Facebook Inc. introduced an email service for users

Facebook Inc. introduced an email service for users of its social networking site, intensifying competition with Google Inc., Yahoo Inc. and Microsoft Corp.

Facebook is giving all users a "facebook.com @" email address, Mark Zuckerberg, the company's CEO, said today at an event in San Francisco. The new service will include text messaging and instant messaging, as well as traditional email.

By adding e-mail, Palo Alto, California, Facebook offers an alternative to Google's Gmail, the fastest growing service web mail in the last year. It also increases pressure on Microsoft and Yahoo, who are competing for the attention of Web users who rely more on social sites, and contact information with friends.

"This is not a murderer-mail," said Zuckerberg. "Maybe we can help push messaging is to make this time more towards simple, real, immediate and personal experience."

Gmail had 193.3 million global users in September, up 21 percent from the previous year, according to Reston, Virginia, comScore Inc. data monitoring Gmail still trails Microsoft's Windows Live Hotmail users 361,700,000 Yahoo and 273100000. Both of the services recorded declines of visitors in September the same period last year.

With Facebook's new product, users can send messages to friends who appear as text messages from mobile phones, emails or instant messages, based on the preferences that were set for each friend. Previously, users could receive alerts in your e-mail when it was published a photo or friends commented on his Facebook wall.

Best Filter

Facebook users can now drop Microsoft Office documents to your messages in the network, Microsoft said in a blog today.

Facebook, the world's largest social networking services, you may be able to filter spam better than other rivals in the data webmail friend, Danny Sullivan, who runs the Web site Search Engine Land, said in an interview.

"The idea of a white list of people who are just friends with you - it sounds very good," said Sullivan. "This could put pressure on Google" to improve its system of classification of messages that are important to users.

Yahoo last month took steps to make their service more attractive to Web users love social networking. There was a version that integrates e-mail messages and the microblogging site Twitter Inc. provides information at faster speeds. The service, still in a testing phase, also improves search, spam protection and viewing photos.

AOL Inc., the market leader in one-time email, preview changes to your web mail yesterday. New features allow users to view images, maps and other accessories contained in a message on a panel at the side of the screen. AOL was fifth on the website of e-mail in September with 30.7 million users, a decline of 18 percent over the previous year.

"Email remains one of the killer apps on the internet," said Brad Garlinghouse, senior vice president of AOL's consumer products that ran through Yahoo e-mail until you go to AOL last year. "We recognize we are not only in the business of e-mail, we are in the business of communication."

Read more »

The automobile and the truck is gaining the confidence of bond investors

The automobile and the truck is gaining the confidence of bond investors as sales soar and General Motors prepares an initial public offering of shares this week.

Yields on securities tied to car sales have dropped to 80 basis points more than the reference exchange rate of 95 basis points three months ago, according to Barclays Capital. Spreads on bonds linked to consumer debt such as credit cards and student loans, remained unchanged at 73 basis points.

The increased appetite for the debt means that automakers and their finance units can more easily raise money to make loans, helping sales of cars and trucks and potentially boost its solvency. Global sales of light vehicles, can increase to 71.1 million this year, according to JD Power & Associates in Troy, Michigan, surpassing the record 70.3 million units sold in 2007.

"The automotive sector is the only area that has a strong new issue market," said Joseph Astorina, a bond analyst at Barclays Capital in New York. "It was very strong appetite for new agreements and has helped the ramp in demand and adjust the differential."

Sales associated with auto loans account for 54 percent of the 108 billion in securities backed by family and business loans have been sold this year, according to data compiled by us ,Last year, 36 percent of the 184 billion U.S. dollars of the securities sold were tied to the debt at issue.

Procter & Gamble

GM, rescued last year by the U.S., plans an initial public offering after reporting 2.16 billion U.S. dollars in net income for the third quarter. Ford Motor Co. 's nine-month revenues of 6.37 billion U.S. dollars more than double its 2.72 billion U.S. dollars in profits for the past year.

Elsewhere in credit markets, yields on corporate bonds worldwide rose for the second straight week. Spreads on debt from U.S. company Europe and Asia widened 2 basis points, or 0.02 percentage point last week to 167 basis points, and are up 3 basis points this month, according to Bank of America Merrill Lynch Global Broad Market Corporate Index.

Yields increased by an average of 3.58 percent from 3.42 percent on 5 November. Yields were 4.25 percent higher than a year ago.

Procter & Gamble Co., the world's biggest consumer products, can sell tickets for five years in a reference offer, according to a person familiar with the operation. The senior unsecured debt can be sold as early as today, said the person, who declined to be identified as terms are not set. reference sales are typically at least $ 500 million.

Default Swaps Fall

Barclays Capital is marketing the $ 500 million of bonds backed by credit card payments, according to a person familiar with the operation. The class titles, due in 1.98 years, can give 60 points higher than the interbank rate of one month's supply of London, said the person, who requested anonymity because the terms are not public.

The cost of protecting corporate bonds from default in the U.S. fell, Markit CDX North America Investment Grade Index, which investors use to cover losses on corporate debt or to speculate on creditworthiness, the decline of 2.1 basis points at an average price of 91.5 basis points from of 11:46 am in New York, according to index administrator Markit Group Ltd.

The overall index falls as improving investor confidence and increases as it deteriorates. Swaps credit-default pay the buyer face value if a borrower defaults on its obligations, less the value of the defaulted debt. A basis point equals $ 1,000 annually on a contract protecting $ 10 million of debt.

Esparza stricter

automobile manufacturers and finance are based on asset-backed securities to raise funds to make loans. The sale of debt is a cheap way to diversify sources of funding, according to Barclays Capital Astorina.

"The all-in cost is very attractive," he said. "It's a cheaper source of financing of unsecured debt or bank loans."

The spreads of the values of auto asset-backed bond rated A to AAA and maturing in three years was reduced by 145 basis points to 100 basis points in the last 52 weeks, according to a report by Citigroup Inc., dated 12 November. Similarly nominal value of credit cards five years have been hardened by 90 basis points.

AmeriCredit Financial Services, a lender to car buyers with bad credit property located in Detroit, GM, and Japan's Nissan Motor Co., sold $ 1,450,000,000 of bonds backed by assets, on 10 November.

Fort Worth, Texas-based AmeriCredit paid 55 basis points more than the reference exchange rate of 90.3 million U.S. dollars of securities with a maturity class at 2.12 years. In his previous sale of similar debt in September, the company paid 45 basis points over swaps, according to Our data.

Most prime-selling Nissan, a slice 223 million U.S. dollars maturing in two years, yields of 47 basis points more than benchmark swap rate.

Sales in Europe

In Europe, sales of bonds backed by car loans increased to 6 million euros (8.23 billion) this year, 1.2 million for full year 2009, according to JPMorgan. Investors demand an average of 80 basis points more than the euro interbank offered rate, or Euribor, maintaining high values of two years backed by European car loans, compared with an extension 135 basis points late last year, according to JPMorgan show.

"Auto loan ABS has attracted considerable investor interest due to their nature short time, liquidity and guarantee good performance of German," said Flavio Rusconi, a London-based analyst at JPMorgan. "This helped to tighten spreads over the past year."

GM would price its IPO above the expected range and to exercise an option to sell more shares amid signs of strong demand, according to two people familiar with the operation.

Ford Turnaround

The six receiving GM executives have received from investors in a promotional tour to announce the IPO has been strong enough to sell the shares at the top of the range offer of $ 26 to $ 29 or more $ 30, said the people, who declined to be identified because the information is private.

Noreen Pratscher, a GM spokesman, declined comment.

Ford CEO Alan Mulally, the automaker turned in Dearborn, Michigan, around after losses of $ 30 million in 2006 to 2008, allowing the company to pay 10.8 billion U.S. dollars in obligations this year and reduce the debt of its automatic printing device 22.8 billion U.S. dollars.

Global sales of light vehicles, increase by 6 percent to 73.8 million next year, of Lexington, based in Massachusetts, said IHS Automotive in September. The forecast is 1.95 million additional deliveries in China and South Asia and an increase of $ 1.5 million in sales in North America.

Declining Market

Offers related to auto loans, leases and debt finance cars have gained a greater share of a declining market for asset-backed securities, the data show Citigroup. While the car market has fallen 0.8 percent this year, issuance of securities backed by credit card debt of $ 5.99 billion represents a decline of 85 percent over the previous year and that households save more.

Default rates on auto loans packaged into bonds are running "well below" the peak levels of 2007 and 2008, according to a report by November 04, Wells Fargo Securities.

"The automotive sector has passed its peak in the losses from the credit crisis and recession," said analysts led by John McElravey in Charlotte, North Carolina. Used vehicle demand is also helping to shore up prices, helping to minimize losses on defaulted loans, they said.

Read more »

budget deficit of $ 25 billion according to California

California is selling $ 10 billion tickets a year to boost cash on hand, as the state that produces 13 percent of the U.S. Gross domestic product is to assure investors that can repay the loan in the midst of a budget deficit of $ 25 billion.

Investors offered $ 2 billion of bonds maturing in May in the provisional returns of 1 percent to 1.25 percent, according to two people familiar with the offer. That's about 0.58 to 0.83 percentage points more than top-level municipal bonds one year from November 12, according to Municipal Market Advisors. The $ 8 billion of bonds maturing in June was trading at 1.25 percent to 1.5 percent, or about 0.83 to 1.08 percentage points more than top-rated notes.

The problem comes after the state Legislative Analyst's Office said the California deficit may exceed $ 25 billion over the next 19 months, including $ 6.1 billion in the fiscal year ending in June. Treasurer, Bill Lockyer, also is selling 3.75 billion U.S. dollars of long-term liabilities, as of this week.

"If you're full of California, then do not add fuel to the fire," said Marilyn Cohen, president of Envision Capital Management in Los Angeles, which manages $ 250 million in fixed income assets. "If California have little exposure and have cash sitting in money markets, then you better make sure it is worth your time because the news headlines will continue to go from bad to terminal."

Individual investors

The State shall take orders today and tomorrow from individual investors for the revenue anticipation notes, municipal bonds, short-term RAN known as the State provides cash when the pay is low and the collection of taxes later. Institutional investors like mutual funds November 17 orders. JPMorgan Chase & Co. is managing the sale, along with De La Rosa & Co. and Wells Fargo Securities.

California notes hit the market after yields on top-rated municipal bonds a year rose 1 basis point to 0.42 percent on Nov. 12 after falling to its lowest level in August. Top-rated municipal bonds a year yielded 0.3 percent on Aug. 18, according to the MMA, the lowest since the index began in 2001. A basis point is 0.01 percentage point.

The notes are classified F2 by Fitch Ratings, the third highest. Standard & Poor's rated the SP-1 notes, the second highest, while Moody's Investors Service assigned the notes MIG-1, its highest rating. S & P ranks of the long-term debt of California, A-, its fourth year of lower investment, higher risk among U.S. states.

No Surprise

The deficit projection LAO "not surprising, and it should not surprise investors," said Tom Dresslar, a spokesman for Lockyer. "We fully disclosed the potential economic problems in our brochure RAN supply, and do not expect that the projection of the OAI to affect the operation of cash flow borrowing. I still have more than enough cash available to pay RAN in time and in full. "

When California sold $ 8,800,000,000 of debt a year on 23 September last year, notes that matured in May were at a yield of 1.25 percent, or about 59 basis points more than a year bonds primetime according to the MMA, an independent research firm based in Concord, Massachusetts. Notes that matured in June were at a yield of 1.5 percent, or 84 basis points more than the highest rated debt at the time.

Lockyer was able to sell 6.64 billion U.S. dollars of the notes to individual investors, or about 75 percent of the total.

'Punitive' Performance

The "punishment" California Performance pay this year will be determined by the amount of interest from individual investors that the state can draw, Regina said Shafer, who oversees $ 5.3 billion in tax-exempt municipal bonds as senior vice president of investments bond for USAA Investment Management Co. in San Antonio, Texas. The notes will be attractive to retail buyers as compared with cash alternatives like money market funds, which offer lower yields, he said.

"Given the marketing effort will probably be a very easily," said Shafer. "In states with high tax rate, is very attractive. I think retail is going to be very successful."

Texas paid $ 7,800,000,000 August 24 through ticket sales and forecasting tax revenues a year, paying a weighted average interest cost of 0.34 percent, or 4 basis points more than top level bonds a year, according to the Comptroller's web site for sale. The notes carried the highest ratings in the short term from Moody's, S & P and Fitch.

New Jersey, whose short-term debt also carries a higher credit rating, provided 2.25 billion U.S. dollars with a yield of 0.33 percent on Aug. 19. That was 3 points higher than the highest rated debt at the time.

Extra Performance

California sold about $ 6.3 billion in public debt, the obligation after its RAN sale last year, according to data. In the midst of increased supply, the extra yield on AAA bonds for debt investors required 10 years of state issuers have increased to 158 basis points to 104 basis points year on 8 October.

States and municipalities are able to borrow some 16.8 billion U.S. dollars this week, most on record, according to data compiled by dating from 2003. Issuers are expected to offer more than 20.1 billion U.S. dollars in the next 30 days, the index visible supply on November 12, the most since October 23, 2009, almost double the daily average this year.

Read more »

Avoid Currency Controls & keeping currency gains from damaging their economies

At a time when nations from Japan to Brazil are struggling to maintain foreign exchange earnings of damaging their economies, Reserve Bank of Australia governor Glenn Stevens welcomes a stronger exchange rate.

Australia dollar has advanced 19 percent since late June, most of the 16 major currencies followed by data  reaching parity with U.S. dollar last month for the first time since July 1982. The rally may help curb inflation, sales of iron ore and coal to China bring less local dollars. When Stevens surprised investors by raising interest rates on 2 November, said in a statement that the increase in the money "will help, at the margin, in the containment of inflation pressure."

Stevens is allowing gains, while Japan sold yen for the first time since 2004, and Brazil, South Korea and Taiwan to obstruct foreign investors. World leaders from countries like Japan, Brazil and China have said that the U.S. is degrading its currency through the Federal Reserve's plan to print dollars so you can buy $ 600 billion of Treasuries.

"The Australian dollar is between what we call the world of new shelters," said Jonathan Lewis, the founding director of New York, Samson Capital Advisors LLC, which manages $ 6,900,000,000 and specializes in bonds and currencies. The Australian called "float more freely than others," he said. "Even the free-floating currencies should have an asterisk next to their names because of central bank interventions."

Buying Bonds

After the meetings in Seoul last week, leaders of the Group of 20 countries agreed to seek gradual changes in currency values, providing some cover countries to adopt capital controls to limit exchange rate movements.

The outlook for the Australian has taken some of the world's largest investors in bonds to build the nation's debt, although Stevens said more rate hikes may come.

Lewis has twice the percentage of Australian dollars as contained in its benchmark index used to measure fund performance. Kokusai Global Sovereign Open, the biggest Asian bond fund, increased its investment in Australia to a record 15 percent of assets this year.

"The Australian economy is healthy," said Masataka Horii, one of four managers, 37.5 billion U.S. dollars of funds in the Kokusai Global Sovereign Tokyo. "The Reserve Bank of Australia will increase its policy rate and the currency will appreciate."

"Aggressive" Bank

Samsung Investment Trust Management Co., the largest private investor in South Korea fixed-income next year is starting a fund to invest in the debt of Australia.

"Australia has one of the most aggressive central banks in the world," said Sungjin Park, who oversees the equivalent of 55.9 billion U.S. dollars as head of fixed income at Samsung in Seoul. "Many fund managers in Asia, including China and Japan, Australia's bonds are more attractive" than any other sovereign debt in the region, he said.

The government's November 10 auction of debt maturing in July 2022 attracted bids for 4.55 times the amount of available titles, the most since the country expanded its lending program in 2009.

The Aussie fell 0.1 percent today to 98.36 cents U.S. as of 8:58 am in London, from this year low of 80.67 cents in May. It rose as high as $ 1.0183 on 5 November.

Beating forecasts

Analysts predicted earnings. The Australian ended the third quarter to 96.71 U.S. cents, while the median estimate of economists and strategists surveyed was 88. They are now catching up with the rally, raising its estimate in mid 2011 to 99 cents U.S. 88 two months ago.

The progress of the Australian dollar has become the world's most expensive currency based on purchasing power parity, a measure of cost of goods relative to other countries. The indicator shows the Aussie is trading at a premium of 30 percent, according to data compiled

"It's very overrated and is unlikely to remain so for a considerable period," said Lee Hardman, currency strategist in London at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan's largest publicly traded bank.

The unemployment rate in Australia of 5.4 percent compared with 9.6 percent in the U.S. and 10.1 percent in the euro area. The IMF predicts that Australia's economy will expand 3.5 percent next year from 3 percent in 2010 compared to 2.3 percent in the U.S. and 1.5 percent in Europe.

China's growth

The figure will be 9.6 percent for China, the IMF forecasts, fueling demand for resources from Australia, the world's largest exporter of iron ore and coal. China's iron imports averaged 51.5 million tons a month this year and last year, compared with 37 million tonnes per month in 2008.

Shipments of products from China are the promotion of employment. BG Group Plc, the third largest UK oil and gas producer, said Oct. 31 it will build a business by 15 billion dollars of liquefied natural gas in Queensland. The project will create 5,000 jobs, reading, the British company said.

Australia's employers added 29,700 workers in October from the previous month, the statistics bureau reported on 11 November. News survey of economists projected 20,000.

Recruitment threatens to increase inflation, the central bank aims to maintain a range of 2 to 3 percent. Consumer prices rose 2.8 percent in the third quarter last year, compared with 3.1 percent in April-June period, the government said Oct. 27.

The rate increase

The Reserve Bank of Australia, known as the RBA has raised the interbank lending rate seven times a day since October 2009. The measure was increased by a quarter point to 4.75 percent on Nov. 2. In his speech that day, Stevens said the growth outlook, saying he hoped that "the strongest private spending over the next couple of years."

benchmark rates in the U.S. and Japan are near zero. The central banks of both countries are also buying government bonds, a strategy known as quantitative easing that pumps money into the economy. Japan sells yen on September 15 rally to stop the coin to a maximum of 15 years.

Japanese Prime Minister Naoto Kan, said earlier this month the U.S. is implementing a "weak dollar policy" and said the Chinese central bank adviser Xia Bin amounts U.S. Print quantitative easing "uncontrolled" money. President-elect of Brazil, Dilma Rousseff, said last week other countries are driving the cost of U.S. debasing its currency.

Stevens tolerance of a stronger dollar in contrast to local officials from other nations who are concerned about the profits to reduce demand for exports and investors seeking higher yields lead to flood markets with money.

Exchange controls

Brazilian President Luiz Inacio Lula da Silva tripled a tax on purchases of foreign bonds last month to 6 percent. South Korea may revive a tax of 14 percent of the bonds held by international investors in January, ruling party lawmaker Song Sik Kim said in an interview in Seoul on November 9.

Taiwan, said Nov. 9 that would limit foreign investment in government bonds and money market products to a maximum of 30 percent of the value of foreign fund portfolio is.

Currency gains help Stevens fresh growth, said Ken Leech, chief investment strategist committee overall Western Asset Management Co., the unit of Legg Mason Inc. 's bond.

"We do not believe that they will intervene," said Leech, who helps oversee $ 482,200,000,000 in Pasadena, California, Western Asset, November 02 at a seminar in Singapore.

The Australian economy is attractive enough to draw Franklin Templeton Investments, as the company's San Mateo, California, the second largest holder of the debt of the nation behind Kokusai, according to our data

"The fundamentals are still better in Australia than in the U.S., despite the recent appreciation of the currency should be allowed to remain strong," said David Zahn, who helps oversee Franklin 664.3 billion U.S. dollars in assets such as a fund manager based in London higher in the fixed income group. "We have a responsibility to raise rates to keep the economy from overheating and keep inflation under control," he said in an e-mail. "The rise of the currency does something of this for the RBA."

Read more »

G-20, the APEC yield little to correct the imbalances stem outflow concerns

The leaders of the world's biggest economies ended four days of talks without taking decisive action to address global imbalances that have fueled asset bubbles and the risk that leads to a protectionist backlash.

Asia-Pacific leaders in Japan yesterday pledged to take "concrete steps" toward creating a regional free trade agreement, without setting a target to achieve that goal. The meeting followed the November 11 to 12 Group of 20 in Seoul that "the actions of opposing trade protectionism," while failing to agree on a remedy to the distortions of trade and investment.

The officers entered the G-20 pledged to reduce global trade friction by agreeing not to weaken its currency to boost exports. Once there, the U.S. and China took turns blaming others for the exchange rate policy, with President Barack Obama calling the yuan "undervalued" and the Chinese authorities saying monetary easing by the Federal Reserve was undermining the dollar.

"The problem that people really care about the effects of U.S. monetary policy in terms of capital flows, addressed almost all," said Uwe Parpart, chief economist and Asia strategist at Cantor Fitzgerald HK Markets Capital. A solution that does not involve boosting domestic demand in China and the U.S. increased savings "refers to the symptoms, not the real cause," he said.

U.S., China Positions

Hu indicated that there was no change in monetary policy of their country in a November 13 speech, adding that the pressure for quick reforms "will not make a good international cooperation." The same day, National Security Adviser Thomas Donilon told reporters that the U.S. wants China to let the yuan rise more before Hu Jintao visits Washington in January.

Obama flew home yesterday after a 10-day trip designed to support its goal of doubling exports in five years. Pressed Hu to allow the yuan to strengthen at a 80 - minute meeting on November 11 that China has a record trade surplus with the U.S. $ 28,000,000,000 in August the biggest criticism that his government is keeping a lid on the currency unfair.

Yuan forwards fell after the summit, with the central bank set its daily reference rate weaker for the first time in five days. Delivery within twelve months fell 0.1 percent to 6.4595 per dollar as of 9:45 am in Hong Kong, reflecting the currency bets strengthened 2.75 percent in a year from spot rate of 6.6373.

China forex reserves

The yuan, also known as renminbi, has risen about 3 percent against the dollar since June 19, when China scrapped its two-year parity. China has 2.65 trillion U.S. dollars of foreign currency reserves, more than double any other country.

"The pressure from the U.S. is more likely to result in not so subtle threats about the dollar's reserve status," said Paul Donovan, deputy head of global economics at UBS AG in an email yesterday. "It is unlikely to accelerate the process of revaluation of the renminbi."

Obama told reporters after the G-20 that the Federal Reserve plan to buy an additional $ 600 billion of Treasuries was designed to boost growth. He said a stronger economy would help the U.S. reduce the budget deficit which reached 1.294 trillion U.S. dollars in the fiscal year ended September 30, surpassed only by the deficit of $ 1,415,000,000,000 in 2009.

Ireland debt concerns

The fragility of the global financial situation was underlined by concerns about debt in Ireland. The country is in talks with European officials on "market conditions" as Germany pushed to accept a ransom. The International Monetary Fund is ready to help Spain if necessary, Managing Director, Dominique Strauss-Kahn said November 13 in the APEC.

The G-20 statement said that emerging markets face a wave of capital flows can take regulatory action to address, providing coverage to limit currency fluctuations and stem asset bubbles. Finance ministers of the G-20 will work next year on a set of indicative guidelines call designed to identify the major economic imbalances and the necessary actions to solve them, the leaders said in a statement.

"The decision to create a framework is a useful step, because it can show the relative importance of imbalances in each country and provide an indication that adjustments should be done," said central bank governor of the Philippines, Amando Tetangco in a phone message yesterday.

APEC

Leaders of 21 APEC economies, which represent over 50 percent of the global economy and nearly 45 percent of their trade, said the region "is recovering from the recent economic and financial crisis, but uncertainty remains. " Echoing the G-20 of the statement, the group called for greater exchange rate flexibility, and warned against volatile movements in the currency market that can disrupt economic growth.

"We will move towards more market-determined rate of change" and "refrain from competitive devaluation of currencies," said the statement. Developed countries will remain vigilant to "help mitigate the risk of volatility in capital flows to some emerging market economies."

"The APEC meeting was overshadowed by the G-20, where countries were divided on the yuan and other policies of the coin," said Koji Murata, a professor of international relations at Doshisha University in Kyoto. "The result was vague and lacking in substance."

Trade Negotiations

U.S. pushed for the completion of the Trans-Pacific Partnership nine countries next year's meeting of APEC in Honolulu, the sales representative, Ron Kirk, said yesterday in an interview in Yokohama, Japan. That set the stage for a broader agreement that includes China, he said.

Obama on 13 November, said "well received" interest of Japan to join talks on the PCC, which would be the biggest U.S. trade deal since 1994 Free Trade Agreement with Canada and Mexico. The talks now include the U.S., Australia, Singapore, New Zealand, Brunei, Chile, Vietnam, Peru and Malaysia.

Japanese Prime Minister Naoto Kan, who favors talks to join the TPP, faces resistance within his own party amid a backlash from farmers who benefit from tariff protection. His Cabinet last week agreed to start preliminary talks only about the negotiations.

"We just want to keep the foot to the pedal and see how far you can go to close by the time they convene next year," Kirk said, adding that five rounds of talks is scheduled for 2011. "What we are creating will ultimately become the Free Trade Agreement of Asia-Pacific."

Read more »

China could overtake U.S. in 2020 .

China will overtake the U.S. to become the largest economy in 2020, helped by a more rapid expansion and an appreciation of its currency, according to Standard Chartered Plc.

"We believe the world is in a" super-cycle "of sustained high growth," economists led by Gerard Lyons, said in a report released today. "The magnitude of change in the next 20 years will be enormous."

China's economy will be twice as large as the United States in 2030 and represent 24 percent of world output, compared with 9 percent today, "Lyons said in the super-cycle 152-page report. India will surpass Japan as the third largest economy in the next decade, according to the report. Goldman Sachs Group Inc. estimates that China will overtake the U.S. in 2027.

The world may be experiencing its third "super-cycle", which is defined as "a period of historically high global growth, which lasts a generation or more, driven by increased trade, high investment rates, urbanization and technological innovation, which is characterized by the emergence of large economies, again for the first time in the high catch-up growth rates across the emerging world, "said Standard Chartered.

Production in China, the largest manufacturer of mobile phones, computers and vehicles, surpassed Japan for the second consecutive quarter in the three months through September, the Japanese government said today. China's economy overtook the UK as the fourth largest in 2005 and tipped Germany from the third position in 2007.

Faster growth

China has expanded by an average 10.3 percent a year over the past decade compared with an average of 1.8 percent for the U.S. The Standard Chartered estimates growth will slow to an annual rate of 8 percent by the middle of the decade, making it easier to 5 percent from 2027 to 2030.

The U.S. economy, however, still faces one or two years of "slow growth, forecast at 1.9 percent in 2011, before returning to its long-term trend rate of expansion 2.5 percent in three or four years, Nicholas Kwan, regional head of Hong Kong research for Asia at Standard Chartered, said in a telephone interview.

relatively rapid expansion of China, along with an expected 25 percent appreciation of the yuan, should be sufficient for nominal gross domestic product than the U.S. at the end of the decade, said Kwan.

Risks, Challenges

However, the stage is facing risks in both the U.S. and parts of China, Kwan said.

"In China we have to consider how much the economy can continue growing without serious disruptions, while the U.S. faces different challenges as a mature economy struggling to recover from an unprecedented crisis," he said.

China could fall "fast track abruptly,''as the Soviet Union and Latin America did in the 1970 and Indonesia and Thailand, experienced in the 1990's, the Standard Chartered report said.

The economy is "unbalanced" and faces significant risks, including an expansion of the imbalances, asset bubbles, excess capacity and rising bad loans that could lead to a significant decline, the report said. A decrease of 10 percent of investment in China makes it very difficult to achieve any growth of GDP in all, the report estimates.

Currency Stable

Previous "super-cycle" of growth that occurred from 1870 to 1913, and after the Second World War until the 1970's, Standard Chartered, said today. The current cycle began in 2000, he said.

"If we are right about this being another super-cycle, does not mean that growth is strong and continuous throughout the period," said Standard Chartered. "The first super-cycle, for example, had episodes of high inflation and deflation. Much will depend on the monetary policies adopted throughout the world."

Previous super growth cycles are characterized by stable currencies where exchange rates were linked to gold or silver, monetary unions and the Bretton Woods agreement, Standard Chartered, said. Current concerns about the "war of currencies" to highlight the challenges within the current system, the bank said.

"The possibility of a formal motion to the global monetary stability can not be ruled out," the report said. "However, in the present context, it is difficult to predict. More currency intervention may be plausible, and in time, one should expect to see more countries manage their currencies against a basket of currencies of the countries with trading. The managed float exchange and baskets may be more of a monetary policy rule. "

Read more »

The euro could fall as low as $ 1.31 if the problems of sovereign debt climbing , Nomura's Nordvig Says

The concern that some European countries will have difficulty paying their debt has pushed the euro by 12 percent against the dollar since 2008 and can be pushed even lower, according to Nomura Holdings Inc.

The euro could fall as low as $ 1.31 if the problems of sovereign debt climbing, Jens Nordvig, managing director of currency research at Nomura in New York, wrote in a note to clients. The present crisis represents a premium of 12 percent of currency risk, Nordvig wrote, quoting Nomura model.

The 16-nation currency fell 0.5 percent to $ 1.3619 in New York today, near a six-week low of $ 1.3574 reached on 12 November. While it has fallen 4.9 percent against the dollar this year has increased by 14 percent from a low of 2010 on June 7 by the concern that a new round of program buying bonds Federal Reserve known as quantitative easing of destroying the dollar.

"The euro has been on a roller coaster in the last year," he wrote Nordvig. "There was a significant upward pressure on the euro / dollar since the start of the Fed's QE2. Meanwhile, peripheral tensions within the eurozone have risen again, putting significant downward pressure on the euro."

The euro traded at $ 1.38 in six months if the sovereign risk remains more or less constant, Nordvig wrote. The currency will drop to $ 1.33 if you increase the concern of the debt, and $ 1.31 if the European debt crisis has an impact on the current expectations of change. The common currency will strengthen to $ 1.44 if the sovereign risk of the debt falls, he wrote.

Investors should trade between the euro and other European currencies, not just the dollar, Nordvig said in a radio

"The euro crosses, like the euro, Sweden, Norway, the euro and the pound sterling, euro, not fully reflected, as has been reflected in the euro and the dollar," said Nordvig.

Read more »

U.S. stocks may rise 15 percent in the next 12 months

Legg Mason Inc. 's Bill Miller said U.S. stocks could increase 15 percent over the next 12 months, the Federal Reserve is continuing efforts to inflate asset prices and boosting the economy.

"The Fed wants the stock market go up, and they will do whatever it takes to reach the level that is necessary for the wealth effect of stock prices to stimulate growth," Miller wrote in a letter to shareholders released today.

Miller, famous for beating the S & P 500 for a record 15 consecutive years until 2005, followed by the U.S. reference for the next three years as it underestimated the gravity of the financial crisis and the stakes in banks and real estate companies failed. He surpassed his peers in 2009 as the stock market recovered from a minimum of 12 years.

The decrease in first-class farms as an energy producer AES Corp. have hurt returns in 2010. $ 4,100,000,000 Miller of Legg Mason Capital Management Value Trust Fund was up 3.8 percent this year through Nov. 12, compared with a 9.4 percent return for the S & P 500, including dividends reinvested. In the past five years, the fund was reduced to an average annual rate of 7.7 percent.

The Federal Reserve on Nov. 3 announced plans to buy $ 600 billion in U.S. Treasury bonds in a round of unconventional monetary stimulus known as quantitative easing. The Fed left unchanged its commitment to keep interest rates low for an "extended period."

Critics of the Fed

The Fed's plan has drawn criticism from the leaders of China, Germany and Brazil, have said that lowering the value of the dollar and has the potential to fuel the speculative flows of money. It has also encouraged U.S. investors and economists, including the hedge fund manager Cliff Asness and Stanford University professor John Taylor, to urge the Fed chairman, Ben Bernanke, to stop the encouragement, saying that the risks of rising inflation .

Miller said the most likely negative impact of purchases by the Fed is higher prices for commodities, which could slow economic growth and mitigating the impact of the stimulus.

"This is not an endorsement of the policy, only a statement that I think the Fed has the tools to change the preferences on aggregate portfolio towards riskier assets, and intends to use them."

Miller, who has managed the fund Value Trust since its inception in 1982, remained a long-term optimism in the U.S. market, even amid the crisis that dragged stocks 39 percent in 2008. He stuck to his bets optimistic about an economic recovery last year, rejecting the idea of a "new normal" characterized by the growth of U.S. below average economic and high unemployment as shown by Pacific Investment Management Co. 's director general, Mohamed El-Erian.

Read more »

U.S. stocks have returned more than junk bonds after they fled a decade

U.S. stocks have returned more than junk bonds after they fled a decade, valuations have fallen to a record high relative to credit - and investors withdrew more money than ever for equity funds.

The Standard & Poor's 500 Index rose 17 percent including dividends since June, compared with 10 percent for the Barclays Capital U.S. Corporate High Yield Index. The gauge of equity is the rate of its gain over six months Bond Index since 1999.At the same time, the rally of more than 120 percent in junk bonds since 1998 has left them more money than ever from stocks based on earnings yields measurement of annual profits as a percentage of the price.

"People have gone too far the trade," said Peter Sorrentino, who helps oversee $ 13.8 billion at Huntington Asset Advisors in Cincinnati. "The next step is to move from fixed instruments in inventory. Junk bonds have so little bonus at the moment. It's like the last chapter in which people will finally capitulate. "

Individuals do not reflect the opinion, taking $ 55.3 billion from equity mutual funds since late June, after 11 billion dollars was wiped off the value of the shares of the United States between October 2007 and March 2009. withdrawals for the third quarter came as S & P 500 rose 11 percent, the first time an advance of three months does not promote investment, according to LPL Financial Corp. in Boston.

Stocks Privileging

Huntington, PNC Wealth Management and Goldman Sachs Group Inc. say stocks will beat debt speculative as the economy improves. S & P 500 earnings per share are set to increase by 37 percent in 2010, the largest increase in 22 years, estimates of over 10,00
The S & P 500 rose 0.5 percent to 1204.90 from 11:39 in New York.

The benchmark for U.S. equities fell 2.2 percent to 1,199.21 weeks ago that profits from Cisco Systems, Inc. in San Jose, California, Burbank, California, Walt Disney Co. trailed estimates analysts. S & P 500 which beat estimates by more than 70 percent of the time helped push the gauge up 7.5 percent this year.

Stocks remain cheap relative to bonds, even after the rally. Debt rated below Baa3 by Moody's Investors Service and BBB-by S & P pays an average yield of 7.25 percent, compared to a yield gains of 6.64 percent for the S & P 500 . It is the smallest gap since Barclays started in 1991.

"Overweight" rating

Goldman Sachs in New York last month has advised clients to start increasing the proportion of shares they own in relation to the debt, citing the expansion of the economy. The bank the world's most profitable investment lowered its rating on investment grade corporate bonds to "neutral," saying they were likely to return next to nothing compared with a gain of 14 per cent of the shares of more 12 months, according to an Oct. 15 note to clients.

Junk bonds, where rates of Goldman "overweight," will probably trail stocks yielding more than 10 percent in the year ahead, based credit strategist Alberto Gallo.

"It will be harder for a high yield stocks to outperform over the next 12 months," he said in an interview. "We already had two years in a row where a high yield was better."

Investors should buy shares that "resemble bonds" with international sales, debt below average and growing dividend, "said Chris Hyzy, New York, chief investment officer of U.S. Trust, Bank of America Corp. unit oversight of $ 339.9 billion in client assets.

"Sweet Spot"

"It's the sweet spot for a balanced investor looking to reallocate excess of the ownership of fixed income," he said. "High yield is fairly valued. We expect the gap between the performance gains on equities and fixed income returns to close dramatically in the next 12 to 18 months."

Shares of retailers and technology companies such as JC Penney Co. and Motorola Inc. have surged since June 30, outperforming their obligations in a reversal of the first half, where shares have fallen and scrap metal rallied.

Department-store chain JC Penney in Plano, Texas, returned 47 percent since June 30, compared to a gain of 0.02 percent of its senior unsecured debt, rated Ba1 by Moody's and BB by S & P . This contrasts with the first six months, when the shares have fallen 19 percent and debt has increased by 7 percent.

Motorola, the second largest U.S. mobile phone special, climbed 23 percent this half, five times the 4.2 percent gain on its debt. During the first six months, Schaumburg, Ill.-based Motorola bonds returned 16 percent, while its stock has lost the same amount.

Car Rental

Avis Budget Group Inc. rallied by 38 percent since June 30, while the obligations of the company gave 11 percent. Year to date, the obligations of the rental company cars increased 16 percent, compared to 3.6 percent for the stock.

"If I had to add money in a portfolio, I add the stock," said James Dunigan, chief investment officer at PNC Wealth Management in Philadelphia, which oversees $ 105 billion. "The valuation of the shares remain attractive. The earnings outlook continues to be positive. We will probably return to a developing economy in the first part of 2011. "

While the S & P 500 has recovered ahead 2.15 trillion in market value since July, shares are getting cheaper relative to earnings forecasts. The revenue growth that analysts predict will exceed 13 percent in both years: the index is trading at 12.5 times 2011 and 11 times earnings projections for 2012. The S & P 500 price / earnings average since 1954 is about 16.5, the data show.

QE

At the same time, the Fed policy called quantitative easing to buy as much as $ 600 000 000 000 Treasury Bills has reduced yields on government bonds are the benchmark for corporate borrowing and mortgages. Rates on the junk has fallen to 5 1/2-year 6.97 percent on Nov. 9, from 9.5 percent five months ago and a record 23 per cent in December 2008, according to Barclays Capital .

"Quantitative easing is extremely favorable to short-term actions," said Lucette Yvernault, which helps oversee the equivalent of about 7 billion euros (9.5 billion) at Schroders Investment Management Ltd London. "The adverse effects of the ANC is that investors are not necessarily reinvest in the U.S. economy, but instead fuel more growth in emerging markets."

benefit of the United States can continue to increase as more executives than forecast increase more compared to lowering them. EBay Inc., United Parcel Service Inc. and 196 other companies raised earnings estimates above forecasts of analysts last month that 130 companies cut, the biggest gap.

Greed kicks in

The S & P 500 earnings yield on average to 5.6 percent by the last bull market that ended Oct. 9, 2007, according to data compiled for reported earnings. Using the estimated revenues, the total yield of 7.1 percent, 0.2 percentage point lower than the average for junk bond followed by Barclays.

"Greed relax in, and this will propel the stock market," Sorrentino said Huntington Asset.

Although stocks have beaten bonds in 4 1 / 2 months, investors have been more successful this year with fixed income securities. The measurement of Barclays junk bonds returned 15 percent since Dec. 31, double the advance in the S & P 500.

Investors piled about 190 billion dollars in U.S. bond funds this year by 31 October, a pace that exceeds last year's record $ 214.1 billion, according to Cambridge, Mass., research firm EPFR Global. Customers earned about $ 56 billion of equity funds and 74.6 billion in 2009.

Flows to junk bonds fell to 1.7 billion in October from $ 3.35 billion in September, more than any year, preliminary data show EPFR. This brings the total to around $ 8.6 billion at October 31, compared to $ 19.9 billion in 2009.

"Ultimately the Fed will succeed," said Wayne Lin, a fund manager at Baltimore-based Legg Mason Inc., which manages $ 677 billion. "It's just a question of how they will succeed and how long will it take for them to convince people to take money in the mattress and start to implement. "

Read more »

GM Offering More Week leads to the U.S. IPOs Since Lehman

General Motors Co. 's initial public offering and the sale of four private equity-backed companies are taking the biggest week of IPOs in the U.S. since before the collapse of Lehman Brothers Holdings Inc.

Ten companies plan to raise a total of $ 12.5 billion this week, the most since San Francisco, Visa Inc. 's 19.7 billion U.S. dollars sales in March 2008, the largest IPO in U.S. history,  GM, 61 percent owned by the U.S. Treasury can sell $ 10,600,000,000 shares Nov. 17 to help pay his ransom. Carlyle Group and Golden Gate Capital are among private equity firms taking public companies in the deals that could raise $ 1.5 million, offers brochures, he said.

While U.S. taxpayers will have a 34 percent loss on sale of treasury shares of GM at the offer price up to $ 29 per share, Carlyle and Golden Gate Capital can more than double the performance of their investments in Booz Allen Hamilton Holding Corp. and Aeroflex Holding Corp. The sales come after the Standard & Poor's 500 Index, the benchmark for the U.S. capital, rose to a maximum of two years this month.

"The week is large enough to explicitly define the temperature of the market for IPOs," said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees 340 billion U.S. dollars. "It seems a fertile time to address the equity issue.'s Appetite for equity and the risk has increased."

Sale of Shares of GM

GM will sell 365 million shares, or a 24 percent to $ 26 to $ 29 each, according to a filing with the Securities and Exchange Commission. The Detroit-based company also is offering $ 3 billion of preferred stock to be converted into ordinary shares.

The automaker is likely to sell the stock at the top of the price range of the initial public offering or above, two people familiar with the deal, said last week. Steven Rattner, former head of the government force U.S. Automotive task, said today that it expects the offer at a price above the expected range.

"There's definitely a higher level of confidence in the ability of automakers to perform," said Rattner told reporters at an event of the Automotive Press Association in Detroit.

GM insurers is likely to have the over-allotment option to sell 54.8 million more shares, people familiar with the IPO, said last week. That would help regain U.S. Treasury more than 49.5 billion U.S. dollars of public investment in the company.

The car manufacturer may re-submit its registration statement with the SEC from today to boost the price range of the offer, according to CNBC, citing unidentified sources.

Results earnings

The initial offer, which would be the third largest in U.S. history, comes 16 months after GM out of bankruptcy. The company reported third quarter net profit of 2.16 billion U.S. dollars last week, bringing the carmaker's earnings this year to 4.77 billion U.S. dollars. That topped the 4.46 billion U.S. dollars profit for Toyota City, Japan-based Toyota Motor Corp.

The Treasury does not sell GM shares for an average of $ 43.67 per share, or 51 percent above the upper end of the range it offers.

A $ 29 per share, GM would have a market capitalization of $ 43.5 million. That the value of GM's 6.84 times revenue this year, based on net income in the first nine months of 2010. Dearborn, Michigan, Ford Motor Co. in trades 7.9 times analysts' estimates for 2010 earnings, the data show.

Relative Value

GM, which lost 82 billion U.S. dollars from 2005 to 2008, was valued at an average of 10.3 times earnings from 2000 to 2004, monthly data compiled by us. Ford traded at an average of 13 times earnings in the same period.

General Motors Corp. sought bankruptcy protection under Chapter 11 on June 1, 2009, after the failure of New York, Lehman Brothers in September 2008 and froze credit markets has helped fuel the worst recession since the Great Depression.

"The government wants to close the deal out," said Darren material, managing director based in Chicago in iPox Capital Management LLC, which oversees $ 3 billion. "They do not mean much, because they want to get a lot of taxpayers, but not selling the whole thing, so it's okay to go up later, because taxpayers will benefit."

The first U.S. offering week's Booz Allen will be tomorrow. The consulting firm acquired by Carlyle, based in Washington in 2008 is the sale of 14,000,000 Class A shares of $ 17 to $ 19. The midpoint is 233 percent higher than the average price of $ 5.40 per share paid by the current owners, a filing with the SEC, said.

IPOs of private equity

Carlyle, the world of private equity firm second-largest, has no plans to sell shares and retain control of a 71 percent stake in McLean, Virginia-based company.

Aeroflex, owned by San Francisco Golden Gate Capital, Veritas Capital of New York and a buyout fund by Goldman Sachs Group Inc. in New York, will offer 17.25 million shares at $ 13.50 to $ 15.50 on 18 November submission to the SEC, said.

The maker of semiconductor test equipment has not posted a profit since it was privatized in August 2007. IPO buyers are asked to spend 141 percent more than the average price paid to existing investors for their participation.

LPL Investment Holdings Inc., the brokerage firm based in Boston and investment advisory firm owned by TPG Capital and Hellman & Friedman LLC, offered 15.6 million shares at $ 27 to $ 30 each on 17 November. At the midpoint, the IPO would LPL a market capitalization of $ 3,050,000,000. Fort Worth, Texas-based TPG and Hellman & Friedman of San Francisco bought 60 percent of the LPL in 2005.

"Open now '

Harrah's Entertainment Inc., the world's largest casino company, will sell 31.3 million shares for $ 15 to $ 17 each on Nov. 18, his presentation, he said. The company, based in Las Vegas is changing its name to Caesars Entertainment Corp. before the IPO.

New York, Leon Black of Apollo Global Management LLC and TPG, David Bonderman Harrah's was deprived of $ 30,700,000,000, including the cost of debt and transaction in January 2008.

While 21 companies completed IPOs in the U.S. in October, the highest since December 2007, and 10 have sold shares in November, offers this week come after the S & P 500 posted the largest weekly decline in three months.

"It's a calendar very, very thorough," said Uri Landesman, president of New York, hedge funds Platinum Partners LLP. "Both the insurers and businesses are realizing that this window is now open for public tenders may be closed at any time."

Read more »