Governor sues NCAA over Penn State sex scandal

(Reuters) – Pennsylvania Governor Tom Corbett said on Wednesday he is seeking to have the costly sanctions levied by the NCAA against Penn State University over the Jerry Sandusky sex-abuse scandal thrown out, saying the punishment threatens to cause devastating damage to the state’s residents and economy.

The sanctions, which included an unprecedented $ 60 million fine, are “overreaching and unlawful,” he said at a news conference in State College where the university is located.

“I cannot and will not stand by and let it happen without a fight,” said the Republican governor, who was accused of dragging his feet on the Penn State scandal when he was state Attorney General.

The lawsuit asks the U.S. District Court in Harrisburg to throw out all Sandusky-related sanctions that the National Collegiate Athletic Association, the governing body of U.S. collegiate sports, filed against Penn State.

At least one legal expert said the case is weak.

The NCAA fined Penn State $ 60 million in July and voided its football victories for the past 14 seasons in a dramatic rebuke for the school’s failure to stop the assistant coach’s sexual abuse of children.

“The NCAA, and the competing colleges and universities represented on its governing boards, cynically and hypocritically exploited the tragedy of the Sandusky Offenses as a ‘blank check’ to impose crippling and unprecedented sanctions on an already weakened competitor,” the lawsuit said.

Corbett said the NCAA overstepped its bounds and said the case was “a criminal matter, not a violation of NCAA rules.”

The scandal was revealed by a grand jury Corbett convened in 2009 when he was Pennsylvania‘s attorney general.

State Attorney General-elect Kathleen Kane, a Democrat, said during her campaign last year that by convening the grand jury, Corbett failed to protect children by delaying prosecution for more than two years. She has vowed to probe his handling of the case. Corbett has said he would welcome such an investigation.

In a statement, Kane said she had not been consulted on the filing of the lawsuit and would reserve comment.

Pennsylvania voters also have expressed dissatisfaction with Corbett’s handling of the case. Nearly two thirds of registered voters said he did a fair or poor job, according to a Franklin & Marshall College survey in September.

Sandusky, Penn State’s former defensive coordinator, was convicted in June of 45 counts of sexually abusing 10 boys over 15 years, some in the football team’s showers. He is serving a prison term of 30 years to 60 years.

The scandal sparked a national discussion of child sex abuse, embarrassed the university and implicated top officials in a cover-up, including the late Joe Paterno, the legendary football head coach.

The NCAA said it was disappointed by Corbett’s move.

“Not only does this forthcoming lawsuit appear to be without merit, it is an affront to all of the victims in this tragedy – lives that were destroyed by the criminal actions of Jerry Sandusky,” NCAA General Counsel Donald Remy said in a statement.

Pennsylvania residents have also been unhappy with the NCAA sanctions. The Franklin & Marshall poll showed more than half the respondents believed they were unfair.

Although Corbett might be seen as pursuing the lawsuit to further his own political ends, “this decision will be popular among Pennsylvanians,” said Terry Madonna, a professor of public affairs at Franklin & Marshall and director of the poll.

At Wednesday’s press conference Corbett rejected any political motivation for the lawsuit.

Max Kennerly, a Philadelphia-based attorney who has followed the case closely, questioned the chances of the case succeeding. It was unclear if the governor has the legal authority to file such a lawsuit he said, adding courts have generally sided with the NCAA on issues of sanctions.

“It’s not a frivolous lawsuit, there are real arguments to make, but, boy is it weak,” he said.

James Schultz, general counsel for the Commonwealth of Pennsylvania, who will be handling the case, said the governor has legal standing to sue, because he is acting on behalf of residents and businesses “collaterally damaged” by the NCAA sanctions.

The sanctions harm those who depend on revenue from the Penn State football program and negatively impact the state’s tax revenue base.

Also, the lawsuit said: “The stigma attached will diminish recruitment of students and student athletes, as well as the value of a Penn State education, for decades.”

In State College, Pennsylvania where the university has its campus, Kathy Punt, manager of a motel used by football fans, said her business dropped 30 to 40 percent this past fall as fewer people attended the games.

“We didn’t get the Penn State fans who usually come in,” she said.

The university recently made the first payment of $ 12 million of the sanctions toward a national fund to support the victims of child abuse. Other sanctions included a ban on its football team from appearing in bowl games for four years.

According to the governor’s office, Penn State football was the second-most profitable, collegiate athletic program in the United States in 2010-11 when it brought in $ 50 million, generating more than $ 5 million in tax revenue.

Penn State released a statement saying it was not party to the lawsuit and reiterated its commitment to comply with the NCAA sanctions.

The governor was asked about the report into the Penn State scandal produced by former FBI director Louis Freeh that was the basis of the NCAA sanctions. The report was scathingly critical of the university and said Penn State leaders covered up Sandusky’s sexual abuse of children for years.

“The Freeh report is an incomplete report,” Corbett said.

The family of Joe Paterno, who was fired by Penn State trustees who said he failed to do enough when he was alerted to suspicions about Sandusky, said: “The fact that Governor Corbett now realizes, as do many others, that there was an inexcusable rush to judgment is encouraging.”

Paterno died a year ago of lung cancer.

(Reporting by Jonathan Stempel, Daniel Trotta, Dan Burns and Peter Rudegeair in New York and Dave Warner in Philadelphia, Writing by Ellen Wulfhorst, Editing by Kenneth Barry, Claudia Parsons and Leslie Gevirtz)

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Wall Street Market Report

31 December 2012 Last updated at 16:21 ET

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(Close): Wall Street shares rose after President Obama said that a deal to avoid the fiscal cliff was in sight.

The Dow Jones Industrial Average closed up 166.0 points, or 1.3%, at 13,104.1, following five days of losses.

It meant that the index was up 7% for the whole year.

The index had been little changed for much of the day, but rose after the president said: “There are still issues left to resolve but we’re hopeful Congress can get it done.”

But he warned that a deal was unlikely before the midnight deadline.

US markets are closed on Tuesday for the New Year holiday, which means they will be unaffected if a deal is done on Tuesday instead of Monday.

The day’s top gainer was Hewlett Packard, which rose 4.2%, although it has been one of the worst performers on the Dow Jones for the year as a whole, dropping about 45%.

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Housing and jobs key to lifting S&P toward record

NEW YORK (AP) — It may be a big if, but assuming Washington lawmakers can get past the “fiscal cliff,” many analysts say that the outlook for stocks next year is good, as a recovering housing market and an improving jobs outlook helps the economy maintain a slow, but steady recovery.

An advance of 10 percent in 2013 would send the S&P 500 toward, and possibly past, its record close of 1,565 reached in October 2007.

A mid-year rally in 2012 pushed stocks to their highest in more than four years. Both the Standard & Poor’s 500 and the Dow Jones industrial average gained in 2012. Those advances came despite uncertainty about the outcome of the presidential election and bouts of turmoil from Europe, where policy makers finally appear to be getting a grip on the region’s debt crisis.

“As you remove little bits of uncertainty, investors can then once again return to focusing on the fundamentals,” says Joseph Tanious, a global market strategist at J.P. Morgan Funds. “Corporate America is actually doing quite well.”

Although earnings growth of S&P 500 listed companies dipped as low as 0.8 percent in the summer, analysts are predicting that it will rebound to average 9.5 percent for 2013, according to data from S&P Capital IQ. Companies have also been hoarding cash. The amount of cash and cash-equivalents being held by companies listed in the S&P 500 climbed to an all-time high $ 1 trillion at the end of September, 65 percent more than five years ago, according to S&P Dow Jones Indices.

By the time trading ended Monday, Republicans and Democrats still hadn’t reached a budget compromise — but investors were betting that they would — after President Barack Obama said that a compromise was “within sight,” but not finalized. Without a budget agreement, millions of Americans face the prospect of higher taxes and the government would be forced to slash spending, measures that would probably push the economy into recession, economists say.

Assuming a budget deal is reached in a reasonable amount of time, investors will be more comfortable owning stocks in 2013, allowing valuations to rise, says Tanious.

Stocks in the S&P 500 index are currently trading on a price-to-earnings multiple of about 13.5, compared with the average of 17.9 since 1988, according to S&P Capital IQ data. A lower-than-average ration suggests that stocks are cheap.

The stock market will also likely face less drag from the European debt crisis this year, said Steven Bulko, the chief investment officer at Lombard Odier Investment Managers. While policy makers in Europe have yet to come up with a comprehensive solution to the region’s woes, they appear to have a better handle on the region’s problems than they have for quite some time.

“There is still some heavy lifting that needs to be done in Europe,” said Bulko. Now, though, “we are dealing with much more manageable risk than we have had in the past few years.”

Next year may also see an increase in mergers and acquisitions as companies seeks to make use of the cash on their balance sheets, says Jarred Kessler, global head of equities at broker Cantor Fitzgerald.

While the number of M&A deals has gradually crept higher in the past four years, the dollar value of the deals remains remains well short of the total reached five years ago. U.S. targeted acquisitions totaled $ 964 billion through Dec. 27, according to data tracking firm Dealogic. That’s slightly down from last year’s total of $ 1 trillion and about 40 percent lower than in 2007, when deals worth $ 1.6 trillion were struck.

M&A deals are good for stock prices because the acquiring company typically pays a premium for the one it’s buying.

Falling interest rates also set off a rally in the bond market. Concerns about swings in stock prices prompted investors to switch money out of stocks and into bond funds. If investors decide that the bond rally may be nearing an end, that flow of funds may be reversed, providing a support for stocks.

“Equities are the best house in a bad neighborhood,” says Cantor’s Kessler. “Bonds are, not priced to euphoria, but they are definitely rich compared to equities right now.”

Not all investors are as sanguine about the prospects for 2013.

The rally in stocks in 2012 had less to do with company earnings and the economy and more to do with monetary stimulus from the Federal Reserve and other central banks around the world, says David Wright, a managing director and co-founder at Sierra Investment Management in Santa Monica, Calif.

Federal Reserve Chairman Ben Bernanke announced Sept. 13 that the central bank would add another round to its bond-purchase program, known as “quantitative easing” on Wall Street, which is intended to lower borrowing costs and boost growth. Speculation that more stimulus was coming had pushed the S&P 500 index to 1,466, its highest close of the year, a day earlier. The Dow peaked for the year at 13,610, Oct. 5.

“The Fed has done everything it can do and is probably pretty close to having used its last bullet,” said Wright. “It’s been a good year for stocks, but we think that’s an artifact of monetary stimulus.”

This year’s peaks in the Dow and the S&P 500 won’t be surpassed in 2013 and stocks may even slump in the first quarter, as investors lower their earnings expectations, Wright says. The money manager also says that any budget plan, regardless of the details, will be negative for stocks as it will involve higher taxes and lower government spending.

Wells Fargo Securities market analyst Gina Martin Adams also says companies will struggle in the first half of the year as the economy flirts with recession. Export growth is slowing and policymakers are struggling to come up with a plan to reduce the budget deficit.

The bank recommends that investors add to their holdings of financial and utilities stocks because low rates should help support steady earnings growth in the early part of the 2013. Financial stocks advanced 25 percent in 2012, making them the best performing industry group in the S&P 500. Utility stocks fell 3.4 percent, the worst performing of 10 industry groups in the index. The bank says investors should reduce their exposure to so-called consumer discretionary stocks, such as hotels and restaurant companies, because consumer spending will likely take a hit next year as taxes rise.

With a backdrop of historically low interest rates and an economy that still needs to address its fiscal imbalances, investors should remain realistic about the returns they are going to get from the stock market, says Darell Krassnoff, managing director at Bel Air Investment Advisors.

“Things are getting better, not worse, but you have to have reasonable expectations,” Krassnoff says.

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A Famous Short Seller Turns His Gaze Toward Singapore

The short-seller who made his reputation by savaging Chinese companies is turning his attention elsewhere. Carson Block, 36, whose research helped erase almost $ 7 billion of market value in China since 2010, says Olam International (OLAM), the Singapore-backed commodity merchant responsible for 90 percent of the world’s peanut trade, is a sham doomed to fail. “Comparisons to Enron are overused, but in the case of Olam, the similarities really are uncanny,” Block wrote in a Nov. 26 report to clients of his Los Angeles-based firm, Muddy Waters Research, which is shorting the peanut company. “We believe that the single biggest factor in Enron’s collapse was its use of accounting techniques similar to Olam’s value gains.” Olam’s U.S.-traded shares began a 20 percent plunge minutes after Block trashed the company at a Nov. 19 cancer benefit in London. According to Block, Olam uses noncash accounting gains to boost earnings, has been “burning cash,” and will need to raise or refinance as much as S$ 4.6 billion ($ 3.78 billion) of debt in the next year to stay solvent. Two days later, Olam, which has a market valuation of S$ 3.49 billion, sued Block and his firm for defamation in the Singapore High Court.

When he called out Olam, Block wasn’t just challenging the world’s dominant peanut company. He was also taking on Temasek Holdings, the Singapore sovereign wealth fund run by Ho Ching, the wife of the city-state’s prime minister. Temasek, which has S$ 198 billion in assets, is Olam’s second-largest shareholder, with a 16 percent stake. That stake has lost more than $ 100 million in value since Muddy Waters first questioned Olam’s finances.

Olam Chief Executive Officer Sunny Verghese dismisses Block’s claims as a means to “create panic,” citing more than S$ 10 billion of balance-sheet liquidity. On Dec. 3, Temasek said it would buy any unpurchased Olam bonds in its recent $ 1.25 billion offering. In a statement, Temasek’s senior managing director of investments, David Heng, said the fund’s executives are “comfortable with Olam’s credit position and longer-term prospects, and are pleased to have another opportunity to invest in the company, alongside other shareholders.” Temasek declined to comment further for this story.

Block shorts companies he claims are guilty of inconsistencies in their financial reporting or of outright fraud. “The Carson Block model of very detailed reports has set a new standard,” says Sahm Adrangi, who manages $ 125 million at New York-based hedge fund Kerrisdale Capital Management. Muddy Waters reports critical of Chinese firms listed on U.S. exchanges helped drive down the shares of eight companies, some with ties to the Chinese government, by an average of 60 percent, according to data compiled by Bloomberg. Shares of Sino-Forest, which had a market value of about $ 6.1 billion, slumped 74 percent before the company filed for bankruptcy in March. (Temasek was a major investor.) Muddy Waters’ most recent shorts in China failed to pay off, though: Despite Block’s allegations of fraud, Beijing-based wiremaker Fushi Copperweld (FSIN) gained 25 percent on the Nasdaq this year after the China Development Bank loaned it money to buy back shares.

This year, Block says, he stopped betting against Chinese companies because government agencies, including the Ministry of State Security and the Public Security Bureau, are harassing his analysts and limiting their research. The Ministry of Public Security didn’t respond to requests for comment. A person who answered the Ministry of State Security’s listed number said the ministry does not handle media inquiries via phone or fax.

Block isn’t expecting such problems in Singapore. The Olam work should go more smoothly, he says. “We do not believe that Singapore is a thugocracy,” he said in an e-mail. The stakes are high, though, says Low Chee Keong, a professor of corporate law at the Chinese University of Hong Kong. “Carson Block is putting his whole reputation on this one,” Low says. “He’s taking on the Singapore government, Singapore Inc. here.”

The bottom line: Peanut giant Olam is challenging Muddy Waters’ allegations of fraud and taking its founder to court.

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Employed ‘to reach 30 million’

28 December 2012 Last updated at 04:07 ET

The Chartered Institute of Personnel and Development (CIPD) says employment should grow to a record high by 2015.

Its study says the number of people employed should grow throughout 2013 to reach 30 million two years later.

The CIPD says that the reasons for jobs growth throughout a period of flat economic growth remain obscure.

It says underemployment – people taking part-time jobs who would like full-time work – has not grown significantly and does not explain this jobs growth.

A report earlier this month from the independent Office for Budget Responsibility predicted that the number of people in work would be unchanged between the last quarter of this year and that of next year.

Insecurity

A separate report out on Friday, compiled by the CIPD’s former chief economist, John Philpott, predicted a year of “slog” for those in work.

Dr Philpott, who heads the Jobs Economist consultancy, said workers could expect longer hours, static pay and limited jobs creation next year.

He says job insecurity will remain high and unemployment will rise to 2.63 million, because the size of the workforce will outstrip the number of jobs being created.

However, he expects the number of young people unemployed will fall below 900,000, moving away from the one million level it threatened to breach through 2012.

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The jobs enigma, of strong growth in private sector employment in the absence of sustained economic growth, has been one of the most mystifying economic features of 2012”

End Quote Mark Beatson CIPD

Dr Philpott said: “Our jobs outlook for 2013 is relatively optimistic in that we expect only a modest rise in unemployment. However, the fact that this can be considered good news merely underlines the harsh reality of current economic austerity.

“GDP may grow somewhat faster but 2013 will be another year of hard slog, with longer hours for those lucky enough to have jobs and a further squeeze on living standards for workers and the jobless alike.”

‘Mystifying’

Mark Beatson, chief economist at the CIPD, said the labour market was currently difficult to understand: “The jobs enigma, of strong growth in private sector employment in the absence of sustained economic growth, has been one of the most mystifying economic features of 2012, and if 2012 proved an enigma, the labour market appears equally difficult to pin down for 2013.”

He added that the underemployment explanation was not adequate: “While there are undoubtedly significant numbers of people working fewer hours than they would like… the numbers have not increased significantly this year, making it a poor explanation on its own for the 2012 jobs enigma.”

The most recent official employment figures showed the number of people out of work fell by 82,000 between August and October, to 2.51 million.

They also recorded a 40,000 rise in employment to 29.6 million, which was the highest figure since records began in 1971.

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HSBC to refund forgotten ATM cash

27 December 2012 Last updated at 08:40 ET

High Street bank HSBC is to join RBS in refunding customers who forget to take their cash from ATMs following withdrawals.

HSBC said it would automatically refund money left in cash machines since May 2005, although the process would not be immediate.

Notes are sucked back into a machine if the user fails to take the cash within 30 seconds.

This could occur, a bank spokesman said, if customers had been distracted.

The bank has paper receipts that allow it to work out whether people have missed out.

Both HSBC and RBS changed their policies in January 2011 so notes that failed to be collected were automatically refunded to an account.

Previously customers had to claim the money back when they realised they had failed to collect the cash.

Now the banks are working with the UK Payments Council, which oversees payments strategy, to install a system that automatically refunds those who lost money for as far back as records allow.

Customers who believed that they had lost out did not need to do anything, but would see their accounts credited in due course, a spokesman said, regardless of which institution they banked with.

However, there was a very small minority of cardholders who would still need to claim, he added.

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U.S. retailers scramble after lackluster holiday sales

(Reuters) – The 2012 holiday season may have been the worst for retailers since the 2008 financial crisis, with sales growth far below expectations, forcing many to offer massive post-Christmas discounts in hopes of shedding excess inventory.

While chains like Wal-Mart Stores Inc and Gap Inc are thought to have done well, analysts expect much less from the likes of book seller Barnes & Noble Inc and department store chain J. C. Penney Co Inc.

Shares of retailers dropped sharply on Wednesday, helping drag broader indexes lower, as investors realized they were likely to be disappointed when companies start to report results in a few weeks’ time.

“The broad brush was Christmas wasn’t all that merry for retailers, and you have to ask what those margins look like if the top line didn’t meet their expectations,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group.

Growth was always expected to slow this season, though an improving employment picture and rising home values had helped mitigate the worst fears. But then Superstorm Sandy hit the East Coast in late October, mild weather blunted sales of winter clothing and rising concern about the “fiscal cliff” became more of a reality, dragging down already-pessimistic forecasts.

The latest sign of trouble came from MasterCard Advisors Spending Pulse, which reported holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year.

The preliminary estimate from SpendingPulse was in line with other estimates showing weak growth during the holiday season, when retailers can book about 30 percent of annual sales – and in many cases, half of their profit.

“It has been a very uneven industry performance, probably at least for the last year, and that certainly continued into the holiday season,” said Michael Niemira, chief economist at the International Council of Shopping Centers, in an interview with Reuters Insider.

The latest holiday season could end up the weakest since 2008, during the last recession, when sales actually declined. The National Retail Federation had previously predicted 4.1 percent sales growth this year, versus a 5.6 percent increase a year earlier.

Markets reacted sharply to the gloomy outlook.

The S&P retail index closed down 1.7 percent, and 14 of the top 20 decliners in the broader S&P 500 were retailers or consumer brands.

INVENTORY CRUSH

To be sure, the actual percentage change in holiday sales can differ substantially, depending on which group is calculating the figure. SpendingPulse and the National Retail Federation, for example, look at different categories, which can cause some variation in their forecasts.

Regardless of how bad the figure is, one concern for retailers is that soft sales will mean an excess of inventory that will force some to slash prices.

The day after Christmas, retailers were using deep discounts to lure shoppers. Among other brands, Barnes & Noble offered 50 percent discounts in stores via email promotions on Wednesday, while Ann Inc had half-off at its Loft stores, and Macy’s Inc’s Bloomingdale’s promoted discounts of up to 75 percent in some cases.

At a Target store in New York City’s Harlem neighborhood, most shoppers seemed to be spending more on groceries, toys and small gifts than on gadgets or clothes.

Despite discounts of 50 percent, there were few takers for Jason Wu glass ornaments, Oscar de la Renta canvas totes and other designer goods launched under the mass merchant’s tie-up with upscale chain Neiman Marcus.

Even in a good year, retailers would have offered discounts to lure customers, but some suggest a weak year has now forced their hands.

“Retailers are no longer chasing sales, they are chasing inventory management. That means the discounts that they would have liked to be at 50-60 (percent) off have climbed to 75 to even 80 (percent) off,” said Marshal Cohen, chief industry analyst at The NPD Group.

This week’s cold, snowy weather on the heels of a warm start to December could spur people to use the gift cards they received or their remaining discretionary income to buy everything from jackets to snow blowers, said Evan Gold, senior vice president of client services at Planalytics, which tracks weather for businesses including retailers.

In December, he said, “people are out spending anyway, weather can trigger what you purchase, not if you purchase, but what you purchase.”

SANDY AND CLIFF

A variety of factors were thought to be at fault for the weak season, starting with Superstorm Sandy, which depressed sales in the U.S. Northeast in late October and early November.

Sales recovered in the second part of November, with early hours and promotions helping drive traffic during the “Black Friday” weekend after Thanksgiving, analysts said.

But there was a deep lull in early December as a winter storm in parts of the United States may have limited sales, said Michael McNamara, vice president of research and analysis at MasterCard SpendingPulse.

On top of that, there were fears that taxes will rise in the new year if Washington cannot negotiate a solution to the end-of-year “fiscal cliff” dilemma.

A recent Ipsos poll for Reuters found that only 17 percent of shoppers were spending less due to cliff fears, though analysts said the damage was still done.

“The government usually does not have a role in holidays but this year they did. They got right in the midst of it, the timing couldn’t have been any worse,” NPD’s Cohen said.

BRIGHT SPOTS

One bright spot has been online sales, which continue to grow at a faster pace.

On Christmas Day, online sales jumped 22.4 percent, outpacing the 16.4 percent increase in 2011, according to IBM Digital Analytics Benchmark, which tracks more than 1 million e-commerce transactions a day from 500 U.S. retailers.

Whether online or off, some of the winning retailers were expected to be Wal-Mart, which attracted shoppers with early deals on the night of Thanksgiving and kept its focus on value, and apparel chains like the Gap, whose bright sweaters were successful, according to analysts.

Toys sold well, and hot items that were harder to find later in the season included certain Mattel Inc Barbie dolls and LeapFrog Enterprises Inc’s LeapPad2 tablet computer, according to B. Riley Caris analyst Linda Bolton Weiser.

For retailers that have struggled, analysts said all hope was not lost. Many have fiscal quarters that end in January, so they still have time to benefit from a post-Christmas rebound. Because Christmas fell on a Tuesday, some said they could even see a boost this week from people who have extra time off.

“There’s still a little bit more time to go until the holiday season is officially over,” Morningstar analyst Peter Wahlstrom said.

Wal-Mart shares ended down 0.8 percent at $ 67.99 on Wednesday, while Macy’s shares were down 1.1 percent at $ 37.11, Barnes & Noble shares were down 3.5 percent at $ 14.49, Amazon.com Inc shares ended 3.9 percent lower at $ 248.63, and Ann Inc shares lost 5.1 percent to close at $ 32.06.

(Reporting by Brad Dorfman, Nivedita Bhattacharjee and Jessica Wohl in Chicago; additional reporting by Chuck Mikolajczak and Dhanya Skariachan in New York; writing by Ben Berkowitz; editing by Jeffrey Benkoe and Matthew Lewis)

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Taking on Guns and the NRA, One Tweet at a Time

(Updates the number of video views, petition signatures, and twitter impressions)

On Dec. 21, a group of A-list Hollywood celebrities, including Jon Hamm, Reese Witherspoon, Jamie Foxx, and Beyoncé, posted an 80-second, black-and-white video clip on YouTube calling for lawmakers to develop a comprehensive plan to deal with gun violence. The clip, uploaded the same day the National Rifle Association held a press conference calling for armed guards in schools and no new restrictions on guns, has been viewed 4 million times.

The public service announcement is well-produced and hits all the intended emotional chords as it reminds viewers of mass shootings from Columbine to Newtown. It’s is part of a broader “Demand a Plan” social media campaign by the advocacy group Mayors Against Illegal Guns that was launched right after the Newtown massacre. (The group is co-chaired by New York Mayor Michael Bloomberg, founder of Bloomberg L.P., which owns Bloomberg Businessweek.) The video also raises an intriguing question: Can social media strategies somehow level the playing field with the NRA, a laser-focused, well-financed, and successful lobbying group with four million members?

John Feinblatt, who oversees MAIG and is a chief policy adviser to the mayor, is ready to go on the offensive with the NRA and thinks the moment has arrived for the gun safety movement  to make legislative advances. He says there is “enormous pent up frustration because Americans want to be safe.” Facebook (FB), Twitter, and YouTube (GOOG) can effectively focus that raw energy on Congress and President Barack Obama to get things moving and undercut the NRA’s clout in Washington. “What people want is to be heard and you have to give them that vehicle,” says Feinblatt.

The Demand a Plan site delivers that video testimonials of 30-plus survivors and victims’ family members and all manner of online tools to mobilize support and donations to pressure the White House and Congress. Some 600,000 users have signed an online petition to ban assault weapons and high capacity magazines, require criminal background checks on every gun sold in the U.S., and crack down on arms trafficking. The Demand a Plan campaign has generated 10 million tweet impressions since its launch on Dec. 17, according to Feinblatt. This chart of Google search results for “gun control” shows interest spiking far higher after Newtown, compared with responses to other shooting incidents, going back to 2005.

Yet it’s worth asking if a “Twitter Revolution,” to borrow from the Arab Spring lexicon, can change the U.S. gun policy debate over the long haul? Social media is a great technology for disseminating information, organizing protests, and expressing spontaneous emotion—but it is unclear how effective it might be in a prolonged legislative battle to sway, cajole, and basically electorally threaten lawmakers beholden to the NRA and gun industry money.

“Signing an online petition is easy, but getting the continuing electoral and financial support of millions is difficult,” says Harry Wilson,  a gun industry expert and a public policy professor at Roanoke College in Virginia. “If gun control groups, including MAIG, are not significantly emboldened and empowered by the Newtown tragedy, then they have lost the battle.”

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Start of “Santa Claus rally” dampened by “cliff’ worries

NEW YORK (Reuters) – U.S. stocks edged lower on Monday as caution over the potential for volatility driven by worries about the U.S. “fiscal cliff” dampened enthusiasm at the start of a seasonally strong period for equities.

Investors are betting Congress will reach a deal to avert most of the austerity measures due to come into force at the start of next year. That has led to the best year for stocks since the post-financial crisis rebound. But those gains may be quickly reversed if a deal is not reached soon.

The S&P 500 index posted its biggest drop in more than a month on Friday as a Republican plan to avoid the cliff – $ 600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession – failed to gain traction on Thursday night.

Sharp moves like that highlight how headlines from Washington can whipsaw markets, especially during the thinly traded period over the Christmas holiday.

Still, with the S&P 500 up 0.7 percent in December and on course for its strongest month since September, some analysts are predicting that stocks will find their footing during a market seasonality known as the “Santa Claus rally.”

“Right now we’ve seen some very constructive action in the market so I think that bodes well for this being a positive seasonal ‘Santa’ period over the coming seven days,” said Ari Wald, a technical analyst at The PrinceRidge Group.

He noted an all-time high in the NYSE advance-decline line, which compares advancing and declining stocks, as indication of strong participation in the rally off November lows.

“Pull-backs are buying opportunities,” said Wald. “There has been really great participation on this move, a lot of small- and mid-cap stocks behaving well, pushing out to the upside; we’re seeing some good leadership from offensive sectors of the market as well.”

A high ratio of advancing stocks to declining issues shows there is broad participation across the equity market.

The Santa seasonality covers the last five trading days of the year and the first two of the new year. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during this period and risen 79 percent of the time, according to data from PrinceRidge.

The Dow Jones industrial average <.dji> dropped 51.76 points, or 0.39 percent, to 13,139.08. The Standard & Poor’s 500 Index <.spx> fell 3.49 points, or 0.24 percent, to 1,426.66. The Nasdaq Composite Index <.ixic> lost 8.41 points, or 0.28 percent, to 3,012.60.</.ixic></.spx></.dji>

The S&P 500 is up more than 13 percent for the year, having recovered nearly all the losses suffered in the wake of the U.S. election. The yearly gain would be the best since 2009.

Some U.S. lawmakers expressed concern on Sunday the country would go over the cliff, as some Republicans charged that was President Barack Obama‘s goal. Talks are stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays.

“It does seem like we are continuing through the same drift of the same thing we’ve had the past couple of weeks – ‘cliff’ talk,” said Nick Scheumann, wealth partner at Hefty Wealth Partners in Auburn, Indiana.

“You can’t trade on what you don’t know and we truly don’t know what they are going to do,” he said.

Congress is expected to return to Washington next Thursday as President Barack Obama returns from a trip to Hawaii. As the deadline draws closer, a ‘stop-gap’ deal appears to be the most likely outcome of any talks.

Trading volume was muted, with U.S. equity markets closing at 1 p.m. (1800 GMT) ahead of the Christmas Day holiday on Tuesday.

In addition, a number of European markets operated on a shortened session, with other markets closed.

U.S. retailers may not see a sales surge from this weekend as ho-hum discounts and fears about imminent tax hikes and cuts in government spending give Americans fewer reasons to open their wallets in the last few days before Christmas.

Aegerion Pharmaceuticals Inc said the U.S. Food and Drug Administration approved Juxtapid capsules in patients with homozygous familial hypercholesterolemia, but will conduct a post-approval study to test long-term safety and efficacy. Shares fell 1.8 percent to $ 25.25.

Herbalife Ltd dipped 4.4 percent to $ 26.06 after the company said it expects to exceed its previously announced repurchase authorization guidance and has retained Moelis & Company as its strategic adviser. The declines put the stock on track for a ninth straight decline.

Yum Brands Inc advanced 1.8 percent to $ 65.01 after Shanghai’s food safety authority said the level of antibiotics and steroids in the company’s KFC chicken was within official limits.

(Reporting By Edward Krudy; Editing by Chizu Nomiyama and Dan Grebler)

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Major jobs boost in UK North Sea

21 December 2012 Last updated at 11:20 ET

Statoil is to invest £4.3bn in a North Sea oil field, bringing hundreds of jobs to the north east of Scotland.

The Norwegian company said the investment in the Mariner field was the largest new offshore development in the UK in more than a decade.

Statoil expects to start production from Mariner in 2017, pending final approval by the UK authorities.

More than 700 jobs will be created, including 200 onshore posts in Aberdeen.

The field is expected to produce for 30 years, with average production of about 55,000 barrels of oil a day from 2017 to 2020.

The Mariner Field is located on the East Shetland Platform of the UK North Sea, about 150km (93 miles) east of the Shetland Isles.

Statoil is the operator of the field, with 65.11% equity. Other partners include JX Nippon Exploration and Production (UK) Limited (28.89%) and Cairn Energy (6%).

The development concept includes a production, drilling and quarters (PDQ) platform based on a steel jacket, with a floating storage unit (FSU).

More than 140 reservoir targets are planned for Mariner.

‘Good fit’

Executive vice president for development and production international in Statoil, Lars Christian Backer, said: “Statoil has extensive heavy oil experiences from offshore fields in Norway and Brazil.

“The Mariner field was discovered in 1981 and Statoil entered the licence as operator in 2007 with the aim of finally unlocking the resources.

Continue reading the main story

The North Sea is a core area for Statoil, and we look forward to taking a leading role in further developing also the UK part of this basin”

End Quote Lars Christian Backer Statoil

“We are satisfied that we now are able to make an investment decision for a profitable development of the Mariner field.”

He added: “The Mariner project is a good strategic fit for Statoil.

“We are the world’s largest offshore operator and have a portfolio of attractive projects in some of the most prolific basins in the world.

“The North Sea is a core area for Statoil, and we look forward to taking a leading role in further developing also the UK part of this basin.”

Industry body Oil and Gas UK welcomed Statoil’s announcement.

Economics director Mike Tholen said: “The largest offshore development in the UK for a decade, Mariner requires pioneering technology and will bring hundreds of high-skilled, long-lasting jobs across the country, hundreds of millions of pounds in additional tax revenues, as well as crucial security to our energy supplies.

“Expected to produce oil and gas for 30 years, this project – and others recently given the go-ahead on the UK continental shelf – will help to boost production and stem the decline we have seen in recent years, so helping the full economic benefit of our reserves to be realised in time.”

‘Tremendous news’

Energy Minister Fergus Ewing described the investment as “tremendous news for Scotland’s energy industry”.

He said: “There remains more value still to be extracted from the North Sea than there has been to date.

“With up to 24 billion barrels of oil still to be recovered, with a potential value of around £1.5 trillion, North Sea oil and gas is attracting record investment levels with capital investment of £8.5bn in 2011 and an expected £11.5bn in 2012.

“This announcement builds on positive announcements by Global Energy Group and Dana Petroleum this month, who are investing further in Scotland to capitalise on the potential of our energy resources, which will remain an enormous economic resource for decades to come.”

BBC News – Business

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Vote on US fiscal cliff ‘Plan B’

20 December 2012 Last updated at 17:23 ET

The Republican-led US House is set to vote on a package of spending cuts and tax rises party leaders say will keep the US away from the “fiscal cliff”.

The vote includes tax rises on earnings above $ 1m (£614,000) on Speaker John Boehner’s so-called “Plan B” option.

It comes as talks with the White House appear to have stalled, with President Barack Obama seeking a lower threshold.

A deal must be reached by 1 January, or a combination of steep tax rises and sharp spending cuts will take effect.

Analysts in the US and overseas have expressed concern that failure to reach a deal could take the US into recession.

Veto threat

A vote is expected by the late afternoon on Thursday, but could stretch on into the evening.

House Majority Leader Eric Cantor said on Thursday: “We, as Republicans, have taken concrete actions to avoid the fiscal cliff.”

He and Mr Boehner say the bill as proposed would ensure permanent tax cuts for 99.8% of Americans.

Continue reading the main story

What is the fiscal cliff?

• On 1 January 2013, a series of tax increases and huge spending cuts are due to come into force – the so-called fiscal cliff


• The deadline was put in place in 2011 as a means of forcing the president and Congress to agree on ways to save money over the next 10 years


• If they can reach a deal before 1 January, the cliff will be averted


• The fear is that raising taxes while massively cutting spending will have a huge impact on households and businesses


• Experts believe it could push the US into recession, and have a global impact on growth, especially in China and Europe

But Mr Cantor added that Republicans would not be sending their members home for the Christmas recess after the vote – a sign that Congress could be expected to vote on a more bipartisan deal within days.

Correspondents say the Republican plan has no chance of passing the Democratic-led Senate, and is in effect an effort to tell the US public that they should not be blamed if the US falls over the fiscal cliff.

The White House has threatened to veto the legislation if does pass Congress, saying the bill would mean tax rises on 25 million Americans making under $ 250,000.

A study by the non-partisan Tax Policy Center found some low-income people would see tax rises because the measure would not renew several tax cuts that were part of the 2009 stimulus package.

On Thursday, the White House criticised Republicans, saying Mr Boehner’s response to compromises from the president was “to walk away” from negotiations.

Spokesman Jay Carney said the introduction of Mr Boehner’s so-called Plan B was a “multi-day exercise in futility at a time when we do not have the luxury of exercises in futility”.

‘Partisan war paint’

Mr Boehner announced the bill on Tuesday, saying he would bring forward a measure that extended Bush-era tax cuts for those earning less than $ 1m per year – but would not address the automatic spending cuts.

Correspondents say the move came as a surprise as negotiations appeared to be making progress.

On Wednesday, the Republican leadership added a companion bill that would replace the automatic cuts with a proposal to remove cuts from defence and government operating budgets. They would be offset by reductions elsewhere in the budget.

Continue reading the main story

“Start Quote

It is positioning, theatrics, part of the negotiations, not the negotiations themselves. There are still few days left, and many think a deal will be done, because it has to be done”

End Quote

The proposal would cut food stamps, benefits for federal workers and some social services programmes.

On Wednesday, Mr Obama dismissed the bill, telling reporters that he and Mr Boehner were just a few hundred billion dollars apart on full 10-year deal.

The president said Republicans should “peel off the partisan war paint” and take his most recent offer.

Mr Obama is now proposing a tax rise on incomes over $ 400,000 (£247,000), an increase on the $ 250,000 level he had originally sought.

He also offered a change to the way Social Security cost of living adjustments are made for some recipients, cuts from government healthcare programmes and a two-year extension of the debt ceiling.

Mr Boehner’s office called the proposal “a step in the right direction” but not fully “balanced”.

In a brief news conference on Wednesday, the House Speaker countered that the president will bear responsibility for “the largest tax increase in history” if he does veto the bill.

But Senate leaders have signalled there is little hope for the measure in Congress’ upper-chamber.

Senate Majority Leader Harry Reid has said the proposal would not pass and that lawmakers would return to Washington next Thursday to continue working on a deal.

Analysts have painted a grim picture of the consequences of going over the cliff, with some warning that the impact could push the US back into recession.

The Organization for Economic Co-operation and Development (OECD) said in its latest economic outlook that the recession from the cliff could become global.

Changing taxation across the years
Tax year	1993-2000	2001	2002	2003-2008	2009-2012	2012 tax brackets	2013 scenarios
Source: Tax Foundation, IRS Tax brackets shown for unmarried individuals
President	Bill Clinton	George W Bush			Barack Obama		Tax cuts expire	Tax cuts expire for top incomes
Bottom rate	15%	15%	10%	10%	10%	Up to $ 8,700	15%	10%
			15%	15%	15%	$ 8,700-$ 35,350		15%
	28%	27.5%	27%	25%	25%	$ 35,350- $ 85,650	28%	25%
	31%	30.5%	30%	28%	28%	$ 85,650- $ 178,650	31%	28%
	36%	35.5%	35%	33%	33%	$ 178,650-$ 388,350	36%	33%
								36%
Top rate	39.6%	39.1%	38.6%	35%	35%	Over $ 388,350	39.6%	39.6%

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Google given EU anti-trust deadline

19 December 2012 Last updated at 07:09 ET

Google has been given a month to address complaints its search results favour its own services over those of its rivals.

EU regulators said they would end their investigation into the allegations if Google came “forward with a detailed commitment text in January 2013″.

If found guilty of breaching anti-trust rules, Google could face a fine of up to $ 4bn (£2.5bn).

Google said it continued to co-operate with the EU competition commission.

EU competition commissioner Joaquin Almunia said he had “decided to continue with the process towards reaching an agreement” to settle the investigation.

“Since our preliminary talks with Google started in July, we have substantially reduced our differences,” he wrote in an emailed statement.

“On the basis of the progress made, I now expect Google to come forward with a detailed commitment text in January 2013.”

The commission had been investigating Google since November 2010, following complaints from several rivals.

In May this year, Mr Almunia said Google had the chance to outline steps to address the claims, rather than face formal action.

The investigation centres on four areas:

• the manner in which Google displays “its own vertical search services differently” from other, competing products


• how Google “copies content” from other websites – such as restaurant reviews – to include within its own services


• the “exclusivity” Google has to sell advertising around search terms people use


• restrictions on advertisers from moving their online ad campaigns to rival search engines

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Dublin opposes Aer Lingus deal

18 December 2012 Last updated at 17:17 ET

The Irish government has voiced its opposition to Ryanair’s bid to buy rival Aer Lingus, saying the deal risked damaging competition.

However, despite Dublin holding a 25% stake in Aer Lingus, it is the European Union that will decide whether the takeover can go ahead.

Ryanair responded that the Irish government has no power to block its bid. It already owns 30% of Aer Lingus.

Brussels will rule on the deal early next year.

Ryanair wants to buy Aer Lingus for 694m euros ($ 917m; £565m).

It is the third time the airline has attempted to take full control of Aer Lingus, having seen its first bid turned down by the Commission in 2007. Ryanair subsequently dropped a second offer in 2009.

Last month, the Commission gave Ryanair a list of objections, but the airline offered new concessions to Brussels, including selling some of Aer Lingus’ landing slots at London Heathrow to British Airways.

The Republic of Ireland’s Transport Minister, Leo Varadkar, said: “The Ryanair offer and at least the remedies that are being reported are not sufficient in our view, so we won’t support their bid and, in addition, won’t co-operate with their remedies package.

“The Commission will make its own decision, but we have given our views and they are around connectivity, competition and employment.

“We don’t see any advantages for Ireland in what’s being proposed and we see very significant potential risks.”

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Optimism about “cliff” boost market; financials lead

NEW YORK (Reuters) – The S&P 500 ended at its highest level in almost two months on Monday on rising hopes that negotiations over the “fiscal cliff” were making progress and that a deal could be reached in days.

After weeks of stalemate, President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising hopes that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy.

All of the S&P 500‘s 10 sectors were higher, led by financials and other growth-oriented sectors. The S&P Financial Index <.gspf> gained 2.1 percent, and shares of Bank of America jumped 4 percent to $ 11. In a research note Monday, Meredith Whitney Advisory Group shifted to a positive stance on financials and upgraded Bank of America, Citigroup and Discover Financial shares.</.gspf>

The S&P consumer distretionary index <.gspd>, up 1.8 percent, was the second-best performing sector. Investors worry the U.S. economy could slide into recession if the tax and spending changes are implemented.</.gspd>

Boehner has edged closer to Obama’s position by proposing to extend lower tax rates for everyone who earns less than $ 1 million. Still, his position remains far from that of President Obama.

“Trumping everything right now are the fiscal cliff talks. It seems like progress is being made. I think it’s getting to the nitty gritty,” said Alan Lancz, president of Alan B. Lancz & Associates Inc. in Toledo, Ohio. “The bet right now is that something will come by the end of this week.”

The Dow Jones industrial average <.dji> was up 100.38 points, or 0.76 percent, at 13,235.39. The Standard & Poor’s 500 Index <.spx> was up 16.78 points, or 1.19 percent, at 1,430.36, its highest close since October 22. The Nasdaq Composite Index <.ixic> was up 39.27 points, or 1.32 percent, at 3,010.60.</.ixic></.spx></.dji>

The gains, which came on lighter-than-usual volume, ended a two-day losing streak on the S&P 500. The index also had its best daily percentage gain since November 23. Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.4 billion.

In the financial sector, American International Group Inc. shares rose 3 percent to $ 34.95 on plans to sell as much as $ 6.5 billion of AIA Group Ltd. Advancing stocks also included those in the home construction sector <.djushb>, which rose 4.5 percent.</.djushb>

“People are looking for sectors to play, and I think Bank of America broke out of some long-standing price levels, and it got everything going in that sector,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Shares of Citigroup were up 4.1 percent at $ 39.15 while shares of Discover Financial were up 1.6 percent at $ 40.18.

Clearwire Corp agreed to sell the rest of the company to Sprint Nextel Corp for a slightly sweetened $ 2.2 billion offer just days after minority shareholders criticized the previous bid as too low. Clearwire tumbled 13.6 percent to $ 2.91, while Sprint was up 0.2 percent to $ 5.56.

Apple Inc shares edged up after recent losses, rising 1.8 percent to $ 518.83 even though two firms cut their price targets on the stock Monday.

The tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday, but the figures did not ease worries about stiffer competition. Apple shares have tumbled more than 25 percent in about three months.

Compuware Corp rose 12.9 percent to $ 10.76 after hedge fund Elliott Management offered to buy the business software maker for $ 2.3 billion and S&P Capital IQ raised the target price and moved it to “hold” from “strong sell.

Advancers outnumbered decliners on the NYSE by about 2 to 1, and on the Nasdaq by nearly 9 to 4.

(Editing by Kenneth Barry and Nick Zieminski)

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Abe’s challenge: Can he give Japan what money can’t buy

TOKYO (Reuters) – Even before Japanese voters returned Shinzo Abe‘s party to power, he had already won over financial markets with an economic revival plan as seductively simple as economists say it is risky: print money and spend it. Lots of it.

The Liberal Democratic Party’s landslide on Sunday is likely to sustain a market rally fuelled by economic stimulus hopes, but Abe’s economic legacy will probably be defined by how he tackles chronic ills that easy money alone cannot fix and that were largely ignored during the campaign.

The conservative leader set to return to the prime minister’s post he abruptly left in 2007 campaigned on a promise to double spending on public works and to push the Bank of Japan for radical action to end deflation and help exporters such as Toyota and Sony by taming the yen.

“The fact that Abe points to changes in the BOJ law or forex levels, or aggressive easing as solutions to Japan‘s problems is, if anything, worrying,” said Yuuki Sakurai, chief executive of Fukoku Capital Management which manages $ 19 billion in assets.

“They should be treated as tools to buy time to implement structural reforms, but we’re not hearing anything about deep reforms that the LDP wants to carry out.”

The so-called Abe trade – a 4 percent slide in the yen and more than a 10 percent rise in stock prices over the past month – shows that for now, most investors just want to see the new leader fulfill his pledges.

Analysts said they expected Sunday’s vote, which according to TV projections based on counted votes gave LDP and its ally a two-thirds lower house majority, to sustain that trend in the near-term.

“Abe’s economic policies will be implemented so the economy will improve next year. The problem is what happens after that,” said Koichi Haji, chief economist at NLI Research Institute in Tokyo. “The key is whether Abe can implement long-term structural reforms and growth strategies.”

The BOJ is poised to heed Abe’s calls for more aggressive easing and a more ambitious 2 percent inflation target, with markets expecting the central bank to ease policy for the fifth time this year on Thursday.

Investors also expect an extra budget of up to 10 trillion yen ($ 120 billion) as a down payment on Abe’s plan to spend such amounts per year over the next decade – double the current level – on public works long synonymous with the LDP.

Economists say pumping cash into the economy will only give it a temporary jolt if not followed by efforts to lift its growth potential and contain runaway debt.

In just three decades Japan has become the world’s oldest society, with those 65 or above making up nearly a quarter of a population that is greying and is estimated to have shrunk by over 260,000 in the last fiscal year alone.

Recipes to cope with it are well known: social security overhaul, including cuts in healthcare and pensions; boosting access to overseas markets and opening Japan to foreign goods, workers and investment; power sector revamp and bringing more women into the workforce.

All, however, carry political and social risks that Japan’s recent revolving-door leaders were unable or unwilling to take.

Left to sink or swim with swings in overseas demand for its exports and its currency, the world’s third-largest economy has been in and out of recession and dogged by low-grade deflation for the past two decades.

Now, in firm control of the lower house, Abe has a chance to prove his mettle and erase the memories of his first troubled year in office.

So far he has played it safe.

His “Abenomics” — a mix of potent monetary stimulus and big public spending — carries little political cost and he has been coy on touchy issues such the U.S.-led Trans-Pacific Partnership (TPP) free trade pact, or implementing sales tax increases.

With some luck, the new government may be even be able to call an end to a brief recession it entered last quarter.

Economists polled by Reuters last week predict the economy will start growing again in the first quarter of next year, largely due to expected recovery in China, Japan’s top export market.

TAX TEST

Abe’s first stern economic test will come after August, when the government, armed with second-quarter data, will decide whether the economy is strong enough to go ahead with a first round of planned sales tax increases.

With 10-year bond yields near a decade low below 0.7 percent, bond investors are now confident that he can steer the central bank to buy more bonds from the world’s most indebted government without setting off a market meltdown.

To keep that trust, Abe must convince investors that in his push for big scale-stimulus, he has not abandoned budget discipline. Economists say with Japan’s public debt at more than twice its economic output and climbing, the new government can ill-afford delaying a tax hike that has become a symbol of Tokyo’s fiscal rectitude. Their message is clear: “Just do it!”

“I hope they will go through with it,” said Takatoshi Ito, a Tokyo University professor, former adviser to the first Abe administration who is now mooted as a possible successor to BOJ Governor Masaaki Shirakawa when his term ends in April.

“Tax revenue is less than half of expenditures. Bond issuance is bigger than tax revenues. It’s like using a credit card for more than half of your monthly expenditure. It’s crazy, abnormal, you can’t go on like that.”

(Additional reporting by Kaori Kaneko, Antoni Slodkowski and Leika Kihara; Editing by Raju Gopalakrishnan)

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Man City losses halve in 2011-12

14 December 2012 Last updated at 11:49 ET

Manchester City has revealed that its financial losses for 2011-12 have halved from a year earlier.

The Premier League champions announced a pre-tax loss of £93.4m, down from £189.6m in 2010-11.

Revenues increased 51% to £231.1m, with the club’s first appearance in the Uefa Champions League contributing more than £22m in new revenue.

The club’s sponsorship deal with Etihad Airways helped commercial partnership revenue double from £48.5m to £97m.

City’s operating loss also improved from a record £194.9m to £104.1m.

Uefa’s Financial Fair Play rules, which say clubs must break even over three years, come into full effect in 2013-14.

Investment impact

City was acquired by Sheikh Mansour of Abu Dhabi in 2008. In its annual report, the club said it had undergone a “significant period of investment” since then. Over that time, it has spent about half a billion pounds on new players.

“The club’s performance in the 2011-12 reporting period demonstrates the tangible and positive impacts of that investment across many areas of our operations,” it said.

It added that its player recruitment strategy had transitioned from one of rebuilding to one of refinement.

“With a relatively young squad that has won an FA Cup and a Barclays Premier League in consecutive seasons, our recruitment needs have been reduced.

“As a result, the amortisation of player contracts and the net impact of player trading on the club’s bottom line has decreased by 27% (£30.3m) over the previous year, consistent with our belief that the peak of the club’s investment in its playing squad has passed.”

The club’s wage bill increased to £178.2m from £153.7m the previous year.

That covered 237 football players and staff and 239 commercial and administration staff.

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Google Maps Restores Order to the Universe

Well, that pretty much settles it. Everyone please go back to whatever you were doing.

Today, Google (GOOG) released its free Google Maps for iPhone app in Apple’s (AAPL) App Store. Besides reestablishing galactic tranquility, the new app brings iPhone users all the features they were missing by using Apple’s new home-grown Maps app. Apple’s Maps were pretty and slick, but the service was crippled from the get-go. Sure, turn-by-turn directions were great to have, but losing such things as transit information was a pretty severe price to pay for it.

Google Maps also adds a delightful new feature that Apple’s map app was lacking: accuracy. Reports from Apple Maps users of wrong directions and incorrect information have been legion. I, for one, used Apple’s Maps app to find a bookstore to buy a present for a seven-year-old girl’s birthday party. Apple’s Maps sent me to a Barnes & Noble (BKS), but it was a Barnes & Noble-operated college bookstore at St. Francis College (I’m sure the birthday girl is smart, but the gifts there weren’t terribly festive). When I looked it up on Google’s app after the fact, the special status of the bookstore was indicated.

Google’s new, native app (in this weird interregnum, iPhone users could continue to use a Web version of Google Maps, but the new app is faster, smoother, and more feature-laden) includes old friends such as Street View, so you can see what a destination looks like, as well as public transit information: Bus lines, subways, and commuter rail are all part of the navigation mix. Try to look that information up in Apple’s Maps, and the app suggests third-party apps to provide this data. That’s like a restaurant serving you an appetizer, then refusing to provide an entrée but very nicely suggesting some other places you can go to get a main course. Um, thanks, but I’m already here—why can’t I have a full dinner?

Google’s new app also incorporates more data for the locations you may be looking for. Look up a restaurant on Apple’s maps app, and you could pull some data from Yelp (YELP), but the same search on Google Maps yields Zagat ratings, menus, links to OpenTable and other useful information.

Here’s what you don’t get with Google Maps instead of Apple’s Maps: You’ll lose Flyover, Apple’s gee-whiz feature where you can see a satellite-image of an area in a 3D-like perspective. Flyover was impressive to look at, but it’s always been little more than a gimmick. After all, being able to travel virtually over land and between buildings is not nearly as useful as Google’s Street View, where you can actually see where you’re going. Unless you’re Superman, I suppose. OK, fine—if you’re Superman, Flyover is incredibly useful. The rest of us are better off with more terrestrial navigation capabilities.

You also lose Siri integration, so you can’t activate Google Maps by voice. That’s a bummer, but not a dealbreaker. Google Maps more than compensates for that by linking to your Google account, so any Maps search you’ve performed on your PC will be listed in the history of the Google Maps app. This is particularly helpful if you’re planning a trip: You can find your destinations on your laptop or tablet at home (which is easier than entering all that info on a tiny touch screen), and all your places will be a tap away on your phone when you get in the car.

Last but not nearly least, Google Maps now has turn-by-turn navigation, a feature that had previously been reserved for Android users only. Find a destination, and Google will guide you by voice and image, showing and telling you the next turn you have to make.

And for this, we actually have Apple’s Maps app to thank. Turn-by-turn navigation was the one feature you couldn’t get through Google Maps, part of the ongoing blood feud between the two companies. But once Apple offered the feature in its mapping app, Google was forced to respond. Presumably, Apple engineers and coders are hard at work at their answer to this latest salvo from Mountain View.

As consumers, we should be happy, as all this competition works to our benefit. Think about it that way, and Apple Maps was the best thing that ever happened to Google Maps.

Businessweek.com — Top News

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Fed ties rate pledge to a threshold as new stimulus set

WASHINGTON (Reuters) – The Federal Reserve, announcing a new round of monetary stimulus, took the unprecedented step on Wednesday of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

It was the latest in a series of unorthodox measures taken by central banks around the world as major economies face erratic, sub-par recoveries from the global financial crisis and recession of 2007-2009.

The Fed said it expects to hold rates steady until its new threshold on unemployment was reached as long as inflation does not threaten to break above 2.5 percent and inflation expectations are contained.

Fed officials, who cut their forecasts for both economic growth and inflation next year, also replaced an expiring stimulus program with a fresh round of Treasury debt purchases.

“The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the Fed’s policy-setting panel said in a statement at the close of a two-day meeting.

Fed officials committed to purchase $ 45 billion in longer-term Treasuries each month on top of the $ 40 billion per month in mortgage-backed bonds the U.S. central bank started buying in September. They also repeated a pledge to keep pumping money into the economy until the outlook for the labor market improves “substantially.”

The Fed will fund the new Treasury purchases with an expansion of its $ 2.8 trillion balance sheet. Under the “Operation Twist” program, the Fed bought an identical amount but paid for them with proceeds from sales and redemptions of short-term debt.

Some policymakers view actions that expand the Fed’s balance sheet as economically more potent than those that do not. However, Fed Chairman Ben Bernanke told a news conference that the stimulus would remain about the same, given that the central bank is still purchasing a combined $ 85 billion per month in longer-term securities.

“They see an anemic economy, and they’re doing all they can to get any economic progress,” said Alan Lancz, president of Alan B. Lancz & Associates in Toledo, Ohio.

The Fed’s actions initially gave a small lift to U.S. stocks prices, but the major stock indexes closed mostly unchanged, while government bond prices fell. Oil prices rose and the dollar weakened against the euro.

Fed policymakers voted 11-1 to back the new plan. Jeffrey Lacker, president of the Richmond Federal Reserve Bank, dissented, as he has at every meeting this year, expressing opposition both to the bond buying and the new economic thresholds.

SWEATING A WEAK RECOVERY

The newly unveiled numerical policy guidelines offered the most specific suggestion yet that the Fed is willing to tolerate slightly higher inflation as it tries to juice up a moribund economy and spur stronger job growth.

A drop in the unemployment rate to 7.7 percent in November from 7.9 percent in October was driven by workers exiting the labor force, and therefore did not come close to satisfying the condition the Fed has set for trimming its stimulus.

“Decisions taken today further strengthen the Fed’s commitment to generate a stronger recovery and substantially improve conditions in the labor market,” said Michael Gapen, an economist at Barclays in New York.

In response to the financial crisis and recession, the Fed slashed overnight rates to zero almost exactly four years ago and bought some $ 2.4 trillion in mortgage and Treasury securities to keep long-term rates down.

Despite its unconventional and aggressive efforts, U.S. economic growth remains tepid. Gross domestic product grew at a 2.7 percent annual rate in the third quarter, but a Reuters poll published on Wednesday showed economists expect the economy to expand at just a 1.2 percent pace in the current quarter.

Businesses have hunkered down, fearful of a tightening of fiscal policy as politicians in Washington wrangle over ways to avoid a $ 600 billion mix of spending reductions and expiring tax cuts set to take hold at the start of 2013.

Bernanke has warned that running over this “fiscal cliff” would lead to a new recession. He told reporters the Fed could ramp up its bond buying “a bit,” but emphasized that monetary policy has limits and could not fully offset the impact.

NEW TACK ON RATES

By setting thresholds to help guide its decision on when to eventually hike rates, the Fed was able to jettison a previous prediction that borrowing costs would remain at rock bottom levels until at least mid-2015.

Officials were uncomfortable with guidance that relied on a calendar date, and they are hopeful the new framework will help financial markets assess incoming economic data in a way that helps them correctly guess were monetary policy is heading.

Bernanke emphasized that the central bank would look at a range of indicators, not just the rates of unemployment and inflation, in determining when to finally raise rates.

“Reaching the thresholds will not immediately trigger a reduction in policy accommodation,” said Bernanke, adding that the central bank would not be on “auto pilot.”

“No single indicator provides a complete assessment of the state of the labor market,” he said.

The prior practice of fixing an end point was criticized by some economists as sending a message that the Fed expected the economy to be weak until then. Bernanke said the new framework was consistent with the earlier calendar guidance, because officials do not expect the unemployment rate to reach the 6.5 percent threshold level until sometime in 2015.

Indeed, a fresh set of economic projections from the Fed put the jobless rate in a 6 percent to 6.6 percent range in the fourth quarter of 2015. At the same time, the projections showed that at no point over that forecast horizon does the central bank see inflation topping its 2 percent target.

Officials held to their assessment that they could eventually push the jobless rate down to a 5.2 percent to 6 percent range without sparking inflation, although Bernanke cautioned that policy would have to start tightening before it fell so low. In its statement, the Fed said its long-term asset purchase program would end well before any rate hike.

Fed policymakers see GDP expanding between 2.3 percent and 3.0 percent next year. That’s down from the 2.5 percent to 3.0 percent they forecast in September, but is still a bit more optimistic than most private forecasters. The Reuters poll of economists found a median U.S. growth estimate of 2.1 percent for next year.

(Writing by Pedro Nicolaci da Costa; Editing by Andrea Ricci, Tim Ahmann and Leslie Adler)

Business News Headlines – Yahoo! News

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