Two penthouses in Hong Kong were each put on sale for a record €26m, a developer said today, as demand from wealthy Chinese buyers has sent prices in the city soaring.
Sun Hung Kai, the world's largest developer by market value, said it raised the asking price by 20% for the 4,000 square feet penthouses on top of the Cullinan twin towers, Hong Kong's tallest residential development.
The properties will be the city's most expensive apartments if they are sold at the 300m Hong Kong dollar asking price, which translates into 75,000 dollars per square foot.
Buyers from Hong Kong, China and overseas were reported to have shown interest in the units in recent months. The penthouses, on the 91st to 93rd floor of the 270-metre towers, have their own outdoor garden and swimming pool.
Until now, Hong Kong's most expensive flat per square foot is a 5,497 square feet unit on the 80th floor of The Arch in Kowloon, another development by Sun Hung Kai. It was sold for 225 million dollars, or 40,931 dollars per square foot, in June last year.
Prices in the city's luxury market have been largely driven up by super-rich Chinese who tend to target new, top-end properties, as the Chinese economy has picked up in recent months.
Chinese buyers purchase in Hong Kong as an investment as well as a means to obtain residency in the city, which requires an investment of at least 6.5 million dollars.
Earlier this week, a buyer paid a 24.5 million dollars, or 30,025 dollars per square foot, for an apartment in the Masterpiece luxury development in Tsim Sha Tsui district, making it the most expensive one-bedroom flat in town.
Sep 19, 2009
Sep 18, 2009
If the MP3 player market was a fault line, we'd have a boatload of busy seismographs on our hands. Certainly, two of the most exciting releases of the past couple weeks are the new iPod Touch and the Zune HD. Now, if you're curious how the two devices compare with one another, you could always read the deluge of articles available on CNET and around the Web, but we can certainly see how that might be a bit overwhelming. Soon enough, we'll pit the two players head-to-head in a knock-down, drag-out brawl (aka Prizefight). In the meantime, we've created a purely technical spec-to-spec comparison chart to tide you over.
Business reporter, BBC News, Frankfurt
Page last updated at 12:53 GMT, Thursday, 17 September 2009 13:53 UK
E-mail this to a friend Printable version
Car firms disagree about electric future
By Jorn Madslien
Business reporter, BBC News, Frankfurt
Tesla electric roadster
The Tesla electric roadster - and not a pigeon in sight
Frankfurt's city streets may not be the best for testing cars, yet accelerating between the traffic lights in a Tesla offers a powerful insight into the electric future that most players in the motor industry are raving about.
Tesla says its new electric roadster accelerates from 0-100 kilometres (0-60 miles) per hour in four seconds and can go on cruising for almost 400 kilometres.
But it also comes with a 99,000 euros ($146,000; £88,000) price tag.
Plans are under way to bring electric cars to the masses, however, with most carmakers at the Frankfurt motor show displaying concepts to illustrate how they see the future.
"The electric car will account for 10% of the global market in 10 years," predicts Carlos Ghosn, chief executive of alliance partners Renault and Nissan in a BBC interview. "It is time for zero emission motoring."
Renault-Nissan are investing some 4bn euros in an electric vehicle programme, where some 2,000 engineers and development staff work to make the firm the world leader in this area, observes Global Insight analyst Tim Urquhart.
"Renault is basically betting the future of the company on its bold electric passenger car strategy," he says.
"The cost of developing, marketing and implementing the related infrastructure will mean that there will be little room for error."
If Mr Ghosn and those who think like him are right, then the future looks bleak.
At least, that is, if you are a pigeon.
"Normally, when they hear a car they fly away last minute," says the man from Sixt, the car rental firm that handles the German energy company RWE's fleet of electric cars, during the Tesla drive in Frankfurt.
"But when this one comes along, they don't hear it."
Pigeon lives lost may seem trivial when compared to electric cars' potential to slash vehicle emissions and help curb global warming.
But this is not just an issue that is keeping pigeons up at night. If pigeons cannot hear electric cars then perhaps people should worry too?
Not at all, insists Volkswagen's Ulrich Hackenberg as he presses a button on the dashboard of the company's E-Up concept to release a canned sound of a revving engine.
"Electric cars could sound like this in the future," he says.
No major advancesThe pigeon scenario is an example of the physicists' mantra, that "nothing's for nothing", that every solution poses a new problem.
And with regards to electric motoring, there are plenty of flipsides that cannot be solved by simply pressing a button.
One perhaps surprising sceptic is Shigeru Hayakawa, head of research and development at Toyota.
"The electric vehicle has become a fever and everyone is talking about it," he says during a journalist briefing in Frankfurt.
"But in the 1990s, lots of vehicle manufacturers launched electric vehicles, and Toyota did too.
"And if the question is if there have been any major technological developments since then, the answer is no."
Toyota believes current battery technology, though vital to its petrol-electric hybrid solutions, is merely good enough to power small cars for city driving, just as it was 15 years ago.
Renault-Nissan's Mr Ghosn disagrees. "There are some differences compared with the past," he says, insisting that "we are much more advanced with battery technology than we were five or 10 years ago".
Already, electric cars can deliver what most people need so the impact of a shift to electric would be huge, he insists.
"Ninety-five per cent of the world's population drives less than 100 kilometres per day," he says, "and we have billions of people on the planet whose prime objective is to acquire a car."
Besides, says Ian Robertson, BMW Group's head of sales and marketing, "the battery manufacturers are advancing so fast at the moment".
"Governments and people around the world are beginning to see the advantages of this," he tells BBC News. "And the electricity generating companies are very keen on this."
A switch to electric cars would send electricity demand soaring, though coming at a time of widespread concern about energy shortages and security of supply, this too creates new challenges.
For electric cars to significantly reduce carbon emissions, the electricity must be created by either renewables - such as solar power or wind turbines - or in nuclear power plants.
Here in Germany, about a quarter of the electricity generation takes place in 17 ageing nuclear power plants and the country is also a world leader when it comes to renewables.
Electric cars could further aid a switch from coal-fired power stations towards either renewables or new nuclear power plants, or both, as they could function as a storage facility for power produced at night when windmills turn and nuclear power is produced regardless of whether anybody wants it.
But though such additional demand would add to the power utilities' revenue, it would not be enough to fund the multi-billion euro investments required in electricity generation in the immediate future.
Without massive investment, it is inconceivable that renewable power sources can emerge fast enough to replace Germany's nuclear power plants, which are all destined for closure.
This would leave Germany with a choice between coal or gas fired power stations, thus reducing any impact a shift towards electric cars would have on overall emission levels.
By Jorn Madslien
But given that the world's oil reserves will eventually run out, "there's no choice but to go for emission free personal mobility in the future", says Dieter Zetsche, chief executive of carmaker Daimler, owner of Mercedes and Smart.
"The only way I know how to do that is the electric motor," he adds during a journalist briefing in Frankfurt.
"There are alternatives for how you can store electric power in the car. You can do that with batteries and you can do that with hydrogen, and then go for fuel cells."
Both storage facilities are expensive, and both have a number of disadvantages - not least relating to infrastructure such as charging points or hydrogen stations.
But this is changing, Mr Zetsche insists. On Monday this week, Frankfurt's first electric car charging point was unveiled and last week a cross-industry agreement was struck to roll out fuel cell infrastructure in Germany.
Daimler will do its part, hoping to have a fuel cell solution on the market in five years at a price that can compete with Mercedes' own combustion engines.
"The framework is changing, the environment is changing," says Mr Zetsche. "I am convinced we are facing a paradigm shift."
Samarjit Shankar noted signs of profit taking on the recent gains against the dollar by most Group of 10 currencies
The dollar fell closer to one-year lows against the euro Thursday as mounting hopes for economic recovery from the global economic crisis encouraged risk taking.
At 2100 GMT, the euro fetched 1.4740 dollars, up from 1.4708 late Wednesday in New York.
The dollar rose to 91.03 yen from 90.94 yen.
Trading was volatile, with the euro consolidating gains against the US currency.
Samarjit Shankar of Bank of New York Mellow noted signs of profit taking on the recent gains against the dollar by most Group of 10 currencies, which in addition to the euro includes the yen, the British pound, the Canadian dollar and the Swiss franc.
"The fact that the Swiss franc and Japanese yen also benefited from net buying in the past weeks suggests the dollar sell-off was broad-based," Shankar said.
Euro vs dollar
"Whether the present bout of profit taking is sustained remains to be seen," he added.
Earlier, the single European currency had struck 1.4767 dollars, its highest level since September 25, 2008, as a growing drumbeat of recovery hopes drove traders toward risk taking and away from the safer haven of the dollar.
Dealers said they expect the euro to make further gains against the dollar, possibly to highs around 1.50.
"From a psychological point of view there are hardly any resistance (levels)... around 1.4750 that could stand in the way of the euro moving on to the 1.4965" peak in November 2007, Commerzbank analysts said in a client note.
"And there is little reason for the euro bulls to take profits as the dollar’s (interest) rate disadvantage still supports their view," they added.
The US Federal Reserve has indicated it would continue to keep its key interest rate at almost zero until the world's largest economy solidly recovers from a deep recession that began in December 2007.
Additionally, speculators continue to use the dollar to fund carry trades -- borrowing cheap dollars which they then convert to invest in higher-yielding assets elsewhere.
"It is such a nice environment for carry trades again -- better liquidity, rising risk appetite, lower foreign exchange volumes," said Ulrich Leuchtmann, head of foreign exchange research at Commerzbank.
The Bank of Japan left its key interest rate unchanged at 0.1 percent in a unanimous decision, and maintained its stimulus measures aimed at battling the worst slump in decades.
The world's number two economy was "showing signs of recovery," BoJ governor Masaaki Shirakawa said in comments slightly more optimistic than the central bank's view last month that economic conditions had "stopped worsening."
Federal Reserve chairman Ben Bernanke said this week that the recession in the United States was probably over but warned recovery would be sluggish.
Since December 2008, the US central bank has held its key interest rate at a record low range of zero to 0.25 percent to spur lending and economic activity.
The European Central Bank's main interest rate has stood at a record low of 1.0 percent since last May, but nevertheless gives the euro a return advantage over the dollar.
"Currency investors are searching for yield and the dollar is the lowest yielding because of ultra-low US interest rates," said GFT analyst David Morrison.
"Traders listen to Bernanke and think that this situation will continue for some time," he added.
In late New York trading, the dollar fell to 1.0283 Swiss francs from 1.0317 late Wednesday.
The pound fell to 1.6445 dollars from 1.6486.
One year on from the near collapse of the financial system, Tom Leonard in New York finds it's ordinary Americans who are picking up the bill.
The green shoots of recovery are sprouting up through the still stony ground of the US economy. A year ago, such a scenario seemed impossible as the optimists were drowned out under a barrage of Doomsday pronouncements.
The world’s biggest economy was heading for a 1930s-style Great Depression, if not Armageddon. Even the US Treasury Secretary spoke about perhaps not having an economy to save.
New York’s financial district was Ground Zero once more – hit this time by reckless, greedy bankers who appeared to have hijacked the entire economy.
In a city which some said was ruined by the rich, the schadenfreude was brief. Yes, you could suddenly get a table at the best restaurants and a bargain pair of shoes on Madison Avenue, but New York relies heavily on Wall Street taxes for its livelihood and many of its other jobs.
Tales of business suddenly drying up for cab companies and newsagents around the corner from Lehman Brothers’ offices were soon repeated across the US as the shock waves rippled.
Existing economic problems, particularly in the US car industry, suddenly worsened. The once all powerful General Motors had to be bailed out. Unemployment soared and continues to rise.
The housing market, having caused much of the Wall Street collapse in the first place over sub-prime lending, went into freefall in some states. Tent cities sprung up for the dispossessed and lorry convoys toured the country handing out food to the needy . When the government stepped in to bail out the banks, and when car industry chiefs flew to Washington by private jets to beg for money, a backlash against big business was inevitable. Faced with their own personal economic meltdown, many Americans found the idea that some companies and financial institutions were too big to fail hard to stomach.
The talk was about Wall Street versus “Main Street”, which some saw as a clash of values between a brash American get-rich-quick culture and another, older American philosophy that valued hard work and financial prudence.
A year on – and $700bn (£424bn) of government Troubled Asset Relief Programme (TARP) money later – America is not out of the woods, but the nightmare scenarios did not come to pass. Survival has been a heavy price – 4.5m people lost their jobs and unemployment is still growing at the rate of 200,000 people a month. Some fear future generations will have to bear the cost of the bail-out. Unemployment among teenagers out of education now stands at 25pc.
This week, debate is raging over whether anything has changed on Wall Street. Some say banks will never again be able to borrow so much and take such risks, but most observers seem to believe little has changed. The same archaic federal regulatory system is still there, the banks are still too big to fail and the eye-watering bonuses are back.
“History cannot be allowed to repeat itself,” President Barack Obama warned Wall Street on Monday. But some believe the president, now saddled with health reform and other concerns, has missed his chance to impose radical reform on Wall Street.
The panic may be over and there are signs of growth but sceptics argue the banks are still weighed down by toxic assets and not lending as much as they should.
There is a strong sense here that the next time a Lehman threatens to crash and burn, ordinary Americans will not rush to put out the blaze. Confidence in the system has suffered – many have clearly had their cherished notions about the justness of US capitalism trashed. That you don’t have to reap what you sow if you’re a giant bank or car maker has been the most painful lesson the past year.
• Barack Obama abandons missile shield plans
• U-turn seen as overture to Moscow
• New system to target Iranian missiles
Barack Obama announces plans to scrap the US missile defence shield in central Europe. Photograph: Charles Dharapak/AP
Barack Obama today reversed almost a decade of Pentagon strategy in Europe, scrapping plans to deploy key elements of a US missile defence shield.
Instead, he said, a more flexible defence would be introduced, allowing for a more effective response to any threat from Iranian missiles.
The U-turn is arguably the most concrete shift in foreign policy from that of the Bush administration, which spent years negotiating to place silos and interceptor missiles in Poland, and a radar complex in the Czech Republic.
The shift is a triumph for the Kremlin, which has long and vehemently argued that the shield is aimed at neutralising its intercontinental missiles; Moscow had warned of a return to a cold war arms race, and threatened to deploy nuclear missiles in its Kaliningrad exclave, surrounded by EU states.
President Dmitry Medvedev described today's announcement as a "responsible move ... We value the US president's responsible approach towards implementing our agreements," he said. "I am ready to continue the dialogue."
However, the US decision now puts the onus on Moscow to respond in kind by cooperating with the White House on the Iranian nuclear programme, on Afghanistan, and on nuclear arms control.
At a hastily arranged press conference at the White House after news of the switch leaked overnight, Obama said the aim was to protect against the threat of an Iranian missile attack. He said the Bush plan had intended to intercept long-range Iranian missiles, but US intelligence now showed the danger was short and medium range.
The new system would be more flexible and spread across various countries, Obama said. "It deploys capabilities that are proven and cost effective, and it sustains and builds upon our commitment to protect the US homeland," he said.
The shift could potentially see a more aggressive approach to Iran, with US military deployment shifting from central Europe to right up to the Iranian border. The plan envisages sea-borne missiles in place close to Iran by 2011.
The decision was welcomed among Nato allies in western Europe, which had viewed the earlier project as an unnecessary provocation to the Russians. But some in Poland and the Czech Republic will view it as a betrayal of efforts over the years to accommodate US requests in the face of domestic opposition. Former Czech prime minister Mirek Topolanek, whose government signed the original deal, described Obama's decision as bad news. "This has two dimensions. The first is a certain softer position of the US in negotiating with Russia. And the second, that is bad news, they used the opportunity when this country is unstable, when it is behaving in a very untraditional and unstable way, and ended co-operation on a matter that the Obama administration considered unacceptable," he said.
The Iranian foreign ministry declined to comment on Obama's move, but senior Iranian figures rejected the idea that their country was a threat to the region.
Kazem Jalali, spokesman for the parliamentary committee on national security and foreign policy, said "considering Iran as a threat has been a wrong policy since the beginning".
In Washington, Republicans condemned the U-turn, which came at the end of a 60-day review. Republican Senate leader Mitch McConnell described it as "both shortsighted and harmful to our long-term security interests".
He added: "Further, the administration has secured no apparent commitment from the Russians to work with us to reduce either the missile or nuclear threat from Iran."
Robert Gates, the defence secretary, who served in the post under Bush and had previously been an advocate for the Poland and Czech deployment, denied that the move amounted to appeasement of Russia. The decision was taken on the grounds of new intelligence, cost and technical feasibility, he said.
The White House said that US intelligence on Iran indicated that "the threat from Iran's short- and medium-range ballistic missiles is developing more rapidly than previously projected, while the threat of potential Iranian intercontinental ballistic missile capabilities has been slower to develop than previously estimated".
In spite of Gates's denial that Moscow was a factor, there were indications Russian sensitivities played a part.
The new plan would see a fixed radar system in the Caucusus aimed at Iran, rather than an omni-directional one in the Czech Republic, according to a Pentagon general.
David Albright, a US expert on proliferation, described Obama's announcement as a good move, saying that the Bush plan had been "over the top" while the new one was more relevant to the perceived Iranian threat.
In Warsaw, Polish prime minister Donald Tusk said Obama had assured him in a phone call that the change would not hurt the security of Poland or Europe. "I would not describe what is going on today as a defeat for Poland," Tusk said.
By JEANNINE AVERSA
The Associated Press
Thursday, September 17, 2009; 5:16 PM
WASHINGTON -- For the first time in two years, Americans actually got a little wealthier.
Household wealth grew by $2 trillion, or about 4 percent, this spring, ending the longest stretch of quarterly declines on records dating back to 1952, the Federal Reserve reported Thursday.
Net worth - the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards - came to $53.1 trillion for the second quarter.
Stock portfolios came back to life this spring after the market hit its lows for the year in March, and home prices have stabilized. But the collective American wallet is still almost 20 percent thinner than it was when net worth peaked two years ago.
Some analysts say it could take as long as four years for households to recoup trillions in losses and get back to where they were before the downturn struck in December 2007.
"Households saw $14 trillion of wealth get blown away by the recession, and they recouped $2 trillion of that in the second quarter. That's good news," said Brian Bethune, economist at IHS Global Insight. "But they still have another $12 trillion to go to get back to where they were."
Many analysts expect the economic recovery to be lethargic, limiting further gains in the stock and housing markets. That's why Scott Hoyt, senior director of consumer economics at Moody's Economy.com, thinks household wealth won't rise back to pre-recession levels until 2012 or 2013.
"It is going to take a while for Americans to regain lost ground and become as comfortable as they were before all this started," Hoyt said.
Even if the economy continues to improve, analysts say the erosion of wealth will keep Americans thrifty for years. In fact, even as wealth grew, Americans trimmed their spending slightly in the spring.
The increase in wealth in the second quarter was led by stock portfolios, the Fed report said. The value of Americans' stock holdings rose almost 22 percent from the first quarter - the first increase in two years.
Higher home prices helped, too. The value of real-estate holdings rose 1.8 percent, the first gain since the end of 2006. Home prices are still about 30 percent below their 2006 peak.
Home equity, the market value of a home minus what's still owed on the mortgage, has been dropping in recent years - first because more Americans used their homes to get loans and now because of falling home prices.
By Steven Pearlstein
Friday, September 18, 2009
One thing you learn from booms and busts is the importance of gatekeepers -- those professionals who are supposed to safeguard the system and keep markets honest. When gatekeepers are compromised or fall down on the job, confidence evaporates and markets collapse.
That's what happened during the tech bubble of the 1990s, when the lawyers, auditors and equity analysts decided to hop on the gravy train and turn a blind eye to stupidity and corruption. And it happened during the more recent credit bubble, when the rating agencies were seduced by fat fees to assign triple-A ratings to stuff they barely understood. Even today, large parts of the shadow banking system are still not working because investors and lenders still don't know who -- or what information -- to trust.
The dominant agencies -- Standard & Poor's, Moody's and Fitch -- continue to claim that their mistakes were intellectual rather than venal, but an investigation last year by the Securities and Exchange Commission suggested otherwise. So the firms have now moved to try to restore their reputations by adopting new measures to improve the reliability of their ratings. They have also acquiesced to a number of other measures pushed by the SEC and the Obama administration to increase government oversight, prohibit ratings shopping and bring more transparency to the rating process.
These steps are useful and significant, but they don't go far enough. They would preserve a business model that leaves the agencies hopelessly conflicted between the interests of the banks and corporations that pay handsomely to have their securities rated and investors who rely on those ratings when buying securities. They would leave in place an oligopoly market characterized by "me-too" behavior and a lack of price competition. And they would preserve a legal shield that has made it all but impossible for investors to sue the agencies for negligence when they issue ratings that they know, or should know, are wrong.
Call me simple-minded, but it seems to me that people who use a good or service should also be the ones who pay for it. That's how it works in most markets. And when it doesn't -- health care is a good example -- things tend to go awry.
It used to work that way in the credit-rating business as well, with investors paying directly for ratings and analysis through some sort of subscription arrangement, or indirectly through their brokers. But starting in the mid-1970s, following a number of high-profile bankruptcies, people decided it was important to make credit ratings publicly available to all investors. Companies that issued bonds began paying for the ratings themselves, and it didn't take long before agencies figured out that it was better for business if their ratings were a bit higher and their analysts were a bit slower to issue downgrades. By the time collateralized-debt obligations came along, it was not uncommon for agencies to provide issuers with behind-the-scenes advice on how to structure their new products to get the highest rates. The interests of the ratings agencies came to be perfectly aligned with those issuing the securities rather than those buying them.
It's all well and good to put in rules designed to prevent this kind of race to the bottom, but history suggests that they tend to break down at precisely those moments when they are most needed -- when the bubble is at its height and there are ungodly amounts of money to be made. So the best way to avoid these inevitable conflicts of interest, it seems to me, is to return to the investor-pay model.
The administration's approach, by contrast, seems to be focused on weaning investors from their reliance on ratings so they are forced to do more of their own research. I think that is unrealistic. Investors want a common set of benchmarks that they can use to assess the risk of securities, just as they want a limited number of government-supervised agencies to rate them. That number, however, can surely be larger than three. And there should also be room for dozens of smaller players specializing in different types of securities that should be able to compete with the Big Three on the basis of both quality and price. Until recently, government regulation has been a barrier to that kind of upstart competition. Much more attention should be paid to encouraging it.
Rhode Island Sen. Jack Reed (D) is also right in pushing for more private regulation. Because of specific exemptions in federal law and a claim that ratings agencies are merely peddling opinions fully protected by the First Amendment, no ratings agency has ever been successfully sued for misleading investors. On Thursday, the SEC took a first step to use its existing powers to bring a bit of legal accountability to the ratings agencies, but a better approach would be new legislation that makes clear that the ratings agencies owe the fiduciary duty of care and loyalty to their investor clients. That doesn't mean they can be sued any time an investment goes sour. What it does mean is that they would be liable if they put out a rating they knew, or should have known, was misleading after taking reasonable steps to ascertain that the information provided to them was accurate.
Such a change, of course, would only apply to lapses in the future. For lapses just past, the SEC should join with state attorneys general in filing a civil suit against the Big Three to force disgorgement of all those profits they earned providing triple-A ratings to triple-C junk during the recent bubble. That's how misled investors recouped hundreds of millions of dollars from Wall Street firms whose analysts had helped to blow up the tech and telecom bubble. Misled investors in structured credit products deserve the same.
Steven Pearlstein can be reached at email@example.com.
Already the world leader in search-based advertising, Google Inc. (GOOG-Q491.723.430.70%) is making an audacious move to become the Web's display-advertising stock exchange.
The search giant today launches a new service called DoubleClick Ad Exchange. Essentially, it's a clearing house for display advertising – a real-time auction marketplace where the world's biggest advertisers bid for space on the world's most popular websites, with Google squarely in the middle.
“Display advertising on the Web today – image ads, video ads, interactive ads – are not really living up to their full potential,” Neal Mohan, Google's vice-president of product management, said in an interview. “The reason is, across thousands of advertisers, thousands of publishers, thousands of different ad formats, it literally takes thousands of hours to get a display campaign up and running.”
As a result, Mr. Mohan said, lots of advertisers “just simply give up or drop out,” even though display advertising is often the most effective way for them to get their message out.
Currently, Mr. Mohan said, many publishers see up to half their display ad slots sit empty.
“It'd be sort of like an airplane taking off every single day where more than half the seats are simply unfilled because it's just really hard to buy those seats,” he said. “At Google we think this entire system could be a lot better.”
The newly revamped Ad Exchange represents Google's most significant foray into an area where its competitors have staked much of their online efforts. Yahoo Inc.'s Right Media Exchange service, for example, has more than 120,000 buyers and sellers, and handles more than nine billion transactions a day on average. Executives at some of the world's biggest online names, including Yahoo and AOL, have described display advertising as an area of major focus, even as the market for such advertising has taken a hit as economic conditions soured.
Technically, Google's AdSense program constitutes perhaps the largest display-ad program in the world; however the vast majority of the ads on that service are composed of text, rather than images, video or other rich content.
Google will be integrating its AdWords and AdSense programs into the new exchange, adding a massive base of online inventory at launch time. Advertisers will be able to bid in real time for space offered by publishers. Publishers, on the other hand, are guaranteed to sell their product at the highest bid price, and can set a reserve limit. Google takes care of billing and invoicing, and makes money by claiming a share of the ads transacted through its platform.
The exchange is another step in the strategy Google pursued when it acquired DoubleClick in 2008, said Forrester Research interactive marketing analyst Nate Elliott. The exchange model is particularly helpful for “low-quality inventory” that may not appeal to the biggest advertisers, he said.
“The beauty of the exchange model is that you're no longer losing value because your inventory is simply not valuable to one marketer.”
Japan's new government has said it will review restructuring plans announced by Japan Airlines' (JAL) this week, which included cutting 6,800 jobs.
The plans were drawn up under a committee appointed by the previous administration, which was defeated in a general election at the end of August.
The new government said it will appoint a new committee to oversee the plans.
JAL lost about $1bn (£605m) between April and June as ticket sales fell during the global downturn.
"Since it is a framework formed by the Liberal Democratic Party government, we want to go back to a clean slate and select new members," said Japan's new transport minister Seiji Maehara.
The airline said it had "no idea" about how the review would affect its plans.
Reports suggest that Delta Air Lines, American Airlines and Air France-KLM are in talks with JAL over taking a stake in the troubled airline.
LONDON — The European single currency consolidated gains near one-year highs against the dollar on Thursday as buoyant investors opted for riskier assets in the search for better returns, dealers said.
With US interest rates effectively at zero, the dollar has been bought during the global financial crisis for its safehaven attributes.
Now that the worst of the slump is believed to be over, investors are looking for higher returns, selling down the dollar to put their money into rising stocks and commodities.
Dealers say the dollar will likely continue under pressure in this way until the US economy shows enough strength to justify a hike in interest rates, which would make returns on the US currency more attractive again.
"The time will come when this strength in US data equates to dollar upside but that time is not yet here," said Daragh Maher of Calyon.
In late London trade Thursday, the euro was at 1.4736 dollars, coming off early highs at 1.4767 dollars, a level last seen on September 25, 2008, but still up from 1.4708 in New York late Wednesday.
The dollar edged up to 91.08 yen from 90.94 yen.
Dealers said they expect the euro to make further gains against the dollar, possibly to highs around 1.50.
"From a psychological point of view there are hardly any resistance (levels) ... around 1.4750 that could stand in the way of the euro moving on to the 1.4965 (November 2007 peak)," Commerzbank analysts said in a note.
"And there is little reason for the euro bulls to take profits as the dollar?s (interest) rate disadvantage still supports their view," they added.
Additionally, speculators continue to use the dollar to fund carry trades -- borrowing cheap dollars which they then convert to invest in higher-yielding assets elsewhere.
"It is such a nice environment for carry trades again -- better liquidity, rising risk appetite, lower foreign exchange volumes ... Everything fits so nicely," said Ulrich Leuchtmann, head of foreign exchange research at Commerzbank.
Federal Reserve chairman Ben Bernanke said this week that the recession in the United States was "very likely over."
Since December 2008, the US central bank has held its key interest rate at a record low range of zero to 0.25 percent to spur lending and economic activity.
The European Central Bank's main interest rate has stood at a record low of 1.0 percent since last May, offering an advantage over the dollar.
"Currency investors are searching for yield and the dollar is the lowest yielding because of ultra-low US interest rates," said GFT analyst David Morrison.
"Traders listen to Bernanke and think that this situation will continue for some time," he added.
In London trade on Thursday, the euro was changing hands at 1.4736 dollars against 1.4708 dollars late on Wednesday, at 134.35 yen (133.74), 0.8914 pounds (0.8922) and 1.5164 Swiss francs (1.5177).
The dollar stood at 91.08 yen (90.94) and 1.0208 Swiss francs (1.0317).
The pound was at 1.6549 dollars (1.6486).
On the London Bullion Market, the price of gold edged up to 1,018.50 dollars an ounce from 1,015.75 dollars an ounce late on Wednesday.
Copyright © 2009 AFP. All rights reserved
Do-over on missile defense — reading between the lines
Post a comment (10)
Posted by: Tabassum Zakaria
Tags: Front Row Washington, Barack Obama, George Bush, intelligence report, Iran, missile defense
President Barack Obama’s new missile defense plan is an exercise in reading between the lines.
Does it signal a diminished threat from Iran if he is scrapping the Bush-era system that was to be based in Poland and the Czech Republic? Obama’s plan would use missile interceptors based on ships.
Former President George W. Bush would rattle off Iran and threats in the same sentence so often that sometimes it seemed all roads to fear led to Tehran. He wanted the missile shield as protection. IRAN-MILITARY/PARADE
Obama said one factor guiding his decision was updated intelligence assessments of Iran’s missile programs that emphasized the threat of short- and medium-range missiles capable of reaching Europe.
So the unsaid line appears to be that the threat from a long-range missile is not prevalent.
Greg Thielmann, a former State Department intelligence official, said it became evident that Iran was not reaching some of the milestones needed to develop an intercontinental ballistic missile before 2015 as an intelligence estimate in 1999 had predicted.
On the nuclear threat, we’ve learned that key judgments still stand from a 2007 intelligence report that said “with moderate confidence” Iran had not restarted its nuclear weapons program as of mid-2007.
IRAN/The timing of Obama’s announcement — the week before the U.N. General Assembly and G20 meetings where he will mix with other world leaders — is worth raising an eyebrow. Why give away a bargaining chip ahead of time?
The fact that the announcement comes on the 70th anniversary of the Russian invasion of Poland on Sept. 17, 1939, may be worth raising the other eyebrow.
Photo credit: Reuters/Morteza Nikoubazl (missile driven past picture of Iran’s supreme leader during parade in Tehran in April), Reuters/Raheb Homavandi (Man in Tehran reacts to a camera in April)
By Elaine Lies
TOKYO (Reuters) - Japan's Nikkei stock average slipped 0.7 percent on Friday, with financials hit after consumer finance firm Aiful Corp (8515.T) said it was asking for debt repayments to be rescheduled.
But large banks such as Mitsubishi UFJ Financial Group (8306.T) turned positive in later trade, buoyed by short-covering after sliding all week on worries about financial policy under Japan's new government and ahead of public holidays next week.
The new government's minister for banking, Shizuka Kamei, said this week he would like to introduce a moratorium on some loan repayments to help small and midsized businesses and individuals struggling from the economic downturn, sending bank shares lower.
But comments from Finance Minister Hirohisa Fujii on Friday that hinted at skepticism about such a plan helped investors take heart, market players said.
"Bank shares were really hit by political risk this week, after those comments by Kamei, and what we saw today was a bit of position adjustment ahead of the weekend, helped out by the finance minister," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"It's not really as if anything's been settled, after all."
Overall though, trade was cautious ahead of a five-day holiday in Japan from September 19-23 and after the Nikkei finished above its 25-day moving average the previous day, analysts said.
"A lot of investors are adjusting their positions, with both profit-taking and short-covering emerging depending on individual shares and how they have behaved recently," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The benchmark Nikkei .N225 pared its losses to 73.26 points or 10,370.54 after falling as much as 1.4 percent during the morning, and was down 0.7 percent on the week.
The broader Topix ended flat at 939.44.
"The Aiful news came as a slight shock ... and added to uncertainty in the sector that already existed about the new government's policies," said Kenichi Hirano, operating office at Tachibana Securities.
Aiful was untraded and ended the day at 134 yen, down 27.2 percent from Thursday's close after saying it would ask creditors to push back repayments on about $3 billion in debt as it faces difficulty raising funds and plans for more restructuring.
Rival lenders fell sharply, though some managed to pare losses by the close.
Mazda had already announced plans to sell the Mazda2 in Canada, but now Mazda's subcompact will be coming to America as well. Mazda North American Operation's president and CEO Jim O'Sullivan told top Mazda dealers that the Mazda Mazda2 subcompact will be sold in the U.S. beginning in late 2010, with Canadian sales beginning about the same time.
The Mazda2 has been sold in world markets but not thought appropriate for the U.S. With the Ford Fiesta, which shares a platform with the Mazda2, scheduled to arrive here in the summer of 2010, it must have made sense to bring Mazda's subcompact Stateside.
"As consumers' tastes and attitudes toward small vehicles have changed, we now believe strongly there is a place in our lineup for a car below our current least-expensive car, the Mazda3," O'Sullivan told the dealers.
Although the Mazda2 has been named Car of the Year in more than twenty countries as well as 2008 World Car of the Year (the year the latest generation was introduced), the Mazda Mazda2 is largely unknown in the United States. Mazda has not sold a car in this class since 1985, when it took the GLC, which it had been selling here since 1977, off the American market. The Mazda2 is a "B-segment" car, meaning it's about the same size as a Toyota Yaris. The Mazda2 five-door is almost a foot shorter, however, than the five-door Yaris, at 158 inches overall. Its wheelbase is 98 inches compared to the Yaris' 100.4. Both the Yaris and Mazda2 have three-door versions.
Right now Mazda isn't saying exactly what configuration of the Mazda2 will bring to the U.S. Internationally the Mazda2 is sold with everything from a 1.3-liter to 1.6-liter gas engines as well as a small diesel engine where local regulations and market allow.
Mazda announced its intention to unveil the North American-specification Mazda2 at the 2009 Los Angeles Auto Show this fall, but additional information on specifications, content, pricing and on-sale timing is deferred until closer to actual launch.
In Britain, Mazda is positioning the fun and funky aspects of the Mazda2 and, yes, zoom-zoom, as in this video advert on the telly for a two-door:
SAN FRANCISCO - GOOGLE Inc is counting on the crown jewel of its online advertising empire to burnish a diamond in the rough.
Hoping to take an even bigger bite out of ad budgets, Google has melded the technology powering its lucrative search marketing network with a system that it bought 18 months ago to sell online billboards and other more visual commercials, including video.
The long-awaited combination poses another threat to Yahoo Inc, whose profits have been sliding the past three years. Yahoo is the Internet's largest seller of display advertising, a mantle that Google has set its sights on. Microsoft Corp and Time Warner Inc's AOL also operate large exchanges that help manage display ads.
The upgrade announced on Friday has been something Google has been working toward since it bought DoubleClick Inc for US$3.2 billion (S$4.5 billion) a year-and-a-half ago. Google prized DoubleClick largely for its tools for selling and serving display ads.
Although they are more dynamic, display ads so far haven't proven to be as popular as the text ads that appear alongside search results.
Last year, online search advertising sales in the United States totalled US$10.5 billion, according to the Interactive Advertising Bureau, with most of that money going to Mountain View, Calif.-based Google. The Internet's US display ads totaled US$7.6 billion.
'The display market today is probably not really living up to its full potential,' said Neal Mohan, a Google vice president of product management.
Google is betting it can sell more display ads by drawing on the science, simplicity and ease-of-use that has made its search advertising system so profitable. The marriage will open DoubleClick's display advertising system to hundreds of thousands of advertisers and websites that belong to AdWords and AdSense - the cornerstones of Google's commercial search.
'We are going to be bringing a lot of the know-how and a lot of the efficiencies of the search market to the art of display,' Mr Mohan said. -- AP
By Ken Dilanian, USA TODAY
WASHINGTON — President Obama's foreign policy has employed a starkly different tone than George W. Bush's, emphasizing engagement and cooperation rather than go-it-alone confrontation. Even so, analysts of various political stripes hadn't seen many big differences on substance.
Obama's decision Wednesday to scuttle a costly and technically challenged long-range missile-defense system in Europe marks his most significant reversal of a Bush foreign policy priority. It could change the dynamic of what has been an increasingly tense relationship between the U.S. and Russia, which viewed the Bush plans for missile defenses in Poland and the Czech Republic as a threat.
Bush's proposed missile shield, designed to counter intercontinental missiles from Iran, "was very much a signature initiative of theirs, both with respect to Central Europe and with respect to missile defense," says John Pike, director of GlobalSecurity.org, a defense think tank.
Speaking to reporters at the White House, Obama was careful to portray his decision as a revamping, not an abandonment, of European missile defense. He said he would replace the long-range system Bush envisioned — which had a spotty testing record — with a more reliable defense system aimed at countering what Obama called a more imminent threat from Iran's short-range missiles, which can travel up to 5,000 miles and potentially strike continental Europe.
Defense Secretary Robert Gates said the new plan still places systems in Poland, the Czech Republic and other countries in the region, though the details are still to be ironed out. The plan calls for a ship-based component and some ground-based interceptors designed to target shorter-range missiles that are less difficult to hit.
"Our new missile-defense architecture in Europe will provide stronger, smarter, and swifter defenses of American forces and America's allies," Obama said.
The move wasn't unexpected — Obama had ordered a review of the Bush program shortly after taking office, and outside experts had questioned its feasibility even before then. Even so, Obama's announcement drew heated criticism from Republicans, who accused the president of abandoning central European allies and caving in to Russia in a naive bid for diplomacy.
"Short-sighted and harmful to our long-term security interests," complained Senate Minority Leader Mitch McConnell, R-Ky.
Democrats praised the decision; Senate Armed Services Committee Chairman Carl Levin called it "a sound choice that will improve our security."
Central to the debate over Obama's decision on missile defense is how it will be greeted by Russia, which has been a patron and trading partner of Iran, the Islamic republic that has bedeviled U.S. foreign policy for the last 30 years.
The Iranian regime has an active nuclear energy program, and although U.S. intelligence reports say Iran is not developing an atomic weapon, a new report by the International Atomic Energy Agency concluded Thursday that Tehran has the ability to make a bomb. That news, reported by the Associated Press, also said Iran is on its way to developing a missile system able to carry a nuclear warhead.
Obama is trying to negotiate with Iran. But if those talks fail, his administration will seek to impose "crippling sanctions," in the words of Secretary of State Hillary Rodham Clinton.
Russia, whose president, Dmitry Medvedev, will meet Obama at the United Nations next week, is key to any such effort. So far, it has resisted further sanctions on Iran, which it supplies with weapons and other technology.
If Obama's move was designed to nudge Russia, early signs Thursday weren't encouraging.
Russian Foreign Minister Sergey Lavrov said in a speech before Obama's missile-defense announcement that Moscow will continue to oppose any new sanctions over Iran's nuclear program.
Medvedev, however, said after the announcement that Obama's action was a "responsible move."
Until now — leaving aside domestic issues with foreign policy implications, such as the treatment of terror detainees — Obama's foreign policy hasn't radically departed from that of his predecessor, though the rhetoric has been much different.
He has talked more about engaging adversaries, though no presidential summits have materialized. He has continued Bush's gradual withdrawal from Iraq and added troops to Afghanistan.
Pushing a so-called "reset" button in the USA's relationship with Russia has yielded little that is tangible. Polls in various countries show that Obama is far more popular abroad than Bush is, but that popularity has yet to translate into visibly better cooperation with U.S. policy goals.
Christian Brose, who was a speechwriter for Bush Secretary of State Condoleezza Rice, wrote recently on foreignpolicy.com: "Our NATO allies have passed on sending more troops to Afghanistan and on lifting restrictions on those already there ... India and China don't share any of Obama's enthusiasm for a climate change deal. ... Pakistan is still dysfunctional and supporting terrorism. Iran and North Korea are all middle fingers and no unclenched fists. ... Rarely has a U.S. administration been so well-liked, so eager to engage with others, and had so little to show for it."
Obama officials disagree, of course, but it's not just former Bush officials who hold that view: In July, Columbia University professor and liberal blogger Lincoln Mitchell wrote a post entitled, "Why Obama's Foreign Policy Looks So Much Like Bush's." He previously was a Democratic consultant.
Republicans, including Obama's 2008 opponent, Sen. John McCain of Arizona, have supported many, though not all, of the new president's foreign policy moves. On Thursday, though, they erupted in a chorus of criticism.
McCain called the decision "seriously misguided," while Florida's Ileana Ros-Lehtinen, ranking Republican on the House Foreign Affairs Committee, dubbed it "a policy of appeasement."
Marc Thiessen, a former Bush speechwriter now at the Hoover Institution, said the "disastrous decision" sends "a signal of weakness to Tehran ... and a terrible signal to Russia, that they can bully us into abandoning our friends in what they consider their sphere of influence."
The partisan uproar came despite the endorsement of the move by Gates, who was Bush's secretary of Defense when the deals with Poland and the Czech Republic were finished last year and who holds the same job for Obama.
"This new approach provides a better missile-defense capability for our forces in Europe, for our European allies and eventually for our homeland than the program I recommended almost three years ago," Gates told reporters at the Pentagon after Obama spoke.
A troubled program
The program Gates once supported has been controversial from the moment Bush proposed it in a speech on May 1, 2001, months before the 9/11 attacks and a year before revelations about Iran's nuclear program.
It called for putting 10 land-based interceptors in Poland and a ground-based radar in the Czech Republic.
The Europe system was never deployed, so it wasn't tested. But similar ground-based interceptors failed to hit targets in five of 13 tests, according to the Pentagon, and they have not demonstrated an ability to detect decoys, the Government Accountability Office says.
The Bush system would have cost $9 billion to $13 billion, according to the Congressional Budget Office, and still would have left parts of Europe unprotected from an Iranian missile. Instead of the long-range interceptors, the United States will put in place more seasoned technology that will focus on medium- and short-range missiles, of which Iran has hundreds, Gates said.
Critics of the Bush approach praised Obama's announcement.
"What the president is proposing here actually produces more defense sooner than the program it replaces," said former Pentagon testing chief Philip Coyle, a longtime skeptic of the Bush program.
"The canceled European deployment would have added only marginally and at high cost to the full coverage of the United States already afforded by the existing ground-based interceptors," physicist Richard Garwin, who helped design the hydrogen bomb and recently was on a commission to assess the ballistic missile threat, said in an e-mail.
In Central Europe, reactions to the news were mixed. Bush's plan had never been popular in the Czech Republic, where polls showed 70% opposed it. In a March, a Czech government fell in part because it supported the missile shield.
Still, it was seen in both countries as a bulwark against an aggressive and expansionist Russia.
"Much of Europe — especially the Central and Eastern regions — will now view the United States as unable to fulfill its promises to its allies in the face of a strengthening Russia," said an analysis by Stratfor, a Texas-based intelligence firm.
Obama's shift on missile defense may embolden the Russians and "encourage them to push other buttons," said Janusz Bugajski, director of the New European Democracies Project at the Center for Strategic and International Studies, a Washington think tank.
Bugajski said it did not go down well in Poland that Obama made the announcement on the 70th anniversary of the Soviet Union's invasion of Poland at the start of World War II.
He said the United States will need to take steps to reassure Central and Eastern European countries that they will be protected against Russia. For example, NATO could devise defense plans for the countries, he said, or station troops on their territories.
Obama and Medvedev plan to meet twice next week, once at the United Nations and again in Pittsburgh for the G-20 economic conference. Those meetings could show what dividends, if any, the president will reap from his first major foreign-policy shift from his predecessor.
Contributing: David Jackson and Tom Vanden Brook, wire reports.
Sep 17, 2009
Ross MarowitsAmerican Airlines' American Eagle unit plans to exercise option for 22 CRJ 700 regional jets
Montreal — The Canadian Press Last updated on Thursday, Sep. 17, 2009 05:31PM EDT
Bombardier Inc. (BBD.B-T4.79-0.04-0.83%) is still hunting for commercial jet orders and won't say whether a 22-plane order from American Airlines valued at more than $770-million (U.S.) will help it to avert additional layoffs beyond what is already planned.
“We can't say at this point whether there will be an impact,” Bombardier spokesman John Arnone said in an interview. “The transaction is not yet finalized and we should know more in October.”
AMR Corp. (AMR-N8.801.4519.73%) announced Thursday that its American Eagle regional subsidiary has signed a letter of intent to exercise options for CRJ 700 regional jets as part of a $2.9-billion financing package.
“Today's announcement positions our company well to face today's industry challenges and allows us to remain focused on the future and on returning to profitability,” said Gerard Arpey, AMR chairman and chief executive officer.
Deliveries of the aircraft are scheduled to begin in mid-2010. The value is estimated based on list prices, but the airline is believed to have received a healthy discount.
The airline also plans to add a first-class cabin to its existing fleet of 25 CRJ 700 aircraft.
This is the first of several orders that may materialize over the coming weeks following an intense campaign by the company to boost orders and avert being forced to reduce its production.
Bombardier Aerospace president Guy Hachey said this week that he hopes the efforts will materialize in orders by the end of October.
Analysts said the early signs of recovery in commercial orders will be welcomed, although there remains concern about the decline in demand for business jets.
Bombardier is in the process of laying off 4,360 employees as it reduces production of business and commercial aircraft. Regional jets, which are sold to airlines, are estimated to account for 1,200 of the layoffs.
The CRJ backlog at the end of July was 116 jets.
David Newman of National Bank Financial said the order should help to avert a further production cut for CRJs next year.
“Clearly this order, which management intimated was sorely needed to prevent further production cuts and layoffs beyond that currently planned, should provide some comfort,” Mr. Newman wrote in a report.
Chris Murray of CIBC World Markets said additional orders for new planes this year, including those for the C Series, will provide additional comfort to investors about earnings and margins in the aerospace sector, which has been a drag on share prices.
“We believe early signs of recovery in commercial orders will be greeted positively, particularly for CRJ aircraft where some concern about the depth of the backlog does exist.”
FARGO, N.D. - Sen. Byron Dorgan says a regional carrier for American Airlines plans to start service between Fargo and Chicago.
The North Dakota Democrat says the American Eagle service will start in April, with daily roundtrip flights on three 50-seat regional jets.
Dorgan says more airline competition is good not only for the state's biggest city but for North Dakota as a whole.
For more information listen to 790AM or visi
By HARRY R. WEBER (AP
ATLANTA — American Airlines' parent company said Thursday it is taking on significant new debt at a time when revenues are being hammered, but the $2.9 billion in cash and fresh financing it raised should quiet concerns — for now — that it is in danger of a cash crunch and a bankruptcy filing.
Passengers will see big changes from the nation's second-largest airline, including increased flying in Chicago, New York, Los Angeles, Dallas-Fort Worth and Miami, but fewer flights in Raleigh/Durham, N.C. and St. Louis, where American is giving up major ground to Southwest Airlines.
AMR Corp. said the extra funding it has received includes $1 billion in cash from an advance sale of frequent flier miles to Citigroup. The company is treating that money as a loan.
Other major carriers, including Delta Air Lines Inc. and UAL Corp.'s United Airlines, also have done advance sales of frequent flier miles to raise cash. There is no impact on customers from such transactions. The airline gets cash up front for miles its credit card partner would provide to card holders as they make purchases. As a forward sale of the miles, the airline would pay interest.
The Fort Worth, Texas, company said it also has received $1.6 billion in sale-leaseback financing commitments from GE Capital Aviation Services, a unit of General Electric Co., and $280 million in cash in a loan from GE Capital Aviation Services secured by aircraft.
Of the $1.3 billion in new liquidity, all but $55 million will be included in the third quarter 2009 cash and short-term investment balance.
The transactions will increase the company's cash balance to roughly $3.7 billion by the end of the third quarter, which is Sept. 30. AMR had $14 billion in total debt at the end of the second quarter. It's unclear how much that figure will increase at the end of the third quarter. And AMR has $1.3 billion in debt maturities in 2010.
"The announcement today from our perspective takes the liquidity question off the table," Virasb Vahidi, American Airlines' senior vice president of planning, said in an interview.
Analysts generally agreed.
"Whatever added risks they are taking on by increasing debt and increasing interest expense are more than offset by the near-term advantage of raising more cash to carry them through the weak winter season," said Standard & Poor's analyst Philip Baggaley.
S&P reiterated its "Hold" opinion on AMR shares.
The larger question that looms is what will happen in the future. Overall demand for air travel has shown some improvement in recent months, but yields are down because passengers are paying less for their tickets and are not flying as much in premium seats.
The ability to raise additional financing should AMR need it will be difficult.
AMR has about $2 billion in unencumbered assets remaining, including slots, routes, spare parts and its Eagle operations. But accessing cash from those assets "will be more challenging," Chief Financial Officer Tom Horton said during a conference call with analysts and reporters.
AMR said it will strengthen its flight network by increasing capacity in four hub cities. Those cities, and Los Angeles, are key parts of the company's plan to benefit from closer cooperation with British Airways, Iberia and other partners.
The company said it will reduce operations at St. Louis and Raleigh/Durham, N.C.
American Eagle also announced plans to add a first class cabin to its fleet of 25 Bombardier CRJ700 regional jets and it signed a letter of intent with Bombardier Inc. for options to purchase 22 additional CRJ700 aircraft for delivery beginning in mid-2010.
The new CRJ700 aircraft will be fully financed.
AMR said its mainline capacity for 2010 is expected to increase by about 1 percent over this year, with domestic capacity flat and international capacity up about 2.5 percent.
Excluding the impact of cancellations this year from the swine flu virus and the launch of Chicago-Beijing service in 2010 that was delayed from this year, mainline capacity in 2010 is expected to be roughly flat compared with 2009, the company said.
Employees affected by cutbacks will be allowed to relocate, the company said, although it expects the impact on employees to be minimal.
AMR will add 57 daily flights at O'Hare International Airport in Chicago, six new destinations from JFK International Airport in New York, two new daily American and Eagle flights at Los Angeles and 19 daily departures added to the airline's largest hub at Dallas/Forth Worth.
American and Eagle also will add 23 flights at Miami.
In St. Louis, American and its regional affiliates will reduce daily departures by 46 and discontinue service to 20 destinations. After the reductions, American and Eagle will provide 36 departures per day to nine destinations. In Raleigh/Durham, service to three destinations will be discontinued and a total of nine departures will be eliminated. Raleigh/Durham will continue to provide service to eight destinations with 44 departures per day.
AMR shares rose $1.45, or 19.7 percent, to close at $8.80 in Thursday trading
To determine the effect of gene therapy in curing color-blindness, Neitz and his colleagues trained several of the monkeys in a lab, where they were given the standard color-blindness test for humans. However, the normal hidden letter was changed with a blob-like shape, and the test was put on a touch screen.
Noting that all male monkeys are color-blind and cannot distinguish between green and red, Neitz elaborated that "From the monkey's perspective, the blob is like a fruit against a background of leaves. We trained them to touch the screen where they see the color blob." He added that there was a marked improvement in the monkeys' perception after the treatment.
Commenting on the findings, Neitz remarked that treating humans with the gene therapy might possibly "cure their color vision."
In addition, inventories dropped by 4.73 million barrels as compared with 2.5 million-barrel decline estimate by analysts.
A weaker US dollar against euro and pound has also boosted oil prices. The dollar dropped to $1.4767 against euro from $1.4709 in New York.
Speaking on the soaring oil prices, Liberty Trading Group's president, James Cordier, said, "The only reason prices are rallying today is again because of the weakness of the dollar and the strength of the stock market."
Two days back on Tuesday, oil soared to settle at $70.93 per barrel, up 3 per cent.
In London, Brent crude was down 3 cents to $71.64 per barrel on the ICE Futures Europe exchange.
he securities were given the highest ratings by the companies; some of them backed by subprime mortgages, making them "appear as safe as government issued Treasury bonds." The announcement regarding the investigation will be made by Brown today in San Francisco.
The statement by Brown said: "In rating these securities, these agencies worked behind the scenes with the same Wall Street firms that created them. For their work, the agencies earned billions of dollars in revenue, at a rate double what they earned for rating other financial products."
Brown did not name the companies to be investigated.
The recent development has appeared after a federal judge passed a ruling that rejected arguments by Moody's Investors Service Inc. and Standard & Poor's, which was that investors can't sue over deceptive ratings of private-placement notes because those opinions are protected by free-speech rights.
Under the ruling, those companies, which are in the class-action lawsuit filed in New York by investors alleging the raters hid the risks of securities linked to subprime mortgages, are compelled to respond to fraud charges.
Those claiming benefit increased to 1.6 million, the highest since May 1997
The jobless rate in Britain is nearly 8%. Photograph: David Sillitoe
Unemployment has jumped to its highest level since mid-1995, pushing the jobless rate in Britain up to nearly 8%, official data showed today.
The Office for National Statistics (ONS) said the jobless total on the broad International Labour Office measure rose by 210,000 in the three months to July, taking the total to 2.47 million. That rise was broadly in line with those of recent months and economists said there was little to suggest that the increases in unemployment were slowing.
The narrower claimant count measure, which only includes those claiming unemployment benefit, rose by 24,400 in August to 1.6 million, the highest since May 1997, and a rate of 5%, the worst since September of that year. That increase was also in line with those of the previous two months.
The ONS reported that average earnings growth slowed sharply to just 1.7% in the three months to July versus the same period last year, down from 2.5% in the three months to June.
TUC general secretary Brendan Barber said: "There are now over a million people out of work for more than six months, one in three of them under 25. There are no signs of recovery here.
"This is not the time to take risks with policies that could make unemployment worse. It might look rosier in city dealing rooms but out in the real world unemployment is the number one issue."
Catherine Matthews, a partner at licensed insolvency practitioners Tomlinsons, said: "With so many firms folding, the prospects of re-employment are proving increasingly slim for those that have been unfortunate enough to lose their jobs.
"The big problem for Britain's businesses, the reason why so many of them are going bust and laying off staff, is the banks aren't lending. The funding and financial support needed to survive just isn't there. It's what small and medium-sized business owners, and the accountants we work closely with, are saying to us day in, day out."
Economists were concerned about the slowdown in pay growth, which could prevent the economy recovering quickly from recession. Vicky Redwood at Capital Economics said: "As [Bank of England governor] Mervyn King highlighted yesterday, even if the recession is technically over, it will continue to feel like one for many people for a long time yet."
OECD sees 25 million unemployed
The Organisation for Economic Co-operation and Development also warned today that the recession could push unemployment across the developed world to a record high.
In its latest employment outlook report, the OECD predicted that the jobless rate across the world's 30 richest countries could come close to hitting 10% by the end of 2010. That would equate to 25 million people having lost their job in the downturn.
The OECD said that 15 million jobs had already been lost since the end of 2007, and called for more government action. "A major risk is that much of this large hike in unemployment becomes structural in nature," the Paris-based group warned.
"This unwelcome phenomenon occurred in a number of OECD countries in past recessions when unemployment remained at a new higher plateau compared with the pre-crisis level even after output returned to potential, and it took many years, if ever, to bring it down again to the pre-crisis level," it added.
y ANNE FLAHERTY, Associated Press Writer
WASHINGTON (AP) - Four months after its creation, a congressionally appointed panel modeled after the 9/11 Commission and the Iraq Study Group is opening a 15-month investigation into the causes of last year's economy-crippling financial collapse.
The 10-member, bipartisan Financial Crisis Inquiry Commission holds its first meeting Thursday. With a budget of $5 million, its instructions are to submit findings to lawmakers by December 2010, long after Congress hopes to have a new regulations in place for preventing another Wall Street meltdown.
That deadline also assures that the findings won't have any impact on the 2010 congressional races.
The commission is co-chaired by Democrat Phil Angelides and Republican Bill Thomas, both from California. Angelides is a former state treasurer who in 2006 unsuccessfully challenged Arnold Schwarzenegger for governor. Thomas is the former Republican chairman of the House Ways and Means Committee.
The panel's executive director is Thomas Greene, a high-profile lawyer who was the lead attorney in a California case against the tobacco industry that resulted in a $26 billion settlement. Greene also brought several civil cases against Enron and worked on an antitrust case against Microsoft, according to a biography released by the panel.
Both the White House and Democratic leaders in Congress said at the start of this year that overhauling how the government regulates banks and related financial businesses was a top priority. But that effort is bogged down in partisan bickering as well as differences between the Obama administration and key Democrats in Congress on what the new regulatory structure should be.
And after passing a $787 billion bill to stimulate an economic recovery, Democratic leaders in both the House and Senate put health care reform and global warming ahead of dealing again with the financial collapse.
While nearly every member of Congress agrees that the current regulatory structure is too lax in allowing banks and other lenders to write bad mortgages and sell them off to investors, Republicans and the financial industry say Obama's plan would increase consumer costs and limit choices.
There's been little fanfare surrounding the financial inquiry commission. Just what impact it might have is uncertain. But at the start of its work in 2006, the Iraq Study Group also got little attention. It rose in prominence as violence in Iraq increased and ended up profoundly affecting the national security debate.
By: Ed Ferrara. FreeRateUpdate.com LLC Contributing Writer. September 17th, 2009: 12:45 PM PST
Mortgage interest rates are flat today. The benchmark 10 year treasury yield, used to forecast mortgage interest rates, decreased to 3.4 percent on housing and job data that signals slight recovery. Freddie Mac released their weekly conforming 30 year fixed average mortgage interest rate report today. Freddie says Monday through Wednesday of this week 30 year fixed mortgage interest rates averaged 5.04 percent, down from 5.07 percent last week. Today's report from Freddie shows mortgage interest rates are continuing their week over week descent.
A 30 year fixed mortgage with a balance of $250,000 at an interest rate of 4.875 percent has a monthly principal and interest payment of $1,323.02, comparable to the rent of a 2 bed room apartment in most areas. This payment does not account for taxes and insurance. The interest portion of a mortgage payment is however tax deductible
Barclays has been accused of "banking by sleight of hand" after creating a new company to take over its most toxic assets and ringfence future losses.
By Philip Aldrick, Banking Editor
Published: 8:19PM BST 16 Sep 2009
he deal promises to make 45 former investment bankers at Barclays Capital very rich Photo: AFP/GETTY
Britain's second largest bank has sold $12.3bn (£7.5bn) of its riskiest assets to a new company called Protium Finance, registered in the Cayman Islands and run by two Barclays bankers who resigned on completion of the deal on Wednesday. Barclays has provided Protium with a 10-year, $12.6bn loan to buy the assets.
The sale will allow the bank to "derecognise the assets", shielding it from any further fall in their "mark-to-market" value. Instead, Barclays will use a different accounting treatment to take "a longer term view" that will provide "a boost to its capital strength by punting the issue into the long grass", Ian Gordon, banks analyst at Exane BNP Paribas, said.
Simon Maughan, analyst at MF Global Securities, described it as a way for Barclays to "wriggle free from its toxic assets". Barclays has a core tier one capital ratio of 8.8pc, which Mr Gordon said was expected to be under pressure as the assets face further mark downs.
Barclays' clever accounting comes at a time of failing trust in the banks and politicians claimed the move would not help restore it. John McFall, chairman of the Treasury Select Committee, said: "This is short-circuiting the transparency that is required in the market at the moment. Is it banking by sleight of hand?"
The deal also promises to make 45 former investment bankers at Barclays Capital very rich. They have resigned to join Protium, which will charge Barclays a $40m annual management fee, including office costs. The bank stressed that no leaver will receive a severance payment.
The structure of Barclays' loan is unusual. It will earn interest at 2.75pc above the US inter-bank rate, which it hopes will "amount to a cumulative total of $3.9bn" over the 10 years. However, interest will be paid after investors, who are injecting $450m and earning 7pc a year, receive their cut. Normally, investors rank behind lenders in the payment heirachy.
Chris Lucas, finance director, said: "If we have received $16.5bn in 10 years time, I will be very satisfied with this trade."
The investors, who have not been revealed but Barclays said consisted of one US and one UK fund, and the bank will be paid from the assets' cashflow. Mr Lucas said: "What we are trying to do is get a stable return profile for shareholders. We rely on those cashflows, so why not undertake a restructuring to show we rely on them and maximise shareholder value?"
Protium hopes to repeat the deal with other banks.
The delivery company FedEx has said it plans to increase its prices next year after reporting falling profits.
Its net profit for the three months to the end of August was $181m (£110m), which was down 53% from the same period last year.
The company said that the slow economy was hurting its sales. It is to raise express shipping rates 5.9% in January.
It said falling fuel prices had reduced its profitability because its fuel surcharges lag behind the price of oil.
'Consistent with others'
There was support for the price rises from analysts.
"This is consistent with what others are doing," said Helane Becker from Jesup & Lamont Securities.
"Lufthansa announced a 25% rate increase in August. AirFrance-KLM announced 20% rate increases."
The big delivery companies FedEx and United Parcel Service are seen as indicators of the state of the health of the US economy.
Previous close value *All charts show local time Select time span for charts: 76.46 91.13 34.28
Top 10 winners Strategic Hotels Inc. A M R Corp. Newcastle Inv Corp. Us Airways Group Inc. Orient-Express Hotel Western Refining Inc. Danaos Corp. Rite Aid Corp. Cooper Tire Rubber M G M Mirage Top 10 losers Synovus Finl Corp. Headwaters Inc. Eastman Kodak Co U S G Corp. Hecla Mining Co Stone Energy Corp. Moody's Corp. Protective Life Corp. Keycorp IAMGOLD Corp. Winners and Losers are drawn from NYSE equities with a daily trade