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Nov 8, 2012

The Economist | Business this week: Highlights of news coverage from November 3rd - 9th 2012.

The EconomistBusiness this week

» In a landmark ruling, a judge in Australia found that Standard & Poor's had misled investors by awarding a triple-A rating to a "grotesquely complicated" derivative product. The risky derivative was dreamed up by ABN AMRO, a Dutch bank that had to be rescued during the financial crisis. The judge ordered S&P and the bank to compensate investors, the first time that a ratings agency has been held liable for losses on a financial product it has assessed as top-notch. S&P plans to appeal. See article»

Merely a precaution
» HSBC more than doubled its estimate of the amount it may have to pay to settle penalties arising from a regulatory investigation in the United States into its business in Mexico. The bank is setting aside $1.5 billion to cover fines that could flow from allegations that drug gangs laundered money through HSBC accounts. Some analysts think the figure may reach $2 billion.
» BNP Paribas reported a quarterly net profit of €1.3 billion ($1.7 billion), a vast improvement on the same quarter last year, when it wrote down the value of its holdings of Greek debt. The French bank also said it had completed the restructuring of its balance-sheet in order to meet capital requirements under the new Basel 3 rules.
» France and Belgium injected another combined €5.5 billion ($7 billion) into Dexia, a stricken bank that is still losing money despite a bail-out in 2008. The decision is likely to be very unpopular with French and Belgian voters, since governments in both countries are pushing to cut spending on social services in order to ease budget deficits.
» The European Union slashed its growth forecast for next year. It now expects output in the 17 euro-zone countries to expand by an average of just 0.1%, down from its previous forecast of 1% in May. Germany's economy is predicted to grow by 0.8%, whereas Spain's is expected to contract by 1.4% and Italy's by 0.5%.

Must do better
» The EU also forecast that Spain's budget deficit will reach 6% of GDP in 2013, instead of the 4.5% Spain agreed to four months ago. This puts more pressure on the government in Madrid to introduce further austerity measures.
» Fitch upgraded Turkey's credit rating to BBB- from junk status, the first investment-grade rating from any of the big agencies for the country since it was plunged into an economic crisis in 1994.

» American employers added 171,000 jobs to the payrolls in October but the unemployment rate rose slightly, to 7.9%. Barack Obama won re-election with unemployment at its highest on polling day since Franklin Roosevelt's time, and above the average for presidents since 1948 who have been successfully re-elected. (Interactive data on this chart can be found here.) See article»
» Australia's central bank kept its main interest rate on hold at 3.25%. A cut of around 25 basis points is widely expected some time before the end of 2012 because of concerns that the slowdown in commodity prices will hurt growth.
» Toyota bucked the recent trend of gloomy annual-earnings forecasts from Japanese carmakers, and raised the amount of profit it expects to make to ¥780 billion ($9.7 billion). Like its rivals in Japan, Toyota has suffered from a sharp drop in sales in China (which were down by 44% for the company in October compared with the same month last year) because of political tensions over some disputed islands. But its business in America has been thriving, mostly driven by demand for its Prius, Camry and Corolla models. See article»
» Suzuki decided to stop selling cars in the United States and put its American division into bankruptcy protection. The Japanese carmaker's small vehicles sell well in India and South-East Asia, but it struggled to compete against bigger American models.
» Apple's share of the global market for tablet computers fell sharply in the third quarter, according to IDC, a research firm. Apple's iPad accounted for 50.4% of all tablets sold, down from 65.5% in the previous quarter, while Samsung, Amazon and Asus all saw their share of the market jump. But consumers may merely be delaying buying an Apple device; the company said it sold a combined 3m mini iPads and fourth-generation iPads in the three days since they were first available in shops on November 2nd.

The answer, my friend…
» Vestas, the world's biggest manufacturer of wind turbines, announced plans to cut another 3,000 jobs. It will have reduced its workforce by 20% this year, following a previous round of lay-offs in 2010, as cash-strapped European governments curb their subsidies for wind power and competition from China increases.

The Economist Politics this week: Highlights of news coverage from November 3rd - 9th 2012.

The EconomistPolitics this week

» Barack Obama was re-elected as America's president, beating Mitt Romney by around 50%-48%. Although the result was close in the popular vote, Mr Romney managed to win over only two states—Indiana and North Carolina—that had voted for Mr Obama in 2008, and failed to make much of an impression in the crucial Midwest. Mr Obama's victory was helped in large part by strong support from Hispanic voters and women. See article»
» The Republicans had a bad night in Senate races, too. The party lost in Maine to an independent, and in Massachusetts Scott Brown, who claimed a stunning upset in 2010 by winning Ted Kennedy's old seat, was defeated by Elizabeth Warren. Todd Akin and Richard Mourdock, two Republicans who sparked a storm of controversy on rape and abortion, lost heavily in contests the party had hoped to win in Missouri and Indiana. Republicans kept hold of the House. See article»
» It was a good night for gay rights, with Wisconsin's Tammy Baldwin becoming the first openly gay candidate to be elected to the Senate, and voters in Maine, Maryland, Minnesota and Washington giving the thumbs-up to same-sex marriage.
» As Democrats celebrated, stockmarkets tanked; investors fretted that nothing had changed in Washington, and that continuing political rivalry would leave America vulnerable to the looming "fiscal cliff" of sharp spending cuts and hefty tax rises. See article»

Divided we stand
Click Here! » A gathering of Syria's fractious opposition met in Qatar in an effort to create a broad united front that would supersede the Syrian National Council, which has failed to win the trust, inside or outside Syria, of citizens and foreign well-wishers opposed to President Bashar Assad. A veteran dissident, Riad Seif, proposed a new opposition body. See article»
» Prince Muhammad bin Nayef replaced one of his uncles as Saudi Arabia's minister of the interior, a job his father, who died earlier this year, had held for 37 years. The appointment fuelled speculation that the royal family might at last look to a younger generation to run the country. See article»
» Bahrain revoked the citizenship of over 30 members of the opposition. The interior minister said that the government could not accept their "repeated abuse" of the right of freedom of speech.
» At an official inquiry into the deaths of 44 protesting miners in August at Marikana, in South Africa, lawyers accused the police of planting weapons near miners' bodies after they had been killed.
» Somalia's new government appointed a woman to be foreign minister for the first time. Three days later, a bomb, thought to have been planted by the Islamist Shabab militia, went off outside parliament, killing one person.

Bye-bye, Mr Hu

» The 18th Chinese Communist Party congress opened in Beijing. Hu Jintao, who is stepping down as party chief, admitted in his state-of-the-nation speech that China's development is "unbalanced, unco-ordinated and unsustainable", but did not put forward any plans for deep political reform. See article»
» Human-rights groups reported that four more Tibetans, including three teenage monks, set fire to themselves in western China on the same day. More than 60 Tibetans have killed themselves this way since last year to protest against Chinese polices.
» A Chinese court sentenced a Burmese drug-smuggler to death over the murder of 13 Chinese sailors on the Mekong river last year. He had been extradited to China in May.
» Dozens of people were missing after an overcrowded boat capsized off the Bangladeshi city of Cox's Bazar. The boat was carrying Bangladeshis trying to emigrate illegally to Malaysia. A number of Rohingya Muslim refugees fleeing violence in Myanmar were also said to be on board. It was the second recent sinking of a vessel carrying Rohingyas.
» Sri Lanka's parliament began formal impeachment proceedings against the country's chief justice, lodging 14 charges against her, including for failing to disclose her income. Critics say the move is aimed at stifling the court's independence, though the government denies this. See article»

Dire traits
» A report commissioned by the French government described the lack of competitiveness in the French economy as an "emergency situation". The IMF urged France to cut public spending and reform the labour market, or risk falling behind Italy and Spain. Jean-Marc Ayrault, the Socialist prime minister, responded by announcing €20 billion ($25 billion) of tax breaks for companies. See article»
» Russia's defence minister, Anatoly Serdyukov, was sacked by Vladimir Putin, the president. He had been caught up in a corruption scandal surrounding Oboronservis, a holding company that manages military property. See article»
» Georgia's former defence minister and two senior members of the army were arrested and questioned for allegedly insulting junior officers. Critics of the new prime minister, Bidzina Ivanishvili, claimed it was nothing more than an attempt by his government to embarrass the president, Mikheil Saakashvili.
» Greece was gripped by a general strike as parliament voted on a new round of austerity measures, which was passed with a slim majority. See article»

Still operating from prison
» In Brazil the federal justice minister set up a joint intelligence centre with the state of São Paulo to counter a wave of murders of police by a criminal gang based in the state's jails.
» Nicaragua's ruling Sandinista party scored a sweeping victory in municipal elections. The opposition claimed fraud, but was hindered by its divisions and a low turnout.
» An earthquake in Guatemala killed at least 48 people.
» The mayor of Montreal, Gérald Tremblay, resigned after evidence about kickbacks in building contracts in the city emerged during a judicial inquiry.
» The Canadian government's plan to build a new bridge across the Detroit river came a step closer, after voters in Michigan defeated a measure that would have stopped the project.

NYT THe Learning Network -November 8, 2012-: This Week on The Learning Network: Election 2012

The New York Times

November 8, 2012

The Learning Network

Lesson Plans

Teaching With 'Teenagers in The Times'

Teaching With 'Teenagers in The Times'

Quick ways to teach with our monthly collection of Times articles and multimedia about young people. How might you use this feature? We'd love to include your ideas on our list.
Manage the Damage: Preparing for Natural Disasters

Manage the Damage: Preparing for Natural Disasters

In this lesson, students research different ideas to protect New York City from future hurricane damage and determine which they believe is the best option. Then, students research local hazards, and develop plans for mitigating impacts to housing, transportation, utilities and more.
Ways to Engage: Election Night

Ways to Engage: Election Night

Don't watch election returns passively. Instead, join the conversation on our blog or on Twitter, play with Times interactives and keep track of data as the night goes on to understand the implications of races throughout the nation.
What's Going On in This Picture? | Nov. 5, 2012

What's Going On in This Picture? | Nov. 5, 2012

Every Monday morning, we publish a New York Times photo without any caption, headline or other information about its origins. Join the conversation by posting about what you see and why in our comments section.
Common Core Practice Interrupted as Our New Jersey Classroom Collaborators Recover

Common Core Practice Interrupted as Our New Jersey Classroom Collaborators Recover

Though Hurricane Sandy raged up the East Coast, New Jersey may have taken the brunt of it. Here is a dispatch from one of the teachers with whom we collaborate weekly for this feature describing what life is like for her and her students this week.

Student Opinion Questions

Is Your Bedroom a Nightmare?

Is Your Bedroom a Nightmare?

Is your bedroom your kingdom? How clean or messy is it? Does your mess make your parents crazy?
What Is Your Reaction to the Results of the Election?

What Is Your Reaction to the Results of the Election?

Tell us how you feel about what happened in the election. What do you think another term for President Obama will mean for the United States and for the issues you care most about?
Who Do You Hope Wins the Election?

Who Do You Hope Wins the Election?

Tell us which candidate you hope wins the presidency, and tell us why.
When Have You Spoken Out About Something You Felt Had to Change?

When Have You Spoken Out About Something You Felt Had to Change?

When have you used your words or actions to make a change at school, at home, in your community or group?
Are You Distracted by Technology?

Are You Distracted by Technology?

Two recent surveys reveal a widespread belief among teachers that students have shorter attention spans because of their constant use of digital technology. Is this true of you? Why or why not?

Visit our other daily features:

DealBook Afternoon Edition -November 8, 2012-: For Obama, Housing Policy Presents Second-Term Headaches

Thursday, November 8, 2012
The government guarantees over 90 percent of all new residential mortgages.
News Analysis: For Obama, Housing Policy Presents Second Term Headaches President Obama's economic team has said it wants the housing market to work without significant government support. But it has taken few steps to advance that idea.
  • DEALBOOK » | Election Implications for Major Industries
    Ex-UBS Trader Accused of 'Playing God' With Bank's Money During closing arguments in the eight-week court case, the prosecution said that Kweku M. Adoboli, a former UBS trader in London, had "arrogantly" side-stepped the firm's rules and carried out risky trading activity from 2008 to 2011.
    The Trade: Setting the Table for Tax Negotiations Victor Fleischer says that the government can address the so-called fiscal cliff through more progressive spending, not higher tax rates.
    Orient-Express Rejects Takeover Bid and Names New Chief Orient-Express Hotels formally rejected an unsolicited takeover bid by an arm of the Tata Group of India, criticizing it as undervalued and ill timed. It also named a new chief executive, John M. Scott, who would replace the company's outgoing leader.
    JPMorgan Cleared for $3 Billion Stock Buyback The bank also disclosed in its quarterly filing that it had come to an agreement with the Securities and Exchange Commission to wrap up two investigations into mortgage-backed securities.
    Carlyle Swings to Profit as Its Asset Values Rise The third quarter has proved to be good for yet another firm, as the Carlyle Group swung to profitability on the improving value of its holdings.
    Permira Sells Last of Its Stake in Macau Casino Operator Permira, a European private equity firm, said on Thursday that it had sold its remaining stake in the casino operator Galaxy Entertainment, almost tripling its initial investment.
    Dexia Gets a New Bailout The French and Belgian governments said on Thursday that they would inject an additional 5.5 billion euros into the troubled bank Dexia.
    Societe Generale Profit Plunged in Third Quarter The French bank Société Générale said third-quarter net profit fell 86 percent, to $108 million, as it booked large one-time charges.
    Economic Reports Data to be released on Friday will include import prices for October, wholesale trade for September and Thomson Reuters/University of Michigan consumer sentiment index.
    Corporate Earnings Companies scheduled to release quarterly earnings on Friday include J.C. Penney.
    In the United States On Friday, the Agriculture Department will release its monthly report on crop supply and demand.

NYT Afternoon Update -November 8, 2012-: Fate of Health Law Now Clear, States Rush to Meet Deadlines

The New York Times
November 8, 2012

Afternoon Update


Fate of Health Law Now Clear, States Rush to Meet Deadlines

After years of political and legal threats kept President Obama's health care law in a state of uncertainty, his re-election all but assures it will survive. The next hurdle is making it work.

Obama's Quiet Return to the White House

Thirty-six hours after his re-election, President Obama had made no public remarks outside of his victory speech.

How a Race in the Balance Went to Obama

The first presidential debate sharply exposed President Obama's vulnerabilities and forced his advisers to work to reclaim the campaign over a grueling 30 days, ending with his triumph on Tuesday.

Gunman in Giffords Shooting Sentenced to 6 Life Terms

The husband of former Representative Gabrielle Giffords spoke at the sentencing hearing for Jared L. Loughner, as did other victims.

A Basketball Fairy Tale in Middle America

The uplifting story of the Oklahoma City Thunder may have suffered an agonizing plot twist, but just try to find someone in town who doesn't still believe in a happy ending.

Video: Attention Shifts to Washington

TimesCast Politics: Republicans search for a path forward. | Changes in store for Obama's cabinet.

The Conversation

Orca, Meet Obama

Brooks and Collins on what the re-election of the president means for Republicans, Democrats and Christmas carols.
News Analysis

For Obama, Housing Policy Presents Second-Term Headaches

President Obama's economic team has said it wants the housing market to work without significant government support. But it has taken few steps to advance that idea.

JPMorgan Cleared for $3 Billion Stock Buyback

The bank also disclosed in its quarterly filing that it had come to an agreement with the Securities and Exchange Commission to wrap up two investigations into mortgage-backed securities.

Bank of England and E.C.B. Hold Rates Unchanged

The president of the European Central Bank expressed satisfaction with progress toward resolution of the euro zone crisis.

Dexia Gets a New Bailout

The French and Belgian governments said on Thursday that they would inject an additional 5.5 billion euros into the troubled bank Dexia.

Europe Intensifies Chinese Solar Panel Investigation

The European Commission has accused the Chinese government of unfairly subsidizing makers of solar panels, a day after the United States imposed duties on Chinese solar products.

Business in Vancouver | BIV Today's Business News -November 8, 2012-: China rumoured to be seeking Vancouver Island timber investments

Politics and Policy

Clark appoints municipal auditor general

Premier Christy Clark has appointed Ontario bureaucrat Basia Ruta as B.C.’s first auditor general for local government (AGLG).

NPA denounces city wage increases as “too rich”

NPA councillor George Affleck has denounced a deal, just endorsed by Vancouver Council, which Affleck says will give Canadian Union of Public Employees (CUPE) Local 15 members a 6.75% pay increase over the next four years.

Vancouver and CUPE ratify four-year agreement

The City of Vancouver and CUPE Local 15 have ratified a four-year agreement that covers 3,700 clerical, technical and administrative workers, the city announced November 7.



China rumoured to be seeking Vancouver Island timber investments

Forestry analysts say the Chinese government is likely negotiating to buy timber investments on Vancouver Island.

Mining and Energy

Rio Tinto's troubled Mongolian copper-gold mine sees the light

After months of difficulties, Vancouver-based Rio Tinto's (LON:RIO) flagship Oyu Tolgoi copper-gold mine in Mongolia is set to start producing early next year, as the company finally solved the problem over power supply from neighbouring country China.

Finning lands Chilean contracts worth $500 million

Vancouver-based Caterpillar equipment dealer Finning International Inc. (TSX:FTT) announced today that it has won three large contracts to provide equipment and maintenance services to Chilean mining companies.

Wall Street at Close Report | MarketWatch -November 8, 2012-:U.S. stocks drop on Europe, fiscal cliff

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch)U.S. stocks fell on Thursday, pushing indexes to lows not seen since late summer, as worries about the global economy and U.S. “fiscal cliff” displaced enthusiasm that came with upbeat economic reports. 

“There are still international events going on that influence the markets,” said Paul Nolte, managing director at Dearborn Partners in Chicago, listing Greece, the European Union and China as among the issues driving investors. 

Greek austerity passed, but at a cost The Greek Parliament has passed a key austerity package but the ultra-slim majority suggests that Prime Minister Samaras's coalition is in danger. 

The slide follows a strong selloff on Wednesday, as investors considered the political landscape after an election that had President Barack Obama re-elected and Congress still divided, with the “fiscal cliff,” or more than $600 billion in tax hikes and spending cuts, scheduled for January unless lawmakers reach a deficit-reduction agreement. Read: U.S. stocks slammed on fiscal-cliff fears. 
“What was surprising was not that Obama won, but that there was very little change in the composition of Congress,” said Nolte, who adds the continued partisan makeup in Washington has him putting the odds at better than even that “we do go off the cliff.” 

But the scenario isn’t necessarily a dire one, since the new Congress to be installed in January “will have an opportunity to roll those back, so Democrats can say we did raise taxes on the uber rich and Republicans will be able to say we had some cuts,” said Nolte, adding investors are looking to “see movement towards a middle ground.” 

The Dow industrials DJIA -0.94%  fell 121.41 points, or 0.4%, to 12,811.32, its lowest close since late July.

Shares of J.P. Morgan Chase & Co. JPM -0.20%  finished 0.2% lower, erasing gains that came after it said that U.S. regulators had approved the bank repurchasing as much as $3 billion of its stock in 2013’s first quarter. 

Finishing at its lowest level since early August, the S&P 500 index SPX -1.22%  shed 17.02 points, or 1.2%, to 1,377.51, with consumer-discretionary shares leading sector declines among its 10 major sectors and utilities hit the least. 

The Nasdaq Composite COMP -1.42%  lost 41.71 points, or 1.4%, to 2,895.58, its lowest read since late July. 

For every stock gaining more than two slid on the New York Stock Exchange, where nearly 759 million shares traded. Composite volume neared 3.8 billion.

Greece delayed

The indexes headed south, clearing moderate gains, after Bloomberg News reported that European Union ministers would delay a Greek aid call for weeks.

“These headlines are moving the market lower, but the German finance minister was hinting at this early this morning,” emailed Peter Boockvar, an equity strategist at Miller Tabak, after Bloomberg cited a European Union official as saying a decision on releasing funds for Greece might not come until late this month.
Bloomberg cited a European Union official, speaking on condition of anonymity, as saying EU finance heads would not move to unleash another round of funds for Greece when they meet on Monday. 

The report comes after Greek Prime Minister Antonis Samaras managed to find parliamentary support for austerity moves required to obtain rescue funds in a vote viewed as weakening his majority.
The European Central Bank on Thursday held interest rates steady and ECB President Mario Draghi said the economic forecast had worsened with the central bank still ready to start its bond-buying plan if governments meet the required conditions. Read: ECB’s Draghi keeps pressure on politicians. 
Stocks had been modestly higher, with the Dow Jones Industrial Average bouncing back after its largest drop this year, as jobless claims declined last week and the U.S. trade deficit narrowed in September. Read: Weekly jobless claims drop by 8,000. 
“The trend continues to be good. It’s still supportive of a better jobs market and supportive of some of the numbers we’ve seen in the monthly jobs report,” said Nolte after the Labor Department reported applications for jobless benefits fell by 8,000 to 355,000 in the week ending Nov. 3.
Last week, the Labor Department reported employers added 171,000 positions in October, with the unemployment rate at 7.9%. 
Kate Gibson is a reporter for MarketWatch, based in New York.

Money Show Investors Daily Alert -November 8, 2012-: Internet Pioneer Slogs Its Way Back

Investors Daily Alert

The Daily Guru

Jim Jubak on

Today's Top Pros' Top Picks

Today's Gurus' Views & Strategies

Today's Charts in Play Exclusive Interviews

Ideas from Around the World

Today's Featured Videos & Exclusive Interviews

NYT Opinion Today -November 8, 2012-: Picket Fence Apocalypse

The New York Times

November 8, 2012

Opinion Today

Campaign Stops

Picket Fence Apocalypse

Political reality made for a great rending of garments and gnashing of teeth among conservatives.
Victory Speeches
Opinionator | Draft

Victory Speeches

President Obama's speech should reassure his fans that when he reaches back to throw the high hard ones, he's got plenty left.
Orca, Meet Obama
The Conversation

Orca, Meet Obama

Brooks and Collins on what the re-election of the president means for Republicans, Democrats and Christmas carols.
Op-Ed Contributor

A Bad Trip for Democrats

Efforts by the Democratic Party to legalize marijuana are misguided and harmful.
A To-Do List for the Next Four Years
Room for Debate

A To-Do List for the Next Four Years

President Obama has been re-elected, what does he do now?
Op-Ed Contributor

Can Obama Give Us Confidence?

President Obama's task for his second term: inspire confidence.
Op-Ed Contributor

Values, Not Demographics, Won the Election

America's changing demographics didn't seal Obama's victory. It was his appeal to the middle-class values that matter to most voters.
Opinionator | Things I Saw

Things I Saw - No. 41

The artist draws things he saw in Pennsylvania and Michigan.
Gay Rights Done Right

Gay Rights Done Right

That the demands of gay rights activists in Argentina are now so broad and vague is proof of how far they've come.

An Invigorated Second Term

Having won decisively, President Obama can now expand his agenda and isolate his opponents.

Republicans, Unplugged

A diverse America heard the right-wing appeal to fear and resentment and voted against it on Election Day.

A Big Leap for Marriage Equality

The nation's march toward full equality for all took an important step forward on Election Day with victories for same-sex marriage.

The Opinion Pages

Read the full opinion report, including editorials, columns, op-eds and Opinionator. Go to the Section »
G.O.P. Post-Election Spin
Taking Note

G.O.P. Post-Election Spin

It comes in two basic flavors: predictable denial and bizarre denial.
Bill Keller's Blog


Meet the new boss. Maybe not quite the same as the old boss.
Power-Mad Conservatives
The Conscience of a Liberal

Power-Mad Conservatives

What we learned from poll rage.
Obama's Next Steps on Energy and Climate
Dot Earth Blog

Obama's Next Steps on Energy and Climate

Reviewing Obama's approach to climate and energy, with a look to the next four years.