Finance Blog number 1

Taiwan President Ma Ying-jeou named Sean Chen as premier, choosing an official who oversaw the island

Leaders of the world

Germany

+%3Cp%3E+What+fiscal+pact%3F+There+is+little+sign+that+last+week%27s+European+summit+even+happened%2C+judging+from+the+high+cost+of+sovereign+debt+and+the+weakness+in+European+markets.%3C%2Fp%3E%3Cp%3ELast+Friday%2C+European+leaders+–+with+the+exception+of+Britain%27s+David+Cameron+–+pledged+to+form+a+tighter%2C+more+deeply+integrated+fiscal+bond+among+member+states.+Of+course%2C+most+of+the+countries+still+need+to+get+parliamentary+approvals+before+moving+forward.%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3C%2Fp%3E%3C%2Fp%3E%3Cp%3EOne+of+the+most+crucial+aspects+of+the+fiscal+pact%2C+which+was+masterminded+by+Germany%27s+Angela+Merkel+and+France%27s+Nicolas+Sarkozy%2C+was+to+force+eurozone+members+to+maintain+responsible+budgets.+Countries+would+face+sanctions+if+they+allow+their+deficits+to+stray+above+3%25+of+their+gross+domestic+product.%3C%2Fp%3E%3Cp%3E%26quot%3B%5BThe+summit%5D+is+clearly+a+stepping+stone+to+fiscal+union+but+there+are+still+a+lot+of+hoops+to+jump+through%2C%26quot%3B+said+Nick+Stamenkovic%2C+fixed+income+strategist+at+RIA+Capital+Markets+in+Edinburgh%2C+Scotland.+%26quot%3BPeople+are+getting+more+and+more+nervous+for+the+outlook+of+Europe+and+the+lack+of+political+agreement.%26quot%3B%3C%2Fp%3E%3Cp%3EBond+buyers+showed+little+indication+that+they+felt+any+better+about+European+debt+in+Italy+on+Wednesday.+Italy%27s+%26euro%3B3+billion+auction+of+five-year+notes+met+with+relatively+strong+demand%2C+but+resulted+in+a+high+yield+of+6.47%25.%3C%2Fp%3EEuropean+debt+saga+far+from+over%3Cp%3EAnd+yields+on+Italy%27s+10-year+bonds+remain+closer+to+7%25+than+6%25.+That+7%25+level+is+closely+watched+since+it+typically+starts+to+flash+bailout+warning+signs.%3C%2Fp%3E%3Cp%3EGreece%2C+Ireland+and+Portugal+got+bailed+out+shortly+after+their+yields+crossed+that+mark%2C+though+the+bailouts+weren%27t+triggered+until+they+went+even+higher.+%3C%2Fp%3E%3Cp%3EItalian+bond+yields+have+risen+above+7%25+before.+While+many+experts+think+Italy+can+manage+those+levels+for+a+bit%2C+it+is+the+third-largest+economy+in+the+eurozone+and+third-largest+bond+issuer+in+the+world.+In+other+words%2C+it%27s+too+big+to+fail+but+also+too+big+to+bail+out.%3C%2Fp%3E%3Cp%3ELast+week%27s+formation+of+the+fiscal+union+was+supposed+to+keep+bond+yields+in+check.+But+the+only+thing+that+could+really+put+a+lid+on+rising+yields+would+be+a+promise+from+the+European+Central+Bank+that+it+will+step+in+to+buy+more+bonds.+But+that+didn%27t+happen.%3C%2Fp%3E%3Cp%3EThe+central+bank%27s+president%2C+Mario+Draghi%2C+has+stood+firm%2C+saying+the+ECB%27s+only+mandate+is+to+manage+inflation+%3Ca+href%3D%22http%3A%2F%2Fpay-day-loans-4all.com%22%3Echeap+pay+day+loans%3C%2Fa%3E%3C%21–+.+–%3E.%3C%2Fp%3EECB+willing+to+help+banks%2C+not+governments%3Cp%3E%26quot%3BThey%27re+not+going+to+intervene+on+behalf+of+Italy+because+they+believe+that+these+countries+should+get+their+fiscal+house+in+order+and+they+shouldn%27t+do+their+dirty+work+for+them%2C%26quot%3B+said+Stamenkovic.%3C%2Fp%3E%3Cp%3EOther+symptoms+of+European+economic+weakness+include+the+plunge+of+the+euro+to+its+lowest+level+since+mid-January+and+the+collective+decline+of+the+stock+markets.+Since+Friday%27s+summit%2C+London%27s+FTSE+%28%29%2C+the+DAX+%28%29+in+Frankfurt%2C+and+the+CAC+40+%28%29+in+Paris+have+all+dropped+between+1%25+and+4%25.%3C%2Fp%3E%3Cp%3EAdding+to+the+jitters+are+downgrade+worries.+Standard+%26amp%3B+Poor%27s+put+most+of+the+17+eurozone+members+on+notice+last+week+that+they+could+face+potential+downgrades.+The+ratings+agency+also+warned+the+EU%2C+several+banks+and+Europe%27s+rescue+fund+that+they+could+all+face+downgrades.%3C%2Fp%3E%3Cp%3EThe+warnings+all+came+ahead+of+last+Friday%27s+summit+and+the+S%26amp%3BP+has+said+it+hoped+to+complete+it%27s+decision-making+process+earlier+than+the+normal+90-day+window.%3C%2Fp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E+%3C%2Fp%3E%3Cp%3EMario+Monti%2C+the+newly-anointed+prime+minister+of+Italy%2C+was+clearly+annoyed+by+the+stigma+that%27s+been+attached+to+countries+relying+upon+economic+intervention%2C+when+the+purpose+of+that+intervention+is+to+avoid+international+contagion.%3C%2Fp%3E%3Cp%3E%26quot%3BIt+is+impossible+to+trace+a+border%2C+as+Germany+would+like+it%2C+between+the+virtuous+and+sinful+countries%2C%26quot%3B+he+told+Italian+senators+Wednesday.%3C%2Fp%3E%3Cp%3EMeanwhile%2C+German+Chancellor+Angela+Merkel+touted+the+plan+to+her+Parliament+Wednesday.+%26quot%3BWe+have+decided+to+correct+constructional+mistakes+that+were+made+at+the+beginning+of+the+economic+and+monetary+union%2C%26quot%3B+she+said.+%26quot%3BThe+answer+in+this+situation+could+not+be+to+do+nothing.%26quot%3B%3C%2Fp%3E%3Cp%3EYields+on+German+10-year+bonds+slipped+below+2%25%2C+once+again+cementing+their+Teutonic+reputation+as+a+bastion+of+economic+strength+and+stability.%3C%2Fp%3E%3Cp%3E%26quot%3BThe+whole+deal+seems+to+be+unraveling+in+our+faces%2C+and+that+is+clearly+benefiting+German+bunds+at+the+expense+of+peripheral+markets%2C+particularly+Italy%2C%26quot%3B+said+Stamenkovic.%3C%2Fp%3E%3Cp%3EThe+French+10-year+bond+yield+also+declined%2C+sliding+to+3.2%25.+%3C%2Fp%3E%3Cp%3E–+CNN%27s+Stephanie+Halasz+and+Hada+Messia+contributed%26nbsp%3B+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fmoney.cnn.com%2F2011%2F12%2F14%2Fmarkets%2Feurope_debt%2Findex.htm%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+

The Toronto stock market was set for a higher open Tuesday as crude oil prices rose and traders took in positive data from Europe

Ford Motor Co. said Thursday it will resume paying a dividend in March, more than five years after it halted payments because of its financial problems.

The company’s board approved a quarterly dividend of 5 cents per share. It will be paid on March 1 to shareholders of record as of Jan. 31.

“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” Executive Chairman Bill Ford said in a statement. “The board believes it is important to share the benefits of our improved financial performance with our shareholders.”

Its stock pared its loss for the day after the announcement. Ford shares fell 4 cents to $11.04 per share in midday trading. Before the dividend was announced, it had traded as low as $9.84 earlier in the session.

The company stopped paying a dividend in September 2006, when it was deeply in debt. The company lost $12.7 billion that year fast cash advance.

But since then Ford has shed brands like Volvo and Mercury, closed factories, offered buyouts to thousands of employees and earned praise for new products like the Ford Explorer SUV and Ford Fiesta subcompact. Ford reported its tenth straight profitable quarter in the third quarter of this year, and it earned $6.6 billion in 2010.

“We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles,” Chief Financial Officer Lewis Booth said in a statement.

Ford spokesman Todd Nissen said the New York Stock Exchange halted trading of Ford shares temporarily just before the noon announcement. Trading resumed about 10 minutes later.

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A pair of triple button Ugg boots for just $209 at a U.S. online retailer looks like a better deal than the $285 price tag on Ugg

The Treasury Department has raised $12.2 million from the sale of warrants of 17 banks that received government support during the financial crisis. The sales are part of the government’s efforts to recoup the costs of the $700 billion financial bailout.

The Treasury said Friday that the largest amount raised in gross proceeds was $2.79 million from the sale of warrants of Eagle Bancorp Inc. of Bethesda, Maryland, followed by $1.75 million from warrants of Horizon Bancorp of Michigan City, Ind.

The warrants give buyers the right to buy common stock at a fixed price. Treasury is using direct sales of the warrants to institutional investors because the holdings were judged too small to justify the cost of holding public auctions.

The 17 banks received approximately $1 billion in support from the Troubled Asset Relief Program in 2008 and 2009. All 17 have repaid the money and the warrants represent their last link to the TARP program.

Banks, other financial firms and U.S. carmakers received $413.4 billion from the taxpayer-funded bailout. So far, the government has recovered $317.6 billion. Of that amount, $9.1 billion has come through the sale of warrants.

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Tony the Tiger and Toucan Sam can rest easy. Government officials fine-tuning guidelines for marketing food to children say they won’t push the food industry to get rid of colorful cartoon characters on cereal boxes anytime soon.

Allowing the brand icons from popular cereals to remain untouched is one of the concessions officials say they are likely to make as they work to convince food companies to curb junk food marketing to children.

The draft of voluntary guidelines released earlier this year sets maximum levels of fat, sugars and sodium, among other requirements, and asks food companies not to market foods that go beyond those parameters to children ages 2 through 17. The guidelines would apply to many mediums, including ads on television, in stores and on the Internet, in an effort to stem rising obesity levels.

The food industry, backed by House Republicans, who are holding a hearing on the issue Wednesday, has aggressively lobbied against the voluntary guidelines, saying they are too broad and would limit marketing of almost all of the nation’s favorite foods, including some yogurts and many children’s cereals. Though the guidelines would be voluntary, food companies say they fear the government will retaliate against them if they don’t go along.

Officials from the Federal Trade Commission, the Agriculture Department and the Centers for Disease Control and Prevention, who jointly wrote the guidelines, will on Wednesday face the Republican-led House Energy and Commerce Committee, which has already made its distaste for the proposal clear. In a letter last month, Republicans on the committee wrote the agencies and called the guidelines “little better than a shot in the dark.”

Following the industry objections, the congressional pushback and a public comment period on the proposal, the government agencies involved appear to be softening their approach. In testimony released by the committee before the hearing, David Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection, said the coalition of government agencies is “in the midst of making significant revisions to the original proposal.

Among the changes he suggested are narrowing the age group targeted and focusing on children aged 2 to 11 instead of up to age 17 and allowing marketing of the unhealthier foods at fundraisers and sporting events. Vladeck also said that his agency would not recommend that companies change packaging or remove brand characters from food products that don’t qualify, as was originally suggested in the guidelines.

“Those elements of packaging, though appealing to children, are also elements of marketing to a broader audience and are inextricably linked to the food’s brand identity,” Vladeck says in prepared testimony. Tony the Tiger is well-known as the mascot for Frosted Flakes and Toucan Sam for Froot Loops, both Kelloggs’ cereals.

Still, industry officials say they would not be appeased by the changes suggested in the prepared testimony. Scott Faber, a lobbyist for the Grocery Manufacturer’s Association, said companies want the government to prove how these changes will help stem obesity and do a cost analysis looking at the effects through the chain to customers.

“The impact of these proposals would be far reaching and negative,” he said of the voluntary guidelines.

The industry came out with its own guidelines over the summer, proposing to limit advertising on some foods for children but adjusting the criteria. Though the industry proposal is more lenient than the government one, it has won praise from federal officials, who said they would consider it if they finalize the guidelines.

It isn’t clear how soon that will happen. House Republicans have attempted to delay the guidelines through the budget process by asking for further study of the guidelines’ impacts.

If they are not delayed by Congress, a final draft of the standards could come by the end of the year.

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With NATO jets roaring overhead, revolutionary forces fought their way into Moammar Gadhafi’s hometown Saturday in the first significant push into the stubborn stronghold in about a week.

Libya’s new leaders also tried to move on the political front, promising to announce in the coming week a new interim government that it hopes will help unite the country. However, disagreements remain about what the Cabinet should look like.

The National Transitional Council led the rebellion that forced Gadhafi into hiding and has taken over the leadership of the oil-rich North African nation even as it continues to fight forces still loyal to the fugitive leader.

The NTC-appointed prime minister, Mahmoud Jibril, sought support from leaders at the United Nations on Saturday, telling them that “a new Libya is coming to life” as a nation committed to democracy, equality and reintegration into the international community. He said the council was committed to drafting a constitution that would be put to the Libyans for a referendum.

More than a month after seizing Tripoli and effectively ending Gadhafi’s rule, revolutionary forces have been unable to rout well-armed Gadhafi loyalists from strongholds in his hometown of Sirte, Bani Walid and some southern enclaves. Taking the cities is key for Libya’s new leaders to extend their control over the large desert nation.

Explosions rocked Sirte throughout the day as fighters pushing in on four roads came under heavy fire from loyalist snipers and artillery guns. Along the city’s main thoroughfare, they faced close-range gunfights with loyalists hiding in apartment buildings and throwing hand grenades at them from windows.

Moftah Mohammed, 28, said snipers shot two of his friends as they advanced to fire a rocket-propelled grenade on a loyalist truck. When others approached to help the wounded, Gadhafi supporters opened fire and hurled hand grenades, injuring two more.

By evening, however, the fighters had pushed east along the city’s main thoroughfare into its urban center, overrunning a TV station and pushing loyalists farther back. NATO warplanes patrolled overhead during the fighting, and revolutionary commanders said airstrikes took out some loyalist tanks, although that could not be confirmed immediately.

Walls along the town’s main boulevard were pockmarked from heavy caliber machine-gun rounds, and the charred metal hulks of cars lined the streets in front of shuttered shops, some of which had been torched.

Gaping holes marred the walls of the TV building, and two of the Gadhafi regime’s green flags still flew from the roof. Two tanks sat nearby, and rebel trucks with mounted machine guns raced forward while blasting at loyalist positions. In front of a convenience store, a group of men fired a half dozen mortars, yelling “God is great!” after each one flew into the distance.

Most of the fighters came from the western city of Misrata, which saw some of the fiercest fighting in the civil war that erupted after Libyans rose up against Gadhafi in mid-February. For the assault on Sirte, they have used many of the urban battle tactics developed in the defense of their own city, including blocking the road with shipping containers and filling them with sand so they couldn’t be moved.

“When we fought in Misrata it was all new to us,” said Adnan al-Zredi, 25, a former clothing store clerk who manned an anti-aircraft gun on the back of a truck. “Now we’re fine in war. We know exactly what to do.”

Some fighters said Gadhafi forces in the city had adopted similar tactics, building a similar barricade of shipping containers and sand elsewhere in the city. “They got some ideas from us,” fighter Abdel-Aziz Salim said proudly.

He spoke from an elementary school on the city’s edge that had been transformed into a military staging ground. Nearby, fighters pounded huge bullets into ammunition belts and armed rocket-propelled grenades before heading back to the front.

Sirte is the Libyan city most associated with Gadhafi. Revolutionary fighters tried to push into the city last weekend but were driven back in fighting that killed at least 25 and wounded dozens. They pulled back to regroup and let civilians leave the area, although the two sides exchanged fire daily.

In the meantime, more than 1,300 families have left the city, fighters said. A few dozen waiting at a checkpoint outside the city on Saturday described rapidly deteriorating conditions. Many had been clustered in basements, eating once a day and drinking water from nearby wells or water tanks. Some said their children had gotten diarrhea from the water.

Over the last week, fighters said they wouldn’t attack until all the city’s civilians were out. In the end, they decided to advance Saturday because they feared many families from Misrata that were stuck in the city were in danger, said a brigade commander, Mohammed al-Sugatri.

“There are lots of people from Misrata who are stuck in the city living in basements. They have no food or water and many of their children are sick so we had no choice but to attack,” he said.

It remains unclear how many civilians remain in the city and how many of them remain loyal to Gadhafi and his forces.

At a small mosque outside town that has been converted into a field hospital, Dr. Mahmoud Khlef said six revolutionary fighters were killed Saturday and close to 80 wounded, most of them by shrapnel from rocket-propelled grenades.

Members of the National Transitional Council have been struggling to form a new interim government amid political infighting over everything from which cities should be represented and how many Cabinet ministers there should be. That has raised concerns that the former rebels will splinter into rival factions now that they no longer have the ouster of Gadhafi as a common cause.

NTC chief Mustafa Abdul-Jalil, speaking to reporters in Benghazi after attending the U.N. General Assembly in New York, acknowledged differences but said a new government would be named next week to guide the country until formal elections can be held.

“This is the crisis management phase and it should be led by people who are efficient, even if they have to be from the same city, until the liberation of the country and until the constitution is established,” he said. “Then they can choose a government that they want.”

In the capital, Tripoli, a series of explosions went off at a military storage warehouse on a Libyan naval base near the harbor Saturday afternoon and heavy black smoke poured out of the facility, although no injuries were reported. A revolutionary command spokesman, Abdel-Rahman Busin, said it was an accident caused by either an electrical problem or the improper storage of ammunition.

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