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Jun 4, 2013

Op-Ed Contributors Playing Politics With Student Debt: The New York Times: ALERT FGC BOLSA - FGC FINANCIAL MARKETS; June 04, 2013



Compiled: June 4, 2013 09:37:16 PM

Op-Ed Contributors

Playing Politics With Student Debt  
Tying federal student loan rates to Treasury rates would make them more stable and less arbitrary.

Asian Markets News, at The Time for June 04, 2013 22:35 E.T by MarketWatch


China service-sector growth remains weak: HSBC LOS ANGELES (MarketWatch) -- China's service-sector growth remained at low levels in May though activity still increased, HSBC reported Wednesday. The bank's China Services Business Activity Index edged up to 51.2 from April's 51.1 but was still "one of the lowest readings in the series history," HSBC said. "Service-sector activities stabilized in May at a relatively low level of growth," said HSBC senior China economist Hongbin Qu, adding that "the improving property market and Beijing's renewed effort on expanding [value-added tax] reform nationwide could lend some support for the service sector's future development." The Shanghai Composite Index added slightly to its losses after the data, trading 0.2% lower, while Hong Kong's Hang Seng Index was down 0.8%.  
Australia economic growth disappoints LOS ANGELES (MarketWatch) -- Australia's gross domestic product rose 0.6% during the January-March quarter, the statistics bureau reported Wednesday, with the result missing expectations. On a seasonally adjusted basis, GDP was up 2.5% from a year earlier. Economists had on average expected a 0.7% rise, or 2.7% year-on-year, according to a Dow Jones Newswires survey. Net exports were a key driver of the expansion, the Australian Bureau of Statistics said. By industry, the agriculture-forestry-fishing segment was the top growth source, up 2.6%, followed by transport-postal-warehousing, it said. The Australian dollar fell after the data release, slipping to 96.18 U.S. cents from 96.36 U.S. cents ahead of the numbers, though off its intraday low. Stock losses accelerated, with the S&P/ASX 200 trading 1.3% lower.

Hong Kong stocks retreat in early trade HONG KONG (MarketWatch) -- Hong Kong stocks fell early Wednesday as lingering worries that the Federal Reserve may taper the pace of its monthly bond purchases inspired weakness across sectors. The Hang Seng Index fell 0.8% to 22,104.69, staying on course for its fifth decline in six trading days, while the Hang Seng China Enterprises Index gave up 1.1% to 10,423.56. Among the notable decliners, Bank of East Asia Ltd. dropped 2%, food-products firm Tingyi Cayman Islands Holding Corp. shed 1.7% and Hang Lung Properties Ltd. declined 1.8%. China's Shanghai Composite slipped 0.1%.

Gerald Celente - Alex Jones Show, Talks about Money on June 3, 2013.

Gold still gleams for China's acquisitive miners: GATA I THE GATA DISPATCH; June 04, 2013.

Gold still gleams for China's acquisitive miners

By Yvonne Lee
The Wall Street Journal
Monday, June 3, 2013

Chinese companies are snapping up overseas gold mines in their quest to become international giants like Canada's Barrick Gold Corp., even as prices for the metal hit a two-year low.

Driven by strong domestic demand for gold, Chinese miners are taking advantage of depressed company valuations to boost gold reserves by acquiring mines. The challenge they face is that most of the mines that are large enough to pique their interest are either not for sale, already developed with dwindling reserves, or in politically unstable countries.

"New significant mines are always harder to find and more expensive or in a more difficult political environment. If you are a latecomer, you are unlikely to ever become as big as an earlier participant," said Viral Gathani, head of energy, natural resources, and infrastructure investment banking at CIMB Securities Ltd. in Hong Kong.

 Despite a 17% drop in gold prices this year, Mr. Gathani also noted that valuations for miners haven't come down. "Sellers still have robust valuation expectations," he said.

Deal activity has declined since last year, but Chinese gold miners continue to buy mines, as they count on a recovery in gold prices. On Friday, Chinese gold miner Kingwell Group Ltd. said it plans to make an offer for more than half of Brazilian Gold Corp., a Canadian mining firm with a major project in northern Brazil, taking the value of deals launched by Chinese companies this year to $436 million, according to data provider Dealogic.

The total is a fraction of last year's $2.9 billion but it is sharply higher than the $260 million worth of deals from Canada, where some miners are seeking to sell noncore assets in response to the decline in gold prices. The nation is home to Barrick Gold, the world's biggest gold miner, as well its smaller rival, Kinross Gold Corp. "Some companies have lowered their prices by about 20%-30% after the recent gold price correction," said Kam Kit, managing director at Kingwell.

Kingwell, which owns gold mines in Russia's Amur region and China's Shandong province, remains optimistic about the gold market and is seeking overseas assets to boost its reserves. Mr. Kam said he expects gold to rise to more than $2,000 a troy ounce in two to three years, arguing that loose monetary policy in Japan and Europe will likely support the market.

On Friday, the Hong Kong-listed company said it could make a general cash offer to Brazilian Gold's shareholders for at least 50.95% of the company's outstanding common shares at 27 Canadian cents (26 U.S. cents) each.

There have been other deals in recent months, too. In May, Shenzhen-listed Shandong Qixing Iron Tower Co. agreed to acquire Australia-listed Stonewall Resources Ltd.'s gold assets for $140 million.
State-owned Zijin Mining Group Co., China's biggest gold producer by output, is looking to bid for three of Barrick Gold's mines in Western Australia, a person familiar with the matter told The Wall Street Journal in May, just months after Zijin acquired more than 50% of Australian miner Norton Gold Fields Ltd. in August. On its website, the gold miner said it wants to be a leading international mining firm by 2020.

Barrick Gold and Zijin Mining didn't immediately respond to requests for comment Monday. An Australia-based spokeswoman for Barrick declined to comment in May, while Norton's chief executive officer confirmed the company's interest.

Gold, which is widely considered a store of value, surged to a record high in September 2011 as money managers seeking haven investments after the financial crisis piled in. But interest has receded in recent months, thanks to economic expansion in the U.S., tame inflation, and a rising dollar.
Strong demand for physical gold in China, which is the world's largest consumer of the precious metal, could help buoy prices.

China's gold demand rose 20% from a year earlier in in the three months ended March 31, according to the World Gold Council, indicating retail investors' confidence in the long-term value of the precious metal.

On Monday, spot gold was trading around $1,393.30 an ounce, up 5% from its April low of $1,321.50 an ounce, but still down 17% year to date.

* * *

Join GATA here:
Liberty Mastermind Symposium
Double Tree Hotel, Dallas-Fort Worth Airport
Friday-Saturday, June 28-29, 2013
* * *

China becomes lead financier to new Australian mines: GATA I THE GATA DISPATCH; June 5, 2013.

China becomes lead financier to new Australian mines

China Affirms Appetite for Metals with $1.55 Billion in Local Mine Deals
By Barry Fitzgerald
The Australian, Sydney
Wednesday, June 5, 2013

China is backing up its status as the world's biggest consumer of metals by becoming the lead financier to new Australian mines, with more than US$1.5 billion (AU$1.55 billion) now being committed to projects Beijing wants to see developed to ensure a diverse and long-term supply of metals vital to that nation's ongoing industrialisation and urbanisation.

While traditional financiers for Australian projects in Europe and the US have retreated from the sector and equity markets have been closed off as a source of ready funding, China's network of state-controlled development banks, mining companies, and engineering and construction groups is taking up the slack.

ASX-listed Rex Minerals yesterday became the latest beneficiary, with the group signing a financing and engineering/construction memo of understanding under which Chinese interests will facilitate $US550 million in debt funding for the likely $US800 million cost of developing its Hillside copper project on South Australia's Yorke Peninsula.

This comes as Melbourne-based and Chinese-controlled MMG works towards finalising, by month's end, a proposal from state-controlled China Development Bank Corp to arrange and underwrite $US1 billion in financing for the $US1.5 billion development of MMG's Dugald River zinc mine in Queensland.

Rex shares shot up 13.5 cents, or 54 per cent, to 38.5 cents on news of the China agreement. But the stock remains well short of the 94 cents a share it commanded in November last year before concerns became entrenched about how it would finance the Hillside development in the face of deteriorating equity and commodities.

That it has been able to secure the support of Chinese interests has come as no surprise to Rex chief executive Mark Parry. He said that while there was a lot of money in the major capital markets looking to be invested, it was a trait of Western world markets that "people tend to be very short-term-driven, and that any adverse news forces a sell mentality."

"But the market in China tends to be more long-term thinking. It is looking to secure offtake of critical commodities, so you get a far better hearing there," Mr Parry said.

"Hillside is like an option in the ground, one capable of generating 600 jobs in construction and in operation, plus tens of millions if not hundreds of millions of dollars in taxes and royalties. That option can be realised only if somebody underwrites it or finances it. And at the moment, the people most likely to do that are the Chinese."

Mr Parry said that non-Chinese interest in copper -- particularly in the right sort of political environment, like Hillside -- was still strong, and that Rex would seek to tap that interest to provide the balance of funding for the Hillside development. Mr Parry said the China deal gave Rex greater certainty about the timing and quantum of debt funding.

The (non-binding) memorandum signed by Rex has China Nonferrous Metal Industry's Foreign Engineering and Construction Co (NFC) taking the lead role on facilitating the $US550m in debt financing with Chinese banks. The key driver for it in the deal is the sale of mining equipment to the project. Perth-based mining engineering and construction group Arccon is the subcontractor to NFC.
Baillieu Holst told clients the memo was a start toward solving the funding puzzle for Hillside. The signing of the engineering procurement and construction contract and financing term sheets is expected in September. Rex tips a start to construction in the first half of next year.

* * *

Join GATA here:
Liberty Mastermind Symposium
Double Tree Hotel, Dallas-Fort Worth Airport
Friday-Saturday, June 28-29, 2013

Chinese Poultry Factory Was Considered a Model: The New York Times Global Update; June 04, 2013.

June 4, 2013
Compiled 20:45 GMT

Global Update 




Chinese Poultry Factory Was Considered a Model

The glowing assessments of the plant where more than 100 people were killed in a fiery explosion suggested government officials had missed problems.

U.N. Panel Reports Increasing Brutality by Both Sides in Syria

United Nations investigators said chemical weapons and indiscriminate bombing had been used and urged world powers to cut off weapons supplies.

European Union Backs Down on China Tariffs

The bloc's trade commissioner imposed tariffs that were much lower than expected on the $27 billion worth of solar panels China sells to Europe each year

Video: Remembering Tiananmen Square

Beijing tightened security as Hong Kong residents recalled China's bloody crackdown on student protests 1989.

Op-Ed Contributor

Xi Jinping's Chinese Dream

American policy makers must understand that the new Chinese leader needs to be a nationalist to be a reformer.

Thousands Rally in Hong Kong on Tiananmen Square Anniversary

The annual demonstration, which this year drew over 50,000 people, is the most vivid display of the continuing passions over the 1989 crackdown on student protests in Beijing.

Elite in China Molded in Part by Tiananmen

The immersion of today's leaders of China in the political experimentation that preceded the Tiananmen Square crackdown in 1989 raises the question of whether they will be open to new ideas and discussion.

Turkish Official Apologizes for Force Used at Start of Riots

Deputy Prime Minister Bulent Arinc appeared to be trying to ease mounting criticism after violent crackdowns by the police.
Square Feet

Walgreen Builds an Energy-Saving Showcase Store

The store in Evanston, Ill., will test several technologies, and is meant to produce more energy than it consumes.

President Moves to Curb Patent Suits

The administration ordered the Patent and Trademark Office to make clear who owns the companies – which are often little more than legal shells – that assert patent-infringement claims.

Chrysler Declines U.S. Request to Recall Jeeps

The company said it disagreed that 2.7 million Jeep models posed a danger of fire in rear-impact accidents.

Viacom Strikes Deal With Amazon to Stream Children's Shows

On Tuesday, Viacom and Amazon announced an extensive, multiyear deal that includes granting Amazon exclusive rights to Nickelodeon's preschool shows.

I.B.M. Buys Cloud Computing Firm

I.B.M. announced on Tuesday that it agreed to buy SoftLayer Technologies, a cloud computing company, in a deal said to be worth $2 billion.

Salesforce to Acquire ExactTarget for $2.5 Billion

The acquisition of ExactTarget, a provider of marketing software services, for about $2.5 billion will further bolster Salesforce's social marketing offerings.

European Soccer's Summer Exodus Begins

The departures of Radamel Falcao and Jesús Navas will doubtless be the start of a net summer migration out of La Liga. Why? Simple economics.

No Easy Cure for Indian Cricket

The miasma of corruption claims hanging over the Board of Control for Cricket in India, by far the most powerful body in the game, is not going away any time soon.

Earning Merit Badges and Learning Knots Under New Flags

The controversies over gay Boy Scouts and their leaders have benefited alternative groups geared to the secular and the religious.

Link to Boston Bombing Rattles a City Known for Its Tolerance

Residents of Cambridge, Mass., are having a hard time squaring the accusations against the Tsarnaev brothers with the diversity they view as inherent in the city.

Fort Hood Suspect Says He Was Defending Taliban Leaders

Maj. Nidal Malik Hasan, who is accused of killing 13 people in 2009, said he believed he was defending the lives of Taliban leaders from American military personnel.
Op-Ed Columnist

The Way to Produce a Person

When it comes to moral concerns and vocational choice, proceed with caution in thinking in purely utilitarian terms.
Op-Ed Columnist

Prisoners of the Euro

With Europe's unemployment, how long can the center continue to hold?
Op-Ed Contributor

Turkey's Authoritarian Turn

Opposition to Prime Minister Recep Tayyip Erdogan isn't about a park. It's about a power grab.

The Conscience of a Liberal Moral Derpitude by Paul Krugman: The New York Times I Opinion Today June 04, 2013.

June 4, 2013

Opinion Today

Op-Ed Contributor

Don't Trust the Pentagon to End Rape

The U.S. military has a problem with embedded sexual predators.
Opinionator | Draft

Whither the Hatchet Job?

In Britain, blasting someone's reputation is recognized blood sport.
Op-Ed Contributor

Turkey's Authoritarian Turn

Opposition to Prime Minister Recep Tayyip Erdogan isn't about a park. It's about a power grab.
Op-Ed Contributors

Why the Court Was Right to Allow Cheek Swabs

In his unusual alliance with three liberal justices, Antonin Scalia misread the meaning of the Fourth Amendment.
What Are Fathers For?
Room for Debate

What Are Fathers For?

In an age when more and more mothers are sole or primary breadwinners, do fathers bring anything unique to the table?

Invitation to a Dialogue: More Time in School

An education consultant says we should shorten school vacations and lengthen the day. Readers are invited to respond.
The Pirate-Warden of Richmond
Opinionator | Disunion

The Pirate-Warden of Richmond

Capt. George Washington Alexander was a pirate, a playwright, a torturer – and one of the most fascinating characters of the Civil War.

An Unnecessary Military Expense

A second site on the East Coast won't address the missile defense system's basic weaknesses.

A Smart Change in Iran Policy

Allowing companies to export cellphones and laptops could frustrate censorship and send a message that America stands with the Iranian people.

DNA and Suspicionless Searches

The Supreme Court decision to permit DNA collection from people who have been charged but not yet convicted severely undermines fundamental Fourth Amendment principles.

The Opinion Pages

Read the full opinion report, including editorials, columns, op-eds and Opinionator. Go to the Section »
Reagan for Health Care Reform
Taking Note

Reagan for Health Care Reform

The Republican governor of Ohio, John Kasich, said the G.O.P.'s favorite president would have expanded Medicaid.
Moral Derpitude
The Conscience of a Liberal

Moral Derpitude

Josh Barro learns the hard way.
How Storm Chasers Have Made Tornado Alley Safer
Dot Earth Blog

How Storm Chasers Have Made Tornado Alley Safer

A meteorologist focused on severe weather hails the contributions of storm chasers.

Trade Deficit Widens as Demand for Imports Grows, by The Associated Press: The New York Times: Alert FGC BOLSA - FGC FINANCIAL MARKETS; June 04, 2013.



Compiled: June 4, 2013 05:38:04 PM

Trade Deficit Widens as Demand for Imports Grows
A wide trade gap can restrain growth because it means Americans are spending more on foreign goods than United States companies are gaining in overseas sales.

U.S. stocks hit by central-bank worries: MarketWatch I Wall Street at Close Report; June 04, 2013.

By Kate Gibson, MarketWatch 
NEW YORK (MarketWatch)U.S. stocks fell, derailing a long-running Tuesday winning streak for the Dow industrials, as Wall Street remained on alert for clues as to central-bank policy moves ahead. 

“The past few weeks have been all about whether the taper is going to occur or not, and what that means,” Nick Raich, CEO of the Earnings Scout, said of the heightened volatility that has come with uncertainty as to whether the Federal Reserve would curb its $85 billion in monthly bond purchases sooner than anticipated. 

The Next 24: ShuffleMaster
The Next 24: ShuffleMaster puts online gambling in focus, traders could see the Nikkei drop on disappointing data from Japan or China, and a key homebuilder reports before the open. 

On Tuesday afternoon, Fed Bank of Kansas City President Esther George cancelled a speech slated to be delivered in New Mexico, but her prepared remarks had her advocating for the central bank to cut the size of its asset-purchase program. 

The Chicago Board Options Exchange Volatility Index VIX -0.06%  is up 30% in the last month, and 15% in the last week, and that’s because of the tapering concern, said Raich. 

On Tuesday, equities illustrated that volatility by fluctuating on either side of unchanged before sinking in afternoon trade. 

Rising as much as 50 points and falling as much as 153, the Dow Jones Industrial Average DJIA -0.50%  lost 76.49 points, or 0.5%, to end at 15,177.54, halting a Tuesday winning streak at 20 consecutive sessions. 

Had the Dow industrials finished the session in positive terrain, it would have been the longest trend of its kind since at least 1900. Read more about the Tuesday phenomenon
Home-improvement retailer Home Depot Inc. HD -2.62%  fell the most among the blue-chip index’s 30 components.

FactSet Enlarge Image
The VIX’s one-month pop.
“The Fed’s bond-buying program has propped up certain areas of the economy, such as home builders, and they have really taken it on the chin in the past month on fear of the Fed taking away the punch bowl,” Raich said. 

And, while home builders have been hit in recent weeks, banks continued to fare well, thanks to rising interest rates, illustrated by the yield on the 10-year Treasury note 10_YEAR 0.00% , used in determining mortgage rates and other consumer loans. Read more on Treasury yields.
A year ago, the 10-year Treasury yield 10_YEAR 0.00%  started the month of June at 1.455%. By late May of this year, that yield was climbing to just above 2% for the first time in more than a year. 

“The Fed wants that yield to go up; it will help banks with their net interest margins. For the spread-base lenders, it helps their profits,” said Raich. Read David Weidner’s commentary on Warren Buffett’s bank buying.

 Year-to-date, the financial sector has been the best performer, a fact that Raich attributes to the Fed’s monetary policy. When the Fed began its monetary easing, “you had to overweight the financials and the home builders, as that is who they were targeting,” said Raich. 

The S&P 500 index SPX -0.55% fell 9.04 points, or 0.6%, to 1,631.38, with financials pacing the losses that included all but two of its 10 major industry groups.
Shares of Dollar General Corp. DG -9.17%  fell 9.2% after the retailer reduced its 2013 earnings outlook. “A lot of these retailers reporting in the last quarter have been cutting their estimates pretty hard,” said Raich.
The Nasdaq Composite COMP -0.58%  lost 20.11 points to 3,445.26.
For every stock rising nearly two fell on the New York Stock Exchange, where nearly 786 million shares traded. 

Composite volume approached 3.6 billion. 

On the New York Mercantile Exchange, the price of a barrel of oil CLN3 +0.55%  reversed course multiple times before closing down 14 cents at $93.31. Gold futures GCQ3 +0.12%  lost $14.70 to close at $1,397.20 an ounce. 

The U.S. dollar DXY +0.10%  gained against other currencies and the yield on the 10-year Treasury note 10_YEAR 0.00%  climbed to 2.146%. 

Seaking at a panel discussion on employment Tuesday afternoon, Sarah Bloom Raskin, a governor of the Federal Reserve’s board, said the nation’s 7.5% jobless rate “still remains too high” and it underestimates “the scope of the problem,” Reuters reported

“With unemployment still high, the Fed needs that closer to 7% before it takes its foot off the gas,” Andrew Fitzpatrick, director of investments at Hinsdale Associates, said in emailed commentary.
“Friday’s jobs report should give us a strong indication as to the health of the economy,” added Fitzpatrick of the nonfarm-payrolls report for May. 

On Wednesday, the ADP employment report for May is slated for release, followed by Thursday’s weekly jobless claims. See economic calendar.
Ahead of the open, U.S. stock futures extended gains after the Commerce Department reported the U.S. trade deficit climbed 8.5% to $40.3 billion in April, less than the $41.5 billion projected by economists. 

Data from CoreLogic showed home prices rose 12.1% in April, the fastest rate since February 2006.
Wall Street stocks rallied on Monday after Federal Reserve Bank of Atlanta President Dennis Lockhart told Bloomberg Television that the central bank is committed to its record stimulus program. 

Kate Gibson is a reporter for MarketWatch, based in New York.


DealBook P.M. edition; June 04, 2013: I.B.M. Buys Cloud Computing Firm

The acquisition of SoftLayer is the largest deal that I.B.M. has made so far under the leadership of Virginia M. Rometty, who became chief executive in January 2012.
I.B.M. Buys Cloud Computing Firm I.B.M. announced on Tuesday that it agreed to buy SoftLayer Technologies, a cloud computing company, in a deal said to be worth $2 billion.
Marc Benioff, the chairman and chief executive of
Salesforce to Acquire ExactTarget for $2.5 Billion The acquisition of ExactTarget, a provider of marketing software services, for about $2.5 billion will further bolster Salesforce's social marketing offerings.
Standard Deduction: Calculating Apple's True U.S. Tax Rate Apple's chief has said that the company paid about 30.5 percent in taxes on its profits. Victor Fleischer examines cash tax payments to the Treasury Department and says it's probably closer to 8.2 percent.
After JPMorgan, Staley Sizes Up Banks for Hedge Funds James E. Staley, who left JPMorgan Chase this year to join the hedge fund BlueMountain Capital Management, said on a panel at the Bloomberg Hedge Funds Summit that the regulatory changes being developed could present an investment opportunity.
China Insider: Crunchtime for China's High School Seniors Bill Bishop says that Friday and Saturday will be momentous days for millions of Chinese families, but not because of the upcoming California summit meeting between President Obama and China's new leader, Xi Jinping.
Gleacher to Shut Its Investment Bank Gleacher & Company, the troubled boutique bank, is shutting down its investment banking business and has named a restructuring expert as its chief executive.
Breakingviews: The Hurdles to Reviving an Investment Bank Partnership The activist investor Knight Vinke says UBS could adopt something like a partnership structure as part of its plan to split wealth management from investment banking. Dominic Elliott says that's overambitious at the moment.
Buzz Tracker
HSBC Sued by New York Over Foreclosure Abuses Attorney General Eric Schneiderman accused Europe's largest bank of ignoring a law designed to protect homeowners from being thrown into foreclosure without getting a chance to renegotiate their mortgages.
Economic Reports Data to be released on Wednesday includes the ADP jobs report for May, the ISM purchasing manager index for May, factory orders for April and the Federal Reserve's Beige Book.
Corporate Earnings Companies scheduled to report results on Wednesday include Hovnanian Enterprises and Francesca's Holdings.
Overseas On Wednesday, Japan's prime minister, Shinzo Abe, above, will speak on his economic policies.