Ireland became the second country to seek a bailout euro

Ireland became the second country to seek a bailout euro and the cost to save their banks threatened with a repetition of the Greek debt crisis that destabilized the currency. The euro rose and fell in European bond risk.

A package that Goldman Sachs Group Inc. estimates may total 95 million euros (130 billion) to damp speculation that no Portugal and Spain would need to tap the emergency fund set up by the European Union and the International Monetary Fund after the rescue of Greece.

"The speculative actions against Portugal and Spain are not justified, although they may," said Luxembourg Prime Minister Jean-Claude Juncker, today in Luxembourg RTL radio. "At a time when financial markets have an excessive tendency to punish those countries that did not stick 100 percent to an Orthodox consolidation, you can never rule out that something similar will happen."

The aid, which the Irish authorities, said recently, in November 15 that did not need, marks the latest blow to an economy more than doubled in the decade ending in 2006. The real estate bubble burst in 2008 plunged the country into recession and banks brought to the brink of collapse. With yields of Ireland, near a record, policy makers are trying to prevent the crisis from spreading.

"Clearly, given the size of their loan portfolios, the huge risks they took, became a threat not only to the state but to the" euro region, Lenihan told RTE radio in Dublin, in an interview today. "The banks will be reduced to the real needs of the Irish economy" to "consumers in Ireland and Irish companies. That has to be the main focus of the Irish banks."

Capital Bank

Ireland part of the aid channeled to lenders through a fund of "quota" of capital, Finance Minister Brian Lenihan said.

The euro rose 0.5 percent to $ 1.3740 at 10:30 pm in London. Ireland to 10 years rose, sending the yield up 24 basis points to 8.11 percent. Ireland led a decline in the cost of insuring against debt default in Europe, according to traders of credit default swaps. The contracts of Irish government bonds fell 28.5 points to 478.5, its lowest level since 29 October, according to CMA data provider in London.

"Ireland had no choice," said Nicholas Stamenkovic, fixed income strategist in Edinburgh at RIA Capital Markets Ltd., a broker for money managers. "The market is still waiting for details of aid and conditionality, but there must be a relief rally."

The UK and Sweden can contribute bilateral loans, the EU said in a statement. Lenihan refused to say how big the package will be, saying that it will be less than 100 million euros. Goldman Sachs, chief European economist Erik Nielsen said yesterday that the government needs € 65000000000 funds itself for the next three years and 30 million euros for the banks.

Budget Cut

The talks will focus on government plans to reduce the deficit and restructuring the banking system, the EU said in a statement. The Irish Prime Minister Brian Cowen, speaking at the press conference as Lenihan said banks stress test. Ireland nationalized Anglo Irish Bank Corp. in 2009 and is preparing to take a controlling stake in Allied Irish Banks Plc, the second largest bank.

Lenihan and Cowen appeared minutes after the finance ministers issued a statement supporting a call for help to calm the markets. Allied Irish emphasized the fragility of the system on 19 November, reporting a decline of 17 per cent of deposits this year.

"In the short term, will stabilize the situation, no doubt about that," said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London, which considers a package of 80 million euros and 100 euros million dollars. "But as we saw in the case of Greece, uncertainty will remain."

Elections

Cowen is expected to announce the government's budget plan four years this week and said a deal with the EU and the IMF will come "in the coming weeks." Cowen, also faces an election in Donegal in northwest Ireland on 25 November to fill a vacant seat. The vote threatens to erode most Cowen. He has the support of 82 legislators, including independents, compared with 79 for the combined opposition.

The bailout follows two years of budget cuts not to restore market confidence as the cost to shore up the financial sector soared.

Lenihan cancels bond auction in October and November and announced € 6,000,000,000 austerity measures for 2011 on 4 November in a bid to restore investor confidence. These efforts after German Chancellor Angela Merkel, led to an exodus of investors saying that the bondholders should foot some of the bill in any future rescue.

Bond spreads

The risk premium on debt to 10 years in Ireland on German bonds, the European benchmark, fell to 523 basis points today. Widened to a record 652 basis points on November 11, with production reaching a record 9.1 percent. In 2007, it cost less from Ireland to Germany to borrow. Its differential at 10 years fell to a low of 77 basis points less than the levees. ISEQ stock index has fallen 70 percent since its record in 2007.

Ireland will be based on the fund of 750 million set by the EU and the IMF in May as part of the Greek rescue to protect the currency shared by 16 countries.

Irish officials initially resisted pressure from the EU to take any help, saying that will be funded in full until mid-2011. European leaders sought to spread the head of Ireland and reduce pressure on the European Central Bank to shore up lenders in the country, providing unlimited liquidity.

Cowen defended its investment in need of help. "I do not accept that I am the bogeyman," he said. "Now the circumstances have changed, we changed our policy."

The yields of Spain and Portugal have jumped amid concern that the precipitation of Ireland would be extended. The extra yield investors demand to hold Portuguese 10-year bonds rather than German bonds rose to a record 484 basis points on November 11.

"It may not stop the spread. The crisis of sovereignty is not over yet," said Sylvain Broyer, an economist chief euro-region Natixis in Frankfurt. "Ireland is in the midst of a difficult crisis."

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Hong Kong Property Sales Slide as Tax Deters Buyers

William Yue was ready last week to pay about HK $ 11 million ($ 1.4 million) for an apartment in Hong Kong Kowloon Tong district. Now, he is reconsidering.

Financial Secretary, John Tsang, on 19 November raised registration fees and deposit requirements, and mortgage insurance limited, however, tougher measures to curb the value of homes soared 50 percent since January 2009. Li Ka-shing's Cheung Kong (Holdings) Ltd. fell more than six months, and Midland Holdings Ltd., the largest city realtor, fell more than a decade.

"The signal we have to pay would probably be a little out of our budget," said the 58-year-old Yue yesterday. "We have to negotiate with the seller again and see if the price was lower. Imposing the additional stamp duty should have been enough to curb speculation. The only thing it does is damage to the real users like us."

Weekend home sales fell 83 percent from the previous week, according to Centaline Property Agency Ltd. The changes mean homes sold within six months of purchase incur a duty of 15 per cent of stamps, while The initial payment shall be 50 percent of the properties cost HK $ 12 million or more, and 40 percent to HK $ 8 million and HK $ 12 million.

"The measures will likely have the greatest impact and more lasting in property prices seen to date," said Donna Kwok, a Hong Kong economist at HSBC Holdings Plc, in a report. "Hong Kong has joined the bandwagon of Asian central banks and is building its own defenses to cope with the flood" of the capital of the flexibility of the U.S., he said.

Hong Kong's currency peg to the dollar prevents the de-facto central bank to raise interest rates to prevent speculation. South Korea, reviving a tax on foreigners investing in its bonds last week, while Brazil has tripled the tax on local purchases of fixed assets of foreign investors.

Shares Fall

The Hang Seng index of property, which tracks builders seven largest city, fell 2.6 percent in the time close to 16:00 on business premises. It has fallen 10 percent since the peak of this year on 8 November.

Cheung Kong, the second largest developer by market value city, lost 3.2 percent, while Sun Hung Kai Properties Ltd., the largest, fell 3.1 percent. Midland fell 17 percent.

"This is a strong dose of calming the housing market," JP Morgan Chase & Co. analysts led by Lucia Kwong wrote in a report dated yesterday. "Taking into account the new measures are expected to slow sales of properties that reduce the" net asset value for developers.

The number of transactions in some of the largest in Hong Kong private housing dropped to 10 on November 20 and 21, Centaline, the city's largest private property agent real estate, said in a statement. There were 59 deals last weekend.

"We expect transactions to fall by between 10 and 20 percent this quarter, and prices will probably drop 5 percent less," said Wong Leung-sing, associate director of research at Centaline.

Housing developments

The agent had a single transaction on November 20 in 12,700 unit-Tai Koo Shing urbanization in Hong Kong Island, from six in the previous week, district manager Kenneth Chiu said yesterday.

"Most of the buyers who've been talking to said they expect prices to fall further so I will hold off making a decision now," said Chiu. "On the other hand, sellers on average are willing to lower the asking price."

The prices in the city of origin may fall 5 percent by year-end, while the transactions may fall 40 percent due to the measures, Credit Suisse Group AG analyst Cusson Leung and Kwock Joyce wrote in a report released today. JP Morgan also predicted a 5 percent decline in prices.

Fall transactions

Prices in some of the most expensive in Hong Kong, Kowloon Tong in Kowloon peninsula, bordering China, increased 52 percent since early 2009, according to an index compiled by Centaline. Those gains prompted the International Monetary Fund last week warned that asset inflation could derail the city's economy.

The measures will drag on the earnings of house prices rather than invest the proceeds, UBS AG, said in a report. Real estate transactions are reduced by 20 percent to 30 percent, the analyst Eric Wong said, adding that the liquidity measures can lead to other assets like stocks.

Under the new measures, resale properties within 6 months to 12 months will have a duty of 10 per cent of seals, while resold between 12 and 24 months will be charged 5 percent, said Tsang. The fee is divided between buyers and sellers.

Down payments for households cost HK $ 12 million or over will increase from 40 percent and those of HK $ 8 million and HK $ 12 million of 30 percent, the Hong Kong Monetary Authority Chief Executive Norman Chan , said 19 November. The maximum loan to value residential properties not occupied by their owners will drop to 50 percent, said Chan.

More sidewalks

It was the second time the government raised the requirements for a down payment this year. On August 13 were for apartments increased costs HK $ 12 million or more and for investment property at 40 percent, 30 percent.

Hong Kong Mortgage Corp., an insurance company in the home loan backed by the government, Hong Kong limited to $ 6,800,000 the value of a property that may be covered by mortgage insurance, said on 19 November.

Hong Kong this year has also stopped offering residence to foreigners who buy property in the city and pledged to increase the land supply to curb prices, which surpassed a peak of 1997 on the back of historically mortgage rates low and an influx of buyers from China.

The government "will monitor the market" and may introduce new measures if the final turns not arise property prices, Tsang, wrote yesterday in his blog on the website of the government. The program to buy U.S. bonds announced earlier this month has increased the risk of asset bubbles in Hong Kong and is necessary for the government to take "preventive" measures, Tsang wrote.

'Extra Careful'

"We must be very careful," Chow said tallow-kuen, a retired civil servant who is looking to buy an investment apartment, a day after government measures. "We are not speculators, but the additional stamp duty may require us to hold onto properties below. I will probably wait to see how the market reacts."

Chow, who was in the Hung Hom district sales office for the Festival of Cheung Kong, Phase II City project in Sha Tin District, said his family was a long-term investor and owner of three properties investment in the Kowloon area.

The developer began selling 335 units in the Festival City for Phase II of the afternoon of 19 November.

However, Fred Leung, a businessman of 40 years old, looking to buy an apartment to live in the Festival City, said the stamp duty is not affected, although it may deter purchase.

"I can see how the stamp would affect the speculators, but not really concerned," Leung said a day after Tsang announced the measures. "I'm not sure if I will make a decision now, and we really hope that the developer will lower the prices of the units later."

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Riskier junk bonds are providing a haven for investors

Riskier junk bonds are providing a haven for investors concerned that inflation will accelerate as the Fed tries to bolster the economy.

debt problems of iStar Financial Inc., the commercial real estate lender, and Atlanta-based credit card processor First Data Corp. are taking profit of 0.22 percent this month for bonds rated CCC and lower while higher-ranked debt to BB level is 0.76 percent, Bank of America Merrill Lynch index data show. Investment grade debt losses averaged 1.15 percent.

Lower notes offer income level of about 11.5 percent, compared with 6.4 percent for BB bonds, providing a buffer in case of consumer prices rise at a rate faster than the Federal Reserve prints money to buy 600 billion U.S. dollars of Treasury bonds. When inflation accelerated in 2006, returns on bonds of CCC were 18.6 percent, nearly double the 9.9 percent gain debt BB and 4.64 percent for high-grade securities.

"The wider the spread of the pad has more" against rising consumer prices eat into the interest payments, said James Serhant, senior vice president and head of high yield bonds at Hartford Investment Management Co. Hartford, Connecticut, which oversees the $ 448.6 million from Hartford High Yield Fund.

Holding Value

The emission of lower-rated debt is accelerating, with bonus offers $ 8000000000 CCC or lower in November, after 9.7 billion U.S. dollars in October, the highest since the credit crisis began in 2007, according to sales JPMorgan Chase & Co. this year of $ 45,800,000,000 of debt are only surpassed by the record 52 billion U.S. dollars issued in 2007, JPMorgan analysts led by Peter Acciavatti in New York, wrote in a report dated 19 November.

The concern that inflation may accelerate also arise in the market for mortgage bonds backed by the government, leading buyers to seek full value of loans with higher rates of Barclays Capital index data show.

Elsewhere in credit markets, yields on corporate bonds fell worldwide last week, the investment to increase the previous period. The cost of protecting the company's debt default in U.S. and Europe fell. borrowing costs declined after rising for three consecutive weeks. In emerging markets expanded by a second week.

The debt yields of U.S. company Europe and Asia fell 2 basis points compared with government bonds last week to 165 basis points, or 1.65 percentage points, according to Bank of America Merrill Lynch Global Broad Market Corporate Index. The spreads are up 1 basis point this month. Yields rose last week to an average of 3.67 percent from 3.58 percent.

Decline Default Swaps

Swaps credit-default in the Markit CDX North America Investment Grade Index, which investors use to cover losses on corporate debt or to speculate on creditworthiness, fell 4.3 basis points last week to 89.33 points core, according to Markit Group Ltd. It is the lowest level since Nov. 8.

In London, the Markit iTraxx Europe index of 125 investment grade companies was reduced from 3 to 100.5, the biggest decline since the week ended Oct. 8, when the benchmark fell 7 basis points. The Markit iTraxx index of Asia of 50 investment-grade borrowers outside Japan fell 3 basis points to 104 last week, according to CMA data provider. The index was trading at 102, 8:18 am in Singapore, prices of Credit Agricole CIB show.

The rates tend to fall as improving investor confidence and rising as it deteriorates. Swaps 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.

New Zealand

New Zealand risk bonds rose more than six months after its review of Standard & Poor's outlook on the credit rating of the sovereign foreign currency from stable to negative.

Swaps credit-default in the South Pacific nation rose 8 basis points to 62.5 basis points from 16:23 in Wellington, says the National Australia Bank Ltd. prices. That's the biggest increase since May 21 and the highest since Aug. 31 supplier prices CMA data show.

"The main risk to the rating would be a significant weakening of the credit quality of New Zealand's banking sector," said S & P said in a statement. Nation rating of AA, the second highest grade is the same level as that of Hong Kong.

Global sales of corporate bonds fell 38 percent last week to 74.5 billion. Wind Telecomunicazioni SpA, the Italian mobile phone company, whose father is the merger with VimpelCom Ltd., sold 3.69 billion U.S. dollars of the dollar and euro banknotes on the largest offering of high yield, risky debt in Europe by year.

Leveraged loans

The S & P / LSTA U.S. Leveraged Loan 100 Index fell 0.38 cent to 92.01 cents, the lowest since 05 November. Prices in the index, which measures the 100 largest dollar loans first lien leveraged, have fallen 92.72 cents on Nov. 9, the highest since May 3.

In emerging markets, the relative yields rose 6 basis points to 244 basis points, according to JP Morgan index. Spreads have widened two basis points since late October.

The less creditworthy borrowers are attracting investors hungry for yield, as Fed chairman, Ben S. Bernanke seeks to reduce unemployment, to 9.6 percent last month, and avoid deflation by keeping interest rates at historic lows. The U.S. central bank has kept its benchmark rate in a range from zero to 0.25 percent since December 2008, after the worst financial credit crisis since the Great Depression.

Consumer prices

The consumer price index rose 0.2 percent in October after increasing 0.1 percent the previous month, the Labor Department said on Nov. 17 in Washington. Excluding food and fuel, called basic expenses increased 0.6 percent from October 2009, the smallest increase in registration.

Fed officials are not looking for inflation higher than the level of "2 percent or slightly less" than most politicians to be consistent with the legislative mandate of the bank, he said in Frankfurt on 19 November. Inflation has declined since the last recession began in December 2007, and "deflation could hinder recovery," he said.

Bonds that pay 10 percent hold their value better than those who paid 6 percent, said James Lee, a bond analyst at Calvert Asset Management in Bethesda, Maryland.

"The question is, 'Are you getting enough compensation for the risk CCC?'" Said Lee. "The answer is" probably. "They're probably fully valued."

iStar, First Data

Bond New York-based iStar have returned 6 percent this month, while First Data's debt, purchased by KKR & Co. three years ago, has gained 5.23 percent, according to U.S. Performance of Bank of America Merrill Lynch High, rated CCC and below index.

The return of 1.2 percent of Plano, Texas-based JC Penney Co., the U.S. company third largest department store, led the Bank of America Merrill Lynch U.S. High Yield, BB rated index.

The lowest score index gained 3.54 percent in October, compared with 2.04 percent for bonds CCC BB following returns of 3.8 percent in September compared to 2.74 percent.

High performance, high-risk debt is rated below Baa3 by Moody's Investors Service and lower than BBB-by S & P.

The concern that the reduction in coupon mortgage securities backed by the government will remain outstanding for longer than increase borrowing costs is one of "the most likely culprits" responsible for a jump in the volatility of this market, analysts at Citigroup Inc. Brad Henis and Inger Daniels in New York wrote in a Nov. 19 report.

Rollover Risk

Higher rates reduce the funding from the underlying mortgages, the creation of the called in the life of the bonds that means holders must wait longer to get your principal back as new investments offer higher returns. Low-coupon debt is now more sensitive to the dynamics and the refinancing and the failure of borrowers with higher rate loans will be less affected by higher costs of the new mortgage.

Agency mortgage bonds to 3.5 percent of the coupons, with an estimated duration of 18 November of 4.73 years, a similar Treasury underperformed by 21 basis points this month through that date, data show Barclays. Securities with coupons of 5.5 percent and the duration of 2.97 years exceeded by 65 basis points. Duration is a measure of sensitivity to stock prices to bring about change.

The lowest-rated corporate borrowers is used primarily offers bonds to refinance debt, according to the report of JP Morgan. This year's 46 billion U.S. dollars for the issuance of the CCC, 69 percent were for refinancing, compared with 9 percent of 52 billion U.S. dollars sold in 2007.

Default values have declined as companies have access to cheaper debt. The 12-month default rate on U.S. flight speculative-grade corporate bonds fell by 11 consecutive month in October, to 3.37 percent from 3.96 percent in September, the S & P analyst Diane Vazza wrote in a report of 19 November.

The lowest-rated bonds usually have a shorter duration. CCC and lower rated notes have an average duration of 3.35 years, compared with 4.89 years for BB notes, Bank of America Merrill Lynch, the data show.

"You are exposed to price risk more as interest rates go up" to longer-term debt, said Edward Mally, director of fixed income research at Imperial Capital LLC.

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The euro rose for a fourth day versus the dollar and yen

The euro rose for a fourth day against the dollar and the yen on bets on a deal to rescue the Irish banks to prevent contagion in bond markets in the region.

The single currency hit a one-week high against the dollar after the finance ministers of the EU said the deal will create a capital fund lenders in Ireland. New Zealand dollar fell after Standard & Poor's revised its outlook on the nation's credit rating to negative. The U.S. dollar fell before the Federal Reserve released minutes of the meeting this month, when politicians decided to buy $ 600 billion in Treasuries.

Ireland try to "remove some of the uncertainty, and we're seeing a bit of a relief rally in the euro," said Henrik Gullberg, currency strategist at Deutsche Bank AG in London. "If this will continue or not, I'm not so sure. Attention will shift to the other, presumably weaker peripheral states such as Portugal."

The euro advanced 0.5 percent to $ 1.3743 at 10:46 am in London from $ 1.3673 in New York on November 19 and touched $ 1.3786, the highest since Nov. 11. The currency gained 0.4 percent to 114.71 yen. The dollar fell to 83.46 yen from 83.55 yen. New Zealand currency fell 0.5 percent to 77.52 U.S. cents.

Ireland's request for a bailout makes it the second member of the euro to find the rescue of the EU and the International Monetary Fund. The European Central Bank said in a statement that is "safe", the program will help ensure the stability of the nation's banking system.

The MSCI World Index advanced actions fourth straight day, gaining 0.4 percent.

'Next week'

The Irish Prime Minister Brian Cowen said yesterday he hoped that talks on the package to be completed in the coming weeks. "Said Finance Minister Brian Lenihan the loan will be less than 100 million euros (137 billion), but declined to give further details in a press conference in Dublin the night.

"A sovereign small as Ireland, facing a huge problem we have in our banking sector can not in its own address all the problems," said Lenihan. Ireland can not draw down the entire loan, he said.

The dollar fell against 15 of its 16 most-traded counterparts before the Fed released minutes of the meeting this month's Federal Open Market Committee's.

Fed chairman, Ben S. Bernanke said Nov. 19 that the use of purchases of monetary policy affects asset prices "very significant."

Disinflation concerns

U.S. inflation has slowed since the most recent recession began in 2007, and "deflation could hinder recovery," Bernanke said. "Policies are not enough support in advanced economies could undermine the recovery not only in those economies, but for the world as a whole."

Bernanke "strong language" will be launching a fall in the dollar as the pressure of unemployment and deflation of the Federal Reserve will continue to provide a mandate for the measures in force, Todd Elmer, currency strategist in Singapore-based Citigroup Inc .

"There are plenty of breathing room for the Fed to maintain its very accommodative stance," said Elmer.

The housing industry triggered the worst recession in seven decades, is still struggling to recover.

The median forecast of 57 economists expected a report from the National Association of Realtors on Nov. 23 will show the purchase of homes already sold fell 1.1 percent to an annual pace of 4.48 million last month.

The slowdown in Europe

The euro's gains were limited amid concerns of other countries such as Portugal, are still vulnerable and fiscal austerity measures slow growth in the region.

The strength of the euro against the dollar should be seen as "short-term corrective" and the single currency may weaken to a low of $ 1.3365, Karen Jones, head of fixed income, commodities and technical analysis in currency Commerzbank AG in London, wrote in an e-mail the report today.

A composite index based on a survey of purchasing managers in the euro area, both in industries probably fell to 53.6 this month from 53.8 in October, according to the median forecast of economists polled ahead of tomorrow's report London-based Markit Economics. A reading above 50 indicates expansion.

"It will take many years, many of the fiscal problems of some eurozone countries to solve," said Gareth Berry, currency strategist at UBS AG in Singapore. "We are very bearish for the euro, as these problems will not disappear overnight."

Kiwi gives

UBS recommends investors sell the currency, pointing to a fall of 1.25 dollars in late January, said Berry. The median forecast of economists surveyed by our News of the euro to trade at $ 1.37 in the first quarter of 2011.

Called kiwi dollar slipped against all its major counterparts after S & P rating of New Zealand's credit was at risk of weakening the nation's banks. long-term 'AA' from 'A-1' sovereign credit ratings in the short term were affirmed. New Zealand is in danger of a "prolonged" struggle to recover from the global recession given the decreased demand for their products in the U.S., UK and Japan, central bank governor, Alan Bollard said last week.

Asian currencies rose as Ireland's decision to seek help calmed investor concerns that the debt crisis from spreading. The rescue package helped to counter speculation that China will increase in the amount of cash banks must set aside reserves to slow economic growth in the market in the region of greatest export.

Thailand reported today that its economy expanded by 6.7 percent last quarter last year, cooling from a rate of 9.2 percent in the last three months.

South Korean won appreciated 0.7 percent to 1,125.85 per dollar. Malaysia's ringgit rose 0.5 percent to 3.1033. Thailand's baht rose 0.1 percent, to 29.93.

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Greed Beats Fear With Stock-Bond Correlation at Three-Year Low

For the first time since the financial crisis began, the U.S. equity are moving independently of the bond market, a sign that the benefits and assessments are guiding investor concern over the economy.

The correlation of 30 days of measuring coefficient of the frequency with which the Standard & Poor's 500 Index moves in parallel with yields of 10-year Treasury fell to minus 0.42 from a peak of 0.89 in June. Reading 1 indicate prices move together, while zero shows no connection and less means going in opposite directions. The debt stock and ends a relationship together that began in July 2007 and lasted until the worst recession since the 1930s.

Pioneer Investments, investors and Citigroup Global Security Inc. said that the broken connection is up as the largest number of S & P 500 in a decade as earnings growth. During the bull market from 2002 to 2007, when the S & P 500 is the price and profits have doubled, the average correlation of 0.15 .
"I prefer days when the companies are rewarded or punished based on their performance," said John Carey, a fund manager at Boston-based Pioneer, which oversees about $ 250 billion. Before, "people were worried that some big events over which they had no control could influence the direction of market performance and investment," he said.

Bernanke's Promise

The S & P 500 rose less than 0.1 percent to 1,199.73 last week that China had taken steps to curb inflation. The index is up 13 percent from the Federal Reserve chairman, Ben S. Bernanke hinted on 27 August in Jackson Hole, Wyoming, that he would use a strategy known as quantitative easing to stimulate the economy. The relationship between the 500 shares and the benchmark index fell to 0.55 on 11 November, the lowest since May 3, according to Birinyi Associates Inc. in the balance of 50 days.

Futures on the S & P 500 expiring in December rose 0.5 percent to 1204.4 at 8:48 am today in London.

The relationship with the 30 days of data between the S & P 500 and Treasury yields negative last 10 years in July 2007. Climbed to 0.79 on August 14, 2007, after five days with Paris-based BNP Paribas SA halted withdrawals from three investment funds because it could not value its holdings in U.S. losses subprime mortgages affected the credit markets. The relationship between stocks and bonds not turned negative in 2008.

The S & P 500 fell 4.7 percent and the yield on the benchmark 10-year Treasury fell 33 basis points, or 0.33 percentage point on September 15, 2008, after New York, Lehman Brothers Holdings Inc. filed for bankruptcy. The correlation rose to 0.83 on October 6, 2008, as the financial crisis intensified, reaching the highest level since a month after the Iraq war began in २००३.
Profits, takeovers

Bernanke's comments in August 1927 helped end the same rate moves. weaker connections between the assets means earnings, acquisitions and valuation drive returns, Global Security Marcos, Bronzo said. The S & P 500 rose to a maximum of two years on November 5 and the rate on the benchmark 10-year Treasury fell to its lowest level since 2009 on 8 October.

While Howard Ward, Mario Gabelli's Gamco Investors Inc. said it is likely that stocks rally, loosening the correlations are not feeding their optimism.

"Correlation is moving lower because of what is now perceived a real difference in the return potential of stocks versus bonds," said Ward, whose firm oversees $ 26 billion in Rye, New York. "I understand that people are very concerned about the stock due to volatility due to economic uncertainties and because he did well in the past 10 years, but the purchase of bonds today is like buying shares in 1999," before the S & P 500 fell 49 percent, he said.

First Lost Decade

Treasury bonds returned 81 percent between 1999 and 2009 while the S & P 500 fell 9.1 percent, including dividends, for his first defeat in over a decade, according to data compiled by Bank of America Corp . 's Merrill Lynch .
As the correlations break down, the quarterly financial results are oscillating stock prices more than any other time since 2007. S & P 500 companies that beat analysts' forecasts of average profit up 0.1 percent since the earnings report, while those who lost fell by 3.3 percent, according to data compiled by November 16 Westport, Connecticut Birinyi. That's the first time in three years by beating estimates and companies joined the losers fell on average.

"There are the names of the people who produce strong earnings and profit margins, and be rewarded for it," Bronzo said, a money manager in Irvington, New York, whose firm oversees $ 22 billion. "We are returning to more normal economic environment, as we are moving beyond the financial crisis. So when the market traded at all as a group, there will be more of a distinction between sectors and names."

Beating forecasts

The third-quarter profit beat analyst forecasts of 6.6 percent of the 457 companies that have reported since 07 October. It was the sixth consecutive period in which more than 70 percent of companies beat expectations, the longest stretch since at least 1993.

Analysts expect 87 percent of the S & P 500 higher incomes will be published next year. That would be the highest since at least 2000, estimates more than 10,000 analysts .
"There is no better opportunity for asset managers to overcome," said Eric Teal, chief investment officer at First Citizens Bancshares Inc. in Raleigh, North Carolina, which manages $ 5 billion. "In recent years, many of the macro forces have driven the stock yields far more fundamental and are beginning to drive the market."

Stock, junk bonds

The shares that trade at price-earnings ratio below average and dragged the benchmark indices in 2010 - as Hewlett-Packard Co. and Merck & Co. - should benefit as the return on capital differ, Carey said. MFS Investment Management James Swanson recommends technology companies because they have money to return to shareholders.

Hewlett-Packard has nearly $ 15 billion in cash, the 12-highest amount in the S & P 500. While at least 28 of the 38 analysts covering the Palo Alto, California-based company should invest in the largest maker of computer world, the stock has fallen 18 percent this year, pushing the value up to 8 3 times 2011 estimated earnings.

Merck, the drugmaker's second largest in the world, has a price-earnings ratio of 9.2 times forecast next year. Whitehouse Station, New Jersey company, is down 3.3 percent this year compared with the S & P 500 gain 7.6 percent and earnings per share excluding certain items is projected growth of 13 percent next year, the best annual growth since 2007, according to analysts' average.

"My Goodness"

"My God, these prices are very good for these stocks," said Carey, company health care. The 51 pharmaceutical manufacturers, device manufacturers and health insurance companies in the S & P 500 trading 12 times annual earnings, compared with a 10-year average of 19.2 .
While the benchmark index for U.S. stocks is up 77 percent since reaching a minimum of 12 years, March 9, 2009, prices on incomes remain below historical levels. More than 88 percent of S & P 500 are cheaper than their average since 2005, as planned next year, compared with 66 percent of the half-decade.

Procurement collected this year, with $ 651 000 000 000 dollars in U.S. deals announced in January, compared with 635.8 billion U.S. dollars for all of last year.

Similar performance

strong correlations made it difficult for funds to be distinguished. The standard deviation, or variation in the returns for funds invested in the largest U.S. companies fell to 4.1 percent in the second quarter, according to data compiled by Lipper and Bloomberg. That was the lowest since at least 2000. The figure rose to 9.8 percent last quarter as weak correlations.

Returns money managers reflect each other, regardless of the strategy. An index of hedge funds focused on distressed corporate bonds has returned 8.5 percent this year and Chicago-based Hedge Fund Research Inc. In the same period, indicator of Latin American funds returned 7.1 percent. The correlation between the two has risen to about 0.28 points higher than the average of 12 years.

"The investment can be more focused on the development process," wrote Tobias Levkovich, head of Citigroup, U.S. equity strategist New York, in a report this month. "Returning begin to diverge, investors can probably be well served by the purchase of the shares they consider attractive without having to worry about the macro conditions that entire groups can vary."

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U.S. Stock index futures rose after an agreed Ireland rescue plan

U.S. Stock index futures rose after an agreed Ireland international rescue plan to save their banks and prevent contagion in Europe's debt markets.

Barrick Gold Corp. and Alcoa Inc. rose metals prices advanced. Merck & Co. rose a study showed its drug Vytorin security reduces the risk of cardiac complications in kidney patients. SanDisk Corp. met in the trade of the early New York and Robert W Baird & Co. upgraded the stock.

December contracts, 500 of Standard & Poor's gained 0.3 percent to 1202.5 from 10:32 am in London. U.S. stocks avoided a straight weekly decline on 19 November as higher corporate profits than expected and the acquisition of Caterpillar Inc. 's Bucyrus International Inc. overcome concerns about the decision by China to cool inflation. Dow Jones Industrial Average futures up 0.3 percent to 11,213 today, while the Nasdaq-100 Index future increase of 0.5 percent to 2,144.5.

"We have good news in Europe and that is positive for equity markets," said Jacques Porta, a fund manager based in Paris in the Ofi Patrimoine, who helps oversee about $ 425 million in shares. "The macroeconomic data markets should give some support to the end of the year. The European Union is stabilizing the situation, but I'm worried about Spain."

Greek Rerun

Ireland became the second country in the euro will need a bailout as the cost to save their banks threatened with a repetition of the Greek debt crisis that destabilized the currency.

Irish Finance Minister Brian Lenihan told reporters yesterday afternoon that Ireland will channel some money from the European Union and the International Monetary Fund to lenders through a fund of "quota" of capital. The rest of the package, Goldman Sachs Group Inc. estimates may total 95 million euros (130 billion), would help prevent the sale of bonds of Ireland.

With yields of Ireland, near a record, policy makers are trying to prevent the crisis engulfing Portugal and Spain, the fourth largest economy of the euro.

"The speculative actions against Portugal and Spain are not justified, although they may," said Jean-Claude Juncker, who heads the group of finance ministers from the euro area, now in the Luxembourg RTL radio.

For the first time since the financial crisis began, the U.S. equity are moving independently of the bond market, a sign that the benefits and assessments are guiding investor concern over the economy.

The correlation of 30 days of measuring coefficient of the frequency with which the Standard & Poor's 500 Index moves in parallel with yields of 10-year Treasury fell to minus 0.42 from a peak of 0.89 in June. Reading 1 indicate prices move together, while zero shows no connection and less means going in opposite directions. The debt stock and ends a relationship together that began in July 2007 and lasted until the worst recession since the 1930s.

Top Metal

Barrick rose 0.8 percent to $ 50.15 gold rose 0.6 percent to $ 1,360.90 an ounce. The precious metal may advance 11 percent in a year, benefiting from the stimulus packages of the central banks and the weak dollar expected, Frederic Lasserre, head of commodities research at Societe Generale SA, said in a press conference today.

Alcoa, the largest U.S. aluminum producer, 0.6 percent, to $ 13.46. Copper, lead, nickel, tin and zinc all rose on the London Metal Exchange.

Merck & Co. rose 0.6 percent to $ 35.55 in Germany. Merck's cholesterol drug Vytorin reduced security risk of cardiac complications in patients with renal disease in a study that could ease concerns of unrest since 2008 when work no better than a generic drug and is associated with cancer. The results were presented at the November 20 meeting of the American Society of Nephrology in Denver.

SanDisk, the world's largest maker of flash memory cards, rebounded 0.9 percent to $ 40.35 in early trading as Robert Baird raised its rating on the stock to "overweight" from "neutral."
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Euro, Asian Stocks Rise After Ireland Seeks Bank Bailout

The euro, the U.S. stock and futures the index rose after Ireland international agreed a rescue. Ireland yields 10-year bond fell to its lowest level in almost two weeks and reduced the cost of insuring government debt.

The euro strengthened 0.5 percent against the dollar and 0.3 percent on yen at 10:25 am in London. The MSCI World Index added 0.4 percent as 500 of Standard & Poor's Index. The extra yield investors demand to hold debt in 10 years Irish Landmark German bonds fell 15 basis points, and credit-default swaps linked to the debt of Ireland fell 28.5 basis points. U.S. performance 10 years won a basis point to 2.88 percent before the sale of the Treasury of $ 99 billion of notes this week. Commodities rallied, with oil jumping by 1.1 percent.

Ireland became a member of the euro in the second to seek the recovery of the European Union and the International Monetary Fund, preventing a run on its banks. Today's demonstration has been limited by the concern of the debt crisis can not be greater. While bond yields retreated from Portugal, the cost of protection against default on the country's debt increases.

"The big question is whether this new bailout plan will act as a firewall and an end to the contagion effect," wrote Gary Jenkins, head of fixed income developments Securities Ltd. in London, in a report released today. "In the short term, the answer may be yes. Could it be that the final decision regarding a mechanism of permanent debt crisis will be the next most important catalyst for determining the direction of yields."

Ireland, Portugal

The euro rose against 11 of its 16 most actively traded peers, while the dollar index, which tracks U.S. currency against six trading partners, fell 0.5 percent, slid for the fourth consecutive day.

The performance of Irish 10-year bond fell 22 basis points to 8.103 percent, the lowest level since Nov. 9 on a closing basis. The performance of the Portuguese equivalent security maturity decreased eight basis points to 6.87 percent. Contracts in Portugal rose five basis points to 422.5, according to CMA, a data provider. The Markit iTraxx Crossover Index of 50 European companies swaps mostly junk rating fell 9 basis points to 448, the prices of Markit Group Ltd. show.

The Stoxx Europe 600 index gained 0.5 percent, three companies rose for every one that fell, while the MSCI Asia Pacific Index rose 0.7 percent. Porsche auto stocks led higher, rising 2.4 percent after Bank of America Merrill Lynch recommends buying the shares, saying the German manufacturer of sports cars, may not be merged with Volkswagen AG. Irish banks led declines on concern that a bailout will dilute existing investors' stakes. Bank of Ireland fell by 11 percent, while Irish Life and Permanent Plc sank 16 percent.

Emerging Markets

The development of the nation's stocks rose for a third straight day, with the MSCI Emerging Markets Index rose 0.7 percent. The Bombay Stock Exchange Sensitive Index rose 2 percent, its biggest gain since 04 November, Infosys Technologies Ltd., the country's second software exporter, increased 3 percent. The Hungarian forint currency led gains, the appreciation of 0.9 percent against the dollar and 0.4 percent against the euro.

The U.S. futures rise indicated that the S & P 500 may extend its 0.4 percent advance on November 19. The index is up 17 percent from its 2010 low on July 2 on optimism the Federal Reserve plan to buy assets that stimulate growth as the company's quarterly results beat analysts' forecasts. The index had fallen the most in almost three months on November 16 amid speculation that the debt crisis is worsening in Europe and China will curb lending to curb inflation.

The yield on Treasury two years has changed little over 0.52 percent. The U.S. dollar auctions 35 billion of debt today, followed by sales of titles from five years ago and seven-year notes in two days.

Oil, gold

Crude for January delivery gained as much as 89 cents to $ 82.87 a barrel in electronic trading on the New York Mercantile Exchange. Gold for immediate delivery by 0.6 percent, to $ 1,360.98 an ounce. Corn for March delivery rose 1 percent on the Chicago Board of Trade. The S & P GSCI commodity index rose 0.9 percent.

The New Zealand dollar fell against the 16 most actively traded peers, weakening 0.3 percent to 77.61 U.S. cents. S & P cuts outlook credit of the nation in its AA rating to negative, saying in a statement that "the main risk to the rating would be a significant weakening of credit quality in the banking sector in New Zealand."

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Oil rose & The Irish bailout story is driving today’s gains said "Thorbjoern Bak Jensen"

Oil rose, rebounding from its biggest weekly loss in three months, the optimism of a deal to rescue the banks of Ireland, avoid debt problems undermining Europe's economic growth and fuel demand.

Futures fall back on some of last week's 4 percent after Ireland yesterday called for a rescue of the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one-week high against the dollar even more attractive commodity to investors.

"The rescue story of Ireland is boosting profits today," said Thorbjoern Bak Jensen, an analyst with Global Risk Management in Middelfart, Denmark. "The speculation that Ireland would not get the support has been putting pressure on the previous prices."

Crude for January delivery gained as much as 89 cents, or 1.1 percent, to $ 82.87 a barrel in electronic trading on the New York Mercantile Exchange. It was at $ 82.78 at 10:15 am, London time. Brent crude oil for January settlement advanced to $ 1.11, or 1.3 percent, to $ 85.45 a barrel on London's ICE Futures exchange in Europe.

On 19 November, the New York contract fell 44 cents, or 0.5 percent, to $ 81.98. Futures are up 4.1 percent this year. Prices fell late last week after China ordered banks to increase reserves in a move that could slow growth and crimp demand for fuel in the country's largest energy consumer in the world.

The dollar index, used by IntercontinentalExchange Inc. to track the dollar against six major currencies worldwide, fell 0.5 percent to 78,101. It's down for a fourth day.

"The concerns of the debt of the euro are declining as Ireland has decided to accept the ransom and that will lead to a weaker dollar," said Serena Lim, a commodity strategist at Australia and New Zealand Banking Group Ltd. in Singapore. "It is rather the weakening dollar is helping drive oil prices."

The demand for diesel

U.S. consumption diesel increased in October last year, a sign that the U.S. economy is recovering, according to the American Petroleum Institute.

The demand for ultra low sulfur diesel, the type used on the roads, climbed 8.4 percent on average 3.19 million barrels a day last month, the industry-funded group said 19 of November. Consumption during the first 10 months rose 2.9 percent to 2.97 million barrels a day.

Hedge funds bullish bets on oil cut by most in almost three months. large speculators reduced long call positions, or bets on rising prices, 15 percent in the seven days ended Nov. 16, the report says U.S. Weekly Commodity Futures Trading Commission on 19 November. It was the first decline in four weeks and the biggest decline from seven days to 24 August.

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The dollar index has risen 5.1 %

At a time when foreign officials and U.S. lawmakers are criticizing the Federal Reserve plan to buy Treasury bonds, the currency market is the vote in favor of Ben S. Bernanke 's quantitative easing.

The dollar index measuring the performance of the currency against six major trading partners has risen 5.1 percent since its low this year on November 4. Futures traders reduced bets on a decline in the dollar against the euro, yen, Australian dollar and Swiss franc, the data from the Commodities Futures Trading Association in Washington show.

Leaders Chinese Premier Wen Jiabao to John Boehner, the candidate to be the next speaker of the House of Representatives, have said plan Fed chief Bernanke to print money and buy 600 billion U.S. dollars of U.S. government debt. UU. cause instability and rising inflation. The currency market millones 4000000 dollars a day, notes the Fed's strategy is unlikely to degrade the dollar as the economy continues to strengthen.

"The dollar has found a final," said Lane Newman, director of foreign exchange in New York for ING Groep NV, the largest Dutch financial services company.

Strategist forecasts for the dollar to weaken ceased. From mid-October, the average of 38 estimates was for the currency to trade at about $ 1.36 to the euro in mid-2011. It ended last week at $ 1.3673.

"Clueless" Policy

German Finance Minister, Wolfgang Schaeuble, said the policy November 05, the Fed was "no idea" and is unlikely to revive growth. Brazilian Finance Minister Guido Mantega, who used the phrase "currency war" six days after the Fed suggested in its meeting of 21 September that it was willing to ease monetary policy, said the November 4 U.S. is throwing "money from a helicopter and can cause asset bubbles to form.

Bernanke defended the decision in a speech in Frankfurt last week, saying it is the best way to support the dollar and support the global recovery. Economists at Barclays Capital said in a report of 19 November that U.S. growth will accelerate this quarter from 2.4 percent in the three months ended September 30, while the 16 euro zone nations involves "churning" in the middle of negotiations to rescue Ireland.

Ireland requested a rescue plan to help fund himself and save his bank, becoming the second member of euros to find the rescue of the European Union and the International Monetary Fund. Irish Finance Minister Brian Lenihan said the loan will be less than 100 million euros (138 billion U.S. dollars), declining to give further details at a press conference in Dublin the night.

investor concerns that Ireland may default drove up yields on 10-year bonds last week to 6.46 percentage points more than German bonds of similar maturity, a record.

As bullish

"It has become almost fashionable to criticize the Fed," despite the fiscal crisis of Europe "has changed the image a bit," said Vassili Serebriakov, currency strategist at Wells Fargo & Co. in New York.

Wells Fargo, the third currency more accurate predictor of 44 companies for the six quarters ending Sept. 30 estimated that the dollar will end the year at $ 1.38 to Europe's common currency, and increased to $ 1.34 in 2011. Last month, the company called an exchange rate of $ 1.43.

IntercontinentalExchange Inc. 's dollar index fell 0.5 percent to 78,134 from about 9:45 am today in London, falling for a fourth day. That is still below the 82,918 level on August 27, when Bernanke said the central bank will "do everything possible" to keep recovery on track. That prompted speculation that the Fed would conduct a second round of quantitative easing call and keep interest rates at historically low levels until 2011.

Open Letter

"The dollar can not mount a sustainable rally in the face of quantitative easing," said Richard Franulovich, currency strategist at Westpac Banking Corp. in New York. "The Fed is clogged the U.S. interest rates and in so doing, is making the dollar is unattractive compared to other countries with higher interest rates."

A group that includes former Republican government officials and economists wrote an open letter to Bernanke, issued Nov. 15, saying that the purchase of assets "currency debasement and inflation risk" and will not stop U.S. unemployment . UU. which has remained above 9 percent since May 2009.

The best way to support the dollar and the global recovery is through policies that lead to the resumption of robust growth in an environment of price stability in the United States, "Bernanke said in a speech in Frankfurt on November 19 . The countries that undervalue currencies can inhibit the growth of the world and the instability of financial risk in the country, he said.

Foreign demand

Treasury Department figures showed last week that global investors bought a net $ 81 billion of U.S. stocks, bonds and other financial assets in September, above average this year of $ 71 million dollars, after Bernanke outlined the plan to buy bonds from the month before central bankers in Jackson Hole, Wyoming.

During the first round of quantitative easing, the central bank bought $ 1,725,000,000,000 government bonds and mortgage between November 2008 and March 2010. In the past three years, the dollar index has ranged from a low of 70,698 in March 2008 to 89,624 in March 2009. This was the year of acquisition 88,708 in June.

Investors may prefer the dollar as the Fed's effort to avoid deflation by injecting more money into the financial system is showing signs of success. A general decline in consumer prices tends to hurt a currency because international investors have less incentive to buy assets in that country.

The yield on the benchmark 30-year Treasury, which are more sensitive to changes in expectations of rising inflation, rose last week to 4.42 percent, the highest since May.

Take Pimco

"The long end of the market is telling you to give Bernanke and his colleagues the benefit of the doubt that this can succeed," said Paul McCulley, managing director of Newport Beach, California, Pacific Investment Management Co., ie world's biggest bond fund. McCulley made the comments last week "The advantage of Hays with Kathleen Hays.

Futures traders reduced bets that the dollar will weaken against the euro. The number of contracts to hedge funds and other large speculators have on the Chicago Mercantile Exchange increased commitment to the European currency fell to 8606 from 16 November of the 48,243 high school this year on 8 October; Data Commodity Futures Trading Commission.

Traders "exceeded" the weak dollar and "now we're seeing a reversal of that," said Jeffrey Young, head of currency research at North American foreign Barclays in New York. "It makes sense that the dollar will keep up" as bond yields in the U.S. increase, he said.

Broad Rally

Discharged from the dollar index this year on November 4, legal tender of the United States has risen to 15 of its 16 widely traded counterparts. Won the majority against the Swedish crown, increased 4.2 percent, followed by 3.6 percent against the Norwegian Crown and 3.1 percent compared with the franc.

UBS AG, the currency trader's second largest behind Deutsche Bank AG, raised its forecast of a month last week for the dollar on signs of recovery in U.S. economy and persistent fiscal crisis in Europe.

The Zurich-based company believes that the strengthening dollar to $ 1.30 per euro in one month, compared with its previous estimate of $ 1.40, according to a research note dated 15 November. The U.S. currency can rise to 85 yen a month, from a previous target of 80 yen, he said. The dollar traded at 83.44 yen in London today from 83.55 yen in New York on 19 November.

"Europe's fiscal problems will continue and the U.S. economy is beginning to revive after a weak summer," analysts led by Mansoor Mohi-uddin, chief currency strategist based in Singapore at UBS, wrote in the note. "We expect investors to look more favorably on the dollar now."

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European Default Swaps Index Converges With Emerging Markets: Euro Credit

The cost of insuring government debt against default Western Europe is converging with that of emerging markets.

The Markit iTraxx Index SovX Western European credit default swaps, in 15 countries, including Germany and Ireland this month rose to 18.25 points based on a similar indicator for the risk of emerging markets, the nearest history, according to CMA. The spread was 160 basis points as recently as February.

"Emerging markets have better fundamentals and growth prospects," said Lucas Spajic, the London-based chief European management of the loan portfolio at Pacific Investment Management Co., which runs the world's biggest bond fund. "I am a buyer of the idea."

Rated garbage Turkey, Kazakhstan and Ukraine moves through the crisis better than the developed European countries because they have less debt and avoid falling real estate prices that affected the west. The cost of bond insurance for the nations from Greece to France increased by 14 percent this month as Ireland faced an international bailout to prevent contagion in the euro region.

s Markit Group Ltd. SovX CEEMEA iTraxx default swap index of emerging markets fell 6.5 percent to 203 basis points since it started trading on January 20, CMA prices show. That means it costs $ 203,000 a year to secure $ 10 million five-year bonds. The Markit iTraxx Index SovX Western Europe doubled to 166 basis points over the same period.

Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a country or company fail to adhere to its debt agreements.

"Trade in parity"

"There's a good chance that indices trade at par," said Greg Venizelos, a credit strategist based in London at BNP Paribas SA, Europe's largest bank by assets. "Most CEEMEA countries, including Turkey and Russia, are better than Spain or Ireland, or Greece or Portugal."

developing nations of Europe are forecast by the International Monetary Fund to grow 3.7 percent this year and 3.1 percent in 2011, compared with 1.7 percent and 1.6 percent for the economies most advanced in the region.

A reallocation of a percentage point of the investments in stocks and bonds of real money investors such as insurance called and pension funds of the G-4 countries to developing countries would be equal to an exodus of $ 485 million According to the IMF.

Emerging market stocks

The MSCI Emerging Markets Index of stocks rose by 13 percent this year, compared with 7 percent increase in Europe's Dow Jones Stoxx 600 and up 8 percent of the 500 Standard & Poor's in the U.S. .

The comparison of emerging markets with developed European countries is "unfair," said Gabriel stars, an economist at brokerage Exotix Holdings Ltd. in London. "Unfair to emerging countries."

Government bonds also show how investors perceive the risk of Western Europe and emerging markets have come together from the European Union led a bailout of Greece in May.

Turkey has 750 million euros (1.03 billion U.S. dollars) of 5 percent bonds in 2016 Ba2 rated at a "junk" by Moody's Investors Service and an equivalent BB by Standard & Poor's. The notes yield 3.76 percent, about half of Ireland's 4.6 percent 2016 bonds, which are classified as many as nine overpasses, and near where the securities were trading as recently as March.

Turkey growth

Turkey's economy grew at an annual rate of 10.3 percent in the second quarter, driven by a consumption boom helped the historically low interest rates. The nation matching China with the fastest growth among the Group of 20 major economies only two years after his departure from a funding program of the IMF itself.

Ireland became the second euro-region country to request international assistance when Finance Minister Brian Lenihan said yesterday that the country will seek to at least 100 million euros from the European Union and the IMF. Swaps credit-default linked to the Irish government bonds fell 28.5 basis points today to 478.5, CMA prices show.

Ghana $ 750 million 8.5 percent notes due 2017, rated B by S & P, the yield of 5.93 percent, below the rate of 6.3 percent in Portugal 6100 million dollars, 4.35 percent bonds, rated A-. 300 million euros of Albania's 7.5 percent 2015 bond, rated B, the yield of about 8.4 percent, about debt in Ireland.

"At that time, an investor might decide that it may be better to buy bonds Polish Portuguese debt," said Christian Keller, an analyst at Barclays Capital in London.

Five-year bonds issued by Greece, which has the highest speculative grade rating in the S & P, the yield of 12.3 percent, nearly 3 percentage points from Albania or Jamaica, which are classified by least three steps below. The $ 500 million in bonds of 7.125 percent, 2,016 of Pakistan's nuclear weapons, fighting an Islamic insurgency and grade B, 8.67 percent yield.

Sharing the pain

Swaps credit-default in western European government debt and bond yields soared after the German chancellor, Angela Merkel, called Oct. 29 to bondholders to take over rescue cost nations have to restructure its debt. She repeated the comments in Seoul on November 11 in the G-20, sending benchmark yields Ireland's benchmark 10-year to a record 8.9 percent.

"This has been so incredibly poorly managed that no evidence," said Gary Jenkins, head of fixed income developments Securities Ltd. in London. "Reyes depend on the bond market, so says the bondholders are going to take some pain is self-fulfilling. It was somewhat irresponsible, ridiculous to do."

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Booker Struggles With Newark Recovery

Cory Booker says his plan to lay off hundreds of city workers, including 15 percent of the police force to help close the last of a decade of budget deficits is the most difficult decision yet in five years as mayor of Newark, New Jersey.

"These things are very difficult," said Booker, 41, graduated from the University of Oxford, who attended as a Rhodes scholar, in a telephone interview from the back seat of his sport utility vehicle driven by the police. "These are families who have relied on the use of the city. It is very heartbreaking, difficult process moving."

Democrat proposes the elimination of even position as the state's largest city, where more than half the residents are black and one quarter live in poverty, had a 9 percent rise in shootings in 2010. Booker on Nov. 20 gave the police until Nov. 30 to vote on a proposal to avoid layoffs, as Esmeralda Cameron, his spokesman.

Since taking office in 2006, Booker has earned $ 240 million in donations from businesses and foundations, led by Facebook founder Mark Zuckerberg Inc. and hedge fund manager, Bill Ackman, by promoting the idea that the city of 280,000, located 15 miles (24 kilometers) west of Wall Street, is a medium-sized laboratory for urban renewal. The mayor's need to balance its budget of $ 600,000,000 as Republican Gov. Chris Christie is cutting aid to cities like Newark can limit the impact of the donations that are attracted.

"I see nothing of that goes," said Cynthia Andrews, whose son, Muhammad mujaheed E. Williams, 28, was robbed and killed Aug. 20 while walking home. "Why are closing libraries and why recreation centers closing?"

Budget Gaps

The rising costs of pensions, a drop of 23 percent of state aid from 2009 and the longest recession in U.S. since the 1930s combined to overcome Booker promise to eliminate the deficit by the end of his term in July. He won reelection in a partisan race in May with 59 percent of the vote.

Facing a $ 83,000,000 deficit this calendar year, Booker cut hours at the pools and libraries and property taxes rose 16 percent. The city plans to lay off hundreds of city workers to save money, and sale of buildings for Essex County for cash.

Booker drew national attention to Newark after he appeared on Oprah Winfrey's show in September to report a donation of $ 100 million Zuckerberg to support teachers, improve accountability and promote charter schools.

Free Lunch

Newark Public Schools, at its best, educated Pulitzer Prize-winning author Philip Roth in the 1930 and 1940, according to Philip Roth Society in New Britain, Connecticut. About 82 percent of students in the system now receive free or reduced price lunches, according to a report published this month by the Association for Children of New Jersey, an advocacy group of children.

Thirty-four percent of freshmen from Newark High School in the 2005-2006 school year dropped out before graduation, the data from the National Center of Education statistics show. The rate compares with 14 percent of the suburbs of New Jersey in Toms River, where the median household income is $ 71,032, compared with the average U.S. of $ 52,175 and $ 35,601 of Newark, data from the Census Bureau show.

Julian Robertson, founder of New York hedge fund Tiger Management LLC, donated the maximum $ 26,000 allowed by the laws of New Jersey's campaign finance until 2010 run for mayor of Booker and said it is "a leader ".

'Big' bet

"I'm sure going to keep things done," said Robertson, 78, in an interview from 04 October. "That's what I'm betting. I bet big."

Booker came to office promising to repair the finances of a city that has yet to fully recover from six days of race riots in 1967 that left 23 dead and 725 wounded.

The riots accelerated a process of migration that began in the years after World War II, said Jason Barr, associate professor of economics at the campus of Rutgers University in Newark.

"The deck is stacked, in a sense, contrary to Newark, only that there was a change in the U.S. economy," said Barr. "People were moving to the suburbs and making out in the Northeast. The riots made the situation much worse. And the lasting effect of the riots has been in the name of Newark and perception."

Repair of Newark, Sharpe James began under the mayor for 20 years, who was released from prison in April after serving 18 months of his sentence of 2008 property management illegally owned by the city to a former mistress.

Casa del Diablo

In 1986, James, a Democrat, helped revive downtown by attracting a performing arts center and the state of minor league baseball. Newark is home to companies such as Prudential Financial Inc. and IDT Corp. The $ 365,000,000 Prudential Center, home of the New Jersey Devils hockey, opened in 2007.

James, 74, refused to seek a sixth term in 2006, paving the way for Booker to win the election.

Booker grew up in the northern suburb of Harrington Park New Jersey and moved to Newark in 1996. He graduated from the University of Stanford, Oxford and Yale Law School.

The Mayor made crime reduction his first term and focus the city was shaken by the 2007 execution-style shootings of four college students behind an elementary school.

Booker hired Garry McCarthy, a veteran of 25 years with the Police Department of New York and his chief crime strategist, to lead its police department. Using private money, buy Newark police cars, a firearm, location and cameras CCTV. Shootings dropped 46 percent from 2006 to 2009.

"New Strategies'

This year, overall crime rose 3 percent to 31 October compared with the same period last year. The murder has risen 16 percent, according to police statistics department.

"The current rise in crime is small, and violent crime is still significantly reduced since 2006," Booker said on November 13 by text message. "Many cities are murders, but we are introducing new strategies, technologies and initiatives to continue."

The city has lost about $ 120 million in state funds and the Port Authority of New York and New Jersey over the past two years, and faces a jump of $ 130 million in pension and health care costs the next year, said Booker. Newark unemployment rate was 14.7 percent in September, according to U.S. Bureau of Labor Statistics. Statewide, the rate was 9.4 percent.

Booker budget plan included 167 police officers shoot was scheduled for 12 November, to a state Superior Court judge granted the injunction blocking the move. The elimination of hundreds of non-uniformed job waiting also said Cameron, a spokeswoman for Booker.

Less overtime

In a press conference on 20 November the mayor said the city offers a plan that includes five days of rest and a reduction in overtime instead of layoffs. The unions in the negotiations also offered concessions including pay less effort, clothing allowances and raises, according to the city.

The city will submit a written proposal today and circulated to all police forces who will vote on it Nov. 30, Walter Melvin, a police union representative, said in an interview.

"Shoot 167 staff is entirely preventable," Booker said at a news conference. "We welcome the conclusion of a couple of days if they are willing to work with us."

Newark has recast itself since the riots as a home to education and health, with 18,643 jobs in schools and local universities. Rutgers University, the University of Medicine and Dentistry of state medical school and Essex County College has a combined enrollment of 15.024 students on campuses in the city. Medical care is also responsible for 13,133 to more than 100,000 jobs in the city, according to the state Labor Department.

Gain support

Booker said he is focusing on K-12 education this term. Zuckerberg also pledged to match $ 100 million and said it raised $ 43,000,000 so far. Have to convince people that will spend the money to help them, said the Newark native Steve Adubato Jr., a Democratic political consultant.

"All politics is local to Newarkers and need to know that you are one of them," said Adubato. "They need to feel that they feel that they understand."

"Cory has always been questioned in that regard," said Adubato. "He is one of those streets. Cory could bring in $ 500 million and people still question his commitment."

Booker said none of the money earned will help balance the budget in Newark.

"People are not given to the general funds of cities," he said. "They're giving to specific projects."

Christie Court Help

Booker announced the award of nearly three months after Christie aid cut by 5 percent for the Newark school system of 39,000 students.

"My initial reaction was that it is a wonderful thing," Kim Rivers, a stay at home mother of three, whose son attends the autistic XIII Avenue Elementary School, said of the donation. "At the same time, I have to wonder if it was the money that has been the subject of Newark."

Newark spent $ 24,228 per child in the 2006-2007 academic year, more than any other district in the U.S. more than 15,000 students, according to the National Center for Education Statistics. The national average for these districts was $ 9,323.

New Jersey, the second richest state, according to the per capita income, under a Supreme Court ruling gives state extra money for poorer school districts 31, including Newark, to bring them in line with expenditure levels of the richest.

Best Neighborhood

The best way to fix the schools is to improve their surrounding neighborhoods, said Alan Sadovnik, Professor of Education, Sociology and Public Administration and Home Affairs Rutgers. Policies should include economic development and job creation, improved health care and housing and the elimination of gangs, he said.

"The conclusion is that it's all about money," said Maryam Bey, former school board member.

Bey said Booker is concerned about relying too heavily on outsiders to save the city, and has not focused enough on the changes on the ground.

"People are starting to reach the limit," said Bey. "They can not pay the rent, can not feed their families can not pay their car notes. It is very hypocritical for the mayor to say he wants to save our children, and do not want to help their parents."

The case is the Fraternal Order of Police v. City of Newark, C-000237-10, the Superior Court of New Jersey (Essex County).

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Economic climate negotiations 50 years' Bretton Woods process as clean energy slips

It took decades for negotiators to write treaties to reduce nuclear warheads and resolve trade disputes between nations, and by that measure, efforts to limit global warming may be just the beginning.

Conversations on the United Nations climate from Mexico next week resembling "sit in Bretton Woods in 1944," said Harvard University Environmental Economics director Robert Stavins, referring to meetings he devised a new world financial system provides an agency that govern international trade.

"Negotiations on the weather will be a continuous process, as trade negotiations, is not a simple task with a clear end point," Stavins said in a telephone interview. "It took 50 years to build the institutions that led to the World Trade Organization. It was something that was done in a moment."

Impulse, however slight, is needed to support world markets carbon dioxide as well as the 5.7 trillion U.S. dollars should be invested in clean energy projects by 2035, according to estimates by the International Energy Agency.

Trade in carbon dioxide permits, which aims to curb the burning of fossil fuels that emit gases responsible for global warming, will shrink by 4 percent this year to $ 122 billion.

After the talks failed to produce a treaty in Copenhagen in December 2009 - despite the presence of world leaders including U.S. Barack Obama President and Chinese Premier Wen Jiabao - investors reduced their bets on wind and solar energy and carbon reduction technologies. The WilderHill New Energy Index of 87 companies that develop or use of low carbon technologies has fallen 18 percent this year, erasing $ 500 billion in market value.

'Signal' for investors

Investors could not get a "sign" of Copenhagen, that global standards would encourage investment, Fatih Birol, IEA chief economist, told a conference of 11 November. That "casts a shadow over the prospects for clean energy technology," he said.

"Expectations are very low compared to any significant result" of this year, said Robert Clover, global head of clean energy research at HSBC Holdings Plc in London. "People are looking for in the talks to see how to promote national policies and regulations."

The outlook is bleak for completing an arms control agreement in 1979 after the Soviet Union invaded Afghanistan. U.S. responded by refusing to ratify the second Treaty Strategic Arms Limitation. President Ronald Reagan withdrew from the agreement in 1986, ending discussions dating back to 1964.

Bretton Woods

The talks resumed with the Soviet Union collapsed in 1991. Two U.S. treaties since then allowed and Russian arms inspectors access to other nuclear arsenal to verify reductions in stockpiles of warheads. Obama is trying to push in Congress a new arms treaty with Russia after the program expired in December.

The summit in Bretton Woods, New Hampshire, in 1944 created the International Monetary Fund and led to the creation of the World Bank. It is the vision of a trade body but did not complete the letter. It took five years of negotiations for the WTO, which has awarded the trade disputes between the nations since its inception in 1995.

global warming talks accelerated in 1992 when the Earth Summit in Rio de Janeiro established the United Nations Framework Convention on Climate Change, which coordinates the annual conferences, including last year's summit in Copenhagen and turns of this year in Cancun. Now with 194 members, the agency agreed in Kyoto, Japan in 1997 to limit CO2 emissions from developed countries. U.S. signed the treaty but never ratified it.

"Smaller Pieces"

"We've been at it for 18 years on climate change, but that is not unique," Duncan Hollis, an associate professor at Temple University Beasley School of Law in Philadelphia and editor of the "Oxford Guide to treaties" that published next year. "The failure of this in small pieces and trying to hit a piece at a time is certainly worth trying."

The UN talks are aimed at reducing emissions of greenhouse gases to limit global warming to 2 degrees Celsius (3.6 degrees Fahrenheit). Envoys have suggested as much as $ 100 billion a year to help poor countries to produce clean energy technologies and promote low carbon energy like wind, solar and electric cars.

When negotiators in Copenhagen did not reach a treaty to succeed Kyoto when its targets expire in 2012, Obama and Wen were among some 30 leaders formed the non-binding agreement in Copenhagen. The agreement, which had joined 140 countries, including pledges to limit emissions of all major emitters in the world.

"Hole in One

"The realization is that you can not have a hole in one, we can not accept the big problem than once," Danish Climate and Energy Lykke Friis, the minister said in an interview. "That's not the same as saying the process is broken. Let's focus on what we can not agree and we can not agree."

Christiana Figueres, the UN's top diplomat talks in Cancun, said that the goal of advancing a package of measures that include forest protection, climate aid and distribution of technology. A full-fledged treaty is not on the agenda.

"It is unrealistic to expect governments to move in a major step towards a legally binding treaty," Figueres said in a press conference in Bonn on 15 November. She told the UN General Assembly in New York on 01 November that "a silver bullet solution to climate change is not an option" and "progress has to be done one step at a time."

climate negotiations may be more complex than that of Bretton Woods, as they include developing countries such as China, India, Russia and Brazil - not only in the U.S. and its allies. And the divisions that prevented a deal in Copenhagen remain.

U. S. View

U.S. says he will not sign a treaty unless all major emitters such as developing countries are obliged to respect it. China, which has the most greenhouse gases, says he is not willing to devote their national objectives in international law.

"You can not build a system based on the idea that China should be treated the same as Chad, where China is now the largest emitter in the world," said U.S. Special Envoy Climate Change, Todd Stern, 8 October in a speech at the University of Michigan Law School in Ann Arbor.

The November 2 election that cut the representation of Obama's Democratic Party in Congress that the U.S. action climate change even less likely for now. The Paris-based IEA estimates the inaction on climate change from Copenhagen raised the cost of reducing carbon emissions at $ 1 billion to $ 18 billion by 2035.

Stavins said that a treaty is unlikely to be in writing, either in Cancun or the next year's conference of the UN climate in southern Africa. That is a view shared by Trevor Houser, a negotiator for the U.S. State Department Copenhagen summit, which is now a visiting fellow at the Peterson Institute for International Economics.

'Beat Time'

"A treaty may not even be the right approach in the short term," Houser said in an interview. "Instead of wasting valuable time waiting for the stars to align behind a new treaty, the international community has the opportunity to get down to the implementation of financing, transparency, adaptation and technology cooperation provisions of the Copenhagen agreement. "

The agreement promises Copenhagen can take from 3 to 3.9 degrees Celsius warming by 2100, the Pew Center on Global Climate Change, said. That could lead to rising sea levels more than 2 meters (7 feet), which would submerge most of countries like the Maldives and Tuvalu, according to the Intergovernmental Panel on Climate Change 2007 Change assessment of global warming. Up to 30 percent of species at risk of extinction and hundreds of millions of people face water scarcity, he said.

"We're running out of time," said Alden Meyer, policy director at the Cambridge, Massachusetts-based Union of Concerned Scientists. "The atmosphere does not negotiate with politicians."

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raising the Gold in london

Gold rose in London, the dollar weakened against the euro on optimism a deal to rescue banks in Ireland can halt the spread of the debt crisis.
The euro gained for a fourth day against the dollar after the finance ministers of the European Union said the deal will create a capital fund lenders in Ireland. Gold, which reached a record $ 1424.60 an ounce on 09 November, usually moves inversely to the dollar. Bullion fell 1.2 percent last week as China moves to combat inflation and demand growth slow erosion of precious metals and commodities.
"A weaker dollar is good for gold," said Peter Fertig, owner of Quantitative Hainburg Commodity Research Ltd., Germany, today by phone. "Investors are really looking forward to the situation in Ireland will improve, helping the euro."
immediately bullion delivery added $ 7.22, or 0.5 percent, to $ 1,360.15 an ounce at 9:28 am in London. The metal for delivery in December was 0.5 percent, to $ 1359.60 on the Comex in New York.
Ireland's request for a rescue that makes the second member of the euro to find the rescue of the EU and the International Monetary Fund, after Greece. The European Central Bank said in a statement that is "safe", the program will help ensure the stability of the nation's banking system. The Irish Prime Minister Brian Cowen said yesterday he hoped that talks on the package to be completed in the "coming weeks."
"The Irish problem was not fixed yet, but the agreement appears to be a relief for the moment, that is driving the euro," said Hwang Il Doo, a senior trader at Korea Bank Futures Co. in Seoul. "I guess ingots may have bottomed out and could head north towards the end of the year."
China measures
China last week ordered banks to set aside large reserves for the fifth time this year. The country is the largest gold consumer after India.
gold assets in exchange-traded products rose 4.9 metric tons of 2087.54 on 19 November,from 10 suppliers. Holdings reached a record 2,104.65 tonnes on 14 October.
Silver for immediate delivery in London rose 1.1 percent to $ 27.6012 an ounce. It peaked at $ 29.36 30 years on November 9 and 64 percent this year. Sales of silver will rise as investors seek to protect their wealth of weakening currencies, according to the Perth Mint, producer of about 6 percent of the world's gold bullion.
Palladium rose 1.2 percent to $ 710.75 an ounce. Platinum was 0.4 percent, to $ 1,670.25 an ounce. Metal holdings in three PTE That won 0.79 tonnes to 34.7 tonnes on 19 November, the highest amount since at least February.

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Madagascar Deals Blow failure another blow to the economy paralyzed by the crisis

Madagascar's government hopes the referendum last week on a new constitution would ease political and economic isolation of the nation. In contrast, a coup attempt on the day of the vote plunged the economy into deeper chaos.

"It's a step backwards," Lydie Boka, director of risk analysis group based in Lille Stratego., Said by telephone on 19 November. "If the EU or the U.S. to return there must be a return to political stability."

The EU and the U.S. halted humanitarian aid to Madagascar after President Rajoelina Andry, a former DJ and mayor of Antananarivo, the capital, took over from his predecessor Marc Ravalomanana, with the help of the military in March last year and later reneged on power-sharing agreements. On November 17, 1920 senior officers turned against him, demanding that the power of the hand of the army.

The withdrawal of aid, which accounts for two thirds of the budget of the Indian Ocean island nation, led the economy to contract by 3.7 percent in 2009 and 2 percent this year, the International Monetary Fund, which Madagascar makes the only African economy to shrink this year.

The rebel officers lay on a military base near the international airport north of Antananarivo for three days before he was assaulted by troops loyal to the government on 20 November. There were no casualties, Defense Minister General Lucien Rakotoarimasy said.

'Persistent' tensions

The attempted coup "shows the persistence of economic stress, social and security", the chief EU foreign policy, Catherine Ashton, said in a statement on 19 November.

Authorities arrested 16 officials, including General and Colonel Noel Rakotonandrasana Carlos Andrianasoavina, who announced the coup on 17 November, Colonel Richard Ravalomanana, the security chief in the central region, including the capital, said by telephone.

"In other African countries, even if they are transparent, predictable," said Robert Strauss, director of the American Chamber of Commerce in Madagascar, in an interview from Antananarivo. "Here, it is unclear what the rules are, or applied."

Madagascar's mineral and oil wealth has attracted companies such as Rio Tinto Plc, Total SA and Toronto-based Sherritt International Corp., which has a 40 percent stake in the proposed $ 4,650,000,000 nickel Ambatovy.

Nickel Gains

Nickel gained 3.5 percent to $ 21,550 per tonne on the London Metal Exchange on the day of the attempted coup in the concern of the mine will start production in the first half of next year as planned . The metal rose 1.4 percent over the next day and was little changed at 19 November.

Last week's survey had no impact on the development plan for the mine Ambatovy, Koji Furui, a spokesman for Tokyo-based Sumitomo Corp., which owns 27.5 percent of the project, said by telephone on 19 November.

Other projects are in limbo.

An oil exploration licensing round to be held last month has been delayed indefinitely. Only be considered when the government revises its code of oil, which has been postponed from Rajoelina took power, Joeli Valerien Lalaharisaina, general manager of the Office of National Mines and Strategic Industries, said on 21 October.

The U.S., which accounted for about 278 million U.S. dollars of textile exports from Madagascar in 2008, dropped the country from the African Growth and Opportunity Act, which gives African countries preferential access to U.S. markets.

Textile Factory

The garment factory K3, which exported to the U.S., you may have to close if the owners can not find buyers in Europe for producing shirts and trousers, Sanjay Chandran, general manager of the plant, said by phone. That would mean the loss of 450 jobs.

"If I get orders from somewhere else we will survive, otherwise we have to close," said Chandran, a 36-year-old Indian who has been in Antananarivo, for 10 years.

The EU in June scrapping an aid package of 588 million euros ($ 804-million) due to Rajoelina refused to accept a compromise with his political opponents.

To cope with the economic crisis, the government in September cut its budget by 40 percent, reducing investment, keeping the salaries of officers and soldiers.

"The instability is not helping the economy, especially as we can not create some conditions such as giving tax incentives to investors," said Trade Minister Freddie Mahazoasy in an interview on 19 November. "Every dollar we get is used to support services for the people."

Opponents say the new constitution intended to extend the rule of Rajoelina. The EU, U.S. and the African Union, which suspended Madagascar, do not recognize the leadership of Rajoelina.

The lack of transparency

Charter lowers the minimum age for presidential candidates to 35 from 40, and forces all candidates to be resident in Madagascar for six months before the vote, setting Rajoelina to run and to disqualify Ravalomanana. Elections are scheduled for next year.

The "Yes" led with 73.87 percent of the vote, based on the results of 17,003 of the 18,173 polling stations, the Independent National Electoral Commission said yesterday.

"The coup attempt was not certain that will help restore a climate-friendly investment with the private sector and the image of Madagascar in the international arena has been tarnished," said Adolfo Brizzi, manager of World Bank country in Madagascar, in an e-mail response to questions.

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The Taiwan dollar climbed twice as fast as the Chinese yuan,

The Taiwan dollar rose twice as fast as the Chinese yuan in the past three months, to reap the benefits of strengthening trade and investment ties with the fastest growing economy in the world.

the island's currency appreciated 5.6 percent against the dollar since Aug. 20, while the yuan has risen 2.2 percent as Chinese President Hu Jintao said earlier this month exchange rate change of policy will be "gradual." Taiwan's economy expanded 9.8 percent in the third quarter, completing its longest stretch of overcoming the mainland in 19 years.

Taiwan's currency stock data gathered showed foreigners bought a net $ 1.7 billion of equities since the beginning of November, boosting net purchases this year to $ 6.3 billion, after the government signed a trade agreement with China in June. Compared investors betting on yuan appreciation pace as China deflects criticism of his monetary policy in the Group of 20 in Seoul on 12 November.

"The trade pact has made relations between Taiwan and China closer together, making it a very good indicator for the yuan," said Samson Tu, who helps manage the equivalent of U.S. $ 1.6 billion stock bonds in Taipei at the Uni-President Assets Management Corp. and the purchase of corporate bonds in Taiwan dollars. "China's booming economy will mean more appreciation of the Taiwan dollar."

Thaw relations

Relations have improved since Taiwan President Ma Ying-jeou, won elections in March last year, abandoning his predecessor's stance in favor of independence. The island has enjoyed autonomy 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 trade agreement, China agreed to open markets in 11 sectors such as banking services and lower tariffs on imports from Taiwan valued at $ 13.8 billion last year, or about 16 percent of the total.

Taiwan's economic growth of 9.8 percent in the three months through September, followed by expansion of 12.9 percent in the second quarter and 13.7 percent in the first. The figures were faster than similar types of China's 9.6 percent, 10.3 and 11.9 percent, the longest streak of outperformance since 1991.

The Taiwan dollar rose 0.2 percent to NT $ 30,628 after 17:40 local time, while the yuan has changed little to 6.6416. the island's currency has climbed 11 percent in the last five years, well below the 22 percent gain in the Chinese yuan. The correlation between the Taiwan dollar and the yuan rose to 0.65 in October from 0.17 the previous month. A reading of 1 means the two currencies moved in unison.

Forward Cues

The 12-month forward delivery without betting the yuan reflects rise by 2.9 percent to 6.4625 over a year, while contracts for the Taiwan dollar indicate an increase of 3.7 percent to NT $ 29.53 .

The annual cost of insuring the debt of China in foreign currency for five years with credit-default swaps fell 2 basis points on November 19 to 60, according to CMA prices. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent if the government fails to adhere to its debt agreements. Taiwan has no similar contracts.

Taiwan's benchmark 10-year yield of 1.37 percent from 3.74 percent in China and 2.89 percent in U.S. Treasury bonds due in 2020. island populations have joined with the TAIEX index closing at the highest since Nov. 10 June 2008.

"It is improving Taiwan's ties with China, which makes the shares attractive," said Yosuke Mimaki, a fund manager in Tokyo at Sumitomo Mitsui Asset Management Co., which has 128 billion U.S. dollars of assets under management, including shares of Taiwan.

Flood of investment

Taiwanese companies have invested 8.7 billion U.S. dollars in China over the past nine months, compared with $ 6.1 billion in 2009, according to the Chinese offshore island and the Foreign Investment Commission. It sold a record NT $ 344 300 000 000 of bonds this year, helping to fund expansion in China. Taiwan's shipments to China jumped 18 percent in October from the previous year, representing more than 26 percent of all overseas orders.

Taiwan's Foxconn Technology Group, whose flagship of Hon Hai Precision Industry Co. makes iPhones for Apple Inc. and Dell Inc. said Aug. 18 it planned to add 400,000 more personnel to its nearly 1 million workers in China in 2011 .

"Many Taiwanese companies have large manufacturing segments in China," said Erik Lueth, a senior Hong Kong economist at Royal Bank of Scotland Group Plc, which forecasts the Taiwan dollar will be at NT $ 29.5 in late 2010. "The product mix of China and Taiwan are much more similar to other Asian economies."

Investment Limits

China has foreign exchange controls in place that have deterred foreign investment funds yuan in debt, allowing the currency to trade only within a certain range and majority foreign investment in their markets through quotas. The central bank said it would raise the reserve ratio requirement for banks in the nation by 50 basis points, or 0.05 percentage points, from 29 November, following its purchases of foreign money flooded the economy with cash.

Taiwan has also acted with the failure of regulators on 9 November that offshore funds can only invest up to 30 percent of its debt portfolio in the island. The central bank said Oct. 19 it will step in when the currency market "overshoot." The Taiwan dollar has risen more than 1 percent on the day of the last 14 days, only to lose most of their profits in the last minutes of trade. Spencer Lin, head of foreign central bank of Taiwan, declined comment.

"A little more liquidity and less regulation would make me consider adding the Chinese yuan and the Taiwan dollar to my bond portfolio," said Kei Katayama, who helps oversee the equivalent of 55.7 billion U.S. dollars as group leader foreign debt in Tokyo at Daiwa SB Investments Ltd., a brokerage unit of Japan's second largest.

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