find cialis online


‘Orangutan’ slur highlights open racism in Italian politics

Posted on 15 July 2013 by James Bond

Italian Minister for Integration Cecile Kyenge Cecile Kyenge says she has accepted Roberto Calderoli’s apology

When Cecile Kyenge agreed to become a minister in Italy’s latest government she was well aware that she would have to break new and difficult ground.

Not only was she taking on the controversial immigration brief, she was also about to become Italy’s first black minister.

But perhaps even Ms Kyenge has been surprised by the ferocity of the backlash.

She has been repeatedly subjected to racist slurs of the crudest kind.

The latest came over the weekend from a vice-president of Italy’s the Senate, Roberto Calderoli, a prominent member of the anti-immigration Northern League party.

Addressing its supporters he said; “I love animals… but when I see pictures of Kyenge I cannot but think of – even if I’m not saying she is one – the features of an orangutan.”

Roberto Calderoli (file photo)
Roberto Calderoli said Ms Kyenge was attracting illegal immigrants to Italy

He went on to say that Ms Kyenge was attracting illegal immigrants to Italy, and that she should be a minister in her “own country”.

This is fairly typical of the kind of abuse that has been directed at the minister by Northern League activists.

One accused her of wanting to impose “tribal traditions” on Italy.

And another actually went so far as to call for Ms Kyenge to be raped so that she would understand what someone who might be raped by an immigrant might go through.

Ms Kyenge, the one prominent black figure in parliament, seems to have become the focus of a very large amount of the openly racist sentiment in the Italian political arena.

So far she has coped with considerable dignity.

Amid the furore over his “orangutan” remark, Mr Calderoli was forced to apologise.

Social change

Ms Kyenge accepted this but said that if Mr Calderoli could not translate his views into proper political discourse he should perhaps step aside as the Senate’s vice-president.

In the background to all this lies some quite profound social change.

Italy is now having to absorb larger numbers of immigrants.

Back in 2000 there were only about one million of them here. Today there are about five million – about 8% of the population.

And right now, with so many Italian families of all backgrounds finding it difficult to cope economically, perhaps tensions are inevitable.

Silvio Berlusconi, right, with Barack Obama in 2009
Silvio Berlusconi famously described US President Barack Obama as “tanned”

As Ms Kyenge herself put it: “Some people are struggling to accept that the country has changed.”

Professor James Walston of the American University in Rome, who analyses Italian attitudes towards race, wrote recently in his blog: “To these people a woman like Cecile Kyenge would be acceptable if she was a docile house servant on the lines of the 30s Hollywood stereotype.

“The fact that she is a successful eye surgeon and now a self-assured cabinet minister is threatening for them.”

The Northern League has set itself against what it calls an “uncontrollable influx of immigrants”.

This is an important part of its electoral platform.

And a long-time observer of the party, Professor Roberto Biorcio, of Milan’s Bicocca University, sees Mr Calderoli’s remarks as part of a calculated effort to focus more on this emotive area.

“I’m under the impression that Calderoli and certain sectors of the league want to draw attention back to the issue of immigration,” he said.

“As usual, they do it in the most provocative manner – but it has helped them in the past.”

Away from the party political fray, casual racism surfaces in many areas of Italian life.

Among the gaffes of Silvio Berlusconi during his time as prime minister was a reference to US President Barack Obama as being “sun tanned”.

He dismissed anyone who did not think that this was funny as a “humourless imbecile”.

‘Racist mentality’

And racism has repeatedly manifested itself in Italian football.

Earlier this year the whole of the AC Milan team walked off the pitch in support of one of their black colleagues who was being subjected to abusive chanting from the stands.

But far from the headlines, in the course of everyday life, immigrants talk of being surrounded by racism.

“You hear comments on the bus, in the markets, in schools,” said Pape Diaw, a leader of the Senegalese community in Florence.

“To think that the Italian people are racist is wrong. But there is… a type of racist mentality. ”

He said that politicians were reluctant to tackle the issue, and that with tensions building there was a risk of a social explosion.

Comments (0)


Bangladesh Sentences Former Islamic Party Leader to 90 Years

Posted on 15 July 2013 by James Bond

Associated Press

Ghulam AzamIslamic, 91, former leader of the Jamaat-e-Islami party in Bangladesh, was sentenced to 90 years in jail in Dhaka, on Monday.

Published: July 15, 2013

NEW DELHI — A Bangladeshi war crimes tribunal sentenced an aged but still powerful Islamist to 90 years in jail for crimes committed during the country’s 1971 war for independence from Pakistan, drawing fury from those who found the punishment either too harsh or too weak.

The Islamist, Ghulam Azam, who is 91 and in ill health, was convicted on all five major counts against him, including murder, conspiracy, and incitement and complicity to genocide. The tribunal concluded that a death sentence would have been appropriate for the charges but instead handed down what is effectively life in prison.

Mr. Azam was part of a dedicated group of Islamists who were opposed to the Bangladeshi independence movement and actively collaborated with Pakistani military officials, the court found. Until 2000, he was the leader of Jamaat-e-Islami, a small but well-organized Islamist party.

He is the third Islamist leader to be convicted in recent months for collaborating with the Pakistani authorities during the 1971 war, in which as many as three million people were killed and more than 200,000 women raped, and an estimated 10 million people fled to India. Several more such verdicts are expected in the coming months.

The trials and the verdicts, part of a long-delayed reckoning with Bangladesh’s birth, have led to violent strikes and deep unrest in Bangladesh pitting members of Jamaat-e-Islami against youthful progressives who have demanded death sentences for the Islamist leaders.

Each side in the fight has repeatedly called for strikes that have paralyzed the country and wounded its economy, which was already reeling from disasters in its all-important textile industry, including the collapse of the Rana Plaza building that killed more than 1,100 people. Jamaat-e-Islami called for a strike on Monday in advance of the expected verdict, and at least one person was beaten to death by political activists for failing to heed the strike call, according to local media reports.

Dr. Atiq Rahman, executive director of the Bangladesh Center for Advanced Studies, said that while both sides in the dispute were dissatisfied with the verdict announced Monday, he did not expect the same level of violence that followed previous verdicts.

“Neither side got what they wanted,” Dr. Rahman said.

Mr. Azam’s lawyers have vowed to appeal.

When Pakistan lost the war, Mr. Azam moved abroad and formed a government-in-exile in London called the East Pakistan Restoration Committee. Bangladesh canceled his citizenship in 1973, and for years he traveled on a Pakistani passport. He returned to Bangladesh in 1978.

Mr. Azam was charged with directing atrocities that resulted in deaths and torture, and the court cited myriad news reports from the time to demonstrate that Mr. Azam was intimately involved in suppressing the Bengali independence movement. Mr. Azam’s lawyers responded that, as a politician, he was not directly involved in killings or torture and that the procedures and documents used by the war crimes court were improper.

Since his arrest in January 2012, Mr. Azam has been largely confined to a prison cell at Bangabandhu Sheikh Mujib Medical University Hospital, but allowed home-cooked food.

Comments (0)


Spain Barcenas scandal: Rajoy rejects resignation calls

Posted on 15 July 2013 by James Bond

Spain’s prime minister says he will not give in to “blackmail”, amid calls for him to resign over alleged links to a suspect in a payments scandal.

Mariano Rajoy said he would fulfil the mandate given by the Spanish people.

The calls came after a newspaper published text messages he allegedly sent to the suspect, Luis Barcenas, ex-treasurer of his Popular Party (PP).

Meanwhile Mr Barcenas repeated in court allegations that Mr Rajoy received payments from a slush fund.

He said Mr Rajoy secretly received money between 2008 and 2010.

An El Mundo report on Monday said Mr Rajoy had sent text messages of support to Mr Barcenas, who is in custody facing trial for corruption and tax fraud. He denies the allegations.

Mr Rajoy, too, denies any wrongdoing, though he did not deny sending the text messages.

He said they showed his commitment to democracy and to allowing the justice system to do its work without political interference.

On Sunday the leader of the country’s main opposition Socialist Party, Alfredo Perez Rubalcaba, called for Mr Rajoy’s immediate resignation.

‘Serious democracy’

At a news conference, Mr Rajoy said a prime minister could not be expected to spend all day denying every rumour or insinuation made about him.

“The rule of law does not bow to blackmail and the institutions, the administrations of justice, the judicial police and tax administrations have acted and are acting and will continue to act with absolute independence,” he said.

“This is a serious democracy… and I will submit myself to investigation.”

Luis Barcenas arrives for questioning in Madrid, 6 February
Luis Barcenas has been denied bail pending his trial

A series of newspaper allegations that Mr Rajoy and other top politicians received illicit payments has enraged a country in the depths of recession and record unemployment.

It is claimed that Mr Barcenas ran a PP slush fund that took donations from construction magnates and distributed them to party leaders in cash.

El Mundo said last week that it had delivered documents with Mr Barcenas’s original ledger entries to the High Court.

Another Spanish paper, El Pais, published similar documents earlier this year.

Reuters news agency quoted lawyers as saying Mr Barcenas handed over the originals in court on Monday.

El Mundo’s most recent report includes a text message Mr Rajoy apparently sent to Mr Barcenas in January this year – when the slush fund allegations broke.

He said: “Luis, I understand. Stay strong. I’ll call you tomorrow. A hug.”

The paper said the conversations showed Mr Rajoy maintained “direct and permanent contact” from at least May 2011 to March 2013.

Correspondents say it is unlikely that Mr Rajoy will step down given his party’s outright parliamentary majority.

Mr Barcenas is being investigated over allegations he stashed up to 48m euros (£41m) in secret Swiss bank accounts. Prosecutors allege that some of the funds stem from illegal party donations or kickbacks.

He and his wife are also suspected of falsifying documents on their tax statements between 2002 and 2006.

The couple deny the charges.

Comments (0)


U.S. Steps Up Public Diplomacy in Egypt Crisis

Posted on 15 July 2013 by James Bond

Amr Abdallah Dalsh/Reuters

Deputy Secretary of State William J. Burn met with Egypt’s interim president, Adli Mansour, in Cairo on Monday.

Published: July 15, 2013

CAIRO — A senior United States official arrived here Monday for meetings with the new military-led government as it tries to end a standoff with tens of thousands of Islamists camped out at a sit-in to protest the ouster of President Mohamed Morsi of the Muslim Brotherhood.

The visit by William J. Burns, the deputy secretary of state, is the most public United States engagement with the ongoing crisis in Egypt since Mr. Morsi’s ouster on July 3, and it comes at a moment when anti-American sentiment is running high on all sides.

Mr. Morsi’s Islamist supporters accuse Washington of giving its blessing to a military coup that ousted him as the country’s first elected president. Their opponents charge that the Obama administration wrongly supported Mr. Morsi’s Islamist government. Banners in Tahrir Square — the frequent focal point of protest — and elsewhere denounce President Obama as a Brotherhood enabler and depict United States Ambassador Anne W. Patterson with a large X over her face.

Advisers to Mr. Morsi and leaders of the Muslim Brotherhood have said that United States officials pushed him to try to reach some accommodation with the generals before his removal and have continued to urge the Brotherhood leaders to reach some agreement to participate in the political process under the new military-led government.

The Brotherhood has refused, deeming the new government undemocratic and illegitimate. United States officials have declined to comment on their role.

Leaders of the Brotherhood vowed Monday to escalate their street protests, centered in a Cairo neighborhood near the Defense Ministry and presidential palace. They have called for marches and possible street blockades in the afternoon and evening after another day of fasting during the Muslim holy month of Ramadan.

In a further sign of the country’s divisions, Islamist militants in Sinai used rocket-propelled grenades to attack a bus early Monday, killing three people and injuring 17, state media reported.

The assault on the bus is part of a sharp uptick in violence in the relatively lawless Sinai region since Mr. Morsi’s ouster. Mr. Morsi’s opponents blame his Islamist allies in the Muslim Brotherhood for encouraging the retaliation, but leaders of the group say it has not condoned violence in Egypt since the British occupation.

Although the attacks are very likely carried out by more militant Islamists angry at Mr. Morsi’s removal, some Brotherhood leaders have gone as far as suggesting that Egyptian intelligence agencies manufactured the violence or reports of violence as a way to cast blame on the Brotherhood.

The developments came a day after the military-based government said Sunday that it was freezing the assets of 14 Islamist allies of the ousted president, stepping up pressure on Mr. Morsi’s supporters to back down from their continuing public protests.

Officials associated with the military takeover say they want all factions, including the Islamists, to participate in forming a government and competing for a new Parliament. But the Islamists object to the military overthrow of an elected government and a newly ratified Constitution. They note that the generals are proceeding with the extralegal detention of the president, as well as with the arrests of scores of top Islamist leaders.

Among others, the asset freeze hit Khairat el-Shater, a millionaire businessman who is both the chief financier and the chief strategist of the Brotherhood. Because of Mr. Shater’s importance to the group, he was subjected to long years in prison and asset seizures under former President Hosni Mubarak, and he sometimes handled the group’s negotiations with Mr. Mubarak’s government from inside his jail cell.

The freeze also included the Brotherhood’s spiritual leader, Mohamed Badie, and the leader of its political arm, Saad el-Katatni, the former speaker of Parliament. Mr. Morsi is being detained without any legal warrant, but the new government has charged the other Islamist leaders with inciting violence.

Also on Sunday, the interim president, Adli Mansour, swore in as vice president Mohamed ElBaradei, the Nobel Prize-winning diplomat who has been the highest-profile public defender of the takeover. Mr. Mansour is expected to announce a full cabinet of as many as 30 ministers this week.


Comments (0)


Microsoft slashes Surface RT price by $150

Posted on 15 July 2013 by James Bond

LOS ANGELES (AP) — Microsoft Corp. is slashing the price of its Surface RT tablet by $150 as it fights to increase its tiny share of the booming tablet market.

The cut brings the price of the Surface RT with 32 gigabytes of memory to $349 without a cover, which also acts as a keyboard. Including a cover with a touch-sensitive keyboard, the device comes to $449. The Surface has a 10.1-inch (25.6-centimeter) screen measured diagonally.

According to market research firm IDC, Microsoft shipped about 900,000 tablets in the first quarter of 2013. That includes both the slimmed-down RT version and the Pro version of Surface, which is compatible with older Windows programs.

That gave Microsoft a slim 1.8 percent share of the 49.2 million tablets shipped worldwide. Apple remained the leader with 39.6 percent and was followed by Samsung Electronics Co., AsusTek Computer Inc. and Inc. Microsoft was No. 5. For the first time in IDC’s quarterly report, Microsoft crept into the top five manufacturers, displacing Barnes & Noble Inc., which makes the Nook. Second-quarter figures are not yet out.

The cut, implemented Sunday, comes just days after Microsoft reorganized its corporate structure to become more of a “devices and services” company.

Microsoft has manufactured devices before, such as its Xbox gaming console, but when it began selling Surface tablets in October, the company became a competitor to its many manufacturing partners, who rely on its Windows operating system to power their machines.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments (0)


Putin hopes Snowden will leave Russia soon

Posted on 15 July 2013 by James Bond

Putin says the U.S., by revoking Snowden’s passport, has kept him stuck in Moscow.


Russian President Vladimir Putin said Monday that NSA leaker Edward Snowden would leave the country at the “earliest opportunity,” reports.

“As soon as there is an opportunity for him to move elsewhere, I hope he will do that. He is familiar with the conditions of granting political asylum, and judging by the latest statements, is shifting his position. The situation is not clear now,” Putin said, according to the Russian news site.

Putin’s remarks indicated that it is increasingly unlikely that Russia will offer political asylum to the 30-year-old former defense contractor.

Snowden, who remains in the transit area of Moscow main international airport, has been charged under the Espionage Act for allegedly disclosing secret U.S.government anti-terrorism programs, particularly details of the National Security Agency’s surveillance and data-collection network.

Putin said Snowden was initially offered an opportunity to apply for asylum in Russia, but only if he stopped his “political activity.”

The Russian president said Moscow officials had told Snowden that they did not want him to engage in activity that would harm the United States while he was in Russia” and he refused.

“He said, ‘I want to continue my activity, to fight for human rights and think that U.S. is violating certain regulations, international, intervene in private life and my goal to fight this,’” Putin said, according to



Putin made his remarks in response to questions from reporters while on an island in the Gulf of Finland.

The Russian leader emphasized that the U.S. basically blocked the former defense contractor from leaving Russia, where he arrived from Hong Kong June 23.

“He arrived on our territory without an invitation, he was not flying to us — he was flying transit to other countries,” Putin said. “But as soon as he got in the air it became known, and our American partners, in fact, blocked his further flight.”

Putin is quoted by one Russian news agency as saying, “Such a present to us. Merry Christmas.”

Putin was referring to the U.S. revoking Snowden’s passport shortly after he arriveed at Moscow Sheremetyevo Airport.

“They themselves scared other countries; no one wants to accept him,” he added, according to

When asked about what was next for Snowden, Putin replied: “How should I know? That’s his life, his fate.”

Comments (0)


How Fed’s 7% Jobless Avoids Deterring Bondholders Is Mystery

Posted on 02 July 2013 by James Bond

Unemployment will fall to about 7 percent in the fourth quarter, according to economists at five of the world’s largest banks, creating more confusion among investors about the Federal Reserve’s bond-buying plans.

Fed Chairman Ben S. Bernanke said last month that the central bank could stop purchasing assets around the middle of next year when joblessness “would likely be in the vicinity of 7 percent.” Bank of Tokyo-Mitsubishi UFJ, Barclays Plc, Citigroup Inc., Deutsche Bank AG and UBS AG all predict the rate will be either at or just above that level in the fourth quarter, six months sooner than Bernanke projected.

“It will definitely pose more communication problems for the Fed,” said Drew Matus, deputy U.S. chief economist at UBS Securities LLC in Stamford, Connecticut, and a former analyst at the Federal Reserve Bank of New York. “And once again, those problems will be of its own making.”

Bond prices have dropped and market volatility has increased in the last six weeks as investors have struggled to figure out the Fed’s plans for its asset purchases. Prices will fall further during the next 12 months, as a faster-than-forecast decline in unemployment pressures the Fed into ending its program early, said Joseph LaVorgna, Deutsche Bank chief U.S. economist in New York.

One consequence of 7 percent unemployment is that the yield on 10-year Treasury notes will rise to 2.75 percent by year’s end, with a further increase to 3.25 percent by next June, after the Fed winds up purchases by January, LaVorgna said. Treasuries advanced today, with the 10-year yield slipping 2 basis points to 2.46 percent as of 9:11 a.m. London time.

‘Anchored’ Rates

“The yield curve will steepen,” because interest rates on two-year notes will be “anchored” by the Fed’s promise to keep short-term rates near zero for a long time, LaVorgna added. The yield on these securities was 0.35 percent on July 1.

Bond-market volatility probably will increase even more later this year, as the drop in joblessness sows confusion among investors about the Fed’s aims, Matus said. Unlike LaVorgna, he doesn’t see the Fed ending its purchases early and instead says policy makers will point to other indicators — such as continued low inflation — to justify extending the program until the middle of 2014.

Volatility in Treasuries fell to 97.13 (MOVE) on June 27 from 103.46 the previous day, the most recent data available, as measured by Bank of America Merrill Lynch’s MOVE index. It climbed to 110.98 on June 24, the highest since November 2011, and has averaged 62.55 this year.

Celebratory Milestone

James Paulsen says investors shouldn’t be worried by an end to quantitative easing.

“This should be more of a celebratory milestone than a scary event,” said the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees more than $340 billion. “From an equity investor’s standpoint, the end of Federal Reserve easing is a goal. It is reflecting a stronger economy and a wonderful thing.”

The U.S. unemployment rate dropped to 7.5 percent last month from 7.6 percent in May as employers added 165,000 jobs, according to economists surveyed by Bloomberg News ahead of a July 5 report.

Forecasts for joblessness in the fourth quarter of this year ranged from 6.5 percent to 7.8 percent in a separate Bloomberg survey. The median prediction of the 72 economists polled from June 7 to June 12 was 7.3 percent.

Fed Purchases

The Fed is purchasing $85 billion of assets each month, comprising $40 billion of mortgage-backed securities and $45 billion of longer-term Treasury debt. It has said it will keep buying assets “until the outlook for the labor market has improved substantially.”

Bernanke said on June 19 that the Fed looks at “many factors” in judging the state of employment, including payroll growth and the number of people in the labor force.

“But the 7 percent unemployment rate is indicative of the kind of progress we’d like to make in order to be able to say that we’ve reached substantial progress,” he added at a press conference following a two-day meeting of the policy-making Federal Open Market Committee.

Reaching 7 percent unemployment this year would prompt Federal Reserve Bank of Atlanta President Dennis Lockhart to favor an early curb to stimulus, he told reporters last week in Marietta, Georgia.

“If we were to get to that level, in my mind we would have accomplished substantial improvement at a faster pace, and I would be very open to considering then a faster pace of reduction in purchases,” he said.

Too Optimistic

The Fed has been consistently too optimistic about the strength of the recovery ever since the 18-month recession ended in June 2009 — a fact that New York Fed President William C. Dudley acknowledged in a May 21 speech.

At the same time, the central bank has been too pessimistic about how quickly unemployment would fall from a high of 10 percent in October 2009. In January 2012, policy makers predicted the rate would average 8.2 percent to 8.5 percent in the fourth quarter of that year, according to their central-tendency estimate, which excludes the three highest and three lowest projections. Instead it averaged 7.8 percent, Labor Department data show.

A decline in workforce participation, partly caused by retiring baby boomers, has helped bring the rate down faster than Fed officials expected for an economy expanding at about 2 percent annually.

Further Decline

The proportion of the population in the labor force, either employed or looking for work, dropped to 63.4 percent in May from 66.2 percent in January 2008. While it rose 0.1 percentage point from April, a further decline is possible, said Gary Burtless, a Brookings Institution senior fellow in Washington.

“The U.S. adult population is getting older,” he said. “This means we should expect that labor-force participation will decline if the job market gets no stronger or no weaker. The number of new 60- to 69-year-olds is climbing fast,” and these adults have lower employment and participation rates than younger Americans, “even in a very healthy job market.”

Structural forces, including the aging population, have caused about half the decline in participation since 2008, said Mary Daly, group vice president and associate director of research at the Federal Reserve Bank of San Francisco. The other half can be chalked up to cyclical influences that should reverse as the job market strengthens, she said, drawing back into the labor force Americans who had stopped looking for work.

Slow Transition

The transition probably will happen slowly and occur over “more than a couple of years,” she added.

About 7.2 million Americans described themselves as wanting work in May, even though they had given up actively searching and weren’t counted as part of the labor force. That was up from 6.8 million a year earlier, Labor Department data show.

Karen Strong-Daniely, 48, went to Kennesaw State University in Georgia after losing her job at a mortgage company in 2008 following the housing slump. She earned a bachelor’s degree and is in a master’s degree program in public administration.

She’s taken computer classes and says she’s surrounded by “nontraditional students, older students like myself.” While federal, state and local governments have been cutting jobs, Strong-Daniely is optimistic about her future when she graduates in 2014.

“With my degree, I stand a better chance of landing a position than I did before I went to school,” she said.

Raising Questions

The Fed’s focus on a 7 percent unemployment rate has raised questions about how much emphasis it will give other labor-market indicators, such as payroll growth, in deciding when to stop buying assets. What’s particularly unclear is how the central bank will react if the jobless rate falls to its new threshold simply because more Americans leave the labor force.

Investors aren’t sure how the end of quantitative easing will play out, said Nathan Sheets, former global head of the Fed’s international-finance division and now global head of international economics at Citigroup in New York. The central bank should explain in greater detail how it expects the participation rate to evolve and how policy will be influenced if it fails to pick up, Sheets said.

“This is creating confusion for the markets about how to interpret the announced guideposts for the unemployment rate,” he said.

Comments (0)


Nowhere to Hide in Worst Bond Losses Since 2008: Credit Markets

Posted on 02 July 2013 by James Bond

Investors are finding no shelter from the worst corporate-bond losses in almost five years as debt plunges for the most creditworthy to the riskiest borrowers in every industry worldwide.

Company debentures erased 2.2 percent the last three months, the worst quarterly decline since a 5.2 percent plunge in the period ended September 2008, when the collapse of Lehman Brothers Holdings Inc. ignited the worst credit crisis since the Great Depression, Bank of America Merrill Lynch index data show. All 16 industries in the index lost during the period, from a 0.7 percent decline for the debt of automakers to a 3.5 percent drop in energy-company bonds.

Speculation that Federal Reserve Chairman Ben S. Bernanke may soon lead a pullback from unprecedented stimulus efforts fueled a 1 percentage point jump in 10-year Treasury yields the past two months. That sparked withdrawals from bond funds and a slowdown in corporate debt issuance from a record pace. Royal Bank of Scotland Group Plc strategists in the U.S. lowered their predictions for 2013 gains last week.

“There has been no safe haven,” said Jeroen van den Broek, head of credit strategy for ING Bank NV in Amsterdam, who recommends investors buy credit, with a preference for investment-grade debt. “We’re seeing a complete focus on rates and everything surrounding Bernanke.”

Junk Deflated

Even junk-rated bonds, typically considered a buffer against rising interest rates because they offer larger relative yields over Treasuries, lost 1.5 percent in the second quarter, compared with a 2.4 percent decline for investment-grade notes.

By comparison, when 10-year Treasury yields surged 1.45 percentage points during two months in 2003, speculative-grade debt fell 2 percent, less than half the 4.3 percent drop in their higher-graded, lower-yielding counterparts.

“High yield has been hit more than we would have expected, especially considering the losses we see in investment grade,” said Putri Pascualy, the senior credit strategist at Pacific Alternative Asset Management Co. in Irvine, California, which oversees $4 billion in fixed-income investments. “It’s not cheap, but it’s approaching fair value.”

Global Spreads

Elsewhere in credit markets, the cost of protecting corporate bonds from default in the U.S. and Europe fell to the lowest in almost two weeks. Egypt’s borrowing costs and credit risk climbed to records as masses poured into the nation’s streets demanding President Mohamed Mursi step down, prompting the military to threaten intervention. Alstom SA (ALO), the world’s third-largest power-equipment maker, sold bonds for the first time since October.

The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark used to hedge against losses or to speculate on creditworthiness, dropped 2.6 basis points to a mid-price of 84.5 basis points as of 12:09 p.m. in New York, poised for the lowest closing level since June 18, according to prices compiled by Bloomberg.

In London, the Markit iTraxx Europe Index fell 4.5 to 114.7, the lowest since June 19.

Both indexes typically decline as investor confidence improves and rise as it deteriorates. Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a swap protecting $10 million of debt.

Egypt Risk

Credit swaps protecting Egyptian debt against default for five years climbed 18 basis points to 900, heading for the highest closing level on record after surging 261 basis points in June, according to data provider CMA, which is owned by McGraw Hill Financial Inc. and compiles prices quoted by dealers in the privately negotiated market.

The yield on the government’s benchmark $1 billion of 5.75 percent Eurobonds due in April 2020 rose 18 basis points to 10.33 percent at 4:57 p.m. in Cairo. The yield jumped 211 basis points, or 2.11 percentage points, in June.

The military said it will intervene if the government doesn’t find a solution to the crisis in the next 48 hours. Anti-government demonstrations intensified today, with protesters storming the headquarters of the Muslim Brotherhood and setting it ablaze. The violence reflected the magnitude of the rift dividing the nation as Mursi’s supporters vowed to protect him on grounds he was democratically elected a year ago.

Alstom Offering

Bonds of Fairfield, Connecticut-based General Electric Co. (GE) are the most actively traded dollar-denominated corporate securities by dealers today, accounting for 3.7 percent of the volume of dealer trades of $1 million or more, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Alstom sold 500 million euros ($653 million) of six-year, 3 percent securities to yield 165 basis points more than the mid-swap rate, according to data compiled by Bloomberg. That compares with an average 140 basis-point spread for similarly-rated BBB securities, Bank of America Merrill Lynch index data show.

Corporate-bond sales of $196.8 billion worldwide in June were the least since December 2011, bringing this year’s total to $2 trillion, Bloomberg data show. That’s more than the $1.96 trillion sold in the first six months of 2012, a year in which offerings reached a record $3.98 trillion worldwide.

Investors Withdraw

U.S.-listed bond mutual funds and exchange-traded funds posted record monthly redemptions of $61.7 billion through June 24, surpassing the previous record of $41.8 billion in October 2008, according to an e-mailed statement last week by TrimTabs Investment Research in Sausalito, California.

The bond-market selloff accelerated after Bernanke said June 19 the Fed may start dialing down its $85 billion monthly bond purchasing program this year and end it entirely in mid-2014 if growth is in line with the central bank’s estimates.

The comments sparked declines from bonds to stocks as investors weighed the possibility of an end to easing that has suppressed interest rates, pushing investors into riskier assets and helping to keep the U.S. growing in the face of federal budget cuts, a slowdown in China and a recession in the euro area. Less than two months before Bernanke’s comments, global corporate-bond yields touched a record-low 3.09 percent.

Gains Lost

“The initial reaction was just to sell everything,” Regina Borromeo, a money manager at Brandywine Global Investment Management LLC, which oversees $36 billion in fixed-income assets, said in a telephone interview from London. Rising rates are logical in light of a gradually recovering U.S. economy, “but the magnitude of the move and the indiscriminate selling was a surprise to us,” she said.

The second-quarter decline more than erased a 0.8 percent gain in the three months ended in March, leaving investors with a 1.4 percent loss since year-end on the Bank of America Merrill Lynch Global Corporate & High Yield index, the worst first-half performance in records dating back to 1997.

Investment-grade securities, which posted their worst June on record with a 2.4 percent decline, have lost 1.96 percent this year. Junk bonds declined 2.8 percent last month, paring the year’s gain to 1 percent, the smallest first-half returns since 2008. Speculative-grade debt yields fell to a record 5.94 percent on May 9, a week after its duration, a gauge of the securities’ price sensitivity to rate moves, touched a two-year high of 4.71.

Emerging Markets

Emerging-market securities are leading the declines as rising interest rates discourage investors from lending to companies in developing nations.

Bonds of state-owned oil company Petroleos Mexicanos have dropped the most among the top 50 issuers this year, with an average 7.1 percent loss. Debentures of Petroleo Brasileiro SA, the most indebted publicly traded oil company, posted a 6.3 percent decline.

European bank bonds have performed the best this year, with French bank Credit Agricole SA (ACA) debt gaining an average 2 percent to lead the biggest issuers as the lender completed the sale of its Greek consumer-bank unit in February and shut its riskiest investment-banking businesses.

Lloyds Banking Group Plc, which is 39 percent-owned by the U.K. government, has returned 1.6 percent, while Intesa Sanpaolo SpA (ISP), Italy’s second-biggest bank, has advanced 1.4 percent.

Corporate debt pared losses last week as Fed officials stepped up a campaign to damp expectations that an increase in the benchmark interest rate will come sooner than previously forecast. In Europe, European Central Bank President Mario Draghi said June 26 that policy makers will maintain a loose monetary stance for as long as needed.

‘Tail End’

Bond yields and risk spreads were too low two months ago and “the Fed tilted over-risked investors to one side of an overloaded and over-levered boat,” Bill Gross, manager of the world’s largest mutual fund at Pacific Investment Management Co., said in a July investment outlook note posted on Pimco’s website on June 26. “We like bonds here. They won’t make you rich, but the May/June experience is unlikely to be replicated in 2013,” Gross wrote on Twitter two days later.

As rates begin to stabilize, investors will return to the corporate-debt market, according to Ashish Shah, head of global credit investment at New York-based AllianceBernstein Holding LP, which oversees about $250 billion in fixed-income assets. Ten-year Treasuries have eased 18 basis points from a near two-year high of 2.66 percent reached June 24.

“These types of moves burn themselves out,” Shah said. “We’re in the tail end of this thing, and I do think we’re at a stage where now is a good time to buy.”

Estimates Pared

U.S. issuance this year will decrease “modestly” from last year’s record pace as many issuers have already completed their long-term refinancing plans and with Treasury yields elevated above historical lows, RBS strategists led by Edward Marrinan wrote in a June 28 report. Investment-grade credit will return 0.6 percent this year, down from the 3.5 percent projected in December, they said. Junk-rated debt will return 8.3 percent, compared with the 8.9 percent seen earlier.

JPMorgan Chase & Co. expanded its recommendation for investors to favor equities over fixed-income investments, saying they should be underweight both government debt and corporate credit “given now more clearly negative price momentum,” Jan Loeys, the bank’s chief market strategist, wrote in a June 26 note.

“In an environment like this, it’s going to be an awkward dance,” Pacific Alternative Asset’s Pascualy said in a telephone interview. “The Fed takes one step forward, and the market takes two back. As hard as it is, you just have to look at the long-term expectations.”

Comments (0)


U.S. Factory Orders Rose in May on Machinery, Computers

Posted on 02 July 2013 by James Bond

Orders placed with U.S. factories rose in May, reflecting broad-based gains that signal manufacturing is stabilizing.

The 2.1 percent gain in bookings followed a revised 1.3 percent advance the prior month, the Commerce Department reported today in Washington. The median forecast of 61 economists in a Bloomberg survey called for a 2 percent increase. Demand for capital equipment increased more than the government estimated last week.

Sales of motor vehicles, gains in residential construction, and a boom in domestic energy production are helping make up for weakness in U.S. export markets. A pickup in business investment in new equipment and improving consumer demand would help bolster manufacturing and the expansion in the second half of 2013.

“We’re expecting a second-half growth story, which should promote better investment,” said Bricklin Dwyer, an economist at BNP Paribas in New York, the top forecaster for factory orders over the past two years according to Bloomberg analysis. “Growth is pretty stagnant at this point.”

Stocks held earlier gains after the report. The Standard & Poor’s 500 Index rose 0.3 percent to 1,620.28 at 10:13 a.m. in New York, led by shares of financial and consumer companies.

Estimates in the Bloomberg survey ranged from a 1 percent drop to a 4.9 percent gain after a previously reported 1 percent advance in April.

Factory orders excluding the volatile transportation component climbed 0.6 percent after a 0.2 percent increase the prior month, the Commerce report showed.

Aircraft Demand

Bookings for commercial aircraft jumped 50.8 percent after climbing 18.4 percent in April. Chicago-based Boeing Co. (BA) received 232 aircraft orders in May after 51 in April.

Bookings for durable goods, which make up more than half of total factory demand, rose 3.7 percent. Today’s reading was little changed from the 3.6 percent gain the Commerce Department initially estimated on June 25.

Orders for non-durable goods including petroleum climbed 0.7 percent. The gain in non-durables reflected gains in fuel and chemicals, today’s report showed. Because the figures aren’t adjusted for inflation, they’re often influenced by changes in prices rather than shifts in demand.

Bookings for capital goods excluding aircraft and military equipment, an indicator of future business investment, increased 1.5 percent in May, a third consecutive advance. The reading was revised up from the government’s first estimate last week which showed a 1.1 percent gain.

Growth Impact

Shipments of those goods, used in calculating gross domestic product, rose 1.9 percent in May, also more than estimated last week, after a 2.1 percent drop in April.

Orders for machinery increased 0.7 percent, led by a 7.6 percent jump in construction (CNSTTMOM) equipment. Demand for computers rose 8.8 percent.

Home values continue to rise, boosting sales and prompting builders to step up housing starts, which in turn generate more orders for building materials, furniture and appliances.

Construction spending climbed in May, led by the strongest expenditures on residential projects in more than four years, the Commerce Department reported yesterday. Los Angeles-based KB Home (KBH) is among builders raising prices and buying land, President and Chief Executive Officer Jeffrey Mezger said.

“If a consumer feels good about their personal situation, they will always work through any obstacles and find a way to become a homeowner,” Mezger said on a June 27 earnings call. “With job growth accelerating and consumer confidence hitting a five-year high last month, I expect the housing recovery will continue its solid advance.”

Autos, Homes

Automakers and homebuilders are helping keep America’s factories busy. Vehicle purchases increased to a 15.24 million annual rate in May, the strongest in three months, according to figures from Ward Automotive Group.

Purchases probably climbed to a 15.5 million rate in June, the most since June 2009, according to the median forecast of economists surveyed before industry data today. Ford Motor Co. (F) and General Motors Co. (GM) sales last month topped analysts’ estimates.

Today’s report showed manufacturers are having trouble boosting stockpiles as demand improves. Factory inventories were unchanged in May after climbing 0.1 percent the prior month. Manufacturers had enough goods on hand to last 1.3 months at the current sales pace, down from 1.31 the prior month.

Manufacturing, which accounts for about 12 percent of the economy, is projected to keep contributing to growth this year. At the same time, the outlook may be clouded by across-the-board federal spending cuts that began on March 1, when lawmakers failed to reach a compromise on ways to reduce the debt.

A report yesterday showed American factories rebounded in June as orders picked up. The Institute for Supply Management’s manufacturing index climbed to a three-month high of 50.9 from 49 in May. A reading of 50 is the dividing line between expansion and contraction.

Comments (0)


7 killed in Afghan attack on NATO compound

Posted on 02 July 2013 by James Bond

Bombings and other violence have been on the rise in the Afghan capital in recent weeks.


KABUL — Afghan militants armed with explosives and firearms attacked a NATO compound just outside of Kabul early Tuesday, killing seven people and wounding several others, according to a high-ranking police official.

The seven killed include four private security guards from Nepal, one Afghan guard and two Afghan truck drivers waiting to get inside the compound when the attack began.

Kabul provincial Police Chief Mohammad Ayuob Salangi said the attack was carried out by four men, one of whom rammed an explosive-laden truck into the compound’s gate. The others were wearing suicide vests, Deputy Chief of Police Dawoud Amin told USA TODAY. All four were killed in the explosion and subsequent gunbattle.

A truck packed with explosives left a crater more than 30-feet wide, blowing open the compound gate. The other militants entered the breach before exploding their vests. The blast destroyed several buildings and reduced more than a dozen tractor trailers to smoldering, twisted heaps of charred metal.

The attack occurred just off a main highway linking Kabul to the country’s eastern provinces that is lined with compounds for private companies that supply NATO forces.

A truck bombing at a NATO compound just outside Kabul left a 30-foot-wide crater outside the gate and destroyed several buildings.(Photo: Carmen Gentile for USA TODAY)

The Taliban claimed responsibility for the attack, the latest in a series of attacks carried out in and around the capital.

Shopkeeper Bismillah Khan said he was just about to open his store when there was a large explosion about 100 yards away, sending him and others scurrying for safety. “It was a huge blast that knocked all of us to the ground,” Khan said.

Bombings and other violence are on the rise in the Afghan capital in recent weeks, targeting both local government offices and foreign interests. The uptick in violence comes amid U.S. efforts to hold peace talks with the Taliban in Qatar, home of the militant group’s recently opened office.


Comments (0)

Advertise Here
Advertise Here