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Jul 24, 2011

The Australian Business Briefing: US debt gridlock roils markets





 
US debt gridlock roils markets
Barack Obama Corey Boles US political leaders remained split today on how to resolve the debt troubles, sending stocks in Australia down and gold to a new record.
 
Premier to close 50 stores
Premier Investments Blair Speedy PREMIER Investments is set to close up to 50 loss-making stores across its retail portfolio after a profit downgrade.
 
Fund sells Transurban stake
Transurban Rebecca Thurlow CANADA Pension Plan Investment Board has divested its 12 per cent stake in Transurban Group for $903.3 million.
 
Mining M&A more valuable
Dalrymple Bay Francesca Freeman THE value and number of M&A deals in the mining sector are set to grow, says Ernst & Young.
 
Producer prices pick up speed
Construction AN index of final Australian producer prices rose 0.8 per cent in the second quarter, higher than some forecasts.
 
Graincorp buys German rival
Graincorp Ray Brindal MALTING, logistics and marketing group Graincorp said today it has bought GermanMalt for $77 million.
 
Platinum to fight mine closure
Strike at Platinum Australia David Fickling PLATINUM Australia's Smokey Hills mine has again ceased operations after South African government intervention.
 
Bracks to push cars, trade in Mid-East
Former Victorian Premier Steve Bracks talking about the state of the automotive industry Damon Kitney FORMER Victorian premier Steve Bracks will lead a high-level trade mission to the Middle East to seek support for Australia's car exports.
 
Financial Markets
US debt gridlock roils markets
Barack Obama Corey Boles US political leaders remained split today on how to resolve the debt troubles, sending stocks in Australia down and gold to a new record.
 
Stocks fall on US debt risks
$US wobbles on US debt woes
 
Financial Markets Coverage
 
Mining & Energy
Mining M&A more valuable
Dalrymple Bay Francesca Freeman THE value and number of M&A deals in the mining sector are set to grow, says Ernst & Young.
 
Platinum to fight mine closure
Why has Nexus been caught short?
 
More Mining & Energy


DJIA futures down over 100 points Sunday night: MarketWatch | Bulletin - Market Pulse



By Steve Goldstein 
 
WASHINGTON (MarketWatch) -- In thin electronic trade Sunday night, U.S. stock futures were down by nearly 1% as U.S. lawmakers failed to reach agreement on a plan to raise the $14.3 trillion debt ceiling. Dow Jones Industrial Average futures DJ1U -1.42% fell 114 points, or 0.9%, and S&P 500 futures SP1U -0.92% also declined by 0.9%. Gold futures GC1Q +1.29% rose by $14.30 to $1,615.80 an ounce.

The Australian Capital Circle: Labor hope as Malaysia deal signed

Capital Circle Newsletter

Labor hope as Malaysia deal signed
 
The Gillard government enjoys rare good news today with its Malaysian refugee swap finalised and its Newspoll freefall apparently over.

Julia Gillard: The shoe leather tour appears to be over, with the Prime Minister spending the day in Canberra. She has no official events scheduled but may do a doorstop later. Cabinet is meeting today.
Tony Abbott is in Townsville, where he is visiting Queensland Nickel this morning.
Malaysian Solution: The government will chalk up a rare win today with the signing by Immigration Minister Chris Bowen of his refugee swap deal with Malaysia. The agreement has the potential to solve the second biggest problem facing the government. The government will widely publicise the new deterrent. But the agreement is not without risks. It would be a major political blow if any harm were to befall any of the 800 exported asylum-seekers.
Limbo: Expect word soon on what the government will do with the 568 asylum-seekers being held in limbo on Christmas Island, whom Malaysia will not accept under the deal. Chris Bowen was paving the way last week to have them processed in Australia.
Newspoll: The latest Newspoll holds a glimmer of hope for Labor. Support for the carbon tax rose six percentage points to 36 per cent, after sitting at 30 per cent for almost three months. Labor's primary vote rose from its lowest-ever support of 27 per cent to 29 per cent and the Coalition's fell from 49 to 47 per cent. It follows a disappointing poll for Labor published in yesterday's Sunday Herald Sun, taken in Julia Gillard's own seat.
Honeypot: The Gillard government says it wants to toughen privacy laws here in the wake of the News of the World scandal. In a similar vein, perhaps it should re-examine its own plans to issue every Australian with a unique health identifier number that will become the gateway to accessing their private medical records online. The Australian Privacy Foundation compared the system to the ill-
Read more...
 
Mumble
Peter Brent
Peter Brent
 
Labor dodged a bullet in Victoria
At the next federal election the two largest states will have Coalition governments. If the election is at all close (which doesn’t look…
 
More Peter Brent

No U.S. debt deal; Obama meeting with Democrats Chance of technical default 20%, investor says: Market : MarketWatch - Analysis on Congressional debt deal by Debora Levine.



By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — With no apparent deal to increase the U.S. debt limit in sight, President Barack Obama is meeting with Congressional leaders of his own party Sunday.

Throughout the weekend, lawmakers and officials expressed optimism that a deal would be done before trading in major Asian markets began to avoid the possible roiling of financial markets. But no such deal is in the offing Sunday night.
A meeting is underway between Obama, House Democratic Leader Nancy Pelosi and Senate Majority Leader Harry Reid..

 
U.S. week ahead: earnings, debt MarketWatch’s Laura Mandaro looks at how Amazon and Exxon earnings, and negotiations over raising the U.S. debt ceiling, are likely to affect financial markets in the coming week. 



Separately, House Speaker John Boehner reportedly told colleagues Sunday evening that he was still working on a two-stage plan and that Republicans were “going to require some of you to make sacrifices.“
The gist of the Boehner plan is for a two-stage approach, with an immediate increase in the debt ceiling of about $1 trillion and an additional amount next year to be determined by a commission that would be created to study the issue.
Reid, meanwhile, is working on his own plan, which would increase the debt ceiling by $2.4 trillion to make it through the next presidential election and include spending cuts that were greater than the debt ceiling increase, but wouldn’t include the tax increases that derailed the Obama-Boehner talks.
Markets in Tokyo and Sydney were scheduled to open at 8 p.m. Eastern.
White House Chief of Staff William Daley said on CBS’ “Face the Nation” that the lack of an agreement could be “stressful” for global investors.
“We may have a few stressful days coming up, and stressful for the markets of the world and the American people,” he said.
The chance of a technical default by the U.S. is still seen at around 20%, said Jack Albin, chief investment officer at Harris Private Bank.
“The problem from an investment standpoint is hedging is difficult,” he said. “Our conclusion is to buy any significant dip, should one occur.”
Coming up with a plan very soon to make sure the U.S. meets its debt obligations is “the only option available,” Treasury Secretary Timothy Geithner said Sunday. “They’re going to increase the debt ceiling, and we will not default.”

Default would be ‘devastating’

The White House has warned that the U.S. could default on Aug. 2 if the $14.2 trillion debt limit isn’t raised by Congress.
“To default would be a tax on all Americans and it would be devastating to the country,” Geithner said on ABC’s “This Week.” 

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The Washington PostToday's Headlines: Today's Highlights | Politics | Style | Sports | World| Live Discussions | Technology | Business

The Washington Post
TODAY'S HEADLINES
TODAY'S HIGHLIGHTS
Boehner tells GOP he will unveil new debt strategy
The speaker seeks to reduce future borrowing by as much as $4 trillion.
(By Lori Montgomery)

Dan Balz: Debt talks show breakdown in governing
Americans are witnessing a breakdown in governing as corrosive as a possible financial default.
(By Dan Balz)

In Norway attacks, hints of Oklahoma City
First assumption in both attacks: Muslims did it; now right-winger stands accused.
(By Will Englund and Michael Birnbaum)

Car theft tamed by technology, police work
Anti-theft technology and aggressive police work have sent car theft plummeting across the United States by more than 40 percent since 2003, the last year that saw an increase.
(By Allison Klein and Josh White)

1st gay couples wed in New York as it becomes largest state to legalize same-sex vows
NIAGARA FALLS, N.Y. — Gay-rights activists Kitty Lambert and Cheryle Rudd were legally married the very first moment they could be during a midnight ceremony at Niagara Falls that ushered in same-sex marriage in the state and marked a pivotal moment in the national drive for recognition.
(By Associated Press)

POLITICS
GOP leaders find consensus elusive
For Republicans, the debt talks have shown three leaders calling three different plays but success is elusive on one they all can support.
( by Paul Kane and David A. Fahrenthold , The Washington Post)

District contractor doubles as a ‘kingmaker’
Jeffrey E. Thompson has constructed a business empire — in large part through government contracts — and built a political network nurtured by campaign contributions.
( by Mike DeBonis , The Washington Post)

Debt crisis and market worries: Quick deficit-deal framework sought to head off stock sell-off
WASHINGTON — Precariously short of time, congressional leaders struggled in urgent, weekend-long talks to avert an unprecedented government default, desperate to show enough progress to head off a plunge in stock prices when Asian markets open ahead of the U.S. workweek.
( Associated Press Associated Press , AP)

Charles Manatt, Democratic Party chairman in the early 1980s and former US ambassador, dies
WASHINGTON — Charles T. Manatt, a former chairman of the Democratic National Committee and a U.S. ambassador during the Clinton administration, has died. He was 75.
( Associated Press Associated Press , AP)

Mitt Romney’s Mexico roots
The story of Mitt Romney's family in Mexico is not well-known or frequently mentioned by the candidate, who is widely viewed as the front-runner for the Republican nomination.
( by Nick Miroff in COLONIA JUAREZ, Mexico , The Washington Post)


STYLE
Miss Manners: Wedding isn’t real unless it’s a really big show
Miss Manners wonders why a legal union isn’t considered “real” until an extravagant display has taken place.
(, Universal Press)

Ask Amy: Insane attraction part of toxic cycle
She’s on a relationship roller coaster that may seem exciting, but is not likely to end happily.
(, Tribune Media Service)

Avoiding the ‘My son is better’ mind-set
A parent wants to forestall being competitive over a son’s achievements.
(, The Washington Post)

Newseum explores past, present
Through Labor Day, kids can get in free to the Newseum with a paying adult.
(, The Washington Post)


SPORTS
Nationals can’t finish off Dodgers
Rafael Furcal hits an RBI double with one out in the ninth inning, and the Dodgers rally from a four-run deficit to beat the Nats.
( by Adam Kilgore , The Washington Post)



( by Adam Kilgore , The Washington Post)

Nats give up tying run on Rodriguez's wild pitch, lose 7-6 to Dodgers
LOS ANGELES — The Washington Nationals were on their way to their first one-run victory since July 6, when hard-throwing reliever Henry Rodriguez got a little too far behind one of his heavy fastballs and threw it to the backstop with Rafael Furcal at the plate and a runner at third base.
( Associated Press Associated Press , AP)

Dodgers beat Nats on double in ninth
LOS ANGELES — The key hits have been few and far between this season for Rafael Furcal, who has spent more time on the disabled list than he has on the field.
( Associated Press Associated Press , AP)

Nationals can’t finish off Dodgers
Rafael Furcal hits an RBI double with one out in the ninth inning, and the Dodgers rally from a four-run deficit to beat the Nats.
( by Adam Kilgore , The Washington Post)


WORLD
In Norway attacks, hints of Oklahoma City
First assumption in both attacks: Muslims did it; now right-winger stands accused.
( by Will Englund and Michael Birnbaum , The Washington Post)

Man accused in Norway's bombing, shooting spree wanted to bring about revolution
OSLO, Norway — The man blamed for attacks on Norway’s government headquarters and a youth retreat said he was motivated by a desire to bring about a revolution in Norwegian society, his lawyer said Sunday.
( Associated Press Associated Press , AP)

Suicide bomber kills 1 soldier, wounds 2 at army checkpoint in northwest Pakistan
DERA ISMAIL KHAN, Pakistan — A suicide bomber blew himself up at an army checkpoint in northwest Pakistan on Sunday, killing one soldier and wounding two others, officials said.
( Associated Press Associated Press , AP)

North Korea holds local elections amid ongoing hereditary succession plan
SEOUL, South Korea — North Korean leader Kim Jong Il cast a ballot Sunday with his son Kim Jong Un in rubber-stamp local elections seen as another step toward strengthening the younger Kim’s power as ruler-in-waiting.
( Associated Press Associated Press , AP)

Clinton urges Indonesia to be role model for democratic transition in Myanmar, Middle East
BALI, Indonesia — U.S. Secretary of State Hillary Rodham Clinton is urging Indonesia to promote democracy in Myanmar and countries in the Middle East and North Africa in the throes of upheaval. She says its successful transition from dictatorship and status as a vibrant Muslim-majority democracy make it an ideal role model for both Myanmar and the Arab world.
( Associated Press Associated Press , AP)


LIVE DISCUSSIONS
Heat Wave: 5 myths about extreme weather
Jennifer Morgan, director of the climate and energy program at the World Resources Institute, discusses the links between extreme weather and climate change.
(, vForum)

Debt talk negotiations and News of the World's demise: Brad Hirschfield's ethical take on the news (Video)
Join Brad Hirschfield as he talks about the ethical and moral issues raised by the week's biggest stories.
(, vForum)

Nickelodeon brings back the 90's: Doug, All That and more
Nickelodeon's Keith Dawkins discusses the decision to bring back classic Nick shows.
(, vForum)

Carolyn Hax Live: Advice columnist tackles your problems (Friday, July 29)
Advice Columnist Carolyn Hax takes your questions and comments about the strange train we call life.
(, vForum)

Carolyn Hax Live
Advice Columnist Carolyn Hax takes your questions and comments about the strange train we call life.
(, vForum)


TECHNOLOGY
The Winklevosses Vs. Silicon Valley

( by TechCrunch.com , TechCrunch.com)

Lego Cased Computer Crunches Efficiently For A Good Cause

( by TechCrunch.com , TechCrunch.com)

Healthcare Disruption: Pharma 3.0 Will Drive Shift from Life Science to HealthTech Investing (Part I of III)

( by TechCrunch.com , TechCrunch.com)

Microsoft’s Online Business For The Year: Over $2.5 Billion …Lost

( by TechCrunch.com , TechCrunch.com)

Shocked By News Corp Phone Hacking Revelations? Please. [TCTV]

( by TechCrunch.com , TechCrunch.com)


BUSINESS
Leading from behind the curve
Figuring out how to break out of insular bubbles and see the world as it really is may be the central challenge of modern leadership.
(, The Washington Post)

Weighing several options, lawmakers seek debt accord outline before Asian markets open Monday
WASHINGTON — Congressional leaders planned to work on a fiercely hot Sunday in Washington to try to reach a bipartisan accord to avert a debt-ceiling crisis on Aug. 2.
( Associated Press Associated Press , AP)

Emirati telecom Etisalat and Spain's Telefonica sign wide-ranging cooperation deal
DUBAI, United Arab Emirates — The United Arab Emirates’ largest telecom, Etisalat, and Spain’s Telefonica say they have signed a wide-ranging deal to cooperate across several business areas.
( Associated Press Associated Press , AP)

The Winklevosses Vs. Silicon Valley

( by TechCrunch.com , TechCrunch.com)

Quant trader moving on
Peter Muller made “a boatload of money” at Morgan Stanley. Under the new bank rules, he and his team will now do it on their own.
( by Richard Teitelbaum , The Washington Post)

NYT: Today's Headlines: Top News/| Quotation of The Day / Politics / Business / TEhnology / Sports / Arts / New York / Region / Magazine /Editorials / Sunday Review /On This Day /



TOP NEWS

Oslo Suspect Wrote of Fear of Islam and Plan for War

By STEVEN ERLANGER and SCOTT SHANE
The man charged with the attacks in Oslo that killed at least 92 people left behind a detailed manifesto calling for a Christian war to defend Europe against the threat of Muslim domination, officials said.

Lawmakers Renew Push to Reach Deal on Cutting Deficit

By CARL HULSE and JACKIE CALMES
Hoping to reassure markets, Congressional leaders raced to reach a new deficit-reduction deal that Speaker John A. Boehner said could cut $3 trillion to $4 trillion in spending over 10 years.

Former City Schools Chief Emerges as Murdoch Ally

By JEREMY W. PETERS, MICHAEL BARBARO and JAVIER C. HERNANDEZ
Joel I. Klein, who joined the News Corporation this year, had opposed a probe into hacking. Now he is leading it.
QUOTATION OF THE DAY
"What? You're going to work for Rupert Murdoch?"
DAVID GERGEN a former adviser for Bill Clinton, reacting to Joel I. Klein's job choice after leaving his post as New York schools chancellor.

Fashion & Style

Video: On the Street | Blue Chip

Blue has taken the Fashion Style / Opinion /World /U.S. /Polispotlight, from the intense hues of hydrangeas in gardens and markets, to the shades that the fashion world contributes.
Opinion
Opinion

The Sleepover Question

Teenage sex is a source of conflict in American families. It doesn't have to be.
WORLD

For Campers, Island Turned Into Fatal Trap

By MICHAEL SCHWIRTZ
Hundreds of young people, gathered at a camp for liberal elites, were trapped on the island of Utoya as a gunman, identified by police as Anders Behring Breivik, stalked them.

Norway Attacks Put Spotlight on Rise of Right-Wing Sentiment in Europe

By NICHOLAS KULISH
Across Europe, opposition to Muslim immigrants, globalization, the power of the European Union and the drive toward multiculturalism has proven a potent political force.

Pakistan Spies on Its Diaspora, Spreading Fear

By MARK MAZZETTI, ERIC SCHMITT and CHARLIE SAVAGE
American officials say a campaign by ISI, the Pakistani spy agency, aims to exert influence over lawmakers, stifle dialogue critical of Pakistan's military and blunt the influence of India.
U.S.

Interest and Scientific Advances Lead to Progress on Contraceptive for Men

By PAM BELLUCK
Male contraceptives are attracting growing interest from scientists, who believe they hold promise for being safe, effective and, also important, reversible.

After Devastating Floods, Debate Over Mission of the Missouri Rolls On

By A. G. SULZBERGER
Record flooding has accentuated a battle between those who advocate shipping and others who favor recreation.

Gunman Kills Self and 5 Others at Texas Rink

By THE ASSOCIATED PRESS
A man attending a birthday party at a North Texas roller rink opened fire after an apparent family spat.
POLITICS

Default Seen as Unlikely, but Markets Prepare

By BINYAMIN APPELBAUM and ERIC DASH
Traders were looking for evidence of progress toward a deal on the debt ceiling before markets open on Monday, but some were preparing for the worst-case scenario.

A Rock-Solid Conservative Who's Willing to Bend

By JENNIFER STEINHAUER
Senator Tom Coburn, Republican of Oklahoma, now sees promise in proposals to limit the debt offered by the so-called Gang of Six, a group he walked out of this year.

Video of a Lethal Injection Reopens Questions on the Privacy of Executions

By ERICA GOODE
For many years, executions in the United States were private, but a video made for arguments about a lethal injection drug cocktail may change that.
BUSINESS

Rise of Consumer Credit in Chile and Brazil Leads to Big Debts and Lender Abuses

By ALEXEI BARRIONUEVO
The rise of consumer credit in two of South America's strongest economies has brought growth, but also problems with predatory practices.

China to Wall Street: The Side-Door Shuffle

By DAVID BARBOZA and AZAM AHMED
With some deft financial maneuvers, a number of Chinese businesses have gone public in the United States without some usual hurdles.

Is Hulu Boxed In?

By BRIAN STELTER
Hulu has helped to free television from the tyranny of the TV set, but questions about how to make money off online content pose a challenge to the Web site's future and eventual buyer.
TECHNOLOGY
Digital Domain

The Auteur vs. the Committee

By RANDALL STROSS
While Google makes its design choices by consensus, Apple has found success by relying on the eye of Steve Jobs, whose role resembles that of a film auteur.
Slipstream

Slowing Down to Savor the Data

By NATASHA SINGER
Think Quarterly, a business-to-business marketing tool from Google, will make its debut this week. But it's being promoted with a retro technique: snail mail.
App City

Ordering Food by Phone, Without Saying a Word

By JOSHUA BRUSTEIN
GrubHub and Seamless, which started as Web sites, say that an increasing amount of their business is taking place via smartphones. Both recently updated their apps.
SPORTS

Kei Igawa: The Lost Yankee

By BILL PENNINGTON
Acquired for $46 million with the hope that he could be a rotation stalwart, Kei Igawa lasted 16 games with the Yankees before being banished to the minors.

Cadel Evans Set to Win First Tour de France

By GREG BISHOP
Evans overcame a 57-second deficit in the final time trial putting him in position to become the first Australian to win the race.

Players Committee Expected to Ratify N.F.L. Labor Agreement on Monday

By JUDY BATTISTA
The lockout would only end after the full union votes in favor of the collective bargaining agreement, although the doors of N.F.L. facilities could open conditionally before then.
ARTS

Amy Winehouse, British Soul Singer With a Troubled Life, Dies at 27

By BEN SISARIO
Ms. Winehouse, the British singer who found worldwide fame with a sassy, hip-hop-inflected take on retro soul, became a tabloid fixture because of addiction problems.
An Appraisal

For Winehouse, Life Was Messier Than Music

By JON PARELES
Under better circumstances, Amy Winehouse's "Back to Black" would have been a foundation for a maturing catalog. Now, it remains a warning she could not heed.

At the Theater, You Can Feel the Connection

By BEN BRANTLEY
Plays in London this summer have startling moments in which they connect with us in ways that feel almost embarrassingly intimate.
NEW YORK / REGION

After Long Wait, Same-Sex Couples Marry in New York

By THOMAS KAPLAN
The first weddings began taking place shortly after midnight Sunday at Niagara Falls, and several government officials are hosting celebrations in New York City.
In the Family

The Van Dusens of New Amsterdam

By ALISON LEIGH COWAN
Fifteen generations, including two U.S. presidents, soldiers in the Civil War and a noted theologian, expanded outward from an early settler of Manhattan, a man named Abraham.
City Critic

No Windmill, but Still a Cure for the Wicked

By NEIL GENZLINGER
Miniature golf as shock therapy? A theory of redemption is put to the test with two women who could use some correction.
MAGAZINE

Yemen on the Brink of Hell

By ROBERT F. WORTH
If Ali Abdullah Saleh and his generals believe they can defeat protesters, they are taking an enormous risk.

Where Do Dwarf-Eating Carp Come From?

By JONAH WEINER
Tarn Adams ditched a career in mathematics to build an ingenious, ever-evolving computer game.

Sink and Swim

By ELIZABETH WEIL
After nearly drowning, Cullen Jones set his mind to conquering the water.
EDITORIALS
Editorial

In the Wake of Fukushima

Nuclear power regulators can learn from the accident at Japan's Fukushima plant and take the necessary steps to ensure safety.
Editorial

One Step Forward, More to Take

The ban on gays serving in the military will soon be repealed, but same-sex couples are still waiting for their equal rights.
Editorial

Herman Cain's Bigotry

Herman Cain stands out in the field of Republican presidential candidates by using religious bigotry to gain political traction.
SUNDAY REVIEW
Op-Ed Columnist

Bad Food? Tax It, and Subsidize Vegetables

By MARK BITTMAN
Taxing junk food and making healthy food more affordable would save millions of lives and billions of dollars in health care costs.
Op-Ed Columnist

The End of Awe

By MAUREEN DOWD
The stirring sound of mythologies cracking, on both sides of the Irish Sea.
Op-Ed Columnist

Republicans, Zealots and Our Security

By NICHOLAS D. KRISTOF
Forget about Iran. These days, the most dangerous threat to national security comes from our own elected officials.
ON THIS DAY
During a visit to the Soviet Union, Vice President Richard M. Nixon got into a discussion at a U.S. exhibition with Soviet leader Nikita Khrushchev that was dubbed the ''kitchen debate.''