Finance Blog number 1

The chief of the International Monetary Fund said Saturday that Italy’s financial reform is key to reducing the impact of the eurozone crisis, and that no country is immune to the consequences if the efforts fall short.

After meeting in Tokyo with top Japanese financial officials, including Finance Minister Jun Azumi, IMF chief Christine Lagarde said Italy must restore political stability and implement financial reforms to provide “clarity and credibility” and restore confidence.

Italy needs “steady, solid and sustained implementation of measures,” she said at a news conference.

The eurozone financial crisis, set off two years ago by Greece’s overwhelming debt, has now engulfed Italy, which has the third-largest economy among the 17 nations that share the euro currency. The crisis has toppled Prime Minister Silvio Berlusconi, who says he will step down once reforms are passed to help Italy control its own staggering debt payday advance.

Lagarde expressed concerns about the possible consequences outside the eurozone, particularly in Asia. She urged Japan to use caution against the impact of the eurozone crisis.

“I insisted with Minister Azumi that no country can be immune under the present circumstances, no matter how developed or how emerging or how far away it is,” Lagarde said. “Japan is no more immune than other countries.”

A major exporter, Japan “would be exposed if some of its large clients are in serious difficulty,” she said.

Europe has bailed out Greece, Portugal and Ireland.

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The National Corn-to-Ethanol Research Center has added $3.5 million in advanced corn fractionation technology, provided by Cereal Process Technologies LLC of Overland Park, Kan., with support from the Illinois Department of Commerce and Economic Opportunity.

Located on the campus of Southern Illinois University Edwardsville, the nonprofit research center focuses on improving efficiencies in the production of ethanol for fuel. The new equipment will enhance advanced ethanol research and career training programs at the center payday loans direct lenders.

Kenneth “Pete” Moss, vice president of marketing for Cereal Process Technologies, said the company’s fractionation technology is “the foundation for a revitalized ethanol industry.” He said it enables ethanol plants to reduce energy consumption while producing more ethanol and edible corn oil.

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Japan has made big strides toward stabilizing its tsunami-crippled nuclear plant but is now facing another crisis _ what to do with all the radioactive waste the disaster created.

Goshi Hosono, the country’s nuclear crisis minister, said Friday that Japan has yet to come up with a comprehensive plan for how to dispose of the irradiated waste that has been accumulating since the March 11 earthquake and tsunami.

Hosono gave the assessment after the government announced an $11.5 billion (900 billion yen) allocation to help the cash-strapped plant operator cover the massive cost of recovery without collapsing. Officials have rejected criticism that the allocation is a bail-out _ stressing that the money comes from a joint fund of plant operators, with a government contribution in zero-interest bonds that must be paid back.

The disaster, which killed nearly 20,000 people along Japan’s northeastern coastline, touched off the world’s worst nuclear accident since Chernobyl, generating meltdowns, fires and radiation leaks at the Fukushima Dai-ichi nuclear power station northeast of Tokyo.

Officials say that _ almost eight months later _ the plant has been restored to a relatively stable condition and is leaking far less radiation than it did in the early days of crisis. They hope to achieve a “cold shutdown” _ with each reactor’s temperature below 212 Fahrenheit (100 C) _ by the end of the year.

But Hosono, in a response to a question from The AP, acknowledged Friday that the crisis has spawned a huge amount of irradiated waste that will require new technology and creative methods to dispose of safely.

“We still don’t have a full picture of how to deal with the waste,” he said. “It would require research and development that may take years. For instance, we still need to develop technology to compress the volume of the huge amounts of waste that we cannot move around.”

Japan could be stuck with up to 45 million cubic meters of radioactive waste in Fukushima and several nearby prefectures (states), according to the environment ministry.

Hosono said Japan is not considering shipping out the waste for overseas processing.

The total amount of radiation released from the plant is still unknown, and the impact of chronic low-dose radiation exposures in and around Fukushima is a matter of scientific debate. More than 80,000 people evacuated from their homes, and a 12-mile (20-kilometer) no-go zone is still enforced around the plant.

Cleaning up the area and compensating residents is expected to cost trillions of yen (tens of billions of dollars). Hot spots of highly localized radiation have been reported hundreds of kilometers away, and Hosono said a task force has been set up to investigate them.

The fund payout of $11.5 billion (900 billion yen) announced Friday for Tokyo Electric Power Co. came after the plant operator agreed to a restructuring plan to cut more than 2.5 trillion yen ($32 billion) in costs over the next 10 years and reduce more than 7,000 employees.

TEPCO has been bitterly criticized for its lack of transparency and slow response to the crisis. The application process for residents and business owners to seek compensation has also been called extremely cumbersome.

The controversial fund is designed to help the operator meet its responsibilities without going bankrupt.

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The number of Americans who signed contracts to buy homes fell for the third straight month in September after the spring-and-summer peak buying season failed to entice new buyers.

The National Association of Realtors says its index of sales agreements fell 4.6 percent last month to a reading of 84.5.

A reading of 100 is considered healthy. The last time the index reached that high was in April 2010, the final month that buyers could qualify for a federal tax credit that has since expired cash advance no fax.

Contract signings are usually a reliable indicator of where the housing market is headed. There’s typically a one- to two-month lag between a contract and a completed deal.

But the Realtors group said a growing number of buyers have canceled contracts.

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Pharmacy benefit manager Express Scripts said it expects to keep more than 95 percent of its prescription volume in 2012 even though it plans to stop doing business with Walgreen Co., the largest drugstore chain in the U.S.

St. Louis County-based Express Scripts and Walgreen have been unable to come to terms on a new contract to replace a deal that expires Dec. 31. Express Scripts pays Walgreen to fill prescriptions, but after the contract ends, Walgreen won’t fill prescriptions for most Express Scripts members.

The dispute became public in June, after Walgreen said it would stop handling Express Scripts claims because Express Scripts would not pay it enough money and wanted too much control over their relationship.

Walgreen runs close to 7,800 stores, and it fills about 20 percent of all prescriptions in the U.S. Walgreen has said it would lose $5.3 billion in annual revenue by parting with Express Scripts.

Express Scripts said Tuesday its profit rose 8 percent in the third quarter as revenue increased and selling, general and administrative costs fell. The St. Louis company’s net income grew to $324.7 million, or 66 cents per share, from $301.5 million, or 56 cents per share. It earned 79 cents per share excluding one-time costs, most of which were connected to its planned acquisition of competitor Medco Health Solutions Inc. Revenue grew 3 percent $11.57 billion from $11.25 billion.

Analysts expected Express Scripts Inc. to report a profit of 76 cents per share and $11.28 billion in revenue, according to FactSet.

The company handled 184.8 million adjusted prescription claims during the quarter, down 1 percent from a year ago. Medication use has declined because of high unemployment and because some consumers are skipping trips to the doctor to save money. The company handled 556.6 million adjusted prescriptions in the first three quarters of 2011, also down 1 percent from the same period last year. Adjusted prescriptions count 90-day mail order prescriptions as three one-month prescriptions.

Earlier this month the company cut its annual profit guidance because of those trends and said it was not filling as many prescriptions as it had expected. Express Scripts said Tuesday it still expects to earn between $2.95 to $3.05 per share in 2011. Analysts expect $3.01 per share, on average.

The company currently expects to fill less than 750 million adjusted prescriptions in 2011, down from 753.9 million in 2010. Express Scripts expects medication use in 2012 to be about equal to current levels. It said total adjusted prescriptions could be unchanged from 2011, or they could grow as much as 2 percent. It did not provide a profit forecast, citing its planned $29.1 billion acquisition of Medco.

The companies announced the deal in July, and Express Scripts hopes to complete the purchase in the first half of 2011. Antitrust regulators and Congress are scrutinizing the transaction. The companies have said the larger Express Scripts would be able to use its size to save money for consumers and health plans, but critics have said the deal will reduce health care choices and may not deliver the savings.

If the cash-and-stock deal goes through, the new Express Scripts Holding will be the biggest pharmacy benefits manager in the U.S. by far, with about a 30-percent share of the market. Combined, Express Scripts and Medco handled about 1.7 billion prescriptions in 2010.

Express Scripts said its results in the third quarter included 8 cents per share in professional fees and financing costs related to the Medco deal. The remaining charges including 4 cents per share in expenses related to its purchase of NextRx in April 2009, and a penny per share in other amortization costs.

Shares of Express Scripts fell $1.98, or 4.9 percent, to $38.47 on Tuesday. In aftermarket trading, the stock picked up $1.23, or 3.2 percent, to $39.70.

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World stock markets jumped Monday, buoyed by resilient economic indicators from Asia’s two biggest economies and hopes of progress in resolving Europe’s debt crisis.

Oil prices rose above $88 a barrel. The dollar fell against the euro but rose against the yen.

European shares advanced in early trading. Britain’s FTSE 100 gained 0.4 percent to 5,512.34 and Germany’s DAX added 0.9 percent to 6,021.92. France’s CAC-40 rose 0.5 percent to 3,188.44. Wall Street was headed for another day of gains, with the Dow Jones industrial average 0.3 percent higher at 11,795 and S&P 500 futures gaining 0.3 percent to 1,238.30

Asian shares posted solid gains earlier in the day as economic data from Japan and China showed a measure of strength.

Japan’s Nikkei 225 index added 1.9 percent to close at 8,843.98 after the government said exports grew for a second straight month in September. The country’s trade suffered a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

Mainland Chinese shares rose after HSBC said its preliminary China Manufacturing Purchasing Managers Index, which measures industrial production, rose to 51.1 in October from 49.9 in September. A result above 50 indicates expansion but the preliminary indicator is often subject to substantial revision.

The Shanghai Composite Index was 2.3 percent higher at 2,370.33 and the smaller Shenzhen Composite Index climbed 1.9 percent to 977.03.

Hong Kong’s Hang Seng soared 4.1 percent to 18,771.82 and South Korea’s Kospi shot up 3.3 percent to 1,898.32. Benchmarks in Singapore, Taiwan, Australia, India, Indonesia and the Philippines were also higher.

In Europe, leaders are to meet Wednesday to hammer out a concrete resolution to the region’s debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.

Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome.

“Markets will remain nervous ahead of Wednesday’s EU summit, hoping that officials can settle their differences and emerge with a concrete solution credit report. In this respect, the risk of disappointment is high,” Credit Agricole CIB said in a research note.

South Korean constructions shares rose on expectations that the death of Libyan leader Moammar Gadhafi would lead to the resumption of construction projects in the North African country, Yonhap News Agency reported. Daewoo surged 5.5 percent. Hyundai Heavy Industries jumped 7.3 percent.

Chinese banking shares soared ahead of earnings reports to be released this week, analysts said. Hong Kong-listed Agricultural Bank of China jumped 8.5 percent, and Industrial and Commercial Bank of China, the world’s largest bank by market value, gained 5.5 percent.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said speculative investors appeared to be scooping up what were thought to be bargain-priced Hong Kong stocks.

“Today, there is some bargain-hunting for sectors like the Chinese insurance sector and Hong Kong property,” he said. Hong Kong-listed Ping An Insurance gained 6.9 percent. China Overseas Land & Investment Ltd. was up 9.3 percent.

In the U.S. on Friday, enthusiasm for stocks was on the upswing amid some positive third-quarter earnings reports from U.S. companies, which come despite a weak economy. Among S&P 500 companies reporting so far, seven out of ten have posted higher profits than expected.

The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday’s surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.

In currencies, the euro rose to $1.3889 from $1.3864 Friday in New York. The dollar rose to 76.22 yen from 76.12 yen.

Benchmark crude for December delivery was up 96 cents at $88.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to settle at $87.40 in New York on Friday.

Brent crude was up 74 cents at $110.30 a barrel on the ICE Futures Exchange in London.

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OTTAWA — Statistics Canada says the country’s annual inflation rate edged up a notch to 3.2 per cent last month as the cost of most consumer goods the agency tracks cost more from a year ago.

On a month-to-month basis, consumer prices rose two-tenths of a cent between August and September.

The increases were moderate, but if there was an alarming signal in the report it was that the Bank of Canada’s core inflation index shot up three-tenths to 2.2 per cent.

That’s the largest annual gain since December 2008, and puts core inflation above the central bank’s two per cent target for the first time since February 2010.

The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago.

But the agency says other items also cost more, including shelter, the cost of transportation, car insurance, recreation and education, alcohol and tobacco, health and personal care and clothing and shoes.

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Apple Inc. said Monday it sold 4 million iPhone 4S units in the three days since it went on sale Oct. 14.

Sales in stores began on Friday in Japan, Australia, France, the U.K., Germany, Canada and the United States.

The company took more than 1 million online orders in the first 24 hours after the release of the iPhone 4S, exceeding the 600,000 for the iPhone 4, though it was sold in fewer countries.

Unveiled just a day before Apple Chairman Steve Jobs died, it was initially dubbed a disappointment, partly because it looked identical to its predecessor low interest rate personal loans. But anticipation of its “Siri” voice software helped it set an online record in orders on Oct. 7.

Along with the new iPhone, more than 25 million customers are using the iOS 5 mobile operating system, in the first five days of its release, and more than 20 million customers have signed up for its free cloud services, Apple said.

The latest iPhone will be available in 22 more countries on Oct. 28 and more than 70 countries by the end of the year.

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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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Researchers who study economic growth and how technology helps drive long-term development are among the top contenders for the Nobel prize for economics being awarded Monday, Swedish Nobel guessers say.

A day before the announcement of the prestigious 10 million kronor ($1.5 million) award, Americans Robert Barro and Paul Romer stand out as favorites for the prize for their research on growth, leading experts say.

The Nobel Committee maintains it doesn’t pay attention to current events when picking a winner, but an award to growth theory would be closely watched as the world debates how to revive the economy in the face of large public spending cuts.

Romer, a former senior fellow at Stanford University now at New York University, has been hot “for a couple of decades,” said Uppsala University economics professor Daniel Waldenstrom. That is one of the unspoken criteria to win the prize because it typically takes that much time to evaluate if results are sustainable.

“His research is focused on powers within technology and development that drive growth, that had previously been overlooked,” Waldenstrom told The Associated Press. “He has showed that it is actually significant for long-term growth and has changed our view of what drives growth.”

Romer has constructed mathematical models showing how technological advances are the result of specific decisions to invest in research and development. Later, he advanced his ideas, concluding that to make real progress, societies must also keep implementing better rules that structure how people work together.

He could share the prize with growth theory pioneer Barro, a professor of economics at Harvard University, who has specifically looked at the links between innovation, public investment and growth.

Hubert Fromlet, a professor in International Economics at the Jonkoping International Business School and Linnaeus University in Sweden, put Barro among his top-five candidates for the prize.

Fromlet correctly predicted that American economist Dale Mortensen would win the award last year for his work, together with fellow prize winners Peter Diamond and Christopher Pissarides on developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies.

“You have to look at research areas: What areas haven’t been awarded in a while?” Fromlet said. “Most often a certain research area is awarded, but sometimes lifetime achievements can also be awarded.”

The economics prize is not among the original awards established by Swedish industrialist Alfred Nobel in his 1895 will, but was created in 1968 by the Swedish central bank in his memory.

Fromlet said other hot candidates for this year’s award include: the India-born game theorist Avinash Dixit; French professor Jean Tirole, for work within industrial organization and other fields; as well as MIT professor Jerry A. Hausman, who created a method that allows scientists to evaluate their statistical models.

Also mentioned are Douglas Diamond of the University of Chicago, for his analysis of financial crises, or American professors Anne Krueger and Gordon Tullock for their description of a behavior they called rent-seeking, which refers to actions to manipulate an environment for personal gains without contributing to productivity.

Another potential candidate is American professor Martin S. Feldstein for his work on macroeconomics and public finance, including research on public pension systems.

Since the economy prize was first awarded in 1969, more than 40 Americans have received it.

Last week, Bruce Beutler of the U.S. and Frenchman Jules Hoffmann won medicine prize for their research on innate immunity, when receptor proteins that recognize bacteria and other microorganisms as they enter the body activate the first line of defense in the immune system.

They shared it with Canadian-born Ralph Steinman, who died three days before the announcement, and who was honored for his discovery of the dendritic cell and its role in adaptive immunity.

U.S.-born scientists Saul Perlmutter, Brian Schmidt and Adam Riess won the physics prize for discovering that the universe is expanding at an accelerating pace, while Israeli scientist Dan Shechtman won the chemistry award for his discovery of quasicrystals, a mosaic-like chemical structure that researchers previously thought was impossible.

Acclaimed Swedish poet Tomas Transtromer won the literature prize and Liberian President Ellen Johnson Sirleaf, Liberian activist Leymah Gbowee and Tawakkul Karman of Yemen shared the Nobel Peace Prize “for their nonviolent struggle for the safety of women and for women’s rights to full participation in peace-building work”.

The awards are always handed out on Dec. 10, the anniversary of Nobel’s death in 1896.

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Online:

http://www.nobelprize.org

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