Dec 14, 2010 ~ Business

Tuesday, December 14, 2010

Oil falls as Fed maintains stimulus Register

Crude oil fell after the Federal Reserve said it would maintain its plan to buy $ 600 billion of Treasuries in June, the dollar strengthened.

Futures fell 0.4 percent as the Federal Open Market Committee said today that it will keep the program because the economic recovery is insufficient to reduce unemployment. An Energy Department report tomorrow may show that oil supplies fell last week.

"There were rumors that the Fed would increase the stimulus beyond the $ 600 billion," said Jason Schenker, president of Prestige Economics LLC, an energy consultancy in Austin, Texas. "The dollar has strengthened in some cases since the announcement."

Crude oil for January delivery fell 33 cents to settle at $ 88.28 a barrel on the New York Mercantile Exchange. Futures are up 27 percent from a year ago. Prices reached $ 90.76 a barrel on 7 December, the highest since October 2008.

Brent crude oil for January settlement rose 2 cents to end the session at $ 91.21 a barrel on London's ICE Futures exchange.

The U.S. currency rose 0.1 percent to $ 1.3383 per euro at 2:49 pm in New York. Earlier, the dollar fell to 0.8 percent at $ 1.3499, its lowest level since 23 November. A stronger dollar reduces the appeal of commodities as an alternative investment.

The Federal Reserve agreed to expand the purchase of bonds last month, a measure known as quantitative easing, to increase economic growth.

"We're getting good economic news, allowing the Fed to raise no quantitative easing, and potentially pull back in the future," said John Kilduff, a new partner of Capital LLC, a hedge fund in New York which focuses on energy.

U.S. optimism

Optimism among U.S. executives in the fourth quarter rose to its highest level since early 2006 as business leaders projected sales growth, investment and hiring, a private survey showed. economic forecast rate of up to 101 Business Roundtable, the Washington-based group said today. Readings above 50 signal expansion.

Gasoline inventories rose 2 million barrels in the week ended Dec. 10, according to the median of 17 responses from analysts polled by us. Supplies of crude oil probably fell 2.5 million barrels. Analysts were divided over whether distillate fuel stocks increased or decreased.

Gasoline for January delivery fell 2.2 cents, or 1 percent, to $ 2.2964 a gallon in New York, the lowest close since Nov. 30.

"The failure to hold above $ 90 last week hanging over the market," said Addison Armstrong, director of market research at Tradition Energy, a broker of Stamford, Connecticut. "Speculators At the same time we must try to make an offer is higher, and will not change until it runs out of money or go somewhere else."

Hedge Funds

Managed money, including hedge funds, pools of commodity trading advisors and commodity, increased net long positions by 42,603 futures and options combined to 206,807 the week ended December 7 The Commodity Futures Trading Commission said in its Commitments of Traders report from December 10.

"We will continue to play about $ 90 and perhaps the strike at $ 100 before year end," said Armstrong.

World oil demand has exceeded supply by more than 900,000 barrels per day on a seasonally adjusted basis since May, Goldman Sachs Group Inc. said in a report e-mailed yesterday. Goldman said it expects world oil market to remain in deficit in the first half of next year. The crude will average $ 100 a barrel in 2011 and $ 110 a barrel in 2012, according to estimates by Goldman.

Saudi Arabia, the largest oil exporting country, not immediately increase production when prices reach $ 100 a barrel, according to Banque Saudi Fransi.

"In order for Saudi Arabia to encourage other members of OPEC to do something, the prices remain at $ 100 for a long period and not just for a few weeks or a month," said John Sfakianakis, chief economist at the bank headquarters in Riyadh today by telephone. "This is not likely to happen soon."

OPEC Targets

The Organization of Petroleum Exporting Countries kept its production quotas unchanged at a meeting Dec. 11 in Quito, Ecuador. OPEC has maintained a target of 24.845 million barrels per day since December 2008, the longest period without change since it was first used in 1982.

volume of oil on the Nymex was 538,397 contracts as of 15:22 in electronic trading in New York. Volume was 692,514 contracts yesterday, close to the average of the last three months. Open interest was 1.38 million contracts.

European shares rose for the seventh day

European shares rose for the seventh day, its longest winning streak in almost six months, better than forecast U.S. retail sales offset the decline in basic shares resources and automakers.

Air France-KLM and Deutsche Lufthansa AG rose to Credit Suisse Group AG upgraded the airlines. ProSiebenSat.1 Media AG lost 5.7 percent as Die Welt reported that the owners of the largest private broadcaster in Germany to sell the company in 2011. Outokumpu Oyj sank 5.4 percent after saying the fourth quarter will be weaker than previously expected. European car manufacturers posted the worst performance among 19 industry groups.

The benchmark Stoxx Europe 600 Index advanced 0.2 percent to 277.65 closing at 4:30 pm in London, having declined to 0.3 percent. The indicator has been met for seven days to the highest level in over two years, China has refrained from raising interest rates when inflation in the second world's largest economy rose.

"It is very quiet as investors positioned themselves now," said Matthias Jasper, head of equities at WGZ Bank AG in Düsseldorf. "Investors are unwilling to assume additional risks at the moment. The shares are still more attractive than other asset classes and strategically you have to be overweight shares next year."

Federal Reserve officials probably will not make any change in the size of the stimulus when they meet today in Washington last year, according to 38 of 39 analysts in a survey of December 7-8. Fed chairman, Ben S. Bernanke, in an interview released on December 5, told CBS Corp. s' "60 Minutes" that recovery can not be self-sustaining and further purchases of debt beyond the $ 600 million approved by the central bank through June is "certainly possible."

U.S. retail sales

The U.S. retail sales rose more than expected in November as the holiday shopping season got underway, a report showed today. Purchases rose 0.8 percent after a gain of 1.7 percent in October, which was higher than previously estimated, show figures from the Department of Commerce. The median forecast of economists surveyed by us called for an increase of 0.6 percent.

German investor confidence improved for the second consecutive month in December as recovery in Europe's biggest economy showed signs of enlargement. The ZEW Center for European Economic Research in Mannheim said its index of investor expectations and analysts rose to 4.3 from 1.8 in November. Economists predicted a gain of 3.9, according to the median of 36 forecasts in a survey.

U. K. House Prices

An indicator of the housing market in the UK remained near its lowest level in 18 months in November decreased housing demand, the Royal Institution of Chartered Surveyors said.

Belgium had the prospect of lowered debt rating from stable to negative in the Standard & Poor's by the country's political impasse makes it vulnerable to rising borrowing costs.

Analyst estimates compiled by us show annual revenue growth in Europe will average 46 percent in 2010 and 2011, more than any time in the last seven years. The performance gains for Stoxx 600 companies, or profit as a percentage of share price, is 6.53 percent. That is 3.6 percentage points higher than the yield on the benchmark German 10-year government.

"We'll see continued growth in 2011 earnings," said Ian Scott, London-based strategist at Nomura Holdings Inc., at a conference in Frankfurt. "Business is very profitable, however, the market is not paying for it."

National benchmarks rose in 11 of the 18 western European markets. The French CAC 40 Index increased 0.3 percent. Britain's FTSE 100 Index gained 0.5 percent, while Germany's DAX index fell below 0.1 percent.

Air France, Lufthansa

Air France and Lufthansa rose 1.4 percent to 14.40 euros and 1.7 per cent to € 17.34, respectively. The two airlines were raised to "overweight" from "neutral" by Credit Suisse.

Mediaset SpA, the station owned by Silvio Berlusconi, rose 3.3 percent to 4.64 euros after the Italian prime minister survived a confidence vote rebel lawmakers could not muster enough support to topple his government.

TUI AG rose 5.1 percent to 9.83 euros the German owner of the largest travel company in Europe said its earnings in Hapag-Lloyd increased its operating profit for the year. Hapag contributed € 150 million (200.9 million U.S. dollars) in net income compared with a loss of 174 million euros a year earlier, Hanover, Germany-based TUI said today.

BP rises

BP Plc gained 3.2 percent to 473.1 pence, as the international oil companies sold camps in Pakistan to Hong Kong, the investment group United Energy Group Ltd., as part of its plan to pay for spill Gulf of Mexico oil.

Vestas Wind Systems A / S rose 4.7 percent to 181.90 crowns. The company won an order for 30 turbines V52-850 kW model for a project in Cape Verde, the company said.

Vilmorin & Cie gained 3.3 percent to € 85.75 after the second largest seed company in Europe was raised to "overweight" from "underperform" from CA Cheuvreux.

ProSiebenSat fell 5.7 percent to € 21.68 for the biggest drop in the Stoxx 600 after newspaper Die Welt reported that Kohlberg Kravis Roberts & Co. and Permira LLP goal of selling the chain next year. Die Welt quoted unidentified people in the financial markets.

Outokumpu fell 5.4 percent to 13.10 euros after forecasting Finnish stainless steel manufacturer that fourth-quarter operating profit will be "significantly negative" instead of near breakeven, the company said.

ThyssenKrupp, Acerinox

basic resources shares had the second worst performance among 19 industry groups in the Stoxx 600, falling 0.7 percent. ThyssenKrupp AG, Germany's largest steelmaker, fell 1.5 percent to € 31.16, while Acerinox SA retreated 1 percent to € 11.83.

German car manufacturers rate decreases by a measure of European car manufacturers. Volkswagen AG, the largest European automaker, lost 1.9 percent to € 128.90. Bayerische Motoren Werke AG and Daimler AG, the world's largest maker of luxury cars, fell 1.5 percent to € 62.47 per cent and 1.2 to 54.11 euros, respectively.

Allied Irish Banks Plc fell 4.6 percent to 43.9 cents, erasing yesterday's breakthrough. The Dublin-based lender, which is being rescued by the government, decided not to pay bonuses to some employees in its unit market following a letter he received from Finance Minister Brian Lenihan.

Meetic SA, the operator of a dating website, plunged 13 percent to € 16.87 of the founder and CEO Marc Simoncini abandoned plans to sell the company. On the other hand, actions are reduced to "underperform" from "outperform" from Cheuvreux.

Corn Futures Decline on Speculation

The corn was reduced from a maximum of one month on speculation that demand for grains used in livestock feed may decrease due to increasing the supply of low quality wheat.

Wet weather could result in 60 percent of the wheat crop in three states of Australia is classified as food quality, Australia and New Zealand Banking Group Ltd. said Dec. 10. Up to 30 percent of the country's estimated 14.3 million metric tons of exports may be to food, said Wayne Gordon, an analyst at Rabobank International in Sydney.

"U.S. export sales of corn could slow Asian power producers to buy more wheat from Australia, " said Jack Scoville, vice president of futures prices Group Inc. in Chicago. "Export demand is a bit slow, after prices rose, said Scoville.

Corn futures for March delivery fell 1.25 cents, or 0.2 percent, to close at 5.8725 dollars per bushel at 1:15 pm at the Chicago Board of Trade. Earlier, the price reached $ 5.89, equaling the highest for a most-active contract since Nov. 10.

Raw materials has risen 57 percent since late June as bad weather reduced U.S. production.

Jerry Moyes sale 25% discount to 07 IPO LBO rapid transit

Jerry Moyes, who took control of Swift Transportation Co., a leveraged buy 2.37 billion U.S. dollars in 2007, is planning an initial public offering that values the shipping company by 25 percent after three years loss.

the largest airline in North American truck is trying to raise one billion U.S. dollars of sales 67,300,000 Class A shares of $ 13 to $ 15 each in today's second-largest U.S. IPO 2010, according to a filing Securities and Exchange Commission. The midpoint price would give the Phoenix-based company a market value of $ 1,780,000,000. Moyes pays about the same amount in May 2007 involving 74 percent of capital that had.

Moyes, 66, co-founder of Swift in 1966 with one truck. He resigned as executive director in 2005. Now he is selling a 53 percent to help pay the debt after the company reported 678 million U.S. dollars in losses. Swift Transportation's net debt in relation to cash flow more than four times the average for U.S. trucking companies on the stock.

"Investors are very wary of buying anything but a very pristine growth story," said Timothy Cunningham, a money manager in Santa Fe, New Mexico-based Thornburg Investment Management, which oversees about $ 70 billion. Swift is "losing money. It's hard to get excited about that," he said.

Name Change

Morgan Stanley in New York, Bank of America Corp. of Charlotte, North Carolina, and San Francisco, Wells Fargo & Co. are arranging the sale. Swift Transportation, which is changing its name to Swift Holdings Corp., will begin trading on the morning New York Stock Exchange under the ticker SWFT.

Swift Transportation, which had about 16,200 tractors and 48,600 trailers in North America starting in September, reported a net loss of $ 77 million for the first three quarters of 2010.

Moyes, Swift originally took public in 1990, had resigned as president and CEO in October 2005 after paying $ 1.5 million to settle SEC case accusing him of insider trading, without admitting or denying wrongdoing, said the leaflet . The charge related to its purchase of 187,000 shares of Swift in May 2004, days before the company announced better than expected earnings and the population increased 20 percent.

NHL team

Moyes sold Phoenix Coyotes National Hockey League NHL's $ 140 million in November 2009 after the team filed for bankruptcy protection under Chapter 11 in May of that year.

In March, the NHL Moyes sued for breach of contract, aiding and abetting the violation of fiduciary duty and the Coyotes try to sell without the consent of the NHL, seeking damages of at least $ 60 million, said the leaflet. Moyes has filed a motion to dismiss the claims in the NHL.

Dave Berry, vice president of Swift Transportation that deals with questions from the press of Moyes, said executive director was unavailable for comment.

Moyes, who graduated from Weber State University in Ogden, Utah, in 1966 with a degree in business administration, earned $ 1.6 million CEO of Swift Transportation over the past three years, the company's prospectus said. He was also president of Simon Transportation Services Inc., the trucking company that filed for bankruptcy in 2002.

Swift Transportation had $ 2,330,000,000 in debt over cash at the end of September and generated $ 341 million in earnings before interest, taxes, depreciation and amortization in the first nine months of 2010, its prospectus said.

Relative Value

Swift Transportation That would give 5.13 times the net debt to cash flow for a full year, more than four times the average net debt to EBITDA of 1.12 by 23 U.S. trucking companies on the stock .

Neither Werner Enterprises Inc., of Omaha, Nebraska, and Phoenix-based Knight Transportation Inc., Swift Transportation cited as competitors of Marina del Rey, California-based IPOdesktop.com, had a debt in late September.

Swift Transportation is "obviously a company that is struggling," said Michael Yoshikami, which oversees $ 1,000,000,000 in YCMNet Advisors in Walnut Creek, California. "If you're investing in a company with a lot of losses in a high growth rate is not on the table is a significant risk."

GM, ISoftStone

The IPO would be the second largest in U.S. this year after Detroit-based General Motors Co. 's 18.1 billion U.S. dollars in common stock sale last month. try to Swift is one of 11 scheduled for this week, the busiest period since December 2007, according to the data.

First IPO of the week came from ISoftStone Holdings Ltd., a Beijing-based technology service provider information that raised 141 million U.S. dollars yesterday. The stock rose 36 percent to $ 17.70 at 9:41 am in the market for New York Stock Exchange today.

ISoftStone sold 10,830,000 American Depositary Receipts at $ 13 each, the top of its forecast range, according to its filing with the SEC. The sale was the 40 th IPO of a U.S. company mainland China in 2010, capping a record year surpassing the 37 agreements in 2007, according to the data.

Venezuela’s central bank plans to increase sales of dollar-denominated bonds that have to become the leading provider of foreign exchange to importers in the coming year, a government official said.

Central Bank of Venezuela will sell up to $ 40 million a day in government bonds and the state oil company to supply the foreign exchange market Sitma for at least the first three months of the year, said the official, who asked not to be identified because t is not 'authorized to speak publicly. In June the government ordered commercial banks to sell dollar-denominated bonds to provide BRT.

President Hugo Chávez tightened controls to curb capital flight in May and the new rules imposed on currency transactions in January, which limited the sale of dollars. The central bank's plan signals that the supply of dollars are tight and that the government will have to issue more bonds to avoid running out of the U.S. currency, said Milton Guzmán, an economist at Caracas-based consulting firm Guzman Fortuny & Associates.

"Sitma government needs to keep the sale of bonds to power the system, and can even see the government buy back bonds to sell in the market," Guzman said in a telephone interview today. "The central bank should have enough to supply the market until March."

Bond transactions

One of the ways in which the government supplies of dollars to importers is allowing them to buy dollar-denominated debt with Bs in the system and then Sitma dollars by selling securities abroad. Sitma has negotiated $ 4,660,000,000 in bonds since June 9, when it created the market at a average rate of 5.3 per dollar.

The market trading securities 78.5 million U.S. dollars today, the second highest amount since the market opened, including 32.5 million U.S. dollars of government benchmark bonds maturing in 2027.

The yields of 9.25 percent due in 2027 fell 20 basis points to 13.12 percent at 3:28 pm in New York, according to JPMorgan Chase & Co. The price rose 1 cent to 74 cents.

The central bank is now the leading provider Sitma dollars and buy the $ 2 billion of bonds that Petroleos de Venezuela SA plans to sell at the end of the year, the official said yesterday in Caracas.

Barclays Capital estimates that the bank has about $ 3.5 billion of bonds denominated in dollars that could be used to feed the foreign exchange market.

The devaluation of the bolivar

Chavez, the Venezuelan bolivar devalued by 50 percent in January, has created a multi-level exchange, where some companies are able to buy dollars at 2.6 or 4.3 to the dollar. Companies that do not get government approval to buy dollars in fees Sitma can use to buy up to $ 50,000 per day.

A black market there are also cases in which pay up to 8.4 per dollar in the street.

The currency board, known as Cadivi, deals with dollar sales at 2.6 and 4.3 per dollar, which are made to companies that import food, medicine and other goods deemed important by the government . Cadivi has approved the sale of 33.4 billion U.S. dollars this year, or about 123.1 million U.S. dollars a day, according to a statement by e-mail sent yesterday.

Multinational expected to repatriate dividends from Venezuela will not be able to do so through Sitma and Cadivi have to wait for the approval of their applications, the official said.

Sitma Funds

While Sitma only funds a quarter of all imports into the country, the market has helped the country to prevent shortages, Bret Rosen, Latin American debt strategist at Standard Chartered Bank in New York, said. The concern among investors, said Rosen, is that the government and PDVSA will continue to sell bonds to manage the foreign exchange needs.

"We have had several billion dollars of the issues that are right to be primordial to feed the foreign exchange market," Rosen said in a telephone interview. "That risk is a continuous supply of the reason why Venezuela spreads have remained high."

The extra yield investors demand to own Venezuelan government bonds instead of U.S. Treasuries fell 24 basis points, or 0.24 percentage point for 1039 at 3:28 pm New York time, according to JPMorgan Chase & Co. This is the most widespread among emerging market countries.

The government and PDVSA has sold a total of $ 7.6 billion of bonds this year to meet demand for dollars and their own funding needs. Local investors buy the securities in bolivars and sell them abroad to earn foreign exchange.

Barclays is expected that the government and PDVSA will sell a total of $ 10 billion of bonds in 2011 and devalue the three fixed rates by 15 percent, according to a research report dated December 01, Alejandro Grisanti and Alejandro Arreaza.

The decision to devalue the exchange rate is a strictly political decision, not a misaligned currency, Daniel Volberg Morgan Stanley said in a telephone interview.

"Sitma has played the role of alleviating some of the most acute pressures of demand for dollars," said Volberg, America's Morgan Stanley economist in America, by phone from New York.

Outstanding shares of the iShares Gold Trust

Outstanding shares of the iShares Gold Trust, the bottom of the fourth largest publicly traded backed by gold, rose in most of the more than four years yesterday.

The number of shares increased by 27 million, or 7.6 percent, to 383.55 million, the biggest increase since February 2006. About 28 million shares changed hands yesterday in an operation block is equal to more than 90 percent of the volume of the day. Trade, which occurred at 1:41 pm in New York at 13.6762 per share, was worth about 383 million U.S. dollars.

Soros Fund Management, according to the website Soro manages about $ 27 billion, added a stake in the iShares Gold Trust in the third quarter after cutting its stake in the SPDR Gold Trust, the largest gold-backed fund. Investors have amassed record amounts of precious metals this year, sending global asset exchange-traded products by 17 percent, data from 10 providers of entertainment.

Outstanding shares of the SPDR Gold Foundation were unchanged yesterday at 424.7 million. Yesterday at 1:40 pm, about 2.8 million shares of SPDR Gold Trust are traded on a single block of transaction that is equal to more than 20 percent of the volume of the day.

Gold futures, which hit a record $ 1432.50 an ounce on 07 December, rose $ 6.30, or 0.5 percent, to settle at $ 1404.30 an ounce on the Comex 13:46 New York. The metal, up 28 percent this year, went to the 10 th consecutive annual gain.

Lance Berg, a spokesman for the iShares fund, and Natalie Zarechnak a SPDR fund spokesman declined to comment about the trades.

China and India could increase coal imports by 78 percent to 337 million tons next year

China and India could increase coal imports by 78 percent to 337 million tons next year, raising prices further from the highest in two years and divert supplies from Europe to Asia.

China could buy 233 million tons of fuel exports next year, up from net imports of 143 million in 2010, Citigroup Inc. said in a report dated 29 November. India faces a shortfall of 104 million tonnes in the 12 months ended in March 2012, mjunction Services Ltd., a commodities trader based in Calcutta, said in a note of 06 December, citing Coal Minister Sriprakash Jaiswal .

two fastest-growing major economies in Asia are burning more fuel economic expansion and increasing demand for electricity. The International Monetary Fund forecasts that China's gross domestic product will expand next year by 9.6 percent and India 8.4 percent. China added about 51 gigawatts of coal capacity last year, more than half the total capacity of the United Kingdom, according to Daiwa Capital Market and the U.S. Department of Energy.

"All indications are for increased demand in 2011," said Andrew Harrington, an analyst at Paterson Securities Ltd. in Sydney, in an interview from 09 December. "China has become much more important, especially because of expectations that they will be unable to meet their own needs for domestic supply."

China's appetite for the goods sent internal reference prices at the port of Qinhuangdao, a maximum of two years from $ 129 per tonne for the week ending Nov. 26, according to IHS McCloskey, a researcher at Petersfield, UK Kingdom.

fuel for power plants in the Australian port of Newcastle, the world's largest port for coal export, and Richards Bay South Africa rose to its highest since October 2008, according to data compiled by us IHS McCloskey.

Offer 'limited'

China will need 2 billion tons of coal in the next 10 years to boost the country's industrial development, the China Securities Journal reported today, citing Dai Yande, deputy director of China Institute of Energy Research.

"The thermal coal market will remain tight as strong demand from emerging markets, particularly China and India, the units of record levels of imports," said Daniel Brebner and Xiao Fu, the London-based analysts at Deutsche Bank AG. "Supply is expected to be limited in the major producing regions such as China, Indonesia and Australia."

Prices in Australia's Newcastle port, a benchmark for Asia, rose to $ 114.50 a tonne in the week ended Dec. 10, according to IHS McCloskey.

Export prices at Richards Bay Coal Terminal gained $ 2.89 to an average of $ 110 per tonne in the week ended December 10, IHS data showed McCloskey. Benchmark European coal derivatives closed at $ 113 a tonne yesterday, the highest closing price this year. Coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year dropped $ 1.50 to $ 111.50 a tonne from 11:52 am London time.

Indonesia Rates

The government of Indonesia raised the benchmark price for December sales by 8.3 percent from the previous month, the biggest increase since its introduction in February, the Ministry of Energy said on 8 December. The benchmark price for fuel with a gross energy value of 6,322 kilocalories per kilogram rose to $ 103.41 a tonne this month, according to the Directorate General of coal and minerals.

The use of coal in Asia rose 6.4 percent last year, an increase of over 0.8 percent in oil consumption, according to BP Plc.

Prices have also increased due to disruptions in the supply of heavy rains and flooding in the mines in Indonesia, Colombia and Australia, while the export growth in South Africa has been pressed by the lack of rail capacity.

Xstrata Plc, the world's largest exporter of thermal coal, has declared force majeure on some shipments from Australia on December 7 due to flooding of the mines. PT Bumi Resources, the largest coal producer in Indonesia, revised down its coal production target by 6 percent this year, heavy rains hampered mining, Dileep Srivastava Director on November 11.

South Africa shares

Such disruptions have led to South Africa and Colombia to divert supplies from traditional markets in Europe to better paying Asia.

South Africa accounted for about 30 percent of imports of thermal coal in India this year, according to the ministry. Shipments in the first nine months of this year increased 16 percent to 15.2 million tonnes, while China's purchases increased to 5.1 million tons through October compared with 1.52 million tons cared for all of 2009, as mjunction Services, which is backed by Tata Steel Ltd. and Steel Authority of India Ltd., and Chinese customs data.

"The strong demand for coal in China and import growth will continue throughout 2011," said Jeffrey Landsberg, president of New York, Commodore Research & Consulting, December 10 in an e-mailed response to questions. "China still has many decades left to develop. Only a fraction of the population, and actually only the eastern part of the nation, has grown deeper. The rest of the country must also develop."

The dollar fell against most of its counterparts

The dollar fell against most of its counterparts after the Federal Reserve said it would keep its asset purchase program in an effort to boost the U.S. economy.

The U.S. currency extended a loss of 3.5 percent this month against the euro, the Fed said that after monetary policy meeting will continue with its plan of 600 billion U.S. dollars to purchase the Treasury scheduled to run until June. The central bank said last month it would inject more money into the economy with the program, known as quantitative easing, to try to spur inflation and employment. yields on Treasury bonds remained high.

"It was largely a repeat of the November session," said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. "They are clearly keeping the policy course they are."

The dollar fell 0.2 percent to $ 1.3410 per euro at 2:35 pm in New York from $ 1.3391 yesterday. Was little changed at 83.40 yen.

The dollar index, IntercontinentalExchange Inc. uses to track the dollar against the currencies of six major U.S. trading partners, including the euro, yen and sterling, fell 0.1 percent to 79,236. Is

Fed Policy

The Fed left its benchmark interest rate unchanged at zero to 0.25 percent, where it has been since December 2008.

Shopping will "promote a stronger pace of economic recovery" and keep prices stable "over time," said the Federal Open Market Committee in a statement today in Washington. Unemployment is very high, said the central bank, reiterated his promise to leave interest rates low for a "prolonged period".

In its first round of purchases of assets, ended in March, the Fed bought 1.75 trillion U.S. dollars in securities, including $ 300 billion in Treasuries in an effort to stimulate economic growth strong enough to reduce unemployment near a maximum of 26 years.

In its second round of quantitative easing, the Fed has bought 114 billion U.S. dollars of Treasury bonds. The New York Fed has set dates for about $ 105 million in the purchase of Treasury for the period from December 13 through January 11

Economic Outlook

While reports last week showed that U.S. exports in October reached a confidence level in two years and consumers rose in December to the most since June, the Labor Department reported Dec. 3 that the unemployment rate rose for the first time since August of last month.

U.S. sales retail rose 0.8 percent, higher than estimated, the Commerce Department figures showed today in Washington. The median forecast of economists surveyed by us called for an increase of 0.6 percent.

The dollar index up 0.9 percent last week after President Barack Obama broke a tie on extending tax cuts for the middle class made by the administration of George W. Bush.

Obama said he would accept lower rates of income tax high earners, dividends, capital gains and multimillion dollar properties for the next two years in exchange for extending federal unemployment insurance. The current tax rates, enacted in 2001 and 2003, will increase to 31 December.

The measure is expected to boost inflation. Yields on 10 - year Treasury note rose to a maximum of six months of 3.39 percent yesterday.

The dollar's decline against the euro this month has been prepared by investor concern that the European crisis of sovereign debt will be extended throughout the region.

Union leaders attending a summit on December 16 and 17, with Italy, Belgium and Luxembourg for euro-zone bonds, while Germany and France oppose the idea. German Chancellor Angela Merkel and French President Nicolas Sarkozy said on December 10 oppose the bond joint and rejected any increase in the size of a rescue fund set up in May.

Goldman Sachs Asset Management Chairman Jim O'Neill, said that Brazil's currency may be overvalued and predicted more volatility in the debt markets in the euro zone in 2011.

"People have to be a little careful about Brazil, but has come a long way, " O'Neill said in a radio interview today on surveillance with Tom Keene. "The currency is overvalued. I that the people of Rio and Sao Paulo I visited in London and the description of London as economic. "

The comments are a reminder of how much has changed since O'Neill coined the acronym BRIC in 2001 to describe the rise of Brazil, Russia, India and China as economic powers. The Brazilian real has strengthened about 15 percent against the dollar since early 2001 and 36 percent since early 2009.

monetary union, or EMU.

"I do not think this is a credit crisis, " he said. "It's more of a crisis on the structure of the EMU and the governance of EMU. It is not so easily solved overnight."

"Very nervous"

The extensive debate on governance, which EU leaders will resume when they meet this week in Brussels, can promote financial market volatility.

"People are going to be very nervous, " said O'Neill. "We need much bolder, clearer leadership in Europe. "

O'Neill also hopes that the performance of the 10-year U.S. Treasury bonds to increase to about 5 percent in the medium term from the current 3.3 percent.

"The more I look at U.S. data, the more I think of the U.S. to return to reality, " he said. In the medium term, "equivalent to a yield of 10-year bonds than 5 percent. Not necessarily for the next year, but it is true that people think about it. I see that, along with the continued rise stock prices as a good thing for everyone. "

The euro may gain against the dollar as the Federal Reserve purchases of Treasuries to widen the yield spread between Germany and the U.S. The two-year bonds, Citigroup Inc. said

"With the European Central Bank is still perceived as tougher than the Fed, the euro and the dollar should continue receiving support cyclic differential rates for two years, "he wrote Valentin Marinov, currency strategist at Citigroup in London, in a report released today. "There may be indications that the Fed could accelerate their purchases of bonds in the future if the upward pressure on the perseverance of Treasury yields."

The euro gained 0.1 percent to $ 1.3401 as of 14:21 in London, leaving 1.3 percent in the last two days.

Two-year German government realized 46 basis points more than similar maturity U.S. security, down from 48 basis points yesterday, which was the most since Nov. 22 on the basis of prices closing.

Emerging market stocks rose

Emerging market stocks rose, lifting the benchmark index to a maximum of one week, after Hyundai Heavy Industries Co. won more orders are sent from a client and inflation slowed to India at least 11 months.

The MSCI Emerging Markets Index rose 0.5 percent to 1128.28 as of 10:31 am in New York, went to its highest close since Dec. 7. The Bombay Stock Exchange Sensitive Index rose 0.6 percent, falling inflation led to speculation the central bank to pause in raising interest rates. reference measurements in Russia and Brazil fell.

Hyundai Heavy, the world's largest shipbuilder, rose 8.9 percent in Seoul after Hapag-Lloyd AG container increased request. Sterlite Industries (India) Ltd., the largest copper producer in India, rose by 3.4 percent as the metal rose to a record. Hon Hai Precision Industry Co. rose 2.2 percent in Taipei on speculation that it will form a solar company.

"This certainly increases the confidence of investors," said Kishor Ostwal, director of the CNI Research (India) Ltd., a publicly traded provider of research activities in Mumbai. "Companies can now expect the central bank to focus more on the relaxation of a liquidity crisis for them to raise funds for expansion."

Developing country bonds gained as investors extra yield to the demand characteristic of the debt rather than U.S. Treasuries fell 7 basis points to 228, according to JPMorgan Chase & Co. 's EMBI + index.

"Nice run Up '

The MSCI Emerging Markets index has risen 15 percent this year. The indicator fell 0.6 percent last week as concern grew that the central bank of China may raise interest rates. The bank instead of increased requirements of lenders reserve ratio. The MSCI index has gathered 1.2 percent.

"We had a good run after the central bank decided not to raise interest rates during the weekend," said Wang Zheng, director of Shanghai-based investment in Jingxi Investment Management Co., which manages about $ 120 million .

The Shanghai Composite Index gained 0.1 percent, software companies came together after the Shanghai Securities News reported the government will maintain preferential policies for the industry. Kospi index in South Korea rose 0.6 percent.

In Seoul, Hyundai Heavy jumped after Hapag-Lloyd said that increased an order for 10 ships of six. Daewoo Shipbuilding & Marine Engineering Co., the second largest shipyard in the world, rose 6.2 percent.

La India

Stocks in India rose as the Ministry of Commerce said the benchmark index of wholesale prices rose 7.48 percent in November from a year earlier after jumping 8.58 percent in October. Repurchase rate in the country concerned is at 6.25 percent after six increases since March to cool inflation. Reserve Bank policy makers in India meet on 16 December.

Hon Hai Precision rose in Taipei after a research note active Mirae Securities Co. cited speculation that he will form a solar Foxconn unit GCL Poly Energy Holdings Ltd. Hon Hai Technology Co. rose by 6.7 percent.

Edmund Ding, a Hon Hai spokesman, did not return calls made to his mobile phone. Yee Ming Tong, chief financial officer of GCL, was not immediately available for comment at his office.

The Bovespa index fell 0.5 percent, falling for the first time in three days after retail sales rose less than analysts' estimates and Gerdau SA, said it would issue new shares.

Retailer Lojas Americanas SA and Cia. Brasileira de Distribuição Grupo Pao de Acucar fell after sales rose 0.4 percent in October from September, below forecasts of 1.1 percent on average by 25 economists surveyed by us.

The Russian MICEX index fell, led by OAO Novatek, the Natio natural gas producer, the second largest. Oil revenue source main export from Russia, fell 30 cents to $ 88.31 a barrel in New York.

Expand Schools Courses Amid shortage Sharia Scholar

Universities are expanding Islamic finance courses as the demand for qualified professionals in Islamic law exceeds supply in the industry $ 1 billion.

International Islamic University Malaysia plans to start postgraduate courses specializing in capital markets that comply with Shariah, banking and insurance after the registration of its overall finances to comply with Muslim principles tripled in the last year said Professor Mohd Azmi Omar, the dean of the institute. La Trobe University in Melbourne, which began classes this year, is working with officials in Malaysia to provide industry recognized qualifications.

The lack of skills is one of the biggest challenges for the expansion of the global Islamic banking, based in Washington, said Patrick Imam, an economist at the International Monetary Fund. About 50,000 people will be needed over the next five to seven years to meet demand, according to Ishaq Bhatti, head of Islamic banking and La Trobe funding program.

"There are very few people who are very good, both in finance and interpretation of Islamic law," the imam said in an email response to questions sent on 10 December. "For Islamic banking must be fluent in finance and Islamic principles, and are usually one or the other."

Industry Standards

The Islamic finance industry, with a capital of Kuala Lumpur-based Islamic Financial Services Board estimates will rise to $ 1.6 trillion by 2012, is the development of global standards to improve the legislation. The Manama, Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions said the shortage of specialists increases the risk of conflict of interest because many sit on various advisory boards.

Sheikh Nizam Yaquby of Bahrain and Syria Abdul Sattar Abu Ghuddah who serve on 85 boards of Islamic financial institutions, ranked first among the 20 religious scholars in an October report from Zawya, a midline News this business and directory, and the Funds @ Work AG, a consulting firm Kronberg, based in Germany.

Experts are preparing the first certification standard for scholars. A standing committee should be selected later this year to work on creating a body responsible for issuing permits for qualified persons to sit on the boards of the Sharia, Aznan Hasan, the chairman of the oversight committee, said in a August 30 interview in Kuala Lumpur.

"You could see the hunger and thirst for Islamic finance when first announced this program in July 2009," said Bhatti La Trobe, in an interview on 28 October in Kuala Lumpur. "At first we thought that 100 people would sign up, then we started getting requests for high profile government and industry, which increased to 200."

Thailand, Senegal

Thailand, Senegal and Sudan are among the countries seeking to harness the wealth of 1.6 billion Muslims in the world by selling Islamic bonds, which are reviewed by experts for the implementation of Islamic law.

Global sales of sukuk, which pay returns based on asset flows to comply with the ban on religion in the interest fell 28 percent this year to $ 14.5 million for the same period of 2009, as data compiled by us. Issuance reached a record $ 31 billion in 2007.

Shariah-compliant bonds returned 12 percent in 2010, the HSBC / NASDAQ U.S. Dollar Dubai sukuk index shows, while the debt in emerging markets gained 13 percent, according to JPMorgan Chase & Co. 's EMBI Global Diversified index.

Malaysia yields

The difference between the average yield of sukuk in developing countries and the interbank offered rate in London has dropped 160 basis points, or 1.6 percent, to 308 this year, according to the HSBC / NASDAQ U.S. Dollar Dubai . UU. sukuk index.

The performance of Malaysian Islamic bonds with a maturity of 3.928 percent in June 2015 was little changed today at 3.06 percent, according to the price of Royal Bank of Scotland Group. The extra yield investors demand to hold the government rather sukuk Dubai from Malaysia also was little changed at 342.

The UK's Durham University, Al-Azhar University in Cairo and Ethics Institute of Islamic Finance in Dubai also offer courses in Islamic finance. Harvard University in Cambridge, Massachusetts, is an Islamic legal studies program through its School of Law, according to data on its website.

Durham University

Schools and universities are facing a shortage of teachers for courses on Islamic finance as demand increases, "said Professor Rodney Wilson, professor at the Center for Middle Eastern and Islamic Studies at the University of Durham.

"We need to appoint more staff" as Durham only four class teachers, Wilson, who is based in London, said in an emailed response to questions yesterday.

La Trobe University is working with Kuala Lumpur, Malaysia-based International Centre for Education in Islamic Finance for approval to offer the Chartered Islamic Finance Professional Certification, said Bhatti.

The Institute of Islamic Banking and Finance, IIUM will begin a Masters in Islamic capital markets in September 2011 in relation to the Securities Commission of Malaysia, dean of the institute, said in an interview on 6 December.

"We have bankers, lawyers and fresh graduates who attend our classes," said Mohd Azmi, who also teaches Islamic capital markets in Trisakti University in Jakarta, Indonesia.

Fed Retains $600 Billion Bond-Buying Plan to Boost Economy

Federal Reserve maintains its plan to expand the monetary stimulus registration, saying that economic growth has not been strong enough to reduce unemployment.

The Fed has 600 billion U.S. dollars in purchases of Treasury are aimed at promoting a recovery that has been "disappointingly slow" and keep prices stable "over time", said the Federal Open Market Committee in a statement today in Washington. The central bank reiterated its pledge to leave interest rates low for a "prolonged period".

Chairman Ben S. Bernanke, is resisting the top Republican lawmakers critical for the survival of unconventional efforts to reduce persistent unemployment rate near a maximum of 26 years. Gains in manufacturing, retail sales and inflation expectations indicate purchases of assets may be helpful. The strengthening dollar has defied the skeptics who said the policy would weaken the currency.

Stocks held gains and Treasury bonds declined after 10 years of instruction. 500 of Standard & Poor's rose 0.2 percent to 1,243.34 at 2:48 pm in New York. The yield on the benchmark 10-year Treasury rose to 3.45 percent from 3.28 percent late yesterday.

Recovery "continues, albeit at a pace that has been insufficient to reduce unemployment," said the statement from the Fed "The household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth and the credit crunch. "

Target Rate

Fed officials left their target for the federal funds rate, which covers interbank loans overnight, in a range from zero to 0.25 percent, marking two years of the policy. The central bank is likely to wait until the first quarter of 2012 to increase the rate, based on the median estimate of 8.2 in December poll of economists by us.

"The unemployment rate is high, and measures of core inflation are relatively low, compared to the levels that the Committee of judges to be consistent in the long term, with its dual mandate," the Fed said, repeating the language the statement last month.

Republican lawmakers, including Indiana Rep. Mike Pence, wants to get rid of half the Fed's legislative mandate that focuses on the maximum use to focus on price stability alone.

"The core inflation measures have followed the downward trend," said the statement.

Hoenig dissent

Kansas City, Thomas Hoenig, president of the Fed, the head of the longest-serving policy, voted against the decision of the FOMC for the eighth straight time and reiterated its view that "continued high level of monetary flexibility "may" destabilize the economy. " He tied the record of former Governor Henry Wallich in 1980 for most in a year dissents.

The $ 600 billion of purchases are in addition to the Treasury's long-term the Fed is buying for reinvestment of maturity of the mortgage debt, a policy that began in August. June combined purchase of a total of $ 850,000,000,000 to $ 900 million, or $ 110 billion per month, the Fed said Nov. 3. Policymakers reiterated that he will "regularly review, the purchase program and adjust as necessary.

The central bank has bought 114.1 billion U.S. dollars of Treasury bonds since November 12 when he began to purchases under the program called Queen Elizabeth 2 for the second round of so-called quantitative easing. The Fed bought $ 1,700,000,000,000 debt and mortgage bonds in the first round until March 2010.

Thirty-eight of 39 analysts surveyed by us taken Dec. 7 to 8 forecast the Fed would buy bonds program unchanged. Eight of 37 said the Fed ultimately buy more than $ 600 million expected until June, and two said they would buy less.

Signs of strength

Signs of economic strength, combined with the prospects for additional fiscal stimulus, has pushed Treasuries lower, with the 10-year yield rising to 3.28 percent yesterday from 2.57 percent on 3 November the day of action. 500 of Standard & Poor's has increased by 3.6 percent through yesterday, while the dollar has risen 3.8 percent against a basket of six currencies.

Inflation expectations for the next five years, as measured by the rate of equilibrium between nominal bonds and inflation index, rose to 1.58 percent yesterday from 1.47 percent on Nov. 3.

Some data suggest the U.S. recovery gaining strength in the sixth quarter after the end of the worst recession in seven decades. The U.S. retail sales last month rose more than expected, a government report showed today. Manufacturing expanded for a month running in November sixteenth, and a measure of consumer confidence rose in December to a maximum of six months.

'Delete' recovery

The global economy is in a "clear" that the recovery is to promote confidence in the transportation industry, Richard Giromini, executive director of truck manufacturer Wabash National Corp., said yesterday in an interview on Television "InBusiness With Margaret Brennan. "

At the same time, employment remains stagnant. Payrolls expanded by 39,000 jobs in November and the unemployment rate rose to 9.8 percent from 9.6 percent, compared with analysts' median forecasts for an addition of 150,000 and no change in unemployment rate has remained at 9.4 percent or higher since May 2009.

In 2008, the people "have called you crazy" if you said that U.S. interest rates would be zero for two years, said Paul Dales, economist at U.S. Capital Economics Ltd. in Toronto. Now, "is not too difficult to do so for another two years."

Core prices

Inflation excluding food and fuel costs, as measured by the consumer price index for personal expenses, decreased to 0.9 percent in October, the slowest pace since records began in 1960. Central banks prefer a long-term rate of 1.6 percent to 2 percent for core PCE indicator call.

"Given the current economic environment, most restaurant companies, including ours, have been reluctant to take the kind of price increases would be needed to offset the commodity inflation that has occurred this year," Andrew Puzder, chief executive of CKE Restaurants Inc.., operator of Carl's Jr. and Hardee's burger chain's, said in a conference call on December 8. CKE, based in Carpinteria, California, was purchased in July by an affiliate of Apollo Management LP.

Bernanke, who turned 57 yesterday, said in a Nov. 19 speech that there are limits to what the Fed can do alone and called for "a fiscal program that combines short-term measures to increase growth induce strong confidence measures to reduce structural deficits in the longer term "as a complement to central bank actions.

Transaction Tax

The Fed chief may get the first part. Congress this week is the vote of an estimated 858 billion U.S. dollars compromise tax package that temporarily maintain the Bush tax cuts-was for all Americans. This can reduce the chances of the Federal Reserve increasing Treasury purchases over $ 600 million dollars, Michael Feroli, chief U.S. economist JPMorgan Chase & Co., said last week.

Pacific Investment Management Co., which manages the largest bond fund, raised its forecast for growth next year in response to stimulation, Director General, Mohamed El-Erian said last week. Now sees the economy growing 3 percent to 3.5 percent in the fourth quarter of next year over the same period this year, up from 2 percent to 2.5 percent growth, El-Erian he said.

This is in line with forecasts average policy makers from the Fed last month. Central banks see an unemployment rate of 8.9 percent to 9.1 percent in the fourth quarter of 2011.

Republican Letter

purchases by the Fed will do more harm than good to the U.S. economy, John Boehner, R-Ohio, nominated to be chairman of the House, and three other top Republicans in the House and Senate, said in a letter November 17 Bernanke.

Bernanke said sitting for an interview with CBS Corp. s' "60 Minutes" program that aired on 05 December, the first TV sit-down with a news organization since July 2009.

"We're not far from the level at which the economy is not self-sustainable," said Bernanke. It is possible that the Fed could expand the purchase of bonds beyond $ 600 billion, he said.

The tension sets the stage for next year's clashes between Bernanke and congressional Republicans, who gained control of the House and most Democrats reduced "the Senate in the November elections.

Representative Ron Paul of Texas, author of "End the Fed" chair a House subcommittee central bank supervision. The House Oversight Committee will be headed by California Republican Darrell Issa, who is the target of increasing the transparency of the Fed, such as shortening the period of five years in the release of transcripts of FOMC meetings.

"The cost of the independence of the Fed, at some point have to be a scapegoat," said Vincent Reinhart, former director of monetary affairs of the Fed who is now a resident scholar at the American Enterprise Institute in Washington.

Largest price increase since July inflation units Bonds

Argentina may report an increase in consumer prices fastest since July, fueling demand for peso bonds indexed to inflation, investors have delivered nearly twice the performance of public debt in dollar terms this year.

The national statistics institute said today that prices rose 11.2 percent in November from the same month a year ago, compared with an increase of 11.1 percent in each of the three previous months, as estimated median of seven analysts surveyed by us. The yield of 7.13 percent in Argentina, local currency bonds indexed to inflation compared to 3.3 percent in Mexico and 6.07 percent in Brazil, according to Barclays Plc.

Argentina's peso bonds tied to consumer prices returned 52 percent this year, compared with 34 percent for dollar bonds, according to Barclays and JPMorgan Chase & Co. economists and investors, including Eduardo Costantini of Asset Management Consultatio say inflation is more than double the official rate.

"Inflation is accelerating because there is no tools to stop or slow down or change the dynamics of inflation," Costantini, who manages 1.2 billion U.S. dollars including Argentina's debt indexed to inflation, said in an interview from 09 December in Buenos Aires. Prices are rising at least 20 percent per year, he said.

Argentine consumer prices rise by 26 percent this year from 2009, most of the world after Venezuela, said Miguel Kiguel, a former undersecretary of finance. The central bank prints pesos at the end of November at the fastest pace in at least four months, which led the country to start importing 100,130 million pesos ($ 25) notes in Brazil.

Printing money

"It's getting harder for them to hide," said Juan Pablo Fuentes, Latin America economist at Moody's Analytics Inc. in West Chester, Pennsylvania. "The central bank is printing too much money. We have monetary and fiscal policies now very expansive."

Public spending increased 45 percent in October to 36.9 billion pesos. Tax revenue rose 53 percent to about 40 billion pesos in the same period.

Inflation could accelerate to 40 percent next year in a "worst case scenario," said Kiguel, who served under former President Carlos Menem, in a Dec. 10 interview in Buenos Aires. The government is intensifying the growth of an already overheated economy, he said.

The National Statistics Institute will publish the November inflation report tomorrow at 2 pm New York time.

Inflation estimates

Economists and politicians including Vice President Julio Cobos reports have questioned the government's inflation since 2007, when then-President Nestor Kirchner began changing personnel in the national statistical institute. Kirchner, died in October.

President Cristina Fernandez de Kirchner, the widow of former president, he brought in the International Monetary Fund officials last week to offer advice on creating a new national inflation index.

The Argentines expect prices to rise 30 percent over the next 12 months, according to a survey by November 15, 1210 published by the people of Buenos Aires based at the Universidad Torcuato Di Tella. The poll has a margin of error of 3.5 percentage points.

A central bank official, who declined to be identified in accordance with internal policy, declined comment. Messages left at the Economy Ministry were not answered.

The extra yield investors demand to hold Argentine dollar bonds instead of U.S. Treasuries fell 1 basis point to 505 at 6:15 am New York, according to JPMorgan Chase & Co.

Guarantees linked to economic growth rose 0.05 cents to 14 cents. The peso rose 0.1 percent to 3.9733 per dollar yesterday.

Credit Default Swaps

The cost of protecting Argentina's debt against non-payment for five years with credit-default swaps rose 5 basis points to 636, according to data compiled by CMA. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fail to adhere to its debt agreements. A basis point is 0.01 percentage point.

Minister of Economy, Amado Boudou, began meeting with officials of the Paris Club group of creditor nations yesterday to discuss the solution about $ 7 billion in defaulted debt. Boudou said in Paris that the country is seeking a solution with the club, whose members are Germany, Japan and the U.S., which will enable Argentina to maintain growth and "open investment in the economy."

the second largest economy in Latin America is forecast to grow 9 percent this year, the most since 2005 after a record of 55 - million metric tons of soybean crop and record car production, according to a forecast central bank. vehicle production increased 36 percent in November from the previous year and exports of cars by 26 percent during the same period, the association of automobile manufacturing country, said on 3 December.

Policy Changes

Even with the government with the IMF at a rate of inflation, the statistical agency is unlikely to price increases of over 12 percent, sources said, to Moody's. Unofficial inflation probably will remain a 30 percent growth in 2011 slows to 5 percent, he said.

"To close that gap, the government must take seriously what policy moves right, by spending slowdown," said Fuentes. "The economy has the capacity to grow from 9 to 10 percent."

Gold gained for a second day in New York

Gold gained for a second day in New York as the weak dollar boosted demand for the precious metal as an alternative investment.

The dollar fell to a three-week low against the euro on speculation the Federal Reserve may signal today is open to purchases of increasing debt beyond the $ 600 billion already announced. Gold, which usually moves inversely to the dollar reached a record $ 1432.50 an ounce on 07 December.

"The weak U.S. dollar is leading to gold," said Peter Fertig, owner of Quantitative Hainburg Commodity Research Ltd., Germany, today by phone. "There is still an argument for further implementation of quantitative easing in the U.S. that would benefit gold."

Gold for February delivery rose 50 cents to $ 1,398.50 an ounce at 8:43 am on the Comex in New York.

Gold will average $ 1,550 next year, compared with a previous forecast of $ 1,400, an analyst at UBS AG Julien Garran, said in a report yesterday. Platinum and palladium are also among the best teams in the bank for next year, said Clawson.

Gold gained 28 percent this year, set for an annual gain of 10, as investors lost confidence in the currency and buy precious metals as a hedge of wealth. More government bond purchases by the Fed are "certainly possible", said Chairman Ben S. Bernanke, in an interview broadcast on CBS Corp. s "60 Minutes" on Dec. 5.

'Safety Unit'

"We hope that European concerns debt, continuing the implications of quantitative easing and a security unit under way to boost investor demand," Garran said UBS. "Absolute faith in fiat currencies remains unstable. Gold is currently behaving like a coin rather than a commodity."

gold assets in exchange-traded products rose 2.98 to 2,096.39 tons metric tons yesterday. Holdings reached a record 2,104.65 tonnes on 14 October. won silver holdings to 51.02 tonnes 15,090.16 tonnes, the highest amount since at least February, data from four suppliers of entertainment.

Platinum for January delivery gained $ 7.70, or 0.5 percent, to $ 1.705 an ounce and palladium for March delivery added $ 5.55, or 0.7 percent, to $ 758 an ounce. Silver for March delivery fell 10.9 cents, or 0.4 percent, to $ 29,515 an ounce.

A drop in mortgage bonds backed by the government

A drop in mortgage bonds backed by the government that sent yields to the highest level since May of threat to the recovery of the U.S. housing market, which had been fueled by historically low borrowing costs.

Yields on Fannie Mae to guarantee that most affect lending rates jumped as high as 4.21 percent yesterday, up 1 percentage point from a record low in October. Completed the New York market by 4.1 percent.

The highest rates of loan "will not be fun" for a weak housing market, said Scott Simon, director of mortgage bonds in Newport Beach, California, Pacific Investment Management Co., manager of the largest bond fund in the world. "If you're thinking of buying a house a few weeks ago, the same house, you, it seems that up to 9 percent more expensive," he said.

The agency mortgage securities investors have suffered during the accident this month in bond prices, amid speculation that the agreement of President Barack Obama to extend and expand tax cuts will spur growth and inflation. While the decline was not as severe as for Treasuries, the effects of higher mortgage rates, coupled with escalating gas prices, offset much of the fiscal stimulus package intended effects, according with Gluskin Sheff & Associates chief economist David Rosenberg.

Top Monthly payments

The average rate on a typical mortgage of 30-year fixed rate has risen for four weeks averaged 4.61 percent last week, according to Freddie Mac, pushing the monthly cost of a loan of U.S. $ 300,000 to $ 1,540 from $ 1,462. The rate had fallen to a record low 4.17 percent in the week ended Nov. 11 amid speculation of a bond purchase program by the Federal Reserve may limit yields.

Elsewhere in credit markets, the extra yield investors demand to own corporate bonds rather than similar-maturity government debt remained unchanged at 171 basis points, or 1.71 percentage points below this year in the high of 201 basis points in June, according to Merrill Lynch Bank of America on the world market overall Corporate Index. The average yield of 3.952 percent.

Occidental Petroleum Corp. sold 2.6 billion U.S. dollars of debt in the largest bond offering in over five weeks. four largest banks in Australia may cut borrowing costs by up to 40 percent of the sale of covered bonds after the government pledged to lift a ban on the issuance of securities.

Bonds Fairfield, Connecticut-based General Electric Co. were the most actively traded U.S. corporate securities by dealers, with 120 transactions of $ 1 million or more, according to Trace, the bond information system in the prices of the Financial Industry Regulatory Authority.

The Barclays Capital Global Aggregate Bond Index has returned 0.03 percent this month, bringing the gain this year to 4.22 percent.

Sale West

West, the largest producer of raw land in the continental United States, sold $ 600 million three-year bonds yield 50 basis points more than similar Treasury bonds to maturity, $ 700 million debt five years with a spread 60 basis points and $ 1.3 billion 10-year bonds at 80 basis points above the benchmark. A basis point is 0.01 percentage point.

The sale is the largest since Coca-Cola Co., the world's largest maker of soft drinks, issued $ 4,500,000,000 of bonds on Nov. 4. The income can be used to finance acquisitions, the company in Los Angeles, said yesterday in a regulatory filing.

West last hit debt markets in May 2009, the issuance of $ 750 million 4.125 percent notes 7. The debt traded on 9 December at 108.68 cents, monitoring data show.

IBM Notes

Armonk, New York, International Business Machines Corp. sold $ 1 billion of floating rate notes in its first offering of this type of credit in more than one year. The notes yield 3 basis points more than the three-month interbank rate in London offer a benchmark for loans.

Westpac Banking Corp., the Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd. and National Australia Bank Ltd. may be able to issue covered bonds three years to yield about 50 basis points more than the rate of bank swap bill, unless the spread 85 basis points on senior debt, according to Royal Bank of Scotland Group Plc. Moody's Investors Service estimates a savings of 20 percent.

"The main weapons'

Covered bonds are "essential weapons as banks seek cheaper and more diversified funding sources," said John Manning, a credit analyst at RBS in Sydney, in a telephone interview.

Australian banks are excluded from the sale of securities that are backed by assets like mortgages that can be sold in the event of a default, because they conflict with local laws giving the depositors' interests must come ahead of creditors.

The Markit iTraxx Financial index of credit default swaps insuring the debt-Europe junior 25 banks and insurers fell 10 basis points to 316 today, according to JPMorgan Chase & Co. The index rose 10 December to the highest level since April 2009 on bets the bondholders will have to share in the costs of bank bailout.

Contracts linked to the Spanish public debt fell 2 basis points to 331 basis points after the Treasury issued € 2,500,000,000 ($ 3.4 billion) of treasury bills, below the maximum target of the auction and a higher performance than paid in previous sales.

Swaps credit-default usually falls improve investor confidence and rising as it deteriorates. Contracts 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.

Leveraged loans

The Standard & Poor's / LSTA U.S. leveraged loan 100 Index rose for a fifth day yesterday, up 0.12 cent to 92.16 cents. The index, which measures the 100 largest loans in first lien leveraged dollars, has returned 0.79 percent this month, so again this year to 8.56 percent. leveraged loans and junk bonds are rated below Baa3 by Moody's Investors Service or below BBB-by S & P.

In emerging markets, the extra yield investors demand to own corporate bonds rather than government bond rose 5 basis points to 233 basis points, according to JPMorgan Chase & Co. index data.

Yields on agency mortgage bonds are guiding rates in almost all new U.S. home loans after the collapse of the market not the agency in 2007 and a decline in the banks. $ 5,300,000,000,000 market includes government-guaranteed debt backed by Fannie Mae and Freddie Mac and Ginnie Mae federal agencies.

Fannie Mae Esparza

The difference between yields on the present value of coupon Fannie Mae, the greatest impact on lending rates, as trade closer to their face value of Treasury bonds to 10 years has dropped to 82 basis points from up to 15 months of 99 basis points on December 1.

An increase in spreads before the rise of yields and the outlook for bond prices and who have contributed least to the owners refinance mortgage agency bonds than the bond market this month, said Tom Sontag, senior portfolio manager Neuberger Berman in Chicago Group LLC.

"They become more attractive from the point of view of propagation: That attracted investors in them, thus preventing prices from falling further," said Sontag, whose firm oversees about $ 16 billion in structured-product investments.

The lawsuit settlement

Housing demand has fallen this year as tax credits for buyers of maturity and unemployment hovered below 10 percent. Existing home sales, which reached a record low in July, rose at an annual rate of 4.43 million in October compared with an average of 5.81 million in the last decade, the National Association of Realtors said on 23 November.

About 10.8 million households, or 22.5 percent of people with mortgages, were worth less than their debt at 30 September, according to CoreLogic Inc. additional 2.4 million were less than 5 percent of capital of Santa Ana, California-based company, real estate information, said Dec. 12.

As many as 8 million homes are in some stage of default or foreclosure, known as shadow inventory, and may be released over the next five years, according to Morgan Stanley.

"The rise in mortgage rates will not demand the removal at a time when the market is close to being in balance, but when there are still huge oversupply," Rosenberg said in a telephone interview. He cited an S & P / Case-Shiller Home Price Index shows a decrease of 1.5 percent in the three months ended in September.

Affordability

Mortgage broker returned 37 basis points more than Treasuries of similar duration of this month through December 10, the loss of 98 basis points in absolute terms, according to Barclays Capital.

"It's definitely been a significant movement in yields and that move has clearly had a direct impact on mortgage rates," said Matthew Marra, portfolio manager of fixed income in New York, BlackRock Inc., the largest asset manager.

The increase is also exacerbated a selloff in Treasuries, as investors covered by mortgages and debt managers with the projected life of roughly doubling in value due to lower average forecast for the refinancing homeowner he said.

The increased affordability of housing based on housing prices low means that the recent rise in mortgage rates will have little effect on the value of the bonds in the mortgage market not the agency, said Sontag Neuberger, who has been buying of high-risk mortgage securities.

"They remain very low rates," said Didi Weinblatt, vice president of mutual fund portfolios at USAA Investment Management in San Antonio, where he helps oversee about $ 45 billion.

High Performance

No agency debt in household debt have joined the high-performance company this month to avoid losses due to higher projected returns. The high-yield bonds have returned 0.95 percent this month, Bank of America Merrill Lynch index data show.

Typical prices of securities backed by higher option adjustable-rate mortgages rose to 53.95 cents, to 52.60 cents on November 30 and 48.21 cents on Dec. 31, according to JPMorgan Chase & Co.. Option ARMs allow borrowers to pay less than the interest due each month, adding that the unpaid amount to the overall mortgage balance.

"If rates go up another 100 basis points that have an impact? Yes, I do not think that will happen in the short term?" No, "said Sontag. "To not think that the 10-year Treasury around these levels is at fair value, you have to buy into the theory that the inflation genie is out of the bottle."

Asian Stocks Rise to Two-Year High

Asian stocks rose, lifting the regional benchmark index to its highest level since July 2008, as rising commodity prices lifted shares of raw materials. Japanese exporters fell as the yen rose against the dollar.

BHP Billiton Ltd., the world's No. 1 mining company, advanced 0.5 percent in Sydney after copper prices hit a record price of crude oil advanced. CNOOC Ltd., the largest producer of offshore oil, rose 0.8 percent in Hong Kong. Reliance Industries Ltd., which owns the largest refinery complex in the world, rose 1.3 percent in Mumbai. Canon Inc., the world's largest manufacturer of cameras, sank 0.5 percent after the yen's advance against the dollar soured its earnings forecast.

The MSCI Asia Pacific Index rose 0.9 percent to 135.5, the highest level since July 24, 2008, from 19:46 in Tokyo. About three stocks gained for every two that fell. The indicator fell 0.3 percent last week as concern grew that China's central bank may raise interest rates. The bank instead of increased requirements of lenders reserve ratio.

"Fears of a rise in interest rates in China have not come to fruition until now," said Tim Schroeders, who helps manage $ 1 billion in Melbourne in Pengana Capital Ltd. "There is a sense of relief in the markets . This may only be temporary and that the Chinese authorities are increasingly worried about inflationary pressures undermining the economy's growth prospects in the long term. "

Japan's Nikkei 225 Stock Average rose 0.2 percent, while the broader Topix index rose 0.5 percent. Australia S & P / ASX 200 gained 0.2 percent. South Korea's Kospi index rose 0.6 percent, while Hong Kong's Hang Seng rose 0.5 percent.

S & P 500

Sensitivity index of Bombay Stock Exchange, or Sensex, rose 0.6 percent to its highest level in a week as inflation slowed, so the Central Bank room to hold interest rates after the fastest increase of any Asian country this year.

Future over 500 of Standard & Poor's rose 0.2 percent today. In New York, the index rose 0.06 points to 1,240.46, after rising to 0.5 percent, as the Senate began voting on the agreement of President Barack Obama to cut taxes for the Republicans, and investors turned their attention the Federal Reserve meeting in December 1914.

Materials and energy stocks increased more among the 10 industry groups represented in the MSCI Asia Pacific. BHP Billiton, also the largest oil producer in Australia, rose 0.5 percent to A $ 45.65 in Sydney. Rio Tinto Group, the world's third largest mining, rose 0.2 percent to $ 87.90.

OZ Minerals Ltd., one of Australia's copper and gold mining company, rose 5.8 percent to $ 1.73, while in Seoul, Korea Zinc Co., the world's largest producer of refined zinc, advanced 3.9 percent to 304,000 won.

CNOOC, PetroChina

CNOOC rose 0.8 percent to $ 18.48 in Hong Kong in Hong Kong and PetroChina Co., the nation's largest oil company, rose 0.6 percent to HK $ 10. Confidence increased 1.3 percent to 1,055.25 rupees in Mumbai, the largest contributor to earnings today the Madrid stock exchange sensitive index.

Commodities rallied and the dollar weakened yesterday after China refrained from increasing interest rates. Standard & Poor's GSCI products advanced 1.3 percent to 5 pm in New York, copper futures rose to a record $ 9,248 a tonne in London.

Crude oil for January delivery rose 0.9 cent to settle at $ 88.61 a barrel in New York, while London Metal Exchange Price Index of six industrial metals like copper, zinc and Aluminium rose 2.2 percent.

"Markets With Relief

While China's inflation accelerated at its fastest pace in more than two years, the central bank kept its benchmark interest rate unchanged. That helped boost optimism that the world's fastest growing economy will continue to fuel global expansion and demand for raw materials.

"One of the major macro-risks out there was a China policy mistake," said Prasad Patkar, who helps manage about $ 1.8 million at Platypus Asset Management Ltd. in Sydney. "Markets are taking a bit of relief that we will not exaggerate."

Hyundai Heavy Industries Co., the world's largest shipbuilder, rose 8.9 percent to ₩ 417 000 in Seoul after saying that Hapag-Lloyd AG increased its order for 10 ships of six. Deliveries of the ships will take place between July 2012 and November 2013, he said.

Hon Hai Precision Industry Co. rose 2.2 percent to NT $ 115 in Taipei after a research note active Mirae Securities Co. cited speculation that he will form a solar Foxconn unit GCL Poly Energy Holdings Hon Hai Technology Co. Ltd. rose 6.7 percent to NT $ 111.

U.S. retail sales

In Tokyo, NTN Corporation, the world's third largest manufacturer having climbed 5.2 percent to 449 yen after Credit Suisse Group AG raised its investment rating to "overweight" from "neutral."

Li & Fung Ltd., the No. 1 supplier to Wal-Mart Stores Inc., rose 1.6 percent to $ 45.40 in Hong Kong in Hong Kong before a report expected to show sales U.S. retail rose as demand recovers in the world's largest economy. Esprit Holdings Ltd., the largest clothing manufacturer listed in Hong Kong, gained 2 percent to 38.85 Hong Kong dollars.

U.S. retail sales probably rose in November for the fifth consecutive month, economists said before a Commerce Department report later today. The median estimate of 62 economists surveyed by us is for a gain of 0.6 percent after increasing 1.2 percent in October.

The MSCI Asia Pacific index rose by 11 percent through the night in 2010, matching the gain for the S & P 500 and surpassing the 9.1 percent increase in the Stoxx Europe 600 Index. Stocks in Asia benchmark is valued at 14.8 times estimated earnings on average, compared with 14.5 times for the S & P 500 and 12.4 times for the Stoxx 600.

Canon, Honda

Canon dropped 0.5 percent to 4,080 yen in Tokyo after the yen rose to 83.11 against the dollar, compared with 84.15 at the close of stock trading in Tokyo yesterday. Honda Motor Co., with about 80 percent of its sales outside Japan, lost 0.2 percent to 3.170 yen. A potentially stronger yen reduces the value of overseas earnings of Japanese companies.

"The appreciation of the yen weighed on exporters in Japan, said Kenichi Hirano, president and chief strategist at Tachibana Securities Co.

AGL Energy Ltd., the largest distributor of electricity in Australia, fell 4.9 percent to A $ 15.07 in Sydney after failing to buy energy assets the government of New South Wales amid reports that rival Origin Energy Ltd. and a unit of CLP Holdings Ltd. success.

U.S. Stock index futures fluctuated

U.S. Stock index futures fluctuated, indicating the Standard & Poor's 500 will remain near the highest level since Lehman Brothers Holdings Inc. 's 2008 bankruptcy, before a meeting of the heads of the Federal Reserve.

Amgen Inc., the world's largest biotechnology company, advanced 7.7 percent in early trading after a study showed one of its drugs delay the spread of prostate cancer to the bones of men. HCP Inc. may move as the health care real estate investment trust agreed to pay 6.1 billion U.S. dollars for 338 nursing homes in UNHCR ManorCare Inc.

Futures on the S & P 500 expiring in March rose 0.1 percent to 1238 at 6:30 am in New York. The index has risen 11 percent this year, the Fed announced a program of 600 billion U.S. dollars of bonds with an option to purchase to help economic recovery and improved corporate profits. Dow Jones futures Industrial Average added 0.1 percent to 11,380 today, and Nasdaq-100 Index futures rose the same amount of 2,213.5.

"The Fed policy is well designed and will be very useful from the standpoint of the economy," said Andrew Popper, chief investment officer at SG Hambros Bank Ltd., on Television "On The Move" with Francine Lacqua . "It is still very positive on equities."

The S & P 500 rose 0.06 points yesterday to 1,240.46, after rising as high as 1,246.73 earlier in the day, nearly beating 1,251.7, its closing level prior to the bankruptcy of Lehman Brothers sent the gauge to a crash 46 percent through March 2009.

Fed Stimulus

Fed officials are likely to make any changes in its economic stimulus package when they meet today in Washington last year, according to 38 of 39 analysts in a survey of 7 to 8 December.

The U.S. retail sales probably rose in November for the fifth consecutive month holiday shopping season got underway, a sign consumers will play an important role in recovery, economists said before a Commerce Department report due at 8:30 am Washington.

The projected increase of 0.6 percent would increase 1.2 percent in October on purchases, according to the median of 77 economists surveyed by us. Other figures may show the cost of wholesale were contained and increased inventories.

Also at 8:30 am, the Labor Department may report the producer price index rose 0.6 percent in November from the previous month, according to the survey median. Excluding fuel and food, core prices were probably 1.2 percent since November 2009, the smallest increase year after year, since June.

Amgen progress

Amgen gained 7.7 percent to $ 58.25 in New premarket trading after saying York denosumab malignancy spread to the bones stuck at 4.2 months in patients with prostate cancer that the drug, compared with those taking placebos.

U.S. regulators approved November 18 drugs for use in reducing fractures in those whose cancer had already moved to his bones. Sales could grow to an additional $ 2 billion a year if the drug has also been approved Food and Drug Administration to prevent breast cancer in the bone moves, said Eric Schmidt, an analyst with Cowen & Co. in New York.

Amgen shares were raised to "overweight" from "neutral" at Piper Jaffray Cos

PCH, the largest U.S. health care real estate investment trust by market value, may be active after agreeing to buy nursing homes ManorCare UNHCR in the biggest acquisition of the property in at least three years.

UNHCR is owned by funds managed by Carlyle Group, which bought Manor Care Inc. for $ 6.3 billion in 2007. HCP non-commercial in Europe.

International Game Technology can climb as Morgan Stanley rated the shares "overweight" in new coverage.

LontohCoal has contracted with Samsung Securities Asia Ltd

LontohCoal Ltd., the South African Closed coal mining company, has contracted with Samsung Securities Asia Ltd as lead manager for its initial public offering in Hong Kong, CEO Tshepo Kgadima said.

Power producer with assets of thermal coal and steel making in South Africa and Zimbabwe plan to raise up to U.S. $ 500 million selling shares in Hong Kong and may list in the first half of next year, Kgadima said in an interview on TV today.

"We've been talking to a number of private equity funds and sovereign wealth funds," he said in Hong Kong.

The proceeds from the sale of shares will be used to develop LontohCoal mine in South Africa, KwaZulu-Natal and Limpopo provinces, and coal deposits Lubimbi in Zimbabwe, where production is expected to begin next year, said the CEO.

Bonds Irish Portuguese peers as shopping ECB rates

European Central Bank purchases bonds secured Ireland and Portugal beat their fellow euro region this month, even as Deutsche Bank AG plans to Portugal will be the next country forced to seek help.

Ireland bonds gave investors a return of 6.9 percent since late November, cut losses this year to 10.3 percent. Portuguese debt advanced 3.7 percent, compared with a gain of 1 percent for Spanish stocks and 1.04 percent for Italian bonds. Investors lost money in AAA debt rating German and French, according to data compiled by us and the European Federation of Financial Analysts Societies.

"The excess return of Irish and Portuguese bonds was probably more or less down to buy BCE reported aggressive," said Mohit Kumar, fixed income strategist at Deutsche Bank AG in London. "I see no improvement in spreads as a turning point. The bigger picture of the debt crisis, especially for Portugal, has not changed."

Investors are demanding yields less additional debt to keep the Irish and Portuguese German bunds and the premiums have been reduced more than in Italy or Spain. Irish production of 10 years was extended to the equivalent German bond maturity fell to 512 basis points from 616 earlier this month, while the Spanish expansion was reduced to only 2 basis points to 249.

More Buying bonds

The ECB has accelerated purchases of bonds from Ireland, Portugal and Greece to stop the contagion from spreading, according to traders familiar with the operation who declined to be identified because the transactions are confidential. The central bank bought at least € 2,667,000,000 ($ 3.6 billion) of bonds last week, up 36 percent from the previous week, according to central bank data released yesterday.

Europe sovereign debt crisis erupted last year after the newly elected socialist government of Greece said that the budget deficit was twice as high as the previous administration had revealed. The sell-off of so-called peripheral euro bonds accelerated in October, after German Chancellor Angela Merkel, asked bondholders to share losses taxpayers.

Yield spreads can expand again as spending cuts affect growth, increasing the risk that some countries may lose their fiscal targets, according to Marcel Bross, a fixed income strategist at Frankfurt-based Commerzbank AG. The Portuguese economy will contract next year and Spain will grow slightly, according to analysts surveyed by us.

Refinancing needs

high refinancing needs of Portugal and Spain in the second trimester can result in increased yields, "said Bross. Spain has nearly 45 million euros of bonds next year, because, with the first payment of € 15,500,000,000 scheduled for April. Portugal may be necessary to increase by at least 9.4 million euros in the first half of 2011.

"With respect to the larger picture spreads, we do not believe we're out of the woods yet," said Bross. "We look for other leg crisis since the end of the first quarter and second quarter early."

Bank of England Deputy Governor Charles Bean said the European Union and the International Monetary Fund may have to help nations in the euro area.

"Support for Greece and Ireland the IMF and the rest of the European Union has given these countries an respite to carry out the necessary adjustments," Bean said in a speech in London yesterday. "The financial support from other countries may or may not be necessary. Only time will tell."

Any deterioration may prompt the ECB to increase purchases of bonds unless policy makers agree on the longer-term solutions, "said Peter Chatwell, fixed income strategist at Credit Agricole Corporate & Investment Bank in London.

"Extremely illiquid"

"The purchase of bonds by the ECB has had a strong impact on the spreads for now because it is carried out in a very illiquid market," said Chatwell. "The market will see what the central bank do when liquidity returns to normal in the new year. We need clear and credible long-term solution to turn sentiment around."

Spanish and Italian bonds have weakened amid signs of division among European governments on how to contain the crisis in the region of the debt. Union leaders attending a summit on December 16 and December 17, with Italy, Belgium and Luxembourg for the joint sale of bonds in the euro area, while Germany and France oppose the idea.

the survival of the euro is "not negotiable", that require monitoring of the budget and closer economic cooperation to overcome the "structural weaknesses" in the euro region, Merkel and French President Nicolas Sarkozy said on 10 December. Joint bond was discarded and rejected any increase in the size of a rescue fund set up in May.

Resource Capital Funds & Australia Tax Office Agree to Settle Court Dispute

Resource Capital Funds and Australia tax office agreed to settle a civil dispute, less than two weeks after private equity firm based in Denver criticized the authority's handling of the case.

The Australian Tax Office and Resource Capital Fund III, LP, a fund company to buy ", has reached an agreement to resolve outstanding issues relating to current procedures," they said in a joint statement e-mailed today. He said if the agreement includes a financial settlement.

The Australian newspaper said Dec. 4 that the tax office had frozen the local assets of Capital Resources, based in its structure may allow offshore to avoid taxes. The ATO was seeking $ 43 million (42.8 million U.S. dollars) in taxes, penalties and interest, the newspaper said, citing court documents in Perth, Western Australia.

Capital Resources, which invests exclusively in mining, said this month that its structure complies with tax regulations in Australia, calling the ATO's conduct "deplorable." The company said it has taken "full and open" talks with the authorities if they had been contacted before court proceedings.

Taiwan Dollar Rises to 13-Year High With a gain of .05 Percent

Taiwan dollar the best performing currency in Asia this quarter, finished with a gain of 0.5 percent after the withdrawal of a 13-year high on suspected central bank intervention.

The currency rose to 2.3 percent to NT $ 29,890 against the dollar, its highest level since October 1997, before paring its gain to close at NT $ 30.45. The currency has advanced 4.5 percent this quarter, global funds bought $ 1,500,000,000 shares in the country more than they sold this month, boosting the year's net purchases of U.S. $ 8 billion.

"Strong foreign capital inflows and strong economic growth are factors increasing the Taiwan dollar," said Henry Lin, a currency trader based in Taipei in Taiwan Shin Kong Commercial Bank. "The central bank will not allow a large increase in the currency. It's going to come for smooth movements."

The monetary authority has bought U.S. dollars in late trading almost every day since April to fight the satisfaction that poses a threat to exports, according to two traders familiar with the matter who declined to be identified.

China Trade

Relations with China have improved since Taiwan President Ma Ying-jeou, won the elections in March 2008, abandoning his predecessor's stance in favor of independence. The island has been self-ruled since the Nationalists of Chiang Kai-shek fled the mainland in 1949 after losing to Mao Zedong's communists in a civil war.

Under the terms of a trade pact signed in June, China agreed to open markets in 11 sectors such as banking services and lower tariffs on imports from Taiwan with a value of 13.8 billion U.S. dollars last year, or about 16 percent of the total.

growth in the third quarter of Taiwan's 9.8 percent was the fastest among the 10 largest economies in Asia. Taiwan Council for Economic Planning and Development of gross domestic product forecast to grow by 5 percent in 2011, the Economic Daily reported yesterday.

government bonds rose today on the island, dragging the benchmark yield to 10 years less than a maximum of nine months. The interest rate of 1 125 percent safety in September 2020 fell two basis points to 1.482 percent, according GreTai Securities Market, the largest island exchange of bonds. A basis point is 0.01 percentage point.

Qatar Sees More Output Gains

Qatar met the chief executives of major energy companies to celebrate reaching an annual production capacity of 77 million tons of liquefied natural gas, underlining its status as the world's largest exporter of LNG.

The Persian Gulf state may further increase its capacity to 10 million tonnes a year if it can improve efficiency in their production units, the Energy Minister Abdullah al-Attiyah told reporters. Exxon Mobil Corp. 's Rex Tillerson, Royal Dutch Shell Plc Voser Peter and ConocoPhillips, Jim Mulva, were among the executives who attended the ceremony in the industrial city of Ras Laffan Qatar yesterday.

"If we want to expand in the future, we will expand as a renewal" so that existing facilities more efficiently, al-Attiyah said yesterday. The construction of new LNG would be a more expensive option, he said.

While Qatar is recognized as the largest exporter of LNG and is the world's third largest natural gas reserves after Russia and Iran, its gas fields is a source of growing volumes of natural gas liquids such as propane, butane and condensate. These products, known collectively as natural gas liquids, is used for commercial products like crude oil or refined, increasing the total energy sales in Qatar.

Qatar will be a year of grace with pump 1.19 million barrels of natural gas liquids per day, according to a forecast based in Paris, the International Energy Agency. NGL will be leaving the country for the first time exceeds its production capacity of crude, the IEA estimates is 1,020,000 barrels per day in 2011. combined capacity of Qatar for the production of natural gas liquids and crude oil to exceed its OPEC partners, Algeria and Libya, according to forecasts by the agency.

Higher Traffic

"It is very clear Qatar pushes the ranks of oil producers and also - for the semi-refined some of these - the ranking of manufacturers of refined products, as well," said Lawrence Eagles, head of global research raw materials JPMorgan Chase & Co. in New York, speaking in a telephone interview in November.

The tiny nation of 1.6 million people is the second smallest producer of crude in the Organization of Petroleum Exporting Countries. Ecuador is the smallest. OPEC quotas do not apply only to oil, natural gas liquids.

transforming Qatar into a major producer of natural gas liquids has implications for OPEC, which supplies 40 percent of world crude, and the group's ability to influence energy markets. Qatar was the only one of the 12 OPEC members to see their combined production of crude oil and NGL place last year, after the group reduced its production target in December 2008. For next year, Qatar will be the only member capable of producing liquid natural gas than oil, the IEA says.

Flagship plant

Shell is building a 19 billion U.S. dollars of gas to liquid plant to add capacity of NGL. The Anglo-Dutch company expects its plant in Pearl to be fully operational in early 2012 and to begin converting the gas into kerosene, diesel, lubricants and naphtha in the second quarter of this year.

Qatar can expand the production of gas to liquid, even after the pearl is finished, al-Attiyah said yesterday.

Other OPEC members are producing more natural gas liquids of their own. By 2015, production of NGL group may be equal to 20 percent of their combined production of oil and natural gas liquids, compared with 14 percent in 2009, IEA data show.

"While natural gas liquids OPEC are a growing competition for OPEC oil is difficult to see how they could be included in the quota system," said Robin Mills, an oil analyst based in Dubai and author of 'The myth of the oil crisis, in an interview in August.

Early Celebration

Qatar exported its first cargo of liquefied natural gas in 1996. The country will have the capacity to produce annually 77 million tonnes of LNG, or about 3.75 trillion cubic feet of gas by pipeline, after Qatar Liquefied Gas Co. brings its liquefaction plant in the seventh and final operation early 2011. Qatar officials organized event yesterday in anticipation of this achievement.

Qatar Liquefied Gas, known as Qatargas, is a partnership between the state Qatar Petroleum, Exxon Mobil, ConocoPhillips, Total SA and Shell. Another company, Ras Laffan Liquefied Natural Gas Co., commenced its LNG production unit seventh and final earlier this year. RasGas, as this company is known, is a partnership between Qatar Petroleum and Exxon Mobil.

A moratorium on gas fields in Qatar North field opposes the development of additional LNG projects. The North Field is the largest gas reserves, with an estimated 900 trillion cubic feet of fuel. The moratorium will not rise before 2014 in any case, Saad al-Kaabi, director of Qatar Petroleum for oil and gas companies, said last year.

LNG accounts for half the growth in gas trade between 2008 and 2035, the IEA said in November. The fuel can be transported by refrigerated vessels specialized markets inaccessible by pipeline.

Malaysia was the second largest LNG exporter after Qatar last year, followed by Indonesia, Australia and Algeria, according to BP Plc.

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