wall Street's derivatives business overseas.

As Greece Ponders Default, Lessons From Argentina

The effects of Argentina 2001 debt crisis still linger, and the country's default at the time is still keeping it away from the global credit market.

G-20 Officials Agree on Steps to Stabilize Food Prices

Initiatives include creating a database on food stocks, a joint international research program on wheat and a "rapid response forum" to address food crises.

Reuters - Daily Investor Update: Dow, S&P end down but off lows on Greek deal


Dow, S&P end down but off lows 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 the downward trend intact. | Full Article

Fed balance sheet hits another record size
June 23, 2011 04:32 PM ET
NEW YORK (Reuters) - The Federal Reserve's balance sheet expanded to a record size in the latest week, as the central bank bought more bonds in an effort to support the economy, Fed data released on Thursday showed. | Full Article
Oil dives to 4-month low as emergency stocks unleashed
June 23, 2011 04:11 PM ET
NEW YORK (Reuters) - Oil tumbled 6 percent on Thursday to a four-month low after the world's top consumers released emergency oil reserves for the third time ever, a surprise intervention to aid the struggling global economy. | Full Article
Oracle software sales beat its forecast
June 23, 2011 04:25 PM ET
BOSTON (Reuters) - Oracle Corp's new software sales rose 19 percent during its fourth quarter ended May 31, beating its own forecasts of 4 percent to 14 percent growth. | Full Article
LSE bid on knife edge as TMX battle heats up
June 23, 2011 04:35 PM ET
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. | Full Article

Hidden fees can eat away retirement savings | MarkeWatch | Personal Finance Daily

Personal Finance Daily
JUNE 23, 2011

Hidden fees can eat away retirement savings

By MarketWatch

Don't miss these top stories:

Do you know about hidden or unexpected fees that might be eating away at your retirement savings? Most 401(k) savers incorrectly believe they aren't paying any fees, Robert Powell reports today in his retirement column. He says there are many unknown costs and fees lurking about your 401(k)s, IRAs and other retirement accounts. Some are common, such as maintenance or transfer fees, but others, like "special investment" fees and loan-processing and recordkeeping fees, are less well known and can really add up. Take the time to find out what fees you're being charged and what kind of a bite they're taking out of your savings. We need every penny, right?

And speaking of pennies that count, Andrea Coombes reports that higher gasoline prices have prompted the IRS to hike the standard mileage rate used to deduct the cost of business-related driving. The rate will jump to 55.5 cents per mile for travel in July through December, a 4.5 cent hike from 51 cents a mile for driving in January through June.

Anne Stanley , Managing Editor, Personal Finance

10 fees that can wreck your retirement savings

There's a host of unknown costs and fees lurking inside your 401(k) plans, IRAs and other such retirement accounts. And often, those fees can make a world of difference in your overall investment returns.
Read more: 10 fees that can wreck your retirement savings.

Gas prices prompt IRS to raise mileage rates

The IRS is making an unusual midyear hike to the standard mileage rate used to deduct the cost of business-related driving.
Read more: Gas prices prompt IRS to raise mileage rates.

Dads, don't sacrifice family for work

Before next Father's Day rolls around, here's a mission for working dads: let your co-workers know how you balance work and family life.
Read more: Dads, don't sacrifice family for work.

Rates on 30-year fixed-rate mortgage holds at 4.5%

Rates on the 30-year fixed-rate mortgage held steady at 4.5% this week, and other mortgage types changed very little, according to Freddie Mac's weekly survey of conforming mortgage rates, released on Thursday.
Read more: Rates on 30-year fixed rate mortgage holds at 4.5%.

The 5 most intriguing new cable TV shows

Scripted original cable-network programming is as strong as ever this summer, with several new and continuing shows that should get both critical acclaim and solid ratings, in the view of at least one advertising executive.
Read more: The 5 most intriguing new cable TV shows.


Budget talks at ‘impasse,' leading Republican says

Deficit-reduction talks led by Vice President Joe Biden have hit an "impasse" over taxes, the No. 2 House Republican says in announcing he's pulling out of the negotiations.
Read more: Budget talks at ‘impasse,' leading Republican says.

Sales of new homes slip 2.1% in May

Sales of new U.S. homes slipped 2.1% in May after a steep downturn in activity in the Northeast, the Commerce Department estimates in the latest indicator of a struggling housing market.
Read more: Sales of new homes slip 2.1% in May.

Requests for jobless benefits rise to 429,000

More workers file new applications for unemployment benefits in the latest week, reflecting persistent weakness in the U.S. labor market. Jobless claims reach a seasonally adjusted 429,000 in the week ended June 18, up by 9,000, government data show.
Read more: Requests for jobless benefits rise to 429,000.


Balanced portfolios don't fit unbalanced market

Nowadays, conventional investing wisdom is being questioned by financial market experts who are convinced that investors are facing decidedly unconventional times.
Read more: Balanced portfolios don't fit unbalanced market.

Be a better investor; dump your iPhone

If individuals really want more emotional control over their finances, maybe they should get rid of their smart phone, says Chuck Jaffe.
Read more: Be a better investor; dump your iPhone.

Five money moves one inflation hawk is making now

QE2 is coming into port, and it's about to broadside the S.S. United States. At least, that's the view of Robert Arnott, an influential voice in the study of portfolio asset allocation, indexing and risk management.
Read more: Five money moves one inflation hawk is making now.

Oil reserves move seen serving two key purposes

The International Energy Agency's decision to tap emergency reserves of crude oil is seen as an attempt to stave off a more severe economic slowdown and to show the world some measure of control over oil markets.
Read more: Oil reserves move seen serving two key purposes.

Top letter is free, but frightening

Nick Chase's The Contrarian's View, offered free on the web, predicts a ‘decades-long' bear market, reports Peter Brimelow.
Read more: Top letter is free, but frightening.

5 hard questions many bears just can't answer

Since I'm a glutton for punishment, I figure I'd bang on some bunkers today and see what kind of bears are inside. Are you a reasoned, defensive and judicious bear? Or are you hoarding canned goods and firearms, cheering for economic failure?
Read more: 5 hard questions many bears just can't answer.

Stocks bounce back to close mixed on Greek plan: MarketWatch | Market Pulse



By Tom Bemis 

SAN FRANCISCO (MarketWatch) - Stocks staged a dramatic rebound late in Thursday's session to end mixed on reports Greek authorities have agreed to a new 5-year austerity plan to avoid a sovereign default. The Dow Jones Industrial Average DJIA -0.49% fell 0.5% to end at 12,050.15 with 28 stocks in the index falling and just two higher. Earlier the index had plunged more than 200 points as a plan to release petroleum from global reserves hammered oil giants Exxon Mobil XOM +0.20% and Chevron CVX +0.19% , both major components of the Dow. In the broader markets, the S&P 500 index SPX -0.28% ended down 0.28% at 1,283.52 after earlier bouncing off its 200-day moving average at 1,262. The NASDAQ Composite Index

The Economist | BusinessThis Week: Highlights Of New Coverage From 18th - 24th June 2011

The Economist  Business This Week
» Corporations and the court
» Enough already
» Timber!
» It's a rich man's world

» In an important test of the law on class-action lawsuits in America, the Supreme Court threw out a case that had been brought on behalf of 1.5m female workers at Walmart. The case claimed that women were discriminated against in pay and promotion, but the court ruled that the plaintiffs could not show a common grievance. The employees may still pursue their claims in smaller groups or individually. Business groups had predicted a flood of sex-discrimination lawsuits if the court had let the class-action suit stand. See article
» Women activists interrupted Carrefour's shareholder meeting in Paris, to protest that there are too few female executives at the world's second-largest retailer. At the meeting shareholders backed a plan to spin off Dia, Carrefour's low-cost supermarket chain. It was also confirmed that Lars Olofsson would become chairman in addition to his job as chief executive, as the company rejigs its European operations.

Enough already
» As expected, the Federal Reserve announced no new initiatives at its regular policy meeting, marking the end of its second programme of quantitative easing. But with the Fed again lowering its growth forecast for the year, interest rates will stay pinned to the floor. Ben Bernanke, its chairman, said he would be "prepared to take additional action if conditions warranted".
» PNCFinancial Services bought the American retail-banking business of Royal Bank of Canada for $3.45 billion. It was the second big banking deal within a week: Capital One Financial acquired the American online-banking unit of ING, a Dutch company, for $9 billion.
» JPMorgan Chase agreed to pay $154m to settle a civil-fraud charge that it misled investors about a mortgage-securities portfolio by failing to disclose that a hedge fund, which had helped to select the assets for the portfolio, was at the same time betting that half of the assets would lose money. JPMorgan neither admitted nor denied wrongdoing.
» Winifred Jiau was found guilty of securities fraud in the first insider-trading-related trial of someone who works at an expert-network company, a business where clients in finance are hooked up with specialists in a given industry.

» Paulson & Co, a hedge fund, was estimated to have lost $500m when it sold its stake in Sino-Forest, a forestry company that has been accused by a short-seller of overstating its assets in China, causing its share price to collapse.
» After an internal inquiry into last year's explosion on the Deepwater Horizon rig in the Gulf of Mexico, Transocean, the owner of the rig, placed the blame for the disaster firmly on BP, the rig's operator. The presidential commission that investigated the incident concluded that BP and its contractors should share the blame. That finding has been accepted by other contractors, inducing them to settle with BP, including, this week, the firm that made the well's float collar.
Click Here!
» Citigroup began the process of putting EMI up for sale (the music company said it was seeking "strategic alternatives"). In February Citi seized EMI from Terra Firma Capital Partners as the private-equity firm struggled with loans that it had obtained from the bank to finance its buy-out of EMI. One potential bidder for the business could be Len Blavatnik, who recently bought Warner Music.
» Foster's rejected a takeover bid from SABMiller, which valued the Australian beer company at A$9.5 billion ($10.1 billion). Foster's recently divested its sagging wine business to refocus solely on its "amber nectar". Other big brewers are expected to submit rival offers to SABMiller's.
» Qantas reached a settlement with Rolls-Royce for last November's explosion in a Rolls-Royce Trent 900 engine on one of its jets, which forced an emergency landing and caused the airline to ground aircraft as it conducted safety tests. Qantas will note the value of the settlement as A$95m ($101m) in its earnings.
» Research in Motion's share price fell by 21% after the BlackBerry-maker lowered its outlook for the year. Once considered to be the hottest wireless device around, the BlackBerry has not gained much from the growing demand for smartphones; its share of the market in North America has shrunk to 17% from around 50% just two years ago.

It's a rich man's world
» An annual survey estimated that the combined wealth of the world's 10.9m rich people (27% of whom are women) stood at $42.7 trillion in 2010, more than in 2007, the year the financial crisis was brewing. More than half of the monied classes live in the United States, Japan and Germany, though Asia has more in total than Europe for the first time.

The Economist | Politics This Week:Highlights of New Coverage From 18th - 24th June 2011

The Economist  Politics This Week

Highlights from The Economist online's Politics this week
» The euro crisis: If Greece goes…
» Italian politics: Still in league
» Security in Central America: Rounding up the governments
» Syria's turmoil: Wooing the middle
» Repression in China: No melting mood
» Banyan: Neither a picnic or a Switzerland
» Lexington: Mars in the descendant

» It was a turbulent week for Greece and the euro zone. As angry demonstrators filled the squares of Athens, George Papandreou, the prime minister, narrowly won a vote of confidence in parliament. A bigger test will come when Greek politicians vote on contentious legislation to enact yet more austerity measures and structural reforms. Euro-zone finance ministers meeting in Luxembourg gave warning that the next tranche of bail-out funding for Greece, which is needed to avoid a debt default in mid-July, would be released only if the legislation is passed. See article
» The IMF said that contagion from the Greek crisis posed considerable risks to the Spanish economy and that efforts on reform must not slow. Earlier, up to 200,000 people rallied on the streets of Spanish cities, protesting against austerity and political corruption. The so-called indignados plan to stage a huge demonstration in Madrid in late July.
» Silvio Berlusconi, Italy's prime minister, promised both to lower income taxes and to keep the budget deficit under control, after he won a vote of confidence in parliament. Days earlier Umberto Bossi, the leader of the Northern League, Mr Berlusconi's coalition partner, had called for tax cuts. See article
» A court in the Netherlands cleared Geert Wilders on all charges of inciting hatred against Muslims. Mr Wilders, who leads a far-right party that supports the minority government, has compared the Koran to "Mein Kampf". His trial was seen as a test of Dutch freedom-of-speech laws.

Going against the traffick
» The presidents of seven Central American countries, Colombia and Mexico, together with Hillary Clinton and other foreign ministers, gathered in Guatemala for a summit which approved a co-ordinated strategy against drug mafias in Central America. See article
» After having kept Argentina guessing for months, Cristina Fernández de Kirchner, the president, said she would seek a second term at an election due in October. Opinion polls suggest that she should win easily against a splintered opposition.
» In Venezuela troops laid siege to a prison after 22 people were killed in battles between rival gangs of inmates.
» Haiti's parliament rejected Michel Martelly's nominee for prime minister, a setback for the country's new president.

A bloody regime
» In his first public speech for two months, Bashar Assad, Syria's embattled president, called for a "national dialogue", once again promised reform, and said an election would be held in August—but with no hint that his ruling Baath party would allow an opposition to compete. Demonstrations and killings continued. See article
Click Here!
» Tunisia's former president, Zine el-Abidine Ben Ali, and his wife were each sentenced in absentia to 35 years for corruption and fined $66m.
» As Yemen's government in Sana'a seemed to lose its grip, dozens of members of al-Qaeda escaped from a prison in the southern port city of Mukalla. Allies of the organisation have recently captured or attacked several towns in the region.
» In Bahrain eight pro-democracy campaigners, all Shias, were given life sentences in a special security court for "plotting to overthrow the government". Thirteen other opposition figures were sentenced to up to 15 years in prison, seven in absentia.
» A spate of bombings in Iraq killed at least 35 people, 27 of them in Diwaniya, south of Baghdad, the capital. The attacks were presumed to have been carried out by Sunni extremists linked to al-Qaeda.
» In a blow to Palestinian hopes of unity, Mahmoud Abbas and Khaled Meshal, leaders respectively of Fatah and Hamas, the two main Palestinian factions, who have agreed to oversee jointly a government of technocrats, cancelled a meeting at which they were meant to select a prime minister.

Nice to see you
» China released Ai Weiwei on bail from detention, after the artist and human-rights activist admitted evading tax. Mr Ai was arrested in April as he boarded a flight for Hong Kong, and was held in secret without access to a lawyer. China said it released Mr Ai for "his good attitude in confessing his crimes" and because of a chronic illness. See article
» After government-backed protests in Hanoi demanded that China respect Vietnam's territorial claims in the South China Sea, the two countries conducted a joint naval patrol in disputed waters. China urged America to avoid getting involved in the dispute.
» A volcano in Chile continued to send plumes of ash across the southern Pacific, obscuring airspace in the far south of the world and grounding flights around the region.
» Pakistan arrested Brigadier Ali Khan for his ties to Hizb-ut-Tahrir, a banned Islamist group. The most senior Pakistani army officer to be taken into custody in a decade, Brigadier Khan was detained shortly before India's foreign secretary flew to Islamabad for talks with her Pakistani counterpart. Both sides started a dialogue in February for the first time since the Mumbai attacks of 2008, in which Pakistani officers are accused of involvement.

The beginning of the end
» Barack Obama proposed withdrawing 33,000 troops from Afghanistan by the end of next summer, with 68,000 remaining to support the transition of responsibility for security to the Afghans by 2014. Some military men worried that Mr Obama's plan would hamper American advances against the Taliban. See article
» Republicans threatened to stop funding American participation in the Libya campaign, claiming that Mr Obama is violating the 1973 War Powers Resolution by not seeking congressional approval for military action. Senators John Kerry and John McCain introduced a bipartisan resolution authorising the president to commit forces, but not to deploy ground troops. See article
» Jon Huntsman declared his candidacy for president. The former governor of Utah and ambassador to China is a late entry to the Republican field, but is exciting interest as a more charismatic version of Mitt Romney, the party front-runner. As an Obama appointee to China, however, he is sure to get a rough ride from conservative activists.